One of the big success stories in the trade world for 2011, other than passage of the FTAs, was success of the Export-Import Bank’s Global Access for Small Business program. Last year the Ex-Im Bank approved $6 billion in small business financing through this helpful new program which is supported by the National Association of Manufacturers.

It’s a little known fact that more than 85 percent of all the Bank’s transactions directly benefit small business exporters.

As you can see export financing is paramount to the ability of manufacturers to export and in turn grow jobs and invest. We have to remember that 95 percent of the world’s consumers are outside of the U.S. and our manufacturers need the tools to reach them, if not we will be eclipsed by our overseas competition.

The NAM is urging Congress to act as soon as possible to reauthorize the Ex-Im Bank and to increase the Bank’s lending capacity. If we are going to meet the goal of doubling exports by 2014 an improved Ex-Im Bank is going to play an important role and we can’t afford to wait to act until the temporary authorization expires.

Manufacturers are constantly planning for the future several months and years in advance which is why a multi-year extension is needed. 

Ex-Im Bank Chairman Fred Hochberg is also pushing for Congress to move quickly as CQ reported earlier this week.

In an interview, Ex-Im Bank Chairman Fred Hochberg said Congress needs to quickly assure businesses and foreign customers that it will have more financing authority. Hochberg called legislation to raise the bank’s lending limit a “jobs bill.”

Reauthorizing Ex-Im means more exports which translates to more jobs for American workers. We are hopeful Congress can come together to move forward soon before we lose out to the competition.

Today we heard from President Obama about his plan to reorganize several federal agencies – many of which are critical to manufacturers and their ability to create and retain jobs.

Changes would include combining the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency into a single department in an effort to improve government efficiency and to help promote business. The key question in reviewing this proposal is will it help manufacturers compete, export, invest and create jobs?

Any changes that are considered must focus on improving intellectual property protection, opening markets for exports, improving market access, and more. Additionally, while manufacturers have done well in leaning their processes to improve their competitiveness and would vigorously support the federal government doing the same in this difficult debt and deficit environment, the agencies affected must continue to have the necessary resources to meet their missions.

If the streamlining and efficiency undertaken in this proposed combination of agencies will mean that manufacturers will have less intellectual property protection, for example, it would be a devastating mistake. If, on the other hand, this leaning process will mean doing more with less, it would be a great step forward.

As policymakers respond to the President’s proposals today, we are hopeful that the discussion centers on the key question for manufacturers – will they be better able to compete, export, invest and create jobs as a result? With a 20 percent cost disadvantage already, manufacturers will deeply care about the impact these proposals will have on their ability to compete.

Aric Newhouse is senior vice president for policy and government relations, National Association of Manufacturers.

The Bureau of Economic Analysis and the Census Bureau reported that the U.S. trade balance in November widened to $47.8 billion from $43.3 billion in October. Americans imported $225.6 billion in goods and services for the month (up from $222.6 the previous month) and exported $177.8 billion (down from $179.4 billion).

A widening of the deficits for goods and petroleum led to this month’s larger overall deficit. Exports of industrial supplies and materials fell from $43.1 billion to $41.4 billion, with smaller declines observed in the export of food products, automobiles and capital goods. There was, however, a net gain in exports for consumer goods. The trade balance for petroleum, meanwhile, fell from $24.2 billion to $27.6 billion, largely on higher imports.

Looking geographically, exports to Europe have slowed somewhat, as you might expect given challenges in the Eurozone area. Exports of goods and services to Europe fell from $28.4 billion in October to $26.8 billion in November. Note that Europe accounts for over 20 percent of U.S. manufactured goods exports, so any stalling in the region for sales of our products can have an impact. Nonetheless, slower exports were not just a phenomenon of Europe, as few exports were also observed across-the-board in other regions, as well.

The value of U.S. manufactured goods exported in November was $81.9 billion, down from $86.2 billion in October. Still, there have been $889.3 billion in manufactured goods exports year-to-date in 2011 (through November); that represents an 11.8 percent increase on the $795.4 billion at the same point in 2010. Note that these numbers are not seasonally adjusted.

Manufactured goods account for 60 percent of our total exports. With that in mind, we will depend heavily on the manufacturing sector if we are to make the President’s goal of doubling exports by 2015. Hopefully, global economic growth can pick up in the coming month, helping to provide a boost to our trade numbers. Economic weaknesses in Europe and elsewhere, though, could hinder this goal.

Chad Moutray is chief economist, National Association of Manufacturers.

The evidence keeps rolling in about the value of having free trade agreements (FTAs) that open up foreign markets to American exports.  The Commerce Department data on FTAs that the International Trade Administration just posted shows that we are on track for a fourth straight year of manufactured goods trade surpluses with our FTA partners.

Moreover, based on their data through October, that surplus has already reached a record $40 billion.  If that rate continues for November and December, the U.S. manufactured goods trade surplus with FTA partners will be $46 billion in 2011 – double the 2010 surplus of $23.4 billion.

The manufactured goods surplus with NAFTA is running at a $12 billion annual rate, and with CAFTA at a $3 billion annual rate. 

The record with FTA partners is in sharp contrast to U.S. manufactured goods trade with countries that do not have FTAs with us.  Based on January-October data, it looks like U.S. manufactured goods trade with non-FTA partners will register a deficit of close to $500 billion in 2011. 

The facts are clear -  we need more FTAs to let our manufactured goods into more foreign markets – and we need them as fast as we can get them.

Frank Vargo is vice president of international economic affairs, National Association of Manufacturers.

While overall U.S. exports of goods and services are still on track to double in five years, the Commerce Department trade figures released today show that both manufacturing and services exports have dropped below the 15 percent annual growth path needed to double in five years. 

Overall exports of goods and services through October were 15.5 percent larger than in January-October 2010. Manufactured goods exports, however, were up by a lesser amount – a 12.7 percent increase over the year earlier period.  While that is still a good growth rate, it is below the path needed to double in five years.

Services exports are also below the 15 percent path, being up 10.6 percent over the year-earlier period, barely into double digit growth. The manufacturing and services export figures are troublesome, as these two sectors account for over 80 percent of overall U.S. exports of goods and services.

The overall export growth rate is being sustained by agricultural exports, up 24 percent, and mineral fuels exports, up 62 percent.  It is doubtful whether the 15 percent overall figure can be sustained into the future unless the growth rates for the huge manufactured goods and services sectors pick up.

Manufactured goods imports through October grew at exactly the same rate as exports – 12.7 percent.  However, since imports are significantly larger than exports, an identical growth rate produces a larger dollar growth figure for imports than for exports.  Year-to-date growth was $382 billion for exports, $339 billion for imports, and $43 billion for the trade deficit. (continue reading…)

The United States is negotiating a state of the art, twenty-first Century, Free Trade Agreement with eight countries in the Pacific Rim. This “TransPacific Partnership” or TPP, brings together countries with which we have free trade agreements (Australia, Peru, Chile, Singapore) and countries with which we do not yet have open access to their markets (New Zealand, Malaysia, Vietnam and Brunei).

The NAM believes that the TPP should be the beginning of the Free Trade Area of Asia and the Pacific– which would include Japan.  Asia is the fastest-growing area of the world, and American manufacturers need to have open access to that market. 

Yesterday, the United States Trade Representative published Federal Register notices requesting comments on the expression of interest that Canada, Japan and Mexico have shown in potentially joining TPP negotiations in light of the TPP’s high standards for liberalizing trade. It also asked for specific issues of concern to the United States regarding barriers to manufacturing trade, including non-tariff measures. 

The NAM has called on the Administration to negotiate the broadest and deepest agreement and work with negotiating partners and domestic stakeholders to address sensitivities and concerns in a way that ultimately ensures the most comprehensive outcome possible. 

We welcome the interest of Canada, Japan and Mexico but the negotiations cannot go back to the starting place and begin all over again.  All three will need to eliminate non-tariff barriers which are still significant impediments to American exports given that Japan’s tariffs are very low, and Canadian and Mexican tariffs have been eliminated under NAFTA. A key question is how this can be done without delaying the conclusion of the agreement, at least among the original participants.

We hope that the consultations with the three governments will address quickly any issues that arise as a result of this request for comments so that the three can join the negotiations as soon as possible in 2012 and truly make the TPP the pathway to a Free Trade Area of the Asia-Pacific.

Stephen Jacobs is senior director of international business policy, National Association of Manufacturers.

The NAM has been making the point for some time now that manufactured goods trade with current Free Trade Agreement (FTA) partners is in surplus.  Our manufactured goods trade deficit is with countries that DON’T have FTAs with us.  It is amazing how many people have fallen for the myth that trade agreements are bad for us without bothering to seek the facts.

Third Way has just made understanding the facts easier.  They have come out with a terrific “infographic,” titled “Black is the New Red,”  that nails down the point that oil imports drive trade deficits: trade deals don’t.

Third Way’s graphic makes this point in an outstanding and instantly recognizable way. Everyone should look at it.  It reinforces what pro-trade agreement advocates know, and should be a real eye-opener for those who oppose trade deals because they think they are bad for American manufacturing and jobs.

Thanks, Third Way!

Also, it is important to know that the Commerce Department has begun posting the trade statistics with FTAs on their website www.trade.gov/fta .  Click on Trade Tables, at the left of the page.  The lower left hand part of page two of the trade tables shows clearly that we have a manufactured goods trade surplus with our current FTA partners.  As Third way points out, the overall balance with FTA partners is in deficit because of all the oil we get from NAFTA.

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

Today the Senate is continuing debate on legislation to extend the Generalized System of Preferences (GSP) and Trade Adjustment Assistance (TAA) programs.  We expect the Senate to wrap up debate later today and then vote on final passage which will move us another step closer to being able to pass the three pending free trade agreements.

This morning the National Association of Manufacturers sent a Key Vote letter on the GSP/TAA bill to Senators urging them to support the bill.

Manufacturers support the extension of GSP, which provides preferential access to certain imports from selected developing countries. Last year, $23 billion of imports came into our nation duty-free under GSP, nearly three-quarters of which were raw materials, components, parts, or other inputs used to manufacture goods here in the United States. GSP reduces these companies’ input costs, making their products more competitive with their global counterparts. Moreover, it is estimated that nearly 82,000 U.S. jobs are directly or indirectly associated with the importation and use of GSP-eligible imports.

The Senate Banking Committee approved legislation today to reauthorize the U.S. Export-Import Bank through 2015. The reauthorization measure, which was approved by a voice vote, would gradually increase the loan ceiling to $140 billion. In addition to increasing the Bank’s exposure cap, the bill would also direct the Bank to review its current domestic content requirements, with due consideration for maintaining and creating jobs in the United States, and encourage the Bank to increase financing of exports for renewable energy and energy efficient technologies.

Ex-Im Bank, which is self-sustaining, provides financing to U.S. exporters through direct loans, guarantees and payment insurance. Last year alone, Ex-Im authorized more than $26 billion in exports that supported an estimated 230,000 jobs at more than 3,300 companies across the country. 

Additionally, more than 80 percent of Ex-Im Bank’s transactions directly involve small businesses. Congress must swiftly move to reauthorize the Ex-Im Bank before it expires on September 30.

Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.

The Canada-Colombia free trade agreement went into effect today. Canadian exports are now duty-free in Colombia.  Since the effective duty on manufactured imports into Colombia is 15 percent, that gives Canadian manufacturers an attractive advantage.

This adds further to the imperative of passing and implementing the U.S. – Colombia trade agreement.  Distributors, wholesalers, and retailers in Colombia may be willing to bear a 15 percent disadvantage in importing U.S. goods for a short time; but if they see that time difference persisting, many of them will consider shifting to Canadian suppliers wherever Canadian and American products compete with each other.

Passage of the U.S. – Colombia trade agreement by Congress does not mean the agreement goes into effect the next day.  Some months are needed after passage to ensure that both governments have done what they said they would do, that customs officials have their procedures and systems in place, and that necessary regulations have been published. So every day of legislative delay pushes implementation of the U.S. – Colombian agreement one more day into the future – adding to the risk of losing U.S. business.

Also, every day the pending trade agreements with Colombia, Korea, and Panama languish, American workers lose another $8 million in wages and benefits.  That adds up.  As of the afternoon of August 15, 2011, their cumulative loss was a staggering $12 billion.

Opponents of trade agreements are badly mistaken in thinking they hurt our trade. Over the past three years, American manufacturers have enjoyed a cumulative surplus of over $70 billion with our existing trade agreement partners.  During that same time, however, manufacturers faced a cumulative deficit of $1.3 trillion with countries that have not entered into trade agreements with us.

It is time to open more markets to American goods and services, starting with quick action by Congress to pass the three pending agreements.