San Diego’s Invention Contest Showcases Innovative Products and Technology

August 29th, 2015

The San Diego Inventor’s Forum held its 9th annual invention contest on Saturday, August 15th at Coleman College’s Kearny Mesa campus to see which product would come out on top as the best technology or consumer product invention of 2015. San Diego is no stranger to innovation. In 2013, the Organization for Economic Co-Operation and Development (OECD) ranked San Diego as the second most innovative city in the world and the most innovative in America. This contest kept the innovation momentum rolling.

Adrian Pelkus, President of the San Diego Inventors Forum, said “Over two dozen patented or pending inventors entered the contest this year. Further proof how inventive San Diego is! All the inventors that exhibited were super creative and ready for market. Thanks to all that entered and congratulations to the winners. I wish all of you the best on your ventures, and we look forward to seeing your product on the store shelves soon!” Ten finalists were selected to compete for best consumer product and five finalists were selected for the technology category.

The event was lively this year after the second inventor, Shane Cox, demonstrated that questions posed to the inventors by members of the 150-person audience could be broadcast over the PA system as the QBall was tossed from person to person. Cash prizes were awarded to the first and second place winners in each category. There was a tie for second place in the consumer product category. The winners were:

First Place

  • Consumer Product: REMEDI™ – a new antibiotic that Dissolves Airborne Diseases
  • Technology: Blue Marble, Inc. – Individually app-controlled solar sprinkler heads, drip valves, and sensors (don’t need batteries)

Second Place

  • Consumer Product:
    • QBall: a throw-able ball containing a wireless microphone designed to encourage audience participation by voice amplification
    • IR SkullCap – a high performance, smart-foam insert for hats or beanies to reduce impact to the head
  • Technology: Intruder IDTM Camera System – a solar-powered, easily-installed, self-contained wireless system including a motion sensor, noise maker, and camera to deter and catch intruders bent on burglary, property damage, or graffiti “tagging”

The Solamatic ® Solar Technology in Window Treatments came in as a close third in the Technology category. The Solamatic ® automatically opens and closes blinds with sensors that detect daylight and weather. Inventor Marin Caspa, President and CEO of VSI Technologies Inc., demonstrated how the technology works by darkening the auditorium while simulating the rising sun with a spotlight. As the “sun” rose and set, the device opened and closed window blinds in sync with the cycles of day and night. For further information, contact Martin Caspar at cas...@solamatic.com.

David Horrigan of Horrigan Labs is celebrating his fourth win at San Diego Inventors Forum annual contest for his REMEDI™. Mr. Horrigan discovered this formula when he was developing biocides for nail fungus as part of his CoolToes™ treatment for onychomycosis. Another formula made the cut for that treatment, but this product was very effective for other things. “The patent pending formula is made from two natural oils extracted from food. The vapors from this formula dissolve the wall of fungus, mold, bacteria and viruses. Because it is the vapors that do the work, the antibiotic can attack pathogens in places where other antibiotics can’t go like the sinus cavities and lungs. A client was looking for a fungicide suitable for removing mold on fruit,” stated Mr. Horrigan. “I tried it on strawberries and grapes, and it proved effective at controlling those molds. I then tried it on numerous other pathogens, and surprise, it controls the microbes that cause eight of the 12 diseases on the president’s list of Fast Track diseases, or diseases that are out of control or cause great financial hardship to the country ? diseases like howlie rot, ringworm, tuberculosis, influenza, and antibiotic resistant or flesh-eating diseases.”

REMEDI™ will be going to market as a consumer home fungicide available through direct response and through dealers. Horrigan Labs is seeking licensors for distribution for the consumer medical applications under the name Neomycosin™. These products will be manufactured in the USA. For further information, contact Horrigan Labs at dave...@cox.net.

The big winner for 2015’s technology invention was Blue Marble, Inc., with its intelligent irrigation system. Founder of Blue Marble, Paul F. Sabadin, showed off the system of app and weather-connected individual sprinkler heads, drip valves, and soil sensors. California’s drought accentuates the value of this impressive technology, which works directly with existing irrigation systems to enable precise control, turning on only individual heads and valves that indicate a need while leaving other heads and valves off, conserving water, saving money, and lessening irrigation’s environmental impact. The devices are solar-powered and were touted as being 100% battery-free and therefore expected to last for decades on agricultural farms or in residential gardens. “We envision a day where Blue Marble will deliver the perfect drink to every plant on every farm, every apple in every orchard, and every blade of grass on every lawn,” said Sabadin. The company has launched a crowdfunding campaign for the technology at Kickstarter.com.

Mr. Sabadin had referred to his product as an “Internet of Things” startup and when I asked why, he said, the “Internet of Things” is perceived by many to be the next social/industrial movement with respect to the integration of the Internet into the fabric of global society. As differentiated from the social Internet, or “Internet of People” where peoples’ data, communications, affairs, and accounts have been subsumed into the global Internet, the “Internet of Things” does the same for physical devices, essentially making devices first class citizens of this global network, having implicit identity, voice, and interacting with other physical “things,” in addition to being controlled by and exchanging data with the Internet of people. For me, being an “Internet of Things” developer means that my systems and devices leverage connections to the Internet to optimize benefit for the end users of our products … to use the internet to manage the physical world to optimal benefit. For example, I use both wireless and wired connections to retrieve Internet weather to optimize irrigation and water savings while, at the same time, I enable system users (people, of course) to monitor and control their systems over the Internet. It is an extremely exciting field and capability that I have imagined and wanted to work in all my life. Technologies, society, and economies have reached a nexus where implementations of this interconnected world are being quickly realized. Blue Marble is smack-dab in the middle of this movement.”

He stated, “Winning the SDIF contest is a great honor. For tech startups it is a great challenge to garner visibility in a crowded world and this honor both validates and adds welcome momentum to our work. While I sat in the audience watching the other contestants demonstrating their creations, I thought, “Wow, that device is clever. I could use one of those.” When I was announced as the winner, I was both surprised and flattered. And then I thought, “Wow, this audience and the other creative inventors were thinking the same thing, ‘Wow! Blue Marble! I could really use one of those!’ For a product developer and inventor there really is no better feeling!”
Second place winner in the consumer product category, Shane Cox, founder of PEEQ and inventor of the Qball, said “We were so excited to participate in this competition. We are even more excited that we won second place in the consumer product category!” The Qball, is a throw-able wireless microphone designed to encourage audience participation. Originally designed for the classroom as a fun way to get students to engage and interact, we quickly realized the need for this type of system in everything from Q&A at events, to Skype calls in the boardroom, and even Karaoke. At only $150 everyone can be a part of it. Keep an eye out for our upcoming Kickstarter campaign. You know you want one!” For further information, contact Mr. Cox at sha...@peeq.us.

The other second place winner George Flint, founder of Impact Reduction Technologies and inventor of the IR SkullCap, said “We developed the technology to reduce impact for people across all walks of life. Using high performance, smart foam technology, we are developing products that help reduce impact to the head and body when added to apparel. The first retail ready product is the IR SkullCap, which can be inserted in any type of hat or beanie. Initial testing has shown that it reduces impact to the head by 60%. “For further information, contact Mr. Flint at i...@irapparel.com

Second place winner in the technology category, John Baranek, inventor of the Intruder Id, said “Winning second place was a big boast to our team efforts to develop an easy to install, affordable intruder system using the latest advances in solar power and wireless technology. We’ve done proof of concept, but now need to make a working prototype system to do a beta test in conjunction with a local law enforcement agency. In these days of budget cuts for law enforcement, it will be a great aid for law enforcement to have a picture of the intruder to make it easier to catch repeat offenders. We want to make the system so easy to install and affordable that a “grandmother” can do it herself.” For further information, contact John Baranek at jwba...@verizon.net.

Other consumer product contestants were:

Rodolpho Brasolin for his collapsible, portable rack for all types of boards, such as surfboards, snow boards, kite boards. It is easily attached or removed from a wall when changing residences. A standing rack not requiring attachment to a wall is in development for athletes who travel.

Joe Buttici for his Pand-A-Choo stuffed doll with a movable right arm and sound to train children to cough or sneeze into their elbow.

Michael Kadie for his Pocket Rocket – a dual USB port that can charge two devices at the same time, featuring a car adapter, Lithium battery, and LED flashlight.

Dean McBain for his wall outlet and light switch gaskets to help prevent the following: Bed bug infestation, Toddler electrocution & choking, saves on heating and cooling costs, makes the wall outlets vanish, helps prevents home and office fires, prevent exposure of toxic gas, cigarette smoke exposure and toxic mold exposure through the wall outlet.

Houman Nikmanesh for his Bixpy Aqua Booster – a portable water jet with modular capabilities to act as a hand-held diver propulsion device, a paddleboard or kayak motor, and even a water pump with available attachment.

Anna Vasquez for her patented spotlight built into the front of a portable iron.

The other technology category contestants were:

Michael Kadie for his Simple Solutions Inclusive Lithium-ion master battery management system with a wide variety of potential applications for the safety and longevity of battery packs.

Dean McBain for his patented Alive Biometric Authentication Identification Security System Solutions, which combines one or more biometric signature sensing identification sensor(s) to authenticate the operator, coupled with physiological sensing sensors to verify the individual is “Alive”. The system then analyzes their physiological condition. If the individual’s condition is within their set parameters, then operation/access is granted through the device or system to the individual.

This was the sixth invention contest that I have attended, and the products and technology presented by the contestants were the most technically developed and market-ready of any previous contest. The availability of Kickstarter and other crowdfunding mechanisms is providing the opportunity for inventors to get their products into the marketplace faster than ever. It was exciting to see the progress of so many of our San Diego Inventors Forum members. Our meetings are held at the conference facilities of AMN Healthcare in the Carmel Valley area of San Diego the second Thursday of every month at 6:30 PM. Our meetings cover topics such as harnessing creativity, patents, trademarks & copyrights, licensing, how to select the right processes and sources for manufacturing (which I give), video and internet marketing for inventors, finding funding, and planning and giving presentations. Meeting presentations are recorded and can be viewed on YouTube.

New Textile Dyes and Fiber Could Generate Paradigm Shift

August 11th, 2015

It is rare to encounter a technology that is so disruptive that it has the potential to generate a paradigm shift, and I had that opportunity last month when I interviewed Suzanne DeVall, founder and president of PBO, Inc. Her patented technology for utilizing the bi-product from tobacco plants to create a new textile fiber and natural dyes could generate a paradigm shift in the textile and leather industries.

I first met Ms. DeVall over four years ago when I was a managing member of a small business incubator for startup companies in the “clean technology” field. She was too early stage for our program, as she was going through a lengthy R&D stage, but I kept in touch with her to keep informed of her progress because I thought her technology had great promise.

In my recent interview at her office in Palm Springs, I asked how and when she got the idea of utilizing tobacco plants. She said, “I’ve been involved with the textile industry for over 30 years and have been a champion for organic materials. From 2007 to 2009, I was part of a small team who traveled to growing areas in Europe and the Middle East to set controls for certified organic textiles. In Turkey and Syria, I saw organic tobacco fields near cotton fields. Tons of plant material was going to waste since they only harvested the leaves for tobacco products, and I thought it would be interesting to see if a textile fabric and natural dye could be produced out of the tobacco plant bi-product. I began working with scientists in the Carolina Research Triangle along with key scientists in the tobacco agricultural and harvesting industry to verify that there was a large amount of raw material resources to support a large scale industrial project.”

I told her that I had written about the devastation of the southern textile industry in my book due to mills closing after transferring textile manufacturing to China, India, and other Asian countries. The textile industry lost 57% of it jobs from 2000 – 2010, and North Carolina had a large number of textile companies, so was the state most impacted by job losses in that industry. It was no wonder that North Carolina scientists were interested in a new textile fabric and dyes made from one of the state’s major crops.

Ms. DeVall continued, “With the assistance of leading scientists, we began converting the tobacco plant bi-product into a viable textile dye. After thousands of trials, our work led to the AvaniTM Color System to be sold under our wholly owned subsidiary, Dimora Colours, Inc., and I was issued a patent on April 8, 2014. We convert our extracted liquid base to a one-step and two-step powder process that is water-soluble. Our research also resulted in a “spinable” fiber that could be woven into fabric, but you can’t patent a fiber any more than you can patent fabrics made out of cotton, silk, flax, hemp, or wool.”

I asked why organic dyes are important, and she said, “The apparel industry is a seven trillion dollar a year industry that uses an astounding 8,000 synthetic chemicals, so it has a big pollution problem. The World Bank estimates that 17 – 20 percent of industrial water pollution comes from textile coloration and treatment. They have identified 72 toxic chemicals in our water solely from textile dyeing, 30 of which are permanent. This is a serious environmental issue for the industry. The U. S. EPA and other national and international agencies have placed increasingly strict regulations on the manufacture and use of synthetic colorants. The pigment and dye industry has had to develop the technology necessary to analyze and remediate pollutants in wastewater.”

She added, “Consumers have the mistaken illusion that synthetic fibers and dyes in clothing are safe. Your skin is the largest organ of elimination and absorption—what goes on the skin goes in the body. When toxins are absorbed through your skin, they are taken-up by the lymphatic system, then into the blood stream and eventually the liver to remove the toxins from your body. Your skin also keeps you healthy by actually eliminating about one pound of toxins daily.”

Our process doesn’t need the pre-treatment, washing, soaping and adding of enzymes, so it only takes three hours compared to the 8 to 10 hours of the traditional dyeing process. With our organic materials, we do not require harmful chemicals for processing the fibers and dyes. Our one-step and two-step powder process is a key development for saving energy, water, time labor and shipping costs. Our dyeing process saves about 60% of labor, energy, and water.”

 

I asked how she came up with that figure. She said, “We have been in clinical trials with major dye houses in the United States, Japan and Europe over the past 18 months with great success. We ran dyeing trials using our dyes at three companies, and these companies told her that it saved them about 60% of labor, energy, and water. They don’t have to heat water for so many different batches to do the pre-treatment, dyeing cycle, soaping, washing, and enzyme treatment.

She added that they use a water filtration system prior to delivering the colorant to the fibers in the final stages. “The water required for our closed loop system does not have to be of a high quality as our process purifies the water. The remaining water is then reused for the next batch. Our water system utilizes the content of the discharge and neutralizes it to a PH of 7.0; which is alkaline not acidic. As this discharge is neutralized during our process, the water is not only safe, it is also drinkable. This is a very attractive and cost-effective major benefit to third world countries where water is a scarce resource.”

 

Ms. DeVall then showed me many different samples of fabric, household textiles, and leather that had been dyed using her proprietary dyeing process. She showed me samples of cotton, hemp, silk, cashmere, and her tobacco fiber in addition to combinations of all of these fibers. The colors were so rich and vibrant that I wanted something made out of every different fabric. The colors ranged from a soft butter yellow to a rich dark purple. The leather was so soft that I thought it was deerskin, but she said it was just normal cowhide. The natural properties of her tobacco plant based dyes have a softening effect on leather that reduces the amount of tanning required.

I next inquired about the industries that could benefit from the AvaniTM Color System. Ms. DeVall responded, “In addition to the apparel industry, our dyes could obviously be used by companies producing household linens and textiles. But there are several other industries that could benefit from using our dyes, such as the leather goods industry, furniture manufacturers for fabric and leather upholstery, paper and packaging, and cosmetics. Our dye powders could also be added to PET material that comes in a powder to make colored bottles and containers without any added chemicals.” This made me think of the company I visited on my plant tour in Toledo, Ohio, Plastic Technologies, Inc., because they make clear and colored bottles and containers out of PET material.

This led me to ask how they plan to market their products. Ms. DeVall replied, “We plan to obtain licensing agreements with companies in different industries and regions of the world. We have discussed a license agreement with several dye manufacturers to process all our major orders. We would provide the technology and they would provide the processing facility and produce the dyes on a royalty arrangement. We have secured our first license agreement with a company in Japan to sell in Japan, Korea, and Taiwan.”

On my drive back home to San Diego, I felt as if I had been given a rare gift of an encounter with a visionary whose knowledge, experience, and tenacity had given birth to a new technology that could indeed generate a paradigm shift in more than one industry and make our global environment better in so many ways. I look forward to writing a future article about PBO’s success.

 

Northwest Ohio’s Advantages as a Manufacturing Location

July 30th, 2015

I was recently provided the opportunity to tour manufacturing plants in the Toledo, Ohio region by the Regional Growth Partnership (RGP), a privately held economic development corporation. Coming from drought-stricken San Diego where everything is brown to the lush green of Toledo was like being in paradise. I was even more impressed by the diversity and use of advanced technology, automation, and robots at the companies we visited. These were no “rust belt” companies.

John Gibney, V. P., Communications and Marketing, of RGP, was our tour host for the five plant visits we did over a two-day period. There were three of us journalists on the tour, Jill Jusko from Industry Week, Jenny McDonald from Manufacturing News, and myself as a freelance journalist. Also along were photographer Ana Duee from JobsOhio and Hannah Dixon of Development Counsellors International, RGP’s Public Relations firm that selected us for the tour.

As a 100 percent, privately funded economic development organization, the Regional Growth Partnership can operate beyond political boundaries. Investors include major corporations in the region, banks, utilities, universities and service providers such as law, finance, and insurance firms. The RGP offers a full range of traditional business development services, working in collaboration with its partners across the region to expedite and simplify the site selection process.

The RGP vision is that “Northwest Ohio and the adjoining Michigan region will be a premier global location for business and a leader in knowledge-based economic growth.” Their mission to achieve this vision is that “We will be the primary, private sector contributor to a collaborative regional economic development enterprise driving growth in jobs, capital investment, and wealth to Northwest Ohio and Southeast Michigan.”

The RGP serves as Northwest Ohio’s network partner for JobsOhio, “a private, nonprofit corporation designed to drive job creation and new capital investment in Ohio through business attraction, retention and expansion efforts.” The RGP is one of the six regional economic development partners of JobsOhio, known collectively as the JobsOhio Network. The Network “provides the necessary connectivity to achieve a One Firm, One State approach to selling Ohio.”

I asked John if the region had lost any major companies or divisions of during the depth of the recession, and he responded, “No, we did not lose any corporations. We had cutbacks and layoffs during the depth of the recession, but no actual company relocations.” He added, “We had a peak unemployment rate of 13.8% in June 2009 for the Toledo Metropolitan Area, but it dropped down to 4.8% by May 2015.

I also asked John what has been their biggest success story of recruiting a company to locate in their region, and he replied, “Brazilian firm Valfilm North America purchased the former Dow Chemical Company plant in Findlay, saving the 55 employees left over from Dow. The company expects to add an additional 80 jobs with capital investment in excess of $13 million. Findlay beat out sites in South Carolina and Texas in a competitive search process.”

In data provided by RGP, I noted that out of a total workforce of 635,057 in the 17-county Northwest Ohio region, there are 172,805employed in Manufacturing. I calculated that nearly 25% (24.8) of the workforce have associate, bachelor, or graduate degrees, and 63.7% are between the ages of 25-54, so it is a younger workforce that most regions.

As a director on the board of the San Diego Inventors Forum, I was most interested in the fact that “the RGP created Rocket Ventures, a business assistance and pre-seed venture capital organization that operates in an 18-county area of Northwest Ohio. Rocket Ventures, LLC’s mission is to prepare technology-based start-up companies for funding and sustainability by providing intensive business assistance, enhanced management services, and pre-seed investments. Its vision is to create high-tech, high-wage jobs and to generate wealth in Northwest Ohio. Eligible clients of the organization possess significant intellectual property for revolutionary technologies.” I know how important it is for startup ventures to be able to get the investors they need to go complete their product development process and get their product successfully launched in the marketplace.

The Regional Growth Partnership’s business development efforts are focused on six primary cluster industries:

  • Advanced & Alternative Energy
  • Advanced Materials & Manufacturing Technologies
  • Automotive
  • Bioscience
  • Food Processing & Agribusiness
  • Transportation & Integrated Logistics

Toledo and Northwest Ohio have been called the “Solar Valley” because of having nearly 2,000 people working in industries related to photovoltaic development. “Moving forward, Toledo and Northwest Ohio are uniquely positioned for success in the solar industry due to a manufacturing and glass-making heritage, world-class research and educational facilities, thin film next-generation photovoltaic expertise and supply chain resources and logistics. In addition, the State of Ohio in 2010 designated Northwest Ohio as a Solar Hub of Innovation.”

Two of the companies we visited are in the Advanced and Alternative Energy industry cluster and one was in the automotive cluster.

The first company we visited on our tour was First Solar, Inc., the largest solar assembly plant in North America and the overall company is the world’s largest manufacturer of thin film Cadmium-Telluride (CdTe) photovoltaic modules. Founded in 1999, First Solar was the first solar company to produce 1GW in a single year, break the $1/watt manufacturing cost barrier, and implement a global PV module-recycling program. While the company headquarters is in Tempe, AZ, the U. S. manufacturing plant is located in Perrysburg, a suburb of Toledo, to be in close proximity to their glass technology that is centered in the Northwest Ohio area. They have installed 10GW worldwide and have 3GW in their contract pipeline. After watching a video about the company, Mike Koralewski, Sr. Vice President, Module Manufacturing, Jim Koedam, Plant Manager, and Jay Lake, Manager, Manufacturing Training, gave us a tour of the main manufacturing building at the Perrysburg site that houses four production lines making their solar panels. The campus includes over one million sq. ft. of floor space and they are converting a warehouse to another production building. They have about 1,300 employees in Perrysburg. They also have six manufacturing plants in Malaysia.

We next visited the Rossford plant of Pilkington North America, Pilkington is part of the NSG Group, one of the world’s largest manufacturers of glass and glazing products for the architectural, automotive industry and technical glass sectors.? Founded in 1918, the company was transformed in 2006 with the acquisition of Pilkington plc, itself a global leader in the glass industry and the inventor of the Float Glass process.? The Pilkington name was retained as a brand for the Group’s architectural and automotive products.

Pilkington North America has five float glass lines in the U.S. ? Rossford, Ohio (2); Laurinburg, North Carolina (2); and Ottawa, Illinois (1). The company has approximately 4,700 employees in North America. The Rossford plant makes float glass for the automotive market and also fabricates glass for specialty transport vehicles, such as farm equipment.

V. P. of Sales and Marketing, Stephen Weidner, conducted the tour for us and told us that the Rossford plant has about 2.5 million sq. ft. of floor space and the glass float production line is as long as a football field. At the beginning of the line, the furnace melts the pure Silica in the form of sand, limestone, and other ingredients into a liquid at 2900o C, which is cooled down to 1,050o C as it floats over the liquid tin and then further cooled down to about 200o C by the end of the line, where robots handle the glass until it is scored and broken into the right size for the end product, stacked into “books” of glass, and cooled enough for human handling. This production line was truly an amazing sight to a person who is fascinated by all types of manufacturing processes.

We next visited the General Motors Powertrain plant in Toledo where the six and eight-speed transmissions are manufactured. Plant Manager Joseph Choate gave us an overview of the division and a plant tour of both the six and eight-speed transmission production lines. This plant has about two million sq. ft. of floor space and about 2,000 employees (1,844 hourly and 184 salaried). One interesting note is that he showed us a picture of the solar panels on a portion of the roof of the building supplied by First Solar, providing 10% of their power.

As a sales rep who has sold every kind of metal casting processing, I have never seen such complex, intricate die castings as those supplied to GM. I was also impressed with the integration of robotics and automation with the human production line workers, which essentially made their jobs easier to perform, ergonomically safer, and more varied because every worker is cross-trained for every job in both the six and eight- speed transmission lines. By the end of these three tours, I felt I had walked five miles.

We ended the day by meeting Paul Toth, Jr., President and CEO of the Toledo/Lucas County Port Authority, at the site of the development of the Overland Business Park, an 80-acre site being redeveloped. He told us that it was originally the site of the Willys-Overland plant that converted from bicycle to automotive manufacturing in 1910 and produced the Jeep brand products from the 1940s through 1987, when it was purchased by Chrysler. He said, “The Port Authority purchased the property in 2010 Chrysler during their bankruptcy reorganization and has razed the plant, except for one of the brick smokestacks.” Extensive grading is being done to level the land to provide easier access to the nearby I-75 interchange and two active Class 1 rail lines. We saw the first of several planned Class 1 spec buildings that is nearly finished. What was very interesting to me is that the Toledo Port Authority’s jurisdiction is not limited to land adjacent to Lake Erie or the two tributary rivers as the San Diego Port Authority’s jurisdiction is limited to land adjacent to the San Diego harbor. The Port Authority operates the Port of Toledo, Toledo Express Airport and Toledo Executive Airport, also known as Metcalf Field, and acquired Central Union Terminal from Conrail in 1994, which was rededicated in 1996 after a $3.1 million renovation.

In addition, the Port Authority entered the business finance arena in 1988 and has assisted in financing close to 300 economic development projects representing a total investment of more than $1 billion while helping to create and retain more than 15,000 jobs. The Toledo-Lucas County Port Authority operates the Northwest Ohio Bond Fund.

On day two, we first visited Plastic Technologies, Inc. (PTI), located in Holland, where Chairman and founder Thomas Brady, Ph.D., and President and COO Scott Steele gave us a thorough company overview and tour of their facility. PTI is the leading industrial source for preform and package design, package development, rapid prototyping, pre-production and material evaluation engineering of PET bottles and containers. PTI manufacturing capabilities include injection molding of preforms and blow molding utilizing these injection molded performs. I have seen the extrusion type of blow molding being done here in San Diego, but had never seen blow molding using injection molded performs, which is a much faster process.

We concluded our day with a visit to Surface Combustion, which is celebrating its 100th anniversary this year. Dan Goodman, V. P. Sales & Marketing said that Surface Combustion was founded in Bronx, NY in 1915 to utilize patents covering a heating concept called “surface combustion.” The company relocated to Toledo in 1924 to serve the growing Midwest industrial base and Toledo glass industry. Surface Combustion has used its technology to design and build a diverse array of thermal systems (furnaces) and equipment, such as atmosphere and vacuum furnaces, atmosphere gas generator equipment, and steel mill equipment. It became a family-owned business when William Bernard, Jr. became the majority owner and President in 1998. The 66,000 sq. ft. plant has four manufacturing bays capable of assembling equipment that could be as tall as 25 ft. and as long as 35 ft. in the highest bay, utilizing their 20-ton overhead crane.

There is interconnectedness between four of the five companies we toured. NSG Pilkington makes the glass that First Solar uses to manufacture their solar panels. GM Powertrain has First Solar panels installed on its building. GM Powertrain either directly or indirectly uses heat-treating equipment produced by Surface Combustion. The common reason why all these companies are located in the Toledo region is the abundant source of natural gas as an energy source. The Northwest Ohio region offers some of the lowest industrial electric rates in the Midwest (4.73 cents per kilowatt-hour for industrial electricity.)

A trained, educated workforce is also another advantage of the region served by the Regional Growth Partnership. In addition, recent tax reforms in Ohio have reduced the tax burden by up to 63%. Toledo is located with a day’s drive of nearly half the U. S. and Canadian industrial markets representing nearly 100 million people according to data from the Port Authority. All of these factors add up to making the Northwest Ohio region an attractive manufacturing location.

However, I can’t say it better than what President and CEO Dean Monske said at our dinner, “I am born and raised in the Toledo area but I have traveled the world extensively and gotten the opportunity to witness and experience a wide range of diverse economies. For me, I still come back to Toledo as the perfect place to build your business and love your life. So, yes, I am a passionate champion of this region. But for the Regional Growth Partnership, our biggest cheerleaders in selling Northwest Ohio are the corporate leaders who have lived around the world and chosen this area to live and raise their families. They are our greatest advocates.”

Defense Department’s Globalization of Supply Chain Threatens our National Security

July 21st, 2015

Over three years ago, I wrote an article (May 21, 2012), about the release of the Senate Armed Services Committee report on counterfeit parts in the Department of Defense supply chain. The Committee had found over 1,800 cases of counterfeit parts in just the Air Force C-130J and C-27J cargo plane, as well as assemblies used in the Navy’s SH-60B helicopter.

To address weaknesses in the defense supply chain and to promote the adoption of aggressive counterfeit avoidance practices by the Department of Defense and the defense industry, an amendment to the National Defense Authorization Act for Fiscal Year 2012 was adopted in the Senate and signed by President Obama.

Instead of implementing the requirements of the Act, it appears that DOD “has entered a new phase of its centuries-long development, the latest characterized by globalization of supply chains and the inability of U.S. defense contractors and laboratories to drive technological change” according to Richard McCormack, publisher and producer of the Manufacturing & Technology News, May 20, 2015 edition.

In this issue, McCormack reported on comments made by Bill Lynn, CEO of Finmeccanica North America and former Deputy Secretary of Defense from 2009 until 2011, at the April 29, 2015 meeting of the Center for Strategic and International Studies in Washington, D.C.

The defense sector and the U.S. military have “moved from being a net exporter of technology to a net importer,” Lynn stated, adding “When their R&D budgets are combined to total a scant $3 billion (or only 1.6 percent of revenue), the five biggest defense contractors — Boeing, Lockheed, Raytheon, L3 and Northrop — would not even make the list of the top 20 global companies that invest in R&D.”

Lynn told the meeting, “Those are things where the commercial industrial base is stronger than the defense industrial base and in many ways the key to maintaining our future [defense] technology edge is to be able to import those technologies into our defense industrial base… Since many of the underlying technologies now reside outside of the United States, DOD has to figure out how to deal with foreign corporations and state-owned enterprises that hold the keys to its success.”

McCormack noted, “The Department of Defense and its major contractors are now dependent on foreign manufacturers for many of the military’s most advanced weapons systems…The defense industry is a shadow of its former self, representing less than 3.5 percent of the U.S. economy, a position that continues to decline as defense budgets reach new lows with no chance of them growing faster than the economy.”

Lynn commented that ” DOD is slowly catching up to the structural change caused by globalization of technology and supply chains. It is wrestling with the regulatory and procurement systems it has in place to monitor and conduct business with foreign suppliers, but it has little time to waste.”

One of these regulations to which he referred is the Buy American Act that was passed by Congress in 1933. It required the U.S. government to give preferential treatment to American producers in awarding of federal contracts. The Act restricted the purchase of supplies that are not domestic end products. For manufactured products, the Buy American Act used a two-part test: first, the article must be manufactured in the U.S., and second, the cost of domestic components must exceed 50 percent of the cost of all its components.

After the end of the Cold War and the subsequent Gulf War, the provisions of the “Buy American Act” were eased to allow purchasing off the shelf commercial parts (COTS) from foreign countries by the Defense Department and other government agencies if they met the same fit and function of parts made to strict military specifications. Previously, parts, assemblies, and systems were required to be substantially made in the United States or in a NATO country, such as Great Britain, France, and Germany.

In the early 1990s, most commercial parts were still being made in the United States, with some outsourcing to the Philippines, Hong Kong, and Singapore, so this change was pretty safe. Permitting commercial parts to replace Mil. Spec. parts probably drove out of business the small companies that catered exclusively to the military and that provided traceability per Military Specifications for parts supplied to government agencies, military contractors, and subcontractors. This was all done in the name of cost savings. Now, however, most commercial electronic components and microchips are fabricated in China.

The President has authority to waive the Act in response to the provision of reciprocal treatment to U.S. producers. Under the 1979 GATT Agreement on Government Procurement, the U.S.-Israel Free Trade Agreement, the U.S.-Canada Free Trade Agreement, the North American Free Trade Agreement, the Central American Free Trade Agreement, and the Korea Free Trade Agreement, access to government procurement by certain U.S. agencies of goods for the other parties to these agreements is granted.

If the Trans-Pacific Partnership Agreement is approved, the procurement chapter would require that all companies operating in any country signing the agreement be provided access equal to domestic firms to U.S. government procurement contracts over a certain dollar threshold. To meet this requirement, the U.S. would have to agree to waive Buy America procurement policies for all companies operating in the 10 other countries.

In fact, it was reported by Reuters in January 2014 that “The Pentagon repeatedly waived laws banning Chinese-built components on U.S. weapons in order to keep the $392 billion Lockheed Martin Corp F-35 fighter program on track in 2012 and 2013, even as U.S. officials were voicing concern about China’s espionage and military buildup.

Lynn doesn’t seem to think that there is anything dangerous in allowing more foreign participation in the defense industry, saying “that changing perceptions about foreign involvement in the defense industry are similar to what happened in the U. S. auto sector…Americans and their representatives in Congress were skeptical about foreign nameplates. But as foreign auto companies started building technologies in the United States and hiring American workers, the tide turned…The politicians care about the jobs, they a\care less about the nameplate.”

It is incomprehensible to me to compare what happened to the U. S. auto industry to what is happening to the U. S. defense industry. The whole purpose of the defense industry is to protect our national sovereignty and national security. How can anyone in their right mind want to make our defense supply chain vulnerable to the foreign country, namely China, which has a written plan to replace us as the world’s super power? The Chinese are never going to bu9od plants in the U. S. to make parts for our defense supply chain. They have just stolen our technology to build up their own military power as evidenced by the “uncanny” similarity of China’s newest stealth fighter, the J-31, as well as the Chengdu J-20 fighter jet, to the F-35 Lightning II advanced fighter jet.

Does anyone believe that we will get any parts and assemblies need by our defense industry when China has decided we are so weak that we cannot stop their aggression in Asia. We are not even safe to have parts sourced in Taiwan, South Korea, the Philippines, Malaysia, Indonesia, or Vietnam. These countries would all be targets for takeover by China once they lose their fear and respect for U. S. naval and air power.

When President Eisenhower warned us about the military-industrial complex, little did he know that the military-industrial would be superseded by the consumer-importer complex, which has led to the virtual demise of the military-industrial complex.

Congress must act to strengthen the Buy American Act, not weaken it, eliminate the incentives for offshoring, and provide incentives for bringing manufacturing back to America. We must protect the supply chain for defense and military products and systems, so that Defense Department can fulfill its primary mission of defending our country. If we don’t, we are setting ourselves up for eventual defeat by our future enemies.

 

Patented Technology is Key to RoadLoK’s Success

July 14th, 2015

There is no lack of ingenuity and innovation in the U. S. today. Each year, thousands of new products are invented, and but most are never produced. Knowing how to use technology to create a product doesn’t mean you know how to manufacture it and get it to market. Obtaining a patent is a key factor in achieving success, but you also need to recognize the limitation of your knowledge and expertise and utilize experts in fields you need, such as product design/engineering, patent/licensing, material/process selection for prototyping and production manufacturing, and marketing.

I recently had the opportunity to interview Adam Xavier, founder and CEO of New Hampton Technologies dba RoadLoK Security, who is an example of an inventor and entrepreneur who successfully got his product patented and into the marketplace.

His company distributes products worldwide under the brand name RoadLoK. The company specializes in the design and production of model-specific vehicle locking systems for motorcycles, scooters and off-road power sports vehicles. The RoadLoK is the only locking system that safely and effectively prevents rollaway theft. The system is designed to be permanently mounted on a motorcycle, thereby eliminating the need for storing the lock while riding. The system’s permanent mounting eliminates all momentum, making it virtually impossible to damage calipers and fenders. This is accomplished while also protecting the rider, should the rider forget to unlock the system before attempting to ride off.

I asked how he got the idea for his product, and Adam said, “My twin brother Eric and I were sitting in the outside seating area of a bar the summer after we graduated from college and saw a man forget to take off his lock and tip over his motorcycle. We started talking about a better idea for a lock and drew a sketch on a napkin. The next day, we searched to see if there was a lock similar to our idea, but didn’t find one. We took our sketch to a CAD designer to turn our idea into a design that could be manufactured. A friend from college, Matt Tomosivitch, who had become a machinist, made our first prototype. Matt is now the chief engineer of our company.

Continuing, Adam said, “We made a video of our lock that showed how it worked. We wrote a comprehensive 60-page business plan. We filed for a provisional patent in July 2005. Then, we sent our video to local investor network group in New York and were kicked down to the group in our area, Orange County. The director contacted us, and we gave our pitch in December 2005. We got our first investment check from the Orange County Capital Development Group on February 16, 2006. This investment was enough to get us to our first trade show in March, the International Motorcycle Show in Atlanta, GA.

Adam said that they set up their first office in Middleton, NY and later moved to Newburgh, NY. They spent two years of R&D to finalize the design and raised another $3 million over three years to get into full production. They used 3D printing to make new prototypes as they improved the design. They received a lot of mentoring and hands-on help from their angel investors.

Their first utility patent was granted on December 23, 2008 after their third attempt at an “office action” at the patent office. They got their second patent in 2010.

When they started the company, Adam said that they wanted to keep everything made in the U. S. They used www.thomasnet.com to find all of their vendors. They have seven major vendors for all of the different parts of their product, and they are located in Illinois, North Carolina, New York, and Texas. Their mission is to produce a high quality product, so all of their vendors are ISO 9001-2008 certified to meet the exacting requirements of their customers.

They later moved to California because they needed to have face-to-face communication with their two biggest customers, one located in Murrieta and one in Corona, CA. California also has the biggest population of motorcycle riders.

The executive offices are now located in Santa Monica, CA, but their product is manufactured in Salisbury, North Carolina and assembled to order at their plant in Torrance, CA. Since the RoadLoK is produced to order, production is not automated and does not utilize any robots. They are looking at doing more vertical integration of parts manufacturing. Their screw-machining vendor in Chicago makes two parts, and the patented design of their locking pin has 5 components made by three different vendors.

They started to implement lean principles in 2009 and changed one component from a square rod to an extrusion, which reduced material waste by 62%. They have been working towards reducing other material waste and time since then.

Their original plan was to focus on after-market sales of the product for the first two years and then license the product to motorcycle manufacturers on a non-exclusive basis similar to how the airbag is licensed to car manufacturers. Now in its 9th year of operations, RoadLoK’s largest customers are KTM Sportmotorcycle and Ducati with others to be announced within the next year.

When asked how his company has been impacted by competition from offshore in Asia, Adam said, “We don’t have any direct competitors offshore, just cheaper substitute locking mechanisms. We are selling in Australia, Japan, and China and recently selected a company to partner with to produce parts in China to sell to the Chinese market. We have started the process to file a patent in China. We need to have manufacturing plant in China to sell to the Chinese market because of the high import duties. Brazil is another county we are looking at to set up a manufacturing plant because of the high import duties. There would be a win/win benefit of jobs to the community and provide a much-needed product for the people.”

I naturally asked how the recession affected his company when they were only a little over two years old when it started in late 2008. Adam said that they were spending about 85% of their time setting up a distributor network and program to sell to dealers utilizing direct sales persons. But, motorcycles are purchased with discretionary income, which dried up during the recession as people lost their jobs. So, their direct sales to motorcycle riders through distributors/dealers dropped drastically. To survive and grow, Adam said, “We had to reduce our direct sales staff and reduce our travel costs. We changed our sales model to online retail sales and direct sales to motorcycle manufacturers. This model has helped us grow and succeed. We have also started R&D on the next generation of vehicle immobilizers to other two or more wheeled vehicles that do not have a transmission.”

Adam had read my article on “Which Patent Reform Bill Doesn’t Destroy the American Patent System?” and said, “Our having a patent pending was key to getting investors and having a patented product has been the key ingredient to our success as a company. Investors want the protection of a patent, but they wouldn’t take the risk of being made personally liable. There is no way that we could have gotten investors if our investors had been personally liable for defending our patent in a patent infringement lawsuit.” Note: Adam was referring to the “Loser Pay’s provision of H. R. 9 and S.1137.

If we want to have more successful companies manufacturing products in America, then we need to protect our American Patent System and stop H.R. 9 and S. 1137 from being passed. Instead, we need to pass the Strong Patents Act of 2015, S. 632, which will “Enact balanced reforms to reduce abuse while sustaining American leadership in innovation.”

 

Fight to Stop Fatal Patent Bills Heats up

July 7th, 2015

Thanks to support from inventors and inventor groups all over the country, Randy Landreneau and Paul Morinville of US Inventor and Independent Inventors of America are continuing their fight to stop the bad patent bills: The House’s Innovation Act, H. R. 9, introduced by Rep. Bob Goodlatte (R-VA) on 2/05/2015, with the “Manager’s Amendment” version passed by the House Judiciary Committee on 6/11/2015, and the Senate’s PATENT Act, S.1137, introduced by Senator Grassley (R-IA) 4/29/2015, with the “Manager’s Amendment” version passed by the Senate Judiciary Committee on 6/04/2015.

In the latest email update from Mr. Landreneau, he reports that he held 65 meetings with House Congressional staff in the last two weeks of June to educate them on why H.R. 9 would crush American innovation. He attached his latest paper, The Innovation Act is Fatal to the American Innovation Ecosystem and Mr. Morinville’s latest paper, We’ve Been Googled.

In his paper, Morinville states, “H.R.9 creates a Patent System without Inventors. Over the last decade, Google and others have spent hundreds of millions of dollars to lobby Congress and produce an ingenious ‘patent troll’ narrative, which distorts the reality of invention in America. In this decade long war on inventors, H.R.9 is the Google lobby’s latest accomplishment. Not surprisingly, H.R.9 is not directed to fixing the fictional problem of ‘patent trolls.’ Instead, H.R.9 mounts its considerable damage on the patent system in general, specifically harming inventors and small patent-based businesses.”

Morinville explains, “If this bill becomes law, inventors will not be able to enforce their patent rights against moneyed corporations like Google. However, moneyed corporations like Google will still be able to enforce their patents against small businesses with even more devastating consequences to those small businesses. Patent litigation is about risk and cost versus reward. If risk or cost is too high in relation to reward, a patent cannot be enforced.”

In is paper, Landreneau states, “With presumptive Loser-Pays, regardless of the merit of any case, the party that does not prevail will automatically owe the other side its legal costs, which could exceed $1,000,000. To avoid this, the non-prevailing party will be forced to re-litigate the case to prove each point objectively reasonable.” He further explains that in addition to making every case more expensive, there will be an additional, even more damaging effect on independent inventors.

The independent inventor will almost always require a contingency attorney to stop the theft of his or her property. Under presumptive Loser-Pays, his attorney will have to be willing to go the extra mile, after losing, for no pay. This will cause many independent inventors to not be able to find representation and have any access to justice.”

Why is this important? Because most new technologies, especially break-through or disruptive technologies come from individual inventors who either start a company or license their technology to companies that are more able to take them to the market.

As a director on the board of the San Diego Inventors Forum, I see new consumer products and break-through technology introduced at our monthly meetings, and the best compete of these compete in our annual inventors’ contest for best new consumer product and best new technology. Our next inventors’ contest will be held on August 15th. All contestants must have applied for a patent before they can participate. The future success of their product or technology is contingent upon their having a patent they can protect from infringement. Their ability to raise the financial investment they need to bring their product to the marketplace depends upon their being able to protect their patent. No investor will take the risk of investing in a product or technology that cannot be protected.

I will not repeat a discussion of what is wrong with H. R. 9 and S.1137 that I discussed in a previous article, “Which Patent Reform Bill Doesn’t Destroy the American Patent System?” but suffice it to say that these bills would essentially destroy the American Patent System. The Loser-Pays clause would make it virtually impossible for independent inventors and small businesses to protect a patent and get investors. Only large corporations would be able to absorb the costs of patent infringement litigation. The economic benefits of patents granted in different metropolitan areas of the U. S. could come to a screeching halt if either of these two bad patent bills is passed. Either bill would squash the American innovation that is so essential to our national prosperity and the prosperity of many metropolitan areas.

In a February 2013 Brookings Institution report, “Patenting Prosperity: Invention and Economic Performance in the United States and its Metropolitan Areas,” an analysis of national and metropolitan area invention from 1980 to 2012, revealed:

  • “The rate of patenting in the United States has been increasing in recent decades and stands at historically high levels.
  • Most U.S. patents—63 percent—are developed by people living in just 20 metro areas, which are home to 34 percent of the U.S. population…the metro areas with the highest number per capita are San Jose; Burlington, VT; Rochester, MN; Corvallis, OR; and Boulder, CO.
  • Inventions, embodied in patents, are a major driver of long-term regional economic performance, especially if the patents are of higher quality.
  • Research universities, a scientifically educated workforce, and collaboration play an important role in driving metropolitan innovation.
  • Patents funded by the U.S. government tend to be of especially high quality, and federal small business R&D funding is associated with significantly higher metropolitan productivity growth.”

Of interest to those of us in California is the fact that when comparing the average granted patents per year and the patents per million residents from 2007-2011, California ranks very high. The report states “… a few large metros notably changed their share of U.S patents. At the top, San Jose moved up from ninth to first, and San Francisco moved from seventh to fourth, moving ahead of Chicago, Philadelphia, Detroit, and Boston. Seattle and San Diego moved up 15 and nine places, respectively, to become seventh and eighth. Meanwhile, Austin and Raleigh moved up 41 and 55 places, respectively, to become 11th and 20th. Cleveland fell 10 slots from 13th to 23rd, while Philadelphia fell from fourth to 13th.”

In his paper, “The Innovation Act, H.R.9 is Fatal to the American Innovation Ecosystem, Randy Landreneau explains why H. R. 9 would be harmful, saying, ” A key reason that America has out-innovated the rest of the world for 200 years is the way the unique American Patent System has not only encouraged individuals to innovate, it has also facilitated the flow of capital into the resulting innovations. A key ingredient in this successful recipe has been the ability to stop the theft of the intellectual property represented by a patent, which results in a valuable patent asset that can be used to attract venture capital and build a successful enterprise… An early-stage investor in a start-up that fails often ends up with little more than the patent. If he then has limited patent rights and significantly greater risk in defending the patent, as is being proposed, then the patent asset loses significant investment value. In a scenario that is already high in risk, the changes proposed by The Innovation Act will severely reduce investment, and the incentive for American innovation will be lost. What is being proposed destroys the innovation ecosystem that has enabled America to be the world leader in innovation.”

 

It is expected that the House will vote on H.R.9 the week of July 13th, so it is critical that we add our voices to its opposition now. The Senate’s S. 1137 will be on the Senate floor soon as well. More attention seems to be paid if you call the Washington, D. C. office of your Congressional representatives and senators than their local office. If you don’t know the names of your representative or senators, search online or call the main switchboard number 202-225-3121 and ask for your representative or senators. Tell your representative to oppose H. R. 9 and tell your senators to vote “no” on S.1137. Ask your senators to support the Strong Patents Act of 2015, S. 632. Don’t let them destroy the goose that lays the golden egg ? the American Patent System that fosters American innovation, which provides jobs and prosperity to our country.

 

House Leadership Blindsides Opposition to Trade Promotion Authority

June 23rd, 2015

On Monday, June 15th, House Republican leadership announced that they had decided to delay the re-vote anytime up to July 30th on Trade Promotion Authority (TPA) which “fast tracks” ObamaTrade. Less than three days later, the opposition was blindsided by representatives in the House approving the standalone TPA bill by a close vote of 218 to 208 (see how Representatives voted here.) Because the House approved a standalone TPA bill, the Senate has to vote on a standalone TPA bill as well as legislation extending Trade Adjustment Assistance (TAA) and the U.S. trade preferences program before the president can sign the TPA bill into law. The trade preferences bill would renew the African Growth and Opportunity Act (AGOA), the Generalized System of Preferences, and trade preferences for Haiti.

There was a question whether enough of the 14 Senate Democrats who voted in favor of a combined TPA-TAA bill on May 22nd would vote in favor of a standalone TPA bill. TPA supporters hoped these senators would be influenced to vote in favor of cloture because they have voted for fast track already and because all 28 House Democrats who voted for a TPA bill to be combined with the Trade Adjustment Assistance (TAA) bill were united in voting for a standalone bill on June 18th.

Senator McConnell filed for cloture on both the TPA bill and the preferences legislation late Thursday, for the vote to be held on Tuesday, June 23rd. The vote on cloture requires 60 votes. As I finish this article, I just watched the Republican leadership get the 60 “yes” votes needed to invoke cloture, with 37 senators voting “no,” and three not voting.

This means 30 hours of debate on the bill would begin, meaning that a final vote on the TPA bill could take place as early as Wednesday. Only a majority of 51 votes are needed to pass TPA. After the passage of TPA, the Senate would then vote on cloture on the Trade Adjustment Assistance (TAA) and the trade preferences bill. If cloture is invoked, a final vote on the TAA-preferences bill could come Thursday or Friday.

The House of Representatives would still need to vote on the Trade Adjustment Assistance bill. Since only 86 Republicans voted in favor of the TAA bill on June 12th, it would require at least 92 Democrats to vote in favor of TAA in order for it to pass the House. At that time, only 40 Democrats voted to renew the TAA program, while the vast majority joined House Minority Leader Nancy Pelosi (D-CA) in voting “no” to stop or delay the TPA.

On June 18th, June 18, White House Press Secretary Josh Earnest told reporters that “President Barack Obama isn’t going to support a strategy that gives him half a loaf on his trade agenda.

With Capitol Hill leaders working on a plan that would split Trade Promotion Authority from Trade Adjustment Assistance, Earnest made clear Obama will demand both. ‘The only legislative strategy that the president will support is a strategy that results in both TPA and TAA coming to his desk,’ he said.”

In an email to members of the SoCal Fair Trade Campaign on June 19th, Arthur Stamoulis, Executive Director of the Citizens Trade Campaign, wrote in part, “As short-sighted and inappropriate as the original Ryan-Hatch Fast Track bill was, the House package is actually even worse. It would weaken human trafficking measures; eliminate simple currency measures and other enforcement provisions; and even prohibit the consideration of climate solutions in future trade negotiations. Senators now have even more reason to vote no than they did last time around.

After the previous Senate vote to approve the combined TPA/TAA bill on May 18, 2015, Senator Elizabeth Warren released a 15-page report, “Broken Promises: Decades of Failure to Enforce Labor Standards in Free Trade Agreements,” showing that the United States pursues very few enforcement actions to uphold the labor protections in its trade agreements. In her press release, she stated, ““Supporters of past trade agreements have said again and again that these deals would include strong protections for workers, but assurances without strong enforcement are just empty promises,” Senator Warren said. ” The facts show that, despite all the promises, these trade deals were just another tool to tilt the playing field in further of multinational corporations and against working families.”

In the Weekly Standard of June 17th, anti-TPA Republican, Senator Jeff Sessions, stated, “It is essential that there be no misunderstanding: fast-track preapproves the formation of not only the unprecedentedly large Trans-Pacific Partnership, but an unlimited number of such agreements over the next six years. Those pacts include three of the most ambitious ever contemplated. After TPP comes the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union, followed by the Trade in Services Agreement (TiSA), seeking as one its goals labor mobility among more than 50 nations. Together, these three international compacts encompass three-fourths of the world’s GDP. Including the nations whose membership is being courted for after enactment, the countries involved would encompass nearly 90 percent of global GDP. Yet, through fast-track, Congress will have authorized the President to ink these deals before a page of them has been made public. Then, the Executive sends Congress ‘implementing’ legislation to change U.S. law—legislation which cannot be amended, cannot be filibustered, and will not be subjected to the Constitutional requirement for a two-thirds treaty vote…This nation has never seen an agreement that compares to the TPP, which forms a new Pacific Union. This is far more than a trade agreement, but creates a self-governing and self-perpetuating Commission with extraordinary implications for American workers and American sovereignty.”

On June 19th, Steve Elliott of Grassfire, emailed, “They made their dirty “back-room” deal behind closed doors and now they are on auto-pilot to “land” ObamaTrade Fast Track despite massive public opposition…Boehner and McConnell use deception and trickery to resurrect the defeated Fast Track bill and then announce that this is on a “glide-path”!

In an email I received June 23rd, Chris Chmielenski of NumbersUSA, stated, “The current version of TPA, H.R.2146, would allow Pres. Obama to negotiate immigration increases into free trade agreements that would only be subject to a simple up-or-down vote from Congress. TPA would not only cover the massive Trans Pacific Partnership (TPP) between the United States and 12 other Pacific Rim nations, but also cover the Trade in Services Agreement (TiSA) between the U.S., European Union, and other nations. TiSA includes labor mobility for more than 50 nations and could increase the number of foreign workers allowed to work in the U.S. and extend the length of their work visas.”

In an email I received on June 22nd, Senator Rand Paul stated, “Over the past few weeks, more and more Americans have begun to see why I oppose Obamatrade. As far as I’m concerned, the American people have had enough of government hiding things from us. And every time they say it’s “for our own good,” we’ve found ourselves in an even deeper mess…If passed, “fast-track” authority would allow trade deals the Obama administration negotiates with the 12 member nations covered in the Trans-Pacific Partnership to pass Congress with a simple majority vote — instead of the 67 U.S. Senate votes the U.S. Constitution requires for ratification of a Treaty…It’s time for this scheme to be released for the American people. If the President won’t release it and agree to an open and transparent process — to ensure Americans’ liberty is protected — Congress must vote “NO!”

Food & Water Watch Executive Director Wenonah Hauter, issued a press release June 23rd, which states in part: “Today, the Senate narrowly approved a procedural motion to pass a degraded version of the Fast Track Trade Promotion Authority that passed last month… Today’s bill also weakened the Senate’s earlier provisions addressing human trafficking and currency manipulation and includes new House language that prohibits trade deals from ever addressing climate change or immigration issues…Fast Track will accelerate Congressional consideration of the as-yet-unseen Trans-Pacific Partnership, a trade pact that will undermine key consumer, public health and environmental protections, and other trade deals that follow. These trade deals could undermine America’s food safety standards and commonsense food labeling measures, bringing a rising tide of unsafe imported food to our grocery stores and restaurants.”

After the cloture vote, Michael Stumo, CEO of the Coalition for a Prosperous America issued the following statement, which in part states, “The Republican base and the Democratic base remain united in their opposition to current trade and global governance policy. Job creation claims are no longer believed because they have proved false. Growth claims fall flat. The rhetoric in favor of trade deals contrasts shockingly with the data on post-agreement performance.

America needs to establish a long term goal of balanced trade, a medium term goal of becoming a net exporting nation and a short term goal of producing more of what we consume. We need to recognize that tariffs and quotas are no longer the issue. This is not 1906 anymore. The new mercantilism and trade distortions are currency manipulation, foreign border tax hikes, industrial subsidies and a few other tactics that move the net trade needle towards deficit. Any modern trade policy must address these modern tactics. And America must fix its tax policy to substantially increase our trade competitiveness.”

Since the Trade Promotion Authority only needs 51 votes to pass, it is likely that the bill will pass the Senate because of 60 senators voting for cloture. The only path left for the American people will be to convince Congress not to pass the Trans-Pacific Partnership Agreement. At least, the Trade Promotion Authority requires “at least 60 days before the day on which the President enters into the agreement, publishes the text of the agreement on a publicly available Internet website of the Office of the United States Trade Representative.”

I urge all Americans to stop being apathetic and exercise their constitutional right to address their representatives in Congress. We must stop the Trans-Pacific Partnership Agreement and other treaties in negotiation from destroying our national sovereignty and harming the American way of life.

Boehner and his “Lieutenants” Battle for International Corporate Elite

June 16th, 2015

On Friday, June 12, 2015, the House passed the Trade Promotion Authority. This meant that 191 Republicans and 28 Democrats in the House of Representatives voted to surrender their Constitutional authority on trade and allow President Obama to conclude the Trans-Pacific Partnership Agreement (TPP) and other agreements that have been negotiated behind closed doors. The good news is that the House failed to renew the Trade Adjustment Assistance (TAA) portion of H.R. 1314 by a vote of 302 to 126. Since the Senate-passed version of H.R. 1314, contained both the TPA and TAA measures, the House needed to pass both portions of H. R. 1314 for the bill to go to the president’s desk for signature.

Many did not expect the Trade Promotion Authority bill to be voted on if the TAA bill failed, but as soon as it failed, a motion was made to vote on the TPA bill. Then, as soon as the TPA passed, I watched Republican House Speaker John Boehner (OH) make a motion to reconsider the TAA after the House reconvenes on June 15th. The re-vote was expected to take place Tuesday, June 16th, but at a Rules Committee meeting late Monday, June 15th, the House Republican leadership decided to delay the re-vote until July 30th in an attempt to give President Obama and the Republican leadership more time to figure out how to pass the stalled trade package.

If the House and Senate pass bills with different language, then they have to form a House/Senate Conference Committee. That committee negotiates and works out the differences in the two bills, sends the bills to the House and Senate, and if both chambers approve, it then goes to the President for signing.

There was also a third trade-related bill, H.R. 644, the Trade Facilitation and Trade Enforcement Act of 2015. This bill was the first of the three bills that the House voted on, and it passed by a vote of 240 to 190. This bill had to pass because it had all the Paul Ryan goodies promised to Republicans who were wavering in exchange for their TPA support (although the currency manipulation language that was in the Senate-passed bill was stripped out.)

It is likely that deal cutting will be conducted behind the scenes to get Democrats to vote in favor of the TAA. Even though Democrats have consistently supported Trade Adjustment Assistance legislation, Democrat leadership and labor unions were unhappy because the TAA program was to be funded by large Medicare cuts, and it would not provide enough funding to offset the harm of TPA. Other Democrats voted “no” to delay or stop the Trade Promotion Authority bill.

The Republican leadership hates TAA, but was willing to help pass it to get Democratic votes. Important conservative organizations like Heritage Action and Club for Growth opposed TAA but supported TPA. A last minute Boehner/Pelosi deal on TAA prevented the defunding of Medicare to fund TAA, and instead would fund it by direct tax hikes by raising the penalties for misfiled taxes. “A vote for Obamatrade on Tuesday is a vote to give the IRS more power and more incentives to go after small businesses,” said Curtis Ellis, founder of the Obamatrade.com website, brought to you by the American Jobs Alliance, in an exclusive interview with Breitbart News. It seems unlikely that more Republicans will vote for the TAA after the revelation that voting for TAA is technically voting for a tax increase.

What angers me is that the existence of the Trade Adjustment Assistance bill is a tacit admission by both parties that trade bills cause people to lose their jobs so that they need assistance to be retrained for other jobs. What does a person with a good paying manufacturing job get trained to do? Work at Walmart or flip burgers for McDonalds? That is what too many American workers have been forced to do when the company they worked closed their doors due to unfair competition from foreign companies as a result of previous trade agreements concluded in the past 20 years.

There are rumors that if the TAA bill fails again, the Republicans have a “Plan B” and will draft another rule that would bring TPA to the floor on its own without being tied to the TAA legislation. If this is necessary, the Republican House leadership would risk losing the support of some Democrats and some of the Tea Party-supported Representatives that voted “yes.” If a stand-alone Trade Promotion Authority bill does pass, the Senate would have to reconsider and vote on the TPA bill without the TAA portion being included.

If the Trade Promotion Authority is granted to President Obama, future historians may mark this event as the day when our Constitutional representative democracy ended and our country unofficially transformed into an oligarchy, which is defined as “a small group of people having control of a country, organization, or institution.”

In 1995, Republicans concluded a “Contract with America,” while in 2015, Republicans appear to have concluded a contract with the oligarchy composed of the international corporate elite of large, multinational corporations that betray America’s small businesses, farmers, ranchers, and workers. These large, multinational corporations now comprise the majority of the membership of the National Association of Manufacturers and the U. S. Chamber of Commerce. Many are no longer American-owned corporations, having been acquired by corporations from foreign countries.

For seven years, Republicans have accused President Obama of overstepping the power of the Executive Branch of our government, but now they just voted to give him even more power in the name of “free trade.” This is why I heard conservative radio talk show host Mark Levin express his outrage against Republican leadership in the House on his show Thursday evening, June 11th, when he said that these “trade agreements aren’t free trade, they are crony capitalism.”

Tea Party members and supporters can feel good that 54 Republicans voted “no” on granting Trade Promotion Authority, nearly all of whom were Tea Party supported candidates in either the 2010 or 2012 election. These Representatives realized that the TPP would be a threat to our national sovereignty and leads us one step closer to global governance. Only seven Tea Party-supported Representatives changed their mind at the last minute and voted “yes” on the TPA. They were: Rod Blum (IA), Mo Brooks (AL), Trent Franks (AZ), Jody Hice (GA), Matt Salmon (AZ), David Schweikert (AZ), and Martin Stutzman (IN).

It is a pity that conservative groups like the Tea Party, Grassfire, and Numbers USA were so late in joining the opposition to the Trade Promotion Authority. Their opposition earlier in the game could have influenced more of the 65 or so Tea Party-supported Representatives to have the courage to vote “no” on the TPA.

Democrats should be ashamed of the 28 Representatives who voted to turn their backs on America’s small businesses, farmers, ranchers, and workers by approving the TPA. Those voting in favor were: Brad Ashford (NE), Ami Bera (CA), Don Beyer (VA), Earl Blumenauer (OR), Suzanne Bonamici (OR), Gerry Connolly (VA), Jim Cooper (TN), Jim Costa (CA), Henry Cuellar (TX), Susan Davis (CA), John Delaney (MD), Suzan DelBene (WA), Sam Farr (CA), Jim Himes (CT), Ruben Hinojosa (TX), Eddie Bernice Johnson (TX), Derek Kilmer (WA), Ron Kind (WI), Rick Larsen (WA), Gregory Meeks (NY), Beto O’Rourke (TX), Scott Peters (CA), Jared Polis (CO), Mike Quigley (IL), Kathleen Rice (NY), Kurt Schrader (OR), Terri Sewell (AL), and Debbie Wasserman Schultz (FL). I don’t know whether any of these Democrats changed their mind at the last minute, but the two Representatives from San Diego, Susan Davis and Scott Peters, were “undecided” up to the day before the vote.

At the beginning of the year, there were 11 Democrat Representatives in southern California that were undecided on the Trade Promotion Authority. Visits to district offices by me and members of the state chapter of the Coalition for a Prosperous America for which I am chair played a role in influencing 9 of the 11 to vote “no” on the TPA. This shows how important work at the district office level is to get our elected Representatives to hear and pay attention to our voices.

Now that the re-vote on the Trade Adjustment Assistance has been delayed for two weeks, there is more time to put pressure on Representatives that voted for the Trade Promotion Authority to influence them to vote against it. I urge you to contact your Representative today and ask them to oppose the Trade Adjustment Assistance bill and a stand-alone Trade Promotion Authority bill. Together we can see that H. R. 1314 succumbs to a well-deserved death!

 

How would the Trans-Pacific Partnership Agreement affect the Reshoring Trend?

June 2nd, 2015

Reshoring has become a trend, not just anecdotal, as hardly a week goes by without an article about a company returning manufacturing to America in some news outlet. However, the Trans-Pacific Partnership Agreement is projected to reduce the rate of reshoring and manufacturing jobs being brought back to the U. S. Combined with the high U. S. dollar, the impact is likely to be severe.

Utilization of the Total Cost of Ownership worksheet estimator developed by Harry Moser, founder of the Reshoring Initiative, has provided a method for companies to do a true analysis to be able to see that they may not be saving as much, if any, of the money anticipated by sourcing offshore because the cost savings are often outweighed by the hidden costs of doing business offshore.

Total Cost of Ownership (TCO) is “the sum of all the costs associated with every activity of the supply stream,” according to the 13th edition APICS dictionary.” However, most companies don’t look beyond quoted unit price to make decision of where to source and ignore 20% or more of the total cost of offshored products. According to the Archstone Consulting survey reported in the American Machinist Magazine July 16, 2009, 60% of manufacturers apply only “rudimentary” total cost models: Wage Arbitrage, PPV (Purchase Price Variance), and Landed Cost.

This is because in the cost accounting systems used by most corporations, transportation costs, travel costs to vendors, rework costs of defective parts, cost of inventory, etc. are in separate accounting categories. This is why it is critical that CFOs and Supply Chain managers be trained in how to use the TCO worksheet to increase reshoring. Harry Moser’s TCO worksheet is able to quantify many of the following hidden costs of sourcing offshore that are not captured by any other current method:

  • Currency fluctuations
  • Cost of managing offshore contract
  • Design changes
  • Quality problems
  • Legal liabilities
  • Travel expenses
  • Time and effort to make transition
  • Poor communication
  • Intellectual Property infringement
  • Cost of inventory

The reshoring trend has also benefited by the following changing supply chain dynamics in offshore sourcing that have occurred since 2007:

  • Oil prices tripled, raising logistics costs
  • Labor rates in China rose by 300%
  • Component/material prices increased
  • Automation increased U.S. productivity
  • Political instability in China – Labor riots/strikes
  • Exchange rate variables
  • Risk of disruption from natural disasters

This is why the Boston Consulting Group issued a press release May 5, 2011, stating, “We expect net labor costs for manufacturing in China and the U.S. to converge by around 2015… since wage rates account for 20 to 30 percent of a product’s total cost, manufacturing in China will be only 10 to 15 percent cheaper than in the U.S.” This prediction was very controversial at the time and generated a great deal of debate.

On October 11, 2011, the Boston Consulting Group issued a report, stating, “Seven industry sectors had reached “tipping point” of returning to U.S.” They are:

  • Appliances and electrical equipment
  • Computer/electronics
  • Fabricated metal products
  • Electrical equipment/appliances
  • Furniture
  • Machinery
  • Plastics and rubber products
  • Transportation goods

Note: These sectors account for 70% of U.S. imports and 2 trillion in U.S. consumption

Because robotics, automation, lean manufacturing, and the rapidly improving technology of additive manufacturing have helped companies do more with fewer people, many have been skeptical that reshoring would create many jobs. The Boston Consulting Group’s predictions of which industry sectors would return to the U. S. first are now verified by data that the Reshoring Initiative has captured since its founding in 2010. This data also provides the answer to the question of how many jobs have been created by reshoring.

The following chart shows the number of jobs created by reshoring:

Industry

Jobs Companies
Transportation Equipment 13,823 33
Electrical Equipment, Appliances, Components 9,240 58
Computer/Electronic Products 3,483 25
Machinery 2,860 20
Apparel/Textiles 2,154 46
Fabricated Metal Products 1,721 39
Food 1,628 9
Wood Products 1,028 18
Medical Equipment    738 17
Hobbies    723 29
Construction    577 4
Plastic/Rubber Products    470 16
Castings      57 8
Non-Metallic Mineral Products      12 1
Primary Metal Products        0 5
Chemicals & Energy        0 1 each
Other 1,016 24

The Reshoring Initiative has also captured reshoring data by state. You will be surprised by some of the states that made it in the top ten because the Boston Consulting Group predicted that reshoring would mainly occur in the low wage states of the south. The data for the top ten states is shown on the chart below.

State

Jobs

Cases Jobs/Facility
South Carolina 7,530 8 941
Texas 3,792 13 292
Kentucky 3,412 4 853
Georgia 3,145 8 393
Tennessee 3,137 15 209
Ohio 2,739 24 114
Michigan 1,742 16 109
New York 1,165 19 61
North Carolina 1,020 15 68
Kansas 1,000 2 500

Three of these states, Ohio, Michigan, and New York are definitely not low wage states. California dropped from a rank of 10th in the number of jobs shown on the 2014 table to 12th on this new table. Frankly, if a company can reshore to California, Michigan, New York and Ohio, they can reshore to anywhere in the U. S.

According to the 2012 Annual Re-Shoring Report by the MIT Forum For Supply Chain Innovation, the top decision drivers for reshoring are: (1) Time-to-Market – 73.7% (2) Cost Reductions – 63.9% (3) Product Quality – 62.2% (4) More Control – 56.8% (5) Hidden Supply Chain Management Costs – 51.4% and (6). Protect IP – 48.5%.

If reshoring continues to expand at its current rate, the Reshoring Initiative predicts that the $600 billion/year trade deficit would be eliminated; the U. S. economy would add 3 million manufacturing jobs while adding 9-12 million total jobs because of the multiplier effect of manufacturing jobs; reduce unemployment by 4%; cut the U.S. budget deficit by about 50%, and increase manufacturing output by 25%.

Because of my concerns about the impact of the Trans-Pacific Partnership Agreement about which I have written, I recently asked Harry Moser for his opinion on the potential effects.

He said, “We have made huge progress from around 2003 when we were losing net about 130,000 manufacturing jobs/year till 2014 when reshoring plus FDI exceeded offshoring by about 10,000 jobs. However there are still about 3 million manufacturing jobs offshored. So, reshoring is still in its infancy and is still fragile. Offshore LLC prices are still typically 25% lower than domestic prices. It is a struggle to get companies to understand that in some cases the domestic total cost is lower even though the price is so much higher. Tariffs are one of the largest, most unambiguous of the “hidden costs” that need to be quantified. TPP will reduce tariffs, making the TCO argument more difficult and less likely to suggest reshoring. This is also an especially poor time for TPP with the USD up substantially and at its highest level in several years. The combination of the high USD and TPP will reduce the rate of reshoring by a roughly estimated 20 to 50%.”

He added, “Since the U.S. is the world’s largest market, with one language and with consumers who are mainly driven by price not nationalism, ours is the target market for all offshore companies. TPP will reduce barriers to trade, making our market even more attractive. If TPP has equal percentage impacts on our imports and our exports, the result will be negative since our goods imports exceed our exports by about 40%. ”

The TPP would reduce or eliminate tariffs for 11 more countries, so it will have the most impact on the companies that have reshored because of cost savings. I think Harry’s opinion that the TPP would have a 20 – 50% reduction on the rate of reshoring is conservative. This adverse effect on reshoring is one more reason why we must stop the fast track Trade Promotion Authority from being passed by the House. Now that the Trade Promotion Authority fast tracking the TPP passed the Senate, it is critical that you contact your Congressional Representative to urge them to oppose granting fast track Trade Promotion Authority for the Trans-Pacific Partnership Agreement.

 

International Corporate Elite Steamrolls Trade Promotion Authority Through Senate!

May 26th, 2015

Late Friday evening, May 22, 2015, the Senate voted to pass the Trade Promotion Authority (H.R. 1314) by a vote of 62 to 37 to give President Obama the authority to “fast-track” trade agreements through 2018, with an extension to 2021 possible. If this legislation also passes the House, this would mean that the Trans-Pacific Partnership Agreement (TPP) and the Trans-Atlantic Agreement may be negotiated and signed without any amendments by Congress and with only a majority vote rather than the supermajority vote required for treaties under the Constitution.

Of the Republican senators, 54 voted yes, four voted no and one did not vote. Fourteen Democrats joined the majority of Republicans in voting yes. According to the Roll Call, they are: Bennet (CO), Cantwell (WA), Cardin (MD), Coons (DE), Feinstein (CA), Heitkamp (ND), Kaine (VA), McCaskill (MO), Murray (FL) Shaheen (NH), Warren (VA), and Wyden (OR). The four Republicans who voted no are: Collins (ME), Paul (KY), Sessions (AL), and Shelby (AL).

Nearly every Democrat or Democrat-leaning organization from unions to the Sierra Club opposed the Trade Promotion Authority, so those fourteen Democrat Senators turned their back on their constituencies and the American working class they claim to support to follow lock-step with the Republicans they accuse of being in the pocket of “big business,” i.e. the large multinational corporations that comprise the membership of the U.S. Chamber of Commerce, the National Association of Manufacturers, etc.

There were over 100 amendments proposed, but only ten were allowed to reach the floor for a vote. Three were rejected for discussion or a vote because they were ruled as not being not germane to the topic: Inhofe (R-OK) # 1312 (AGOA), Shaheen (D-NH) SA #1227 (small business), and McCain (R-AZ) #1226 (catfish).

The Hatch (R-UT) (substitute) amendment #1221 was approved without any description or discussion by a vote of 62 yes to 37 no.

The Flake (R-AZ) amendment #1243 to strike the extension of the Trade Adjustment Assistance program (TAA) failed 35 yes to 63 no. The Trade Adjustment Assistance was originally a separate bill and was added to the Trade Promotion Authority to “sweeten” the deal to gain Democrat votes. Trade Adjustment Assistance is a federal program to reduce the damaging impact of imports. The current program features four components for workers, firms, farmers, and communities.

The Brown (D-OH) amendment #1251 purpose was to require the approval of Congress before additional countries may join the Trans-Pacific Partnership Agreement because the TPP is a “docking” agreement in which other countries may be added after it is signed and in effect. In his comments in support of this amendment, Senator Brown specifically mentioned the need for Congress to approve the addition of China to the Agreement. Unfortunately, the amendment failed by a vote of 47 yes to 52 no.

The Stabenow-Portman amendment #1299, whose purpose was, “To make it a principal negotiating objective of the United States to address currency manipulation in trade agreements,” failed by a vote of 48 yes to 51 no.

The Hatch amendment #1411 was agreed to by a vote of 70 yes to 29 No without any description or discussion.

Two Amendments had already been considered on May 21st:

  • Lankford SA 1237 passed by a vote of 92 to 0 to establish consideration of the conditions relating to religious freedom of parties to trade negotiations as an overall negotiating objective of the United States.
  • Brown SA #1242 failed by a vote 41 to 45 to restore funding for the trade adjustment assistance program to the level established by the Trade Adjustment Assistance Extension Act of 2011

Of equal importance, the Warren amendment #1327 failed to pass by a vote of 39 Yes to 60 No. Its purpose wasTo prohibit application of the trade authorities procedures to an implementing bill submitted with respect to a trade agreement that includes investor-state dispute settlement” [ISDS].

This is the chapter of the TPP that allows foreign corporations to bypass the domestic legal system to use to fight laws they don’t like. International Tribunals, not U.S. courts, would decide on lawsuits between the U. S and “investor” companies in member countries. Foreign “investors” could file lawsuits against city, state, and federal agencies for laws and regulations they feel infringe on their “expected future profits.” They can also sue for compensation for the loss of these “expected future profits.”

In her comments to introduce the amendment, Senator Elizabeth Warren mentioned that over 100 law professors had sent a letter to Congress and the Obama administration urging them to not include the ISDS in the TPP. I discovered that she was quoting from theAnalysis of Leaked Trans-Pacific Partnership Investment Text by Lori Wallach of the Citizen’s Trade group” that was released on Wednesday, March 25, 2015. You can download the leaked chapter at https://wikileaks.org/tpp-investment/

This 13-page analysis includes this paragraph: “A March 2015 letter signed by 139 U.S. law professors urges congressional leaders and the Obama administration ‘to protect the rule of law and our nation’s sovereignty by ensuring ISDS is not included” in the TPP, stating, “ISDS threatens domestic sovereignty by empowering foreign corporations to bypass domestic court systems and privately enforce terms of a trade agreement. It weakens the rule of law by removing the procedural protections of the justice system and using an unaccountable, unreviewable system of adjudication.’ A May 2012 letter signed by former judges, law professors and other prominent lawyers from TPP nations warns: ‘the foreign investor protections included in some recent Free Trade Agreements (FTA) and Bilateral Investment Treaties (BIT) and their enforcement through Investor-State arbitration should not be replicated in the TPP. We base this conclusion on concerns about how the expansion of this regime threatens to undermine the justice systems in our various countries and fundamentally shift the balance of power between investors, states and other affected parties in a manner that undermines fair resolution of legal disputes.”

This analysis is well worth reading to become fully informed of the dangers of international tribunals adjudicating cases instead of our domestic legal system. Two of the most dangerous features of the ISDS chapter are:

  • “Foreign investors alone would be granted access to extrajudicial tribunals staffed by private sector lawyers who rotate between acting as “judges” and representing corporations in cases against governments, posing major conflicts of interest.”
  • “Foreign tribunals would be empowered to order governments to pay unlimited cash compensation out of national treasuries.”

Senator Warren also mentioned that even the CATO Institute, a champion of free trade, had recommended removal of ISDS from the Trade Promotion Authority legislation. The report she referenced is Free Trade Bulletin No. 57, “A Compromise to Advance the Trade Agenda: Purge Negotiations of Investor-State Dispute Settlement,” by Daniel J. Ikenson dated March 4, 2014. The CATO Institute is a well-known American libertarian think tank, so its recommendations should have had some influence on Republicans in the Senate, but evidently did not. Instead, the vast majority of them chose to follow their cue from the international corporate elite behind this treaty.

Ikenson wrote that there are “practical, economic, legal, and political reasons to expunge ISDS from current trade negotiations.” He presented “Eight Good Reasons to Drop ISDS from TPP and TTIP, which you can read in full at the above link.

Since there was very little information on the Trans-Pacific Partnership Agreement in the major media prior to its introduction in the Senate and the failure of the first cloture vote on May 12th, it is imperative that freedom-loving organizations make Democrat and Republican Representatives in the House aware of the facts about the damage the TPP would do to our country.

America now stands at a crossroads, whether Americans will remain in control of their destiny or will be forced to bow before foreign tribunals and have even more of their jobs shipped overseas. If we are to protect our national sovereignty and our jobs, we must stop this legislation in the House by flooding their switchboards!

Members of the manufacturing task force of the California chapter of the Coalition for a Prosperous America of which I am chair have done their part by visiting the offices of all 33 of the southern California Representatives in the past year. The final hour is near. Let your Representative hear your voice! If you don’t know who your Representative is, click here.