Timmons: Scott Garrett at the Ex-Im Bank Is a Bad Deal for America’s Manufacturers

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The U.S. Export-Import (Ex-Im) Bank has operated for decades with a mission to support U.S. jobs through exports. Back in April, President Donald Trump confirmed his support for the export credit agency. In 2015, a bipartisan supermajority in Congress voted to reauthorize the agency through 2019. Who would want to stand in opposition to this small federal agency with an outsized, tangible benefit for the U.S. economy? Unfortunately, a former congressman who has been nominated to lead the agency is just that person. Former Rep. Scott Garrett (R-NJ), the nominee to lead the Ex-Im Bank, has been a vocal and dogged opponent of the Ex-Im Bank.

National Association of Manufacturers President and CEO Jay Timmons, in an op-ed published today in The Wall Street Journal, outlined the negative impact for manufacturers if the Senate moves to confirm Garrett as the leader of the Ex-Im Bank.

As a congressman, Garrett built a record of votes and statements that sought to dismantle the Ex-Im Bank. He voted to close the agency at every opportunity and voted against a reauthorization bill in October 2015 that passed the House with overwhelming bipartisan support. Before the vote, he took to the House floor to mischaracterize the agency as a “fund for corporate welfare” and urge his colleagues to “keep the Export-Import Bank out of business.”

When he voted against the agency’s reauthorization again later in 2015, he issued a statement explaining that he opposed the bill because it would “resurrect the most shameless example of crony capitalism Washington has ever concocted—the Export-Import Bank.” Prior to the 2015 reauthorization, Garrett voted against the Ex-Im Bank reauthorization in 2012 that was strongly approved by both the House and Senate. Garrett’s opposition to the Ex-Im Bank has been consistent, vocal and aimed at undermining the agency’s credibility.

Ex-Im Bank Benefits U.S. Manufacturers, Workers and Taxpayers

  • American Workers and Their Families Benefit from the Ex-Im Bank: U.S. export sales supported by the Ex-Im Bank have directly supported 1.4 million jobs over the past seven years.
  • Small Businesses: In fiscal 2016, about 90 percent of Ex-Im’s transactions—more than 2,600 deals—directly supported small businesses. Tens of thousands of small business suppliers benefit from partnerships with large exporters that also utilize the Ex-Im Bank.
  • Taxpayers: The Ex-Im Bank has generated $7 billion for taxpayers in the past 20 years, mostly through fees collected from foreign customers. The agency is self-sustaining and covers its own operating costs. Eliminating the Ex-Im Bank would actually increase the U.S. deficit. The agency transferred $284 million in deficit-reducing receipts to the U.S. Treasury for fiscal 2016.


Garrett’s past statements are evidence of a fundamental misunderstanding of the Ex-Im Bank’s ability to level the playing field globally. In a competitive global landscape, the Ex-Im Bank is a much-needed counterweight to substantial foreign export financing. The agency recently reported that China continues to be the world’s largest provider of official export credit, providing more trade-related investment support than the rest of the world combined. Together, the BRICS countries (Brazil, Russia, India, China and South Africa) provided a combined total of more than $51 billion in medium- and long-term export credit in 2016—nearly half of the total official export credit provided worldwide. Last year, without a quorum for its board of directors, the Ex-Im Bank was able to authorize just $5 billion. While the agency’s board of directors has lacked the necessary quorum to approve certain deals, an estimated 40 deals worth more than $30 billion are stuck in the pipeline.

The Ex-Im Bank plays a targeted and critical role in securing and creating more American jobs. That is why the Ex-Im Bank needs a leader who will ensure the agency is able to function at its full potential and promote U.S. exports in the face of substantial competition from manufacturers overseas supported by very active export credit agencies. Manufacturers are losing out on opportunities every day that the vacancies on the Ex-Im Bank board of directors are left unfilled, but Garrett, who said “Congress should put the Export-Import Bank out of business” just two years ago, is simply not a credible leader for this agency.

Manufacturers Cheer Decision of Canada’s Highest Court to Fell Invalid Patent Criteria Harming Innovation

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Innovative manufacturers in the United States welcomed positive news out of Canada on the eve of national holidays in both countries: the Supreme Court of Canada struck down an intellectual property approach that had stymied innovation and investment. Such inventiveness, secured by intellectual property, remains fundamental to the competitiveness of modern manufacturing in the United States and the millions of American jobs it supports.

Canada’s troubling “promise doctrine” originated from the fallacy that patents that do not fulfill their “promise”—as arbitrarily construed by the courts, often years after the patent was filed—are invalid, even if they meet internationally accepted criteria for patentability. Canadian courts began freely applying the rule in 2005 and have since revoked 26 patents, intended to help millions suffering from cancer, osteoporosis, diabetic nerve pain and other serious conditions.

In a unanimous decision, Canada’s highest court concluded that the “application of the promise doctrine” fails to determine the utility of patents and is “incongruent” with both the words and the approach of Canada’s Patent Act. This decision affirms the need for Canada and other countries to align their intellectual property policies and practices with global norms.

At a time when Canada and the United States are preparing for modernizing negotiations within the North American Free Trade Agreement, developments like this resolve remaining barriers that encumber North American manufacturers.  The Supreme Court of Canada’s decision supports stronger bilateral ties, investment and innovation in Canada and good, high-paying jobs for innovative American manufacturers.

New State Department “Investment Climate Statements” Serve as Important Resource for Businesses and Roadmap for Governments to Grow

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The U.S. State Department just released its annual “investment climate statements” that examine trade, investment, rule of law and related issues for more than 170 foreign markets. As I explained at an event organized by the Center for Strategic & International Studies (CSIS), these statements provide invaluable information for U.S. manufacturers and other businesses that seek access to foreign markets through exports, investments and other partnerships.

International commerce and investment are critical to manufacturers in the United States. Exports support the jobs of more than half of America’s 12 million manufacturing workers, and foreign investment by U.S. companies spurs those exports.

Foreign investment and U.S. exports work hand-in-hand to benefit U.S. companies, consumers and workers. Indeed, U.S. companies that invest overseas are outsized participants in the U.S. economy and are stronger because of their access to foreign markets. In fact, the primary reason that companies invest abroad is to sell to foreign consumers and bolster their U.S. operations.

Based on the most recent data available from the U.S. Bureau of Economic Analysis, consider that U.S. companies that invest overseas are some of America’s:

  • Largest exporters, exporting 47 percent of all U.S.-manufactured goods sold overseas ($660 billion in 2014). More than 40 percent ($269 billion) of those manufactured exports go to the overseas operations of American companies to help promote U.S. products in foreign markets.
  • Biggest producers, accounting for nearly $1.4 trillion, or almost 65 percent, of all U.S. private-sector value-added manufacturing output in 2014.
  • Most important innovators, expending nearly $269 billion on research and development in the United States in 2014. Of that, 68 percent (or $183 billion) was spent by manufacturers.
  • Largest investors in capital expansion, investing $713.5 billion, or 24 percent, of all spending on new property, plants and capital equipment in the United States in 2014.
  • Most generous employers, paying U.S. manufacturing workers on average $96,030, or about 18 percent more than average U.S. manufacturing wages in 2014.

For manufacturers and other businesses seeking foreign customers, identifying the most promising foreign markets is a difficult, time-consuming process that requires extensive knowledge. The State Department “investment climate statements” provide a valuable resource to businesses, offering detailed information on many of the critical factors they need to understand, including:

  • Openness to trade and investment, market barriers and business requirements;
  • Rule of law, including transparency, impartial rulemaking, corruption and the legal system;
  • The protection of private property (foreign and domestic), including innovation and intellectual property, the sanctity of contracts and land rights;
  • Competition policy, including with respect to state-owned enterprises,
  • Political risk; and
  • Digital policy trends.

Manufacturers welcome this year’s analysis of digital issues, including regulations on cross border data flows and the localization of information and communications technology infrastructure. As manufacturers implement technology and data in overseas sales, production and product usage, these issues have become increasingly important.

These investment climate statements also aid foreign countries looking to bolster their commercial climate. Many of manufacturers’ strong concerns with barriers, distortions and weak standards that are limiting U.S. growth appear in these statements.

Given the significance of international commercial engagement to the U.S. economy, manufacturing sector and workforce, the National Association of Manufacturers advocates open markets overseas, robust standards of governance and the protection of property. This includes investment and intellectual property as well as strong enforcement mechanisms like neutral investment dispute settlement mechanisms to prevent foreign country mistreatment or theft of U.S. property.

To learn more, read about or listen to the discussion at the launch of these statements at the CSIS event.

Manufacturing, Trade Deficits and Opportunities for Growth

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As part of President Donald Trump’s March 31 executive order on trade, the Commerce Department and Office of the U.S. Trade Representative are examining the role trade deficits play in key trading relationships. The National Association of Manufacturers (NAM) provided this detailed submission last week, and I am testifying today about opportunities and challenges that trade presents for manufacturing in the United States.

For those seeking the Readers Digest version, consider the top four takeaways.

    1. Exports are critical to today’s manufacturing success. Indeed, U.S.-manufactured goods exports now represent more than half of U.S.-manufactured output, supporting more than 6 million manufacturing job across the countryjobs that pay substantially more than non-export-related jobs. The U.S. manufacturing sector must have opportunities to expand salesat home and abroadto continue to add jobs.
    2. Manufacturing is growing around the world, creating new middle-class consumers and new partners, but also new competitors. More than $11 trillion in manufactured goods are traded annually as markets have been opened and trading costs reduced. In some cases, imports compete directly with manufacturers in the United States, just as U.S. exports compete with manufacturing overseas and many manufacturers require inputs not domestically available. Unfortunately, however, some import competition is fueled by foreign market-distorting and discriminatory trade practices that create unfair advantages for foreign manufacturing production at the expense of manufacturers, workers and communities in the United States. Under these circumstances, the NAM has long supported robust U.S. government action to address the underlying causes of the distortions and full enforcement of trade agreements and trade rules.
    3. The trade deficit arises as a result of several factors. Overall domestic economic conditions and standards of living, domestic consumption and purchasing compared with savings rates, the price of goods in the market, exchange rates, domestic structural issues (e.g., taxation, regulation) and openness to international trade all impact the trade deficit. In the United States, trade deficits expand as the U.S. economy grows and fall during periods of economic weakness. At the same time, however, when the U.S. economy expands, more workers are employed and unemployment falls, we see that the trade deficit actually increases.
    4. As manufacturers see it, many indicators are relevant in assessing the strength and weaknesses of U.S. trading relationships with particular markets. These factors include the existence and implementation of trade agreements, the size of the trading relationship compared to the size of the foreign economy, the growth of exports over time, the U.S. share of the country’s worldwide imports, foreign direct investment, U.S. content in imports into the United States and overall tariff rates. The chart below shows that Canada and Mexico are outsized purchasers of U.S.-manufactured goods compared to other sources of imports and given the size of the countries’ economies.




As the administration considers next steps, the NAM urges that it prioritize work to address existing distortions and barriers to improve U.S. competitiveness globally through (1) the negotiation of advanced trade agreements that open markets and set strong rules; (2) the modernization of U.S. trade tools to boost U.S. global competitiveness, from improving export financing options to eliminating self-inflicted barriers that impede U.S. manufacturing; and (3) the implementation of more robust trade enforcement consistent with the international rules system to ensure that trade agreement commitments are honored, our innovative technologies are not stolen and U.S. trade rules are effectively enforced. Where trade agreement rules are not keeping up with new challenges and distortions, manufacturers urge U.S. leadership and efforts to develop new internationally agreed-upon rules and frameworks to raise standards and promote a more open and competitive market-driven global economy.

Learn more about manufacturers’ priorities for trade policy here.

American Values, Manufacturing Have a Place in Cuba

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Manufacturers in the United States produce great products desired across the globe each and every day. But our single greatest export remains America’s values—values which include free enterprise, competitiveness, individual liberty and equal opportunity as well as a willingness to lead by example.

That has never been clearer to me than it was during my recent trip to Cuba when I took eight manufacturers there to engage in discussions with government officials and engage in a dialogue with the Cuban people.

Times have changed. The tense days of Kennedy, Castro and the Cuban missile crisis are behind us. I witnessed a nation in transition, whose citizens want to adapt their economy and expand their opportunities.

The decision to normalize diplomatic relations with that isolated island was controversial in some quarters, but a recent national survey found that nearly three-quarters of U.S. adults favor ending the U.S. trade embargo against Cuba. They also favor lifting the restrictions on travel to the island. Based on what I saw during my visit, clearly the time is right for positive interactions between the United States and Cuba.

Cuba May 2017

Economic engagement will benefit both countries. But in the case of Cuba, it will launch its citizens on a trajectory of greater prosperity, opportunity and freedom.

To get there, we need to do more.

Just 90 miles from the United States, Cuba is well-positioned to become a market for U.S. goods and services. With normalized trade, American exports of goods to Cuba could reach an estimated $4 billion per year.

While the United States has eased some of the restrictions on travel, trade and investment, lifting them completely is up to Congress.

The U.S. government has made allowances for some exports to Cuba and issued changes to facilitate authorized travel to the island. There remains, however, a long road ahead for both countries to expand trade and investment opportunities.

Manufacturers are committed to sharing with the Cuban people American values that will enrich the lives of all. Congress needs to listen and to take action by repealing the trade embargo and lifting restrictions on travel once and for all.

The Cuban government should reciprocate by allowing U.S. companies to trade directly with the emerging Cuban private sector and by continuing market-oriented reforms that facilitate foreign investment.

I encourage you to communicate with your representatives in Washington. Expanded economic engagement means new opportunities for us and greater prosperity and freedom for Cubans. It is time to demonstrate our American values in action.

NAM Moves Forward a Positive Discussion on NAFTA

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On April 26, National Association of Manufacturers Vice President of International Economic Affairs Linda Dempsey participated on a Farm Foundation panel on the Future of the North American Free Trade Agreementat the National Press Club in Washington, D.C. Dempsey was joined by Bob Stallman, former president of the American Farm Bureau Federation, and Melissa San Miguel, senior director of global strategies at the Grocery Manufacturers Association.

In her remarks, Dempsey explained the importance of the existing North American market for manufacturers in the United States and how millions of manufacturing workers and thousands of manufacturing firms depend on exports to Canada and Mexico. Dempsey also outlined a number of key principles that are critical for manufacturers in renegotiated agreement, including strong rules that reflect U.S. principles, law and values; strong intellectual property and digital economy rules; updated provisions that promote growth and competitiveness; the need to help, not hurt, America’s industries and workers; and the importance of concluding any NAFTA renegotiations in a timely manner. 

NAM, UK Manufacturers Seek Greater Collaboration

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Today, Jay Timmons, president and CEO at the National Association of Manufacturers (NAM), and Terry Scuoler, CEO at EEF, the UK-based manufacturers’ organisation, signed a Memorandum of Understanding that seeks to promote greater collaboration and partnerships between the two organizations and to promote the NAM and EEF’s respective missions to strengthen and grow manufacturing in the United States and the United Kingdom. The agreement sets forth a number of activities, ranging from information exchanges on policy, economics, business trends and government regulations to potential joint work on international trade, skills development and other issues.

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New NAM Analysis Scrutiny Highlights Need for Strong Action to Address Global IP Challenges That Harm Manufacturing in the United States

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The National Association of Manufacturers (NAM) yesterday urged the U.S. government to boost its efforts to protect U.S. manufacturing innovation against the threat of intellectual property (IP) theft globally in a detailed submission to the Office of the U.S. Trade Representative (USTR). Innovation and IP remains the foundation for a globally competitive manufacturing sector in the United States. Yet, global infringement of IP, including patents, trade secrets, trademarks and copyrights, hurts the ability of manufacturers in the United States to not only innovate but also to sustain and create well-paying jobs. The NAM looks forward to working closely with the Trump administration on stepped-up and vigorous efforts to combat IP theft and to protect and secure strong enforcement of IP rights both at home and abroad. Read More

Business Community Unites Around Ross Nomination

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Today more than 400 businesses and business organizations sent a letter to the U.S. Senate urging support for the confirmation of Wilbur Ross as secretary of commerce. Spearheaded by the National Association of Manufacturers (NAM), the letter urges swift action on Mr. Ross’ confirmation.

“We believe that Wilbur Ross will bring a unique understanding of what it takes to fuel manufacturing enterprises to this vital role,” the letter reads. “Mr. Ross has a firsthand understanding of the challenges manufacturers face to remain globally competitive in today’s economy.”

Read the full letter here.

NAM President and CEO Jay Timmons also sent a letter yesterday on behalf of the NAM offering his support for Ross’ confirmation.

“Wilbur is a businessman with extensive experience in a wide range of industries who knows firsthand what policies it takes to promote competitiveness, investment, job creation and durable economic growth,” Timmons wrote. “In particular, Wilbur has extensive experience in the manufacturing sector and understands the critical need for pro-growth trade, tax and other economic policies.”

Timmons’ letter is available in its entirety here.