There’s lots of news from the first day of the convention, but manufacturers are more concerned with a major omission by the Republican Party: a statement supporting the Trans-Pacific Partnership (TPP). That’s one line worth repeating.
Manufacturers in the United States were happy to post production increases in June, but according to NAM Chief Economist Chad Moutray, “Manufacturing activity remains quite challenged.” Weak export numbers have contributed to these challenges as global demand remains underwhelming and competition from overseas continues to increase. Indeed, U.S. manufacturing exports are down $31 million in the first quarter of 2016 compared to two years ago.
Manufacturers need solutions to increase sales opportunities. Ninety-five percent of the world’s population and hundreds of millions of new middle-class consumers are outside the United States. That’s why improving U.S. competitiveness on trade is a key part of the NAM’s “Competing to Win” agenda. Manufacturers’ timetable is based on the invoices they need to pay to keep shop floors running and payrolls they need to meet for millions of American workers.
While the Republican National Convention platform has embraced many policies for which the NAM has advocated, it is disappointing to see the lack of support for movement on critical free trade agreements, such as the TPP. Every day that goes by, manufacturers in the United States are falling behind our competitors that already have trade agreements excluding and, therefore, putting U.S. manufacturing at a competitive disadvantage. Just consider how the United States has lost market share to China in the five TPP countries with which the United States does not have trade agreements.
To grow U.S. manufacturing opportunities, it is critical that the TPP be embraced as a top priority and not be rejected as a political campaign promise. Without prioritizing this agreement, manufacturers in the United States will continue to lose globally. Of course, there is still work to do, and manufacturers call on both the Obama administration and Congress to roll up their sleeves and ensure that important and outstanding issues are addressed effectively and quickly so that the TPP is ready for consideration this fall, most likely during the post-election (lame-duck) session.
And for those reading the platform or listening to campaign rhetoric, here’s some “Truth on the Trail”: Don’t accept the myths on trade. America’s existing free trade market network with 20 countries has helped drive the substantial increase in manufacturing in the United States. Consider that manufacturers in the United States have nearly doubled production since 1993, the year before the North American Free Trade Agreement (NAFTA) came into force, spurred in significant part by a substantial increase in U.S. exports. Taken together, America’s 20 existing trade agreement partners buy nearly half (48.2 percent) of all U.S.-manufactured goods exports, while they only account for just 6 percent of the world’s consumers and less than 10 percent of the global economy. For those concerned about trade deficits, the United States has an overall manufacturing trade surplus with its FTA partners.
It’s time for economic reality and facts to shake up the misguided political rhetoric.