Innovation and intellectual property are the backbone of the manufacturing industry, and America is a global leader on these issues. In 2015, value-added from IP was nearly 40 percent of total U.S. gross domestic product. And according to the latest data, the U.S. is responsible for more than one-quarter of all research and development conducted globally. This leadership also puts our businesses and ideas in the crosshairs of bad actors that would rather cheat than compete.
That’s why I testified today on behalf of the National Association of Manufacturers before the Special 301 Subcommittee of the Trade Policy Staff Committee on the need to protect manufacturers’ innovation and intellectual property rights. I also highlighted from our written submission countries the NAM believes should receive Priority Watch List and Watch List designations for their market-distorting actions that harm innovative manufacturers – including top priority countries such as Canada, China, Chile, Colombia, India, Indonesia and Russia, and additional countries of concern such as Argentina, Australia, Brazil, Japan, Korea and South Africa.
My testimony focused specifically on three main threats facing manufacturers’ IP and the global context that makes this a critical opportunity for setting new precedents moving forward. First, our competitors are using international organizations (like the World Health Organization and others) to weaken IP protections. Second, and similarly, foreign countries have expanded their use of unbounded compulsory licensing and other limitations that harm innovation as protectionist excuses to promote or protect local manufacturing or to damage U.S. interests. Finally, rampant counterfeiting and piracy has stolen the successes of innovators and undercut manufacturers across industries.
These are only three leading threats facing our IP—there are plenty more putting manufacturers’ innovation and U.S. jobs at risk. That’s why the U.S. has spent decades building a strong domestic legal framework to protect and enforce manufacturers’ IP and pushing for stronger global protection and enforcement of IP rights, but, as I said during my testimony, we must do more. We must strategically use Special 301-related tools available, such as country classifications, out-of-cycle reviews, results-oriented action plans and existing legislative authorities to protect manufacturers’ innovative products and ideas—and we should use this critical moment to set new precedents moving forward.
As Congress moves to consider the U.S.-Mexico-Canada agreement and the administration seeks new bilateral trade deals with the UK, China, Japan and others—must not waste this opportunity. The USMCA, for example, includes best-in-class IP rules to protect the full range of U.S. manufacturing inventions and innovations from foreign theft or misappropriation.
On behalf of the NAM, I urged the administration to seize this moment and to create a fairer and more enforceable trade network that promotes and protects American innovation. That starts with protecting our trade secrets and IP.