Trade critics like to decry unfairness in the global economy, trade deficits and more in their fight against Trade Promotion Authority (TPA). But what solution do they provide? Not one.
Manufacturers are in Washington, DC, today as part of the NAM Manufacturing Summit to talk about solutions and ways to grow manufacturing. For those concerned about the lack of a level playing field, TPA is key to solve the status quo disadvantage faced by manufacturers in the U.S.
Consider the status quo for U.S. manufacturers:
- The U.S. has the most open market of any major economy, with more than two-thirds of all manufactured imports entering the U.S. duty-free in 2014. Under our Constitution and laws, the U.S. already accords the basic non-discrimination, fair treatment and private property protections found in our trade agreements to foreign products and investments.
- Except with our 20 free trade agreement partners, U.S. manufacturers face far greater barriers overseas for our exports, products and innovation. According to the well-respected World Economic Forum, U.S. exporters face steeper trade barriers abroad than virtually any other major country, including Mexico, China and European countries largely because those countries have entered into more market-access agreements than the United States.
In the markets where the U.S. is currently negotiating free trade agreements, U.S. manufacturers face substantial barriers. Manufacturers face tariffs as high as 83 percent on automotive products, 70 percent on machinery and capital equipment, and 30 percent or more on chemicals, health and medical equipment and infrastructure products with some of the Trans-Pacific Partnership countries. Manufacturers face tariffs as high as 20 percent on electrical equipment, 15 percent on consumer goods, 14 percent on information technology products and 10 percent on machinery, capital equipment and metal goods in the European Union. Beyond tariffs, manufacturers face a wide range of other discriminatory barriers around the world—from local production requirements and discriminatory regulations and standards to weak protection and enforcement of U.S. property, innovation and inventions.
How do we solve this status quo disadvantage? Certainly not by standing still as TPA critics seem to believe. In fact, TPA is critical to reverse this disadvantage so that the U.S. can negotiate and conclude new market opening trade agreements that will open markets and help make sure other countries treat our manufacturers and goods as we already treat them.
Manufacturers urge Congress to move quickly to pass TPA so that we can grow manufacturing in the United States, not fall farther behind.