Today, U.S. Deputy Secretary of Commerce Bruce Andrews delivered the keynote remarks on the impact of the Trans-Pacific Partnership on manufacturing at an event hosted by the Washington International Trade Association (WITA). The event was part of WITA's ongoing speaker series which brings together public and private sector leaders to explore different aspects of the TPP.
During his remarks, Deputy Secretary Andrews discussed the importance of the TPP for American manufacturing and how the trade agreement will ensure our nation’s competitiveness in the 21st century global economy.
Remarks as Prepared for Delivery Thank you, Linda for the kind introduction, and thank you to Ken and the Washington International Trade Association for inviting me to join you today.
For many years, WITA has convened representatives across the trade community to discuss the most pressing developments in U.S. trade policy – so it is fitting that WITA is once again showing its leadership by hosting this series on today’s most important trade issue: the Trans-Pacific Partnership.
This morning, I’m going to talk about the impact of TPP on America’s manufacturing sector – something our Department is uniquely poised to discuss.
At the Department of Commerce, we work every day to foster a climate for economic growth and broad-based prosperity in the United States, and to help create jobs for American workers.
In our country, the strength of our economy is closely linked to the strength of our manufacturing base – which is why our Department is laser-focused on expanding this critical sector.
We do this in a number of ways: we help create the conditions for our innovators to thrive, so our technology remains on the cutting edge and our manufacturers stay ahead of their global competition. We support communities as they develop comprehensive plans to grow their local manufacturing base.
We have made workforce training a top priority, so our companies have access to the world-class talent they need. And, of course, we work to ensure that American companies can operate on a level playing field in the global marketplace.
One of the most impactful programs we run is the National Network for Manufacturing Innovation. NNMI breaks down silos between the private sector and academia to collaborate on taking industry-relevant technologies from lab to market.
We currently have seven institutes all over the country and have requested funding for two more. The work being done at these institutes is truly remarkable.
For example, at the Advanced Composite Manufacturing Institute in Oak Ridge, Tennessee, researchers have created a working replica of a vintage 1965 Shelby Cobra sports car created entirely through 3D printing with carbon fiber-reinforced plastic. This car is more than just an incredibly cool piece of technology – it also represents the future of manufacturing.
Today’s manufacturers look very different than the outdated factories filled with line jobs of the past. But unfortunately, our trade agreements have not kept pace. We are trying to ship our innovative, Made-in-America goods around the world using outdated trade rules, which only hurts our global competiveness.
While manufacturing has evolved over the past several decades, one thing remains the same: the strength of America’s manufacturers depends on their ability to export. The time is now to upgrade our trade agreements to reflect a new generation of manufacturing.
We need the Trans-Pacific Partnership.
Everyone here knows that the TPP will give our companies greater access to the fastest growing region in the world. By 2030, the majority of the global middle class – 3.2 billion consumers – will be in the Asia Pacific.
U.S. companies and workers need access to these consumers in order to compete in the fiercely competitive global economy – yet, too often, U.S. companies lack equal access to these markets and confront significant barriers to entry.
That is why we need the Trans-Pacific Partnership to level the playing field for American workers and businesses in the world’s fastest growing region – one that is rapidly requiring the lion’s share of global imports.
TPP gives U.S. goods and services unprecedented market access by eliminating over 18,000 tariffs on Made in America exports. Currently in TPP countries, these import taxes can increase prices by up to 59 percent for U.S. machinery, 70 percent for U.S. autos, and 40 percent for U.S. poultry - putting American workers and businesses at a global competitive disadvantage.
Tariff eliminations and reductions for U.S. products will reduce the end-user price and make Made-in-America products more attractive to TPP consumers.
But TPP does more than eliminate tariffs. It sets new high-standard global trade rules, updating 20-year-old WTO rules for the modern economy.
And not only will it lead to more exports and support higher-paying jobs here at home, it will promote the development of regional supply chains and support economic development and job creation in all TPP parties.
Furthermore, TPP will also support U.S. manufacturing as it continues to make its remarkable comeback.
Manufacturing is growing at its fastest rate in decades. Today, this sector supports an estimated 17.6 million jobs in the United States—about one in six private-sector jobs. Manufacturers in the United States are driving innovation and are responsible for more than three-quarters of all private sector R&D.
TPP will support this resurgence, especially for small and medium-sized businesses. You will likely hear concrete examples from the panel, but I want to highlight some key ways that TPP builds on existing agreements and tackles barriers at and behind the border.
First, TPP countries have committed to transparency measures across the agreement. This includes customs commitments to ensure traders know how their goods will be treated when they arrive in a TPP port. If they run into issues, TPP countries have committed to a predictable and transparent process for customs administration.
The 12 TPP countries have also committed to greater openness in standards development and certification, reducing unnecessary testing and costs, while also requiring the publishing of rules and allowing for public comment.
Second, the agreement includes measures that make it more efficient and easy to do business in TPP markets, such as: common rules of origin to ensure that TPP benefits go to businesses in TPP countries; expedited treatment of express shipments and the establishment of “de minimus” thresholds for low-value shipments; measures that promote paperless trading, including the use of electronic signatures; and allowing for businesses to search, register, and protect intellectual property more easily.
Third, TPP includes cutting-edge rules that promote trade in the 21st Century, such as: rules against forced localization of servers and obligations to ensure the free flow of data across borders; effective intellectual property rights protections, including criminal penalties for the theft of trade secrets, including cybertheft; and commitments to lift complex restrictions to the export of services, as well as guaranteeing equal treatment to services provided through physical investment or over the Internet.
These advancements will make it easier for America’s manufacturers to do business in some of the fastest growing markets in the world.
Beyond its impact on business, TPP is also good for the American worker. The twelve parties agreed not to prohibit or restrict trade in remanufactured goods – an industry that employs hundreds of thousands of U.S. workers.
And TPP provides a fair and more level playing field for American workers, with the largest expansion of enforceable labor rights in history. This agreement brings hundreds of millions of additional workers under International Labor Organization standards, while also including strong mechanisms for partner countries to hold each other to these commitments.
TPP updates decades-old trade rules for not just a modern manufacturing sector but for the modern economy as a whole. This 21st-century, high standard trade agreement will benefit American workers, manufacturers, entrepreneurs, service providers, consumers, farmers, and ranchers – and there is no reason to delay unlocking those benefits for American job creators.
Just this week, the Peterson Institute for International Economics released a report that shows that, if TPP is delayed by just one year, the United States will see an estimated one-time national loss of $77 billion. That translates to a loss of $600 on average for every U.S. household.
In addition, as the President said in his State of the Union Address, the more we prolong the process of approving this agreement, the more we cede the rules of the road to China and other competitors in the region.
With the future of trade in the Asia-Pacific region still being written, we must ask ourselves: can we afford to risk America’s leadership in manufacturing simply because other nations are acting more quickly than we are? At the Department of Commerce, we know that the answer to that question is absolutely not. That is why we are hard at work making the business case for TPP to Members of Congress and the American people.
Working closely with our partners at USTR, we have released more than 60 targeted fact sheets and reports detailing the benefits TPP could have for American companies. We have conducted outreach to over 500 congressional offices, and Commerce officials continue to fly around the country to talk about the benefits of the agreements.
We are all-in in promoting the benefits of this agreement – but if we’re going to be successful in our efforts, we need your help. The best argument in favor of trade comes from all of you – leaders from across the public and private sectors, who understand the real value of trade and exports.
There’s a lot of misunderstanding out there about TPP, and much of the debate has not been substantive. That’s why events like this one are so important, and why we need you to educate your employees, your friends, your family, and your neighbors.
We need you to join us in getting the word out that trade agreements mean lower prices for U.S. consumers, more jobs for American workers, and more growth for our economy.
I look forward to working with organizations like WITA and its members to bring TPP and its benefits to life. Thank you.
Source: U.S. Department of Commerce
