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Ryan Ong

NAM Testimony: The U.S. Must Protect Manufacturers’ Intellectual Property

By | General, Innovation | No Comments

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.

The Time is Now for a Robust, Enforceable China Deal that Benefits Manufacturers

By | General, Shopfloor Policy, Trade | No Comments

U.S.-China trade relations are an especially hot topic this week, which is underscored by U.S. Trade Representative Robert Lighthizer testifying this morning at the House Ways & Means Committee on efforts to address critical trade concerns with China. Today’s hearing follows welcome news over the weekend from President Donald Trump that he would delay scheduled tariff increases given “substantial progress” in negotiations and start planning for a summit with Chinese President Xi Jinping in the coming weeks. Yet the work remains unfinished. As Ambassador Lighthizer meets with members of the committee to discuss the status of these talks, manufacturers are redoubling their call for the two sides to negotiate a robust deal, with a rules-based agreement that includes binding, enforceable statutes to halt unfair Chinese trade practices once and for all.

Manufacturers large and small — and policymakers from both political parties — recognize that now is a pivotal moment in U.S.-China trade relations, with a major opportunity to reset that relationship to address a wide range of longstanding issues. China is a critical market for U.S. exports: manufacturers in the United States sell more of what they make to China than to any other country outside of North America—they also rely on China for imports to help grow manufacturing opportunities for workers here in the United States. This two-way trade has clear benefits, yet for too long, China has reaped the rewards of unfair trade practices, from intellectual property theft and discriminatory industrial policies to market access barriers and excess capacity.

The National Association of Manufacturers has led the charge calling for President Trump to negotiate lasting solutions that help manufacturers compete on a level playing field. Last year, NAM President and CEO Jay Timmons wrote to President Trump urging a comprehensive, innovative bilateral trade agreement to address unfair Chinese trade policies, and manufacturers followed up later in the year with detailed negotiating priorities. Leaders in Congress have joined with the NAM in the intervening months calling for a strong deal with China. Such a meaningful outcome would also alleviate pressure for Section 301 tariffs that have caused both operational disruption and significant uncertainty for many manufacturers in ways that have impacted their competitiveness and ability to manufacture in the United States.

Since January, the two sides have had four rounds of intensive negotiations, including nearly continuous negotiations for the past three weeks. Manufacturers applaud these efforts and welcome reports that these negotiations have covered a full set of manufacturing-priority issues, seeking not just product purchases but tangible policy changes and clear enforcement mechanisms that are badly needed. Getting this work across the finish line is critical. The time is now. The opportunity is clear. Manufacturers need to see a binding, enforceable trade deal that fixes longstanding trade distortions.


Breaking Through: Manufacturers Call for Robust Trade Agenda and Elimination of Unfair Trade Barriers

By | Shopfloor Main, Shopfloor Policy | No Comments

Getting trade right is not just a theory: the very success of American manufacturers from Boise to Buffalo depends on a strong trade agenda. Manufacturers in the United States have already been able to benefit substantially from global economic growth—including record international levels of demand among the 95 percent of consumers who live outside of our borders for high-quality consumer and durable manufactured goods—thanks in large part to trade agreements that lower barriers and enforce fair rules of the road for commerce. In fact, U.S. manufacturing output and exports have quadrupled over the past 25 years as a result of these types of agreements and policies. Yet, despite that growth, major barriers remain that continue to hold back even greater success for our nation’s manufacturers.

That’s why, in a detailed written submission filed yesterday, the National Association of Manufacturers (NAM) called on the U.S. government to tackle trade barriers confronting manufacturers in markets around the world.

The NAM’s submission explains that despite the major success manufacturers in the United States have enjoyed in the global marketplace, a host of barriers—from unfair import policies to weak enforcement of intellectual property (IP), from investment barriers to technical barriers to trade—place real roadblocks to expanding U.S. manufacturing, particularly in markets such as China and India. This year’s submission includes those two countries along with Brazil, Indonesia and Russia among its top-priority countries across a range of issues. The submission also targets additional countries and regions for more focused concerns on specific issues, such as Canada (for IP enforcement), Colombia (IP enforcement) and the European Union (technical barriers to trade).

Recent developments involving top trade issues such as the new United States-Mexico-Canada agreement and China trade tensions underscore just how important strong, trading rules that open markets are for manufacturers in the United States, large and small. From negotiating new high-standard market-opening trade agreements, to fully enforcing existing trade and investment agreements, to working with allies and partners to strengthen international trade-related rules at the World Trade Organization, there’s a lot our government officials can do to expand trade and investment opportunities for manufacturers that will support economic growth, high-wage jobs and a fair playing field.

In Bogota, Brasilia and Buenos Aires: Innovation and Intellectual Property Matters

By | Shopfloor Policy | No Comments

Manufacturers in the United States are the world’s leaders in invention and discovery, resulting in not just millions of jobs here at home but also the improvement of lives all around the world. But not every creative spark that helps humanity happens in our borders, and not every idea that benefits U.S. manufacturing or the American people starts on our shores.

Americans rely on innovation from wherever it springs. From health care to environmental technologies, from autonomous vehicles to the latest in information technology, innovation and intellectual property (IP) give rise to products and technologies that enhance everyone’s economic future and quality of life, while giving consumers access to the best choices for what they need. And for manufacturers in the United States specifically, innovation to create these products and technologies is our lifeblood.

That is why it is baffling that many governments around the world have taken shortsighted approaches to IP by implementing policies that undermine IP rights or impose unnecessary regulation. As opposed to pro-growth policies that ensure strong IP protections and remove trade barriers to innovative products, governments are adopting approaches that not only harm manufacturers, large and small, in the United States, but also cripple domestic innovators in these markets by hampering their ability and incentives to innovate.

Latin America is a growing hot spot for these protectionist policies, with a growing number of domestic policies intended to promote compulsory licensing, to narrow the ability of inventors to receive patents and expand regulations that undermine critical research and development and seize confidential business information. These efforts have been seen across the region, in countries from Colombia to Chile, from Brazil to El Salvador, from Argentina to Peru. And these anti-innovation policies are having an impact on their economies. It is no coincidence that this year’s Global Innovation Index shows Latin America as lagging many other regions in innovation, and that its rankings relative to other regions have not improved, nor that its top-performing country (Costa Rica in 2013; Chile in 2018) has fallen by eight places over the past five years.

Such approaches not only rob Latin America of critical access to high-value products and technologies, but they also hurt us all and squander an important opportunity to promote entrepreneurship and growth in manufacturing.

As a community of manufacturers and innovators, who seek more competition—not less—for new ideas and new discoveries, we’re urging Latin American governments to rethink their shortsighted approaches and strengthen the environment for innovation and protection of IP. Their people and their economies depend on it, and the world would be better for it.

Innovation, Investment—Not Market Access Barriers—Must Be Pillars for U.S.–Saudi Relationship

By | General, Shopfloor Policy, Trade | No Comments

As the White House, government officials and businesses prepare for next week’s Washington visit of Saudi Arabia Crown Prince Mohammad bin Salman, manufacturers across America are calling upon the Saudi government to address a range of outstanding issues that are frustrating manufacturers seeking to export and grow in that market, activities that support good, high-paying jobs here at home.

The United States is Saudi Arabia’s second-largest trading partner, with nearly $35 billion in trade in 2016. In turn, Saudi Arabia is one of the United States’ largest and most important trading partners in the Middle East and the destination for more than $10 billion in investment across a range of business sectors.

Yet, manufacturers are urging the administration and others to raise outstanding commercial issues they face in Saudi Arabia that undermine that partnership and send the wrong signals about Saudi Arabia’s investment environment. Recent decisions by the Saudi Food and Drug Authority to promote local pharmaceutical manufacturing at the expense of U.S. products, for example, undermine Saudi Arabia’s attempts to promote innovation and transform its economy and raise questions about their compliance with both Saudi law and Saudi Arabia’s obligations under the World Trade Organization—questions that are important to a broad range of manufacturers, not just impacted industries.

Manufacturers also face other challenges in Saudi Arabia that directly impact manufacturing exports, such as problematic technical rules in areas from food to product testing as well as revised Saudi regulations that effectively exclude many international standards developed in the United States.

Removing these barriers and recommitting to a pro-business, pro-innovation investment environment must be a priority for these discussions. Manufacturers urge the crown prince and other members of his delegation to work within senior levels of their government to address these concerns and avoid similar steps in the future. These steps are an important part of affirming Saudi Arabia’s continued partnership with the United States.

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.

India’s Jump in Doing Business Report Illustrates Signs of Reform, Need for Further Trade and Investment Reforms

By | Shopfloor Policy, Trade | No Comments

According to the World Bank’s recent Doing Business report, India jumped 30 spots from last year and now ranks 100 out of 190 countries. Manufacturers in the United States are pleased to see improvements to India’s business environment as a sign of progress, but their day-to-day experience in India shows there is still much work to be done to improve India’s trade and investment environment. Such work needs to cut through the red tape that often faces manufacturers in the United States trying to succeed in India.

The Doing Business report is based on quantitative indicators related to how easy or challenging it is for companies to start and operate a business in India. These include policies and practices related to areas such as starting a business, dealing with construction and other government permits, obtaining critical business inputs ranging from credits to electricity, protecting contracts and investors, paying taxes and resolving insolvency.

To be clear, India’s jump in the rankings reflects improvements in various areas. Most of these steps primarily benefit domestic Indian entrepreneurs and businesses, but these moves did include some changes that have a direct impact on manufacturers in the United States. India’s biggest jumps this year fall in a few specific areas: “getting credit,” “resolving insolvency,” “protecting minority investors” and “paying taxes.” These jumps can largely be traced to two high-level reforms over the past year: the passage of India’s Bankruptcy Law and ongoing efforts to reform India’s complicated tax system with the passage of the goods and services tax.

Both improvements have a broad enough impact on the commercial environment that they were listed among improvements in a recent letter to United States Trade Representative Robert Lighthizer from business groups, such as the Alliance for Fair Trade with India, stating that “U.S. businesses have seen small positive steps in the right direction, including foreign investment openings in a few sectors, fossil fuel and energy-efficiency policy initiatives, efforts to address infrastructure project permitting and licensing challenges and passage of legislation related to bankruptcy and tax reforms.”

While manufacturers welcome these changes, India must step up its efforts to accomplish Indian Prime Minister Narendra Modi’s repeatedly stated goal of reaching the report’s top 50. India still trails countries such as the Dominican Republic, Tunisia and Guatemala in the current rankings. Despite progress, India still ranks toward the bottom of the report in areas such as “starting a business” (156), “dealing with construction permits” (181), “registering property” (154), “trading across borders” (146) and “enforcing contracts” (164). Moreover, India fell in the rankings for some of these areas, including cross-border trade, property registration and business start-up. Many of these areas, particularly cross-border trade and enforcing contracts, rank among the most troublesome areas for manufacturers from the United States.

In addition to the focused business indicators listed in the report, manufacturers in the United States still face a wide array of longstanding and new trade barriers in India that make it extremely difficult to do business and undermine India’s efforts to rebrand itself to attract trade and investment. These trade barriers prevent fair access to its markets and ultimately stunt innovation and economic opportunities for both U.S. and Indian manufacturers. Examples of issues include new price controls on innovative medical devices and agriculture products, a series of forced localization policies across high-value industries and ineffective protection of patents, copyrights and trade secrets.

India’s efforts to climb the rankings of the Doing Business report must be applauded, but it clearly still lags behind most large economies, and even other emerging economies, such as China, in terms of its business climate. To boost foreign direct investment and truly position India as a leader in trade and innovation, Prime Minister Modi must take this jump in the rankings not as a victory lap, but as a reason to accelerate reforms and concrete actions to eliminate trade and investment barriers preventing manufacturers in the United States from investing and operating in India.