WASHINGTON, D.C. – Today, Trade Subcommittee Chairman Adrian Smith (NE-03) delivered the following opening statement at a hearing on maintaining American innovation and technology leadership.
As prepared for delivery.
“Thank you, Ranking Member Sanchez, Subcommittee Members, and our witnesses for being here today. Today’s hearing is an important opportunity to discuss intellectual property and digital trade – two subjects that are key to the United States’ strength and global leadership in critical sectors.
“U.S. innovation is one of our nation’s greatest strengths – it is a core driver of America’s economic engine and key to U.S. national security. IP-intensive industries account for 41% of U.S. GDP and 63 million U.S. jobs – including 8.9 million in the U.S. technology sector. This success is in large part thanks to robust and fair domestic laws that don’t pick winners and losers but rather incentivize creativity and development.
“When we create an environment conducive to innovation, all sectors succeed. New agriculture crop varieties and inputs meet the need for affordable and nutrient-dense staples around the world. Pharmaceutical development delivers life-saving advancements. Small businesses have access to a suite of digital services to market their products at home and abroad. When trading partners unnecessarily target American innovation and technology, the trickle down effect is similarly felt throughout the economy.
“Many of our trading partners lack similar innovation-friendly rules and often impose measures aimed at undermining American companies in order to advantage their own firms. The absence of adequate and effective protection for American intellectual property rights holders in export markets also significantly hinders the ability of U.S. innovators to export and operate overseas, harming the economic interests of the United States. Similarly, discriminatory digital trade and tax measures seek to erode America’s competitive advantage.
“Despite frequent warnings from Members on both sides of the aisle, the Biden Administration continually enabled this bad behavior. Their misguided policies opened the door to mistreatment from trading partners. The Biden Administration’s support for policies like the TRIPS waiver for COVID-19 vaccines disincentivized investment in key strategic pharmaceutical capabilities in the United States, and ‘re-evaluation’ of the longstanding U.S. approach to digital trade policy undermined U.S. leadership and led to the proliferation of numerous troublesome policies including digital services taxes (DSTs).
“I’m glad the Trump Administration is working to right the ship. This past year, the Administration has successfully obtained significant commitments from trading partners related to intellectual property and digital trade, paving the way for continued U.S. leadership in emerging industries.
“However, there is more work to do. Numerous countries continue to maintain or introduce harmful DSTs that discriminate against U.S. companies, along with a myriad of other regulations that impose a significant burden on American digital service companies. We cannot accept foreign discrimination under the guise of regulation. As it relates to intellectual property, I welcome the commitments countries have made that strengthen IP protection for U.S. rights holders. Such commitments must also be paired with strong enforcement to ensure that American companies are treated fairly and rights are protected. We must continue to build upon these successes of the Trump Administration and must make sure that foreign governments know that unfair and discriminatory policies that harm U.S. innovators will not be tolerated in the United States any longer.”