By MIKE MAGEE
This week’s Tom Friedman Opinion piece in the New York Times contained a title impossible to ignore: “China’s Bullying Is Becoming a Danger To The World and Itself.” The editorial has much to recommend it. But the item that caught my eye was Friedman’s full-throated endorsement of Taiwan’s “most sophisticated microchip manufacturer in the world,” Taiwan Semiconductor Manufacturing Company (TSMC).
TSMC owns 50% of the world’s microchip manufacturing market, and along with South Korea’s Samsung, is one of only two companies currently producing the ultra-small 5-nanometer chips. Next year, TSMC will take sole ownership of the lead with a 3-nanometer chip. In this field, the smaller the better. (For comparison, most of China’s output is 14 to 28 nanometers.)
U.S. Silicon Valley companies like Apple, Qualcomm, Nvidia, AMD, and recently Intel contract with TSMC rather than produce chips on their own. In addition, the key machines and chemicals necessary to produce the chips are willing supplied to TSMC by U.S. and European manufacturers. TSMC’s secret sauce, according to Friedman, is “trust.” As he writes, “Over the years, TSMC has built an amazing ecosystem of trusted partners that share their intellectual property with TSMC to build their proprietary chips.”
“Trust me” is not a phrase often associated with intellectual property. Consider, for example, Washington Post’s reporting the very same day as Friedman’s under the banner, “In secret vaccine contracts with governments, Pfizer took hard-line in the push for profit, report says.” The article reveals documents in a Public Citizen report that confirms that Pfizer has been maximizing their vaccine profits “behind a veil of strict secrecy, allowing for little public scrutiny… even as demand surges…”
As I describe in my book “Code Blue: Inside the Medical Industrial Complex” (Grove 2020), Pfizer’s focus on intellectual property as a commercial weapon has a history that extends back a half-century.
In the 1980’s Pfizer CEO, Ed Pratt was ideally positioned to lead the global charge on intellectual property (IP) protections. Pratt was chairman of the powerful US Business Roundtable and also the formal adviser to Reagan’s US trade representative, Bill Brock. Pratt’s first move was to form a task force on intellectual property with his chief ally, IBM CEO John Opel. Their recommendation to Brock that a position is created within the Office of the US Trade Representative for a director of international investment and intellectual property sailed through.
The challenge remained in linking intellectual property protections to ongoing multilateral-trade negotiations that currently involved 123 nations. This was a leap because trade agreements normally helped prevent monopolies, while intellectual property protections were viewed by many nations as supporting monopolistic companies. Rather than fight the battle head-on, Pratt and his followers finessed the whole discussion by advocating for the creation of a collection of regulatory policies that prohibit product piracy.
In 1983, Pratt and Opel approached the leaders of 10 other large US-based multinationals, including General Electric, General Motors, DuPont, Johnson & Johnson, and Monsanto, requesting their participation on the Intellectual Property Committee and creating a united front across industries.
At Bill Brock’s request, Pratt worked tirelessly to build a multi-sector global coalition of major corporations to engage the United Nations and World Trade Organization. Domestically, he worked the chambers of commerce, business councils, business committees, and trade associations. As one analyst recounted, “With every such enrollment, the business power behind the case for such an approach became harder and harder for governments to resist.”
During Reagan’s first term as president, the term “piracy” became popularized and connected to American ideas that were being stolen by greedy foreign nations, denying companies like Pfizer and IBM their “rightful rewards.” The messaging was reinforced by generous underwriting of well-funded think tanks across the political spectrum, from the American Enterprise Institute to the Brookings Institution. Pfizer supported a comprehensive public affairs strategy with press releases, speeches, white papers, conferences, op-eds, and special briefings designed to strengthen the connection between free trade and intellectual property.
It took more than a decade to accomplish the goal, but when the eighth round of the General Agreement on Tariff and Trade was signed in 1994, it had 123 signatories and established the World Trade Organization with intellectual property protections for multinational corporations. During the years that the battle was engaged, Pfizer developed resources in government relations, investor relations, media relations, public affairs, and shareholder relations that have continued to facilitate maximizing profitability, including now from their current Covid vaccine in the middle of a worldwide pandemic.
Mike Magee, MD is a Medical Historian and Health Economist, and author of “Code Blue: Inside the Medical Industrial Complex.“
