News release, “AEM Releases Annual Agricultural Equipment Manufacturing ‘Outlook’“:

MILWAUKEE, Dec. 16, 2010 /PRNewswire-USNewswire/ — In the just-released agriculture equipment “business outlook” survey of the Association of Equipment Manufacturers (AEM):

• Agricultural machinery manufacturers predict overall U.S. business to close out 2010 with 2.4-percent growth, then gain 3.7 percent in 2011 and 2.4 percent in 2012, followed by 2013 growth of 3.0 percent.
• Canadian business overall is expected to be 4.1 percent higher in 2010 than the previous year, but then flatten out, down 0.5 percent in 2011, up 1.0 percent in 2012 and up 1.5 percent in 2013.
• Industry business to the rest of the world is expected to increase the most through 2013 – up 2.8 percent in 2010, followed by 7.6 percent growth in 2011 and gains of 6.9 percent in 2012 and 5.9 percent in 2013.

The survey asked respondents to rank how several factors would influence sales. Positive commodity prices were a key factor as well as strong export sales. Credit availability to finance purchases remains a concern as are steel prices.

“While there has been a recession, agriculture has been fortunate to have powered through, showing positive signs in most areas. I emphasize most, because some have struggled along with other economic sectors. Those serving consumers more directly and those in the dairy industry coping with volatile milk prices have certainly faced difficulties. But for the most part, agriculture has remained in good shape,” stated AEM’s Charlie O’Brien, vice president, agricultural sector.

And you know what would help? Free-trade agreements:

O’Brien emphasized that export sales have been a bright spot for U.S. companies, helping to create and support jobs for American workers. “Especially in the current economy, Congress needs to help our farmers and manufacturers by acting on export agreements such as the ones with Korea, Colombia and Panama,” he stated.

The latest Commerce Department trade data show that U.S. exports of manufactured goods are up 20.5 percent from the same period last year, fueled by rapid growth to some of our major markets. What is the fastest growing major market for U.S. manufactured goods exports so far this year? Just about everyone would say, “China.” But that’s the wrong answer.

U.S. manufactured goods exports to China this year are up as very strong 35 percent. But, China takes second place to Korea, where our exports are up a phenomenal 40 percent – putting Korea as the No. 1 fastest-growing major export market for U.S. manufacturers so far this year. Korean data corroborate that, showing that manufactured goods imports from the United States are growing faster than from any other major supplier.

U.S. manufacturers are racking up that growth despite Korea’s nearly 8 percent tariff and other trade hurdles. That shows U.S.-made manufactured goods are competitive and in hot demand in Korea. Just think how rapidly our exports to Korea could grow once Congress passes President Obama’s excellent U.S.–Korea Trade Promotion Agreement that would eliminate Korea’s tariffs on our manufactured goods and give us a big advantage over our competitors.

It is time for the Administration and the Congress to move as quickly as possible to implement all three pending trade agreements — with Colombia, Korea, and Panama. Every passing week costs us exports, competitiveness, and jobs.

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

It was troubling to see U.S. Trade Representative Ron Kirk’s comments in The Dallas Morning News today on pending trade agreements. According to the article, “Trade pacts could boost Texas, but other states wary,” Ambassador Kirk does not want to rush all of the pending agreements to Congress because of American public opinion on trade and the unemployment rate in the United States.

These comments are alarming as trade agreements not only help create jobs but they also contribute to economic growth. While it may be true many people are misinformed or unaware about the benefits of trade, that’s a reason to explain the facts, not to delay. America continues to stand on the sidelines while our competitors reach trade agreements with each other.

The U.S. Department of Commerce’s data show that the U.S. trade agreement partners have never been a major factor in our U.S. trade deficit and have actually given us a trade surplus for the last three years in manufactured goods.

Further, trade agreements reduce foreign barriers or the cost of doing business for U.S. companies. As a result, these companies are able to hire more employees and make more investments. The United States is already a wide open market, with very few barriers, while others are not. When a foreign country is willing to enter into a trade agreement with us, we are the winner: Our barriers to their imports fall only a little, while their barriers to our exports fall a lot.

The article correctly reports how important the growth of exports to our trade partners has been for Texas. But then it follows with this erroneous claim: “But what’s good for Texas is not necessarily good for states like Michigan, Wisconsin and North Carolina, which have lost millions of manufacturing jobs because of America’s great appetite for imports.”

To set the record straight, two-thirds of Michigan’s manufactured goods exports go to U.S. trade agreement partners that have eliminated barriers to our exports, and over the last five years Michigan employment related to manufactured goods exports grew 26 percent. In comparison, other private employment in the state fell by 10 percent.

The story is similar for North Carolina, where more than 40 percent of its exports go to U.S. trade agreement partners, and employment related to manufactured goods exports grew 24 percent while other private sector employment grew only 5 percent. And Wisconsin? Half of its manufactured goods exports go to trade agreement partners, and employment related to manufactured goods exports grew 51 percent while other private employment fell 3 percent. State after state tells the same story.

Rather than hesitancy about moving forward with the pending trade agreements including Colombia and Panama as well as Korea, the Administration should move full speed ahead at educating the public with the truth about trade agreements and should hurry the agreements to Congress.

(continue reading…)

In speaking to the President’s Export Council on Thursday, President Obama provided a solid review of his National Export Initiative, announced early this year with the goal of doubling U.S. exports within five years. The President said:

What we all agree on is that we’ve got to rebuild our economy on a new and stronger foundation for growth. And part of that means getting back to doing what America has always been known for doing -– what our workers and our businesses have always done best –- and that’s making great products and selling them around the world.

The modernizing of the U.S. system of export controls the President announced Thursday will certainly help achieve that goal.

President Obama also highlighted his Administration’s recent, notable accomplishment, completion of the renegotiated free trade agreement with South Korea.

Alas, the President failed to mention two other pending FTAs, both less controversial than Korea: Colombia and Panama. The NAM’s trade mavens have long believed the votes have been there in Congress to enact the two free trade pacts, which would lower tariffs on U.S. exports to those countries. Big Labor’s dead enders will reflexively oppose enactment, but with Korea, the Administration has (finally) shown itself willing to tell the unions no.

If the President wants to elevate the goal of U.S. companies making great products and selling them around the world, then he should make a public pronouncement: “I call on the new Congress to quickly enact the free trade agreements with Colombia and Panama.”

Editors at National Review Online muster good arguments for enactment of the two agreements, “One Down, Two to Go“: (continue reading…)

This morning, in a signing witnessed by Secretary of Commerce Gary Locke and Panamanian Vice President Juan Carlos Varela, Copa, the Panamanian airline, signed a contract to purchase more than 20 Boeing 737-800 airliners equipped with General Electric engines. This deal, worth more than $2 billion, will support thousands of American jobs – not just Boeing and GE workers – but also jobs in their hundreds of Boeing’s and GE’s suppliers, many of whom are small or medium-size firms.

What this huge sale indicates is that the Panamanian market is important to U.S. manufacturing, and we want to see trade with Panama expand.  Among other things, Panama is planning upwards of $20 billion of infrastructure projects, including the world’s largest construction project – expanding the Panama Canal.  We certainly want to see American manufactured goods and American-supplied services employed in those projects.

But there’s a problem.  Our competitors, including Canada and the European Union, have signed Free Trade Agreements (FTAs) with Panama that will soon go into effect.  Those will allow their manufactured goods duty-free access to Panama, while American manufacturers will have to face import duties that can be as high as 15 percent.

The United States concluded a trade agreement with Panama three years ago, an agreement that would eliminate import duties on U.S.-made goods.  Most unfortunately, that agreement has languished, as opponents have said they are concerned about money-laundering and won’t agree to a Congressional vote until Panama signs a tax-exchange agreement with the United States.

Well, today’s second piece of goods news is that this afternoon, Treasury Secretary Geithner and Vice President Varela signed the Tax Information Exchange Information agreement. That agreement now removes the hurdle to sending the U.S.-Panama Trade Agreement to Congress for a vote that is unambiguously in the interest of manufacturing in America.

Let’s get on with it and beat the competition for a change!  We want more deals like today’s Boeing-GE deal with Panama.  And we want them with Colombia and Korea too.  Congress must get out of the business of blocking U.S. jobs and should get into the business of supporting U.S. manufacturers’ efforts to create jobs.

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

President Obama met with members of the House Trade Working Group at the White House yesterday to hear their concerns  the U.S.-Korea Free Trade Agreement (FTA). Meanwhile,  promising developments have occurred with the other two nations with which the United States has pending free trade agreements – Panama and Colombia.

Panama and the United States came to agreement on a Tax Information Exchange Agreement (TIEA), which is one of the outstanding issues that the Administration has indicated needed to be concluded before it would consider moving the U.S.-Panama FTA. Anything that can remove an impediment to a part of the stalled trade agenda is a very good thing.

Of course, over the last few months the business community’s focus has been squarely on the Administration’s discussions aimed at getting a final deal on the U.S.-Korea FTA. If those discussions over resolving the disputes over beef and autos are successful — and it is a shame they weren’t finalized in Seoul last week – that trade agreement could be sent to Congress early in 2011.  U.S. manufacturing exports to Korea are in the neighborhood of $25-30 billion annually over the last few years, and Korea has a manufacturing import sector worth $250 billion annually – so it’s a big deal.

During this same period, the Administration has been working closely with Panama, and with a successful TIEA, we could conceivably see (and we HOPE to see) movement on that trade agreement as well in 2011. Panama is engaged in the largest civil works project on earth right now (expanding the Panama Canal), and it would be fantastic for U.S. companies to be exporting duty-free the equipment, materials, engineering services and everything else this $5 billion project needs as soon as possible.

This leaves us with our last pending trade agreement – Colombia — and as the country’s new Ambassador Gabriel Silva recently told reporters, Colombia has been removed from the International Labor Organization’s watch list because of widespread improvements his government has made in controlling violence against labor activists. This goes to the heart of what the Administration and some Congressional Democrats have been asking for; Colombia is to be commended for its long commitment, under both previous President Uribe and current President Santos, in pushing for improvements. (continue reading…)

As I reported from Seoul, Korea last week, there are multiple reasons why passing the U.S.-Korea Free Trade Agreement (KORUS) (as soon as possible) is exactly what the U.S. manufacturing economy needs to jump-start domestic growth, employment and expansion. I’m beginning to feel a bit like Paul Revere, trying to warn Congress and the Administration that as far as our exports are concerned in Korea, “The British are coming, the British are coming!”

Except it’s not just the British but an entire European Union’s worth of manufacturing that is coming, duty free, to Korea next year. We’re not the only ones sounding an alarm, of course. It was good to see Ambassador Han Duk-soo, Korea’s plenipotentiary to the United States, make the same point in San Francisco earlier this week. What Ambassador Han is essentially saying is: America, it is within your power to remove all the barriers in my country and increase your exports and grow your economy.

The decision not to use that power is a unilateral one that the United States has had on hold for more than three years with Korea, Colombia and Panama. We are patently acting against our own best interests, and the Europeans and others are flooding in to take advantage of our absence.

Not to belabor a point that has been raised by international economists and trade policy analysts across the political spectrum: Cutting tariffs and non-tariff barriers in foreign markets through preferential trade agreements does not reduce or outsource American factory jobs, it creates more of them. How? Our market is open, with tariffs averaging 2.5 percent. Most other markets (developing as well as some developed) in the world have tariff and non-tariff barriers that are far higher. When we sign a FTA with a country, its barriers come down, and as a result, our exports go up, both in volume and value, and more than our imports from that country. (continue reading…)

President Obama addressed the President’s Export Council on Thursday, and his Export Promotion Cabinet released its report making recommendations on how to double exports in five, now four-and-a-half years. There doesn’t seem to be much new from the statements and goals the President made in his July 7th speech announcing the council.

The President’s language on the pending free trade agreements remains the same:

July 7, “We also want to deepen and broaden our relations with Panama and Colombia.  So we’re working to resolve outstanding issues with the free trade agreements with those key partners, and we’re focused on submitting them as soon as possible for congressional consideration.”

Sept. 16, “We’re also working to resolve outstanding issues with our free trade agreements with our key partners, like Korea, and to seek congressional approval as soon as possible.”

How much work has really been done to resolve those “outstanding issues?” And …

How soon is soon?

The Export Council comprises an impressive roster of business and economic leaders, people who really understand trade. Perhaps they can help the Administration move on to the action stage of the export initiative.

As the NAM’s Frank Vargo told Fox Radio, “There’s no way we can reach the goal of doubling exports without getting a lot more market access…” That means, among other steps, enacting the pending Free Trade Agreements with Colombia, Panama and Korea.

The National Association of Manufacturers has developed a comprehensive set of actions necessary to reach the goal of doubling exports, “Blueprint to Double Exports in Five Years.”

John Engler, President of the National Association of Manufacturers, commented after President Obama signed H.R. 4380, the Miscellaneous Tariff Bill, into law:

President Obama signs H.R. 4380, Miscellaneous Tariff Bill.

“Manufacturers are pleased that President Obama signed the Miscellaneous Tariff Bill into law today, which will provide a needed boost to both large and small companies. The NAM has been working relentlessly to educate Congress on the importance of this bill and how it will preserve and expand good American jobs. This legislation will also cut the costs of doing business in the United States and boost American manufacturing exports. In fact, studies show that these provisions can increase production by $4.6 billion and support almost 90,000 jobs.” 

President Obama greeted our attendees at the White House signing ceremony, Ryan Modlin and Doug Goudie, thanking them for the NAM’s efforts on behalf of the bill. Likewise, Mr. President. Thank you. 

• White House blog, “Another Step for American Manufacturing,” with video.
• Transcript of President’s remarks.
• Bloomberg, “Obama Signs Law to Suspend Duties on Imports of Products Not Made in U.S.“
• Washington Times, “Obama signs tariffs bill to aid manufacturers“
• Reuters, “Obama signs bill to ease U.S. manufacturers’ costs“

The Miscellaneous Tariff Bill extends the temporary reductions or elimination of tariffs on materials, chemicals and other items used in U.S. manufacturing but not available here in the United States. It’s traditionally a very popular bill that passes overwhelmingly when standing on its own. (Shopfloor, “Miscellaneous Tariff Bill, a Popular History.”) Still, we appreciate the extra attention the legislation received this year for sharpening the policy focus on the importance of trade and exports to reviving the U.S. economy, especially the manufacturing sector. (continue reading…)

President Obama will host a White House bill-signing ceremony at 2:50 p.m. today  to sign H.R. 4380, the United States Manufacturing Enhancement Act, more commonly known as the Miscellaneous Tariff Bill.

This bill reduces tariffs for materials and chemicals that are essential for U.S. manufacturing processes but are not made or otherwise available in the United States. As the National Association of  Manufacturers’ “Key Vote” letter summarized:

The MTB is one of the most important short-term actions Congress can take to preserve and expand good American jobs, cut the costs of doing business in the United States and boost American manufacturing exports. U.S. manufacturers large and small use the MTB’s tariff suspension provisions to obtain raw materials, proprietary inputs and other products that are not available in our nation.

Without the MTB, the cost of these companies’ products will inevitably increase, forcing them to pass higher costs on to consumers and making their products less competitive. These higher costs translate into lost jobs for American workers.

Passage of the bill was complicated this year by political disputes over the nature of “earmarks” in the House, but H.R. 4380 still passed handily, 378-43, on July 21. The legislation’s signing into law today is terrific news for manufacturers and America’s workers.

But it is just one piece of a pro-jobs, pro-growth agenda. Depicting the Miscellaneous Tariff Bill as the foundation of a trade or manufacturing strategy is overselling it. For one thing, the legislation is about continuing tariff reductions about specific products and materials coming into the United States. The bill has never been controversial before and if considered by itself always elicits overwhelming votes of support. (See accompanying post, “Miscellaneous Tariff Bill, a Popular History.”)

More importantly, the bill does not address the lowering of trade barriers to U.S. exports shipped to foreign markets. Ninety-five percent of the world’s consumers live outside the United States, and U.S.-based companies have to compete to sell goods and services to those billions of people. That’s why it’s essential to enact agreements to lower tariffs and other barriers to U.S. exports, pacts such as the pending Free Trade Agreements with Colombia, Panama and Korea, then the Trans-Pacific Partnership, and multilateral agreements like the Doha round of the WTO.

President Obama has set a goal of doubling U.S. exports within five years, an ambitious goal that will require action on numerous fronts. The NAM recently released its “Blueprint to Double Exports in Five Years to detail the many steps — including major policy action — that Congress and the Administration must take to achieve the worthy, jobs-creating goal.

The President can be expected to highlight manufacturing and trade at the bill signing ceremony this afternoon, and manufacturers are delighted the tariff reduction bill will become law. And after that ….more work to do.