The announcement at the completion of the 21st annual meeting of the U.S.-China Joint Commission on Commerce and Trade (JCCT) on Wednesday highlighted progress on a number of major priorities for manufacturers. (U.S. Trade Representative news release, fact sheet)

A new system of ongoing working group engagement appears to have paid off in commitments on the part of China in areas that the National Association of Manufacturers has long emphasized. In one of the most important issues for U.S. companies, intellectual property (IP) protection, there is potentially significant progress for producers in the wind turbine, pharmaceutical, and software industries. China’s commitment not to discriminate against American IP in deciding what products or companies get preferences for government contracts could have significant impact for NAM members selling in the Chinese market.

In addition, the agreement to revise the major equipment catalogue (which governs what products qualify for special treatment in government purchases) and not to use it to discriminate against imports or provide export subsidies, is similarly a positive signal that China will play by the rules of the international trading system that has benefitted it so significantly.

China also made commitments that could further open their markets to U.S. industrial and telecommunications equipment, and agreed to accelerate the process of joining the WTO Government Procurement Agreement. This agreement has been a priority for the NAM as a way to open the door to billions of dollars in purchases by Chinese government entities.

All of this is good news. But long term, it all hinges on China’s implementation of these commitments.

(continue reading…)

Of all the mechanical and operational woes that bedevil Metro passengers in the Washington, D.C., area, escalator failures are the most woeful. Today’s Washington Post Style section’s piece on Moscow’s 643 moving stairs, “In Moscow, escalators to carry the city,” thus figures to be a high-readership article.

Moscow’s subway system is world-renowned, but did you know its origins lie in American ingenuity? Yep, there’s an IPR angle:

A German historian named Dietmar Neutatz has looked through Soviet archives and tells a somewhat different version of the story in a book he wrote about the Metro. The Soviet idea was to buy one escalator from Otis and then copy it. But Otis executives realized what was going on; they offered to sell one escalator for the price of 12. The Soviets declined, then dragged out negotiations as long as they could in order to find out as much as possible about the Otis escalator’s technical specifications. Then they broke off talks and built their own, as close a match as possible. Escalator piracy, it would be called today.

Yes it would.

Just in time for the opening of the annual U.S.-China Joint Commission on Commerce and Trade (JCCT) today in Washington, the U.S. International Trade Commission (USITC), an independent U.S. government agency, has released an important study on the theft of U.S. intellectual property in China, “China: Intellectual Property Infringement, Indigenous Innovation Policies.” (News release.)

To no one’s surprise, the Commission found that massive Intellectual Property Rights (IPR) infringement harms market opportunities in China and significantly diminishes the income for U.S. companies whose products are counterfeited and pirated in China (as well as other markets, including the United States).

Further, China is engaged in a concerted effort to promote so-called “indigenous innovation” policies designed with the sole intent of keeping U.S. and other foreign firms out of the huge Chinese government procurement market by requiring the development and purchase of Chinese products and technologies, sometimes through the forced transfer of technology as a prerequisite for foreign participation.

The National Association of Manufacturers expects that the U.S. government will use this study when U.S. trade negotiators meet with their Chinese government counterparts. This threat to American innovation must stop.
(continue reading…)

From the Council on Foreign Relations’ excellent Daily News Briefing last Friday:

U.S. President Barack Obama’s visit to India … is expected to focus on producing jobs for the U.S. economy (WSJ) by clinching big commercial deals for U.S. companies and promoting greater access to Indian markets. The trip, which comes shortly after U.S. congressional midterm elections, may be more politically palatable than focusing on thornier geopolitical issues like India’s unease about Afghanistan and Pakistan. Amid U.S. concerns about outsourcing jobs to India, the White House hopes to stress the benefits of the two country’s growing trade partnership. More than two hundred chief executives and corporate officials will travel to Mumbai for a business summit next Saturday (EconomicTimes), the largest contingent of U.S. chief executives to accompany a president on a state visit. The total number of deals resulting from Obama’s trip could help create or sustain one hundred thousand U.S. jobs (FT), according to the U.S. India Business Council. But the United States will be challenged to strike an investment treaty with India amid U.S. corporate concerns about intellectual property abuses. India’s leftist parties said they will hold a nationwide protest (EconomicTimes) during Obama’s visit, opposing U.S. pressure on India to open its agriculture, retail trade, education, and other services to U.S. investment and multinational firms.

Energy development is a major topic on the agenda, including nuclear power and shale gas. The U.S.-India Business Council’s news release, “India Business and Entrepreneurship Summit to Feature President Obama,” has more information about the U.S. business leaders heading to Mumbia. More coverage from Indian news sources:

• Times of India, Nov. 1, “Obama’s Midterm Test“
• The Business Standard, Nov. 1, “US Democrats blaming Indian business money“
• The Hindu, Oct. 31, “Taking economic ties with U.S. to higher levels“

And there’s this from the Center for a New American Security, a think tank, “CNAS Releases Blueprint for the Future of U.S.-India Relations“:

Washington, D.C., October 18, 2010 – In advance of President Obama’s much-awaited trip to India in less than 3 weeks, the Center for a New American Security (CNAS) released today Natural Allies: A Blueprint for the Future of U.S.-India Relations, authored by former Deputy Secretary of State Richard L. Armitage, former Under Secretary of State for Political Affairs R. Nicholas Burns and CNAS Senior Fellow Richard Fontaine.

Ed Silverstein, TMCNet, “Manufacturers Meet with U.S. Officials on Intellectual Property Theft Problem“:

Representatives from the National Association of Manufacturers (NAM) met in person with U.S. Intellectual Property Enforcement Coordinator Victoria Espinel in Illinois to discuss the growing problem of intellectual property theft.

Manufacturers talked with Espinel on Oct. 8, about the challenges and solutions for protecting intellectual property rights.

Associated Press, “Administration Delays China Currency Report“:

U.S. manufacturers believe China’s currency is undervalued by as much as 40 percent, making U.S. goods more expensive in China and Chinese goods cheaper and thus more competitive in the U.S. market.

Frank Vargo, vice president for international affairs at the National Association of Manufacturers, said his group would like to see a much more rapid appreciation of China’s currency than 1 percent per month. He said one of the dangers is that after the upcoming meetings, China could revert to little or no further currency appreciation.

“The heat is on until the meetings, but the question is what will China do after the meetings,” Vargo said.

Morton Kondrake, “Infrastructure pushed by Obama, but too late,” citing the Brookings Institution’s Bill Galston, a former domestic policy advisor it the Clinton White House: (continue reading…)

The National Association of Manufacturers’ Doug Goudie has been reporting from a business and trade mission to South Korea.

Our delegation had a long day of back-to-back high level meetings with a variety of senior officials today, as well as a tour of a GM-Daewoo auto assembly facility. Many of the meetings are off-the-record and I won’t abuse the trust. I will say we served American beef at all our meals with senior Korean officials.

Suffice to say, the U.S. business community is still sounding our strong support and outlining the strong benefits manufacturers in America will see from the market-opening provisions in this agreement (as I outlined in my initial post for Monday).

Rather than end there, we’ve seen and done a lot here so far, and I thought I’d look at a few specific examples and thoughts that have come up so far.

Intellectual Property Rights:  The NAM takes a strong stand on robust protection of intellectual property rights (IPR). IPR protection extends far beyond counterfeiting or piracy, of course – innovation is one of America’s greatest competitive advantages and is our key to remaining the cutting-edge manufacturing center in the world.

In discussions with Korean officials this week, we’ve heard them express the same fears about Chinese IPR violations that we hear in America. In the 1980s, Korea had a reputation for lax IPR protections, particularly in counterfeiting and piracy. This is no longer the case – China and some other Asian nations are the offenders now- but if anyone is still concerned, the Korean-U.S. Free Trade Agreement (KORUS FTA) has extremely strong IPR language written into it. (Chapter 18)

I went shopping first day into some of the markets, looking for counterfeit consumer goods. Not to buy, mind you!  Knock-offs still abound in handbags and luggage at the market I visited — I won’t deny that fact — but they are obvious knockoffs that wouldn’t fool my 3 year old daughter, let alone a Real Housewife. For example, “Conch” bags bear a resemblance to “Coach”.

(continue reading…)

The National Association of Manufacturers’ Doug Goudie is on a business and trade mission to South Korea. This is the second of his reports. Earlier, here.

This morning we had a breakfast meeting with Kang Man-soo, Chairman of the Presidential Council on National Competitiveness (PCNC) and a senior economic advisor to Korean President Lee. The PCNC – created by President Lee after he took office – is a unique advisory body in Korea, perhaps roughly equivalent to the U.S. Council of Economic Advisors (CEA), with an important difference: foreign business representatives have a place in at the table in the PCNC, while the U.S. CEA is entirely an inter-governmental body. Also, CEA has a wide mandate, while the PCNC is focused on ways Korea’s government can improve competitiveness in the country. Given the neighborhood –- a robust, competitive and fast-growing group of Asia-Pacific economies –- having a body like the PCNC seems a smart move.

It was a very good meeting to begin our visit, and the U.S. delegation utilized the Chairman’s time with us to highlight the benefits of the U.S.-Korea FTA for both American and Korean businesses, farmers, and service providers. The Chairman noted an op-ed in The Wall Street Journal last week stating that Democrats in the U.S. Congress ARE in fact promoting free trade – by not acting on the pending U.S. FTAs with Korea (and Colombia and Panama), Congress is promoting the European Union’s increased free trade with Korea (and Colombia and Panama), as the EU enters and completes more and more bilateral FTAs – first up, with Korea.

Korea forms a strategic “bridge” between Japan and China, and the rest of the Asian economies. As noted earlier, the Korean economy is growing quickly, showing good recovery from the 2008 global recession. I can attest that a great deal of infrastructure work is under way in Seoul and elsewhere – bridges are being built, rail lines being extended, new high-rises are rising high. I can also attest – after strolling through some of the largest markets in Seoul this afternoon – the Korean people are out in droves buying lots of consumer goods. This market is an excellent place for U.S. manufactured goods exports. (continue reading…)

Congress is on recess, and President Obama departs on vacation.

President Obama visits a battery manufacturer, ZBB Energy Corp.,  in Wisconsin today and then travels to Los Angeles to raise campaign cash. On Tuesday the President is in Seattle to promote exports and speak at a fundraiser. On Wednesday he speaks on the economy in Ohio and attends a campaign event in Columbus and then Miami, Fla.  The President and his family depart Thursday for a vacation in Martha’s Vineyard. See President’s schedule, CQ Politics.

The Senate reconvenes on Monday, Sept. 13, at 2:30 p.m. The House reconvenes at 2 p.m. Tuesday, Sept. 14.

John Engler, president of the National Association of Manufacturers, speaks Thursday to Nebraska chambers of commerce at their the 2010 Legislative Summit, taking place at the Strategic Air and Space Museum near Omaha.

Senate Committee Hearings: Monday — Senate Budget Committee Chairman Kent Conrad (D-ND) holds the first of three committee field hearings in eastern North Dakota, starting in West Fargo, “Devils Lake Flooding Disaster: A Red River Valley Perspective.”  Tuesday – Chairman Mary Landrieu (D-LA) sponsors a Senate Small Business committee holds a field hearing in Lafayette, La., “The Deepwater Drilling Moratorium: An Economic Disaster for Louisiana’s Small Business?” The Senate Commerce Committee conducts a field hearing in Barrow, Alaska, “The Changing Arctic: Implications for Federal Resources and Local Communities.”  Another Senate Budget Committee hearing is scheduled for the Stake Out Supper Club and Lounge in Lisbon, N.D., “Devils Lake Flooding Disaster: How Should Downstream Impacts be Addressed?” Wednesday — The Senate Budget Committee meets in Wahpeton to consider, “Transportation Infrastructure’s Role in Economic Growth: ND 13,” with testimony from Bobcat and Cargill executives.

Executive Branch: Commerce Secretary Gary Locke is in Louisiana today for events on the Gulf seafood industry. The U.S. Trade Representative’s office hosts the Anti-Counterfeiting Trade Agreement negotiations in Washington starting today, a very private affair. Treasury Secretary Geithner speaks at an Administration-sponsored conference on housing finance in Washington Tuesday.

Economic Reports: New York Times summarizes: “Data will include the Producer Price Index for July, housing starts for July, and industrial production and capacity utilization for July (Tuesday); and weekly jobless claims, Philadelphia Fed manufacturing index for August and leading economic indicators for July (Thursday).” See also Washington Post’s column on the week ahead.

Reuters, “US business beseiges panel with China complaints“:

WASHINGTON (Reuters) – U.S. business groups Tuesday besieged the U.S. International Trade
Commission with complaints about billions of dollars of lost sales due to Chinese counterfeit goods and government policies that threaten to shut American companies out of the market.

“Unfortunately, the stark reality is that China remains ‘ground zero’ for international product counterfeiting and piracy,” Shaun Donelly, senior director for international business policy at the National Association of Manufacturers, told the commission.

The hearing reflects the growing concern in Congress about Chinese trade practices.

The prepared statement from the NAM’s Donnelly is available here.

• National Journal, Tech Daily Dose blog, “Trade Commission, Congress Examining Chinese Policies“
• PC World, “US Panel Looks at Intellectual Property Violations in China“

The International Trade Commission has begun two days of hearings today, announced in a news release, “EFFECT OF INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS IN CHINA ON U.S. ECONOMY AND JOBS TO BE INVESTIGATED BY U.S. INTERNATIONAL TRADE COMMISSION.”

The AP previews the hearings in an article, “China bid to spur innovation raises trade tensions.” Writing about China’s new procurement proposals called “indigenous innovation,” AP reports:

U.S. companies argue that the rules are intended to force them to partner with Chinese companies and turn over technology and intellectual property to them. Doing so would qualify them to sell to Chinese government agencies.

But Pat Mears, director of international commercial affairs at the National Association of Manufacturers, said that given China’s poor record in protecting patents, copyrights and other intellectual property, most U.S. companies prefer to keep their most vital technologies — “the crown jewels” — outside China.

“This is another effort at forced technology transfer,” she said.

The NAM’s Shaun Donnelly is testifying today before the ITC.