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NAM Helps Strike Forced IP Transfer from WHO Draft

In a significant change that protects manufacturers’ intellectual property rights, an updated draft of the World Health Organization’s pandemic agreement no longer includes IP language that would have pressured or compelled manufacturers to turn their innovations over to foreign countries, including competitors such as China, POLITICO Pro (subscription) reports.

  • Convincing organizations such as the WHO to reject forced IP transfers has been a top priority for the NAM, and this week’s announcement represents significant progress for manufacturers.

What’s going on: “The latest text has scrapped a clause stating countries will ‘consider supporting’ time-bound suspensions of intellectual property rights during pandemics. Instead, each country will consider supporting ‘appropriate measures’ to scale up the manufacture of products that could help stymie a future pandemic.”

  • The draft is set to be put to WHO members next month for a vote at the 77th World Health Assembly in Geneva, Switzerland.
  • Subject to applicable laws, under the draft agreement countries will also be required to “support … capacity-building for the transfer of technology and knowhow for pandemic-related health products on mutually agreed terms.”
  • The text indicates that the pathogen access and benefit sharing system—which would require nations to share pathogen information “with the WHO in exchange for access to the resulting health products developed to fight the new threat”—is still under negotiation. Thus far, countries have been unable to agree on the terms of that exchange.

Why it’s important: IP waivers would significantly harm manufacturers and their ability to compete globally.

  • The NAM led the charge with regard to the World Trade Organization earlier this year, when it warned policymakers in the U.S. and abroad about the problems inherent in expanding the WTO’s 2022 TRIPS waiver on IP rights to include COVID-19 therapeutics and diagnostics.
  • As a result of that advocacy, the waiver was ultimately kept out of the WTO’s final Ministerial Declaration last month.
  • In addition, in January, the NAM responded to the U.S. Department of Health and Human Services’ request for comments regarding the WHO’s pandemic preparedness agreement. The NAM urged that any IP waiver be removed from the WHO text.

The funding issue: Another challenge the WHO text puts off is the financing of all the initiatives it lays out.

  • While it mentions establishing a “coordinating financial mechanism,” it does not detail how the mechanism would work.
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How Will AI-Run Factories Be Different?

A common theme in science fiction is the fully automated, robotized factory that manufactures nothing but robots. We’re not there yet, but the fully automated manufacturing plant has already begun making everyday products, including computer parts, electric shavers and CNC machines.

The promise of AI: Now generative AI is promising to take manufacturing automation manufacturing to a new level.

  • At the 2023 Hannover Messe trade fair in Hanover, Germany, Siemens and Microsoft showcased an offering now in use in factories worldwide: a system that uses ChatGPT to generate code for industrial computers known as programmable logic controllers. (For a deeper dive into what this means for manufacturing, read the full version of this article by Tim Hornyak in the Innovation Research Interchange’s Research-Technology Management magazine.)

Why it’s important: The innovation allows users to ask ChatGPT to generate code for specific tasks (i.e., a program to operate the stamping of a part).

  • In addition to saving time and reducing the likelihood of errors, it is capable of understanding commands given in natural language, a characteristic that vastly increases the number of potential users.

Efficient designs: Creating more efficient designs is another early use case for generative AI.

  • General Motors has used the technology to evaluate better designs for some of the roughly 30,000 parts that go into the average car. For example, a standard seat bracket—an important safety component that binds seatbelt fasteners to seats as well as seats to the floor of the car—consists of eight separate pieces welded together.
  • Generative-design software used by GM analyzed the requirements and suggested more than 150 alternative designs, far more than the two or three options a designer can typically offer. GM engineers chose one: a single piece of stainless steel that is 40% lighter and 20% stronger than the conventional part.

Read the full story here.

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Making the Business Case for Sustainability

Ecolab’s mission hasn’t changed much in more than 100 years. It’s still “bringing science to our customers in a way that drives performance, productivity and less water and energy use.”

  • That’s according to Ecolab Chief Sustainability Officer Emilio Tenuta, who says being climate-minded is not only “the right thing to do,” but also at the core of the St. Paul, Minnesota–headquartered water, hygiene and infection-prevention company’s operating model.

A dual purpose: “We make the business case for why sustainability and [profitability] can go hand-in-hand when it comes to driving solutions,” Tenuta told us recently. “It’s why 48,000 Ecolab associates wake up every morning with the feeling, ‘We’re making a real difference in the world.’”

  • Ecolab—which recently announced that 100% of its European operations are now powered by renewable energy sources—helps millions of customers worldwide reduce their environmental impact while promoting food safety, maintaining clean environments and optimizing resource use.
  • “At Ecolab, we talk about eROI—Exponential Return on Investment,” Tenuta explained. “It’s about understanding that we have the ability to deliver on a business outcome—profitability—while also delivering an environmental impact.”

Don’t forget water: Often neglected in sustainability conversations, Tenuta said, is water. For a full picture of the effect of conservation and innovation efforts on climate, water needs to be factored in.

  • “Sometimes we forget the role that water plays in addressing climate change,” he continued. Depending on the type of manufacturing, up to 75% of energy is driven by the water systems. You have to heat it, treat it, pump it, cool it. …Water doesn’t necessarily get the same headlines as climate, but if you follow the water, that’s going to have a lasting impact” on the environment, while also saving you money.

A holistic approach: In addition to being recognized regularly for its environmental stewardship, Ecolab is routinely named to most-ethical-company lists. That’s no accident; to the company, caring for the planet goes hand-in-hand with caring for people, Tenuta told the NAM.

Read the full story here.

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Home Sales Decline

Sales of previously owned homes in the U.S. declined in March, CNN reports.

Whats going on: “Existing home sales, which make up the majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the National Association of Realtors reported Thursday.”

  • The median price for a previously owned home last month was $393,500, an increase of 4.8% from March 2023, which was the highest on record.
  • The only region of the country to see an increase in existing home sales last month was the Northeast.

Why its happening: Higher list prices combined with still-elevated mortgage rates continue to make home purchasing difficult for Americans.

What it means: “Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,” said NAR Chief Economist Lawrence Yun.

  • However, “[t]here are nearly six million more jobs now compared to pre-Covid highs, which suggests more aspiring homebuyers exist in the market.”
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Weight-Loss Drug Shows Potential to Treat Sleep Apnea

A weight-loss drug has shown potential in treating patients with sleep apnea, CNBC reports.

What’s going on: Pharmaceutical manufacturer Eli Lilly’s Zepbound, which is used to treat obesity and diabetes, “was more effective than a placebo at reducing the severity of obstructive sleep apnea, or OSA, in patients with obesity after a year, according to preliminary data” from two late-stage clinical trials.

  • In October 2022, the Food and Drug Administration gave the medication a “fast track” designation for patients with moderate to severe OSA and obesity.

Why it’s important: “The results are an early sign of hope for the estimated 80 million patients in the U.S. suffering from OSA, which refers to interrupted breathing during sleep due to narrowed or blocked airways. Around 20 million of those people have moderate-to-severe forms of the disease, but 85% of OSA cases go undiagnosed, according to Eli Lilly.”

  • Complications of the condition include excessive fatigue, high blood pressure, stroke, heart failure and type 2 diabetes—and treatment options are limited.

Meeting an “unmet need”: “Addressing this unmet need head-on is critical, and while there are pharmaceutical treatments for the excessive sleepiness associated with OSA, [Zepbound] has the potential to be the first pharmaceutical treatment for the underlying disease,” Eli Lilly Senior Vice President of Product Development Jeff Emmick said Wednesday.

  • The sleep apnea trial data means that Medicare may be able to cover the drug, as under new FDA guidance, Medicare can pay for weight-loss drugs if they are used for more than weight loss alone.
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FTC to Unveil, Vote on Noncompete Ban Next Week

The Federal Trade Commission will vote next week on the final version of a rule that would prohibit noncompete agreements between employers and their employees, Law360 (subscription) reports.

What’s going on: “According to the FTC’s announcement, the agency’s five commissioners will vote April 23 on whether to ‘authorize public disclosure of the proposed final rule,’ first unveiled in draft form in January 2023. Assuming a vote in the affirmative, staffers will give a presentation on the rule, followed by a second vote to issue the rule in its final form.”

  • The agency did not indicate which, if any, changes it has made to the previous version of the rule.
  • The FTC received more than 26,000 comments on the rule during the 90-day public comment period.

Why it’s important: A noncompete ban would cause disruption to the majority of manufacturing operations in the U.S., a 2023 NAM survey found.

  • Some 70% of manufacturers in the U.S. use noncompete agreements, and they do so to safeguard intellectual property, sales information, industrial processes and business strategies.
  • Approximately 66% of survey respondents—representing manufacturers of all sizes—said a ban would interfere with their operations.
  • Around 50% of those polled said a ban would have a negative effect on their investment in employee training programs.

The NAM says: “The FTC’s proposed rule severely threatens manufacturers’ ability to protect intellectual property and responsibly invest in their employees,” said NAM Director of Transportation, Infrastructure and Labor Policy Max Hyman.

  • “The NAM remains engaged on this critical issue for our members and will weigh our options in response to the commission’s vote next week.”
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Granholm: LNG Export Permit Freeze “a Study”

Energy Secretary Jennifer Granholm called the Biden administration’s recent moratorium on liquefied natural gas export permits “a pause for a study” at a Senate Energy and Natural Resources Committee hearing Tuesday, according to POLITICO Pro (subscription).

Committee Chairman Sen. Joe Manchin (D-WV) questioned several recent energy-related moves by the Biden administration.

What’s going on: “It is a pause for a study. You don’t need to hype it out beyond what it is,” Granholm told the committee on Tuesday. “It is a pause to get data.”

  • The administration has received bipartisan criticism for the freeze of LNG export permits since announcing the move in January. NAM President and CEO Jay Timmons said the pause “undercut[s] President Biden’s own stated goals” and “weakens our country while giving Russia an upper hand.”

An examination of prices: Granholm told the committee the pause “was needed to examine prices and market demand since the last time a study was conducted.”

  • She said the study will take into account foreign nations’ emissions “that may be linked to the absence of U.S. natural gas shipments.”

45V guidance: Sen. Manchin asked Granholm about proposed guidance on the Inflation Reduction Act’s first tax credit, known as the 45V. In a news release from the committee, Sen. Manchin said the proposed guidance, “if implemented … would jeopardize the viability of the industry before it even has a chance to get off the ground.”

  • Sen. Manchin mentioned a recent letter to the administration from all seven “hydrogen hubs”—locations designated late last year by the administration to scale up the nation’s clean hydrogen production—saying the centers would “no longer be economically viable” without revision to the 45V proposed guidance.
  • “Do you think we should heed the warning of [the Department of Energy]’s own seven hubs, and do you have any insight into what might be changed?” he asked.
  • Granholm responded that the administration has “gotten over 30,000 responses, and they are working through those responses.”
  • She added, according to POLITICO Pro, “The bottom line is clearly we want the hubs to succeed.”

Our take: “No matter what you call it, the administration’s pause on LNG export permits runs counter to the wishes of the American people and the interests of the United States and our allies,” said NAM Director of Energy and Resources Policy Michael Davin.

  • “According to a recent NAM survey, 87% of Americans believe the U.S. should continue to export natural gas. The administration should listen.”
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Manufacturers Face Significant Cost Increases if Tax Bill Fails

U.S. manufacturers and other businesses are sharing the details of the potential economic fallout if Congress fails to pass NAM-supported, pro-growth tax legislation, The Wall Street Journal (subscription) reports.

What’s going on: “[L]arge public companies say the law as it stands is costing them hundreds of millions or billions of dollars, while some owners of small and medium-sized businesses say they wonder if their firms will survive.”

  • The Tax Cuts and Jobs Act of 2017 allowed manufacturers across the U.S. to expand their businesses, hire and purchase new, much-needed equipment. But in 2022 and 2023, three critical provisions from the law—immediate expensing for domestic research and development, enhanced interest deductibility and full expensing—expired, hurting businesses of all sizes.
  • In January, the House passed the Tax Relief for American Families and Workers Act, which would reinstate all three measures. The NAM has been pushing the Senate to pass the legislation, too.

Why it’s important: Lift truck and solutions manufacturer Hyster-Yale Materials Handling Inc. “spends around $100 million a year on R&D, and the law change that went into effect in 2022 increased its tax bill by about $25 million a year.”

  • “So that’s $25 million less that I have to invest back into my business, whether it’s R&D, whether it’s plants and equipment [or] hiring new people,” Chief Financial Officer Scott Minder told the Journal.
  • Other companies say the lack of action on the House-cleared tax bill “may prompt reduced investment in other areas and increase the rate of return required for new projects.”

Weighing a move: Hyster-Yale—which “spends around 80% of its research budget in the U.S.”—would like to keep its operations in the U.S., Minder continued, but it can’t guarantee that it will continue to do so without the return of the expired TCJA tax provisions.

  • Other manufacturers are reporting a similar predicament.

​​​​​​​The last word: “The stakes are clear: Congress must pass the Tax Relief for American Families and Workers Act or risk significant economic damage across the manufacturing sector,” said NAM Vice President of Domestic Policy Charles Crain.

  • “Manufacturers are depending on Congress to restore these pro-growth tax policies, which support the investments in R&D and capital equipment that are so critical for manufacturing growth.”
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Biden Calls for Tax Hikes in Hometown Speech

President Biden called for tax increases during a visit to his hometown of Scranton, Pennsylvania, on Tuesday, the Associated Press reports.

What’s going on: “Biden used Scranton, a city of roughly 75,000 people, as the backdrop to argue that getting rich in America is fine, but should come with heftier tax bills.”

What he said: President Biden—who has proposed a 25% minimum “billionaires tax”—used the bulk of his speech to call for tax hikes.

  • “The president said decades of Republicans’ policies that cut taxes for the wealthy with the idea of stimulating the economy ‘failed America.’”
  • President Biden has said raising taxes on the wealthiest Americans is “how we invest in the country.”

However … The Tax Cuts and Jobs Act of 2017 was “rocket fuel” for manufacturing, NAM President and CEO Jay Timmons said during his 2024 State of Manufacturing Address in February.

  • In fact, as we discuss in another story in this edition of Input, the expiration of three pro-growth tax provisions from that law has harmed manufacturers throughout the U.S. And more tax hikes are scheduled to take effect at the end of 2025.
  • It is critical to a healthy manufacturing industry and U.S. economy in general that expired, pro-growth provisions be reinstated—and that Congress act to forestall further tax increases next year.

The final say: “[T]he path is clear,” Timmons said in his February address. “No new taxes on manufacturers.”

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NAM to White House: Stand Up for U.S. Businesses, Workers

The Office of the U.S. Trade Representative must revise its digital trade policy now to reassert American leadership, the NAM and more than 40 industry partners told the Biden administration ahead of U.S. Trade Representative Katherine Tai’s testimony this morning before the House Committee on Ways and Means.

What’s going on: In the past few years, the USTR has “retreat[ed] from digital trade protections,” the groups told National Security Adviser Jake Sullivan and National Economic Council Director Lael Brainard. Problematic actions/items by the USTR include:

  • The October 2023 withdrawal of longstanding U.S. World Trade Organization positions that support the protection of cross-border data flows, stop data localization requirements, end discrimination against U.S. firms and their goods and services and protect sensitive data from bad actors;
  • Abandonment of core U.S. policy priorities in the Indo-Pacific Economic Framework for Prosperity; and
  • The omission in the USTR’s 2024 National Trade Estimate Report on Foreign Trade Barriers of numerous digital trade barriers, despite the statutory obligation under the Trade Act of 1974 to detail such barriers.

Why it’s important: These moves raise “deep economic and national security concerns,” the groups continued. They are in direct opposition to the interest of U.S. companies and their employees, and they give greater power to foreign nations, including China, “to write the rules that will govern the global digital economy for years to come.”

What must be done: The USTR must revise its stance on digital trade to “stand up for U.S. businesses and workers who face damaging digital trade barriers in foreign countries.”

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