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Trade

U.S., China Talk Results in Broad Commitments, Few Concrete Policy Changes on Manufacturing Issues in Final Commercial Dialogue

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The Obama Administration closed the book on engagement with China last week with the annual meetings of the Joint Commission on Commerce and Trade (JCCT).  These meetings, which ran from November 21-23 in Washington, DC, pushed for full implementation of previous commitments and some new language on manufacturing-relevant issues such as new commitments on China’s trade secrets and online anti-counterfeiting efforts, industrial policy issues in cybersecurity and competition, and specific policy concerns in sectors such as semiconductors, medical devices, pharmaceuticals, and food processing. However, the session still focused more on statements of broad principle and extended dialogue, such as on overcapacity, versus the types of specific, concrete policy changes that are needed to address significantly the many longstanding issues facing the U.S. manufacturing sector in China.

At the end of the day, manufacturers need to see progress on these issues – and it is that concrete progress that manufacturers view as the benchmark for the U.S. approach to China. China stands as one of the U.S.’s largest commercial relationships, with more than $560 billion in bilateral trade and $3 billion in bilateral investment. While the third largest market for U.S. manufactured goods exports, China also persistently ranks as one of the most frequently cited trouble spots for manufacturers in the United States, with a range of market-distorting policies and practices such as industrial overcapacity, insufficient intellectual property infringement, and protectionist industrial policies. All of these policies harm the ability of manufacturers to open new or expand U.S. factories, sell more at home and abroad, and provide good-paying manufacturing jobs here in the United States.

Heading into the next administration, the U.S. government must strengthen U.S. efforts, working with industry and with global trading partners, to hold China accountable to both global trading rules and China’s own trade commitments so that China does not continue to advance its domestic industry at the expense of ours. Such efforts must produce smart, practical outcomes that hold China accountable, while also ensuring that manufacturers in the United States and their workers that depend on a rules-based trading relationship with China are not put at risk. Commercial dialogues like the JCCT are an important part of the toolkit to address those barriers alongside other bilateral and multilateral dialogues, work within the World Trade Organization (WTO), the robust use of trade enforcement tools both domestic and international, as well as trade and investment negotiations that address additional market-distorting activities.

Manufacturers in the United States are committed to building a robust trading relationship with China – but will not settle for anything less than a free and fair competitive landscape where both countries are playing by the same rules.

Tear Down Those Walls: NAM Weighs in on Foreign Trade Barriers Around the World

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The National Association of Manufacturers (NAM) today urged the U.S. government and other stakeholders to address trade barriers faced by manufacturers in the United States in markets around the world. In its detailed submission to the Office of the U.S. Trade Representative for its National Trade Estimate Report (NTE), the NAM described a wide variety of foreign trade barriers that undermine the ability of manufacturers in the U.S. market to compete on a level playing field in international markets, which, in turn, undermines U.S. economic opportunities here at home. Read More

TPP in Real Life: How a Texas Instruments Semiconductor Designed in New Hampshire Can Travel 13,000 Miles and Power the World

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Texas Instruments Inc. (TI) is a Dallas, Texasheadquartered company that designs, manufactures, tests and sells a diverse portfolio of semiconductors and other products used by more than 100,000 of the world’s most innovative companies. TI’s semiconductors in particular are used in products that range from personal electronics and automobiles to industrial automation equipment, medical devices and heating, ventilation and air conditioning (HVAC) systems.

Texas Instruments Wafer Manufacturing Facility in Dallas, Texas. Photo Courtesy: Texas Instruments

TI wafer manufacturing facility in Dallas, Texas. Photo courtesy of TI.

The global supply chain is critical for TI and all U.S. semiconductor companies that, on average, derive more than 80 percent of their total revenue overseas, with Asia representing more than half of that revenue. A semiconductor designed at one of TI’s U.S. facilities and fabricated at U.S. factories may be sent to Trans-Pacific Partnership (TPP) countries, such as Malaysia, for additional processing. From there, the semiconductor may then be shipped to a product distribution center in Singapore before being sent to the customer, which incorporates it into an end product and ships it anywhere in the world.

As Paula Collins, TI’s vice president of government relations, said on a recent NAM Trade Podcast, “A TI chip that was designed in Manchester, New Hampshire, may travel 13,000 miles around the world, and eventually end up in any country in the world.”

USB Power Switch Found in PC Notebooks, 3D Printing and Other Devices. Photo Courtesy: Texas Instruments

USB power switch found in PC notebooks, 3D printing and other devices. Photo courtesy of TI.

TI operates multiple manufacturing, design and other facilities in nine states across the United States. This includes semiconductor manufacturing facilities in Texas (Dallas area, Sherman and Richardson) and Maine (South Portland) as well as more than a dozen design facilities in states around the country, including Texas (Dallas area, Austin and Sugar Land), New Hampshire (Manchester) and Arizona (Tucson and Phoenix), just to name a few.

According to Ms. Collins, “The TPP will support jobs in the United States and enhance TI’s ability to compete in the rapidly growing Asia-Pacific region by eliminating tariffs on advanced electronics and establishing new rules of the road, including in areas that have not been addressed in previous trade agreements.” Beyond tariff elimination, TPP benefits for TI include the following:

  • A prohibition on forced technology transfers as a condition of market access or investment
  • A requirement that partner countries accept commercial products with encryption without additional disclosure of confidential intellectual property or source code
  • Strong patentability standards and protection of trade secrets
  • Strong counterfeiting enforcement and penalties, which are critical because counterfeiting costs the U.S. semiconductor industry billions of dollars each year
  • A ban on data localization requirements, critical for manufacturers like TI that support customers around the world, as requirements to store data locally would significantly increase the costs of doing business

On the NAM Trade Podcast, Ms. Collins added that “trade is going to happen with us or without us. I would rather have the United States be at the table, helping to protect U.S. values, helping to protect U.S. workers, helping to protect the U.S. environment, to ensure that we are helping to shape globalization, rather than just responding to it.”

Read more “TPP in Real Life” stories here.

Final U.S.–India Commercial Dialogue Shows Some Areas of Serious Dialogue, Little Concrete Progress on Priority Issues for Manufacturers

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The United States and India concluded the last major bilateral commercial dialogue of the Obama administration today in Delhi, wrapping up a week of workshops and high-level bilateral meetings with a long joint statement on commercial topics. While this year’s dialogue included language that indicates discussion on issues that better reflects manufacturers’ priorities, such as discussions on intellectual property and customs clearance, it still lacked specific, concrete outcomes that manufacturers in the United States sought to be addressed in order to improve significantly U.S. commercial engagement with India.

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TPP in Real Life: TPP Levels Playing Field for Leading U.S. Restroom Accessory Manufacturer

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If you’ve ever washed your hands or changed your child’s diaper in a public restroom, it’s likely you’ve encountered goods crafted in America by Bobrick Washroom Equipment Inc. Headquartered in Los Angeles, Calif., since its founding in 1906, Bobrick is the world’s leading manufacturer of restroom accessories for commercial building owners, and the company markets its products under the Bobrick, Gamco and Koala Kare brands. It manufactures products in California, Colorado, New York, Oklahoma and Tennessee.

Bobrick Headquarters in Los Angeles, California. Photo Courtesy: Bobrick

Bobrick headquarters in Los Angeles, Calif. Photo courtesy of Bobrick.

While selling extensively throughout the United States, Bobrick has been able to grow by expanding its global focus. Bobrick exports restroom accessories to more than 100 countries in Europe, the Middle East, Africa, Asia and Latin America, including all Trans-Pacific Partnership (TPP) countries, and has operations in the United Kingdom, Singapore, United Arab Emirates and Australia.

According to Alan Gettelman, Bobrick’s vice president of external affairs, “Free trade agreements have lowered many of the tariff and non-tariff barriers that Bobrick has faced overseas, allowing us to improve access to these markets and increase our competitiveness. The elimination of all manufacturing tariffs under the TPP would level the playing field for our company’s exports to these countries, allowing us to boost sales of products crafted throughout the United States.”

Bobrick SureFlo Automatic Soap Dispenser. Photo Courtesy: Bobrick

Bobrick SureFlo automatic soap dispenser. Photo courtesy of Bobrick.

To illustrate the importance of the TPP for Bobrick, consider the company’s SureFlo automatic soap dispensers, which are manufactured at its Los Angeles, Calif., facility. Imports of soap dispensers currently face duties of 24 percent in Vietnam, 5 percent in Malaysia and 5 percent in New Zealand.

As another example, Bobrick’s grab bars are manufactured in Clifton Park, N.Y., and face import duties of 20 percent in Vietnam, 5 percent in Malaysia and 5 percent in New Zealand.

And consider Bobrick’s Koala Kare brand baby-changing stations and child-seating products, which are manufactured in Denver, Colo., and face import duties of 25 percent in Vietnam and 5 percent in New Zealand.

Finally, take Bobrick’s restroom mirrors, which are manufactured in Jackson, Tenn., and Durant, Okla., and currently face duties of 34 percent in Vietnam, 30 percent in Malaysia and 5 percent in New Zealand.

Bobrick Koala Kare Baby Changing Station. Photo Courtesy: Bobrick

Bobrick Koala Kare baby-changing station. Photo courtesy of Bobrick.

All of these tariffs, and thousands of others, will be eliminated on U.S.-manufactured goods exports when the TPP is fully implemented. Bobrick will be able to see substantial savings immediately on many of its exports to these markets, and most of the duties facing its exports will be eliminated within four years of the TPP’s entry into force.

The TPP will also eliminate other discriminatory barriers faced by Bobrick and other manufacturers in TPP countries and will improve Bobrick’s ability to export through more transparent and streamlined customs rules. All in all, the TPP will help level the playing field for Bobrick and other manufacturers across the United States, helping U.S. manufacturing increase sales and support jobs right here at home.

Read more “TPP in Real Life” stories by clicking here.

TPP in Real Life: Smiths Group’s U.S. Exports Save and Protect Lives Around the World

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If you have put your bags through a security screening device at airports and federal buildings or have known anyone who has needed out-patient oncology treatment, then you, like hundreds of millions of other Americans, have likely benefited from the technology manufactured by Smiths Group here in the United States, without ever realizing it.

Smiths Group employs more than 8,000 people in the United States at facilities in 40 states and across five divisions: John Crane, Smiths Medical, Smiths Detection, Smiths Interconnect and Flex-Tek. The company develops and applies leading-edge technology to create innovative products and solutions that range from health care, energy and petrochemicals to threat and contraband detection, telecommunications and equipment manufacturing. Though its headquartered in the United Kingdom, about one-third of Smiths Group’s workforce, half of its capital base and half of its revenue are located in the United States.

Smiths Medical Headquarters in Plymouth, MN. Photo Courtesy: Smiths Group

Smiths Group’s medical headquarters in Plymouth, Minn. Photo courtesy of Smiths Group.

While sales in the United States are important to Smiths Group, as reflected by its big investments throughout the United States, so too are sales overseas. As the company seeks to expand its U.S. production, it also is working to export around the world medical technologies that save lives, screening technologies to help governments protect their citizens and products and services that ensure communities have the energy needed to power their societies. That is why trade agreements that will eliminate foreign trade barriers and improve standards, such as the Trans-Pacific Partnership (TPP), are so important to Smith Group’s U.S. operations and its employees.

For example, the United States currently exports $5 billion worth of medical devices to TPP markets each year. Currently, the United States faces tariffs as high as 30 percent on certain medical devices in Malaysia. Under the TPP, the tariffs on 99.9 percent of U.S. exports of medical devices will be eliminated immediately, making Smiths Medical’s lifesaving technologies more readily available to patients in need.

Smiths Medical’s CADD®-Solis VIP Ambulatory Infusion system. Photo Courtesy: Smiths Group

Smiths Medical’s CADD®-Solis VIP Ambulatory Infusion system. Photo courtesy of Smiths Group.

Another one of Smiths Group’s business divisions, John Crane, designs, manufactures and services a variety of products, including mechanical seals, couplings, bearings and filtration systems for industrial rotating equipment. This equipment is critical to the safety, efficiency, reliability and environmental footprint of rotating machinery.

A significant portion of John Crane revenue comes from the export of products to TPP countries, including Australia, New Zealand, Singapore and Vietnam. Once the TPP is implemented, the duty savings for John Crane’s exports of these goods to TPP countries will be reinvested to improve and expand its U.S. operations.

John Crane Mechanical Seal used in Centrifugal Compressor Applications. Photo Courtesy: Smiths Group

John Crane mechanical seal used in centrifugal compressor applications. Photo courtesy of Smiths Group.

According to Chris Swonger, senior vice president of global government relations, “TPP is a unique opportunity for companies like Smiths Group to increase sales of goods and services in overseas markets through the elimination of unnecessary tariffs. As a result of these duty savings, Smiths Group will be able to expand research and development in new technologies, supporting new jobs and manufacturing in the United States.”

The next time you put your bags through a security device or stop by the doctor’s office, take a look to see if you benefit as well from a Smiths Group product manufactured here in the United States.

Click here to read more TPP in Real Life stories.

TPP in Real Life: Subaru’s Indiana Business Booms in an Interconnected Global Economy

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Subaru of Indiana Automotive, Inc. (SIA) first broke ground in Lafayette, Indiana more than 29 years ago and is the home of Subaru’s North American production. Models built at SIA’s Lafayette, Ind., plant include the Subaru Legacy and Outback. Later this year, production of the Impreza will be moved to the Lafayette facility from Japan, where SIA’s parent company, Fuji Heavy Industries Ltd. (FHI), is headquartered. Even more exciting, an as-yet-unnamed three-row crossover vehicle will be added at SIA in 2018.

Subaru of Indiana Automotive Facility in Lafayette, Indiana. Photo Courtesy: SIA

Subaru of Indiana automotive facility in Lafayette, Ind. Photo Courtesy: SIA

SIA has seen rapid growth in its Indiana vehicle manufacturing in recent years, with production expected to exceed 340,000 vehicles in 2016, an increase of nearly 40,000 vehicles compared to the prior year. To meet and accelerate this rapid growth, SIA has invested more than $1.3 billion over the past four years to prepare for Impreza production and expand its Lafayette facility, including expanding capacity in its engine and body shops and building a second paint shop.

Subaru Impreza Manufactured in Lafayette, Indiana Starting in November. Photo Courtesy: SIA

Subaru Impreza will be manufactured in Lafayette, Ind., starting in November. Photo Courtesy: SIA

SIA’s Lafayette facility employs more than 5,400 associates, and the company has added more than 1,300 associates in the past year to support the production of new models and growth. These job increases in turn support the broader Lafayette and Indiana economy. New jobs created by SIA have a multiplier of 11.4, meaning that for every job created by SIA, more than 11 other jobs are created in other Indiana businesses, according to 2010 estimates by the Center for Automotive Research.

As an automaker operating in the global economy, free and fair trade is essential to SIA’s operations. In the past, SIA has exported vehicles to more than 52 countries in a single year. During the past five years, nearly 62,000 vehicles built at SIA have been exported to other countries, including more than 53,000 vehicles shipped to Canada. Due to the high demand for the Legacy and Outback in the United States, SIA currently only exports to two other countriesMexico and Colombiaplus Puerto Rico. However, with expansion and new models, SIA exports are expected to grow.

According to SIA Senior Executive Vice President Tom Easterday, “SIA strongly supports efforts to establish free and fair trade between the United States and its most significant trading partners, including through agreements such as the TPP. As our track record demonstrates, SIA’s exportation of vehicles to global markets clearly supports the creation of manufacturing jobs in Indiana, and we’re excited about the further job growth SIA and our suppliers have experienced due to the upcoming start of production of the new Impreza here in the United States.”

Read more from the “TPP in Real Life” series here.

 

TPP in Real Life: TPP Will Benefit All Aspects of John Deere’s Business, Supporting Growth and Jobs in the United States

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The Trans-Pacific Partnership (TPP) will benefit all aspects of John Deere’s business, enabling this iconic U.S. manufacturer of farm, forestry and construction equipment to continue to manufacture and grow in 23 locations across 11 states and sell equipment via independent dealers in all 50 states. From the agreement’s elimination of tariffs and barriers faced on the export of remanufactured goods to new rules preventing data localization measures and requiring additional transparency in the development of product standards and predictability for cross-border shipments, the TPP is a strong agreement for Deere, its hundreds of suppliers across the United States and for its customers.

John Deere Harvester Works employee in East Moline, Illinois. Photo courtesy: John Deere

John Deere Harvester Works employee in East Moline, Illinois. Photo courtesy of John Deere.

As J.B. Penn, Deere’s chief economist says, “Deere exports equipment to most TPP countries, and the elimination of all tariffs levied on these exports is a major reason why we support the agreement’s ratification. For example, tractors produced in Waterloo, Iowa, incur a 15 percent tariff when shipped to Vietnam, while harvesters produced in East Moline, Illinois, face a 5 percent tariff in that market. Both tariffs will be eliminated under the TPP, making our products much more price competitive. Also, Malaysia’s 20 percent tariff on the 650K Dozer and the 10 percent tariff on the four-wheel-drive loader will both fall to zero, giving a big boost for Deere’s construction and forestry business.”

Penn adds, “Deere also supports the TPP because of its benefits to our domestic customers. U.S. farmers and ranchers are some of Deere’s most enthusiastic customers, and they will be among the biggest beneficiaries of the TPP’s expanding market access provisions. Whether through the reduction of barriers in the Japanese beef market or the elimination of tariffs on corn exported to Malaysia, U.S. farmers and ranchers finally will be competing on a more level playing field, in turn boosting demand for equipment manufactured by Deere right here in the United States.”

John Deere 9RX Series Tractor, built in Waterloo, Iowa. Photo courtesy: John Deere

John Deere 9RX Series tractor, built in Waterloo, Iowa. Photo courtesy of John Deere.

Furthermore, as Penn says in a recent video, “John Deere strongly supports ratification of the TPP because freer trade is not just good for our customers and our company; freer trade is good for all of us.”

Read more from the TPP in Real Life series here.

TTIP: Negotiators Must Remain Ambitious

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As the 15th Round of Transatlantic Trade and Investment Partnership (TTIP) talks get underway next week in New York City, the National Association of Manufacturers will be watching closely to ensure that the United States and European Union remain steadfast in their pursuit of a comprehensive, high-standard and market-opening agreement that will strengthen manufacturing in the United States. Read More

TPP in Real Life: Texas Medium-Sized Manufacturer Exports Products to More Than 30 Countries

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Polyguard’s primary production facility in Ennis, Texas. Courtesy: PolyGuard

Polyguard’s primary production facility in Ennis, Texas. Photo courtesy of Polyguard.

Polyguard Products Inc. is an Ennis, Texasbased, 138-employee manufacturer that specializes in products that protect surfaces and structures from moisture, water and other substances. The company, which is 100 percent employee stock-owned, has experienced 24 consecutive years of unbroken sales expansion, dating all the way back to 1992.

Polyguard has received Presidential Export Achievement Awards in 2010 and 2014, success driven in large part by the company’s exports to about 30 countries of pipeline coatings for oil and gas-buried line maintenance and building products for high-value construction projects. Ten of these countries are in the Trans-Pacific Partnership (TPP), with Vietnam currently the company’s largest market in the Asia-Pacific region. Polyguard also ships products to Singapore, New Zealand and Australia, among other countries in the region.

Polyguard RD-6® pipeline coating applied in Manila, Philippines. Photo Courtesy: Polyguard

Polyguard RD-6® pipeline coating applied in Manila, Philippines. Photo courtesy of Polyguard.

I recently spoke to Nathan Muncaster, Polyguard’s director of global business development, who underscored the importance of strong free trade agreements for manufacturing companies like Polyguard. “Intellectual property protections and a predictable regulatory environment are critical for small and medium-sized manufacturers like Polyguard that cannot maintain local production or offices outside of the United States. Trade agreements like the TPP strengthen the legal, intellectual property and regulatory environment in our trading partners, helping to boost exports that support manufacturing growth and jobs here in the United States.”

Muncaster went on to say, “We urge Congress to approve the TPP,” a sentiment shared by many manufacturers of all sizes throughout the United States.

With charts, graphs and political rhetoric flying around, it’s easy to forget the human aspect of trade: the many peoples’ lives that manufactured products touch, how far those products travel to reach customers around the world and the jobs in the United States created and supported in the process. Polyguard’s story is one of the many trade stories that need to be shared as the debate over TPP continues.

Over the coming weeks, using this blog, we will highlight several of these stories that demonstrate the importance of free trade agreements, specifically the TPP, for individual manufacturers in the United States and for their employees and communities.