Tag: Trade

Manufacturers Testify Before House Ex-Im Panel

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.

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NAM’s President and CEO Jay Timmons Voices Manufacturers’ Priorities in Europe

This week, the NAM’s President and CEO Jay Timmons and I are in Brussels, Belgium and Berlin, Germany to advance manufacturing priorities in the Transatlantic Trade and Investment Partnership (T-TIP) negotiations and to strengthen U.S.-European trade and investment ties.

Our first meeting on April 2 was with Member of the European Parliament Robert Sturdy, vice chair of the European Union (EU) Parliament’s International Trade Committee. We discussed ways to strengthen our collaboration in advocating for an ambitious, high-standard, comprehensive T-TIP agreement. Jay and I also discussed critical trade issues with U.S. Ambassador to the EU, Anthony Gardner, and EU Trade Commissioner Karel DeGucht.  We also discussed manufacturers’ T-TIP priorities and opportunities to strengthen our partnership with Business Europe and other leading business organizations and manufacturers. In Berlin, we’ll be meeting with a range of government and business leaders as well as U.S. Ambassador to Germany John Emerson.

Throughout this trip we have been advocating for a T‑TIP agreement that will significantly expand trade and investment between the United States and the EU and address global issues of common concern.  A comprehensive T-TIP would strengthen both our economies, which account for nearly half of global output of goods and services and 30 percent of global trade.

Jay has been emphasizing the importance of an agreement that further opens the transatlantic market, protects innovation and eliminates unnecessary barriers. He has also been identifying key priorities for manufacturers from regulatory coherence and transparency, to tariff elimination, intellectual property and investment protections and data flows, as well as highlighting opportunities for the EU and United States to work together to address common trade and investment challenges in markets around the world.

Next week, we head to Hannover, Germany, where Jay will speak at Hannover Messe 2014, the world’s largest industrial trade fair. In Hannover we will also meet with key policymakers and industry leaders to discuss the challenges and opportunities facing manufacturers on both sides of the Atlantic, including advanced manufacturing, export models and skills training.

Jay will continue strongly voicing the high priority that manufacturers place on expanding international trade and investment ties with the EU and U.S. government leaders, leading European business associations and NAM member companies that are key to shaping the T-TIP negotiations.

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A Better Way to Do Business in India: Scrap Discriminatory Policies and Engage on Constructive Solutions

How can India grow its emerging electronics equipment and ICT manufacturing sector? Not with a costly and discriminatory Preferential Market Access (PMA) policy. That’s what Stephen Ezell concludes in a paper released by the Information Technology and Innovation Foundation.

India’s PMA policy mandates local content requirements for as much as much as 30 percent of India’s $20 billion ICT market. By the end of next year, a quarter of the value of mobile phones and computer tablets, desktops, printers, keyboards, servers, memory cards and network equipment must be added in India. That share will rise to 45 percent in 2015 and to 80 percent by 2020.

PMA would block U.S. exporters from a large segment of India’s fast growing ICT market. India boasts the world’s second largest telecommunications network, with a subscriber base that has ballooned from less than 40 million in 2001 to nearly 850 million in 2011. Even without trade distorting preferences, the value of India’s ICT equipment production more than doubled between 2004 and 2009.

But, as Ezell points out, PMA is just as bad for India. Beyond the damage to U.S. and other overseas suppliers, the policy would “impose costs on India’s economy and citizens” without delivering production growth, increased security or better products or services. Overseas investors are already fleeing the sector. FDI in India’s telecommunications sector fell from $2 billion in the period from April 2011-March 2012 to just $300 million from April 2012-March 2013.

Ezell calls on the Indian government to repeal PMA and replace it with measures that can truly drive manufacturing growth and competitiveness. Specifically, he urges India to invest in infrastructure, workforce training and scientific research. He recommends tax and investment incentives to lure overseas firms and an end to an inverted Indian tariff structure that makes it more costly to import component parts than finished equipment.

Manufacturers in the United States are eager to engage on these and other constructive solutions. We continue to seek meaningful dialogue. But to get there, India must end its destructive “talk to the hand” approach to bilateral trade and commercial concerns. The U.S.-India Trade Policy Forum has not met since 2010. No other relevant forum, such as the High Tech Cooperation Group, or the ICT working group has met since 2011.

Early next month, the Indian people will go to the polls to choose new leadership. Manufacturers look forward to working closely with India’s next government. Together, we can find a better way of doing business.

The National Association of Manufacturers is co-chair of the Alliance for Fair Trade with India (AFTI). Click here for more information.

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KORUS Agreement Has Shown Strong Results on Two-Year Anniversary

March 15th marked the two-year anniversary of the Korea-U.S. Free Trade Agreement’s (KORUS FTA) entry into force and the facts are clear. Despite what some trade critics say, exports of U.S. manufactured goods to Korea have increased.  Thanks to KORUS, more than 95 percent of U.S. industrial and consumer goods are entering the Korean market duty-free, and as a result, exports of U.S. manufactured goods to Korea have gone up 3.1 percent or $1 billion since the agreement was implemented. Specifically, exports of electrical equipment, appliances and other components jumped 22.5 percent and exports of pharmaceuticals experienced a huge increase of 52 percent! Moreover, U.S. manufactured goods saw an increase in exports to Korea of 9.2% from January 2013 to January 2014, while manufactured goods exports from Korea to the U.S. only increased 3.1 percent.

The U.S. Trade Representative’s (USTR) Office released a fact sheet on the enhanced opportunities the KORUS agreement has created over the last two years. “In its second year, this landmark agreement continues to provide tangible benefits for American businesses, workers, and farmers exporting to our sixth-largest trading partner,” USTR stated.  As USTR notes, the overall U.S.-Korea trade balance has been negatively impacted by decreases in corn and fossil fuel exports due to the U.S. drought in 2012, but those events are unrelated to the agreement’s implementation. USTR also noted slowed economic growth in Korea over the past two years was associated with decreased demand for all of its imports – not just those from the United States. In addition, the European Union’s free trade agreement with Korea entered into in July 2011, so it is likely that manufacturers in the EU had the advantage of moving their products into Korea’s market first.  As the global economy continues to improve, we hope to see even stronger U.S. exports to Korea.

At the same time, the NAM is working closely with our members, USTR and the Korean government to resolve some key issues with KORUS implementation including customs issues for certain U.S. exports to Korea and an array of non-tariff barriers, especially in the auto sector, which greatly impede manufacturers’ access to the Korean market. Last week, Korean ambassador to the United States Ahn Ho-young expressed a commitment to addressing any outstanding issues with implementation of the KORUS agreement. It is critical that Korea remain focused on resolving these challenges and that the Korean government continue working with the U.S. government to respond to market access concerns from manufacturers in the United States – especially if it is serious about seeking accession to the Trans-Pacific Partnership (TPP) agreement.

Additionally, more work needs to be done to ensure that manufacturers in the United States are aware of the new export opportunities in Korea resulting from the KORUS FTA. Manufacturers can visit FTA Tariff Tool to determine tariff levels for their exports to Korea.

While it’s still too early to determine the full impact of KORUS on U.S. manufactured goods exports, a closer look at the numbers reveal that they are headed in the right direction, and manufacturers believe that continued cooperation with Korea will only strengthen our economic ties and expand the benefits of the KORUS agreement.

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Ex-Im Bank Levels the Global Playing Field for U.S. Manufacturers

In the face of tough competition overseas, the Export-Import Bank (Ex-Im) is a critical tool the U.S. government has to boost U.S. exports and grow manufacturing jobs.

Opponents continue to paint Ex-Im Bank as a costly and unnecessary entity focused solely on providing credit to our nation’s largest exports. That is simply false.

Ex-Im Bank helps U.S. companies, many of them small and medium-sized manufacturers, offset some of the financing support that their foreign competitors receive from their governments. The Bank also helps U.S. companies to secure new customers and increase market share in emerging markets.

In FY2013, nearly 90 percent of Ex-Im Bank’s transactions directly supported small business — providing $5.2 billion in direct support for small business exporters. Small businesses like BTE Technologies in Maryland and Polyguard Products in Texas rely on Ex-Im export financing and insurance to grow their exports and add U.S. jobs. Lion Precision in Minnesota turned to Ex-Im Bank’s single buyer insurance program to bolster exports to countries like China and Japan. A small company with 35 employees, Lion Precision designs, manufactures, tests and ships high-tech sensors. Last year, more than 60 percent of the company’s sales were outside the United States.

Simply put, our foreign competitors use every tool available to aggressively pursue greater market share by offering enticing financing terms. The playing field needs to be level, and Ex-Im Bank is crucial in achieving that. At least 59 other foreign export credit agencies provide significant support to our competitors around the world. And in some cases, foreign customers insist on official export credit agency support for projects.

In the aerospace sector, Ex-Im has helped ensure that the U.S. industry remains competitive, enabling the aerospace sector to produce a positive trade balance of trade of $73.5 billion in 2013. These exports support U.S. jobs at large companies and small, both directly and indirectly. As Ex-Im Bank Chairman Fred Hochberg noted earlier this week, aerospace is the top U.S. export after agriculture. Given the high value and high volume of sales, general aviation and commercial aircraft can — in some years — make up a large portion of Ex-Im Bank’s portfolio.

In the last five years (FY09 to FY13), Ex-Im Bank assisted in financing more than $188 billion of U.S. exports and supported 1.2 million American jobs – in a public-private partnership that actually generates revenue for the taxpayer. The Ex-Im Bank is a self-sustaining agency, generating more than $1 billion for the U.S. Treasury last year — after covering its own operating costs.

In September, the Bank’s charter will expire. Congress should act now to reauthorize Ex-Im Bank. Otherwise, U.S. manufacturers small and large will increasingly find themselves locked out of the competition in global markets, an outcome that would be bad for the economy and for jobs.

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NAM Applauds Critical Step Taken by the Pacific Alliance

The NAM welcomes this week’s announcement by the Pacific Alliance – Chile, Colombia, Mexico and Peru – that they have signed an agreement to eliminate tariffs on 92 percent of goods. The other 8 percent of tariff eliminations will be phased in over time. The Alliance of these Latin American nations was kicked off in April 2011 and formalized in June 2012. Together, these four countries comprise 210 million people – more than a third of Latin America’s population and more than Brazil’s. Combined they boast an economic output of 35 percent of Latin America and the Caribbean’s GDP and roughly 50 percent of Latin America’s trade flows. The Alliance’s objectives include economic integration and a gradual move towards the free circulation of goods, services, capital and persons. But perhaps one of the Alliance’s primary goals is to deepen the region’s trade ties with Asia, whose markets are rapidly expanding.

This critical first step by the Alliance is substantial and much needed in a region where trade-liberalization has been under attack in recent years. For example, Argentina has broken a number of its core WTO commitments and the United States, Canada and others have a pending WTO case against them. There are also ongoing concerns about Brazil’s use of localization requirements to effectively close its market to U.S. and other exports. The four members of the Pacific Alliance, on the other hand, have long supported the ideals of free trade and market-opening agreements.

The Pacific Alliance is being characterized as a living agreement and Costa Rica has indicated its intention to sign on as a full member. A prerequisite of acceding to the Alliance is having free trade agreements in force with the other members. While Costa Rica has agreements with all four, its deal with Colombia has not yet been implemented. Notably, the United States has observer status, along with 22 other nations, including Germany, Great Britain, and Italy which will not be allowed to join as full members as they fail to meet the second requirement, which is having a coastline on the Pacific.

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Manufacturers Look South

Today, a delegation of 17 companies and U.S. Secretary of Commerce Penny Pritzker wrap up a five-day trade mission to Mexico. The delegation included manufacturers like Boston Scientific and Vermeer, who participated in meetings with high-level Mexican officials and business leaders to discuss commercial opportunities and promote U.S. exports.

Mexico is the United States’ second-largest export market, with over $200 billion in manufactured goods exports in 2013. The Department of Commerce recently announced Look South, an initiative designed to help companies access this market and the United States’ other 10 Free Trade Agreement (FTA) partners in Latin America. FTAs increase market access for manufacturers by lowering tariff and non-tariff barriers. Data released yesterday is evidence that manufacturers are benefiting from these agreements. Click here more information about Look South and here for information on how to take advantage of the program.

 

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2013 Trade Numbers Tell Only Part of the Story: Why America Needs to Care about Trade and Trade Promotion Authority

Today, is a day on which we usually focus on numbers – in particular, the full country- and product-specific data on U.S. trade flows for all of 2013 released by the U.S. Department of Commerce’s Bureau of Economic Analysis.  While relevant, these data tell just a sliver of the real story.

Today’s trade numbers show a modest overall increase in U.S. exports of manufactured goods as explained by NAM’s Chief Economist Chad Moutray. Yet, these numbers set a new high in manufactured goods exports – over $1.38 trillion which is important for manufacturers and the nearly 300,000 small and medium sized firms that count themselves as U.S. exporters.  Notably, U.S. manufactured exports have more than doubled since 2002, the last time that Trade Promotion Authority (TPA) was enacted.

Today’s trade numbers also show that the biggest market for our manufactured goods exports are those 20 countries where barriers are lowest and where the basic rules of fairness and property protection apply – the 20 countries with which the United States has in place free trade agreements (FTA)  Consider that 47.5 percent of all U.S. manufactured exports in 2013 – $656 billion in goods made in America  — were sold to just those 20 countries in 2013, while those countries represent a mere six percent of world population and less than 10 percent of the world economy.

All too often criticized in the blogosphere , U.S. trade agreements have been highly successful in expanding markets for exports of manufactured goods that in turn helps sustain and grow manufacturing and manufacturing jobs throughout our 50 states. Notably, the United States has an overall manufacturing trade surplus with our 20 FTA partners.

While posts abound about what is wrong with trade, the fundamental fact is manufacturers need a much more robust trade policy to sustain and grow their business and jobs here in the United States.  Manufacturers face steep competition from private and state-owned firms overseas, where pennies may determine whether U.S. goods win or lose a sale. Except for our FTA partners, most other countries have done the least they can to open up their markets and eliminate the tariffs, non-tariff barriers and other forms of discriminatory and unfair treatment that undermines U.S. competitiveness globally.  On the other hand, the United States has one of the most open markets in the world. We need other countries to follow our lead.Floatwork

But trade is about a lot more than numbers.  Consider the stories of small and medium manufacturers across our nation. Sandra Westlund-Deenihan, CEO and Design Engineer of Quality Float Works, Inc. in Schaumberg, Ill., told her story in January’s Member Focus cover story, explaining how her 24-person company was able to quadruple sales overseas in the past 10 years, with major markets including in key U.S.-free trade agreement countries as Australia, Canada, Mexico, Oman and Singapore.  Sandra explained: “Where’s there’s a level playing field abroad, we are winning sales and supporting jobs here at home.

GreenblattIn Baltimore, Maryland, Marlin Steel President Drew Greenblatt recently penned an op-ed in the Baltimore Sun on the power of trade and Trade Promotion Authority to grow manufacturing in the United States.  Drew explained to me that “Marlin Steel is using American steel and fabricating wire racks, material handling baskets and other products to sell to more than 36 countries around the world, generating more than 20 percent of  Marlin Steel’s total sales. We need more prospects so we can grow revenue and grow jobs.”  The packages of material handling racks below are destined to leave the Port of Baltimore for Colombia, another FTA partner, where Marlin’s sales have increased substantially since the U.S-Colombia FTA entered into force.

But America’s hands have been tied by the failure of Congress and the Administration to enact new Trade Promotion Authority legislation that will enable both branches of government to do their part, to work together and to advance a growth agenda for the United States through strong new trade agreements.  Trade Promotion Authority legislation, particularly the recently introduced Bipartisan Congressional Trade Priorities Act of 2014 lays out key negotiating objectives for the United States and sets forth a process for Congress and the Administration to work together to get and implement the best possible trade deals for the United States

Growing manufacturing requires the United States to tear down barriers overseas, to set in place basic rules of fairness and openness, all subject to strong enforcement. That is precisely what U.S. trade agreements do and why manufacturers are leading the fight here in Washington to ensure that America can again lead on trade through Trade Promotion Authority and new trade agreements in the Asia Pacific and with Europe that will create opportunities to grow manufacturing and grow jobs throughout the United States.

 

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Congress Needs to Act NOW on the MTB

Tomorrow marks an unfortunate anniversary for manufacturers in America.  400 days will have passed without Congressional action on the Miscellaneous Tariff Bill (MTB).

For three decades, Congress has supported manufacturing in America by suspending import taxes on necessary manufacturing inputs and raw materials that are not available in the United States and must be imported from other countries. The last MTB enacted into law expired on December 31, 2012, which has resulted in significantly higher costs and in some cases, reduced hours for workers and even layoffs.

The MTB strengthens manufacturers’ global competitiveness by cutting their production costs. Doing so supports thousands of domestic manufacturing jobs. In fact, the MTB enacted in 2010 was estimated to support 90,000 jobs, increase U.S. production by $4.6 billion and expand U.S. GDP by $3.5 billion. Moreover, failure to pass a new MTB will result in a staggering $748 million tax hike on manufacturing over the next three years. This translates into a whopping $1.857 billion in economic losses. Manufacturers across a broad range of industries are already paying this $748 million tax and are calling on Congress to act as swiftly as possible on this commonsense, bipartisan and jobs-supporting legislation.

Numerous manufacturers, like Glen Raven in Burlington, North Carolina, rely on the MTB in order to make their products here in the United States. The President and CEO of Glen Raven, Leib Ohmig, recently shared with the NAM the importance of the MTB to his business: “Glen Raven is one of the world’s leading manufacturers of performance fabrics used in the furniture, automotive, safety, marine and sun shade industries. Since the raw materials required to manufacture these fabrics are no longer available in the United States, Glen Raven relies on the MTB to ensure these inputs can be sourced competitively. The expiration of the MTB has resulted in a significant tax on American manufacturing and made companies less competitive in the global marketplace. Glen Raven urges Congress to promptly pass the MTB as a means to spur much needed job creation and economic growth in the United States.”

DuPont also relies heavily on the MTB for their crop protection business. James Hay, Business Director for DuPont Crop Protection, North America said, “Duty suspensions increase the competitiveness of our U.S. manufacturing base by lowering our input costs and providing us the tools to sustain U.S. production. Lower manufacturing costs provide opportunities for business growth to support our company’s mission of sustainable growth.”

For companies like Glen Raven, DuPont, Lasko Products, BASF, Bayer CropScience and many others, the MTB is critical to keeping their costs low, enhancing their competitiveness in the global market, and most importantly, to sustaining and growing manufacturing jobs here in the United States.

Congressional action on this critical jobs bill is long overdue.  Tell Congress to ACT NOW!

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Manufacturers Welcome President’s Comments on TPA and Market-opening Trade Agreements

Manufacturers welcome the President’s commitment to seek passage of Trade Promotion Authority and move forward on market-opening trade agreements in the Asia Pacific and with Europe.

For manufacturers, opening new markets overseas is critical. The NAM is working on both sides of Capitol Hill with both Democrats and Republicans to advance a robust trade agenda that will tear down barriers for U.S.-manufactured exports. For too many years, the United States has sat on the sidelines as other countries negotiated trade deals that put our manufacturers at an increasing competitive disadvantage.

We look forward to working with the administration on passage of the Bipartisan Congressional Trade Priorities Act, introduced earlier this month by Ways and Means Chairman Camp, Finance Chairman Baucus and Ranking Member Hatch, which sets forth strong negotiating objectives and the much-needed framework to put the United States in a strong negotiating position for market-opening trade agreements.

The NAM will continue to make the case for robust trade policies and agreements here in Washington and around the country, emphasizing the importance of the elimination of unfair barriers overseas and strong rules on intellectual property, investment, fair competition and other commercial outcomes in new agreements.

Manufacturers also need access to competitive export financing to take advantage of new market opportunities, and the NAM will continue to advocate for a strong U.S. Export-Import Bank that can back exporters when needed. Ex-Im Bank is the only tool American manufacturers have to counter the approximately $1 trillion in export financing that other governments provide their exporters, and Ex-Im Bank helps to level the playing field for exporters to compete on the basis of quality and price rather than on financing terms. The NAM is also working to enhance the competitiveness of manufacturers in the United States through global and national initiatives to cut cross-border transaction costs and address regulatory hurdles abroad.

 

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