At the conclusion of Imports Work Week, we ponder how we can translate this important Import Works equation into a policy agenda.  Last year, we articulated a full To Do list – much of which still needs attention.

This year, we will focus on just one item – the overdue enactment of Trade Promotion Authority (TPA).

Often called “fast track,” TPA is most simply the articulation of objectives that the United States should achieve when it negotiates trade agreements.  It is, in effect, an instruction manual that Congress provides to the Administration on negotiating trade agreements.  Such a manual is needed because Congress, and not the Administration, is empowered by the U.S. Constitution to “regulate commerce with foreign nations.”  Although the Administration negotiates trade agreements, the agreements cannot take effect without Congressional approval.

TPA also provides a series of procedural guidelines for the Administration to follow in crafting these agreements.  It details extensive consultation procedures as well as an expedited consideration process in Congress so foreign negotiators can have some guarantee that the bargain they reach at the negotiating table will not be rewritten or unnecessarily stalled in Congress.

TPA is in urgent need of reauthorization.  The last time Congress approved TPA was in 2002.  The last agreements negotiated under TPA were the Korea, Panama, and Colombia agreements, all of which were approved by Congress in late 2011.  Even though we are into our 17^th round for the Trans Pacific Partnership and are about to start a new agreement with Europe, TPA remains lapsed.

Fortunately, signs are good that TPA could see action this Congress.  The Administration and key Congressional voices have called for its renewal.  Although enactment remains far off, many are working to build momentum so reauthorization of TPA happens.

In the apparel and footwear industries, an updated TPA is critical for opening up the U.S. market as well as foreign markets.  Out of date negotiating objectives – such as quota era provisions dedicated solely to textiles and apparel – should be dropped, while more relevant provisions – such as those relating to customs facilitation and services –should be strengthened.  We also need to see more discussion and perhaps a negotiating objective about the role that global value chains play in trade.  TPA should stop measuring agreements based on quaint mercantilist objectives and instead apply more modern metrics such as best value for the American people.  If we find new ways to declare victory in the TPA debate, we will find new ways in which Americans win through trade.

We look forward to the debate on TPA this year.  While it is impossible to tell how the debate will turn, there is one thing we know for sure:  A TPA that reflects the economy of 2013, withforward looking provisions to be relevant in the years to come, will recognize that imports do work for both America and the world.

Day 4 of Imports Work Week invites us to discuss how U.S. imports work for economic development.  In reality, one can see how U.S. imports work for economic development in several ways.

As we’ve discussed extensively during the past three days (here, here, and here for example), U.S. imports directly stimulate economic development in many cities and communities across the United States.  Through U.S. imports, we create jobs which stimulates commerce and other levels of economic activity.  Consumer choices unleashed through imports fuel that commerce and economic activity as well.  Of course, the multiplier effects magnify the impact of the dollars earned by imports and the dollars saved by imports.

When we’ve written about the 4 million Americans at work because of the U.S. apparel and footwear industry, we don’t include the many millions more whose employment directly or indirectly comes from this industry.  We don’t include, for example, the dock workers who move our product or the dry cleaners who refurbish it.  Nor do we count the countless millions whose salaries are paid for in part by our workers – such as the hot dog vendor on the street outside a distribution center, the 4^th grade teacher who educates the children of apparel and footwear employees, or the computer software designer who creates systems on which clothes and shoes are designed.  Yet these individuals owe part of their livelihood, as well as their affordable and stylish wardrobe, to the hardworking men and women in our industry.

Economic development occurs overseas as well - through a remarkably similar process.  American consumption of products made offshore generates livelihood and salaries for apparel and footwear workers around the globe.  That income is multiplied through those distant communities as folks buy food, clothing, housing, and other items that in turn employ more people or enable government to provide much needed services.   The multiplier effect is so powerful that some of those funds make their way back to the United States and folks buy goods and services that are exported as a result.

And therein lies a secret few politicians care to admit, but which every Economics 101 student learns in the first week.  Exports work only because imports work.  Without imports, exports would by definition cease to exist.   Through imports, we demand the products made by others.  Likewise, through imports, others demand our products.  Economic development is the byproduct.

But economic development works only if it is done so in a manner that is sustainable - one that safeguards basic worker rights, that provides for safe workplaces, and that results in compliant and safe products.  Through our compliance and training programs, we’ve been fortunate to carry this message to apparel and footwear workers in Africa, Asia, Latin America, and Europe, as well as the United States.  This is a continuous job, and we expect to visit these and other places around the globe in the months and years to come.  Through these travels we will meet folks who are separated by continents and cultures, but who are woven together by the power of international trade.  And it is through this linkage that they share in individual benefits while participating in economic development worldwide.

To learn more about the benefits of imports, visit www.importswork.com

https://www.wewear.org/cornerofficeviews/imports-work–time-for-an-instruction-manual/

All too often U.S. imports are set up as the bane of U.S. manufacturing. American policy makers and populist pundits like to perpetuate the myth that imports come at the expense of U.S. manufacturing jobs.  Whether done out of ignorance, convenience, or to further an anti-trade policy goal, the perpetuation of this myth actually undermines the very U.S. jobs it purports to protect.

In fact, manufacturing in America rarely happens without U.S. imports.

This was one of the key points developed in a study released earlier this week.   Among other things, that study notes that:  “American manufacturers and farmers rely on imports including raw materials and intermediate goods to lower their production costs and stay competitive in domestic and international markets. Factories and farms purchase more than 60 percent of U.S. imports.”

We find this to be especially true in the apparel and footwear industries where global supply chains are critical to the competitiveness of U.S. brands.   We've already written extensively about the U.S. value embedded in apparel and footwear imports, drawing upon the work done in a recent study on the apparel global value chain. That study showed the millions of U.S. value added jobs in such areas as design, quality control, compliance, and retail.

But those supply chains also wind through U.S. factories and other manufacturing facilities.  Consider the following scenarios of clothes and shoes being made today.

• Tailored clothing manufacturers in North Carolina, Maryland, Ohio, New York, Pennsylvania, and New Jersey make suits and shirts using imported wool and cotton fabrics.
   
• Shoes and outdoor apparel imported from China contain hi-tech fabrics made in Maryland.
   
• U.S. spun yarn is shipped to kitting facilities where it is turned into fabric that is then shipped to garment factories in such distant locales as Vietnam and Haiti.
   
• Jeans and jackets made in Southern California and exported to Korea, Japan, and Europe contain fabrics imported from Mexico, Asia, and Italy.
   
• U.S. textile makers throughout the southeast use imported yarns and fibers in the products they export to Latin America for assembly into garments that are then imported back into the United States.
   
• Clothing and footwear made throughout the United States with equipment and services imported from throughout the world.

And thousands more.  Because fashion knows no borders, U.S. manufacturers in our industry, be they producers of end products or inputs, have been able to draw upon international suppliers as they gain access to international markets.

Congress and the Administration have recognized this relationship in recent years by reducing duties on imports that are used in manufacturing through such programs as the Miscellaneous Tariff Bill (MTB) or the wool and cotton trust funds.  As our manufacturers become more interdependent on imports, we would expect more such programs in the future.

The next time you look through your wardrobe you will no doubt see many articles made overseas.  With more than 97 percent of apparel and 98 percent of footwear made offshore, this should be no surprise.  But the power of imports, fueled by our global supply chains, means there is also a lot U.S value added in your wardrobe.  That value added, increasingly, contains a great deal of U.S. manufactured output as well.

To learn more about the benefits of imports, visit www.importswork.com

https://www.wewear.org/cornerofficeviews/imports-work-for-economic-development-everywhere/

We’ve been celebrating “Imports Work for America” week (see earlier posts on what imports mean for American jobs, families, manufacturing, and development). While the U.S. Chamber has long argued that boosting exports is vital to our economy, imports also play a critical role.

So how can we better ensure that imports work for America going forward? First, trading away U.S. import barriers to secure better access to foreign markets is a terrific deal. Today, trans-Pacific and trans-Atlantic trade negotiations aim to eliminate tariffs and other trade barriers between the United States and some of the largest economies in the world, including the European Union, Japan, and a collection of other Asia-Pacific nations. The U.S. should vigorously pursue such trade agreements.

Further, the U.S. Chamber strongly supports the Miscellaneous Tariff Bill (MTB), which provides relief from tariffs levied on imported materials or intermediate products that are essential to U.S. manufacturers but unavailable from domestic sources. Tens of thousands of American workers and hundreds of American companies depend on the MTB for relief from tariffs that serve only to raise costs for U.S. manufacturers and dull their competitive edge. The last MTB supported an estimated 90,000 American jobs; the latest bill promises benefits that could reach twice as many workers.

In the view of some, the MTB’s duty suspensions are earmarks because they provide a “limited tariff benefit,” which is defined under House rules as benefiting 10 or fewer entities. However, the MTB’s benefits are in no way limited: Duty suspensions are available to all importers of the product. The bill makes no appropriation of public funds; it merely suspends a tariff that serves only to undermine U.S. competitiveness. The MTB is a tax cut, not an earmark.

Since the expiration of the last MTB on December 31, 2012, U.S. businesses both large and small have faced higher costs for imported inputs not available from domestic sources. It’s time legislators acted to renew the MTB and lift the burden of these pointless and damaging tariffs.

In addition, Congress should move quickly to renew the Generalized System of Preferences (GSP), which will expire on July 31, 2013. Since 1976, GSP has promoted economic growth in developing countries by providing duty-free access to the U.S. market for thousands of selected products from 127 developing countries. In 2012, U.S. imports under GSP reached $20 billion.

GSP helps keep U.S. manufacturers and their suppliers competitive. Approximately three-quarters of U.S. imports using GSP are raw materials, parts and components, or machinery and equipment used by U.S. companies to manufacture goods in the United States for domestic consumption or for export. The products coming in under GSP generally do not compete with U.S.-made goods in any significant way. According to a 2006 U.S. Chamber of Commerce study, over 80,000 American jobs are associated with moving GSP imports from the docks to farmers, manufacturers, and retail shelves.

Finally, the U.S. Chamber has endorsed the Affordable Footwear Act, which suspends for five years U.S. tariffs on inexpensive footwear that is not manufactured in the U.S. Such footwear is often subject to very high tariffs, which represent a hidden, regressive tax on low-income Americans. Similarly, the U.S. Chamber supports the U.S. Optimal Use of Trade to Develop Outerwear and Outdoor Recreation (OUTDOOR) Act, which eliminates tariffs on recreational performance outerwear for which there is no commercially viable production in the U.S.

In the end, imports are important because they show that trade is a two-way street — with benefits on both sides.

Posts in this series:

• Trade is a Two-Way Street (or, Imports are Important, Too!)
• The Importance of Imports to American Families
• The Importance of Imports to U.S. Manufacturing
• The Importance of Imports to Global Development
• The Importance of Imports: The “To Do” List

See the post here: http://www.freeenterprise.com/international/importance-imports-do-list

Throughout the week, we’ve written about how GSP supports American jobs, reduces costs for families (whether they know it or not), improves the competitiveness of American manufacturers, and promotes development. Sounds great, right?

There’s just one problem: GSP is set to expire on July 31.

Given all the positive impacts of GSP both at home and abroad, the solution seems simple: Congress should immediately take up legislation to extend GSP.  The Coalition isn’t alone in advocating for immediate renewal.  More than 160 American companies and associations have called on Congress to do just that.

Such legislation should extend GSP for as long as possible.  Why?

Click here to finish reading at Renew GSP Today

You don’t often turn to the State of Trade blog for food advice. While we’re a fantastic repository for insightful and enjoyable trade policy analysis, our blogs usually whet your appetite for increased international competitiveness…not lunch. But thanks to Imports Work Week, we’re all about delicious coffee, bananas and chocolates.

Or, at least, that’s the clever opening line of our recent joint WCIT-Tacoma-Pierce Chamber op-ed on the positive (and often forgotten) roles imports play in our 21^st century economy.  So coffees, bananas and chocolates not only make a great snack (and a good suggestion for a new Ben & Jerry’s ice cream flavor – Importer’s Delight!); they help reinforce the underappreciated message that imports are key to our state’s trade success.

Those of you who regularly read the State of Trade blog already know a good deal about the value of imports (thanks to our past three blog posts on the “import-ance of import-ing”). In fact, last year’s International Competitiveness Strategy found at least 277,000 jobs in our state are tied to imports, and we recently released a new Imports Factsheet that explains these numbers in greater detail.

However, several studies have come out recently that expand our understanding of the impact of imports on our economy.

On Monday, the Trade Partnership released Imports Work for America, which found that imports support 16 million jobs in the United States in industries ranging from port and freight services to manufacturing and retail. That’s an astounding 9.3 percent of U.S. employment!

The study points out that, contrary to popular belief, the effect of imports on most sectors, including manufacturing, has been quite good. For example, manufacturers rely heavily on access to low-cost, high quality imported inputs, which enable them to lower production costs, create more competitive products, and sell to more consumers. Lower costs and more sales = more U.S. jobs all along the value chain.

Similarly, another recent study, the Federal Reserve Bank of St. Louis’ U.S. Manufacturing and the Importance of International Trade: It’s Not What You Think, called imports the “lifeblood” of U.S. manufacturing and found that imports account for a far greater share of U.S. manufacturing value added than do exports. In Washington state, this is no surprise; many of our manufacturers, from Boeing to Genie Industries rely on imported components to produce innovative and competitive products.

The retail industry also creates thousands of jobs in our state through imports. Think about how many Washington state companies – Amazon.com, Costco, Nordstrom, REI, Eddie Bauer, Sur la Table – depend on a global supply chain to efficiently produce or source many of the items they sell. Even if the label on many of these goods does not say “Made in USA,” chances are that the majority of the purchase price of the product stays right here, supporting American jobs such as engineers, designers, testers, marketers, merchandisers, warehousers, and sales associates. In today’s globally connected economy, products are often designed and tested in the United States and only assembled abroad. For example, another new study by Moongate Associates, Analyzing the Value Chain for Apparel Designed in the United States and Manufactured Overseas, found that over seventy percent of the value of a garment designed in the U.S. and assembled abroad was added in the United States.

Finally, the Imports Work for America study also emphasized the positive role imports play for every American consumer. Without imports, most consumer products like electronics, housewares, furniture and clothes would be much more expensive, straining many Americans’ already tight budgets. In addition, imports provide access to products we wouldn’t have otherwise (and that make our lives a little brighter!).

While we should never forget how important exports are for economic growth, we should also recognize imports have an equally important role in our economy. In Washington state, imports are frequently job creators. In the meantime, does anyone know how I can get in touch with Ben & Jerry’s recipe department? I have a suggestion I’d like to pass along…

http://wcit.org/blog/the-other-good-thing-about-coffee-bananas-and-chocolate/

Job creation is a hot topic in Washington, and lawmakers continually discuss exports as the key to job creation. This mindset is outdated and there is not enough focus on the positive impact that imports have on American job growth.  In today’s economically interconnected world, successful companies maximize their competitiveness by utilizing the most efficient operations around the world. As a result, it is too simplistic to say either a product is Made in the USA or is imported.
 
A report commissioned by RILA and other members of the TPP Apparel Coalition titled, Analyzing the Value Chain for Apparel Designed in the United States and Manufactured Overseas, examines where and how American workers contribute to the value and global production of apparel.  It’s clear in the report what American retailers have long known to be true—apparel imports are responsible for millions of quality white-collar and blue-collar U.S. jobs across the economic spectrum. Nearly three million American workers are employed in the ideation and orchestration of the apparel global value chain—research, design, production, marketing, distribution, retail and support to the final customer.  These American jobs rely on trade and to be successful, U.S. trade policy should bolster, not inhibit, global value chains and the American jobs they create.
 
The report, which studied a variety of apparel categories and companies, also reinforces findings in other recent studies such as a value chain statistical database that was launched jointly by the Organization for Economic Cooperation and Development and the World Trade Organization.
 
The first release from the OECD-WTO Trade in Value-Add (TiVA) database offers new insights on how global value chains impact trade relationships and business activity. The initiative reinforces the reality that “the goods and services we buy are composed of inputs from various countries around the world. However, the flows of goods and services within these global production chains are not always reflected in conventional measures of international trade.”
 
In the changing face of global trade, it is time for U.S. trade policy to reflect the commercial reality that globally-competitive American apparel producers and retailers have embraced international trade and have created global value chains that employ millions of American workers and also increasingly depend on the free flow of goods across borders. Exports are not the only way to create jobs, imports matter too.
 

So far, we have focused on how the GSP program benefits the United States, whether we’re talking about American jobs, families, or manufacturing. But we need to remember the primary purpose of GSP: to provide developing countries with a way to sell their goods to U.S. buyers.  So today we talk about the positive impact GSP has on developing countries.

GSP works by offering duty-free access to the U.S. market instead of direct aid. GSP covers about 3,400 products from 130 developing countries.  Forty-three “least-developed” countries – including South Sudan, the world’s newest country – receive GSP benefits for an additional 1,450 products. All totaled, U.S. companies bought nearly $20 billion worth of GSP products in 2012.

To ensure that GSP maintains its development goals…

Click here to finish reading at Renew GSP Today

We’ve been celebrating “Imports Work for America” week (see earlier posts on what imports mean for American jobs, families, and manufacturing). While the Chamber has long argued that boosting exports is vital to our economy, imports also play a critical role.

That’s certainly true for global development. The past half century has seen an unprecedented rise in prosperity around the globe. According to the World Bank, the number of people living in extreme poverty in the developing world fell from nearly 2 billion in 1981 to an estimated 1.2 billion today — a decline from 52% to about 20%. This may be the biggest news story of the past half century — and the most underreported.

One key driver of this seminal improvement in living standards has been a wave of reforms making it far easier for people in most countries to trade across borders. Often, imports into the U.S. and other developed countries have played a major role.

For example, when Colombian roses are sold across the U.S. this coming Mother’s Day, we can take pride that this commerce sustains 170,000 good Colombian jobs — but it also supports 225,000 American jobs in the U.S. logistics, transportation, and retailing sectors.

Those trade flows are booming, but countries of the developing world are also trading more among themselves in what’s called South-South trade. Two-way commerce is thus becoming an even more powerful engine for economic development.

As Henry George explained in his landmark book Protection or Free Trade (1879), the least prosperous places in the world are those isolated by natural and man-made trade barriers. However, “it is where trade could best be carried on that we find wealth first accumulating and civilization beginning. It is on accessible harbors, navigable rivers and highways that we find cities arising and the arts and sciences developing.”

For a counterexample, see North Korea today, cut off from the world by its own decisions and beset by famine. As George wrote: “What protection teaches us is to do to ourselves in time of peace what enemies seek to do to us in time of war.”

Come back tomorrow — we’ll wrap it up with our “to do” list.

http://www.freeenterprise.com/international/importance-imports-global-development-0

Yesterday, we showed some everyday household items (plates, picture frames….wine) that receive duty-free treatment under GSP and reduce costs for American families in the process.  Yet while families often save money from GSP unknowingly, manufacturers incorporate GSP into their sourcing strategy to reduce costs and increase competitiveness.

Today’s example is another product found in just about every home:

We’re not talking about the remote control, but the batteries.  If you look at the (upside down) text, you can see the battery clearly says “Made in U.S.A.”  But there’s much more to the story…

Click here to finish reading at Renew GSP Today