The Latest from SOCMA

29.01.2013 -

Policies Supporting Competitiveness and Market Expansion are Key

There are policies that the U.S. government can and should pursue, or not pursue, to help American companies be more competitive and expand their markets. Clearly, there are ways it can be a hindrance to growth, such as overregulation and higher taxes. In shaping SOCMA's strategy for 2013, here are a few areas in which we plan to advocate in the new Congress and a second Obama administration.

Regulatory Reform
An August 2012 study by the Manufacturers Alliance for Productivity and Innovation provides solid evidence as to why and how chemical manufacturing is among the most regulated industries in the U.S.. It is very important that government officials understand how regulations hold back our industry in terms of both productivity and innovation. We know that, as a U.S. industry, we must abide by many more regulations than our competitors in Asia, South America, and even Europe. Many of these regulations are intended to serve noble purposes, such as safer workplaces and lower toxic emissions. However, we also know that there are a number of regulations, from environmental to economic, that are duplicative or simply unnecessary. Congress needs to take concrete steps to reform our regulatory process as well as compel the federal government to review and, where necessary, revoke regulations that are duplicative, contradictory, or clearly prevent our industry from leading the world in innovations, not in inhibitions.


The federal research & development (R&D) tax credit is highly important to SOCMA members and chemical manufacturers in general. Because of the highly innovative nature of specialty, custom, and batch manufacturing, much research and investment is devoted to developing a product before it is sold in the marketplace. On average, manufacturers claim approximately 70% of R&D credit amounts. The credit is needed to keep the U.S. competitive in the global race for R&D investment dollars. Congress repeatedly drags its feet in renewing the tax credit, which creates much uncertainty among SOCMA members that rely upon it. We need to find a way through Congress to make this credit permanent.

Intellectual Property Protection

More than 70% of the world's intellectual property resides with U.S. companies. It is no wonder that we are often the target of corporate espionage and intellectual property theft. As a highly innovative manufacturing sector, SOCMA's members are particularly at risk. We occasionally hear from our members that have had their IP stolen by a foreign entity. In most cases, their violator's government merely slaps the company on the hand with little to no consequence other than to our members, who see their proprietary information copied and sold in the marketplace. In other cases, we hear from members who learn that foreign competitors claim to customers that they are making our members' products-and selling them at a lower price-when, in fact, the product is fraudulent. The violation of companies' IP affects not only current profits, but also the long-term sustainability of their business because of unfair competition.

Confidential Business Information Protection

For many years, the U.S. Environmental Protection Agency (EPA) has been protecting confidential business information (CBI) claims for products regulated under the Toxic Substances Control Act. However, today the agency has a proposal awaiting White House approval that would force chemical manufacturers to reveal highly proprietary details of new chemicals even before they are sold in the marketplace. If finalized, this action would deal a significant blow to our industry's ability to maintain our innovative competitiveness. Competitors would no longer need to steal this information, but merely mine EPA's public website for characteristics that were previously protected as CBI but would now be available for anyone to copy.

Free Trade Agreements

Trade agreements continue to be a way for our members to fairly access foreign markets and positively contribute to the growth of the U.S. economy. These agreements support domestic manufacturing jobs by offering access for our competitive, innovative products. SOCMA continues to push for movement of the trade policy agenda, advocating for high standard free trade agreements, such as those with Korea, Colombia, and Panama, which will save U.S. chemical manufacturers billions of dollars now that these agreements are in place.

Read more about SOCMA's "First 100 Days" initiative to educate Congress and regulatory agencies about issues important to the U.S. specialty chemical industry.



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