Today we heard from President Obama about his plan to reorganize several federal agencies – many of which are critical to manufacturers and their ability to create and retain jobs.

Changes would include combining the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency into a single department in an effort to improve government efficiency and to help promote business. The key question in reviewing this proposal is will it help manufacturers compete, export, invest and create jobs?

Any changes that are considered must focus on improving intellectual property protection, opening markets for exports, improving market access, and more. Additionally, while manufacturers have done well in leaning their processes to improve their competitiveness and would vigorously support the federal government doing the same in this difficult debt and deficit environment, the agencies affected must continue to have the necessary resources to meet their missions.

If the streamlining and efficiency undertaken in this proposed combination of agencies will mean that manufacturers will have less intellectual property protection, for example, it would be a devastating mistake. If, on the other hand, this leaning process will mean doing more with less, it would be a great step forward.

As policymakers respond to the President’s proposals today, we are hopeful that the discussion centers on the key question for manufacturers – will they be better able to compete, export, invest and create jobs as a result? With a 20 percent cost disadvantage already, manufacturers will deeply care about the impact these proposals will have on their ability to compete.

Aric Newhouse is senior vice president for policy and government relations, National Association of Manufacturers.

It is no secret other countries are racing ahead with trade agreements while the U.S. stands idly by. There are 120 free trade agreements being negotiated around the world, and the U.S. is a party to just one.

As for pending trade pacts, the U.S. free trade agreements with Panama, Colombia and South Korea have languished for four years.  (But see this post from Monday for a dose of optimism.)

Those countries aren’t waiting for the U.S.  The Wall Street Journal reports today that Colombia is seeking to increase its trade ties with China.

Colombian lawmakers passed legislation they hope will open the floodgates of trade with China, where the government plans two high-level trade missions over the next three months, as a long-delayed U.S. trade deal with the South American nation stalls in Congress.

Colombia Trade Minister Sergio Díaz-Granados said Tuesday’s passage of the “Chinese Trade Promotion and Protection” bill—which affords China certain legal guarantees on its investments in Colombia—could also propel talks with China to build a railway that would link Colombia’s Caribbean and Pacific coasts, and would serve as an alternative to the Panama Canal.

Trade officials in Bogotá expressed frustration with the slow pace of progress in Washington, which they say contrasts with Chinese eagerness to invest in Colombia, Washington’s closest ally in South America.

In an interview, Mr. Díaz-Granados said he remained hopeful a free-trade pact with the U.S. would be passed before year’s end, but that Colombia can no longer “sit with its arms crossed, waiting.”

“We’ve been talking about a U.S.-Colombia free trade deal for 20 years, and it’s certainly the trade deal we want more than any other,” Mr. Díaz-Granados said. “But in the meantime, we have to continue working in other directions. Our business leaders need to pursue other markets and diversify.”

The U.S. has been waiting for too long.  Every day that lawmakers sit on the trade agreements is a day the country is missing out on opportunities for growth and jobs.

The Senate Finance Committee held a hearing on the U.S.-Panama Free Trade Agreement this morning.  Watch the hearing here.

The Committee heard testimony from NAM member Jason Speer, vice president and general manager of Quality Float Works.  Jason had just returned from Panama, so he was able to offer a particularly informed perspective about what the trade agreement would mean for manufacturers.

Jason also spoke with the NAM while he was in Washington:

NAM President and CEO Jay Timmons highlights the pending free trade agreements with Colombia, Panama, and South Korea and discusses why they are critical to U.S. competitiveness this morning in the Daily Caller. He writes,

The pending trade agreements with Colombia, Panama and South Korea offer our elected officials a choice — support economic expansion and job growth or retreat from the world economy and watch U.S. manufacturing stagnate as our foreign competitors thrive. U.S. manufacturers are eager to remove the burdens on trade and grow their businesses.

The trade agreements have been pending for years now, and it’s time for Congress and the President to act.

This week the Senate Finance Committee holds two hearings on pending free trade agreements (FTAs).  Tomorrow, the committee will consider the Panama FTA, and Thursday the committee will turn to the South Korea agreement.

Ahead of those hearings, 25 governors have written congressional leaders urging them to pass the Colombia, Panama, and Korea FTAs.  The bipartisan group writes,

As the chief executives of our respective states and territories, we appreciate how important international trade and investment are to the economic vitality of our jurisdictions, presenting important opportunities for workers, and enhancing our overall competitiveness.  Export-related jobs pay better than non-exporting industries and, with nearly 95 percent of the world’s consumers living outside of the U.S., exports have been the focus of increased job growth in recent years.

These trade agreements have been awaiting congressional approval since 2007 (and 2006 for the Colombia deal).

Read the whole letter here.

The Asia-Pacific Economic Cooperation (APEC) trade ministers who met in Big Sky, Montana, today finally took a hard-nosed look at the state of the World Trade Organization Doha negotiations and admitted that what the United States has been saying for several years: the gaps in expectations for opening new market opportunities around the world are unbridgeable in the current context.  As Ambassador Kirk noted, “we are not in good shape.”  

We welcome this recognition of reality that should help the WTO move forward in a constructive way, rather than continuing to chase its tail in a desperate hope that given enough time the pieces will magically fall into place. 

So the question now becomes what to do with the pieces of Doha that aren’t broken.  We hope that in this period of reflection WTO Members will give serious consideration to moving ahead in concluding negotiations in areas that can garner consensus. One of these issues should be the trade facilitation negotiations aimed at simplifying and speeding procedures for getting goods through customs formalities.

In an age when a large portion of exports are delivered in hours by air rather than weeks or months by sea, the length of time and costs of customs clearance procedures needs to be reduced so components can get to manufacturers and finished products to customers more rapidly. This is not a zero-sum negotiation that involves mercantilist concessions; it is classic win-win. 

Ministers should also give greater consideration to so-called plurilateral agreements that don’t require every WTO country to sign on, such as the Information Technology Agreement. It should be expanded to provide zero-duty treatment for more high-tech products. The existing agreement dating from 1997 has been very successful and reduced costs for manufacturers that rely on information technology products to enhance their competitiveness. There could be other plurilateral agreements that could garner sufficient support–perhaps environmental goods and services.

The WTO is a strong and vital organization and its value should not be assessed on what happens with the Doha negotiations. An organization that deals forthrightly with the situation it faces will be a strong one. 

As is said, the first step to recovery is the recognition that there is a problem.

Stephen Jacobs is senior director of international business policy, National Association of Manufacturers.  

Today, U.S. Trade Representative Ron Kirk issued the annual National Trade Estimate (NTE) report to Congress which describes significant barriers to U.S. trade and investment plus the actions USTR and others in the U.S. government are taking to address them. Click here to go to the report. Again this year, USTR has issued, along with the NTE, parallel reports on Technical Barriers to Trade (TBTs) and Sanitary and Phytosanitary (SPS) Barriers.  The National Association of Manufacturers welcomes the identification of these barriers and urges the USTR to go on to seeking their elimination. 

Manufacturers are adversely affected by non-tariff barriers including  standards and conformity assessment issues around the world.  They can add significantly to the cost of an export, often a multiple of the tariff rate that is charged.  For example, a report on the impact of non-tariff barriers in Asia found that they can have a tariff equivalent ranging from 11.7% to 58.5% in one country and ranging from 6.3% to 60.5% in another! 

The NAM recognizes that not all non-tariff trade barriers are illegal under international trade rules.  However, when the U.S. negotiates a trade agreement, it has the opportunity to seek the elimination of many of these non-tariff barriers…just as it has done in the pending Korea, Colombia and Panama Free Trade Agreements.  So if we want to get serious about tackling non-tariff barriers, the United States must pass these three FTAs and negotiate more.

 To tackle the barriers you have got to get into the game.

Stephen Jacobs is director of international business policy at the National Association of Manufacturers.

From the Senate Republicans, @Senate_GOP:

At 3:30 ET today, Leader McConnell, Sen. Orrin Hatch, and Sen. @robportman will hold a press conference on free trade agreements.

Sens. McConnell, Hatch, and @robportman will call for immediate action from the president on pending free trade agreements.

Washington Post editorial, “Time to act on free trade:U.S. agreements with South Korea, Colombia and Panama should be approved — soon“:

The potential for a trade policy train wreck is real. Everyone needs to focus less on the political tit for tat and more on the policy case for getting these deals done as soon as possible, which is clear and strong. “It is time to identify the specific steps Colombia and Panama must take to move forward,” Mr. Baucus said Wednesday, “so we can finally approve our free-trade agreements with these countries, increase U.S. exports and create jobs here at home.” From a Democrat, that can hardly be considered unfriendly advice, and Mr. Obama would be wise to take it.

House Ways and Means Subcommittee on Trade, “Brady Announces First in a Series of Three Hearings on the Pending, Job-Creating Trade Agreements“:

Congressman Kevin Brady (R-TX), Chairman, Subcommittee on Trade of the Committee on Ways and Means, today announced that the Subcommittee will hold a series of hearings on the pending trade agreements with Colombia, Panama, and South Korea. According to the President’s own statements, these agreements have the ability to create over 250,000 American jobs. The first hearing will address the agreement with Colombia. The hearing will take place on Thursday, March 17, 2011, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 A.M. The Subcommittee will soon advise regarding hearings on the trade agreements with Panama and South Korea.

Testifying on behalf of the National Association of Manufacturers will be William D. Marsh, vice president legal – Western Hemisphere — for  Baker Hughes. Also scheduled to testify is Ambassador Miriam Sapiro of the U.S. Trade Representatives Office.

The USTR on Tuesday also hosts the American Chamber of Commerce in Korea on its annual visit to Washington, D.C. Last week U.S. and Colombian officials met in Washington to discuss the pending FTA. (Also here.)

The Miami Herald reports on President Obama’s upcoming trip to Brazil, Chile and El Salvador, “President Obama’s Latin agenda takes shape.”

U.S. Trade Representative Kirk testified on the President’s 2011 Trade Agenda at the Senate Finance Committee this morning. As expected, the focus was squarely on lack of progress on the Colombia and Panama free trade agreements. Unfortunately, despite an advance request by the Chairman and Ranking Member for a specific timetable on concluding the two agreements, Ambassador Kirk did not provide much of a road map on how the U.S. will proceed in addressing what the Administration feels are outstanding issues in both agreements.

U.S. Trade Representative Ron Kirk

When he appeared in front of the House Ways and Means Committee last month, Kirk promised the Administration wants to move the Korea trade agreement (KORUS) as soon as possible, and it would intensify efforts to resolve outstanding issues in the Colombia and Panama agreements so they could be moved as quickly as possible to Congress for approval –- by the end of 2011 if possible. At the time, we argued that all three agreements need to move as quickly as possible. We still absolutely believe this is the way things should proceed. The agreements with Colombia, Korea and Panama have languished since 2007, while our competitors in Europe and Asia continue to move aggressively to open those markets and gain preferential access for their manufactured goods exports.

The Chairman and Ranking Member of the Senate Finance Committee made it very clear they feel the same way. Chairman Max Baucus (D-MT) was crystal clear: “The time is long past to ratify the Colombia agreement,” said, continuing, “None of these agreements will pass unless they are all packaged together this year.” Ranking Member Orrin Hatch (R-UT) told Ambassador Kirk that he was tired of unfulfilled promises on Colombia and Panama. “It is the Administration’s inaction that speaks volumes – and these promises we’ve heard are inadequate,” the Senator said. Sen. Hatch pulled no punches in saying that he will view any attempt to move the KORUS FTA without action on Colombia and Panama in a very negative light. (continue reading…)

The U.S. Trade Representative is holding a special 301 Review public hearing today at the USITC to examine trade and the protection of intellectual property rights. (Agenda) The National Association of Manufacturers submitted comments. Excerpt:

The NAM emphasizes to the Special 301 Sub-committee that IPR protection and enforcement is an issue for virtually all our members. Manufacturing, yes manufacturing, is as dependent on intellectual property like patents, trademarks, trade secrets, trade dress and copyright as copyright-based industries that receive considerably more attention. Counterfeiting and piracy are existential threats to manufacturers, the people they employ, and the consumers who come in contact with their products and services.

Theft is theft no matter if it is called three-syllable words like “counterfeit” or “piracy”. The trade in fake products supplants legitimate markets, steals our workers’ jobs and puts American and other consumers needlessly at risk as counterfeit pharmaceuticals, unsafe products and even hazardous materials are put into the stream of commerce on a daily basis.

It is simply amazing what products and trademarks counterfeiters and pirates are so willing to steal. While most people are familiar with the counterfeiting of luxury brands because of the cachet that can command premium prices, counterfeiters are willing to engage in criminal activities by selling everyday items such as circuit breakers, extension cords, batteries, fireplace tools, golf clubs, kitchenware, toothpaste, cigarettes windshields – the list can go on and on. Even semiconductor chips that can be used in guidance systems for America’s defense have been counterfeited and found in the United States.

As this nation looks to our economic recovery, it is important to note that IPR theft is an impediment to that recovery. Markets once lost through counterfeiting and/or damaged brands are not readily and easily recovered.