This post was co-authored by NAM Senior Vice President and General Counsel Linda Kelly and NAM Vice President of International Economic Affairs Linda Dempsey.
Manufacturers are on the front lines of a highly competitive global economy. Manufacturers large and small in all sectors of the economy are seeking to access new markets and customers overseas to sustain and grow manufacturing here at home. Yet, each of our manufacturers faces a myriad of challenges in foreign markets, from tariffs and non-tariff barriers to discriminatory and unfair foreign government treatment overseas that protects home country industries to the detriment of manufacturers and workers here in the United States.
For decades, the United States has shown international leadership in promoting the rule of law, due process and fairness by pursuing trade and investment agreements to create a level playing field – to open markets, eliminate barriers and limit the ability of foreign governments to hinder America’s access and success overseas. These agreements are the strongest tools that the United States has to level the playing field and limit the barriers and unfair actions by other governments. The success of these agreements is shown in the simple fact that when markets are open, manufacturers in the United States succeed: In 2012, nearly half of U.S. manufactured good exports were sold to our 20 Free Trade Agreement partners, even though those countries represent merely six percent of world population and less than 10 percent of the world economy.
The principles on which our free trade agreements (FTAs) and bilateral investment treaties (BITs) are based are ones that all Americans know well:
- Non-discrimination or equal protection under the law
- Due process
- Recognition of private property rights through compensation for government takings
- Fair treatment by the government.
These basic principles are set forth in the U.S. Constitution and landmark pieces of U.S. law, starting with the Administrative Procedure Act. So when the United States enters into reciprocal agreements with other countries in which it insists on inclusion of these core rights, it is helping to export the time-tested values and principles on which our country is based.
Unfortunately, some in the United States would seek to erode the U.S. commitment to these rights in our trade agreements. One highly concerning example arose this week in a letter issued from the National Association of Attorneys General urging that U.S. trade agreements should start including product exceptions from basic rules seeking to limit discriminatory and unfair government action. The argument starts with a product about which it is easy for critics to raise concern –tobacco. This product, they and others argue, should be treated differently in trade agreements, despite the fact that it is not in fact treated differently in U.S. law. The United States has robust limits on tobacco use, advertising and access, but, in fact, has never prevented the core rules of our Constitution or legal system from being applied to that product or any other.
Seeking such a product or public welfare exception in our trade agreement will not limit anyone from challenging U.S. rules in these areas. The only major consequence will be to give fodder to foreign governments that want to restrict access of U.S. manufactured goods under the guise of some public welfare objective, be it food or pharmaceutical products to high-tech or environmental goods.
At a time when America is seeking to grow jobs and move its economy in high gear, manufacturers need to see new trade and investment agreements that will aggressively and fully tear down barriers, not create a roadmap for other countries to continue to discriminate and treat our producers unfairly. In short, if we are interested in sustaining and growing manufacturing in United States and being globally competitive, we need to export our basic principles, not lead the charge to undermine them.