The National Association of Manufacturers (NAM) supports open and expanded trade and opposes efforts to limit manufacturers’ ability to expand exports overseas. Exports have been and continue to be a critical source of growth and opportunity for manufacturers throughout the United States, and liquefied natural gas (LNG) exports are no exception.  A series of recent studies by energy research firm IHS CERA show that natural gas development has already led to the creation of more than 1 million jobs, and continued development of unconventional energy resources could create millions more.

Proposals that seek to limit LNG or coal or any other product would have far-reaching negative effects on the United States and should be rejected. Such restrictions limit economic opportunities and stifle job growth rather than provide a source of increased economic growth.

Export growth has created and saved manufacturing jobs over the past few years, which were tough economically for the United States. Export growth is vital not just for businesses across-the-board that directly export, but also for the many manufacturers in the supply chain. 

From the President’s first State of the Union address, doubling U.S. exports has been a top goal, supported by both businesses and workers and both Republicans and Democrats. From its origins, the United States has been built on exports. In fact, Article I, Section 9 of the U.S. Constitution provides quite explicitly that “no Tax or Duty shall be laid on Articles exported from any State,” evincing a strong disinclination to limit exports of any product. (continue reading…)

Today, the House Republican Technology Working Group outlined its policy priorities for the 112^th Congress. The announcement, initiated by the Speaker of the House, John Boehner (R-OH) and Technology Working Group Chairman Rep. Bob Goodlatte (R-VA), was delivered to a packed room of high-tech company representatives, including many NAM member companies.

These proposed policies serve as a starting point for congressional debate, and echo the positions manufacturers have been advocating to help grow their businesses and create jobs.

Technology can be found in all aspects of manufacturing and it is vital that Congress stays abreast on the latest developments to ensure manufacturers have the ability to compete and win in today’s global economy. U.S. manufacturers have a long standing tradition of an entrepreneurial spirit and being at the forefront of innovation. Manufacturers will continue to work with Congress to continue this legacy that has proven to be a job-creating engine for our economy.

Manufacturers are pleased that Congress has acknowledged the vital role technology plays in manufacturing and our economic health. Congress must adopt a strategy that will reduce the aggressive regulatory burden of the federal government and reform our tax code, while providing the infrastructure and common-sense policies needed to allow our technological advances to flourish.

The NAM’s Director of Technology Policy Brian Raymond discussed some of the proposals this afternoon:

From the media briefing Friday, Jan. 28, after a meeting of Secretary of State Hillary Clinton and Vice President Angelino Garzon of Colombia:

QUESTION: Madam Secretary, two points. The first one is: (inaudible) Vice President Garzon asked two days ago the Obama Administration to send this year to Congress the Free Trade Agreement. With all due respect, is the – you – Obama Administration going to do that, yes or no?

SECRETARY CLINTON: Yes.

QUESTION: This year?

SECRETARY CLINTON: Yes

The follow-up adds various qualifiers, but there’s no misconstruing the “yes.”

Brian Wingfield at Forbes this morning provides a good round-up of positive developments, “Colombia Trade Agreement Gaining Momentum In Washington,” pegged to the return to Washington of Colombia Ambassador Gabriel Silva, who represented Colombia in the early 1990s.

According to Silva, the U.S. is seeing what opportunity it has in Colombia slip away. Documents provided by the Colombian Embassy show that the U.S.’ share of agricultural imports to Colombia has dropped from 46% in 2008 to 22% today, due in part to the integration of Latin American markets. Last May Colombian officials concluded negotiations on a free trade agreement with the European Union, and in August they signed a trade deal with Canada that is expected to become effective later this year. By the end of the decade, China could replace the U.S. as Colombia’s largest trading partner.

“We are asking the U.S. to turn things around,” says Silva.

Among the evidence for momentum, Wingfield cites the comments by Sen. Max Baucus (D-MT) after President Obama’s State of the Union address, which were: “Our free trade agreements with Colombia and Panama were signed more than three and a half years ago, so it’s extremely disappointing the president did not lay out a timeline for submitting them to Congress.”

• The Hill (blog), “Baucus rips Obama for not providing trade agreement timeline
• AFP, “Obama ally pushes Colombia, Panama trade deals“
• AP, “GOP calls for quick action on free trade pacts“
• Reuters, “U.S. committed to passing Colombia trade pact: Biden“

From the joint news conference held Thursday by President Obama and President Lee Myung-Bak of South Korea.

President Lee:

Now, with regards to the Korea-U.S. free trade agreement, President Obama and I agreed that we will give my trade minister and the U.S. Trade Representative more time so that they can finalize the technical issues. And President Obama and I will continue to work together so that we can have a mutually acceptable agreement at the earliest possible date.

President Obama:

As President Lee just noted, we discussed the need to keep moving forward towards a U.S.-Korea free trade agreement, which would create jobs and prosperity in both our countries.  We believe that such an agreement, if done right, can be a win-win for our people.  It could be a win for the United States because it would increase the export of American goods by some $10 billion, and billions more in services, supporting more than 70,000 jobs back home.

It could be a win for South Korea, with more access to the American economy, which would support jobs, raise living standards, and offer more choices for Korean consumers.  And it could be a win for the overall economic partnership between our two countries by bringing us closer together, allowing us to benefit from each other’s innovations, and ensuring strong protections for workers’ rights and the environment.

So we have asked our teams to work tirelessly in the coming days and weeks to get this completed, and we are confident that we will do so.  And President Lee in fact asked his team to come to Washington in the near future to continue these discussions.  So I appreciate all the efforts that he’s making on this issue.

And here’s a selection of reading to catch up on the President’s trip to Asia and negotiations over the U.S.-Korea FTA:

• Washington Post, “Obama ends Asia tour with ailing nation“
• Reuters, “U.S.-Korea trade pact faltered over autos: U.S. official”
• Chosun Ilbo (Korea) editorial, “Arm-Wrestling Could Jeopardize Korea-US FTA”
• New York Times, “Obama’s Trade Strategy Runs Into Stiff Resistance”
• The Australian, “Free trade the answer, PM tells leaders
• Sydney Morning Herald, “Unite for free trade, Gillard tells G20 leaders“
• Phil Levy, American Enterprise Institute, writing at Foreign Policy’s Shadow Government blog, “The KORUS catastrophe“

News accounts today reflect determination both by top U.S. and Korean officials that the outstanding auto and beef issues in the U.S.-Korea FTA will be addressed by the Seoul G-20 meeting on Nov. 11 and 12. From the U.S. side, Deputy Assistant to the President and Deputy National Security Advisor for International Economic Affairs and Development Michael Froman said yesterday at a White House press briefing: “We will be putting every effort into achieving an acceptable agreement, a satisfactory agreement by the time the president goes to the G-20.” Mr. Froman also noted that the U.S. negotiators are expending “maximum effort” in order to resolve “all of the issues” related to the KORUS agreement.

Secretary of State Hillary Clinton, in a speech in Honolulu on Oct. 28, noted that the U.S. and Korea “enjoy a vibrant economic relationship, which is why our two Presidents have called for resolving the outstanding issues related to the U.S.-Korea Free Trade Agreement by the time of the G-20 meeting in Seoul.” Secretary Clinton returned to trade later in her speech, noting not only the importance of the KORUS FTA but its key starting role in a larger U.S. pro-trade agenda for 2011 focused on Asia-Pacific.

This messaging is also reflected in today’s Korean press, which are reporting that President Obama and President Lee talked by phone. Korea’s official news agency Yonhap reports “In their telephone talks, the leaders agreed that the FTA ‘should be forged to promote free trade in the world and upgrade the South Korea-U.S. alliance by a notch,’ and that “they agreed to try to reach a compromise before the Seoul G-20 summit from Nov. 11-12.”

It is a very positive sign when very senior officials continue to reiterate their hope and desire to wrap up discussions on the automotive and beef issues still outstanding in the KORUS FTA as the deadline approaches. It is also a good sign that these talks are referred to on both sides as “discussions” rather than “negotiations.” Secretary Clinton’s remarks that put the KORUS agreement at the head of an ambitious trade agenda are heartening. We would suggest that our pending FTAs with Colombia and Panama also be added to that agenda (both border the Pacific Ocean). But this all hinges on finalizing a deal on autos and beef. We encourage both sides to keep moving forward over the next 10 days.

The National Association of Manufacturers has been a strong supporter of the KORUS agreement, but has also always said that more was needed to address the auto industry’s concerns on market access in Korea. We are hopeful that agreement on this is near.

Lori Wallach, of the Public Citizen group, has played a cruel trick-or-treat joke on Wisconsin coated paper workers. And for this reason, it deserves a response as Ms. Wallach is misleading these workers and tricking them into supporting her biased view of trade agreements –- agreements that have allowed more made-in-Wisconsin products to be sold around the world.

In an October 27th report on the website of the Green Bay station, News Talk Radio WTAQ, Ms. Wallach blames trade agreements for layoffs in Wisconsin’s paper mills and claims government researchers say the Korea trade agreement would create more jobs lost and a greater U.S. deficit.

This is simply not so. First, imports of coated paper into the United States are already duty-free –- meaning there is no tax on the product. Thus, there is no advantage with the Korean trade agreement for more Korean coated paper to be imported to the United States. And while Wallach claimed the U.S. Government said the agreement would cost jobs and increase the U.S. trade deficit — the “official” U.S. government International Trade Commission analysis says the Korea agreement will increase U.S. exports more than imports, shrink the trade deficit, and generate over $11 billion in added economic growth for the United States – thus creating most needed jobs.

The paper industry’s problem isn’t trade agreements – it is unfair imports from China. While coated paper imports from Korea are only half as large as five years ago, they have doubled from China because of unfair trade practices. Only last week, the U.S. Government put tariffs as high as 170 percent on dumped and subsidized exports from China. Had Wallach raised her voice against these unfair trade practices instead of misleading American workers about trade agreements maybe the government would have acted faster.

I hope these paper mill workers will not allow themselves to be tricked into supporting someone’s failed biases. They should demand the facts and decide for themselves what is needed to boost U.S. manufacturing. For example, consider NAFTA. It is now Wisconsin’s largest export market, buying over $8 billion of Wisconsin’s production in 2008 – more than twice as much as Wisconsin’s number two market, the European Union.

Korea’s import tariffs on U.S.-made manufactured goods average 8 percent, while U.S. import tariffs on Korean-made manufactured goods average 2 percent – and most U.S. manufactured imports from Korea are already duty-free. I think it is clear who will be the winner from the Korea trade agreement. Too bad Ms. Wallach can’t see it.

Frank Vargo is vice president for international economic affairs at the National Association of Manufacturers.

While it has been expected, the signing of the EU-Korea Free Trade Agreement (FTA) today is a jarring reminder that the United States continues to sit on the sidelines when it comes to expanding market access for manufacturing in America, while our competitors around the world race to gain new markets for their goods. The U.S. and Korea signed a Free Trade Agreement more than three years ago, but it has never been approved by Congress. Lack of action to implement this agreement is hurting manufacturing in America now, and it threatens far greater harm going forward.

The European Union (EU) will implement its FTA with Korea early next year. As a result, European manufacturers will see tariffs removed on nearly every product they export to Korea – while American manufacturers continue to face tariffs averaging nearly 12 percent. This will be a significant blow to American manufacturers –- one that we can ill-afford in this economic climate. This is not an idle threat – the EU is not only a significant competitor to the United States in manufactured goods exports to Korea, they are actually ahead of us. (See chart.) With this FTA, they will reap the benefits of zero tariffs, stronger protection for investments, and the removal of myriad non-tariff barriers.

U.S., EU Manufacturing Exports to S. Korea (Source: Census Bureau)

The EU has already surpassed the United States in manufacturing exports to South Korea.  In sectors like machinery, medical equipment, aircraft, chemicals, high-technology products, vehicles, processed foods, and many others, manufacturers in America face significant and direct competition from European producers.

The Obama Administration is working to address outstanding concerns raised in the automotive and beef sectors and has promised that these negotiations will be completed by November 2010, when the President visits Seoul for the G20 meeting. He has vowed to bring the Korea agreement to Congress for approval in the months following that meeting. But every month that the EU has duty-free barrier-free access to Korea and we don’t is another month of booming European manufacturing exports to Korea, and another month of slumping U.S. exports. Every month is one more month for our European competitors to permanently gain market share by taking it away from an American manufacturer.

Korea is a dynamic and fast-growing economy that represents robust and long-term potential for American manufacturing exports. Across Asia, economies are recovering strongly and are rapidly moving to sign trade agreements with each other – China, Japan and Korea are all looking to open Asian markets through FTAs. We are the fourth largest manufacturing exporter to Korea – China, Japan and the EU are all larger and are growing faster. The U.S.-Korea FTA will provide our manufacturing exports with a level playing field so we can compete fairly and freely.

Looking for news on the European Union free trade agreement with South Korea, online readers in India would have encountered these two headlines, one after another.

• Business Standard, “EU trade deal with S Korea gets green light”
• Reuters India, “Obama hopes to move forward on trade pacts”

Sort of tells the story, doesn’t it?

The European Union’s news release has details, “Council approves agreement with South Korea on free trade.” And there’s news coverage …

Euronews, “EU agrees free trade deal with South Korea”

The European Union’s Foreign Ministers have reached agreement on a free trade deal with South Korea. It’s one of the most ambitious trade pacts the EU has yet signed with a third party, and it will be formally signed at a summit with South Korea in Brussels in October, coming into force the following July.

Steven Vanackere, Acting Belgian Foreign Minister:

“It is I think a very big step in opening markets in Asia for our companies and this will create prosperity and jobs of course in Korea but also in Europe.”

Italy withdrew its objections at the last minute after Foreign Minister Franco Frattini obtained a delay in the deal’s application until July. Officials say the deal will create about 19 billion euros of new European exports.

Our emphasis. That’s almost $25 billion in U.S. dollars.

• New York Times, “EU to Ratify First Free-Trade Deal With Asian Partner”
• Wall Street Journal, “EU Ministers Agree on South Korea Trade Deal“
• The Clare Herald, “Free Trade Deal To Boost Irish Exports To Asia“

Today is the third anniversary of the Bipartisan Agreement on Trade, “The May 10th Agreement,” a bargain that in return for including enforceable labor and environmental provisions in U.S. trade agreements, those agreements would receive speedy bipartisan support in Congress. But three years later, our trade agreements are still languishing with Colombia, Korea, and Panama.

What a sad anniversary. Nearly 80,000 Americans are unemployed today because of inaction on those agreements (based on International Trade Commission estimates of the additional exports those agreements would bring and Commerce Department estimates of jobs related to trade).

How ironic that the reason for this is organized labor’s refusal to recognize they have been wrong on trade agreements and that our existing trade agreements have actually generated a manufactured goods trade surplus for America. What’s worse, as we have been dead in the water, our chief competitor, the European Union has been busy negotiating its own trade agreements with countries like Brazil, India, Canada, Vietnam, Singapore, etc. –- agreements that will wrap up markets for them and push us out.

President Obama is right in saying we have to double America’s exports in five years, but we can’t do that unless we open foreign markets to our goods and services. This year is the Chinese Year of the Tiger –- but for U.S. trade agreements, every one of the last three years has been The Year of the Snail. It’s time to come out of our shell and open new markets –- starting with those that were supposed to be approved because of the historic bipartisan agreement on trade three years ago.

President Obama gave a speech in Tokyo Saturday announcing the Administration’s plans to engage with the Trans Pacific Partnership countries to shape a regional agreement, an engagement that could produce real benefits for U.S. exporters and manufacturers. The Asia-Pacific region is the world’s fastest growing both in terms of trade and in the number of trade agreements being negotiated.  The NAM has long called for a trans-pacific trade agreement that would open up the region to U.S. exports.  America’s manufacturers cannot afford to be on the outside of an Asian trade wall looking in.

Reacting to the President in a statement, U.S. Trade Representative Ron Kirk made the case that a high-standard regional trade agreement under the Trans Pacific Partnership could help generate American jobs and economic prosperity.  (USTR fact sheet.) Exports will be the driver of U.S. economic recovery, but only if they have open access to world markets.

Strong U.S. leadership will be necessary to achieve a regional Pacific agreement that includes the highest standards already incorporated in U.S. bilateral agreements.  The United States currently has bilateral agreements with four of the seven Trans Pacific partners – Australia, Chile, Peru, and Singapore. (The others are New Zealand, Brunei, and Vietnam.) None of the gains for American manufacturers that were negotiated in those agreements should be abridged in any way, including intellectual property and investment protections and market access commitments. 

We were also pleased to see President Obama’s urging other nations to join the United States in demanding an ambitious and balanced Doha agreement, “not any agreement, but an agreement that will open up markets and increase exports around the world.”  This is the only road to success for the Doha Round.

The President’s focus on trade and trade agreements highlighted in his Asian trip should not, however, push other trade priorities off the table. On the contrary, they should produce a concerted effort to resolve any last issues with the three pending trade agreements – Colombia, Korea, and Panama – so these can be sent to Congress for approval.

News coverage…

• Associated Press, “APEC urges new growth model, climate pact progress“
• Reuters, “Obama pledges greater US engagement in Asia“
• Radio New Zealand, “Free trade deal may be in place in two years, says PM“

Frank Vargo is Vice President, International Economic Affairs, National Association of Manufacturers