Finance Committee listening to on Counterfeit items & possibilities for Small business Exporters in the digital Age

Senate Finance Committee Chairman Orrin Hatch (R-Utah) these days brought the subsequent opening statement at a hearing to look at exchange possibilities and demanding situations for American companies in the virtual age:

Welcome anyone to this afternoon’s listening to, which we’ve titled: challenges and opportunities for U.S. commercial enterprise within the virtual Age.

over the last decade, the virtual economy has dramatically modified our manner of existence – from the manner we hail a cab, search for a brand new home, or order take-out, it has a profound impact on our lives.

that is additionally genuine for the methods wherein groups conduct their commercial enterprise.

The virtual economy presents U.S. organizations of all sizes with outstanding possibilities and demanding situations. In these days’s marketplace, businesses not ought to rely upon the hope that a passerby will observe some thing of their storefront window and come in.  these days, a commercial enterprise can setup store anyplace it needs and promote all forms of products over the internet to clients everywhere in the global.

This represents a large component of global trade.  in step with the net association, approximately 8 trillion greenbacks changes arms inside the virtual marketplace each year.

in addition to having a virtual storefront that can be visible in every corner of the world, the internet also gives new equipment for agencies to discover and maintain clients.  for example, it is now feasible to tailor advertisements to precise marketplace segments and interact in significant methods with clients using social media.

but, as with any first-rate technological and societal tendencies, there are demanding situations that come part and parcel with the possibilities.  even though the usa has in large part embraced and supported the modifications added approximately by improved net commerce, there are many countries around the world that do not fully embrace this capability.

many countries want to alter numerous facets of the internet, consisting of the virtual economic system, running beneath a mind-set from the final century.

placed really, that’s now not a smart or sustainable method to coping with the internet.  that is why the Finance Committee labored to make virtual change a priority in our worldwide exchange negotiations via the trade merchandising Authority, or TPA, statute that became signed into law ultimate year.

The virtual trade negotiating goal in the new TPA regulation directs the administration to do a variety of of factors on the way to shield the net as we comprehend it, which include ensuring that our virtual goods and offerings can be exported to other countries with out obligations, that our digital items and offerings are treated no much less favorably than their physical opposite numbers, and that the loose float of records throughout borders isn't inhibited.

some other similarly critical mission facing organizations and customers within the virtual marketplace is the upward thrust of counterfeits.  simply as the digital financial system has made it less difficult for organizations to locate and interact with customers, it has additionally enabled counterfeiters to do the identical.

Small groups are the backbone of our financial system and, for these businesses, the internet is a powerful device.

I don’t think I’m the only who remembers a time in which the primary steps to launching a a success commercial enterprise were finding the right spot to physically discover the commercial enterprise and advertising in the local newspaper.  genuinely, instances have modified, and, these days, small businesses begin via launching a internet site and developing a fb page.

sadly, the relative simplicity and efficiency of this system can once in a while be a double-edged sword.

We hear all the time from businesses that have installed a strong internet presence to grow their business handiest to discover that, as their merchandise have become greater famous, counterfeiters started to sell faux versions of their merchandise.  a number of those counterfeiters are so brazen that they thieve pix from legitimate web sites and use them to market it their faux merchandise on search and social media systems.  similarly as unnerving, the consumer frequently doesn’t realize that they are shopping a counterfeit suitable.

unfortunately, the threat of counterfeit items is only developing.

The agency for financial Co-Operation and improvement (OECD) currently launched a look at that suggests that counterfeit products accounted for up to 2.5 percentage of world trade, or $461 billion, in 2013.  that is a dramatic boom from a 2008 estimate that confirmed that faux merchandise accounted for much less than half that amount.

Counterfeits are a global problem, but the OECD estimates that the united states is the hardest hit, observed by using Italy and France.  Of the predicted $461 billion in counterfeit exchange in 2013, items with registered highbrow belongings rights inside the U.S. represented 20 percentage, or $92 billion, of the OECD estimate.

U.S. alternate records additionally suggests a growing fashion in counterfeits.  U.S. Customs and Border protection, together with Immigration and Customs Enforcement, tracks, on an annual foundation, the variety of seizures carried out at the border to prevent products that violate U.S. intellectual belongings rights from entering the united states.  over the last decade, those seizures have nearly doubled from approximately 15,000 in 2006 to over 28,000 in 2015.  The 2015 seizures constitute approximately $1.four billion of goods.

Congress has taken some of steps to cope with these demanding situations.  further to establishing a TPA negotiating goal on digital exchange, we addressed counterfeits in our Customs invoice, which became signed into regulation earlier this year.  This new law established a chief Innovation and highbrow property Negotiator in the workplace of the usa trade consultant, reinforced the “unique 301” document, required CBP to publish information regarding the seizure of illegal circumvention gadgets, and codified the national highbrow belongings Rights Coordination middle.

these are all crucial tendencies.  however, as we found out at our FTA Implementation listening to earlier this yr, we additionally should make certain that our trading partners completely put into effect their commitments in our trade agreements. All too often, we have visible the govt branch permit agreements to go into into force without first ensuring that our trading partners have completely met their duties. that is particularly proper when it comes to provisions relating to defensive intellectual property, mainly beneath the current administration.

Going forward, if the Obama administration wishes Congress’s support for exchange agreements like the Trans-Pacific Partnership, they should now not simplest cope with notable Congressional worries, but additionally reveal that they have accomplished a common information thru certain plans with our trading partners on how they intend to enforce these and different commitments.

as the digital economy continues to evolve, Congress have to be vigilant in finding new and higher solutions. that is one motive why we're maintaining this listening to these days, to hear firsthand what steps we can take to make sure a safe and cozy digital surroundings for the future.

we've got a few very achieved witnesses with us this afternoon. i'm very plenty looking forward to their memories and to what i hope could be a robust discussion of how we can more correctly make certain that our workers, consumers, and activity creators receive the full blessings of the virtual market whilst also stopping the growing chance of counterfeits going ahead.