As a new Congress kicks off, and as the new administration takes the reins with stated priorities of boosting manufacturing in the United States, now is the right time to assess the state of the U.S.–India economic relationship. The National Association of Manufacturers (NAM) joined 21 other trade associations in a letter today to congressional leadership urging them to work to support a robust, reciprocal U.S.–India economic relationship that creates commercial opportunities in both countries and meaningfully addresses outstanding issues impacting manufacturers in the United States. Read More
A highly interconnected global economy is a fact for manufacturers big and small throughout the United States. Advances in technology and transportation over recent decades have created substantial new opportunities for manufacturers in the United States to reach millions of foreign consumers. That interconnection has also brought increased competition from growing manufacturing sectors around the world, in some cases fueled by market-distorting and discriminatory trade practices that put our manufacturers, workers and communities at an unfair disadvantage.
When markets are open and rules of fairness and equal opportunity are enforced for all, manufacturers in the United States can and do succeed. Consider the following:
- More than half of the U.S. manufacturing workforce depends on exports for their jobs, and nearly half of all U.S.-manufactured goods exports are sold just to the 20 countries that have eliminated barriers through free trade agreements.
- Employees in the “most trade-intensive industries” earn an average compensation of nearly $94,000, or more than 56 percent more than those in manufacturing companies that were less engaged in trade.
With the world’s most productive manufacturing sector in the world, but a domestic market that represents only 10 percent of global consumption and growing global competition, manufacturers in the United States need more robust trade policies and agreements to grow. To be part of the solution, the National Association of Manufacturers (NAM) has shared with the Trump transition team our “Competing to Win” agenda, which includes a blueprint for a winning trade policy.
The NAM is calling on the new administration to focus on three key elements to ensure an open and fair trading system:
- Strong enforcement of global trade rules to crack down on cheating.
- Negotiation of new bilateral and other trade agreements to expand market access, raise standards, ensure fairness and equal opportunity and eliminate foreign market-distorting practices.
- Adoption of customs, financing, export control and other policies to make manufacturers in the United States more globally competitive.
Manufacturers are committed to working domestically and internationally to tap growth beyond our borders and eliminate foreign trade abuses to continue to expand a highly productive and innovative U.S. manufacturing sector that can continue to sustain and increase good-paying American jobs.
This blog is part of the NAM’s “12 Days of Transition” series, an effort to provide the presidential transition team and other Washington policymakers with a roadmap to bolster manufacturing in the United States. Read the other blogs in the series here.
Manufacturers welcome today’s U.S. victory on solar energy with the World Trade Organization’s (WTO) rejection of India’s appeal and urge the Indian government to move quickly to dismantle its discriminatory domestic content requirements that have blocked access for U.S. solar cell modules. As each and every previous ruling in this case has shown, India’s domestic content requirements are a clear violation of core WTO rules, and today’s victory will give an important boost to manufacturing in the United States. This decision also demonstrates why the strong rules-based WTO system and trade agreements with binding and strong enforcement rules are critical to open markets and eliminate unfair barriers overseas. The National Association of Manufacturers (NAM) congratulates Ambassador Michael Froman and the United States Trade Representative (USTR) for their successful efforts. Read More
A highly flawed report that employs the mantle of global health to take aim at innovation and manufacturing was released today by a U.N. panel, representing a real missed opportunity to focus the world on collaborative and effective solutions that could make a substantial difference for real people facing access barriers. Read More
Another article, another letter and another press call from those opposed to the Trans-Pacific Partnership (TPP) and particularly its investor-state dispute settlement (ISDS) provisions emerged today. What we’ve seen over the past two weeks is, in reality, just more of the smoke-and-mirrors approach that opponents have been using for years, rehashing the same tired, false and discredited critiques of ISDS. These critiques have been rejected again and again by:
- The Obama administration when it fully considered and rejected these same arguments in its 2009–2012 Model BIT review, which included a broad public comment process;
- The Senate last year when it strongly rejected Sen. Elizabeth Warren’s (D-MA) amendment to eliminate ISDS from Trade Promotion Authority;
- Both the House and Senate when they rejected such arguments and voted in favor of Trade Promotion Authority legislation last year with its explicit direction to negotiate ISDS in new trade agreements; and
- A broad range of well-grounded academics, think-tank experts and media outlets, including The Washington Post and the Center for Strategic and International Studies.
But like a group of vaudeville magicians—and equally out of date—the anti-trade and anti-ISDS crowd is using a sleight of hand to distract from the clear facts: that ISDS is a respected mechanism, fully in line with our own Constitution and basic rules, that helps protect individuals, NGOs and businesses alike from discriminatory and unfair conduct.
For those who may be new to the debate, here is a mini-video course of why ISDS is valuable.
The United States and India have much to gain by growing their commercial relationship given the relatively low levels of trade and investment that characterize a relationship that many agree is underperforming. This year’s second Strategic & Commercial Dialogue (S&CD) was an opportunity to move beyond the improved dialogue that has characterized the U.S.–India relationship since Prime Minister Narendra Modi took office more than two years ago and into concrete action.
Unfortunately, the just-released U.S.–India Joint Statement marking the conclusion of this year’s dialogue has little to cheer. The NAM and others had urged the two governments to use dialogue to drive concrete deliverables. Yet, this dialogue’s “outcomes,” if they can be so labeled, are heavy on cooperation, collaboration and further discussions, but no concrete movement on issues that matter to a wide swath of manufacturers in the United States. There was, for instance, no renunciation by India of its WTO-violative actions, such as increased information technology tariffs and discriminatory localization measures on solar energy and other manufactured goods. There were no concrete deliverables announced on the protection of intellectual property and little substance on innovation. And while India has moved up on the Innovation Index, India still is in the bottom half of the rankings, behind its key Asian competitors.
As the United States prepares for its next major dialogue with India—the Trade Policy Forum—in October, manufacturers urge outcomes that will make a tangible difference for their ability to do business with India.
Learn more about the NAM’s stance on U.S.–India trade relations here.
More than 200 countries are sending their teams to Rio de Janeiro this week to compete in the Olympics, with hundreds of separate competitions, from cycling and swimming to archery and gymnastics. We all want and expect a level playing field where no athlete or nation has an unfair advantage and where neutral referees, not national biases, determine who wins the gold.
To achieve fair play in the Olympics, there is a substantial rules-based structure at the international, individual sport and national level. The Olympic Charter is more than 100 pages, and there are thousands more pages of rules and requirements set forth by international sports federations and national teams.
Like the Trans-Pacific Partnership (TPP), most Americans have not read these thousands of pages, but understand that the basic rules reflect our common values and sense of fair play. So too does the TPP that sets for a detailed rules-based system that seeks to give industries in the United States a fair shot to win in foreign markets without discrimination or unfair advantages to our foreign competitors. Consider the basic principles that the TPP would implement: Read More
Reading the Democratic National Committee (DNC) platform paragraphs on trade, one might believe that trade and trade agreements have been an overall negative for the United States, its entrepreneurs and its workers. Indeed, that is the apparent belief of many in labor and other organizations that are opposing the Trans-Pacific Partnership (TPP).
In reality, the massive growth of trade and U.S. participation in helping create the World Trade Organization (WTO) and leading the conclusion of 14 free trade agreements (FTAs) with 20 countries over the past half century have spurred a quadrupling of U.S. exports of made-in-the-USA manufactured goods. Those exports and other rules have helped advance a quadrupling of U.S. manufacturing output. Hundreds of millions of people around the world have moved out of abject poverty into a growing middle class, which is vital in its own right but also provides new and needed growth opportunities for the most-productive manufacturing sector in the world—our own.
The platform describes many things that trade agreements should and shouldn’t do. A quick review shows that the TPP meets every single one of the DNC platform’s objectives; yet, unfortunately, the platform fails to endorse the TPP.
|DNC Platform||TPP Provisions|
|“Any future trade agreements must make sure our trading partners cannot undercut American workers by taking shortcuts on labor policy or the environment.”
“We believe any new trade agreements must include strong and enforceable labor and environmental standards in their core text with streamlined and effective enforcement mechanisms.”
|The TPP includes the most extensive labor and environment provisions of any U.S. trade agreement, requiring countries to adopt and enforce domestically the types of International Labour Organization, international environmental agreement and other standards that U.S. labor and environment groups have long cheered.
The TPP provides new levers to address with labor and environmental violations that otherwise would not exist: if countries fail to meet their extensive obligations, they will face dispute settlement proceedings and potentially trade sanctions.
|“They must not undermine democratic decision-making through special privileges and private courts for corporations.”
“We should never enter into a trade agreement that prevents our government, or other governments, from putting in place rules that protect the environment, food safety or the health of American citizens or others around the world.”
|The TPP promotes U.S. democratic values in many ways, including by:
· Explicitly affirming the rights of governments to regulate in the public interest;
· Providing any individual, organization or business the ability to protect their property located abroad through a neutral forum, but that forum cannot overturn any law or regulation; and
· Ensuring food safety and other regulatory and standards provisions are developed in a science-based manner as we do in the United States.
|“Trade negotiations must be transparent and inclusive.”||The TPP was negotiated with strong public consultations with stakeholders of all types, with public hearings, public comments and more than 1,800 congressional briefings.
The full text of the TPP has been available since November 2015 for all members of Congress and the public to read.
|“We will oppose trade agreements that do not support good American jobs, raise wages and improve our national security.”||The TPP eliminates all foreign tariffs on U.S.-manufactured exports in the 11 TPP countries and eliminates other discriminatory and unfair barriers. The TPP also sets high standards based on the U.S. Constitution, laws and regulations to promote a more level playing field and help manufacturers and other businesses and their workers compete more successfully.|
|“Trade agreements should crack down on the unfair and illegal subsidies other countries grant their businesses at the expense of ours.”||Combatting unfair subsidies is dealt with explicitly as part of the WTO Agreement on Subsidies and Countervailing Measures, which currently applies to all TPP countries and 161 other countries around the world, and the TPP in no way undermines countries’ WTO obligations. Furthermore, the TPP adds new anti-subsidy disciplines by prohibiting subsidies to foreign state-owned enterprises, as well as other disciplines to ensure such enterprises do not receive or give unfair advantages to our competitors.|
|“It should promote innovation of and access to lifesaving medicines.”||The TPP advances innovation by ensuring that innovation is protected, including with new provisions that criminalize the growing theft of trade secrets, as well as strong provisions on the protection of U.S. patents, trademarks and copyrights.
The TPP could have and should go further in protecting the innovation climate that will spur development and dissemination of lifesaving medicines. Strong intellectual property protections have, indeed, fostered the creation of 91 percent of all available medicines.
|“And it should protect a free and open internet.”||The TPP makes major advances in promoting a free and open internet not seen in any other trade agreement, including through:
· Preserving the right of individuals and businesses and organizations of all sizes to access and move data and be forced to store data locally; and
· Promoting public participation and transparency in the development of laws and regulations affecting the internet.
For manufacturers in the United States to continue to grow and to sustain and add new high-skilled and good-paying American jobs, we need new demand for our products. It’s that simple. Manufacturers need access to new markets without discriminatory and unfair barriers. That is what trade agreements like the TPP will do.
There’s lots of news from the first day of the convention, but manufacturers are more concerned with a major omission by the Republican Party: a statement supporting the Trans-Pacific Partnership (TPP). That’s one line worth repeating. Read More
The National Association of Manufacturers has been providing a lot of #TruthontheTrail this election season. It’s time for some more truth to weigh new government information.
The U.S. International Trade Commission (ITC) just released a congressionally mandated report on the impact of U.S. trade agreements on the U.S. economy. Contrary to statements by some presidential and other candidates, it finds that:
- Bilateral and regional trade agreements negotiated by the United States have increased GDP, employment, wages, trade and exports; and
- Such U.S. bilateral and regional trade agreements have “had a positive effect, on average, on U.S. bilateral merchandise trade balances with the partner countries, increasing trade surpluses.”
But like its past reports, the ITC misses the mark in many major ways, underreporting the impact of trade agreements on manufacturers in the United States:
- U.S. Manufacturing Has Doubled Since NAFTA. Most prominently, the ITC report ignores the massive growth in U.S. manufacturing output. Since NAFTA, both U.S. manufacturing output and U.S.-manufactured goods exports have doubled. Indeed, manufacturers in the United States are producing more than ever before. The recognition of the growth of manufacturing overall is important, particularly when a large portion of that output is exported to trade agreement partners. Indeed, U.S. free trade agreement partners purchase 13 times more from the United States than the rest of the world and have been an important source of U.S. manufacturing growth.
- Non-Tariff Benefits of Trade Agreements Have Broad Impacts. The ITC’s economic analysis simply cannot and does not capture the vast importance of trade agreements to the U.S. manufacturing economy. When discussing non-tariff issues, such as intellectual property (IP) protections in U.S. trade agreements, for example, the ITC notes the increase in IP receipts. It fails to include, however, any discussion of the importance of these provisions to supporting high-paying manufacturing jobs. There are similarly limited analyses of other provisions, such as investment rules that help many manufacturers reach foreign consumers while supporting good-paying American jobs.
- The World Is Moving Forward Without Us. The ITC’s analysis is also U.S. focused, ignoring the growth in world trade, hundreds of millions of new entrants into the global middle class and foreign trade agreements that exclude and disadvantage the United States. While the United States has 14 trade agreements with 20 countries in operation, the World Trade Organization reports that there are now more than 270 bilateral and regional agreements that provide improved access and better rules for those countries that are participating. The vast majority of these agreements exclude the United States and disadvantage manufacturers in the United States.
Manufacturers in the United States now produce more than ever before and support more than 18 million American jobs. As the most productive manufacturing sector globally, manufacturers in the United States need new foreign markets to sustain, let alone grow, current employment levels. Trade agreements, along with competitiveness and trade enforcement tools, are critical to improved U.S. access to foreign markets and the continued growth of manufacturing in the United States.