Capitol Comments

House Extension of Lapsed Trade Measure Triggers Movement on Pending FTAs

By Jessica Franken, INDAu2008Director of Government Affairs | October 4, 2011

The U.S. House of Representatives Sept. 7 voted to approve an extension of an expired trade measure, thereby triggering a series of steps expected to culminate in long-pending U.S. free trade agreements with Korea, Colombia and Panama finally coming up for consideration on Capitol Hill.

The lapsed program, the Generalized Systems of Preferences (GSP), promotes developing world economies by providing U.S. duty-free access for up to 4800 products from 129 designated countries.The legislation, H.R. 2832, extends the GSP until August 2013 and allows importers to collect duty refunds retroactive to its 2010 expiration. Perhaps more importantly, House passage of the measure now creates a vehicle for the Senate to renew Trade Adjustment Assistance (TAA), an initiative for trade-displaced workers that the White House has said must be reauthorized before it will seek Congressional approval of the FTAs.

The GSP measure is now expected to go to the Senate, where TAA will be attached to it and voted upon. Once that happens, the White House is expected to forward the FTA implementing legislation to Capitol Hill, starting a clock for moving the agreements through Congress without amendment.Insiders predict this legislative tango will take place this month if all goes as planned (with the caveat that we're talking about Washington, where nothing seems to go as planned). Politicians on both sides of the aisle have called for movement on the Bush-era FTAs, which they say are critical to boosting U.S. exports and creating jobs.

Med Device Tax Could Threaten Jobs
A 2.3 excise tax on medical devices set to go into effect in 2013 could jeopardize as many as 43,000 American jobs, a recently released study concludes. The report, which was commissioned by the device manufacturers group AdvaMed, says the employment effects of the tax, which is expected to cost the industry nearly $3 billion annually, is likely to have a disproportionate impact on workers in several states such as California, Colorado, Indiana, Minnesota, Massachusetts and Pennsylvania.

The new fee, which was mandated by last year's federal healthcare reform, will roughly double the device industry's tax burden and raise its effective corporate tax rate to one of the highest for any industry in the world, the study finds. This increased burden will reduce the American industry's competitiveness and force many companies to move operations overseas, the report says.

INDA, whose members make numerous products classified as medical devices, has reached out to AdvaMed and other industry groups to assist in efforts to repeal the damaging tax before it goes into effect. Several bills overturning the device fee have been introduced in both chambers of Congress and enjoy bipartisan support, but currently have no clear timeline for advancing. However, proponents expect these measures to gain steam as Washington discussions on jobs creation and tax reform move forward.

President Obama Signs U.S. Patent System Overhaul
President Obama Sept. 16 signed the Leahy-Smith America Invents Act (H.R. 1249), instituting the most significant changes to the U.S. patent system in 60 years.The law, which has been under development on Capitol Hill for six years, aims to streamline the patent process, reduce costly legal disputes and give U.S. patent officials the resources needed to expedite patent application processing. The reform is being touted by both Democrats and Republicans as critical to efforts to grow jobs and enhance U.S. competitiveness.

Most notably, the measure switches the U.S. from a "first to invent" to a "first to file" system, meaning the patent is awarded to the first party to file for patent protection versus the current system in which the patent goes to the first party to file who has conceived and reduced the invention to practice. Critics argue the change will simply reward the winner of the race to the patent office, but proponents say it will bring the U.S. in line with the rest of the world, eliminating costly and time-consuming fights over who invented something first.

The law includes a number of other changes, among them, an expansion of the "prior user rights" infringement defense, currently limited to business method patents to first inventors of virtually all technologies who have already commercialized an invention that is patented by another party later on. To lessen the prevalence of costly litigation, the measure also provides a new post-grant review procedure that allows for challenges on any ground within nine months of an issued patent. It also provides for a new "prioritized examination" procedure, enabling those willing to plunk down $4800 ($2400 for small businesses) the chance to expedite the patent review process from the current three year average to within one year of the application filing date.

INDA Joins Industry Groups in Opposing "Anti-Jobs" Pro-Union Agenda
INDA is joining scores of industry groups and companies in fighting recent attempts by the Obama Administration to advance an "anti-jobs" pro-labor agenda through regulation after several attempts to do so via legislation failed.

At issue is a June 22 National Labor Relations Board (NLRB) proposal that would expedite the union organizing process by requiring pre-election hearings within seven days of notice, and post-election trials within 14 days of ballots being tallied. Meanwhile, a separate proposal issued that same day by the Department of Labor would require employers to disclose virtually all communications with workers about unions if a consultant or attorney has assisted the employer, making it difficult for businesses to obtain advice on labor issues, and potentially hindering groups like INDA's ability to provide members information about unions. In both cases, INDA joined the employer-backed Coalition for a Democratic Workplace (CDW) in filing formal objections to these proposals.

Although it's unclear which way the agencies will go, if two NLRB decisions released Aug. 26 are any indication, employers have cause for concern.In the Lamons Gasket Co. decision, the board's three Democrats overpowered the lone Republican and voted to require employees to wait six months before petitioning to overturn the results of a successful union organizing campaign (instead of the previous 45-day time frame). Meanwhile, in its Specialty Healthcare and Rehabilitation Center of Mobile decision, the Board again voted 3-1, this time to permit the formation of "micro-unions," allowing unions to organize a minority share of an employer's workforce.

The House issued a sharp rebuke to these and other White House pro-labor efforts, voting Sept. 15 to approve the Protecting Jobs from Government Interference Act (H.R. 2587), which significantly curtails the NLRB's authority by prohibiting it from ordering any employer to relocate, shut down or transfer employment under any circumstance. Although the bill is not expected to survive consideration in the Senate, it is the latest shot fired in a raging partisan clash over the NLRB's ruling against Boeing earlier this year.

"Today's bipartisan House vote clearly demonstrates that Congress believes the NLRB has overreached and needs to be stopped," says NAM President and CEO Jay Timmons. "The NLRB's actions are having a chilling impact on job creation and are causing a great deal of uncertainty for manufacturers throughout the country. Today's vote is just one step in the process of reining in this rogue agency. Manufacturers thank the members of the House who voted to pass this bill today. To protect jobs the Senate must take up this legislation as soon as possible."

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