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Linda Dempsey

Manufacturers Disappointed in Lack of Concrete Progress in U.S.-India Commercial Dialogue

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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 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 by clicking here.

 

Cheering Fair Play and Neutral Referees at the Olympics and in the TPP

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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

DNC Platform Ignores How Much TPP Meets the Objectives Laid Out

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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 worldour own.

exports quadruple

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.

ITC Review Confirms Trade Agreements Benefit America, but Ignores Major Manufacturing Issues

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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.

Manufacturing Output and Exports 93-05

  • 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.

From Westminster Abbey to Your Shopfloor—An Explanation of “Brexit”

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Yesterday’s vote by 52 percent of the United Kingdom to exit from the European Union—the so-called British exit (Brexit)—has sent shockwaves across global financial markets and plunged manufacturers on both sides of the Atlantic into a long period of uncertainty. While there are no direct immediate consequences for the day-to-day operations of businesses in the United Kingdom, European Union or the United States, all businesses engaged in the transatlantic market need to start preparing for the changes that will in fact come. Read More

Colombia Takes Another Step Away from Innovation and a Pro-Manufacturing Climate

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Yesterday, Colombia took another disturbing step that again calls into question its commitment to innovation, manufacturing and the type of investment climate that is vital to grow its economy. Despite its own price controls and existing robust competition in its market, Colombia indicated it would be issuing a Declaration of Public Interest (DPI) to lower again the price of Glivec, an innovative pharmaceutical product. There was no need for this action given that the product is already available at a significantly reduced price, and there are already non-infringing generic versions available in the Colombian market. Read More

ITC Report Barely Scratches the Surface of TPP’s Impact

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However you analyze yesterday’s report released by the U.S. International Trade Commission (ITC), the fact remains: the global economy requires American leadership and know-how to make it easier to create jobs at home and open up markets abroad. Whether it’s electronics manufacturer Texas Instruments, with multiple facilities employing thousands all over the United States and selling its innovative technologies worldwide, or it’s Wisconsin-based Darley with 127 employees, selling fire trucks to more than 100 countries, including China, Australia, Peru, New Zealand, Vietnam, Singapore, Japan, Nigeria and Brazil, we need free trade agreements like the Trans-Pacific Partnership (TPP) so that manufacturers of all sizes can continue to compete and win.

Manufacturers need their products sold to more markets, so we can grow more jobs in America. They need their inventions and innovations protected. The TPP will protect and sell American-made goods—and that’s why manufacturers support swift approval of this critical trade agreement. Read More

#TruthOnTheTrail: Trade Realities That Campaigns Need to Consider

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trade-truth-05

Trade continues to be a key topic in the campaigns of both major parties. Unfortunately, the most oft-repeated claims are flat-out wrong and portend a dangerous path of retreat from the strong trade approach that has long been a powerful positive force for American workers, consumers and families. With World Trade Week officially under way, let’s look again at how trade drives the U.S. economy, raises standards of living for American families and grows manufacturing in the United States by dispelling some of the top trade myths.

  1. Free Trade Agreements. If candidates want to take aim at free trade agreements (FTAs), why not go after the hundreds of trade agreements being negotiated without the United States that exclude and disadvantage manufacturers in the United States? U.S. exporters face higher tariffs and barriers than most of the world’s exporters in other countries (ranking 130 out of 132) because the United States has too few, not too many, trade agreements. FTAs are huge market boosters for manufacturing in the United States because they promote fair trade by leveling the playing field. That’s why moving forward on the Trans-Pacific Partnership (TPP) is so important to manufacturers in the United States.
  1. NAFTA. The criticism of the North American Free Trade Agreement (NAFTA) is an enduring but deeply flawed myth. The United States implemented NAFTA in 1994 and then experienced four years of economic growth and the creation of more than 800,000 manufacturing jobs. The recession in the late 1990s had a negative effect on the U.S. economy and jobs, but if anything, NAFTA helped the United States endure that downturn more successfully and has been critical to sustaining and growing the U.S. manufacturing sector, which then faced even stronger challenges from Asian emerging economies.
  1. China. It is easy for candidates to go after China as a major villain in the trade stories they like to tell. China is not easy, but it is not a one-sided picture. Yes, China has grown its manufacturing industry heavily over the past 20 years and is now the largest foreign supplier of manufactured goods to the United States. To reach this level, China engaged in a number of unfair trade practices, government subsidization and discriminatory policies. No debate there. At the same time, China also became the third-largest market for U.S.-manufactured goods, from the seventh-largest purchaser in 2002, the year after China joined the World Trade Organization, with U.S. exports growing more than 350 percent to $89 billion. There’s a long way to go in creating a fairer and more reciprocal U.S.China commercial relationship, but it’s a lot more complicated than the campaign promise of putting on new border taxes on Chinese imports, which we all know would be contrary to U.S. international commitments and would likely result in even stronger retaliation against U.S. exports to China. And just a reminder, the TPP does NOT include China.
  1. Trade Deficits. When we buy more imports than sell exports, that’s considered a trade deficit, which is used by candidates as a negative report card on U.S. trade. However, our economy is much more complicated than simple subtraction. Oftentimes, when the U.S. trade deficit is rising, the U.S. unemployment rate is declining and U.S. manufacturing production is growing. Also, the critics conveniently ignore when we do have a surplus, such as the fact that our country sells more manufactured goods overall to our FTA partners than we purchase from them. U.S. manufacturing output and exports have quadrupled over the past quarter century. Trade, boosted by trade agreements, is helping to fuel our economy.

Trade and manufacturing go hand in hand. The United States manufactures more today than we have in our entire history. Trade and trade agreements have opened the door to new global opportunities for manufacturers big and small throughout America, helping to sustain and grow jobs for millions of Americans. Let’s continue to make sure manufacturers and America can continue to grow.

Rigorous, Ongoing and Prompt Trade Enforcement Is a Year-Round Manufacturing Priority

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While much of the attention of World Trade Month is focused on the growth that manufacturers can achieve with a strong market-opening trade agenda, that agenda only works if it is backed by strong enforcement. Trade enforcement applies not only to the trade agreements negotiated that eliminate foreign barriers but also to the trade rules that seek to ensure trade that is free from unfair government distortions. Read More