From a report entitled "Enough is Enough: Confronting Chinese Innovation Mercantilism," by the Information Technology and Innovation Foundation:
Empower U.S. Firms to Defend Their Collective Interests Against Chinese Mercantilism
The federal government also needs to empower U.S. firms to more effectively defend their interest when dealing with China. One way is to make it cheaper to do so. Beyond facing retaliatory threats, there’s another reason why U.S. companies don’t bring more trade enforcement cases. They are expensive and the “free rider” problem means that companies can benefit if they can convince other firms in their industry to bear the burden of helping USTR to bring a trade case. In order to remedy this, Congress should encourage companies to build WTO cases by allowing them to take a 40 percent tax credit for expenditures related to bringing the cases.
The 40% figure is an increase from a previous (2008) proposal:
Toward that end, ITIF would also encourage the Committee to consider an additional tool. Even if Congress gives the USTR more resources, government alone cannot investigate all potential WTO cases. U.S. companies will have to play a larger role. But there are two reasons why U.S. companies don’t bring more cases. First, they are expensive. Second, the “free rider” problem means that companies can benefit if they can convince other firms in their industry to bear the burden of helping USTR to bring a trade case. In order to remedy that, ITIF has proposed that Congress should encourage companies to build WTO cases by allowing them to take a 25 percent tax credit for expenditures related to bringing WTO cases. This tax credit could be piggybacked on top of the R&D tax credit.
Not that I expect this to happen, but if it did, I would be curious about the impact. Would law firms simply raise their rates for WTO cases, knowing that companies could now afford to pay more?
