Tear Down Those Walls: NAM Weighs in on Foreign Trade Barriers Around the World

By October 28, 2016Shopfloor Policy, Trade

The National Association of Manufacturers (NAM) today urged the U.S. government and other stakeholders to address trade barriers faced by manufacturers in the United States in markets around the world. In its detailed submission to the Office of the U.S. Trade Representative for its National Trade Estimate Report (NTE), the NAM described a wide variety of foreign trade barriers that undermine the ability of manufacturers in the U.S. market to compete on a level playing field in international markets, which, in turn, undermines U.S. economic opportunities here at home.

These trade barriers vary widely, but all have a significant impact on the ability of manufacturers in the United States to take full advantage of the opportunities provided by global markets and, in many cases, distort competition globally. The NAM’s submission identified a broad range of trade barriers, which the NAM has grouped into several major categories, including the following:

  • Import policies, including high import tariffs, discriminatory import licensing schemes and burdensome customs policies and procedures
  • Investment barriers, such as foreign investment bans or caps in some sectors, investment screening mechanisms and equity caps and investment-related localization/performance requirements
  • Forced localization barriers, including measures designed to boost or defend domestic industries, investors and intellectual property over their foreign counterparts
  • Lack of intellectual property protection and enforcement, such as lax enforcement against counterfeiting and piracy, unwarranted requests from government entities for confidential business information and compulsory licensing regimes
  • Standards and technical regulations, including unique regulatory and technical standards and conformity assessment requirements that act as costly barriers to U.S.-manufactured goods
  • Export restrictions, such as those that limit the export of natural resources used as inputs in the production of a wide range of manufactured goods

The NAM’s submission identifies challenges in nearly 50 countries and regions, with Brazil, China, India, Indonesia and Russia among the most challenging markets. For example, manufacturers in India face a variety of challenges from high import tariffs to localization barriers as well as significant challenges to protection of intellectual property and investment. Manufacturers in Indonesia have noted increasing challenges in the business environment, including growing investment restrictions, high tariffs and discriminatory standards in sectors such as motor vehicles, restrictions on cross-border data flows and a troublesome new patent law. Similar themes confront manufacturers in the United States seeking to export and invest in China, Russia and many other countries.

These barriers underscore the importance of an active trade agenda that creates and defends opportunities for manufacturers here in the United States. With 95 percent of the world’s consumers living outside the United States, overseas sales and exports are critical in creating and sustaining jobs here at home. The World Trade Organization found that trade flows in manufactured goods have grown from $4.9 trillion in 2000 to $12.2 trillion in 2014, but the U.S. share of trade has been decreasing. This is true not only around the world, but in critical markets such as those involved in the Trans-Pacific Partnership (TPP), where the United States has lost critical market share to China, which has trade agreements with major countries that the United States does not.

These trends are only exacerbated by slowing global economic growth and the proliferation of trade barriers around the world. Addressing these problems will require the United States to take action, finding a path forward to pass and implement the TPP this year, securing further market-opening commitments in ongoing and future trade agreement negotiations and active use of trade enforcement tools.

At a time when the global economy is performing well below expectations, and when trade deals and negotiations to address some of these issues are under active discussion, now is the time to get to work, tearing down the barriers that are holding back manufacturing in the United States from growing opportunities around the world for the benefit of jobs and growth here at home.

Ryan Ong

Ryan Ong

Ryan Ong is the Director for International Business Policy at the National Association of Manufacturers (NAM), where he works with NAM member companies to develop and advocate the association’s positions and priorities on intellectual property, standards and regulatory concerns, and investment policy issues, as well as issues in China and India. Mr. Ong has on-the-ground experience on many of these issues in previous stints at the US-China Business Council and the Duke University's Center on Globalization, Governance & Competitiveness.
Ryan Ong

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