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…)

Here is the summary for this month’s Global Manufacturing Economic Update:

The new year has begun with some stronger economic data worldwide. While persistent challenges remain—most notably in Europe, but also some lingering fiscal worries in the United States—the overriding trend has been for some modest gains in new orders, production and hiring in a number of key markets for U.S.-manufactured goods. Seven of the top 10 export markets have economies that are expanding, and there were signs that the pace of the contraction in Europe and Japan eased a little. The Purchasing Managers’ Index (PMI) for the Eurozone rose from 46.1 in December to 47.9 in January. The largest improvements in manufacturing, however, were in Asia, where the pace of industrial production has picked up some steam in the past few months. This news spreads beyond China and into other parts of Asia as well.

Our largest trading partners are Canada and Mexico. Much like the United States, Canada’s economy appears to have stalled of late. This is not surprising given the closeness of our two nations in terms of commerce. U.S. frustrations with the fiscal cliff and upcoming federal budgetary battles tend to resonate beyond our borders, with the effects most felt in Canada. Real GDP is expected to grow around 2 percent this year in Canada, mirroring the forecasts for the United States and essentially repeating last year’s rate. Reflecting these trends, Canada’s PMI suggested very slow growth in January, unchanged from December. Mexico’s economy, meanwhile, decelerated throughout much of the second half of 2012, both leading up to and after its presidential elections. Some of the slowdown involved a wait-and-see approach as business leaders assessed the impact of possible new policies coming from the new presidential administration. Industrial production and PMI values tend to reflect this easing, but Mexican real GDP is still expected to grow 3.8 percent in 2013, which is a solid number.

Even with the progress in foreign markets, the most recent international trade figures were a bit of a surprise. The U.S. trade deficit declined sharply from $48.6 billion in November to $38.5 billion in December. Changes in the petroleum balance partially contributed to the decline, but in general, it was a healthy increase in goods exports corresponding with a decrease in goods imports. For the year as a whole, U.S.-manufactured goods exports rose 4.9 percent in 2012 at the non-seasonally adjusted rate, well below the 15 percent rate necessary for the United States to double exports by 2015. While we were on pace for that in 2011, a number of headwinds globally—including a recession in Europe and slowdowns elsewhere—eased the growth of new export sales significantly in 2012, frustrating manufacturers in the United States. Perhaps the improvements noted in this document more recently will bode well for better export figures in 2013.

Next week, we will be closely following industrial production and GDP releases worldwide. Provisional GDP in the Eurozone is expected to show continental output shrinking around 0.3 percent, with data from a number of member countries reflecting weaker conditions as well. Similarly, Eurozone industrial production is forecasted to fall 1.4 percent. Outside of Europe, China will release its trade figures at the beginning of the week, and if recent surveys are accurate, its exports should be improving. In the United States, the Federal Reserve Board will unveil its latest industrial production figures, with an expected slight gain in January.

Chad Moutray is the chief economist, National Association of Manufacturers.

In recent years, manufacturers have witnessed a growing and worrisome trend among our trading partners to impose localization measures designed to protect, favor, or stimulate domestic industries and technologies at the expense of imported goods or services. These localization barriers to trade (LBTs) differ in two ways from prior measures favoring domestic goods or services.  

First, they are more complex and sophisticated; for example, some LBTs now require the localization of intellectual property and servers for data storage.  Second, they are more expansive in that major LBTs were at one point associated mostly with China, but now are cropping up in countries all over the world, distorting markets and undermining business opportunities for manufacturers in the United States.

Manufacturers welcome the U.S. government’s work to develop and execute a more robust approach to address these growing market access challenges, including the recent announcement of the new interagency Task Force on Localization Barriers to Trade. A coordinated approach within the U.S. government to combating LBTs with other like-minded governments is vital to push back effectively on these anti-competitive practices, including using multilateral venues like the World Trade Organization (WTO) and the Asia-Pacific Economic Cooperation (APEC) forum, as well as through the Trans-Pacific Partnership and investment treaty negotiations.  (continue reading…)

As the 112th Congress came to a close in early January they failed to pass a new miscellaneous tariff bill (MTB) package that would prevent taxes from increasing on manufacturers in the United States.  The MTB provides tariff relief to manufacturers on critical inputs that are not available in the United States, helping manufacturers better compete and create jobs.

Exxel sleeeping bag inspector examining a bag on the conveyor belt.

Exxel Outdoors is a manufacturer that would benefit from a new MTB package. Exxel makes outdoor products such as sleeping bags, tents and hunting and fishing apparel. They are the only company that produces mass-market sleeping bags domestically, at their factory in Haleyville, Alabama. Exxel Alabama manufacturers over two million family-style sleeping bags annually.

Exxel’s sleeping bag production requires the use of materials and inputs that aren’t available domestically. The MTB would help Exxel lower costs, enabling the company to better compete against growing global competition.

“We depend on raw materials that just cannot be sourced here in the U.S. to manufacture our sleeping bags domestically,” said Harry Kazazian, founder and CEO of Exxel Outdoors. “We have approximately 100 employees at our Haleyville facility, and we have plans to expand our operations and add more jobs here.  Passage of the MTB would help us keep costs down, allowing us to be more competitive with other countries and to expand faster.”

Kazazian is hopeful that Congress will act as quickly as possible to pass the MTB to help manufacturers create jobs.  Exxel faces competition from all over the world, and is already 20 percent more expensive to manufacture in the United States compared to our largest trading partners. The MTB would help to bring those costs to manufacture in the U.S. down.

Kazazian stated, “We need Congress to act expeditiously to help create American manufacturing jobs at a critical time for our economy.”

Manufacturers applaud Tuesday’s announcement by the United States Trade Representative (USTR) that the Administration plans to join negotiations on an International Services Agreement (ISA). We recognize the importance of promoting and liberalizing international trade in services given the high degree to which manufacturers rely on a wide range of services.

Improved services trade results in lower costs for manufacturing, as well as improved productivity, competitiveness, product quality and safety.  International services trade also enables manufactures to comply with regulatory standards, thereby increasing their sales in foreign markets.

Manufacturers depend on a broad array of services, including certification and testing; financial and business, such as investment, accounting, and legal expertise; energy and environmental; engineering and design; information and communications technology; maintenance services, including the installation and servicing of products; retail and distribution; and, transportation and logistics.

Given the importance of services in so many areas to help grow manufacturers’ opportunities overseas, the NAM strongly supports the liberalization of services trade in multilateral, plurilateral, and bilateral negotiations. An ISA would boost trade in services, improving manufacturers’ competitiveness in the global market, expanding U.S. exports, and reducing manufacturers’ costs. The NAM looks forward to monitoring negotiators’ progress on ISA talks to ensure that they provide gains for manufacturers, too.

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

The National Association of Manufacturers (NAM) supports open and expanded trade and opposes efforts to limit manufacturers’ ability to expand exports overseas. Exports have been and continue to be a critical source of growth and opportunity for manufacturers throughout the United States, and liquefied natural gas (LNG) exports are no exception.  A series of recent studies by energy research firm IHS CERA show that natural gas development has already led to the creation of more than 1 million jobs, and continued development of unconventional energy resources could create millions more.

Proposals that seek to limit LNG or coal or any other product would have far-reaching negative effects on the United States and should be rejected. Such restrictions limit economic opportunities and stifle job growth rather than provide a source of increased economic growth.

Export growth has created and saved manufacturing jobs over the past few years, which were tough economically for the United States. Export growth is vital not just for businesses across-the-board that directly export, but also for the many manufacturers in the supply chain. 

From the President’s first State of the Union address, doubling U.S. exports has been a top goal, supported by both businesses and workers and both Republicans and Democrats. From its origins, the United States has been built on exports. In fact, Article I, Section 9 of the U.S. Constitution provides quite explicitly that “no Tax or Duty shall be laid on Articles exported from any State,” evincing a strong disinclination to limit exports of any product. (continue reading…)

Here is the summary for this month’s Global Manufacturing Economic Update:

While much of the focus of late has been on the fiscal cliff, manufacturers have also been worried about slowing global sales. Business leaders have said that increasing their exports has been a struggle. Yet, despite these headwinds, year-to-date growth in U.S.-manufactured goods has risen almost 5 percent. The good news is that this figure represents positive growth, but it also shows significant easing from the same time period last year. Much of the deceleration in exports corresponded with challenging economic environments in a number of countries, going beyond Europe’s struggles to include Brazil, China, Japan and elsewhere.

The latest data indicate that the global economy appears to be strengthening, which should bode well for improving international trade this year. Europe and Japan are exceptions as both continue to experience significant weaknesses in their respective markets. The purchasing managers’ indices (PMIs) for both remain negative, with new orders, production and employment contracting. Political and economic uncertainties permeate these data, with manufacturers uncertain about what  the future holds. Elsewhere, the trends are more positive. Seven of the top 10 markets for U.S.-manufactured goods have economies that are growing—a definite improvement from three months ago when just four of them did. As a result, we are seeing pickups in manufacturing activity and business confidence. This does not mean that these economies are growing strongly, but it does suggest that global trends have stabilized and are moving in the right direction.

Ironically, the political battles over U.S. fiscal policy had implications beyond our borders, with concerns about a possible economic downturn a top concern among our trading partners. This was especially the case for Canada, our largest trading partner, but other nations fretted about our fiscal situation, as well. With a deal to avert the fiscal cliff, at least some of these anxieties will go away for now. However, there are still larger concerns about the long-term fiscal health of the United States, and possible battles over raising the debt ceiling will keep these issues front and center. Nonetheless, the United States is now poised for modest growth in 2013, with rising exports a major contributor both to our macroeconomic picture and to manufacturers’ business plans.

Next week, we will receive data on November’s U.S. trade balance. The previous month saw a widening of the trade deficit, with both exports and imports lower. Hopefully, a slowly improving global economy will help to turn that around. Globally, we will get the latest industrial production and retail sales data from a number of European countries, with the European Central Bank meeting to discuss its monetary policy plans for the first time in 2013. Trade data will also be released for China, as well as indices for consumer and producer prices. The larger number to watch from the Chinese perspective will be real GDP growth, which will be out on Wednesday, January 16, and is expected to show an increase of 7.7 percent.

Chad Moutray is the chief economist, National Association of Manufacturers.

The 112^th Congress has officially ended and the 113th has begun. It is deeply disappointing that Congress failed to act on bipartisan jobs legislation– the Miscellaneous Tariff Bill (MTB). As a result, duty suspensions on over 600 products have lapsed, meaning costs have gone up for companies that manufacture in the United States. Another roughly 700 new bill requests were not considered; as a result, manufacturers did not see the costs of their inputs reduced.

It is already 20 percent more expensive to manufacture in the United States than in the markets of our trading partners. The failure of Congress to pass the MTB by December 31, 2012 means higher costs for manufacturers throughout the United States, putting them at a competitive disadvantage in the global marketplace. Manufacturers simply cannot afford this tax increase; they are already facing numerous challenges in a difficult global economy. This legislation would have cut their costs, enabling them to retain and grow critical manufacturing jobs here in the United States.

The MTB legislation has enjoyed bipartisan support in both chambers of Congress for decades, and the 112th Congress had the opportunity to pass this jobs-supporting, competitiveness-enhancing bill, but failed to do so. Manufacturers urge the 113^th Congress to pass this critical, job-supporting bill as quickly as possible and to ensure full retroactive relief on these tariff-cutting measures.

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