Manufacturers Press for Stronger Action to Tackle Foreign Intellectual Property Barriers

By | General, Shopfloor Main | No Comments

Manufacturers in the United States depend on strong intellectual property (IP) protections at home and abroad that allow them to create new products, grow their businesses and thrive in the global economy. That was the core message delivered by the National Association of Manufacturers (NAM) yesterday in its detailed submission to the Office of the U.S. Trade Representative (USTR) about the need for government action to protect U.S. IP rights.

In his January 30 State of the Union address, President Donald Trump underscored the strategic importance of strong IP for manufacturers, noting that his administration “will protect American workers and American intellectual property, through strong enforcement of our trade rules.” Indeed, innovative manufacturing faces growing challenges, including increased global infringement of IP, including patents, trade secrets, trademarks and copyrights, in markets like China and India. These attacks on IP directly hurt the ability of manufacturers in the United States to innovate and create well-paying jobs.

The NAM’s submission for USTR’s Special 301 report identified IP problems in nearly 50 foreign countries and highlighted cross-industry trends that are harming manufacturers and jobs in the United States. These trends include problematic attacks on IP rights in international organizations and forums, increasing challenges to the legitimate use of patents and trademarks, weak trade secrets protection in key markets and rampant counterfeiting and piracy around the world.

The NAM spotlighted a group of 10 countries with major issues, asking the USTR to prioritize and designate them for priority action. Many of these countries, including China, India, Indonesia, Colombia and Russia, have long been in the NAM’s top-five countries of concern. This year’s report elevates the level of concern for Canada, due both to new negative developments impacting innovative manufacturers and to the lack of progress towards a strong, enforceable IP chapter in the North American Free Trade Agreement negotiations.

The NAM’s submission—and request to testify during the Special 301 Subcommittee’s February 28 hearing—will inform USTR’s Special 301 report, slated for release in April. In that report, the USTR will identify actions taken by other countries that deny adequate and effective IP protection and enforcement and cite particular countries for follow-up action.

Innovative manufacturing is central to the American success story, with IP serving as core assets that drive competitiveness of our manufacturing base. Manufacturers across the country call on the U.S. government to use every tool in the toolbox to promote strong IP protections. These include not only strong, enforceable IP protections in trade agreements but also active use of bilateral negotiations and a strategic, results-oriented use of domestic enforcement authorities consistent with the international rules-based trading system. U.S. government agencies must also actively engage with like-minded allies and international platforms and operate creative training programs with foreign governments to cultivate other pro-IP voices.

Given the scope of the barriers they face abroad, and the activity of foreign governments and actors, manufacturers in the United States demand nothing less than the full toolbox of actions to open new markets and break down barriers.

CLOUD Act Supports Digital Age and Modernizes Dated Privacy Laws

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This week, bipartisan legislation to update laws governing access to cross-border data was introduced by Sens. Orrin Hatch (R-UT), Chris Coons (D-DE), Lindsey Graham (R-SC) and Sheldon Whitehouse (D-RI) in the Senate along with Reps. Chris Collins (R-NY), Hakeem Jeffries (D-NY), Darrell Issa (R-CA) and Suzan DelBene (D-WA) in the House. The Clarifying Lawful Overseas Use of Data (CLOUD) Act creates strong standards and emphasizes government-to-government cooperation to address new challenges presented by the digital age.

Creating a legally responsible framework to address concerns of international customers and foreign governments is a critical step for Congress to take to ensure the privacy and security of customer data, while providing law enforcement the tools they need to keep us safe.

Cloud computing is a major growth opportunity for U.S.-based companies selling software and services overseas and a growing technology backbone for small businesses and manufacturers across the United States who are seeking opportunities to sell into overseas markets. Ninety-five percent of the world’s customers reside outside the United States, and the appetite for American-made products and technology continues to be robust, increasingly helping to support well-paying jobs across the country. Industries this week praised the CLOUD Act in a letter to lawmakers.

Digital information moves globally in ways that were never imagined decades ago. Current laws were written in 1986 and have not kept up to speed with technological advances and the connected world in which we live. Connected products, services and the technology of today demand a high level of certainty and stability so that the competitive needs of commerce are appropriately balanced with efforts to thwart international criminals and those who seek to harm our society. The CLOUD Act achieves the right balance, and manufacturers are pleased to see this proposal advance.

CRA That Proposes a Return to Obama-Era Internet Would Challenge the Ongoing Currents of Investment

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Manufacturers oppose Sen. Ed Markey’s (D-MA) Congressional Review Act (CRA) proposal that would, under the guise of “net neutrality,” eviscerate a December Federal Communications Commission (FCC) decision that restored the reasonable regulatory treatment of broadband.

The true effect of the CRA would be to permanently place broadband under Title II of the Communications Act of 1934, which was written to govern traditional telephone service, not broadband. The law was last overhauled in 1996, and a lot has changed in the past 20+ years. Title II for broadband does not consider the architecture of the internet nor the current competitive landscape.

Moreover, Sen. Markey and other proponents of the CRA seek a return to an unsuccessful period of restrictive regulations on the internet that hampered investment in our nation’s broadband infrastructure. This CRA is flawed and should be rejected in favor of a legislative solution that supports continued progress and capital investment in systems and networks that foster innovation.

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Manufacturing Labor Productivity Rebounded Strongly in Fourth Quarter

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The Bureau of Labor Statistics reported that manufacturing labor productivity rebounded strongly in the fourth quarter, up 5.7 percent at the annual rate. The third quarter figures were pulled lower by hurricane-related weaknesses, with labor productivity and output down 4.9 percent and 1.6 percent in that report, respectively. In contrast, output soared 7.3 percent in the fourth quarter, reflecting both a recovery from the hurricanes and stronger economic growth. Hours worked in the sector rose by 1.5 percent in the fourth quarter, with unit labor costs off by 3.7 percent. The sectoral breakdowns were also encouraging, with labor productivity for durable and nondurable goods firms up 6.7 percent and 4.5 percent, respectively.

For the year, manufacturing labor productivity increased 0.7 percent, with output and unit labor costs up 1.7 percent and 0.9 percent in 2017, respectively. The annual figure for manufacturing labor productivity growth was slightly better than the average seen from 2013 to 2017, which was just 0.4 percent. Indeed, sluggish productivity growth continues to be one of the larger frustrations in the U.S. economy in the aftermath of the Great Recession. In comparison, the average growth rate for manufacturing labor productivity was 3.9 percent in both the 1990-2000 and 2002-2008 time frames, or the two prior economic recoveries. Read More