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…)

The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit fell from $48.6 billion in November to $38.5 billion in December. This was the lowest deficit since January 2010, and it resulted from an uptick in goods exports and corresponding decrease in goods imports. Goods exports rose from $129.3 billion to $132.6 billion, and goods imports dropped from $194.9 billion to $188.8 billion. In December we also saw the surplus in trade services increase by $669 million to $17.7 billion.

Petroleum was part of the story, but not all of it. The petroleum trade balance declined from $23.4 billion to $18.7 billion. Petroleum exports were up by $926 million to $11.6 billion, and imports declined by $3.7 billion to $30.3 billion. Illustrating just how much this figure has changed, the petroleum trade balance was $29.9 billion in January 2012, suggesting a drop of over $11 billion throughout the year. The price of West Texas intermediate crude also dropped during that time frame from $100.24 per barrel in January to $88.25 a barrel in December. (It has since risen, averaging $94.69 in January 2013.)

Outside of oil, there were some positives in the goods markets. Most notably, the largest change occurred within industrial supplies and materials, with exports up $3.8 billion and imports down $4.2 billion. Outside of industrial supplies, the largest net winner was foods, feeds, and beverages (up $96 million). There were fewer net exports among non-automotive capital goods (down $431 million), automotive vehicles and parts (down $292 million), and consumer goods (down $240 million).

On the goods imports side of the ledger, there were declines across-the-board in all major categories except consumer goods, which eked out a gain of $43 million. Sectors with reduced imports – beyond industrial supplies – included automotive vehicles and parts (down $944 million), non-automotive capital goods (down $264 million), and foods, feeds, and beverages (down $75 million). (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.

House Armed Services Committee Chairman Buck McKeon has filed the Conference Report for the FY2013 National Defense Authorization Act (H.R. 4310). Included in the NDAA Conference Report is a provision returning authority to determine appropriate export controls for satellites to the President.

This provision will benefit U.S. manufacturers of satellites—as well as their suppliers and the R&D pipeline—by rationalizing export controls and expanding opportunities for foreign sales. The full text of H. Rept. 112-705 is available here, and the Managers’ statement is available here. The satellite provisions can be found in Title XII (Matters Relating to Foreign Nations), Subtitle E.

The NAM has long advocated for this statutory fix, dating back to the 2009 House Foreign Affairs Subcommittee hearing on “Export Controls on Satellite Technology” and support for the 2008 CSIS report on the health of the industrial base. Earlier this year, the NAM co-signed a letter to Senate leadership supporting a satellite export control bill introduced by Senator Bennet (D-CO) and actively supported the Safeguarding United States Satellite Leadership and Security Act of 2011 (H.R. 3288) introduced by Reps. Howard Berman (D-CA) and Don Manzullo (R-IL). (continue reading…)

The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit widened from $40.3 billion in September to $42.2 billion in October. Note that this brings us back to essentially the level of August, erasing the narrowing of the deficit that occurred in September.

Both goods exports and import levels were lower in October. Goods exports dropped from $133.9 billion to $127.5 billion, and goods imports decreased from $191.3 billion to $186.6 billion. Because exports fell by more than imports, the trade deficit widened. We also saw a minimal decline in service sector exports and imports.

A fair share of the monthly change in exports and imports could be attributed to the petroleum market. The petroleum trade balance widened from $21.6 billion to $24.6 billion for the month, as exports dropped by $661 million and imports rose by $2.4 billion. This was largely the result of higher costs. The average petroleum trade balance for 2012 year-to-date was $25.1 billion. October’s figure still represents an improvement from earlier in the year. January’s petroleum trade balance was $30.0 billion.

Looking specifically at goods exports, they were lower across-the-board hitting all of the major categories. These included industrial supplies and materials (down $2.9 billion), non-automotive capital goods (down $1.9 billion), foods, feeds, and beverages (down $1.4 billion), automotive vehicles and parts (down $370 million), and consumer goods (down $73 million). But, as noted earlier, goods imports were also down. The largest decliner among goods imports was the consumer goods sector, down $3.7 billion.

The good news is manufactured goods exports were up $654 million between September and October using non-seasonally adjusted data. This indicates that manufacturers continue to find opportunities even with so many headwinds globally. Indeed, year-to-date manufactured goods exports are up 4.7 percent over what they were during the same point in 2011. While export growth has slowed, it is still a positive number. Our export gains were with most of our major trading partners, with the obvious exception of the Eurozone which was essentially flat.

Manufacturers in the U.S. continue to find new markets for products despite a challenging economic environment domestically and in many other nations throughout the world. Of course, those headwinds have also had an impact, easing the pace of growth of exports and imports in past few months.

Manufacturers have become more pessimistic of late, as noted in last week’s NAM/IndustryWeek survey. The downturn in their outlook can be explained by the fiscal cliff, but also another key factor has been slowing sales – something that tends to move purchasing managers’ indices and other sentiment surveys. Until Washington begins to create some certainty with pro-growth policies, we will continue to see signs of slowing growth which manufacturers’ ability to create jobs and export.   

Chad Moutray is chief economist, National Association of Manufacturers.

It is good news for manufacturers that the Office Clerical Unit Local 63 (OCU) and the marine terminal employers at the ports of Los Angeles and Long Beach reached an agreement this week that ended an eight-day work stoppage.

However, more trouble looms on the other side of the country at the East and Gulf Coast Ports as the International Longshoremen’s Association (ILA) continues its contentious negotiations with the United States Maritime Alliance (USMX). While these talks are being held under the auspices of the Federal Mediation and Conciliation Service, the outlook does not appear to be positive.

The longshore labor unions, especially on the West Coast, have used work stoppage and slowdown tactics successfully during contract talks to make gains in their contracts, ranging from as far back as the 1971 International Longhshore Warehouse Union (ILWU) strike that Nixon ended after 134 days, to this week’s events with the OCU.  In 2002, the ILWU lockout came at a cost of $1 billion a day to the U.S. economy and eventually delivered to the union what one leader described as “the richest contract we’ve ever negotiated.”   

The maritime industry has often noted the difference of style and culture between ILA and the ILWU, but Mr. Daggett, the current President of the ILA, has made strong statements and new commitments to maritime labor solidarity that show a willingness to be more pugnacious. The success of the ILA in negotiating its contracts with management going back to 1977 without any interruption is likely to be challenged in the next few weeks.

Just as with the West Coast ports, manufacturers need the East Coast ports to be open for business.  With a weak economy and a fiscal cliff on the horizon, manufacturers need the ports to ship and receive critical commodities and finished products in order to keep businesses running and people employed.

The ripple effect of a strike or slow-down would lead to curtailed economic growth, lost jobs and higher prices on goods for all Americans. Manufacturers have faith in the federal mediation process and hope when the parties sit down at the table next week, they keep this in the forefront of their minds. Also, today a group of industry groups, including the NAM, sent a letter to both the ILA and USMA to continue negotiating with the goal of finalizing an agreement without disrubtions to the supply chain.

Robyn Boerstling is director of transportation and infrastructure policy, National Association of Manufacturers.

Earlier this afternoon, the Senate passed a bill with overwhelming bipartisan support to establish Permanent Normal Trade Relations (PNTR) with Russia. The Russia and Moldova Jackson-Vanik Repeal Act of 2012 (H.R. 6156), which passed by a vote of 92-4, will now head to President Obama for signing.

The NAM, after several months of extensive outreach on Capitol Hill, was instrumental in convincing Congress to pass the legislation. Russia PNTR will provide a tremendous opportunity for U.S.-manufactured goods exports and ensure manufacturers in the United States operate on a level playing field with our global competitors. The NAM sent a Key Vote letter to senators yesterday, urging their support. The House passed the same bill on November 16.

On August 22, Russia officially joined the World Trade Organization (WTO) and made commitments on increased transparency, lower tariffs and binding dispute resolution. Russia is the ninth largest economy in the world, making it a key emerging market for U.S.-manufactured goods exports. Manufacturers have urged the Senate to pass Russia PNTR, which will grow U.S. exports and secure market access to help create jobs. Click here for more information on Russia PNTR or read testimonials from small and medium manufacturers on the importance of establishing PNTR with Russia.

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

Congress has a number of important issues it needs to address in a short amount of time.  While the Fiscal Cliff is the focal point of this lame duck session, another critical piece of legislation is awaiting consideration – the Miscellaneous Tariff Bill (MTB).   This vital package is a competitiveness bill that has been supporting and growing jobs for thirty years, and it is particularly important right now, given the major challenges manufacturers are facing in a difficult global economy.

The MTB reduces or eliminates import duties on essential manufacturing inputs and products that are not produced in the United States.  Manufacturers rely on these products for their manufacturing processes and can’t make their products without them.  The duty suspensions currently in place will expire on December 31st and if Congress fails to act it will increase costs on job creators, damaging their competitiveness in a challenging global economy and threatening manufacturing jobs in this country.

It is 20 percent more expensive to manufacture in the United States than to manufacture in the home markets of our trading partners.  Failure to pass the MTB will increase costs for manufacturers here, putting manufacturers in the United States at a disadvantage.  Manufacturers simply cannot afford another tax increase or more uncertainty. The MTB legislation has enjoyed bipartisan support in both chambers of Congress for decades, and now Congress has the opportunity to pass this jobs-supporting, competitiveness-enhancing bill before the end of the year.

Of all the challenging issues facing Congress right now and with our economy showing signs of a slow recovery, the MTB should be seen for what is – a jobs bill. Manufacturers all over the United States urge Congress to identify a path to passage for this critical legislation.  We simply can’t afford not to act on this bill.

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