As the last Miscellaneous Tariff Bill (MTB) package expired at the end of the 112th Congress, manufacturers began to see their costs go up. Congress failed to pass a new package which lead to the expiration of duty suspensions on more than 600 products critical to manufacturers in the United States.

Ron Eva Speaks During an NAM Shopfloor Event on the MTB

The MTB provides manufacturers a duty suspension on inputs not available in the U.S. that are critical to the manufacturing process. In its simplest terms, it helps to level the playing field for manufacturers and supports jobs. Currently, it is 20 percent more expensive to manufacture in the U.S. compared to our major trading partners, this is why a tool like the MTB, which lowers costs, is critical to our competitiveness.

One company that sees the MTB as essential to competitiveness is BASF. BASF is the world’s leading chemical company – The Chemical Company. Its portfolio ranges from chemicals, plastics,  and performance products to crop protection products.  BASF has more than 100 facilities in 31 states across the country and more than 15,000 employees in the U.S. alone. The MTB is critical to BASF’s competitiveness in the automotive, printing, packaging, telecommunications and agriculture markets.

“The MTB helps BASF remain competitive in the agriculture market which continues to see increased competition and more choices for customers,” said Ron Eva, BASF global sourcing and contracting manager. (continue reading…)

The Miscellaneous Tariff Bill (MTB) expired on December 31, 2012, causing taxes to increase on more than 600 products critical to manufacturers. Today a group of manufacturing CEOs and senior executives sent a letter to congressional leaders urging action on a new MTB package to boost manufacturers’ competitiveness. The MTB is a tariff suspension on hundreds of inputs and products that are essential to the manufacturing process but not available in the United States.

Every day that passes without congressional action on a new MTB results in manufacturers costs going up, making it more expensive to manufacture in the United States. The longer we go without an MTB, the further it sets us back and puts manufacturing jobs at risk. The MTB levels the playing field for manufacturers and helps spur innovation and development of new products.

It’s time for the House and Senate to move forward with a new MTB.  Manufacturers in America can’t afford to wait any longer.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

Today the House Ways and Means Trade Subcommittee held a hearing on U.S-India trade issues. India represents a large market for U.S. manufactured goods exports and it’s important that India is playing by the rules.

The hearing today really looked at how we can strengthen and expand trade and investment with India, as well as what can be done to better protect investors and manufacturers who export and sell in India. It is important to enforce existing disciplines on intellectual property (IP) in the WTO and continually make progress in improving those disciplines. We have yet to reach our full potential for U.S. exports to India and there are several intellectual property risks which need to be resolved.

Testifying on these issues from a manufacturing perspective today was Roy Waldron, senior vice president and chief intellectual property counsel for Pfizer. Mr. Waldron’s duties include protecting the company’s intellectual property portfolio throughout the world. The pharmaceutical industry supports more than 4 million jobs in the United States and exports $46 billion in goods. (continue reading…)

The NAM is actively supporting the expansion of the Cape Town Convention to include mining, agricultural and construction (MAC) equipment. The Cape Town Convention on International Interests in Mobile Equipment is a treaty that establishes an international legal framework for equipment financing. By applying a uniform legal regime across borders, the treaty streamlines processes, reduces risk and lowers costs for financing certain exports.

The treaty’s first three Protocols have covered aircraft, railway equipment, and space assets. Currently, 55 countries are parties to the Convention. In the aircraft industry, for example, the Cape Town regime has been beneficial to manufacturers and exporters as well as airline customers and travelers. A recent economic impact study suggests that this expansion of the Cape Town Convention could increase sales of MAC equipment by about $600 billion over the next few years.

In a recent letter to the International Institute for the Unification of Private Law (UNIDROIT) Secretary-General, the NAM wrote that manufacturers “hope that a protocol covering MAC equipment could be of similar benefit to those sectors – even if complicated issues need to be addressed during the negotiations, such as the scope of the protocol and how to identify covered equipment. Manufacturers in the United States look forward to working with UNIDROIT to address those issues and develop a strong protocol.”

UNIDROIT’s Governing Council will decide in May whether to proceed with work on a new Protocol to cover MAC equipment. The U.S. government supports moving forward with the project, but a number of other countries have been hesitant.

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

The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit grew to $44.4 billion in January from a revised $38.1 billion in December. December’s deficit was the lowest level since January 2010, so it might have been expected that the deficit in January would stabilize somewhat.

The consensus estimate was for a deficit of $42.6 billion, making the actual number slightly higher than what was expected. Goods exports dropped from $132.8 billion to $130.8 billion and goods imports rose from $188.9 billion to $192.5 billion.

Much of the shift in the goods trade was the result of changes in petroleum costs. The non-petroleum trade balance was not significantly different in January ($41.3 billion) than it was in December ($41.5 billion). Meanwhile, the price of West Texas intermediate crude was $88.25 a barrel in December, rising to $94.69 in January (and $95.32 in February). The result was an increased cost in petroleum imports, up from $14.9 billion to $16.0 billion. At the same time, petroleum exports dropped from $6.5 billion to $5.4 billion. This caused the petroleum trade balance to increase from $8.3 billion to $10.6 billion. Note that this brings it back to where it was in November, making December’s petroleum balance a bit of an anomaly.

The largest decline in goods exports stemmed from industrial supplies and materials, which declined by $2.6 billion in January. Separating out crude oil, fuel oil, and petroleum products from the industrial supplies numbers, this would have declined by $700 million. Similarly, imports of industrial supplies and materials rose $4.0 billion, with almost $3.7 million of that figure stemming from petroleum.

Given the extent to which the trade balance fell in December, the change in January is more dramatic than it is in reality. As noted above, the bulk of the shift was due to higher petroleum costs. Non-petroleum exports and imports were not dramatically different than they were in December.

We have begun to see some signs of improvement in many of our largest trading partners, with the major exception of the Eurozone as a whole. We need to see higher manufactured goods exports in 2013 than the reported 5.5 percent growth experienced in 2012.

Exports are critically important to creating manufacturing jobs. In January we failed to make progress on the goal of growing exports. Manufacturers are looking to policymakers in Washington move forward with a robust trade agenda that will help open more markets to U.S. manufactured goods exports. If we continue the rest of the year with slow export growth similar to January we won’t reach the goal of doubling exports.

Chad Moutray is chief economist, National Association of Manufacturers.

This morning on Capitol Hill the National Association of Manufacturers (NAM) hosted a Shopfloor event to provide Congressional staff with additional information on the importance of the miscellaneous tariff bill (MTB). The current MTB expired at the end of 2012 and manufacturers have faced higher tariffs on products critical to their operations that are not available here in the United States.

The participants in today’s Shopfloor event included Linda Dempsey, vice president of international economic affairs for the NAM; Jessica Lemos, director of international trade policy; House Ways and Means Committee Chairman Dave Camp, Senator Bob Casey; Ron Eva, global sourcing and contracting manager for BASF Corporation and Ed McAssey, COO of Lasko Products, Inc.

Chairman Camp and Sen. Casey both discussed the importance of passing a bill as soon as possible. The MTB has bicameral and bipartisan support and helps support and create jobs.

Lasko Products produces desktop and oscillating fans at facilities in Pennsylvania, Tennessee and Texas and they employee 900 people. Mr. McAssey discussed how important the MTB is to the competitiveness of the company. Without the MTB they will see costs rise, making it more expensive to manufacture fans, putting jobs at risk. The failure to move an MTB will also resonate throughout the supply chain for manufacturers like Lasko, impacting even more jobs.

Mr. Eva from BASF talked about the importance of the MTB to help maintain competitiveness in markets such as automotive, printing, packaging, telecommunications and agriculture. BASF has more than 100 facilities in 31 states in the United States and employ more than 15,000 people. The global market is becoming increasingly more competitive and the MTB helps BASF better compete against this growing competition.

Following the Shopfloor event dozens of manufacturers met with members of Congress and staff in the House and Senate to drive home the importance of moving an MTB as soon as possible. “There is a lot of talk about growing manufacturing jobs and this is an easy step Congress can take to do just that,” said the NAM’s Jessica Lemos. With manufacturers already facing a 20 percent cost disadvantage compared to our major trading partners it’s important Congress gives manufacturers the tools they need to compete.

Automobile manufacturer Toyota has announced earlier today that the company will begin exporting the Venza model, which are assembled in the United States, to Russia and the Ukraine in 2013. This is positive news as manufacturers continue to work to find new export markets for products manufactured in the U.S.

The passage of Permanent Normal Trade Relations (PNTR) with Russia late last year was a big step in enabling manufacturers like Toyota to export to the growing and large Russian market. This legislation helps put manufacturers in the U.S. on a level playing field to better compete and sell goods in Russia.

Toyota expects to export about 5,000 Venza vehicles to Russia and the Ukraine this year. The cars are manufactured at Toyota’s Georgetown, Kentucky plant which employees approximately 6,600 employees.

Market opening agreements help manufacturers grow and create more jobs here in the U.S. Nearly 95 percent of the world’s consumer are outside of the U.S. We have to do more to make it easier for manufacturers in the U.S. to reach new markets which will allow them to prosper and flourish.

Yesterday the Administration announced their enhanced strategy to improve protection of trade secrets globally. The Administration Strategy on Mitigating the Theft of U.S. Trade Secrets consists of five pillars: International Engagement, Voluntary Best Practices by Companies, Increased Law Enforcement Domestically, Legislation, and Public Awareness.

Manufacturers continue to face a number of substantial challenges in the global market, including persistently weak economies, and a growing number of trade barriers across the globe – both in the form of tariff and non-tariff barriers. One of the most concerning challenges facing manufactures in the United States is insufficient protection and enforcement of intellectual property (IP) rights abroad. As described in the NAM’s recent submission to USTR on their Special 301 Review, many of our trading partners fail to provide adequate protection of IP rights, including trade secrets.

From biotech and food and beverage and fragrance producers to information technology and medical device makers, manufacturers across numerous types of industries in the United States rely heavily on strong trade secret protection to ensure their global competitiveness.  While the United States has relatively strong protections domestically, manufacturers are facing new and increasing challenges globally, including limited protections or inadequate enforcement, cyber-espionage and theft, and government regulations and practices requiring unnecessary disclosure of confidential business information.

Furthermore, government failure to prevent or deter theft of trade secrets, as well as failure to enforce trade secret protections remain huge challenges to manufacturers who rely on valuable trade secrets in order to continue innovating and growing in the global market.  Many of these government practices or failures are replicated in broader regulatory schemes and may come in the form of indigenous innovation or other localization barriers to trade, non-transparent and discriminatory standards development, non-scientific sanitary and phytosanitary measures, time-consuming and cumbersome government approval processes, and duplicative and unnecessary conformity assessments.

For these reasons, manufacturers welcome initiatives aimed at combating these unfair and illegal practices and look forward to collaborating with the Administration in their efforts to strengthen the international protection and enforcement of IP rights and trade secrets.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

Manufacturers welcome the President’s announcement during last night’s State of the Union address that the United States and European Union will launch formal trade agreement negotiations. We are pleased with the release of the U.S.-EU High Level Working Group’s (HLWG) final report, which calls for “a comprehensive agreement that addresses a broad range of bilateral trade and investment issues, including regulatory issues, and contributes to the development of global rules…”

The NAM has long supported the launch of formal trade talks between the United States and the EU, and previously submitted these comments to the OMB. Manufacturers will continue advocating for negotiations that result in the elimination of tariff and non-tariff barriers to trade, cutting the cost of doing business across the Atlantic, and increasing economic growth and employment in both the United States and EU.

The United States and the EU already have the world’s largest commercial relationship but major opportunities for increased trade, investment and cooperation remain. A trade-liberalizing agreement could demonstrate the strong leadership of the United States and the EU to the rest of the world and put both our economies in a stronger position in the global marketplace. Ultimately, this agreement can establish the real parameters of 21^st century trade – addressing barriers to global supply chains and worldwide investment.

A key objective for the NAM in U.S.-EU negotiations is promoting regulatory cooperation and coordination in order to remove technical barriers to trade and reduce unnecessary divergence between EU and U.S. regulations. Eliminating redundancies and inconsistencies in regulations, standards, and conformity assessment and certification procedures will concretely lower the costs of doing business for manufacturers on both sides of the Atlantic, and create new market opportunities, thereby enhancing U.S. and EU competitiveness around the world. Such barriers not only limit market access and consumer choice, they substantially increase costs for U.S. and EU manufacturers, undermining their global competitiveness. A U.S.-EU agreement should eliminate duplicative and redundant technical regulations, standards and conformity assessment procedures.

It is vital that U.S. and EU negotiators aim to promote compatibility with respect to standards, regulations and requirements in order to improve efficiency and remove barriers to trade and investment across the Atlantic. A final agreement must result in reduced regulatory costs, the elimination of tariffs, and mutual economic benefits and job creation for both economies. The benefits of such an agreement would be substantial for manufacturers both in the United States and the EU.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

The overall 2012 U.S. trade data were released this morning by the Commerce Department, and the news was disappointing. While there was a decline in the overall trade deficit, another key indicator – exports – showed anemic growth.

U.S. goods exports in 2012 grew by only $66.7 billion, less than half the value of export growth between 2010 and 2011. This 4.9 percent increase in exports is far off the 15 percent rate of increase necessary for the United States to double exports by 2015 and create much-needed new economic opportunities for our manufacturers around the United States.

While global economic slowing has, no doubt, played a major role in these limited export gains, policymakers in Washington, D.C., should heed the call to action that these numbers represent.

With persistent global economic challenges expected throughout this year, the Administration and Congress must develop a greater sense of urgency in the effort to expand trade and achieve the doubling of U.S. exports by 2014. 

Exports are critical to manufacturers in the United States and more substantial export growth is vital to retaining and creating jobs and economic grow domestically.  (continue reading…)