Today in Tokyo the United States signed the Anti-Counterfeiting Trade Agreement and the NAM applauds this decision.

This milestone achievement in IPR protection will enhance criminal enforcement and the seizure and destruction of fake goods, provide new authority for customs to act against import and exports of fake goods and cooperate on transshipment, create new cooperation and information sharing among ACTA signatories and the private sector, and promote best practices that result in better IPR protection.

IPR protection and enforcement is an issue for virtually all manufacturers. Manufacturing is as dependent on intellectual property like patents, trademarks, trade secrets, trade dress and copyright as copy-based industries that receive somewhat more attention. Counterfeiting and piracy are existential threats to manufacturers, the people they employ, and the consumers who come in contact with their products and services.

Theft is theft no matter if it is called “counterfeit” or “piracy”.  The trade in fake products supplants legitimate markets, steals our workers’ jobs and puts American and other consumers needlessly at risk as counterfeit pharmaceuticals, unsafe products and even hazardous materials are put into the stream of commerce on a daily basis. 

IPR theft is an impediment to economic recovery.  Markets once lost through counterfeiting and/or damaged brands are not readily and easily recovered. As cities and states face unprecedented budget shortfalls and deficits, it is important to note that IPR thieves don’t generally pay taxes and maintain books. (continue reading…)

Today Intellectual Property Rights Enforcement Coordinator (IPEC) Victoria Espinel and her team released extensive recommendations for legislative changes to ensure our intellectual property rights (IPR) laws are effective and to remedy deficiencies. Manufacturers believe these changes, some of which the NAM has been recommending for two years, will improve the enforcement of intellectual property rights.

We applaud the Administration and IPEC for their pro-active efforts to prevent the entry of counterfeit goods into domestic commerce because intellectual property is the lifeblood of American manufacturing.  We are especially pleased by the recommendation to authorize Customs to share pre-seizure information about products with right holders to help it determine if the products are counterfeit. This is a change manufacturers have sought for a long time.

Manufacturing, yes manufacturing, is as dependent on intellectual property like patents, trademarks, trade secrets, trade dress and copyrights as copyright-based industries that receive considerably more attention. Counterfeiting and piracy are existential threats to manufacturers, the people they employ, and the consumers who come in contact with their products and services. (continue reading…)

The U.S. Trade Representative is holding a special 301 Review public hearing today at the USITC to examine trade and the protection of intellectual property rights. (Agenda) The National Association of Manufacturers submitted comments. Excerpt:

The NAM emphasizes to the Special 301 Sub-committee that IPR protection and enforcement is an issue for virtually all our members. Manufacturing, yes manufacturing, is as dependent on intellectual property like patents, trademarks, trade secrets, trade dress and copyright as copyright-based industries that receive considerably more attention. Counterfeiting and piracy are existential threats to manufacturers, the people they employ, and the consumers who come in contact with their products and services.

Theft is theft no matter if it is called three-syllable words like “counterfeit” or “piracy”. The trade in fake products supplants legitimate markets, steals our workers’ jobs and puts American and other consumers needlessly at risk as counterfeit pharmaceuticals, unsafe products and even hazardous materials are put into the stream of commerce on a daily basis.

It is simply amazing what products and trademarks counterfeiters and pirates are so willing to steal. While most people are familiar with the counterfeiting of luxury brands because of the cachet that can command premium prices, counterfeiters are willing to engage in criminal activities by selling everyday items such as circuit breakers, extension cords, batteries, fireplace tools, golf clubs, kitchenware, toothpaste, cigarettes windshields – the list can go on and on. Even semiconductor chips that can be used in guidance systems for America’s defense have been counterfeited and found in the United States.

As this nation looks to our economic recovery, it is important to note that IPR theft is an impediment to that recovery. Markets once lost through counterfeiting and/or damaged brands are not readily and easily recovered.

As the two largest economies in the world, the relationship between the United States and China is of great importance to global growth and prosperity. This week’s visit of Chinese President Hu affords the opportunity for direct high-level attention to the imbalances in that relationship and lays the basis for a new direction. 

It is critical that the relationship be characterized by both mutual respect and benefit through adherence to international trade rules.  It is also vital that the relationship be a balanced one in terms of trade and commercial opportunity.  When the final trade data for 2010 come in, the U.S. deficit in manufactured goods with China is likely to have set a new record of about $290 billion, exceeding the 2008 record of $277 billion.

The National Association of Manufacturers (NAM) has long pressed for efforts that would result in a more open and balanced economic relationship.  A key aspect is a bilateral and multilateral effort to address China’s greatly undervalued currency.  We strongly support the Administration’s engagement with Chinese leadership on this issue.  But we also call for much greater attention to China’s distortion of commercial opportunities for U.S. firms – particularly China’s set of policies designed to encourage “indigenous innovation.” 

China’s leadership has set itself a broad strategic objective of making the Chinese domestic economy more innovation-oriented and decreasing China’s reliance on foreign technology.  The leadership considers these policy imperatives as critical to China’s long-term economic development, national security and global competitiveness.  

There is nothing wrong with seeking to spur innovation and technology.  Just about every major country, including the United States, pursues that objective.  But the United States and other countries follow the global rules they have adopted and seek to promote development within those rules.  China’s policies, however, bend and break the rules.  Its policies come at the specific expense of foreign companies and competitors, essentially forcing the transfer of foreign technology to China.  (continue reading…)

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 National Association of Manufacturers’ Frank Vargo, vice president for international economic affairs, testified before the Trade Subcommittee of House Ways and Means last Thursday at a hearing, “Customs Trade Facilitation and Enforcement in a Secure Environment.” Vargo was also speaking as a member of the Customs and Border Coalition (CBC)—a broad based industry group representing all interests in global supply chains from manufacturers and retailers to customs brokers and carriers.

His testimony delves into highly technical areas of trade enforcement, so we’ll just cite the overview:

This hearing is a significant step in recognizing:
* the role of economic security;
* the need to implement balanced, vetted, and effective policies to advance the twin goals of CBP [Customs and Border Protection];
* the importance of public-private partnerships and providing benefits for importers who have taken extensive efforts to secure their supply chains; and
* the need to improve commercial enforcement to prevent the circumvention of intellectual property rights (IPR) and to implement anti-dumping (AD) and countervailing duty (CVD) orders.

We believe customs reauthorization legislation should seek to prioritize trade facilitation within CBP; improve interagency and Congressional coordination; recognize importers with strong compliance records; increase government and industry collaboration; strengthen intellectual property protections, trade enforcement and import safety programs; and expedite the completion of the many still outstanding modernizations needed within the agency. This is no small task, and we appreciate the ambition of this subcommittee to draft legislation to accomplish those ends. 

Note the emphasis on IPR, also highlighted in Doug Goudie’s post this morning on U.S.-Brazil trade.

• Frank Vargo, NAM’s vice president for international economic affairs, testified last Wednesday before the House Committee on Oversight and Government Reform at its Subcommittee on Government Management, Organization, and Procurement’s hearing, “Protecting Intellectual Property Rights In A Global Economy.” His conclusion:

If we are to allow counterfeiting and piracy to run unabated, the risks to the American economy are obviously very serious. However, if we are to invest in protecting our nation’s consumers, workers and businesses from IP thieves, the rewards will come back to us six-fold. According to a report commissioned by the Coalition Against Counterfeiting and Piracy (CACP) – which the NAM helped found – investing in stopping counterfeiting is sound economic policy. Authored by Laura Tyson, former Chair of the National Economic Counsel, the report entitled “An Economic Analysis of the Proposed CACP Anti-Counterfeiting and Piracy Initiative” concluded that:

• For every dollar invested, federal tax revenues would increase significantly with an intermediate range of $4.9 to $5.7;
• Each dollar would increase U.S. economic output approximately between $64 and $75;
• The increase in output would result in the creation of between 174,000 and 348,000 new jobs during the third year of the program; and
• State and local governments can expect to receive incremental revenues between $1.25 billion and $1.50 billion, in present value terms over three years.

The Report also concludes that by aggressively going after counterfeiters and pirates as laid out by the PRO-IP Act and recommendations included in S. 1631, Congress’ efforts could reasonably be expected to reduce losses attributable to piracy and counterfeiting somewhere between five and ten percent over three years.

S. 1631 is Customs Facilitation and Trade Enforcement Reauthorization Act.

On Friday, President Obama nominated Victoria A. Espinel to serve as U.S. Intellectual Property Enforcement Coordinator, Office of Management and Budget. From manufacturers’ perspective, protection of intellectual property is a priority in trade and international law enforcement. The White House summary:

Victoria A. Espinel is the founder and President of Bridging the Innovation Divide, a not-for-profit foundation focused on addressing the “innovation divide” and empowering all Americans to obtain the full benefit of their creativity and ingenuity. From 2007-2009, Ms. Espinel was a Visiting Assistant Professor at the George Mason University School of Law. Her areas of teaching and research were intellectual property and international trade. She has acted as advisor on intellectual property issues to the staff of the Senate Judiciary Committee, Senate Finance Committee, House Judiciary Committee and House Ways and Means Committee. She also served as an advisor to Romulus Global Issues Management and is a member of the Brain Trust of the Global Innovation Forum. In 2005, Ms. Espinel was asked to serve as the first ever Assistant United States Trade Representative for Intellectual Property and Innovation at the Office of the U.S. Trade Representative, serving as the chief U.S. trade negotiator for intellectual property and innovation. She testified on numerous occasions before the House Judiciary Committee and the Senate Committee on Homeland Security and Governmental Affairs. Ms. Espinel also served as Deputy Assistant USTR for Intellectual Property and as Associate General Counsel at USTR. Before joining USTR, Ms. Espinel was with the law firms of Covington & Burling in London and Washington, D.C., and Sidley, Austin, Brown & Wood in New York. She holds an LLM from the London School of Economics, a JD from Georgetown University Law School, and a BS in Foreign Service from Georgetown University’s School of Foreign Service.

The U.S. Government Accountability Office on Monday released a report assessing the impact of the U.S. free trade agreements that were negotiated and went into effect with Singapore, Chile, Jordan and Morocco, “International Trade: Four Free Trade Agreements GAO Reviewed Have Resulted in Commercial Benefits, but Challenges on Labor and Environment Remain.”

While varying in details, the FTAs have all eliminated import taxes, lowered obstacles to U.S. services such as banking, increased protection of U.S. intellectual property rights abroad, and strengthened rules to ensure government fairness and transparency. Overall merchandise trade between the United States and partner countries has substantially grown, with increases ranging from 42 percent to 259 percent. Services trade, foreign direct investment, and U.S. affiliate sales in the largest partners also rose.

The U.S. trade agreements with Panama, Colombia and South Korea will also eliminate import taxes, lower obstacles to U.S. services, increase protection for U.S. intellectual property rights abroad and strengthen rules to ensure government fairness and transparency. History, in the form of a GAO report, tells us those changes bring substantial economic benefits.

Oh, but challenges remain!

Challenges always remain. That’s their nature. Members of Congress who always point to remaining challenges do so to support continued inaction. And as the GAO study proves, inaction is bad for the United States. FTAs have accomplished what they were meant to accomplish: improved access for U.S. products, more exports and economic growth for the United States.

The United States is in a recession, free trade agreements stimulate economic growth and jobs, and yet Congress refuses to act on the Panama, Colombia and South Korea. Challenges remain, but here’s one that Congress can speedily overcome: Enact the agreements.

Warning: Clip Contains Profanity, Irony

Rap Rock/Southern Rock/Country Rock/Nu Metal aficionados will appreciate the Detroit Cowboy’s special attention to the moral health of American kids.  Intellectual property holders will cherish his satirical take on the crisis of counterfeiting and piracy afflicting the nation, if not his colorful language.

UPDATE:  Humorless software execs, angry fashion designers, seen headed towards Michigan.  Check back often for breaking news.