Regional manufacturers benefit when more trade opportunities exist. Trade agreements level the playing field, boost the number of exports and contribute billions to the state's economy.
However, the U.S. government should not block the progress of trade growth or let standards impede progress.
Experts expounded upon these views at a forum on trade and the manufacturing economy at Thermo Fisher Scientific Clinical Services Inc. in Upper Macungie Township on Monday.
Employment at large and small manufacturers throughout the Lehigh Valley such as Fisher Scientific are dependent on overseas business.
Patrick Durbin, president of BioPharma Services at Thermo Fisher Scientific, said the company has about 700 people at this location who he does not want to see disengage in any way.
The event, hosted by National Association of Manufacturers and Fisher Scientific, included Congressman Charlie Dent, several guest speakers and a panel with leaders of Lutron Electronics Inc. in Coopersburg, Air Products and Chemicals Inc. in Trexlertown and Fisher Scientific.
“There is a lot at stake,” said Chris Moore, senior director of international business policy for the National Association of Manufacturers. “Without a robust trade agenda, manufacturers are at a disadvantage. We cannot afford to sit on the sidelines.”
RENEWAL OF TRADE PACTS
According to NAM, the Trade Promotion Authority, a partnership between the president and Congress that facilitates negotiation and approval of trade agreements expired in 2007. The partnership is essential to pass pending trade agreements, including agreements with 11 Pacific Rim countries, which comprise Pennsylvania’s largest export market, according to NAM.
The Trans-Atlantic and Investment Partnership is a proposed trade agreement between the U.S. and the European Union, and Dent said this could see a vote as early as immediately after the November election. The Trans-Pacific Partnership agreement is further along than the European agreement, he noted.
Regarding the Trans-Pacific Partnership, the U.S. government is close to giving its approval.
“We’re very close,” said Robert Manogue, deputy assistant secretary, bureau of economic and business affairs, U.S. Department of State. “I can’t be more specific; we’ve been at it for a long time.”
Regarding the European agreement, Manogue said most of the negotiations will be easy but it will get harder when it gets to standards and regulations. These agreements are really focused on small to mid-sized companies, he said.
Other regional companies benefit from trade agreements as well, Dent said. As an example, if BMW were to expand production facilities in this region, it could be good for Berks County since East Penn Manufacturing in Lyons produces the batteries for these vehicles, Dent said.
Trade can be a way to bring countries together, not just for trade opportunities and economic reasons but to build security, Dent said.
“If we let China dictate the rules of trade and various standards, that would not be in our best interests,” Dent said.
If these trade agreements are approved, it will offer numerous benefits, including growth in the energy sector, Dent said.
“I’m optimistic because the bottom line is this will lead to better economic growth,” Dent said.
Regional companies that import products also rely on trade.
“We do rely very heavily on free trade agreements because we import a lot of our materials,” said Patrick Fiora, global process integration manager, performance materials for Air Products. More than 50 percent of Air Products’ revenue is from outside the U.S., Fiora said.
SEEKING LEVEL PLAYING FIELD
One reason for supporting trade agreements is that they keep all manufacturers on an equal footing, said Michael Pessina, president of Lutron.
“What we would like is free trade. Period,” Pessina said. Manufacturers should let the products stand for themselves, he said.
According to NAM statistics, it’s now 20 percent more expensive to manufacture in the U.S., compared to competing nations, and that figure excludes the cost of labor. The 20 percent cost disadvantage is caused by policies created in Washington, according to NAM.
The organization, which represents manufacturers throughout the U.S., wants the U.S. to be the top place in the world to manufacture and attract direct foreign investment, become the world’s leading innovators, expand access to global markets to reach the 95 percent of consumers who live outside the borders and ensure access to a highly skilled workforce.