Annual Conference Highlights Bipartisan Support for Ex-Im Bank

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Over the past two days, leaders in business, policy and both political parties have joined together to discuss the importance of the Export-Import (Ex-Im) Bank at the EXIM Annual Conference 2018.

They heard from many keynote speakers like Secretary of Commerce Wilbur Ross, a Republican. Secretary Ross spoke on the importance of the Ex-Im Bank in helping U.S. small businesses sell more exports. He also warned how, without a functioning Ex-Im Bank, the United States would continue to cede jobs, growth and geopolitical power to China as Beijing expands in overseas markets at America’s expense. Another keynote speaker was Sen, Heidi Heitkamp, a Democrat. She agreed. “We have got to have the institution of the Ex-Im Bank up and running to be competitive,” Sen. Heitkamp said, noting that 82 other countries have a similar agency. Both Secretary Ross and Sen. Heitkamp, and the many other business and Hill voices, are absolutely right.

These latest bipartisan expressions of support for the Ex-Im Bank come on the heels of recent positive comments from policymakers as varied as Sen. Sherrod Brown (D-OH) and President Donald Trump, and they underline the critical role it plays for manufacturers in the United States—especially small manufacturers, given that more than 90 percent of the bank’s transactions in fiscal 2016 directly supported small businesses. The bank enables U.S. exporters to compete on a global scale for the 95 percent of consumers who are located outside our borders. In short, the Ex-Im Bank helps level the playing field for our businesses competing against foreign companies. But it cannot continue to level the playing field if it is not even allowed to function properly, which is the situation manufacturers face right now. Indeed, the bank lacks a quorum on its board of directors, and thus is unable to even consider many transactions much less support American jobs.

Manufacturers and the many Americans whose jobs depend on the Ex-Im Bank need the Senate to act to restore a quorum on the bank’s board of directors.  That’s what we have repeatedly urged. That’s what members of both parties understand and are echoing at this week’s conference. That’s what our country needs as soon as possible.

Small Manufacturing Leader Chuck Wetherington Testifies on State of Trade

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Today, the U.S. House Committee on Small Business heard from BTE Technologies President and NAM Executive Committee member Chuck Wetherington about how small business manufacturers like BTE can compete and succeed in markets around the world. Here were his key recommendations:

  • A positive outcome on NAFTA talks
  • Senate confirmation of the pending board nominees to return the Export-Import Bank to full functionality
  • More export promotion assistance programs

Wetherington—a leading voice for small manufacturers in America—also shared some of his own experiences competing overseas:

  • About how his company, which consistently focuses on expanding to new markets every two to four years, recently expanded to the Gulf Cooperation Council and saw its exports to those six Middle Eastern countries grow from virtually nothing to 20 percent of its exports in three years
  • About how he, having just returned from China—a country that recently undertook major overhauls to its medical device regulations but is rolling those updates out piecemeal and without any clear path to follow toward compliance—saw firsthand why regulatory harmonization needs to be an important part of U.S. trade strategy
  • About how BTE—like many other small business manufacturers—has benefited significantly from market-opening agreements like NAFTA and the U.S.–Korea Free Trade Agreement, with BTE alone seeing 130 percent growth in its exports to South Korea following ratification of our free trade agreement with that country.

Here’s his statement to the committee:

Louisiana Drug Importation Bill Threatens Patient Safety: Not Worth the Risk

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This week, the Louisiana House of Representatives is holding a hearing on legislation introduced earlier this year that would authorize the state to apply for federal approval to import prescription drugs from Canada. While manufacturers strongly support increased access to affordable prescription drugs, this bill would pose a significant safety risk by exposing consumers to counterfeit and adulterated therapies. Moreover, this legislation does not deliver on a promise to lower drug costs and is not worth the risk.

To date, no secretary of the U.S. Department of Health and Human Services (HHS) has been willing to make a certification to permit drug importation. Concerns for the safety risks to U.S. consumers far outweigh the benefits, and this is well documented by Food and Drug Administration commissioners over the years. Furthermore, importing prescription drugs would not result in cost savings for consumers. The Canadian government has already stated that it will not take responsibility for the legitimacy or safety of prescription medicines exported to countries outside of Canada, leaving the financial and regulatory oversight to U.S. federal authorities and local law enforcement. Federal agencies and local law enforcement already have enough concerns when it comes to counterfeit drugs.

Consumer safety is the most important public policy concern, and the U.S. market for prescription drugs is the safest in the world. To succeed in driving down costs, our federal and state governments should support market-based policies that will support innovation and bring lifesaving medicines to patients.

The National Association of Manufacturers has a longstanding opposition to the importation of prescription drugs. Manufacturers urge Louisiana’s legislators to avoid any needless risks to public health by opposing any effort to allow for the importation or re-importation of prescription drugs.

Signed, Sealed, Time to Deliver

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The U.S. Postal Service (USPS) is in trouble. It has been for a long time. And that’s worrying for a lot of people in our country, including manufacturers. Affordable mail service is critical to American manufacturers, even in the internet age—perhaps especially so. Production, billing, advertising and other important needs of a successful company depend on a reliable, affordable and efficient postal system with universal service. Many manufacturers rely directly or indirectly on the USPS to get their products to customers. Others make indirect inputs like shipping products designed to support our country’s modern logistics backbone. All told, the USPS supports a $1.4 trillion industry on which millions of jobs depend. Yet, today, the USPS is functionally broke, reporting net financial losses for the past 11 years straight, and it’s trapped in a bizarre legal straightjacket—a legal mandate to massively pre-fund its retiree health care plans—that prevents the service from getting itself out of that hole. In response, the USPS has cut costs in areas that harm its service standards, has misattributed costs among product categories and has asked for significant shortsighted stamp price increases that could threaten the manufacturing economy. It is time to finally get the USPS back on its feet.

The problems afflicting the USPS are serious but fixable. That’s why the National Association of Manufacturers applauds Sens. Tom Carper (D-DE), Jerry Moran (R-KS), Heidi Heitkamp (D-ND) and Claire McCaskill (D-MO) for introducing legislation that would take a big step toward achieving real and bipartisan postal reform.  The Postal Service Reform Act of 2018: Improving Postal Operations, Service and Transparency bill, like its House companion the Postal Service Reform Act of 2017, is the result of years of hearings, fact-finding, negotiation and compromise between members of the House and Senate from across the political spectrum. The legislation would provide a more rational schedule for pre-funding the USPS’s retiree obligations, while giving the USPS more of the flexibility it needs to adapt to a changing economy and run its service more like a regular business. Legislation like this simply underscores the fact that the USPS can effectively tackle its problems without resorting to drastic measures—like hiking the price of only a few products like stamps—if Congress gives it some flexibility, and we thank the sponsors of both the Senate and House measures for working hard to put this legislation together.

On a related note, as the postal reform debate moves forward in Congress, manufacturers hope members of both parties will take the opportunity to address other problems like international package deliveries, too. The USPS loses hundreds of millions of dollars per year providing far-below-market rates for inbound packages from countries like China that abuse an international agreement developed by the Universal Postal Union (an international agency based in Switzerland). The USPS loses money on every single package it takes inbound from China, and the annual growth in these package deliveries is astounding. Many of these packages contain drugs or other contraband, and yet, the USPS either does not or cannot collect meaningful data from foreign shippers that would allow U.S. Customs and Border Patrol to screen them effectively. Now is a prime opportunity to make clear to the USPS that these mounting losses and dangerous packages are unnecessary, unacceptable and almost certainly illegal. The USPS should not be allowed to raise shipping rates for American shippers to pay for this absurd subsidy for foreign competitors and counterfeiters. And Congress can give them the relief they need by clearly prohibiting the implementation of any agreement that unfairly discriminates against U.S. shippers and by clearly requiring the USPS to collect advanced information on foreign shipments.

We hope Congress will do just these things, just as we hope members of both parties will work together to pass commonsense postal reform legislation so we can ensure the viability of the USPS for years to come.

Manufacturers Urge Maintaining the Value of Present Part D Networks

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As the Centers for Medicare & Medicaid Services (CMS) closes in on finalizing anticipated 2019 changes to Medicare and several other CMS-sponsored programs, the National Association of Manufacturers urges CMS to refrain from changing its “Any Willing Pharmacy” requirements. Employers and employees increasingly rely on Medicare, Medicare Advantage (MA) and Part D drug benefit programs for health coverage as some employers are sponsors of Part C and D plans for their retirees.

Competitive principles are a hallmark of the Part D program and have kept the program affordable for seniors over the past decade. This proposal directly conflicts with the Part D spirit and intent by adding new challenges and barriers to the establishment of preferred pharmacy networks. As stated in a public comment submitted earlier this year, we highlighted that preferred pharmacy networks allow for more streamlined management of pharmacy benefits by working to reduce fraud, waste and abuse, lowering the cost of the benefit for all Medicare beneficiaries and promoting the delivery of high-quality pharmacy services.

Most beneficiaries today choose to enroll in Part D plans with preferred pharmacies, and this proposal would disrupt their coverage without producing a benefit. Manufacturers strongly support proposals to reduce soaring health care costs, improve the efficiency of the current system and enhance the quality of care. However, the proposed changes by CMS don’t meet those tests. A recent Oliver Wyman report confirms the value of preferred pharmacy networks in the Part D program and employers agree.

Fiscal 2018 Omnibus Offers Opportunity to Advance CLOUD

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Manufacturers appreciate lawmakers’ inclusion of the Clarifying Lawful Overseas Use of Data (CLOUD) Act in the fiscal 2018 omnibus funding package. This is a major victory for the delivery of strong standards and achieving much needed government-to-government cooperation to address new challenges presented by the digital age.

Digital information moves globally in ways that were never imagined decades ago. Current laws were written in 1986 and have not kept up to speed with technological advances and the connected world in which we live. Connected products, services and the technology of today demand a high level of certainty and stability so that the competitive needs of commerce are appropriately balanced with efforts to thwart international criminals and those who seek to harm our society.

The CLOUD Act provides law enforcement the tools they need to keep us safe and creates a legally responsible framework to address concerns of international customers and foreign governments to ensure the privacy and security of customer data. The National Association of Manufacturers has been a stalwart advocate along with other industries and has previously praised the CLOUD Act in a letter to lawmakers.

Cloud computing is a major growth opportunity for U.S.-based companies selling software and services overseas and a growing technology backbone for small businesses and manufacturers across the United States who are seeking opportunities to sell into overseas markets. Ninety-five percent of the world’s customers reside outside the United States, and the appetite for American-made products and technology continues to be robust, increasingly helping to support well-paying jobs across the country. The CLOUD Act achieves the right balance, and manufacturers are pleased to see advocacy efforts come to fruition.