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Guest opinion: USMCA fuels America’s innovation economy



Pablo Martinez Monsivais, AP

President Donald Trump speaks during the USMCA signing ceremony as Canada’s Prime Minister Justin Trudeau, right, and Mexico’s President Enrique Pena Neto, left, look on, Friday, Nov. 30, 2018 in Buenos Aires, Argentina. (AP Photo/Pablo Martinez Monsivais)

In late June, Mexico ratified the new North American trade agreement. The deal, formally called the United States-Mexico-Canada Agreement, is a much-needed modernization of NAFTA, which was signed more than 25 years ago.

USMCA will catalyze growth across the economy, especially in sectors that rely on strong intellectual property protections. America’s creators and innovators depend on lawmakers’ quick approval of USMCA as negotiated by its three signatory nations.

Innovation is the heart of the U.S. economy. We’re home to the most creative business community in the world, regularly generating groundbreaking intellectual property in every conceivable industry, from movies to smartphones, medicines to drones.

Today, America’s Intellectual Property is worth an astonishing $6.6 trillion and accounts for more than half of all U.S. merchandise exports. These vital industries — from tech, to manufacturing, and even agriculture — support more than 40 percent of U.S. economic growth.

IP-intensive companies also employ 45 million Americans — a full third of the labor force. Over the next ten years, job opportunities in IP-intensive industries are expected to grow faster than those in other sectors.

When NAFTA was drafted in the early 1990s, the internet was in its infancy. To most Americans, WiFi, smartphones, and high-speed internet weren’t even imaginable. So unsurprisingly, NAFTA is desperately out of date. USMCA modernizes NAFTA to account for several decades of break-neck innovation and establishes a clear, fair framework for American inventors.

For starters, it requires Mexico and Canada to extend their copyright protections to match America’s, up to the author’s life plus 70 years. This change is crucial to the health of the arts.

The recording industry adds nearly $10 billion a year to the economy. And our movie and television industries are the envy of the world, generating $134 billion in sales in 2016 and supporting more than two million jobs.

Inadequate copyright protections in Mexico and Canada deprive American artists of well-deserved earnings: Local companies are allowed to prematurely create knock-off products and steal sales. This abuse leads to lost revenues, lost jobs, and a hobbled economy here at home. Expanding copyright protections will stem this bleeding and keep our music, movie, and TV sectors humming.

USMCA also cracks down on piracy. The Chamber of Commerce estimates that piracy costs Hollywood $71 billion every year. USMCA beefs up border security, empowering agents to more effectively identify counterfeit and pirated goods. This will ensure that American innovators can reap the full benefits of their labor.

Next, USMCA smooths the channels of digital trade. It prohibits custom duties on digital products, including software, e-books, and games. These charges drive up overhead costs for creators, which ultimately raises product prices for consumers. By eliminating these unnecessary expenditures, digital entrepreneurs and consumers alike benefit from USMCA.

The deal also creates new protections for the code and algorithms behind new software. In effect, these safeguards make it harder for nefarious actors to steal lucrative Intellectual Property.

Put simply: USMCA ensures that American Intellectual Property-intensive companies can easily sell and operate in foreign markets.

Lastly, USMCA installs robust new Intellectual Property protections for advanced medicines derived from living cells. These treatments, called “biologics,” were in their infancy when NAFTA was signed. But today, they’re our most promising weapons against cancer, multiple sclerosis, rheumatoid arthritis and other punishing conditions. By raising “data protection” in Mexico and Canada closer to the American standard, USMCA helps ensure innovators have a chance to recoup their upfront research costs for new scientific discoveries and medical breakthroughs.

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USMCA erects a sturdy, forward-thinking Intellectual Property regime that will power decades of American prosperity. Mexico has already ratified it. And Canada has explicitly indicated it’s waiting for America to move next. Canadian Foreign Minister Chrystia Freeland recently said “Our plan is to move forward in tandem with the U.S.”

The next step is clear. Congress must ratify USMCA. This deal updates the NAFTA framework for the 21st century, protecting the innovation at the heart of the American economy.

Erik Paulsen represented Minnesota in the U.S. House of Representatives from 2009 to 2019. He currently serves as honorary co-chairman of the Pass USMCA Coalition.

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Uber Stock Suffers Greatly From Company’s Hazy ‘Vision’




Every viable business creates a win-win situation. Employees get a sustainable income. Customers get value. Shareholders get profits. Uber (NYSE:) doesn’t do any of that.

Uber Stock Is Barreling Toward Worthlessness Without a Turnaround Plan

Employees aren’t making sustainable income and they’re not treated like employees. Shareholders aren’t seeing any profits, even at scale. Customers have been seeing value only because their rides are subsidized by shareholders.

Uber went public in May 2019 because it had to. Private equity and venture funding had grown tired of the pretense that it would work. They wanted out. Since then, the stock is down almost 33%.

If you bought UBER stock it’s because I couldn’t convince you not to. I warned you in , in August and . You didn’t listen.

Can you believe me now?

Son’s Lack of Vision

Uber is a product of SoftBank Group (OTCMKTS:) CEO Masayoshi Son. The idea behind his Vision Fund was to disrupt huge industries, using software and , and to have a dominant position in the resulting companies.

The fund has . Paytm, the Indian payments company, looks like a winner. Kabbage, another fintech player, may be a winner. Fanatics may do OK.

But most are like Uber. Slack (NYSE:) has been a loser on public markets. WeWork, as I said over the summer, .

Son went too big, too fast on a lot of these deals. He put in more money than many of these companies could use. He convinced founders like WeWork’s Adam Neumann (and Uber co-founder Travis Kalanick) they could do no wrong. SoftBank’s CEO became like Jeffrey Cordova in The Band Wagon, producing pretentious versions of Faust when he could have been making nice little musicals.

Son, in short, let founders run when he should have used a short leash, and a quick hook.

What Tech Can’t Do

Technology can disintermediate industries. When there’s a high cost in making something happen, technology can drop that cost to zero. It’s in transaction costs that disruptive technology earns its way.

But there isn’t enough money in taxis to make that work, even when the business scales. Uber lost $1.2 billion during the most recent quarter, on adjusted revenue of . That’s a 30% gain in revenue, but the losses were 18% higher than the previous year, when they came in at $986 million.

In order to achieve those third quarter results CEO Dara Khosrowshahi bypassed normal employment checks to , which put them in danger. It also treated the people doing its work like hot garbage. In other words, it squeezed the people on both sides of every transaction, as hard as it could, and still didn’t make any money.

The promise of Uber was it would eliminate the driver. But that was always a canard. The technology was stolen from Alphabet’s (NASDAQ:, NASDAQ:GOOGL) , by a man named Anthony Levandowski. And it still doesn’t work.

The Bottom Line on Uber Stock

Uber is the perfect business analogy for our time.

It claimed to be profiting from the benefits of technology, but it was always about disintermediating law, not industry. Drivers were told they were qualified to be taxi drivers, and doubtless many were. Passengers were told technology could give them safe rides at a bargain price, and doubtless many got them. Investors were told that Uber stock could create a dominant position quickly, then squeeze all sides of the business for big profits.

Which was the greatest fool? I’d argue it was those who invested in the Vision Fund. Son believed his own rhetoric. The Saudis bought his reality distortion field. Son has a second Vision Fund and .

We shall see.

 is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time available now at the Amazon Kindle store. Write him at  or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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