Economy

A Small Business Owner's Perspective: "A High Road on the Minimum Wage"

10/20/14
President Barack Obama and Rep. Gary Peters, D-Mich. stop for lunch at Zingerman's Delicatessen in Ann Arbor, Mich., April 2, 2014.

President Barack Obama and Rep. Gary Peters, D-Mich. stop for lunch at Zingerman's Delicatessen in Ann Arbor, Mich., April 2, 2014. (Official White House Photo by Chuck Kennedy)

My partner, Ari Weinzweig, and I never subscribed to the conservative economic theory of Milton Friedman, that “the business of business is business.” To us, the right to conduct business is earned by being a good corporate citizen — by producing products and delivering services responsibly, hiring responsibly, generating profits responsibly, and finally, sharing profits with those who help produce them and with the wider community from which the revenues are drawn.

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Foreign investors aren’t deterred by Burma’s haphazard trademark system

10/16/14

On Tuesday, the newly formed Licensing Association of Thailand (LAT) wrapped up its inaugural meeting in Bangkok, where intellectual property (IP) professionals discussed some of the challenges faced by companies seeking to license their patents, trademarks, and copyrights in Southeast Asia.

A key sponsor of the event was Tilleke & Gibbins, a law firm that opened its first office in Bangkok in 1890 and recently opened an office in Rangoon. After the LAT meeting, DVB spoke with Michael Ramirez, a senior consultant at Tilleke & Gibbins, who now spends most of his time at the firm’s office in Rangoon. Mr. Ramirez indicated that while Burma’s lack of a robust IP legal regime is a major issue for foreign companies seeking to invest in the country, it’s not necessarily the most important factor driving investment decisions.

“Serious investors; that is, those investors who are viewing Myanmar [Burma] as a long-term investment, are not dissuaded by the lack of a fully developed IP regime. It’s certainly an issue—it’s an issue that needs to be addressed – but it is not the determining factor for most of our clients in making that decision to enter the marketplace. Those broader decisions tend to be made based on a number of different inputs,” said Ramirez.

Currently, Burma does not have laws that recognise foreign patents or trademarks, and it’s not party to international treaties which obligate signatories to protect patents or trademarks registered in other signatory countries. Burma also lacks a single, comprehensive trademark law, so trademarks in the country are protected by a hodgepodge of laws, some of which date back to the colonial era.

This mix of various laws has created a unique trademark system whereby anyone can obtain a degree of protection over any trademark by either using the mark in trade or filing a “declaration of ownership”. Filing such a declaration is the equivalent of registering a trademark in other countries, and filing a “declaration of ownership” is considered as Burma’s way of “registering” a trademark. In Burma, however, trademark “registration” does not provide the same protection as trademark registration does in other counties.

One distinct feature of Burma’s trademark “registration” system is that multiple people can actually file a “declaration of ownership” for the same trademark. As a consequence, anyone can obtain a degree of ownership over famous brands such as “KFC,” simply by filing a “declaration of ownership”.

Moreover, prior use of a trademark trumps any rights obtained by filing a “declaration of ownership”. Thus, foreign trademark owners who think they can protect their trademark simply by filing a “declaration of ownership” without actually doing business—perhaps because they want to do market research first or wait until investment conditions are more suitable—can still lose out to local players who are using the brand in their business.

This might explain why Burma had its own version of Walmart and a fast-food company called “ICFC”. Burma’s “ICFC” sold the same products and had a logo similar to the original KFC, which recently decided to enter Burma—a decision which, in part, might have been made to protect its trademark in the country.

As Ramirez puts it: “A first user can complicate or muddy the waters” for a foreign trademark owner, whose only remedy is to file a lawsuit. This is because Burma’s lack of a specific trademark law means that there aren’t any special trademark infringement procedures available to fast-track an original trademark owner’s claim against alleged infringers. Instead, original trademark owners must use Burma’s uncertain and slow-moving judicial system.

Upon signing the World Trade Organization’s TRIPs agreement, Burma became obligated to modify its haphazard trademark regime by enacting a single, comprehensive trademark law that comports with a body of international standards that has developed over the years and now constitutes a uniform legal framework, often referred to as international trademark law.

Until Burma adopts a new trademark law, however, more than one person can declare ownership over the same trademark—so even if a foreign company tries to beat erstwhile trademark bandits by quickly filing a “declaration of ownership”, another person can use that foreign company’s trademark.

Two Tilleke & Gibbins trademark experts who helped organize the LAT meeting, Alan Adcock and Darani Vachanavuttivong, told DVB that until a new trademark law is passed, they typically advise companies to file a “declaration of ownership” in Burma as soon as possible if they’re interested in entering the market at some point. Otherwise, they run the risk of being sued by a person who has already used or registered the trademark.

Yet despite Burma’s efforts to obtain help drafting a new trademark law from international IP associations (e.g. WIPO and INTA) and a series of pronouncements that a new trademark law would soon be passed, the law still hasn’t made it through parliament.

Currently, the draft version of Burma’s new trademark law provides a mechanism by which a “declaration of ownership” can be converted into a trademark certificate similar to those issued in other countries with “regular” trademark registration systems—but only if the trademark owner asks the trademark office to examine and issue a proper trademark certificate within three years of the date upon which the law becomes effective.

During their interview with DVB, Adcock and Vachanavuttivong said that foreign companies can potentially strengthen their claim to a certain trademark if a dispute arises by publishing a “cautionary notice” in a daily newspaper to notify the public of the company’s trademark rights. Publishing such a notice is advised in order to further inform the public that a trademark has been declared as owned, and that any unauthorized use of that trademark could amount to infringement.

Adcock and Vachanavuttivong also made sure to emphasise that if a dispute arises over the ownership of a trademark, foreign companies can file lawsuits in Burmese courts and actually have a good chance of winning.

The problem with resorting to litigation, however, is that court cases in Burma can be very lengthy and the outcome can be uncertain—not to mention the fact that even if a judgment is obtained it might be difficult to enforce. Ramirez explains that foreign investors usually aren’t willing to bear these risks, so they often wind up settling with alleged infringers instead of going to court.

“The reality is [that Burma’s] judicial system is uncertain and it’s very lengthy—not unlike Thailand, where it can take a great length of time before you get a final judgement after exhausting all levels of appeal—so you end up having someone who wants to enter the market, wants to clean up the issues with regard to possible infringement, and get moving. That usually means you have to engage the other entity and maybe even work out a settlement,” said Ramirez.

“Just because you don’t happen to be first in Myanmar doesn’t mean you are devoid of the opportunity to try to prove that you are indeed the brand owner. Of course, it can be complicated [to obtain a judgement from a Burmese court], and often times this results in legitimate brand owners having to deal with illegitimate users by purchasing rights or otherwise settling disputes— sometimes by licensing.”

On a positive note, Ramirez underscored that given the government’s desire to attract foreign investment, trademark infringement will become “less and less common, because it isn’t good for international investment [for the government or judicial system] to support this kind of illicit use of brands”.

At the moment, however, it seems that foreign investors are still willing to enter Burma’s potentially lucrative market despite the lack of a comprehensive trademark regime—particularly Asian investors from countries such as Thailand, which still hasn’t given up its dream of accessing the Bay of Bengal by developing the long-delayed Dawei special economic zone and deep sea port.

Although critics have said that Dawei only stands to benefit Thailand, one Thai banker who spoke with DVB on the condition of anonymity insisted the project will benefit all three countries involved—Burma, Japan and Thailand—and that it’s only a matter of time before a syndicated loan is arranged to finance the ambitious project.

Why are Americans still gloomy about the economy?

10/15/14

For more What in the World watch Sundays at 10 a.m. & 1 p.m. ET on CNN

By Global Public Square staff

The American economy is back. Last week, the IMF projected that the United States will be one of the very fastest growing advanced economies in the world in 2015. In fact, the American economy is just about the great exception in a world that is showing signs of economic stagnation.

Good news keeps piling on. The Congressional Budget Office just announced that the U.S. deficit fell by nearly a third during the fiscal year, which marks a 6-year low. Meanwhile, the Dow Jones Industrial Average and the S&P 500 both surged to record highs over the last month. And the most recent economic snapshot from the Labor Department says that private sector employment grew in September for a 55th month in a row, a record, and that the unemployment rate is now at 5.9 percent, the lowest level it's been since July 2008.

But, and here is the paradox, despite a relatively robust recovery now, Americans aren't feeling more prosperous. In fact, 56 percent of Americans told the Pew Research Center in August that they are "'falling behind' financially." That's pretty much the same percentage as in October 2008, during the heat of the Wall Street financial crisis.

So, why are so many despondent over the economy when the statistics say it's doing pretty well?

For some insight, listen to a recent interview that President Obama granted CBS News's 60 Minutes:

Obama: Ronald Reagan used to ask the question, "Are you better off than you were four years ago?" In this case, are you better off than you were in six? And the answer is the country is definitely better off than we were when I came into office. But now we have to make sure…

Steve Kroft: Do you think people will feel that?

Obama: They don't feel it. And the reason they don’t feel is because incomes and wages are not going up.

Well, the President is right. The one number that isn't up is the average American's pay check.

Look at the data from The Economist, which in turn cites Census Bureau and Sentier Research data. They show that during the first six years of Ronald Reagan's Presidency, the U.S. economy grew by 22 percent and the median household income also shot up by 6 percent.

Fast forward to Bill Clinton's first six years in the Oval Office and the nation's GDP grew by 24 percent, while median income increased 11 percent.

Then, it starts to turn. The first six years of George W. Bush's Presidency saw 16 percent GDP growth but a 2 percent decrease in median incomes. Likewise, the first six years of Obama's presidency have seen 8 percent GDP growth coupled with a decline in median incomes – a 4 percent decline, again according to the research in The Economist.

Indeed, when you adjust for inflation, census data shows that the American middle class is actually 1 percent poorer today than it was in 1989, when Reagan left office. That's also probably why Obama's job approval rating is about 20 percent lower than Reagan's was by the second October after his re-election, according to Gallup.

And guess what? The new employment report sees that trend continuing: the average hourly wage for Americans working in the private sector actually decreased by one penny last month.

Why are wages stagnating (or, even, falling)?

Nobody is actually sure. Generally, when unemployment drops, workers can demand better wages. That's not happening. And no one quite knows why. It could be globalization, with its endless supply of cheaper labor from around the world. It could be technology, which replaces people with machines and software. It could be other, more technical factors.

But we think we can confidently say that until all this changes – and until the majority of Americans who do have jobs see some improvement in their wages – they will feel gloomy. And that will have economic consequences in the years ahead but also political consequences in the weeks ahead.


Chart of the Week: The Deficit Falls to Its Lowest Level Since 2007

10/15/14

A cornerstone of America’s 21st century foundation requires that we get our fiscal house in order for the long run, so we can afford to make investments that strengthen the middle class. That is why President Obama has made it a priority to enact policies that ensure our deficit, or the amount we spend that exceeds our revenues, doesn’t undercut our future.

Thanks to a growing economy, prudent spending cuts, and asking the wealthiest Americans to pay a little bit more on their taxes, we’ve cut our deficits by two-thirds over the last five years. In fact, the Office of Management and Budget and the Treasury Department announced today that the deficit has fallen to 2.8 percent of GDP, the lowest level since 2007 and less than the average of the last 40 years. 

Take a look at the chart of the week to see how the deficit has declined at the fastest sustained pace since World War II:

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What You Need to Know: Our Push To Get Long-Term Unemployed Americans Back to Work

10/15/14

Thanks to the grit and resilience of American workers and business owners, our economy is getting stronger every day. Over the last 55 months, we've added 10.3 million jobs -- the longest streak of private-sector job growth on record -- and the number of job openings rose to its highest level in more than 13 years. We've put more people back to work than Japan, Europe, and every other advanced economy combined and the unemployment rate is falling at a faster pace than predicted

But one of the greatest challenges from the recession was the rise in long-term unemployment. The Great Recession left too many Americans out of a job through no fault of their own and many continue to search for work. Our strong economic growth is beginning to help.

Since December 2013, the number of long-term unemployed has fallen by 900,000, accounting for about 90 percent of the total drop in unemployment in the past 10 months.

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55% of Armenians support country’s membership in Eurasian Economic Union

10/14/14
According to the Caucasus Barometer 2013, 55% of Armenians support Armenia's joining the Eurasian Economic Union.

According to the Caucasus Barometer 2013, 55% of Armenians support Armenia’s joining the Eurasian Economic Union.

According to the Caucasus Barometer 2013, 55% of Armenians support Armenia’s joining the Eurasian Economic Union. More importantly, only 13% are against it.

PS: I trust the Caucasus Barometer and their data. The only problem with this chart is this — I’m pretty sure the 55% of Armenians, plus the 11% who said they don’t know, in reality have a very vague understanding of what the membership in EEU will mean for the country’s future.


Germany's Draghi plan challenge heads to EU Court

10/14/14
Riccardo Barbieri, chief European economist at Mizuho International, talks with Guy Johnson about Germany challenging European Central Bank President Mario Draghi's bond-buying program in a European Union court and how it can impact the European economy






Weekly Address: America Is a Place Where Hard Work Should Be Rewarded

10/11/14
President Barack Obama tapes the Weekly Address in the Roosevelt Room of the White House, Oct. 9, 2014.

President Barack Obama tapes the Weekly Address in the Roosevelt Room of the White House, Oct. 9, 2014. (Official White House Photo by Chuck Kennedy)

In this week's address, the President made the case for why it's past time to raise the minimum wage. Increasing the national minimum wage to $10.10 an hour would benefit 28 million Americans, and make our economy stronger. While Republicans in Congress have blocked this commonsense proposal, a large and growing coalition of state and local leaders and owners of businesses large and small have answered the President's call and raised wages for their residents and employees.

This progress is important, but there is more that can be done. No American who works full time should have to raise a family in poverty. That's why the President will continue to push Congress to take action and give America its well-deserved raise.

Transcript | mp4 | mp3

How $10.10 Would Affect You:

10/10/14

In this year's State of the Union address, the President once again called on Congress to raise the national minimum wage from $7.25 to $10.10 an hour, and soon after used his pen to raise the minimum wage to $10.10 for the individuals working on new federal service contracts. Raising the minimum wage nationwide would provide 28 million workers with a pay increase and boost the bottom lines of businesses across the country.

Today, to mark National Minimum Wage Day (10/10), Cabinet officials, members of Congress, mayors, and other stakeholders participated in events calling for an increase in the minimum wage. Labor Secretary Tom Perez also joined House Minority Leader Nancy Pelosi and Congressman George Miller on a national press conference call to discuss the importance of a minimum wage increase.

We also released a short whiteboard video today explaining why we need to give Americans a raise -- and this afternoon, Secretary Perez sent the following message to the White House email list to highlight the video.

Didn't get the email? Sign up for updates here.

A lot of people are observing October 10 (or 10/10) as National Minimum Wage Day, a day to show support for raising the national minimum wage to $10.10.

But for the millions of hardworking Americans earning the minimum wage, every day is national minimum wage day. Every day, heartbreaking decisions that no one should have to make. Do I pay rent or fix the car? Do I go without this meal so my kids can have more to eat?

If raising the minimum wage seems like a no-brainer, that's because it is. And a new whiteboard video from the White House spells it out -- in less than 2 minutes.

Watch this new video that shows what the average minimum wage earner looks like, and how a higher wage helps all of us. And be sure to pass it on.

Watch on YouTube

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Local Leaders Make 2014 Their "Year of Action" for Raising the Wage

10/10/14

Since the President called on Congress to raise the federal minimum wage, 13 states and the District of Columbia raised the minimum wage for working Americans. Cities and counties throughout the country have also made tremendous progress in using their authorities to make sure workers, contractors, and residents can better clothe, feed, and shelter their families.    

While congressional Republicans blocked proposals to raise the national minimum wage, the President took action to raise the minimum wage for workers on new federal contracts, and mayors, city council members, and county executives continue to follow the President’s lead.

Since the President’s 2013 State of the Union, 21 cities and counties have taken action to raise wages. Cities like Louisville, Philadelphia, St. Louis, Milwaukee, and Ypsilanti, Mich. have raised wages to $10.10 or higher for their city workers or contractors. Other cities like Seattle, Richmond, Calif., Berkeley, Calif., San Jose, Calif., Jackson, Miss., and Las Cruces, N.M. have raised wages citywide, as have counties like Montgomery and Prince George’s in Maryland, which raised them in tandem with Washington, D.C.

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