China, intellectual property and the American job market

After inching down from its recessionary peak, the unemployment rate is still at a staggering 9.1 percent. The solution to replenishing the losses of jobs, an associate dean at Dartmouth’s Tuck School of Business believes, is to get China to help without any expense to American taxpayers.

The professor says the answer to putting at least 2 million people in America back to work may be in nudging China into standing up for intellectual property rights and curbing trademark and copyright infringement on American companies in China. The Dartmouth expert says a new report by the U.S. International Trade Commission shows just how much U.S. money is lost overseas.

The ITC interviewed more than 5,000 American companies abroad to find out how pervasive intellectual property theft has gone in China and how much it’s costing. The survey found that every size of U.S. multinational feels they’ve been intellectual compromised on foreign soil. The companies estimated a one-year total loss in royalties, licensing fees and sales between $48 billion and $90 billion.

Should China bring its intellectual property laws up to speed with those already in place in the U.S., the professor and the ITC report indicate that U.S. multinational companies in China could pump an extra $100 billion in revenue into U.S. companies abroad. This could produce a domino effect through suppliers, creating millions of much-needed U.S. jobs. China’s benefit would be securing the future of its own intellectual property.

The ITC report proposes that, even with no change to already tough trade regulations, China could serve to help resurrect the job market in the U.S. while gaining equal intellectual property protection under its own, new laws.

Source: The Wall Street Journal, “China, Patents, and U.S. Jobs,” Matthew J. Slaughter, 6 June 2011