The Biden administration released an executive order last week that is intended to enhance competition. While agencies will still have to draft regulations in response to the EO, this plan could have a big and potentially negative impact on manufacturers in several sectors. Here’s what manufacturers need to know, according to the NAM’s policy experts.
Antitrust provisions: The EO directs the Federal Trade Commission and Department of Justice to reexamine previously completed mergers and review the guidelines for both horizontal and vertical mergers.
- Why it matters: Business combinations help manufacturers streamline operations and boost efficiency. This directive could hinder pro-competitive mergers and ultimately harm consumers, says NAM Vice President of Tax and Domestic Economic Policy Chris Netram. The NAM has previously weighed in with the FTC on its vertical merger guidelines and its premerger notification rules, highlighting the importance of predictability in the merger approval process.
Other key points of interest: the EO also tells the agencies to crack down on noncompete agreements that keep workers from changing jobs easily, as well as on employers’ collaborations to reduce wages and benefits.
“Right to repair”: Another key target of the EO was the so-called “right to repair”—the ability of third parties to repair sophisticated equipment, like tractors, without involving the manufacturer.
- Why it matters: The NAM has long argued that such repairs pose a danger to consumers and expose companies’ intellectual property to theft by competitors, Netram points out.
Health Care: The EO also covers certain practices in the health care and pharmaceutical industries. Manufacturers should be aware of the following moves:
- Within 45 days, the Department of Health and Human Services is instructed to come up with a plan to address high drug prices. HHS is also directed to work on the importation of drugs from Canada.
- Meanwhile, the FTC is tasked with banning “pay for delay” agreements—when industry players agree to delay the market entry of generics or biosimilars.
- Why it matters: These moves could endanger America’s global leadership in the development of lifesaving treatments, argues NAM Vice President of Infrastructure, Innovation and Human Resources Policy Robyn Boerstling, by reducing the returns on and protections for innovation. This could potentially lead to fewer treatments being developed overall.
Technology: The EO addresses technology policy in a number of ways, most prominently urging the reinstatement of “net neutrality” rules imposed by the Obama administration.
- Why it matters: The NAM urged the repeal of those rules back in 2017. As Boerstling puts it, “net neutrality” treats the new and dynamic technology of broadband as if it were indistinguishable from the telephone, and treats competition in communications technology as if it hadn’t changed since the mid-20th century.
Other key points: The EO also instructs the Federal Communications Commission to hold spectrum auctions that disallow excessive concentration, and to create new reporting requirements for broadband providers’ prices and subscription rates.
Transportation: Lastly, the EO addresses certain practices by railroads, airlines and other sectors in transportation. For example:
- It urges the Surface Transportation Board to require railroad track owners to let competitors and passenger trains have right of way.
- It asks the Federal Maritime Commission to target certain shipping practices—mainly relating to fees charged while goods wait in containers to be unloaded, or while the company has yet to return an emptied container.
The NAM says: NAM President and CEO Jay Timmons released a statement last week, saying, “Our sector is strong and growing, and our people are benefiting. Unfortunately, there are those who want to erode our competitive advantage with archaic tax policies. And some of the actions announced today are solutions in search of a problem; they threaten to undo our progress by undermining free markets and are premised on the false notion that our workers are not positioned for success.”
Read the NAM policy team’s full overview of the EO here.
Washington, D.C. – Ahead of the midterm elections, the National Association of Manufacturers released its policy roadmap, “Competing to Win,” a comprehensive blueprint featuring immediate solutions for bolstering manufacturers’ competitiveness. It is also a roadmap for policymakers on the laws and regulations needed to strengthen the manufacturing industry in the months and years ahead.
With the country facing rising prices, snarled supply chains and geopolitical turmoil, manufacturers are outlining an actionable competitiveness agenda that Americans across the political spectrum can support. “Competing to Win” includes the policies manufacturers in America will need in place to continue driving the country forward.
“‘Competing to Win’ offers a path for bringing our country together around policies, shared values and a unified purpose,” said NAM President and CEO Jay Timmons. “The NAM is putting forward a plan filled with ideas that policymakers could pursue immediately, including solutions to urgent problems, such as energy security, immigration reform, supply chain disruptions, the ongoing workforce shortage and more. Manufacturers have shown incredible resilience through difficult times, employing more workers now than before the pandemic, but continued resilience is not guaranteed without the policies that are critical to the state of manufacturing in America.”
The NAM and its members will leverage “Competing to Win” to shape policy debates ahead of the midterm elections, in the remainder of the 117th Congress and at the start of the 118th Congress—including in direct engagement with lawmakers, for grassroots activity, across traditional and digital media and through events in key states and districts as we did following the initial rollout of the roadmap in 2016.
The document focuses on 12 areas of action, and all policies are rooted in the values that have made America exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.
Learn more about how manufacturers are leading and about the industry’s competitiveness agenda at nam.org/competing-to-win.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org