General

Forfeiting Opportunity is Not an Option

Earlier today, the NAM released a new report that documents the massive size and growth of foreign export credit activity. The findings of the report, along with those of an NAM policy brief, underscore why the reauthorization of the U.S. Export-Import (Ex-Im) Bank is critical to support exports, manufacturing and jobs.

A diverse array of manufacturers, small and large, who use the Ex-Im Bank joined NAM President and CEO Jay TimmonsExImPanel in Washington to unveil the report. Without the Ex-Im Bank, these manufacturers and thousands more would not be able to grow jobs at home and compete in the global marketplace. Even with the Ex-Im Bank’s services, manufacturers in the United States seeking to export their products, and expand their businesses to reach the 95 percent of consumers who live outside U.S. borders, are at a competitive disadvantage.

As the report found, foreign export credit agencies (ECAs) continue to grow among our largest trading partners and in emerging markets. The ECAs of nine of our top trading partners—Brazil, Canada, China, France, Germany, Japan, Mexico, South Korea and the United Kingdom—provided nearly half a trillion dollars in export credit assistance to their exporters in 2013. Collectively, that amount is more than 18 times greater than the modest $27 billion the U.S. Ex-Im Bank provided the same year. China dominates the export credit financing landscape and authorized more than $153 billion in 2013.

If Congress fails to reauthorize the Ex-Im Bank, the discrepancy in export financing between the United States and the rest of the world will only continue to grow. Other nations will jump in and fill the void. Neither our nation’s manufacturers nor the economy can afford for that to happen.

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NAM Applauds Introduction of Trade Secrets Protection Act

The NAM welcomed today’s introduction of the bipartisan Trade Secrets Protection Act of 2014 and applauded the bill’s sponsors, Representatives George Holding (R-NC), Jerrold Nadler (D-NY), Howard Coble (R-NC), Hakeem Jeffries (D-NY), Steve Chabot (R-OH) and John Conyers (D-MI) for their focus on this critical issue.

The Trade Secrets Protection Act is the House companion to legislation (S.2267) introduced in April by Senators Chris Coons (D-DE) and Orrin Hatch (R-UT). It marks a critical step toward ensuring manufacturers can effectively and efficiently enforce their trade secrets at home and abroad.

Trade secrets include everything from the special recipe for a food or beverage to research, marketing data and customer lists. They are the proprietary manufacturing processes and marketing plans that set products apart from the competition.

These vital intangible assets have never been more important to manufacturers large and small. But they increasingly are at risk in today’s mobile and interconnected global economy.

Trade secrets can comprise as much as 80 percent of the value of a company’s knowledge portfolio. But according to one estimate, theft costs businesses in this country some $250 billion a year.

The Trade Secrets Protection Act would help to address this challenge by providing access to federal civil enforcement for trade secrets theft. Right now, businesses must go state-by-state to defend their rights.

At the same time, it would provide a critical foundation for essential trade secrets commitments in U.S. trade agreements, including those under negotiation with Europe and 11 Pacific Rim nations.

The NAM was pleased to testify before the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet last month on the importance of strengthening trade secret protection and enforcement in ways that advance manufacturing in the United States.

We look forward to working with Congressmen Holding, Nadler, Chabot, Conyers, Coble and Jeffries, and with many others in the House and Senate to promote swift consideration and passage of the Trade Secrets Protection Act.

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Timmons in Pittsburgh to Talk Energy and Manufacturing Comeback

NAM President and CEO Jay Timmons addressed some of the country’s leading manufacturing executives today in Pittsburgh at an energy panel hosted by Jones Day.  The discussion centered on the critical need for an affordable and abundant energy supply to fuel the manufacturing comeback.

Jones DayTimmons kicked off the event by noting that, “major events like the shale revolution don’t happen often. Manufacturers can’t let this opportunity pass us by, so we welcome any chance to talk about the transformation in our sector.”

Despite recent manufacturing success, there are significant obstacles facing the economy.  Timmons told executives that “if policymakers make the wrong choices, those decisions could bring the energy revolution to a halt and do irreparable harm to manufacturing and the overall economy.”

Timmons also urged energy and manufacturing executives alike not to settle with their current success but to continue to lead the push for comprehensive policy reform.  He presented manufacturers with a new goal, suggesting that “our challenge in the months ahead is to run up the score on energy—and fix the broken policies that are holding manufacturers back.”

To learn more about the importance of energy to manufacturers, click here.

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Exporters for Ex-Im: Maker Of Biodegradable Products Doesn’t Want Ex-Im Bank To Vanish

Leslie Harty and her husband made –and still sell— the country’s first biodegradable coffee bag.

Their company, Maverick Enterprises Inc., has been operating in Monroe, North Carolina, for 21 years. The company specializes in making biodegradable products, including coffee bags and containers for food, to help reduce landfill waste.

Mrs. Harty, the company’s president, said they used the U.S. Export-Import Bank from 2005 to 2010 when they were selling biodegradable bags to companies in Mexico. They ultimately lost one of the contracts but intend to use the Ex-Im Bank again soon because they’re finishing up a biodegradable backing to use in baby diapers.

The potential buyer is in Mexico, and Mrs. Harty said the company will apply for export credit insurance from the Ex-Im Bank once the product is complete.

“I wouldn’t send anything down to Mexico without having the insurance from Ex-Im Bank,” she said. She said she’s heardMaverick Enterprises “horror stories” of small businesses trying to collect payments for products they’ve exported.

She said it would be “disastrous” if the Ex-Im Bank weren’t reauthorized by Congress in September, right when the company is set to begin exporting again. In addition to hurting the company’s sales, it would hurt their ability to conduct research and development.

She said the company is currently designing biodegradable netting for capturing fish and for laying sod as well as small biodegradable coffee cups like those used in Keurig coffee machines.

Those cups, or pods aren’t biodegradable. There’s a potential market for biodegradable coffee pods, and they’d like to capture those sales if possible.

Having the Ex-Im Bank as a resource, she said, will help them do that.

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx.

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Exporters for Ex-Im:Mint Oil Maker Wants Ex-Im Bank Reauthorized

Terry Cochran didn’t know it at the time, but growing up on a mint farm helped prepare him for his career.

OLYMPUS DIGITAL CAMERAMr. Cochran and his brother run Norwest Ingredients in Royal City, Washington. A 15-person company, they makes mint and other oils used in gum, confection and a range of oral care products from mouthwash to toothpaste. They buy mint oil from farms around the country and process it to ensure it’s safe – and of high quality – before selling it in giant barrels that cost more than $10,000.

The two brothers started the company in 1998 and started exporting shortly thereafter. They’ve gained enough credibility that they count toothpaste giant Colgate among their customers. But as they grew, getting financing from commercial banks became a problem.

“As we grew and more and more of our sales were overseas, our local banks began to get a bit uneasy about it because as you know once it’s overseas it can be hard to get paid,” Mr. Cochran said. The company turned to the U.S. Export-Import Bank, which has approved the company loan guarantees for overseas customers. Their sales have increased, on average, about 20% annually since they began exporting.

Norwest Ingredients is like the many other small firms that rely on the Ex-Im Bank when commercial banks aren’t willing or able to help them expand abroad. The Ex-Im Bank has supported 1.2 million jobs in the last five years, and those jobs could be at risk if Congress doesn’t reauthorize Ex-Im Bank by the end of September.

Mr. Cochran doesn’t want to see that happen. If the Ex-Im Bank doesn’t get reauthorized, his sales will suffer.

And some of the company’s suppliers, including the employees who work on mint farms like Mr. Cochran did, will suffer.

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx.

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Exporters for Ex-Im: U.S. Solar Cell Manufacturer Shines With Help of Bank

Suniva Inc., a metro-Atlanta based manufacturer of high-quality, high-efficiency crystalline silicon solar cells and modules, and the Export Import Bank (Ex-Im Bank) of the United States have been working together since 2007. Suniva has benefitted from the Ex-Im Bank’s buyer financing and working capital guarantees to support its exports to global markets.

Most recently, Suniva announced that Ex-Im Bank will guarantee a $780,000, 10-year loan to be made by UPS Capital Business Credit to finance the export of Suniva’s photovoltaic (PV) solar to a rooftop solar-power project of Grupo Metal Intra S.A.P.I. de C.V. (GMI). GMI Suniva Queretaro Airport 1MW 2014 02

“High-quality American solar products are coveted in many emerging markets. In these markets where there is an abundance of sun, and power is unreliable and/or expensive, solar power is particularly attractive,” said John Baumstark, chief executive officer of Suniva.

“It is critical for American companies to export to help strengthen our economy, and U.S. Ex-Im Bank has been instrumental in providing unique products that enhance the competitiveness of American companies around the world.  It is most fitting that the first major export and installation of our modules in Mexico is utilizing a guarantee from the U.S. Export-Import Bank with which we have a longstanding and valuable relationship,” said Baumstark.

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx.

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Taking a Global Stand Against Harmful Trade Barriers

Over the past quarter century, incredible technological advancements and innovation have increased manufacturing productivity and transformed industry’s ability to expand into the global marketplace.  As a result, since 1990, U.S. manufactured goods exports more than quadrupled, establishing the U.S. as an important and willing trade partner.

Reaching nearly $12 trillion in 2011, worldwide trade imports have risen rapidly. As more and more countries seek to leverage this opportunity for growth, important internationally agreed upon policies were put in place to ensure a fair and level playing field for all countries. Despite the global good achieved through open markets, some countries have chosen to close off their markets to any perceived foreign competition by mandating the manufacturing of certain materials and products within its own borders. These forced localization are extremely detrimental to trade and create unfair disparities since the countries which implement the policy often maintain open access to customers in the United States and many countries in Europe, Asia, South America and beyond.

In India for example, policies have been put in place which block U.S. manufacturers. These include retail investment caps which require stores to purchase from Indian producers and domestic manufacturing requirements for solar materials which mandate certain materials be manufactured within the country’s borders. Not only do these types of policies threaten U.S. jobs, but they also restrict Indian business and consumers’ access to the next generation of innovative technologies. Manufacturers have remained diligent in our call for a dialogue with India to discuss the best path forward to address these concerns and develop solutions that will support India’s economy and job growth. However, until the recent election of India’s new Prime Minister Narendra Modi, these calls have largely gone unanswered.

However, the protectionist policies adopted by India have already begun to proliferate rapidly across other developing nations and are threatening the very foundation of a successful global trade market.  Now more than ever, it is crucial that these concerns be shared on a global stage not only to protect U.S. manufacturers and the jobs they create, but to also ensure the integrity of global trade for the future.

To that end, in anticipation of the upcoming G-20 trade ministers meeting in Sydney, Australia on July 19,  the  NAM as well as industry associations from around the world representing a multitude of sectors  sent a letter urging the ministers to address the growing challenge of forced localization that is creating barriers to global trade among many of the G-20 partners. This letter signifies worldwide concern of this growing trend and the strong support of 21st century trade disciplines (such as within bilateral, plurilateral and multilateral forums) to counter such policies.

Unless policymakers raise forced localization policies as a global economic priority and agree to take united action to address it, the impact on the U.S. economy and economies across the globe will be substantial.

As the letter states, “members of the G20 must lead by example as they jointly represent about two-thirds of the world’s population, 85 per cent of global gross domestic product and over 75 per cent of global trade.”

The NAM stands ready to join these important policy discussions and advance solutions that will break down the barriers to trade and create a level playing field for all nations.

 

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Exporters for Ex-Im: Washington Company Makes Springs Tough Enough For U.S. Military With Help Of Ex-Im Bank

Renton Coil Spring produces high quality, precision springs and assemblies that are tough enough for the U.S. military, aerospace equipment and race cars.

The company, based in Renton, Wash., exports 40% of its products internationally, said Bob Newberry, Vice President of Sales and Engineering.

Renton Coil Spring is one of the thousands of small and mid-sized companies that uses the Ex-Im Bank to grow and keep jobs local. The Ex-Im Bank has supported 1.2 million U.S. jobs in the last five years and in 2013 returned $1 billion to the U.S. Treasury Department.

It’s up for reauthorization September 30th. If it isn’t reauthorized, then U.S. manufacturers like Renton Coil Spring will RENTON EMPLOYEESbe put at a disadvantage.

Mr. Newberry said the Ex-Im Bank “has helped us to grow these exports by enabling us to insure our exports and lower the risk of developing new foreign customers.”

He said some of the company’s products are so unique that no other business makes them.

“Our products are installed into prosthetic limbs in Iceland, mountain bikes in Chile, landing gear in China, Industrial equipment in India and Formula One cars in Italy,” he said.

“Exporters for Ex-Im” is a blog series focused on the importance of the Export-Import Bank to manufacturers. To learn more or to tell Congress you support reauthorization of the Export-Import Bank, visit http://www.nam.org/Issues/Trade/Ex-Im-Bank.aspx

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Toro – An American Icon – Turns 100

Toro Co. has been building and growing for 100 years and the Minnesota based manufacturer is showing no signs of slowing down. Coinciding with the company’s centennial celebration was the grand opening of a $25 million addition to their headquarters, expanding their already massive manufacturing space by 75,000 square feet.

Toro, since its beginnings as a small tractor engine company it 1914, has grown to be a fixture in Bloomington. The expansion will create and keep hundreds of R&D jobs in Minnesota. It’s a continuation of a deep commitment to R&D that has helped Toro become not just a leader in their industry, but a pioneer.

For all of us, Toro is an American icon – their lawnmowers are a symbol of summer and staple in homes, parks and golf courses. Of course, that’s not all they do – they into the heavy equipment market and continuing to innovate.

Congratulations to a titan of manufacturing in the U.S. – here’s to 100 more years.

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Global Manufacturing Economic Update – July 11, 2014

Here is the summary for this month’s Global Manufacturing Economic Update: 

The global economy improved slightly in June, showing some signs of stabilization from weaknesses in prior months. The J.P. Morgan Global Manufacturing Purchasing Managers’ Index (PMI) increased from 52.1 in May to 52.7 in June, its fastest pace since February. Various measures of activity were mostly higher, including new orders, production and employment. Behind this figure, the data also reflected economic progress in countries such as China, Hong Kong and Japan, each of which shifted from a contraction in May to slight growth in June. As a result, just 2 of the top 10 markets for U.S.-manufactured goods had PMI values below 50 in June, an improvement from the five that registered contracting levels in May. Our largest trading partner’s values, the RBC Canadian Manufacturing PMI, increased from 52.2 to 53.5, reaching its highest point since December.

Europe dominated economic headlines on July 10, with worries about a large Portuguese bank and falling industrial production figures for France (down 1.7 percent), Germany (down 1.8 percent) and Italy (down 1.2 percent). Indeed, European growth has continued to ease, with the Markit European Manufacturing PMI down from 52.2 to 51.8. On the positive side, manufacturing activity has now expanded for 12 straight months, but the economy in the Eurozone remains subpar overall. Real GDP was up just 0.2 percent in the first quarter and is expected to increase around 1 percent in 2014 as a whole. Still, growth varied widely from country to country. France sits on one end of the spectrum, with manufacturing sentiment worsening and falling to a six-month low. Meanwhile, Ireland and Spain experienced multiyear highs for sales growth, and new orders in the United Kingdom expanded rather robustly (up from 59.5 to 61.0).

In the emerging markets, manufacturers in Brazil, Russia, South Korea and Turkey reported contracting levels of activity in June, although Russian production grew for the first time in six months and South Korean exports began to stabilize. Overall, however, manufacturing activity in the emerging markets expanded for the second straight month, spurred higher by better news in some Asian economies. Stronger sales and output resulted in increased manufacturing PMI data for China, India, Indonesia and Taiwan. India also benefited from greater export growth. Next week, we will get new data on Chinese GDP, industrial production, fixed-asset investment and retail sales. Real GDP is expected to pick up slightly, from the 7.4 percent annualized growth rate experienced in the first quarter, with a consensus estimate of around 7.5 percent. While this is a marginal improvement, it also continues to reflect decelerating rates of growth from what was experienced in the past.

Looking at U.S. trade flows, petroleum helped to narrow the U.S. trade deficit in May, with more exports and fewer imports improving the headline figure. This continues a trend seen over the past few years whereby improved energy production in the United States has slightly helped balance the trade picture. Outside of petroleum, the numbers were less favorable. The average monthly deficit so far in 2014 reached $43.65 billion, higher than the $39.70 billion average for all of 2013. In addition, U.S.-manufactured goods exports continue to grow at a disappointing rate, up just 0.5 percent year-to-date versus this time last year using non-seasonally adjusted data. Nonetheless, exports of manufactured goods increased to all five of our largest trading partners through the first five months of this year: Canada, Mexico, China, Japan and Germany. That is an encouraging sign, even if we would like to see faster growth in our international sales overall.

On the policy front, the congressional debate on reauthorization of the Export-Import (Ex-Im) Bank continues to move forward, while action on other trade legislation is currently stalled. The World Trade Organization (WTO) officially began environmental goods negotiations, while both the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (T-TIP) continue. The U.S. trading relationship with key partners, including India, China and Russia, continues to be a focus.

Chad Moutray is the chief economist, National Association of Manufacturers. 

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