With just over a month until the presidential election, it’s clear that Democrats and Republicans disagree about a lot, but they have always agreed on one thing: America should level the playing field for its workers and businesses by enforcing its trade agreements.
That’s because they know that getting our trading partners to live up to their promises to open their markets to U.S. goods and services and to treat U.S. companies fairly helps create jobs here at home. With the U.S. economy still reeling from the effects of the coronavirus, knocking down foreign trade barriers, especially those in high growth areas like the innovative and creative sectors, will create valuable opportunities for our economic comeback.
What could be less controversial and more bipartisan than insisting our trading partners live up to their end of a bargain with us? Examples of foreign governments that refuse to honor their commitments to level the playing field for American businesses are unfortunately legion. Consider how poorly America’s tech sector fares abroad. The governments of Indonesia and Brazil, for instance, regularly use unlicensed computer software. That’s just simple stealing from American software engineers and tech firms. In 2017 alone, these two U.S. trading partners installed more than $2.7 billion worth of unlicensed software combined.
There are also a variety of trade practices that threaten medical innovation in countries all over the world. South Korea expressly agreed to “appropriately recognize the value” of the innovation in medicines in the U.S.-Korea Free Trade Agreement but has yet to live up to that commitment. In Japan, the national health system uses nontransparent, unaccountable, and seemingly arbitrary evaluations of cost-effectiveness to block the sale of many American medicines. And some governments – like Malaysia and Saudi Arabia – simply break or ignore patents on U.S. medicines so that a domestic company can produce and commercialize the medicine locally, stealing from American scientists and costing American jobs in the process.
Too frequently America’s creative artists find that their work isn’t properly valued in other countries either. India is the world’s second-largest market for internet and smart phone services, yet it is hampered by rampant piracy. India also lacks a centralized intellectual property enforcement agency, so there is little coordination across the country’s 29 states in enforcing those rights, making pursuing any violations a daunting task.
South Africa is the largest economy in sub-Saharan Africa, but it does not have copyright and enforcement regimes up to the challenge that growing digital access presents. When large and growing overseas markets fail to protect creative content, American artists and industries suffer. Sometimes the barriers for U.S. companies result from government agencies having been captured by local industry, allowing our foreign competitors to write the rulebook for competing in their markets.
All too often, these agencies disregard international standards to create unique and arbitrary regulations and standards, often without advance notice or public input, intended only to advantage local industries by making it virtually impossible for American companies who sell products that meet the international standards to compete. Data localization requirements -- which demand citizens' data be stored and processed within its country of origin -- are one example of an arbitrary regulation that disadvantages American companies. Other non-tariff barriers like equity caps, content quotas, and government procurement preferences are similarly damning for American service providers trying to access foreign markets.
Eliminating such barriers could increase U.S. services exports by as much as $1.4 trillion and support as many as three million new jobs in the United States. Breaking down the barriers that restrict digital access would be particularly important for small and medium-sized enterprises, who could create 2.1 million new U.S. jobs and inject $357 billion into the economy with a fair digital playing field.These are just a few of the many examples of foreign governments ignoring their promises and stealing from American innovators.
Only if our leaders stand up strongly against the violators and others who seek to take advantage of America will other countries be deterred and American jobs be saved. That is why the Administration’s strong stand against digital services taxes in countries that have adopted them has such strong bipartisan support. Trade enforcement has always had strong bipartisan support. It is the motherhood and apple pie of trade policy.
No matter who wins this November, trade enforcement will continue to be a priority. And that’s exactly what American workers and companies need.
Brian Pomper is executive director of the Alliance for Trade Enforcement.
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October 02, 2020 at 01:47AM
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