Today USTR released its annual Special 301 Report on Intellectual Property Rights. The report highlights countries of concern with regard to intellectual property (IP) protections and enforcement and examines market access issues. This report is of great interest to the NAM, as manufacturers increasingly rely on robust protection and vigorous enforcement of IP rights.

Most notably, the report underscores serious concerns with China’s misappropriation of trade secrets and other issues; adds Barbados, Bulgaria, Paraguay and Trinidad and Tobago to the Watch List; and, designates Ukraine a Priority Foreign Country (PFC). In addition, manufacturers note that Canada was upgraded in this year’s report.

While USTR praises the progress that Canada has made in a number of IP areas in the last year, the NAM would be remiss if we failed to note that the pharmaceutical IP situation in Canada, particularly patent utility, remains a serious concern to manufacturers. Canadian courts have invalidated pharmaceutical patents for major products based on a heightened standard for what is useful under patent law. This makes Canada unique among developed countries – and not in a positive way. Our hope is that USTR will continue working with Canada to address this, as all pharmaceutical patents, and potentially those in other industries, are now seriously under threat.

This year’s Priority Watch List includes the following nations: Algeria, Argentina, Chile, China, India, Indonesia, Pakistan, Russia, Thailand, and Venezuela.  While manufacturers face serious challenges in many of those countries, we are particularly concerned by India’s recent actions.  Manufacturers have seen firsthand the situation in India deteriorating over the last year and a half as India has taken a number of deeply troublesome actions, particularly through the rejection of legitimate patent applications, the issuance of compulsory licenses in flagrant disregard of international rules, and the implementation of India’s preferential market access (PMA) policy.

The NAM’s statement for a recent House Trade Subcommittee hearing summarizes some of the key barriers in India as follows: “Manufacturers face persistent challenges in India, including tax and market access issues, localization barriers to trade, lack of or inadequate protections for intellectual property rights and other investment or trade-restrictive policies.” IPR protection and enforcement challenges in India are indeed mounting, raising serious questions about India’s business and innovation climate and undermining the business community’s confidence in India.

IP rights are the lifeblood of the U.S. economy, and the protection of those rights assures manufacturers that their innovations will be secure as build industries around them and create jobs. Manufacturers in every U.S. state rely on IP rights as an integral part of business both domestically and globally. As the U.S. Department of Commerce found in its April 2012 report, IP-intensive industries accounted for $775 billion, or 60.7 percent, of total U.S. merchandise exports in 2010.  For all these reasons, manufacturers will continue to be vigilant in their work with the Administration and Congress to address serious IP violations and lack of enforcement in numerous countries.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

Today marks 100 days since the Miscellaneous Tariff Bill (MTB) expired. The MTB cuts costs for manufacturers in the United States by eliminating or reducing import tariffs on necessary manufacturing inputs that are not produced domestically.  The 112^th Congress failed to act on the MTB by December 31^st, resulting in a substantial tax hike on manufacturers, both large and small.

Unfortunately, the MTB has been mired in inside-the-beltway politics, damaging manufacturers’ competitiveness and threatening jobs.  Job creators in the United States, like BASF and Lasko Products, rely heavily on the MTB to keep their costs down, make investments in their facilities and in R&D, and better compete in a challenging global economy.  The lack of action by Congress is significantly hurting manufacturers and each day that passes without action means higher costs for manufacturers in the United States.

For three decades, Congress has passed this commonsense legislation with broad bipartisan support. The 113^th Congress must act quickly in order to reverse this damaging tax increase on manufacturers in the United States. Manufacturers can’t wait any longer and are calling on Congress to act now on this critical job-supporting, export-enhancing legislation.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

While the United States and EU share the world’s largest economic relationship, the NAM has long believed that eliminating transatlantic barriers and improving commercial relations through an extensive trade agreement would generate substantial new opportunities for manufacturers and the U.S. and EU economies more broadly.

The March announcement by the United States and EU that negotiations for a Transatlantic Trade and Investment Partnership (TTIP) would formally begin was a critical first step towards that objective, which the NAM strongly welcomed.

Today, the NAM joined with others in the business community to launch the Business Coalition for Transatlantic Trade (BCTT) to further that objective with a broad industry coalition seeking similarly ambitious and growth-producing outcomes. As a Steering Group member and a co-leader of several key working groups within the BCTT, the NAM welcomes the opportunity to amplify and advance key outcomes on a host of critical issues, from intellectual property and regulatory cooperation to investment and supply chain and trade facilitation.

As part of the NAM’s efforts to ensure that the outcomes of the TTIP are commercially meaningful, NAM President and CEO Jay Timmons recently sent a letter to President Obama, outlining manufacturers’ goals for the TTIP negotiations, which will officially be launched this summer. The letter urges the Administration to work towards a final agreement that will tear down barriers and substantially reduce the cost of doing business across the Atlantic, and promote economic and job growth. It is critical from the NAM’s perspective that the TTIP create new commercial opportunities – not new regulations or barriers – for manufacturers in the United States.

Removing regulatory barriers to trade and reducing unnecessary divergence between EU and U.S. regulations will be an important focus of these negotiations. These barriers not only limit market access on both sides of the Atlantic, but also significantly increase costs for U.S. and EU manufacturers, undermining their global competitiveness. Strong outcomes on intellectual property, investment and a host of other issues must also be secured.

Major opportunities for increased trade and investment between the United States and EU remain untapped.  Manufacturers look forward to working with our BCTT colleagues and with U.S. and EU negotiators to help them craft an agreement that creates further trade liberalization, allowing both of our economies to benefit from those opportunities.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

The Miscellaneous Tariff Bill (MTB) expired on December 31, 2012, causing taxes to increase on more than 600 products critical to manufacturers. Today a group of manufacturing CEOs and senior executives sent a letter to congressional leaders urging action on a new MTB package to boost manufacturers’ competitiveness. The MTB is a tariff suspension on hundreds of inputs and products that are essential to the manufacturing process but not available in the United States.

Every day that passes without congressional action on a new MTB results in manufacturers costs going up, making it more expensive to manufacture in the United States. The longer we go without an MTB, the further it sets us back and puts manufacturing jobs at risk. The MTB levels the playing field for manufacturers and helps spur innovation and development of new products.

It’s time for the House and Senate to move forward with a new MTB.  Manufacturers in America can’t afford to wait any longer.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

Yesterday the Administration announced their enhanced strategy to improve protection of trade secrets globally. The Administration Strategy on Mitigating the Theft of U.S. Trade Secrets consists of five pillars: International Engagement, Voluntary Best Practices by Companies, Increased Law Enforcement Domestically, Legislation, and Public Awareness.

Manufacturers continue to face a number of substantial challenges in the global market, including persistently weak economies, and a growing number of trade barriers across the globe – both in the form of tariff and non-tariff barriers. One of the most concerning challenges facing manufactures in the United States is insufficient protection and enforcement of intellectual property (IP) rights abroad. As described in the NAM’s recent submission to USTR on their Special 301 Review, many of our trading partners fail to provide adequate protection of IP rights, including trade secrets.

From biotech and food and beverage and fragrance producers to information technology and medical device makers, manufacturers across numerous types of industries in the United States rely heavily on strong trade secret protection to ensure their global competitiveness.  While the United States has relatively strong protections domestically, manufacturers are facing new and increasing challenges globally, including limited protections or inadequate enforcement, cyber-espionage and theft, and government regulations and practices requiring unnecessary disclosure of confidential business information.

Furthermore, government failure to prevent or deter theft of trade secrets, as well as failure to enforce trade secret protections remain huge challenges to manufacturers who rely on valuable trade secrets in order to continue innovating and growing in the global market.  Many of these government practices or failures are replicated in broader regulatory schemes and may come in the form of indigenous innovation or other localization barriers to trade, non-transparent and discriminatory standards development, non-scientific sanitary and phytosanitary measures, time-consuming and cumbersome government approval processes, and duplicative and unnecessary conformity assessments.

For these reasons, manufacturers welcome initiatives aimed at combating these unfair and illegal practices and look forward to collaborating with the Administration in their efforts to strengthen the international protection and enforcement of IP rights and trade secrets.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

Manufacturers welcome the President’s announcement during last night’s State of the Union address that the United States and European Union will launch formal trade agreement negotiations. We are pleased with the release of the U.S.-EU High Level Working Group’s (HLWG) final report, which calls for “a comprehensive agreement that addresses a broad range of bilateral trade and investment issues, including regulatory issues, and contributes to the development of global rules…”

The NAM has long supported the launch of formal trade talks between the United States and the EU, and previously submitted these comments to the OMB. Manufacturers will continue advocating for negotiations that result in the elimination of tariff and non-tariff barriers to trade, cutting the cost of doing business across the Atlantic, and increasing economic growth and employment in both the United States and EU.

The United States and the EU already have the world’s largest commercial relationship but major opportunities for increased trade, investment and cooperation remain. A trade-liberalizing agreement could demonstrate the strong leadership of the United States and the EU to the rest of the world and put both our economies in a stronger position in the global marketplace. Ultimately, this agreement can establish the real parameters of 21^st century trade – addressing barriers to global supply chains and worldwide investment.

A key objective for the NAM in U.S.-EU negotiations is promoting regulatory cooperation and coordination in order to remove technical barriers to trade and reduce unnecessary divergence between EU and U.S. regulations. Eliminating redundancies and inconsistencies in regulations, standards, and conformity assessment and certification procedures will concretely lower the costs of doing business for manufacturers on both sides of the Atlantic, and create new market opportunities, thereby enhancing U.S. and EU competitiveness around the world. Such barriers not only limit market access and consumer choice, they substantially increase costs for U.S. and EU manufacturers, undermining their global competitiveness. A U.S.-EU agreement should eliminate duplicative and redundant technical regulations, standards and conformity assessment procedures.

It is vital that U.S. and EU negotiators aim to promote compatibility with respect to standards, regulations and requirements in order to improve efficiency and remove barriers to trade and investment across the Atlantic. A final agreement must result in reduced regulatory costs, the elimination of tariffs, and mutual economic benefits and job creation for both economies. The benefits of such an agreement would be substantial for manufacturers both in the United States and the EU.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

In recent years, manufacturers have witnessed a growing and worrisome trend among our trading partners to impose localization measures designed to protect, favor, or stimulate domestic industries and technologies at the expense of imported goods or services. These localization barriers to trade (LBTs) differ in two ways from prior measures favoring domestic goods or services.  

First, they are more complex and sophisticated; for example, some LBTs now require the localization of intellectual property and servers for data storage.  Second, they are more expansive in that major LBTs were at one point associated mostly with China, but now are cropping up in countries all over the world, distorting markets and undermining business opportunities for manufacturers in the United States.

Manufacturers welcome the U.S. government’s work to develop and execute a more robust approach to address these growing market access challenges, including the recent announcement of the new interagency Task Force on Localization Barriers to Trade. A coordinated approach within the U.S. government to combating LBTs with other like-minded governments is vital to push back effectively on these anti-competitive practices, including using multilateral venues like the World Trade Organization (WTO) and the Asia-Pacific Economic Cooperation (APEC) forum, as well as through the Trans-Pacific Partnership and investment treaty negotiations.  (continue reading…)

Manufacturers applaud Tuesday’s announcement by the United States Trade Representative (USTR) that the Administration plans to join negotiations on an International Services Agreement (ISA). We recognize the importance of promoting and liberalizing international trade in services given the high degree to which manufacturers rely on a wide range of services.

Improved services trade results in lower costs for manufacturing, as well as improved productivity, competitiveness, product quality and safety.  International services trade also enables manufactures to comply with regulatory standards, thereby increasing their sales in foreign markets.

Manufacturers depend on a broad array of services, including certification and testing; financial and business, such as investment, accounting, and legal expertise; energy and environmental; engineering and design; information and communications technology; maintenance services, including the installation and servicing of products; retail and distribution; and, transportation and logistics.

Given the importance of services in so many areas to help grow manufacturers’ opportunities overseas, the NAM strongly supports the liberalization of services trade in multilateral, plurilateral, and bilateral negotiations. An ISA would boost trade in services, improving manufacturers’ competitiveness in the global market, expanding U.S. exports, and reducing manufacturers’ costs. The NAM looks forward to monitoring negotiators’ progress on ISA talks to ensure that they provide gains for manufacturers, too.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

The 112^th Congress has officially ended and the 113th has begun. It is deeply disappointing that Congress failed to act on bipartisan jobs legislation– the Miscellaneous Tariff Bill (MTB). As a result, duty suspensions on over 600 products have lapsed, meaning costs have gone up for companies that manufacture in the United States. Another roughly 700 new bill requests were not considered; as a result, manufacturers did not see the costs of their inputs reduced.

It is already 20 percent more expensive to manufacture in the United States than in the markets of our trading partners. The failure of Congress to pass the MTB by December 31, 2012 means higher costs for manufacturers throughout the United States, putting them at a competitive disadvantage in the global marketplace. Manufacturers simply cannot afford this tax increase; they are already facing numerous challenges in a difficult global economy. This legislation would have cut their costs, enabling them to retain and grow critical manufacturing jobs here in the United States.

The MTB legislation has enjoyed bipartisan support in both chambers of Congress for decades, and the 112th Congress had the opportunity to pass this jobs-supporting, competitiveness-enhancing bill, but failed to do so. Manufacturers urge the 113^th Congress to pass this critical, job-supporting bill as quickly as possible and to ensure full retroactive relief on these tariff-cutting measures.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

Congress has a number of important issues it needs to address in a short amount of time.  While the Fiscal Cliff is the focal point of this lame duck session, another critical piece of legislation is awaiting consideration – the Miscellaneous Tariff Bill (MTB).   This vital package is a competitiveness bill that has been supporting and growing jobs for thirty years, and it is particularly important right now, given the major challenges manufacturers are facing in a difficult global economy.

The MTB reduces or eliminates import duties on essential manufacturing inputs and products that are not produced in the United States.  Manufacturers rely on these products for their manufacturing processes and can’t make their products without them.  The duty suspensions currently in place will expire on December 31st and if Congress fails to act it will increase costs on job creators, damaging their competitiveness in a challenging global economy and threatening manufacturing jobs in this country.

It is 20 percent more expensive to manufacture in the United States than to manufacture in the home markets of our trading partners.  Failure to pass the MTB will increase costs for manufacturers here, putting manufacturers in the United States at a disadvantage.  Manufacturers simply cannot afford another tax increase or more uncertainty. The MTB legislation has enjoyed bipartisan support in both chambers of Congress for decades, and now Congress has the opportunity to pass this jobs-supporting, competitiveness-enhancing bill before the end of the year.

Of all the challenging issues facing Congress right now and with our economy showing signs of a slow recovery, the MTB should be seen for what is – a jobs bill. Manufacturers all over the United States urge Congress to identify a path to passage for this critical legislation.  We simply can’t afford not to act on this bill.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.