New trade deal will help small biz
The United States-Mexico-Canada Agreement (USMCA) was signed by President Trump and his fellow leaders at the G20 in Argentina.
The accord modernizes the decades-old NAFTA and is chock full of provisions that will help American small businesses boost exports and safeguard their intellectual property (IP). Congress needs to approve USMCA as soon as possible.
Small businesses drive the U.S. economy. Thirty million small businesses employ more than 58 million American workers. They also account for roughly half of U.S. GDP.
Small businesses rely heavily on North American trade to stay afloat. Of the U.S. companies that export to Canada and Mexico, three in four have fewer than 50 employees, and four in five have fewer than 100.
Modernizing NAFTA to strengthen IP protections will provide a much-needed boost to the U.S. economy. Small firms invest heavily in research and development. They produce 16 times more patents per employee than larger businesses.
This innovation would grind to a halt without patents, copyrights, and other IP protections, which prevent rival firms from unfairly replicating and undermining an innovator’s creation. Entrepreneurs wouldn’t invest in innovative ideas — and neither would outside investors — if rivals could steal the fruits of such labor.
The USMCA bolsters IP protections in several ways.
Consider copyrights, which prevent competitors from stealing creative content like books, movies, and art. The USMCA would extend Canada’s copyright terms by 20 years, putting them on par with U.S. standards.
This change would give U.S. small business owners and their families more time to benefit financially from their creations.
The USMCA also furthers the capabilities of research companies that develop biologic medicines — drugs derived from living organisms. These firms are set to receive ten years of “regulatory data protection” for their biologics. During that time, no rival firm can use the innovators’ lab or clinical trial data to create a knockoff treatment.
Canada used to grant just eight years of data protection. Mexico offered a maximum of five years.
The new, stronger standard will spur additional research in the biopharmaceutical industry, which directly employs more than 800,000 Americans and indirectly supports 4 million other jobs.
Big drug companies depend on thousands of small vendors for help in producing lifesaving treatments. Small entrepreneurial firms also dominate the biopharmaceutical industry. Among pharmaceutical and medicine manufacturing firms, 57 percent have less than 20 workers, and 79 percent have less than 100 employees.
The USMCA would assist small firms in other ways, too. For instance, it establishes a committee to educate small businesses about ways to expand their exports and reach new markets.
The USMCA would greatly benefit American small businesses. Congress should waste no time in approving the deal.
Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.