This morning the NAM and the Global Business Dialogue hosted a discussion about the Environmental Goods Agreement (EGA) negotiations underway at the World Trade Organization (WTO). NAM’s Linda Dempsey, Vice President for International Economic Affairs, spoke about the benefits to manufacturing of a broad EGA, mentioning that, “increased trade and global engagement is vital for our manufacturers. With only a 9 percent share of the global $11 trillion market in manufactured goods trade outside our borders, manufacturers can and should be able to expand commercial opportunities.
Manufacturers continue facing congressional inaction on even the most bipartisan pieces of legislation that could help them create new opportunities for growth and jobs in the United States — the Miscellaneous Tariff Bill (MTB). For decades, the MTB has supported manufacturing jobs in the United States by cutting costs and strengthening manufacturers’ competitiveness. Under the MTB, manufacturers are permitted to import certain manufacturing inputs duty free when those products aren’t available in the United States. Read More
Manufacturers welcome the breakthrough in negotiations to expand the Information Technology Agreement (ITA) announced by the United States and China. Agreement between the United States and China will help move the ITA talks forward after being deadlocked for a year.
Ultimately, an expanded ITA could eliminate tariffs on about 200 additional technology products – or roughly $1 trillion in global sales each year, creating an estimated 60,000 new American jobs, enhancing innovation in the United States and increasing global GDP by roughly $190 billion. Read More
Manufacturers applaud today’s announcement that the United States has prevailed in the World Trade Organization (WTO) trade enforcement case against Argentina. The WTO panel agreed with the United States that Argentina’s use of import license requirements and other import restrictions violate international trade rules.
In 2012, the United States was joined by the European Union and Japan in challenging Argentina’s trade-restrictive measures imposed on imported goods. Manufacturers have long called on Argentina to reverse their harmful trade policies, which damage U.S. exporters’ ability to enter that market, and on USTR to raise our concerns at the WTO. Last year, the NAM and a group of other business associations detailed our serious concerns with Argentina’s protectionist policies and their negative impact on U.S. exports to USTR.
Manufacturers in the United States are most successful when our trading partners play by the rules, including treating our products on an equal basis in their markets and not providing their own industries with special advantages. Trade agreements and the WTO set the rules of the global economy, which must be fully enforced.
For our trade agreements to be successful, it is vital to ensure effective enforcement of the commitments contained in those agreements by our trading partners. In manufacturing communities across America, the gains from trade can and should be increased. The United States achieved a record level of $1.38 trillion in manufactured exports last year, but we can and should do better so that America can expand manufacturing and jobs here at home. To improve manufacturers’ global competitiveness and grow our manufactured goods exports, the NAM urges continued enforcement by USTR of our trading partners’ obligations under free trade agreements and under the WTO.
A year ago today, House Ways and Means Chairman Dave Camp (R-MI) introduced Miscellaneous Tariff Bill (MTB) legislation, H.R. 2708, along with his colleagues, Representatives Sander Levin (D-MI), Devin Nunes (R-CA), and Charles Rangel (D-NY). Unfortunately, the House has not taken any further action on MTB legislation and neither has the Senate.
It has been 562 days since the 2010-passed MTB expired and manufacturers have been calling on Congress to extend it ever since. It is long past due time that both chambers of Congress act on critical MTB legislation. As a result of Congressional inaction on an MTB package, manufacturers in America have been facing higher taxes that substantially increase their production costs and concretely threaten their competitiveness as well as their ability to retain and create new manufacturing jobs for American workers.
While some members of Congress provide explanations as to their inaction, there is no excuse. The MTB passed in 2010 enjoyed broad bipartisan support and sailed through the House by a vote of 378-43 and the Senate by unanimous consent. If both chambers acted on this crucial jobs legislation today, we would expect a similar show of support from both sides of the aisle.
In response to inside-the-beltway concerns that MTB provisions resemble earmarks, even stalwart conservatives like Grover Norquist, President of Americans for Tax Reform, has emphasized the importance of passing the MTB, saying that MTB measures “are not spending bills; they are tax cuts, period….While earmarks favor only a special few, the tariff-cuts benefit wide swaths of American industry and help create U.S. jobs and economic growth.” Mr. Norquist aptly points out that, without Congressional action, “the United States is applying a tax that only makes it harder for American companies to compete with their foreign competitors – and harder for them to create or even maintain existing jobs and economic growth.”
Job creators like PING, Bayer, BASF, and Lasko Products cannot afford to wait any longer for this cost-cutting legislation to be enacted. If Congress is serious about supporting manufacturing in the United States, they will move MTB legislation without further delay.
Members of Congress can call the MTB whatever they like, but for manufacturers, it is nothing less than a jobs bill and it is time that Congress act on it now to support American manufacturers and workers.
I was pleased to attend yesterday’s official launch of the Environmental Goods Agreement (EGA) negotiations at the World Trade Organization (WTO) here in Geneva. USTR and their thirteen negotiating counterparts – Australia, Canada, China, Costa Rica, the European Union, Hong Kong, Japan, Korea, New Zealand, Norway, Singapore, Switzerland, and Chinese Taipei – kicked off the first round of talks during a press event. Manufacturers welcome these efforts to build on the progress already achieved by the APEC forum in 2011 to eliminate and reduce tariffs on green goods.
The Coalition for Green Trade, co-chaired by the NAM, National Foreign Trade Council (NFTC) and U.S. Council for International Business (USCIB), was launched this week and released a global sign-on letter by a broad range of international industry associations in support of the EGA talks.
The NAM believes that, in order to address and eliminate trade barriers, the United States must leverage all available tools by securing ambitious, high-standard commitments in ongoing trade agreement negotiations – including in the WTO EGA negotiations. On behalf of our nearly 13,000 member companies, the NAM strongly supports the negotiation of a high-standard, ambitious EGA that significantly reduces and eliminates tariffs on a wide range of green goods and technologies.
With global tariffs on environmental products as high as 35 percent in some nations, a significant reduction or elimination of these trade barriers will have a substantial, positive impact on manufacturers in the United States who develop and produce goods aimed at solving environmental challenges, enhancing their ability to decrease the cost of their products to consumers both inside and outside the United States, thereby, growing sales and creating new manufacturing jobs. A strong EGA will have other significant benefits, as well, from improving access to important green and energy efficient technologies for businesses and consumers worldwide, to improving manufacturers’ ability to enhance their sustainability.
For manufacturers such as The Coca-Cola Company, the EGA represents a significant opportunity to eliminate tariffs on the environmentally sustainable goods they procure in their global supply chain. As a company that operates in more than 200 countries around the world, their procurement system is committed to environmental sustainability. A global trade agreement on “green goods” will allow The Coca-Cola Company and many others to build out supply chains that bring environmentally friendly technologies to markets and consumers that might not otherwise find them cost-effective. Three priorities in these negotiations for The Coca-Cola Company are: 1) systems that help to provide clean drinking water; 2) lower emission, more efficient refrigeration units; and, 3) plant-based PET plastics for their bottles.
The NAM supports APEC’s list of 54 environmental goods eligible for duty reduction or elimination; however, we believe that list is far too limited given the breadth and significant growth in this sector. Therefore, we believe it is critical that these negotiations substantially broaden the list of goods eligible for tariff liberalization across a broad range of industries whose products improve energy efficiency, sustainability and serve other environmental remediation purposes.
Yesterday the NAM is participating in two roundtable events with stakeholders to discuss shared goals and objectives for the EGA talks and to advocate for strong outcomes that will ultimately tear down barriers to trade and help manufacturers grow their exports. We are working closely with our industry counterparts from other participating nations, as well as with U.S. and foreign government officials to build a strong foundation of support for the EGA and to start early towards building critical mass for key elements of an ambitious agreement.
Today dozens of manufacturers are on Capitol Hill delivering a message to lawmakers: pass the MTB. It’s been more than 530 days since the Miscellaneous Tariff Bill expired, resulting in a huge tax increase on manufacturers both large and small.
Congress’s failure to act has resulted in an unnecessary $748 million tax on manufacturing in the United States. As a result of Congressional inaction, not only have manufacturers’ costs jumped, but their competitiveness has also been damaged, threatening their ability to retain and create new jobs.
While the MTB enjoys broad bipartisan support in both chambers of Congress, it remains hamstrung by inside-the-beltway politics. Congress’s failure to act on this jobs bill couldn’t come at a worse time, as manufacturers struggle to regain their footing in a still-struggling economy.
The MTB is exactly the type of bill Congress needs to consider without delay; it cuts costs for America’s job creators and strengthens their competitiveness in a challenging global economy. Congress’s continued failure to act has added to manufacturers’ uncertainty and inability to plan for future investment and job creation.
Manufacturers will not give up until this critical jobs bill is enacted. We will continue telling Congress to act on the MTB now!
This week U.S. and EU negotiators return to the negotiating table in the fifth round of Transatlantic Trade and Investment Partnership (T-TIP) talks. The negotiations are being held in Arlington, VA this round, and I made a presentation to negotiators and stakeholders on manufacturers’ priorities in the T-TIP agreement.
A quick glance at the numbers might lead some to question the importance of negotiating a strong trade and investment agreement between two of the world’s economic leaders, the United States and European Union. After all, the two economies enjoy the world’s largest commercial relationship – comprising one third of total goods and services trade and nearly half of global GDP. In 2013, the United States exported close to $232 billion of manufactured goods to the EU, or roughly 17 percent of all U.S. goods exported to the world.
So, why do we need to strengthen this economic alliance further? The answer is simple and critical: there are barriers to trade and investment across the Atlantic that, if removed, would yield substantial economic growth for both the United States and the EU – growth that both economies desperately need to maintain, sustain, and grow jobs in a changing global market. For example, according to a Johns Hopkins study of the transatlantic economy, even a modest alignment of U.S. and EU regulatory standards and non-tariff barriers could increase GDP by an estimated $106 billion. That’s real money linked to real jobs. Another study by Bloomberg’s Ken Monahan estimates that tariff elimination across the Atlantic would result in more than $10.5 billion in total duty savings and would boost U.S. and EU exports each by 17 percent!
In order to ensure that the final T-TIP agreement lives up to these expectations, it is essential that the T-TIP is a comprehensive, high-standard agreement aimed at further opening the transatlantic market to increased trade in goods and services, promotes greater transparency in rulemaking, and removes unnecessary regulatory obstacles to trade. Ultimately, a T-TIP agreement should eliminate all tariffs upon implementation, address regulatory barriers, strengthen investment ties, and provide strong protection and enforcement of intellectual property rights and set a new standard for the global economy. A successful, growth-producing T-TIP will be one that reduces the cost of doing business across the Atlantic by eliminating both tariff and non-tariff barriers to trade and investment. Such an agreement will put manufacturers in the United States in a stronger competitive position not just in terms of trade with the EU but in the global economy as a whole.
As President Obama heads from South Korea to Malaysia to meet with Prime Minister Najib Razak, manufacturers are focused on promoting the big new growth opportunities in Malaysia that would result from a high-standard, ambitious, market-opening TPP. With a GDP of $525 billion and a population of more than 30 million, Malaysia represents a significant new market opportunity for U.S. exports, sales and commercial partnerships if a strong TPP is concluded.
Along with Japan and Vietnam, Malaysia represents one of the biggest new markets that a successful TPP could cover. Already, it is the United States’ 24th largest export market for manufactured goods. The U.S.-Malaysia partnership can grow even stronger through a successful TPP that would address key impediments to a stronger U.S.-Malaysia commercial relationship. For example, Malaysia continues to maintain significant tariff and non-tariff barriers, including import licensing limits on certain manufactured and other products, export taxes on raw materials and export subsidies on certain manufactured goods exports, stringent limits on foreign participation in investment and government procurement and transparency and intellectual property rules that need improvement. These barriers not only impede U.S. sales into Malaysia, they undermine Malaysia’s own efforts to attract increased foreign investment and increase economic growth.
Overall, with TPP countries representing $28 trillion in GDP and almost 800 million consumers that account for about 40 percent of global trade, the TPP’s potential to drive new growth and opportunity for manufacturers in the United States is substantially larger than any previous trade agreement that the United States has negotiated. While eliminating tariffs immediately is critical, the final TPP agreement must also eliminate government distortions that limit market access, from non-tariff barriers and the lack of transparency to activities of state-owned enterprises (SOEs) that undermine fair competition. The TPP must concretely resolve longstanding market access issues that have impeded U.S. exporters’ access into TPP markets, especially in the Japanese, Malaysian and Vietnamese markets, where the United States does not currently have trade agreements.
While much of the focus is on market access during the President’s Asia trip, a number of critical issues in other TPP chapters remain unresolved, including strong protections for intellectual property rights and investment, provisions dealing with unfair competition created by SOEs, and movement of cross-border data. Ensuring the TPP is consistent with longstanding global trade rules and norms is just as important. In a dangerous and misguided move, the United States has proposed to exclude a single product (tobacco) from rules preventing parties from imposing arbitrary or discriminatory trade barriers. As the head of an independent Malaysian think tank wrote recently in The Straits Times, the U.S. proposal “would reset the international trading system back to the 19th century” and could open the door for similar exclusions for other products.
Manufacturers urge President Obama to continue pushing for an ambitious, market-opening TPP that will boost manufacturers’ competitiveness and ability to grow
With President Obama’s Asia visit kicking off in Japan today, manufacturers are hopeful that the President and Japanese Prime Minister Shinzo Abe will make meaningful progress towards achieving ambitious and market-opening outcomes in the Trans-Pacific Partnership (TPP) negotiations, and that work will continue during the President’s visit to Malaysia to meet Prime Minister Najib Razak later this week. Manufacturers have long supported the negotiation of the TPP that TPP Leaders described in November 2011 that “will be a model for ambition for other free trade agreements in the future, forging close linkages among our economies, enhancing our competitiveness, benefitting our consumers and supporting the creation and retention of jobs, higher living standards, and the reduction of poverty in our countries.” Already, comprehensive, high-standard U.S. free trade agreements help propel nearly 50 percent of manufacturing goods exports around the world. A TPP done right will boost the United States’ already record manufacturing exports, as well as other sales and other commercial opportunities, by linking America’s highly productive manufacturers to new consumers around the world.
- provide comprehensive market access that concretely levels the playing field;
- ensure high standards on issues such as intellectual property, transparency and investment;
- address new trade challenges such as cross-border data flows and longstanding issues such as competition from state-supported enterprises; and
- incorporate strong enforcement mechanisms so that the agreement is more than words on a piece of paper.
When Japan joined the TPP talks in 2013, it committed to negotiate on the same ambitious basis that the existing TPP negotiating countries had already agreed. U.S. Trade Representative Ambassador Mike Froman said today in Japan, the talks are at a “crossroads” and now is the time for Japan “to choose a bold path.” Manufacturers agree. Similarly bold choices must also continue in the capitals of all TPP partners to achieve an ambitious and fully market-opening outcome. Manufacturers urge Japan, Malaysia and all other TPP countries to continue to focus on that ambition this week and in the weeks to come so that the momentum of the TPP talks can be regained and that the TPP countries’ commitment to an “ambitious, high standard and comprehensive” agreement that was renewed in December 2013 can be achieved.
A successful TPP agreement that truly opens markets and improves the competitiveness of manufacturers in the United States represents an unprecedented opportunity to boost commercial ties throughout the Pacific Rim and beyond. The NAM continues to urge the immediate and comprehensive elimination of tariffs and non-tariff barriers, strong protections consistent with U.S. practice on intellectual property and investment for all products, new provisions to permit the movement of data cross border and new disciplines to ensure fair commercial competition with state-owned enterprises. These provisions all must be backed up by state-of-the-art enforcement provisions from state-to-state to investor-state mechanisms. Ultimately a successful, growth-producing TPP agreement will be one that ensure that manufacturers in the United States will be put on a fair and competitive footing in each of the TPP markets.
President Obama, Prime Minister Abe and Prime Minister Najib Razak have a critical opportunity this week to inject new vitality into the TPP talks. Manufacturers hope they will seize this occasion to move the negotiations closer to a pro-growth and pro-competitive conclusion.