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Ideas and knowledge are a central part of creating the goods and services that comprise the global trade repertoire of countries like Mexico and China. The protection of intellectual property of a manufacturer might be the most important safeguard. Investing personnel and fiscal resources in innovation results in the idiosyncratic design, invention, method, repute or success or failure of a manufacturer in Mexico (or anywhere else), enabling it to achieve advantage over the firms with which it competes in the marketplace. These items must be sufficiently protected so that a corporation is assured that its competitive lead will not be stolen, counterfeited, or used without its authorization. Many countries recognize the value of patents and trademarks in world markets and have taken steps to implement stringent intellectual property protection laws and measures. America’s intellectual property industries, which depend on IP defense for their revenues, greatly contribute to the vitality of the U.S. economy, and embody a rising percentage of our gross domestic product. This sector includes not only the copyright industries, such as movies, musical recordings, and book publishing, but also businesses that rely on the value of their trademarked brands. It also includes patent industries, such as the pharmaceutical industry and many manufacturers. Protection of intellectual property varies from country to country, and when considering the laws of other countries, especially when considering host countries for offshore manufacturing and management, it is important to learn the intellectual property protection laws that are in place. In Mexico, the NAFTA protects certain intellectual properties such as: copyright of data, copyright of sound recordings, trademarks, patents or inventions, industrial designs, trade secrets, and geographical indications. These are the minimum standards of protection of intellectual property that the U.S., Canada, and Mexico must provide in their domestic laws, but they may provide more protection than is required under NAFTA. Mexican courts typically respect and enforce companies’ rights to intellectual property and the guarantee of these minimal protections gives some significant peace of mind when considering the possibility of initiating manufacturing operations in Mexico. China, perhaps Mexico’s primary competitor in the competition for direct foreign investment, has very different laws. China has been widely questioned for both the content of its intellectual property protection laws, as well as their enforcement. China’s legal system still has many gaps, it is still weak, and it is still developing. Counterfeits are common in Asia and courts have been slow to enforce or recognize intellectual property rights. Currently the counterfeiting problem in China is widely recognized as the most serious counterfeiting problem in world history. The Chinese Government estimates that the counterfeit trade in China is between $19 and $24 billion per year, accounting for about 8 percent of China’s gross national product. Furthermore, U.S. industries that do business in China estimate their losses to be in the billions to tens of billions of dollars per year. Since it is the world’s largest recipient of foreign direct investment, China now has unprecedented access to the world’s most valuable intellectual property. For companies that outsource their manufacturing to third party Chinese firms, intellectual property problems are not limited to brand name thievery. Other forms of IP theft are cunning but no less detrimental. In many cases, the IP thieves are the current or former employees of Chinese firms that once worked with the original IP owners. As a result of the 2004 Chinese decision that eliminated the export domination that had been benefitted from by state trading companies, counterfeiters can now export forged products. Prior to 2004, a fraudster had to get the cooperation and compliance of a state trading company, which had a control on export rights, before they could export counterfeit products.  Steven is the director of corporate marketing for the Tucson, Arizona-based Offshore Group. The Offshore Group has enabled businesses to establish and start-up low-cost and low-risk operations since 1986 Steve has been working in the area of U.S. -Mexico manufacturing and trade for the past twenty years, and is fluent in both Spanish and Portuguese Manufacturing in Mexico , Mexico Shelter Companies
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