Trading Up: How the TPP Countries Can Set Themselves Apart as Leaders on Innovation and Growth

By November 20, 2013Economy, Trade

From Singapore’s iN2015 Masterplan and Malaysia’s Economic Transformation Programme to Chile’s Year of Innovation, each of the TPP negotiating countries has plans in place to spur innovation and new technologies, particularly information and communications technologies (ICT), as part of broader plans to grow their economies and improve their global competitiveness.  In keeping with those efforts, the TPP countries should embrace strong provisions in the TPP that will advance innovation and the economic growth it brings.

For manufacturers in the United States, innovation and new ICT products and services, are advancing their ability to grow their business and reach new markets.  ICTs enable manufacturers to reach global consumers more efficiently and effectively, to analyze foreign market trends and to manage complex production and supply chains.  New technology, known as “machine to machine” (M2M or the Internet of Things) transfer data remotely between machines that can do everything from locating lost devices and machines through GPS-driven navigation and tracking to providing key information regarding product usage, yield, performance and maintenance.

These technologies have had a particularly important impact on small and medium sized enterprises (SMEs) as documented by a recent report  – “Ahead of the Curve: Lessons on Technology and Growth From Small Business Leaders”  – by the Boston Consulting Group that was released in October.  This report found that SMEs that were technology leaders created 2x more jobs and increased revenue 15% in the past three years compared to those SMEs that lagged behind in the adoption of new technologies.

In short, from companies with foreign distributorships that need to monitor inventories and sales patterns to those that manufacture critical parts in one country that need to be incorporated in production in another country just in time, the ability to move data, engage in e-commerce and make data-storage choices based on commercial considerations are critical guarantees to the success of manufacturing and other businesses big and small.

While such technologies are expanding the reach of manufacturers throughout the world, some countries are increasingly setting up barriers that will impede further progress. Countries like Brazil and Indonesia are looking at imposing requirements to require that data be housed in local servers and data centers and to restrict the ability of companies to move data across borders to the detriment of their own ability to attract foreign investment and participate more actively in global supply chains.

The TPP, by contrast, represents an unparalleled opportunity to set a global pro-growth standard by:

  • Prohibiting governments from limiting the data and information flows across borders (cross-border information and data flows), while ensuring that privacy and intellectual property rights are protected;
  • Prohibiting governments from requiring local presence services to engage in e-commerce or other activities; and
  • Prohibiting requirements to use local computing infrastructure, such as servers, as a condition for doing business or engaging in e-commerce.

In adopting such provisions, the TPP countries will set themselves apart in their quest to grow their economies, attract and retain foreign investment and develop the type of innovation economy that will be able to meet 21st century opportunities and challenges.  Now is the time for all TPP trading partners to come to the table and embrace outcomes that will help set the stage for the next century.

 Trading Up is a blog series from manufacturers, which focuses on the need for a comprehensive, high-standard Trans-Pacific Partnership (TPP) that eliminates barriers, creates concrete new market access and levels the playing field for manufacturers in the United States.


Linda Dempsey

Linda Dempsey

Linda Dempsey is the vice president of international economic affairs at the National Association of Manufacturers (NAM). In this capacity, Ms. Dempsey leads the NAM’s efforts to improve the global competitiveness of manufacturers in the United States by advocating intellectual property protection, increased export financing and the elimination of trade barriers as well as pushing for agreements and treaties to open up new export markets to create jobs. Ms. Dempsey is noted for her experience on a wide range of international trade and investment policy issues.
Linda Dempsey

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