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.

We know there is an important connection between economic growth and IPR protection. We believe strong IPR protection enhances employment opportunities, revenues and encourages innovation and investment.  A recent report from the International Chamber of Commerce noted small businesses that rely on IP of all sorts reported higher growth, income and employment than those that do not – in some cases as much as 20% more.

Multinational manufacturing companies spent $183 billion on research and development in the United States in 2008 – 77% of the total expenditures by multinationals on R&D because they have confidence in the protection of their ideas and innovation in the United States. The ICC report referenced above demonstrates that companies that fully utilize their intellectual property rights generally succeed better and have a higher market value than those that do not.

The U.S. International Trade Commission (USITC) in May 2011 detailed the size and scope of IPR infringement in China on U.S. firms. It estimated that firms in the U.S. IP-intensive economy reported losses of approximately $48 billion in sales, royalties or license fees due to infringement in China. The USITC also estimated that firms in the U.S. IP-intensive economy spent $4.8 billion to address Chinese IPR infringements.

Trademark infringement was the most frequently reported form of Chinese IPR infringement in 2009 with nearly one-third of firms doing business in China citing losses associated with this form of infringement. The Commission noted that if improvement in IPR protection and enforcement would rise, it could lead to an employment increase in the U.S. of almost 1 million jobs. And add over $100 billion in exports and affiliate sales to China.

For these reasons, the National Association of Manufacturers is pleased the Administration signed the ACTA and work with other countries to implement it immediately.

Stephen Jacobs is senior director of international business policy, National Association of Manufacturers.