Latin America is ripping off U.S. manufacturers
By Ryan Ong
When people think of American manufacturing, they envision huge factories churning out vehicles and planes.
But there’s more to manufacturing than heavy equipment.
American workers make advanced medications that treat cancer, biodegradable plastics that reduce pollution, and microchips that give the smartphone more computing power than NASA had when it put a man on the moon.
This high-tech side of our manufacturing sector is under attack. Some of America’s trading partners in Latin America are disregarding legal protections for intellectual property and allowing firms to steal American innovators’ ideas. Such practices harm our economy and our workers.
U.S. trade officials must urge their Latin American counterparts to stop this abuse.
High-tech manufacturing supports millions of American jobs. More than 1 million workers help manufacture specialized computer and communications equipment. Nearly 300,000 produce medicines. About 400,000 create batteries and electrical device components.
These jobs wouldn’t exist without intellectual property protections. If manufacturers were unable to patent their ideas, rivals could steal their proprietary technology and processes with impunity. Few companies would risk the years of effort and billions of dollars needed to create new products.
Strong intellectual property protections also benefit consumers. Everyone who has used a 3D printer, worn a smart watch, or installed solar cells can thank intellectual property rights for creating incentives for innovators to bring those products to market.
Unfortunately, many Latin American nations are abusing laws, which allow domestic manufacturers to infringe on foreign inventors’ patents to create copycat products.
Longstanding international agreements set clear guidelines to ensure that compulsory licenses are only employed in public health emergencies, like an outbreak. If a foreign manufacturer is unable or unwilling to sell the drug in quantities sufficient to bring the outbreak under control, then a government could permit a local drug manufacturer to produce a generic version for a limited period.
But that’s not what’s happening. In Brazil, the government has discussed using compulsory licenses to “promote local production” of pharmaceuticals. The Dominican Republic has tried to issue a compulsory license for a blood thinner.
Countries may see compulsory licensing as a shortcut to reduce health spending and make up for underinvestment in their healthcare infrastructures. But revoking intellectual property rights diminishes incentives to invest in the development of the cures of tomorrow.
This goes beyond pharmaceuticals. Defending intellectual property, no matter the form, is important. The sale of pirated goods costs Colombia $750 million annually. In Paraguay, counterfeiting fuels $17 billion in illegal trade each year.
It also hurts our country. Counterfeiting, piracy, and intellectual property theft cost U.S. companies $600 billion annually.
There are several steps that Latin American governments can take to better protect intellectual property. Countries could issue clearer guidelines for compulsory licensing that limit the practice to true public health emergencies. Governments could also crack down on companies that condone the counterfeiting of manufactured goods.
The health of U.S. manufacturing depends on moves like these that would safeguard intellectual property.
Ryan Ong is director for International Business Policy at the National Association of Manufacturers.
The viewpoints expressed above are those of the author and do not necessarily reflect those of The Independent.
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