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NAFTA Archives - Shopfloor

Manufacturers Cheer Decision of Canada’s Highest Court to Fell Invalid Patent Criteria Harming Innovation

By | Shopfloor Policy, Trade | No Comments

Innovative manufacturers in the United States welcomed positive news out of Canada on the eve of national holidays in both countries: the Supreme Court of Canada struck down an intellectual property approach that had stymied innovation and investment. Such inventiveness, secured by intellectual property, remains fundamental to the competitiveness of modern manufacturing in the United States and the millions of American jobs it supports.

Canada’s troubling “promise doctrine” originated from the fallacy that patents that do not fulfill their “promise”—as arbitrarily construed by the courts, often years after the patent was filed—are invalid, even if they meet internationally accepted criteria for patentability. Canadian courts began freely applying the rule in 2005 and have since revoked 26 patents, intended to help millions suffering from cancer, osteoporosis, diabetic nerve pain and other serious conditions.

In a unanimous decision, Canada’s highest court concluded that the “application of the promise doctrine” fails to determine the utility of patents and is “incongruent” with both the words and the approach of Canada’s Patent Act. This decision affirms the need for Canada and other countries to align their intellectual property policies and practices with global norms.

At a time when Canada and the United States are preparing for modernizing negotiations within the North American Free Trade Agreement, developments like this resolve remaining barriers that encumber North American manufacturers.  The Supreme Court of Canada’s decision supports stronger bilateral ties, investment and innovation in Canada and good, high-paying jobs for innovative American manufacturers.

NAM Testifies on How to Grow Jobs and Manufacturing in North America Through a Renegotiated NAFTA

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Earlier today, Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers (NAM), testified at a public hearing on the modernization of the North American Free Trade Agreement (NAFTA), underscoring key areas to improve and modernize NAFTA in ways that will grow manufacturing and jobs in the United States.

For manufacturers throughout the United States, the North American commercial market is the most important market in the world, with Canada and Mexico alone purchasing one-fifth of all  U.S.-manufactured goods productionmore than the next 10 U.S. trading partners combined.

U.S. manufacturing output has nearly doubled since 1993, with U.S.-manufactured goods exports to Canada and Mexico alone supporting more than 2 million jobs in the United States and more than 43,000 manufacturing firms across the country. Partnerships among North American businesses have helped support this growth and the improved competitiveness of manufacturing in the United States.

NAFTA was negotiated before major technological and energy innovations helped transform what and how we manufacture in the United States. And furthermore, while U.S. negotiators sought to level the playing field fully in the original NAFTA negotiation, barriers and weaker standards remain in both Canada and Mexico.

In her comments today, Dempsey emphasized key points raised in the NAM’s June 12 public comments. Specifically, she focused on the need for a stronger NAFTA that grows American manufacturing, exports and jobs by:

  • Eliminating remaining distortions and barriers in Canada and Mexico, including with respect to remanufactured goods and barriers on food product exports, particularly Canadian dairy tariffs and nontariff barriers;
  • Raising standards to U.S. levels, including with respect to science-based regulatory practices, transparency, competition and state-owned enterprises, the protection of private property and investment overseas and intellectual property;
  • Updating the agreement to include new digital trade provisions important to small manufacturers and those creating and relying on new technologies;
  • Removing unnecessary red tape and duplicative regulations that are holding manufacturers back;
  • Seeking greater collaboration by the United States, Canada and Mexico to take action to stop trade cheating from third countries; and
  • Maintaining and improving neutral dispute settlement provisions.

The NAM and manufacturers embrace the opportunity to modernize NAFTA, and we are rolling up our sleeves to press for changes that further incentivize manufacturing in the United States and North America more broadly.

NAM Moves Forward a Positive Discussion on NAFTA

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On April 26, National Association of Manufacturers Vice President of International Economic Affairs Linda Dempsey participated on a Farm Foundation panel on the Future of the North American Free Trade Agreementat the National Press Club in Washington, D.C. Dempsey was joined by Bob Stallman, former president of the American Farm Bureau Federation, and Melissa San Miguel, senior director of global strategies at the Grocery Manufacturers Association.

In her remarks, Dempsey explained the importance of the existing North American market for manufacturers in the United States and how millions of manufacturing workers and thousands of manufacturing firms depend on exports to Canada and Mexico. Dempsey also outlined a number of key principles that are critical for manufacturers in renegotiated agreement, including strong rules that reflect U.S. principles, law and values; strong intellectual property and digital economy rules; updated provisions that promote growth and competitiveness; the need to help, not hurt, America’s industries and workers; and the importance of concluding any NAFTA renegotiations in a timely manner. 

Canada in Crosshairs for Promise Utility Doctrine at Investor Dispute Hearing

By | Manufacturers’ Center for Legal Action, Shopfloor Legal, Shopfloor Policy, Trade | No Comments

Co-authored by Linda Dempsey, Vice President of International Economic Affairs

Canada’s attempts to defend a questionable intellectual property approach have taken a hit in recent weeks as government experts faced scrutiny from a team of neutral international arbitrators, based on the official hearing transcripts released on August 3. These hearings are vitally important for a wide range of innovative manufacturing companies using patents or investing internationally.

During two weeks of International Court of Settlement for Investment Disputes (ICSID) hearings in late May and early June, Canadian officials and experts faced crossfire for attempts to defend Canada’s “promise utility doctrine.” This rule, which constitutes a “revolution” in Canadian patent law, was invented by their courts and rests on the concept that patents that do not fulfill their “promise”as arbitrarily construed by the courts often years after the patent was filedcan be ruled invalid, even if they meet all of the internationally accepted criteria for patentability. Canadian courts began freely applying the rule in 2005 and have since revoked 25 patents that were invented to help millions of people suffering from cancer, osteoporosis, diabetic nerve pain and other serious conditions. Read More

#TruthOnTheTrail: Trade Realities That Campaigns Need to Consider

By | Shopfloor Main, Shopfloor Policy, Trade | No Comments

trade-truth-05

Trade continues to be a key topic in the campaigns of both major parties. Unfortunately, the most oft-repeated claims are flat-out wrong and portend a dangerous path of retreat from the strong trade approach that has long been a powerful positive force for American workers, consumers and families. With World Trade Week officially under way, let’s look again at how trade drives the U.S. economy, raises standards of living for American families and grows manufacturing in the United States by dispelling some of the top trade myths.

  1. Free Trade Agreements. If candidates want to take aim at free trade agreements (FTAs), why not go after the hundreds of trade agreements being negotiated without the United States that exclude and disadvantage manufacturers in the United States? U.S. exporters face higher tariffs and barriers than most of the world’s exporters in other countries (ranking 130 out of 132) because the United States has too few, not too many, trade agreements. FTAs are huge market boosters for manufacturing in the United States because they promote fair trade by leveling the playing field. That’s why moving forward on the Trans-Pacific Partnership (TPP) is so important to manufacturers in the United States.
  1. NAFTA. The criticism of the North American Free Trade Agreement (NAFTA) is an enduring but deeply flawed myth. The United States implemented NAFTA in 1994 and then experienced four years of economic growth and the creation of more than 800,000 manufacturing jobs. The recession in the late 1990s had a negative effect on the U.S. economy and jobs, but if anything, NAFTA helped the United States endure that downturn more successfully and has been critical to sustaining and growing the U.S. manufacturing sector, which then faced even stronger challenges from Asian emerging economies.
  1. China. It is easy for candidates to go after China as a major villain in the trade stories they like to tell. China is not easy, but it is not a one-sided picture. Yes, China has grown its manufacturing industry heavily over the past 20 years and is now the largest foreign supplier of manufactured goods to the United States. To reach this level, China engaged in a number of unfair trade practices, government subsidization and discriminatory policies. No debate there. At the same time, China also became the third-largest market for U.S.-manufactured goods, from the seventh-largest purchaser in 2002, the year after China joined the World Trade Organization, with U.S. exports growing more than 350 percent to $89 billion. There’s a long way to go in creating a fairer and more reciprocal U.S.China commercial relationship, but it’s a lot more complicated than the campaign promise of putting on new border taxes on Chinese imports, which we all know would be contrary to U.S. international commitments and would likely result in even stronger retaliation against U.S. exports to China. And just a reminder, the TPP does NOT include China.
  1. Trade Deficits. When we buy more imports than sell exports, that’s considered a trade deficit, which is used by candidates as a negative report card on U.S. trade. However, our economy is much more complicated than simple subtraction. Oftentimes, when the U.S. trade deficit is rising, the U.S. unemployment rate is declining and U.S. manufacturing production is growing. Also, the critics conveniently ignore when we do have a surplus, such as the fact that our country sells more manufactured goods overall to our FTA partners than we purchase from them. U.S. manufacturing output and exports have quadrupled over the past quarter century. Trade, boosted by trade agreements, is helping to fuel our economy.

Trade and manufacturing go hand in hand. The United States manufactures more today than we have in our entire history. Trade and trade agreements have opened the door to new global opportunities for manufacturers big and small throughout America, helping to sustain and grow jobs for millions of Americans. Let’s continue to make sure manufacturers and America can continue to grow.

NAM Highlights Key Trade Priorities Ahead of Prime Minister Trudeau’s Visit

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This week, newly elected Canadian Prime Minister Justin Trudeau will arrive in Washington for a state visit—a demonstration of the deep ties that connect the United States and Canada—and the first state dinner for a Canadian leader in nearly two decades.

The United States and Canada share a vibrant trade and investment relationship. Canada had long been the largest U.S. trading partner and ranked second last year behind only China. Canada remains the largest U.S. export market for manufactured goods (totalling $246 billion), and Canada is the United States’ third-largest supplier of manufactured goods imports (totalling $208 billion). Cross-border U.S.-Canadian investment remains high, with Canada the largest destination for U.S. foreign direct investment in manufacturing at $107 billion, and Canadian investment in manufacturing in the United States the eighth largest source at $57 billion.

Despite our vast network of commercial ties with Canada, the two countries are facing several priority trade policy and investment issues. As Prime Minister Trudeau and his delegation meet with President Obama and other key U.S. government officials, manufacturers urge them to address these topics as they consider how to further enhance our economic relationship. Read More

Is the Sky Falling Again? TransCanada, Investor-State and the TPP

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On January 6, 2016, TransCanada Corporation filed two separate lawsuits against the U.S. government’s November 2015 rejection of TransCanada’s plan to build the Keystone XL pipeline to transport crude oil from Canada to the United States:

  • One case was brought in the U.S. District Court for the Southern District of Texas, claiming that the president acted unconstitutionally in unilaterally prohibiting further development of the Keystone XL pipeline, arguing his action was unsupported by any statute and contrary to the expressed wishes of Congress. The claim seeks in principal part to secure a declaration that no presidential approval is needed to construct the Keystone XL pipeline.
  • A second case was noticed and will be brought before international arbitration under the Chapter 11 investor-state dispute settlement (ISDS) procedures of the North American Free Trade Agreement (NAFTA) claiming that the rejection of the Keystone XL pipeline was contrary to the United States’ NAFTA obligations to provide Canadian investment treatment in accordance with international law, to protect against uncompensated expropriation and to ensure non-discriminatory treatment. TransCanada is seeking damages for the NAFTA violations. The claim cannot be formally filed until six months after the November 6 denial of the presidential permit to build the pipeline.

Trade and investment critics have focused on the NAFTA ISDS case as a new “cause célèbre” to once again suggest that the sky is falling and urge the rejection of the recently negotiated Trans-Pacific Partnership (TPP). Once again, they have it completely wrong. Read More

NAFTA’s Boost to Manufacturing – 20 Years in the Making

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Expanded manufacturing. Increased exports. Improved competitiveness, integration and partnership. That is the NAFTA story for U.S. manufacturers.

January 1, 2014 marks the 20-year anniversary of the North American Free Trade Agreement’s (NAFTA) implementation and there is strong evidence of the pact’s positive impact on manufacturing in the United States. Since 1993, value-added manufacturing in the United States has expanded from $1.06 trillion to $1.87 trillion in 2012. The increased exports, improved competitiveness and greater industry integration helped contribute to this 76 percent expansion in manufacturing output.

As U.S. manufactured exports more than doubled since 1993, the largest growth market for our manufactured exports has been our two NAFTA partners – Canada and Mexico, which purchase more from the United States than any other country. U.S. manufactured goods to Canada and Mexico more than tripled since 1993, growing some $173 billion through 2012 and accounting for over 18 percent of the total growth in U.S. manufactured exports over that period.

NAFTA Graph 01 01 14NAFTA’s impact on U.S. competitiveness in an increasingly challenging global economy has also been powerful. NAFTA has promoted greater integration, new partnerships and improved connectivity between our economies. U.S. cross-border investment grew five-fold to $453 billion in 2012, while Canadian and Mexican investment into the United States increased nearly six-fold, expanding to $240 billion. Underneath this investment are cross-border supply and production chains that are improving North American competitiveness, innovation and efficiency.  Notably, the Wilson Center estimates that some 40 percent of the content of U.S. imports from Mexico and 25 percent of the content of U.S. imports from Canada represents U.S. value-added manufacturing, meaning that imports from our neighboring countries actually support U.S. manufacturing jobs.

As we all take stock of NAFTA at 20, manufacturers are also looking forward. We are working with government officials in all three countries to expand efforts to reduce regulatory barriers and improve trade flows and cross-border mobility. All three countries are also back at the negotiating table as part of the Trans-Pacific Partnership (TPP) negotiations, which provide an important opportunity to improve the rules that govern trade between our countries.  And finally, manufacturers are working diligently to support Trade Promotion Authority so that new agreements that eliminate barriers and put in place even stronger rules can be completed and help level the playing field for America’s manufacturers.

NAM’s Dempsey Moderates Panel on Trade and Manufacturing

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Today, NAM Vice President for International Economic Affairs Linda Dempsey moderated a panel discussion on NAFTA and North American Manufacturing.

The panel, which was sponsored by the Washington International Trade Association, brought together business and government experts to look back and forward on NAFTA’s economic and business impact on North American manufacturing and economies of Canada, Mexico and the United States.

During the panel, Dempsey emphasized NAFTA was a “groundbreaking agreement” that helped pave the way for new trade liberalization and “sought to usher in a more a more integrated North American manufacturing sector to spur greater trade and investment flows between the three countries and improve the global competitiveness of manufacturers throughout North America.”

Dempsey also stressed the impact NAFTA has had on trade, noting that “U.S. trade with its NAFTA partners has more than tripled since the agreement took effect. It has increased more rapidly than trade with the rest of the world.”

Dempsey was joined by Ken Smith, the current Head of the Trade and NAFTA Office of the Ministry of the Economy of Mexico, Michael McAdoo, the Vice President for Strategy and International Business Development with Bombardier Aerospace, and Carlos Leitao, the Chief Strategist and Chief Economist for Laurentian Bank Securities.

 

Manufactured Goods FTA Surplus On Track to Double This Year

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The evidence keeps rolling in about the value of having free trade agreements (FTAs) that open up foreign markets to American exports.  The Commerce Department data on FTAs that the International Trade Administration just posted shows that we are on track for a fourth straight year of manufactured goods trade surpluses with our FTA partners.

Moreover, based on their data through October, that surplus has already reached a record $40 billion.  If that rate continues for November and December, the U.S. manufactured goods trade surplus with FTA partners will be $46 billion in 2011 – double the 2010 surplus of $23.4 billion.

The manufactured goods surplus with NAFTA is running at a $12 billion annual rate, and with CAFTA at a $3 billion annual rate. 

The record with FTA partners is in sharp contrast to U.S. manufactured goods trade with countries that do not have FTAs with us.  Based on January-October data, it looks like U.S. manufactured goods trade with non-FTA partners will register a deficit of close to $500 billion in 2011. 

The facts are clear –  we need more FTAs to let our manufactured goods into more foreign markets – and we need them as fast as we can get them.

Frank Vargo is vice president of international economic affairs, National Association of Manufacturers.