Earlier today, the Senate Finance Committee held a hearing on the Trade Facilitation and Trade Enforcement Act of 2013 (S. 662). The bill was introduced by Chairman Max Baucus and Ranking Member Orrin Hatch in March to help reduce costs and delays at the border by modernizing U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE), two key trade-related agencies. CBP is charged with facilitating imported cargo through U.S. ports of entry, enforcing trade and customs laws at the border, collecting customs revenue and enforcing import security laws to prevent illicit shipments from entering the United States.

As Chairman Baucus noted in his opening statement, about 365,000 entries move through U.S. ports – including more than 3,000 express entries – on a typical day. These goods arrive in more than 66,000 truck, rail and sea containers as well as hundreds of aircraft. “American businesses, ranchers, farmers and consumers depend on the timely movement of all these goods across borders to remain competitive. In business, time is money. So CBP and ICE must facilitate trade expeditiously,” Chairman Baucus said. In his opening statement, Ranking Member Hatch reiterated the importance of international trade to the U.S. economy and highlighted the need to protect intellectual property rights.

Manufacturers were represented at the hearing by Chrysler, Procter & Gamble and the National Electrical Manufacturers Association (NEMA). William Cook, Director of Worldwide Logistics and Customs for Chrysler, described the impact of delays at the border on Chrysler’s bottom line in his testimony. (continue reading…)

Earlier today, the NAM sent a letter to the Senate expressing NAM policy positions on the budget resolution (S. Con. Res. 8 ) and its associated amendments. In particular, manufacturers support amendments offered by Senators Orrin Hatch (R-UT), Rob Portman (R-OH) and Ron Wyden (D-OR) to renew trade promotion authority (TPA) and enable the United States to negotiate and implement trade agreements that eliminate barriers to greater market access overseas. TPA, which used to be called fast-track authority, would allow Congress to accept or reject – but not amend – trade deals the Administration negotiates with other countries. Acting U.S. Trade Representative Demetrios Marantis, in testimony before the Senate Finance Committee on March 19, said the Administration was looking forward to working with Congress on TPA. The United States is currently engaged in negotiation on a Trans-Pacific Partnership (TPP) agreement and will be launching Transatlantic Trade and Investment Partnership negotiations with the European Union later this year.

The NAM also supports amendments offered by Senator Hatch to maintain a strong U.S. Trade Representative office and to strengthen U.S. government efforts promoting innovation and protecting intellectual property rights worldwide.

The NAM opposes S.Amdt.374 offered by Senator Mike Lee (R-UT) to defund the Export-Import Bank. Ex-Im Bank authorized more than $35 billion in financing in FY 2012, supporting more than 255,000 American jobs. The Bank worked with more than 3,400 U.S. companies, 85 percent of which were small businesses. Ex-Im is a vital tool in leveling the global playing field, helping manufacturers to offset the financing support our foreign competitors receive from their governments, and in securing new customers in emerging markets. As the “lender of last resort,” Ex-Im has experienced unprecedented demand in the past few years while banks have been hesitant or unable to extend competitive terms on some transactions. The Ex-Im Bank also generates enough fees to offset its costs, contributing the remaining surplus to the U.S. Treasury to help to offset the budget deficit. The 2012 Annual Report outlines the Bank’s accomplishments last year.

The President released an Executive Order today and an accompanying Fact Sheet outlining a crucial step toward implementing changes to the U.S. Munitions List (USML) as part of the President’s Export Control Reform Initiative.

On March 7, the Administration notified Congress – as required by Section 38(f) of the Arms Export Control Act – of the intended changes to USML Category VIII (Aircraft) and USML Category XIX (Gas Turbine Engines). Congress was reportedly given “pre-notification” in February, including text of the intended rule changes, and now has 30 days to review the modifications before the final rules will be published. The Administration has outlined a 180-day transition period that would follow the final rule.

The NAM has long advocated for a more predictable, efficient and transparent export control system. A study by the Milken Institute in partnership with the NAM previously estimated that modernizing export controls could boost real U.S. economic output by $64 billion and create 160,000 manufacturing jobs. Today’s news is a positive step to modernizing our export control system to keep us from falling behind our global competition.

Public comments on the State Department’s proposed rule for USML Category VIII are online here. Public comments on the Commerce Department’s proposed rule for control of items that no longer warrant control under the USML are onlinehere. Public comments on the State Department’s proposed rule for USML Category XIX are online here. Public comments on the Commerce Department’s proposed rule for control of items that no longer warrant control under the USML are online here. A full listing of proposed rules for USML Categories, and their accompanying Commerce Control List (CCL) categories, is online here.

Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.

The NAM is actively supporting the expansion of the Cape Town Convention to include mining, agricultural and construction (MAC) equipment. The Cape Town Convention on International Interests in Mobile Equipment is a treaty that establishes an international legal framework for equipment financing. By applying a uniform legal regime across borders, the treaty streamlines processes, reduces risk and lowers costs for financing certain exports.

The treaty’s first three Protocols have covered aircraft, railway equipment, and space assets. Currently, 55 countries are parties to the Convention. In the aircraft industry, for example, the Cape Town regime has been beneficial to manufacturers and exporters as well as airline customers and travelers. A recent economic impact study suggests that this expansion of the Cape Town Convention could increase sales of MAC equipment by about $600 billion over the next few years.

In a recent letter to the International Institute for the Unification of Private Law (UNIDROIT) Secretary-General, the NAM wrote that manufacturers “hope that a protocol covering MAC equipment could be of similar benefit to those sectors – even if complicated issues need to be addressed during the negotiations, such as the scope of the protocol and how to identify covered equipment. Manufacturers in the United States look forward to working with UNIDROIT to address those issues and develop a strong protocol.”

UNIDROIT’s Governing Council will decide in May whether to proceed with work on a new Protocol to cover MAC equipment. The U.S. government supports moving forward with the project, but a number of other countries have been hesitant.

Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.

House Armed Services Committee Chairman Buck McKeon has filed the Conference Report for the FY2013 National Defense Authorization Act (H.R. 4310). Included in the NDAA Conference Report is a provision returning authority to determine appropriate export controls for satellites to the President.

This provision will benefit U.S. manufacturers of satellites—as well as their suppliers and the R&D pipeline—by rationalizing export controls and expanding opportunities for foreign sales. The full text of H. Rept. 112-705 is available here, and the Managers’ statement is available here. The satellite provisions can be found in Title XII (Matters Relating to Foreign Nations), Subtitle E.

The NAM has long advocated for this statutory fix, dating back to the 2009 House Foreign Affairs Subcommittee hearing on “Export Controls on Satellite Technology” and support for the 2008 CSIS report on the health of the industrial base. Earlier this year, the NAM co-signed a letter to Senate leadership supporting a satellite export control bill introduced by Senator Bennet (D-CO) and actively supported the Safeguarding United States Satellite Leadership and Security Act of 2011 (H.R. 3288) introduced by Reps. Howard Berman (D-CA) and Don Manzullo (R-IL). (continue reading…)

In advance of last week’s meeting of the President’s Export Council (PEC), President Obama issued Executive Order 13630 to establish an interagency task force on commercial advocacy to help U.S. exporters get better access to commercial diplomacy, financing, market intelligence, business leads and technical assistance.

The Commerce Department’s Advocacy Center, which promotes U.S. companies bidding on projects for foreign governments and foreign government-owned corporations, will lead the task force. Currently, 15 federal agencies play a role in export promotion and trade policy. The Advocacy Center last year helped U.S. firms win about $87 billion in contracts. The new Task Force is part of broader efforts under the President’s National Export Initiative (NEI), which has the goal of doubling U.S. exports by 2015. The Commerce Department also released a Fact Sheet with more details.

The Executive Order laid out several objectives for the Task Force:

Review and prioritize already approved commercial advocacy cases, and coordinate the activities of relevant agencies to enhance federal support for those cases, to better help U.S. exporters competing for foreign procurements;

• Increase the number of senior-level agency officials regularly and effectively advocating on behalf of U.S. exporters by coordinating the engagement of agency leadership with their foreign counterparts regarding commercial advocacy issues, particularly during foreign travel and other occasions for engagement with foreign officials;
• Increase the number of U.S. businesses utilizing commercial advocacy services by developing strategies to raise the awareness of commercial advocacy assistance within the U.S. business community;
• Expand awareness of opportunities for U.S. businesses to sell their goods and services to foreign governments;
• Facilitate voluntary short-term personnel exchanges between the Commerce Department and other Task Force agencies, to cross-train federal personnel to better serve U.S. exporters.

The Task Force is also required to submit a progress report to the Export Promotion Cabinet every six months detailing the number of commercial advocacy cases opened and successfully concluded, the number of commercial advocacy engagements by senior-level agency officials, and the number of U.S. businesses utilizing commercial advocacy services.

The NAM has long been supportive of the NEI and other federal export promotion efforts, highlighting exports as part of “A Manufacturing Renaissance” and offering a “Blueprint to Double Exports in Five Years.”  The NAM has also partnered with the U.S. and Foreign Commercial Service to help manufacturers expand their export sales through the New Market Export Initiative (NMEI). Through the NMEI, the NAM will work with manufacturers to find new markets for your U.S. manufactured products.

Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.

Earlier this afternoon, the Senate passed a bill with overwhelming bipartisan support to establish Permanent Normal Trade Relations (PNTR) with Russia. The Russia and Moldova Jackson-Vanik Repeal Act of 2012 (H.R. 6156), which passed by a vote of 92-4, will now head to President Obama for signing.

The NAM, after several months of extensive outreach on Capitol Hill, was instrumental in convincing Congress to pass the legislation. Russia PNTR will provide a tremendous opportunity for U.S.-manufactured goods exports and ensure manufacturers in the United States operate on a level playing field with our global competitors. The NAM sent a Key Vote letter to senators yesterday, urging their support. The House passed the same bill on November 16.

On August 22, Russia officially joined the World Trade Organization (WTO) and made commitments on increased transparency, lower tariffs and binding dispute resolution. Russia is the ninth largest economy in the world, making it a key emerging market for U.S.-manufactured goods exports. Manufacturers have urged the Senate to pass Russia PNTR, which will grow U.S. exports and secure market access to help create jobs. Click here for more information on Russia PNTR or read testimonials from small and medium manufacturers on the importance of establishing PNTR with Russia.

Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.

Today the House overwhelmingly approved a bill to establish Permanent Normal Trade Relations (PNTR) with Russia by a vote of 365-43. The NAM issued a Key Vote letter supporting the Russia and Moldova Jackson-Vanik Repeal and Sergei Magnitsky Rule of Law Accountability Act of 2012 (H.R. 6156) yesterday.

Russia officially joined the World Trade Organization (WTO) in August and passage of PNTR legislation has languished, allowing other nations to take advantage of Russia’s WTO membership while the United States remained on the sidelines.

“Russia’s admission into the WTO was a positive step for global trade – and the recent House action on PNTR is yet another step toward ensuring market access for manufacturers in the United States,” said Alcoa, Inc. Vice President for Global Public and Government Affairs and NAM Russia Trade Relations Task Force Chairman Daniel Cruise. “On behalf of NAM’s Russia Trade Relations Task Force, I urge the Senate to quickly pass a bill for the President to sign so that manufacturers in the U.S. can compete on a level playing field in Russia.”

Manufacturers urge the Senate to take up PNTR legislation quickly. Without PNTR, manufacturers in the United States will continue to have a significant disadvantage in the growing Russian market. Russia imported nearly $300 billion in goods in 2011, yet the United States accounted for less than 5 percent of those imports. Clearly, there is room for growth.

Manufacturers of all sizes will benefit from the commitments Russia has made as a member of the WTO to reduce tariffs and non-tariff barriers, protect intellectual property and adopt key commercial rules to level the playing field in the Russian market. More than 80 percent of the approximately 5,000 companies in the U.S. that currently export to Russia are small- or medium-sized enterprises (SMEs), and these SMEs account for nearly half of all U.S. exports to Russia. These companies exported $2.1 billion of goods to Russia – and those exports could reach $4.2 billion by 2014, according to some estimates.

With 95 percent of the world’s consumers living outside the borders of the U.S. we must take full advantage of opportunities to open new markets to create jobs and grow our economy.

Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.

The NAM joined other major trade associations earlier this week to urge swift and ambitious expansion of the Information Technology Agreement (ITA), the most commercially successful trade agreements in the World Trade Organization (WTO).

“The ITA has helped to drive innovation, accelerate productivity, increase employment, lower consumer prices, and bridge communities across the globe in ways unimagined 15 years ago,” the unified statement, released Monday, said. “This initiative would improve market access for information and communications technology (ICT) products around the world and make the newest technologies more affordable and available to everyone.”

The statement is backed by a coalition of 56 associations from around the world that represent every aspect of the highly innovative technology sector. The latest round of ITA expansion talks opened this week in Geneva, Switzerland. The full statement, with a list of signatories, is available online.

The ITA now has more than 70 signatories, and a report earlier this year by the Information Technology & Innovation Foundation (ITIF) found that the ITA has had a significant impact on expanding trade and economic opportunity. From 1996 to 2008, total global trade in information and communications technology products increased more than 10 percent annually, from $1.2 trillion to $4.0 trillion. An expanded ITA could bring an additional $400 billion in high-tech trade under ITA coverage and increase world GDP by $190 billion, ITIF reported.

The leaders of the Asia-Pacific Economic Cooperation (APEC) expressed support for ITA expansion during the 2012 APEC Ministerial Meeting earlier this month. In May, the WTO held an ITA symposium in Geneva to mark the agreement’s 15^th anniversary and to chart a course toward expansion. That work continued this week in Geneva with technical discussions on an initial list of products to be considered for inclusion in the ITA.

Recently a federal judge ruled against an airline industry trade association in a case that questioned federal loan guarantees that help foreign companies purchase U.S.-made airplanes.

The Air Transport Association of America (ATA) sued the U.S. Export-Import Bank last year over loan guarantees to Air India, contending that the loan guarantees were harmful to domestic carriers in the competition for airline routes. Earlier this year, U.S. District Judge James Boasberg declined to issue an injunction against the Bank.

In July, the District Court determined that the Bank “acted neither arbitrarily and capriciously nor contrary to its governing statute when it approved the 2011 Commitments to Air India.”

ATA argued that export financing for U.S.-manufactured airplanes harms domestic carriers. The suit also alleged the Bank failed to fully assess the potential adverse effect of the loans. The judge found, though, that “there remain significant external checks on such hypothetical transactions: Congress not only has a recurring opportunity to decline to reauthorize the Bank, but it also gets the chance to review new commitments of more than $100 million before they take effect.”

In May, President Obama signed Export-Import Bank reauthorization legislation into law. The legislation reauthorized Ex-Im Bank through FY2014 and increased its lending cap to $140 billion. As NAM President Jay Timmons wrote in an Op-Ed earlier this year, the Ex-Im Bank in FY2011 “helped nearly 4,000 businesses in the U.S. export more than $41 billion worth of goods. Those exports support 290,000 jobs in this country, many of them at small and medium-sized businesses.”

Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.