Today, the Senate will take a final vote on the renewal and modernization of the long-standing congressional-executive framework known as Trade Promotion Authority (TPA). Movement on this top trade priority for manufacturers across a wide variety of industries throughout the United States has been a long time coming, since the expiration of the last TPA in mid-2007. Manufacturers in the U.S. have been at the forefront in pushing this legislation forward, from setting forth TPA priorities in 2013, issuing a unanimous Board resolution later that year, testifying, taking out advertisements, activating call-in campaigns, appearing on TV and radio and of course holding many hundreds of meetings with Members of Congress in Washington and around the country. Read More
Members of Congress, policy experts, economists, and industry leaders gathered at the Newseum in downtown Washington, D.C., yesterday morning for a policy breakfast briefing event to examine an important question: “Is India Open For Business?” after the first year of the Modi government. Read More
NAFTA and free trade agreements (FTAs), what do you think? Good or bad for manufacturers in United States? While a small group of anti-trade critics would have you believe lots of myths, in fact, NAFTA and past FTAs have been critical to the growth of U.S. manufacturing. Moreover, more market-opening trade agreements negotiated with Trade Promotion Authority (TPA) are even more critical to America’s manufacturing future. Read More
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.
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. Read More
Today, the House Republican Technology Working Group outlined its policy priorities for the 112th 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.
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.
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.