This month, the National Confectioners Association (NCA) , a member of the NAM’s Council on Manufacturing Associations, released the results of a new economic impact study at an industry and media briefing in Washington, DC. Joining NCA for the announcement were Members of Congress and leading confectionery manufacturers from across the country. (continue reading…)
Growing Manufacturers’ Opportunities in the Asia Pacific: U.S. Push for Ambition and Market Access in TPP Must Continue
With President Obama’s Asia visit kicking off in Japan today, manufacturers are hopeful that the President and Japanese Prime Minister Shinzo Abe will make meaningful progress towards achieving ambitious and market-opening outcomes in the Trans-Pacific Partnership (TPP) negotiations, and that work will continue during the President’s visit to Malaysia to meet Prime Minister Najib Razak later this week. Manufacturers have long supported the negotiation of the TPP that TPP Leaders described in November 2011 that “will be a model for ambition for other free trade agreements in the future, forging close linkages among our economies, enhancing our competitiveness, benefitting our consumers and supporting the creation and retention of jobs, higher living standards, and the reduction of poverty in our countries.” Already, comprehensive, high-standard U.S. free trade agreements help propel nearly 50 percent of manufacturing goods exports around the world. A TPP done right will boost the United States’ already record manufacturing exports, as well as other sales and other commercial opportunities, by linking America’s highly productive manufacturers to new consumers around the world.
- provide comprehensive market access that concretely levels the playing field;
- ensure high standards on issues such as intellectual property, transparency and investment;
- address new trade challenges such as cross-border data flows and longstanding issues such as competition from state-supported enterprises; and
- incorporate strong enforcement mechanisms so that the agreement is more than words on a piece of paper.
When Japan joined the TPP talks in 2013, it committed to negotiate on the same ambitious basis that the existing TPP negotiating countries had already agreed. U.S. Trade Representative Ambassador Mike Froman said today in Japan, the talks are at a “crossroads” and now is the time for Japan “to choose a bold path.” Manufacturers agree. Similarly bold choices must also continue in the capitals of all TPP partners to achieve an ambitious and fully market-opening outcome. Manufacturers urge Japan, Malaysia and all other TPP countries to continue to focus on that ambition this week and in the weeks to come so that the momentum of the TPP talks can be regained and that the TPP countries’ commitment to an “ambitious, high standard and comprehensive” agreement that was renewed in December 2013 can be achieved.
A successful TPP agreement that truly opens markets and improves the competitiveness of manufacturers in the United States represents an unprecedented opportunity to boost commercial ties throughout the Pacific Rim and beyond. The NAM continues to urge the immediate and comprehensive elimination of tariffs and non-tariff barriers, strong protections consistent with U.S. practice on intellectual property and investment for all products, new provisions to permit the movement of data cross border and new disciplines to ensure fair commercial competition with state-owned enterprises. These provisions all must be backed up by state-of-the-art enforcement provisions from state-to-state to investor-state mechanisms. Ultimately a successful, growth-producing TPP agreement will be one that ensure that manufacturers in the United States will be put on a fair and competitive footing in each of the TPP markets.
President Obama, Prime Minister Abe and Prime Minister Najib Razak have a critical opportunity this week to inject new vitality into the TPP talks. Manufacturers hope they will seize this occasion to move the negotiations closer to a pro-growth and pro-competitive conclusion.
Over the last days and weeks, critics of the Export Import Bank (Ex-Im) have talked about lots of issues and attempted to smear lots of mud. Yet, they continue to ignore the crux of the Ex-Im issue: American jobs and American manufacturing competitiveness.
While critics may enjoy debates inside isolated ivory towers, our nation’s manufacturers have no such luxury. Manufacturers big and small, in communities across the country, face a highly competitive global economy every single day. Every sale made can mean jobs that are saved or new jobs are created. When they lose out to foreign competitors for sales, our nation’s manufacturers are faced with tough choices as they struggle to make payroll and keep their business on track.
Critics of Ex-Im’s reauthorization seem to ignore a basic fact of the global economy when complaining about sales of airplanes to foreign airlines or sales of capital equipment to foreign mining projects. The fact is that other countries are building up their infrastructure and striving to meet growing domestic demand for energy, transportation, water, crops and telecommunications. These projects are moving forward regardless of what the U.S. Congress does or doesn’t do on Ex-Im Bank reauthorization. The issue that Ex-Im reauthorization presents is whether those foreign projects will use products made in the United States by American workers or whether those sales will go to our competitors in Asia, Europe or elsewhere.
Outside the United States, at least 59 foreign export credit agencies (ECA) are working intensively to give our foreign competitors a leg up in sales in fast-growing overseas markets. Those ECAs do not hesitate to support all types of projects, with far less rigor than Ex-Im already places on the sales for which it provides financing, insurance, loan guarantees and other services.
The United States has led efforts to impose important disciplines on ECAs, particularly those for member countries of the Organization for Economic Cooperation and Development (OECD). In 2011, the United States negotiated a new Aircraft Sector Understanding to bring official ECA financing rates more in line with commercial rates, taking away incentives for credit-worthy airlines to use ECA financing. That new agreement went into effect in 2013, and we’ve seen the commercial markets respond by picking up more financing for aircraft. But U.S. leverage has waned as critics seek to have the United States unilaterally disarm its own Ex-Im activities.
While the critics focus on a few large companies that use Ex-Im services (which not only support jobs in their own companies but also in thousands of small and medium-sized companies throughout their supply chains), they ignore the nearly 90 percent of Ex-Im transactions in FY2013 – some 3,413 transactions – that directly supported small businesses. As the NAM’s new Exporters for Ex-Im blog post series will highlight in the days and weeks to come, small and medium-sized businesses make up the lion’s share of Ex-Im’s activities. Ex-Im’s support of dynamic small business exporters like Wallquest has helped small businesses enter and expand export sales – thereby growing not only their manufacturing production, but the number of their employees.
At a time when the global economy is starting to show some growth, and we know our global competitors are seeking to win every sale, the question for lawmakers voting on Ex-Im reauthorization this year is actually quite simple: Do you want foreign purchasers to buy products manufactured in the United States with U.S. workers? If so, support Ex-Im reauthorization. Manufacturers do.
The President’s visit to Asia this week should highlight the value of strengthening trade and investment ties and identifying areas for increased commerce and cooperation throughout the Asia-Pacific region. We believe that increased American economic and commercial engagement in the Asia-Pacific is critical unlocking numerous growth opportunities for manufacturers in the United States. The Asia-Pacific represents a huge market with an even greater growth potential that we hope the President’s trip can help catalyze.
Already, the Asia-Pacific region is a strong and growing purchaser of U.S. manufactured goods. Three of the top ten export destinations for U.S. manufactured goods are in Asia (China, Japan and South Korea). Total U.S. manufactured goods exports to Asia grew from $213.25 billion in 2009 to more than $331.56 billion in 2013. More specifically, transportation equipment exports from the United States to Asia nearly doubled from $30.21 billion in 2009 to just over $60 billion last year. Computer and electronic product exports also grew from roughly $55.61 billion in 2009 to $67.08 billion in 2013. Chemical exports to Asia also increased by $13.4 billion over the last five years.
Yet the potential for greater growth for manufacturers in the United States is substantial The Asia-Pacific region boasts nearly 60 percent of global GDP and is the fastest growing region in the global economy. The Asia-Pacific also makes up roughly half of the world’s population, making it a market ripe for more U.S. export growth.
To boost manufacturers’ export and sales opportunities in the region, more work is needed to eliminate tariff and non-tariff barriers, expand commercial relationships and ensure our trading partners play by the rules of the international trading system. The United States is seeking to negotiate a comprehensive, high standard and market-opening Trans-Pacific Partnership (TPP) agreement that would include our Asia-Pacific partners (Australia, Brunei, Japan, Malaysia, New Zealand, Singapore, and Vietnam) along with several Western Hemisphere partners (Canada, Chile, Mexico and Peru). The United States is also negotiating a bilateral investment treaty (BIT) with China, and efforts are underway to expand relationships with the Association of Southeast Asian Nations (ASEAN). More broadly, the United States has cooperated with 20 of our Asia-Pacific trading partners through the Asia Pacific Economic Cooperation (APEC) forum to expand economic ties and develop stronger frameworks in numerous areas, from trade in environmental goods and transparency to creating a stronger enabling environment for infrastructure investment. At the same time, though, there are over 130 other trade agreements in the Asia-Pacific that exclude the United States and put manufacturers at a substantial disadvantage in other Asian markets.
To move successful trade negotiations forward and eliminate the competitive disadvantage that manufacturers in the United States face in many Asian markets, enactment of Trade Promotion Authority (TPA) is critical. Both the President and Congress need to work closely together to move a strong TPA bill. In January, the Bipartisan Congressional Trade Priorities Act was introduced to facilitate the negotiation and implementation of comprehensive and ambitious trade agreements and require intensive consultations throughout the negotiating process. Despite repeated calls by manufacturers and the broader business community, no further action has been taken on this or any other TPA legislation. To grow substantial new commercial opportunities in the Asia-Pacific, action on TPA is critical.
As Commerce Secretary Pritzker so aptly stated in a speech last week at Johns Hopkins School of Advanced International Studies: “We can act now to advance American values and interests in setting the rules for trade in a region representing 40 percent of the world’s economy, or we can let others with different values and interests take the lead.” Manufacturers agree that the time is now for the United States to lead in this region, where significant growth opportunities are awaiting U.S. exporters.
We wish we were making this up: Federal Government has no idea how it is managing environmental reviews
A new report on the Obama Administration admits a stunning lack of oversight of our nation’s bedrock environmental law, the National Environmental Policy Act (NEPA). NEPA is the law that requires all major projects — think highways, bridges, pipelines, transmission lines — to submit to a comprehensive review of their potential environmental impacts prior to construction. NEPA is often the largest, costliest, most time-consuming regulatory hurdle developers face before they can build. It also is a common target for abuse, as there are countless ways to throw a wrench in the process and make the review take even longer (see XL, Keystone). The longer the delay, the more likely the developer walks away. Project opponents don’t even need a “win” on NEPA to win; the delay is often enough.
The White House Council on Environmental Quality (CEQ) administers NEPA, and for the past few years has assured us that it is best suited to streamline the environmental review process. Today’s report shows CEQ hasn’t even been watching. Consider what the General Accountability Office (GAO) found:
- The Administration does not have accurate data on the number or type of environmental reviews conducted each year.
- The Administration does not know how much it spends on environmental reviews, or how much typical environmental reviews cost.
- The Administration has no idea how long a typical NEPA review takes. GAO instead cites to a nonprofit group, the National Association of Environmental Professionals (NAEP). NAEP estimates that the average environmental impact statement (EIS) takes 4.6 years, the highest it’s ever been. NAEP also estimates that the time to complete an EIS increased by 34.2 days each year from 2000 through 2012.
- The Administration thinks the majority of NEPA reviews are the shorter Environmental Assessments (EA) or Categorical Exclusions (CE), but it really doesn’t have any data.
- No government-wide system exists to track NEPA litigation or its associated costs.
- Delays sometimes occur because agencies assume they will be sued and spend more time making the review “litigation-proof.” Yet there is no evidence that these efforts actually improve the review document.
The White House opposed efforts to streamline NEPA in a bill passed by the House last month. Yet the President promised again this year that he would cut the red tape plaguing these reviews. How in heavens name is the Administration properly able to cure what ails NEPA when they’ve made no attempt whatsoever to diagnose the problem?
It’s time for Congress to step in here. Please.
“I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover. With that in mind, and after careful consideration, I have requested that Administrator Jackson withdraw the draft Ozone National Ambient Air Quality Standards at this time.” –President Obama, September 02, 2011
With the unemployment rate hovering above 9% and in the early stages of his reelection campaign, in September 2011, President Obama told the Environmental Protection Agency (EPA) to stop its work on a new ozone regulation – a regulation that by the administration’s own estimate would have cost industry and consumers as much as $90 billion per year. Now, just two and a half years later, the administration is once again considering a new ozone regulation, and again the costs to manufacturers and the economy could reach never-before-seen levels.
While we are still months away from the release of a proposed ozone rule, the rulemaking process is very much underway – EPA has developed its draft documents, its science advisors have met and environmental advocacy groups are in court seeking to expedite the whole process. Meanwhile, manufacturers are becoming uncomfortably reacquainted with the concept of the administration levying a regulation that makes expansion in many, if not most, parts of the country difficult at best and in some cases impossible.
With so much at stake for manufacturers, the NAM is committed to being involved at every stage of the ozone review and rulemaking process to ensure the administration gets it right. We will work with elected and appointed officials at all levels of government and educate the general public about the regulation, the steady and consistent air quality improvements that have been made over the last 30 years and the improvements that will continue to take place based on laws already on the books. But we will also work to ensure the public understands the consequences of the administration going too far by proposing unattainable standards and how with the right policies we can have both a clean environment and a strong manufacturing economy.
Below is a video the NAM developed that provides some background information on EPA’s review of a new ozone regulation and what’s at stake for manufacturers and the economy.
Yesterday, manufacturers like Boeing and FirmGreen participated in a panel hosted by House Financial Services Committee Ranking Member Maxine Waters (D-CA) to highlight the critical importance of reauthorizing the U.S. Export-Import (Ex-Im) Bank. Ex-Im Bank faces a tough reauthorization fight in Congress this year.
Manufacturers, especially small and medium-sized manufacturers, cannot afford a lapse in the financing support that helps them stay competitive in the global marketplace. Most of the Bank’s financing deals help small businesses, Ex-Im Chairman and President Fred Hochberg told the panel. Hochberg spoke with the NAM’s Member Focus magazine last year about efforts to help businesses of all sizes.
Unfortunately, manufacturers are already facing the consequences of the uncertainty surrounding Ex-Im’s reauthorization. FirmGreen CEO Steve Wilburn told lawmakers that his company lost a $57 million contract to a South Korean competitor because reauthorization legislation faces an uncertain future in Congress. “I just want you to understand the impact on people in my company, me personally and the people in the Midwest that I can’t give those jobs to,” he said. “To me, it’s unconscionable that we allow this debate to rage on a partisan basis.”
Ted Austell, Boeing’s vice president of executive, legislative and regulatory affairs, said that Ex-Im supports the company’s 160,000 employees, 15,000 suppliers and vendors, and hundreds of thousands of workers connected to the aerospace sector. “In a word, it’s jobs,” he said.
House Democratic Whip Steny Hoyer (MD) addressed the panel yesterday afternoon, and he indicated that he will make Ex-Im a legislative priority. The NAM appreciated Rep. Hoyer’s outstanding leadership during the last reauthorization of Ex-Im, and we are very pleased that he continues to make this issue a priority. It is a critical tool that allows our small, medium and larger manufacturers to compete globally. Rep. Hoyer announced at a press conference earlier today that he is including Ex-Im Bank reauthorization in his manufacturing initiative.
This evening, Rep. Denny Heck (D-WA) and other members of the New Democrat Coalition will take to the House floor to discuss the Ex-Im Bank’s positive impact on American jobs during a “special order.” You can follow along with the New Dems on Twitter here.
The NAM will continue to advocate for Ex-Im Bank’s reauthorization on Capitol Hill and with the Administration. In March, we spearheaded a letter that was joined by more than a dozen other business leaders to urge the Senate Banking, Housing and Urban Affairs Committee and the House Financial Services Committee to take immediate action on legislation. We’re also engaging our members to add their voices and influence. Click here to learn more about what manufacturers can do today.
The benefit to manufacturing from the U.S. energy boom is undeniable. In September, the NAM participated in a study that found the unconventional oil and gas value chain could support 3.9 million jobs by 2025. The study cautioned that with the wrong policies in place, much of this economic potential could be lost.
Today, the White House released a strategy document that contemplates new “policy tools” for the oil and gas sector.
As the suppliers of goods to service this sector and the beneficiaries of the low-cost energy it produces, manufacturers encourage the administration to work with industry to build on the progress that has already been made in lowering emissions as opposed to issuing additional, inflexible regulations.
NAM President and CEO Jay Timmons and Arizona Chamber of Commerce & Industry President and CEO Glenn Hamer recently co-authored an op-ed in the Arizona Daily Star, emphasizing the direct impact federal regulations have on local energy prices, consumers, and manufacturers.
Though these policy discussions take place on the national level, Timmons and Hamer note the implications are often most felt on the local level. According to the authors, “Arizona manufacturing has rebounded to levels beyond pre-recession output. Thanks to hard work and smart investments, manufacturers in the state now employ almost 6 percent of Arizona’s workforce. But those gains could be put at risk by misguided federal energy policies.”
As manufacturing continues to grow jobs and expand nationwide, the NAM has made a concerted effort, partnering with the National Federation of Independent Business (NFIB), to advance common sense regulatory reform. A month ago on Capitol Hill, the NAM co-sponsored a “State of U.S. Regulations” event with the NFIB, during which both groups announced they “will utilize the full weight of their grassroots networks in an effort to engage with Congress and the Administration on the need for regulatory improvements.”
Jay Timmons, president and CEO of the NAM, said of the partnership, “This will be a strong and effective partnership because manufacturers and small businesses face a disproportionate burden of all regulatory costs. While manufacturers recognize the need for regulation, the scope and complexity of rules have made it harder to do business and compete in recent years. This is a trend that simply cannot continue and is easily solved with common-sense reforms. We can achieve a streamlined regulatory process with increased accountability and transparency that will protect businesses, manufacturers and consumers.”
The event, which coincided with Congressional debate on regulatory reform, included a keynote address by U.S. Representative Kevin McCarthy (R-CA), House Majority Whip, and opening remarks from Jay Timmons, President and CEO of the NAM, and Dan Danner, President and CEO of NFIB. Following the opening remarks, a panel of policy experts, which included former Governor George Allen (R-VA) and former U.S. Senator Blanche Lincoln (D-AR), discussed the complications within the federal regulatory system, noting how complexities create unintended consequences for manufacturers and small business.
On Tuesday, March 25, the Environmental Protection Agency (EPA) and the Army Corps of Engineers (Corps) released a copy of the proposed Clean Water Act rule on the Waters of the United States (WOTUS). The rule’s intended purpose is to clarify current regulations on EPA and the Corps’ jurisdiction over “navigable waters” of the United States, but unfortunately it has only created more uncertainty.
The proposed rule expands their jurisdiction to further regulate things such as fire ponds, dry ditches, ephemeral or seasonal streams, cooling ponds, isolated mosaic wetlands, snowmelt and storm drainage ponds. In doing so, this will significantly impact manufacturers’ ability to build new or expand existing facilities, and in some cases it will impact the ability to conduct day to day operations.
There are hundreds of activities that currently do not require a clean water permit, but with this new rule many of these activities will now need a permission slip from the government; or at the very least require companies to inquire of the agencies to determine if a permit is necessary. Waiting for these agencies to respond could take anywhere from weeks to months.
Another troubling aspect of this proposed rule is that the EPA chose not to wait for a final peer review of their “Connectivity of Streams and Wetlands to Downstream Waters: A Review and Synthesis of the Scientific Evidence” study. This study has been touted as the basis of the rule, but has not been peer reviewed by the EPA’s own Science Advisory Board (SAB). Further, a number of members of that board raised concerns with deficiencies in the report at a recent meeting.
Manufacturers are concerned about the negatives impacts and uncertainty that this rule will create, and will continue to provide input to the EPA and Army Corps.