International Trade

1.01 International Trade

The objective of the NAM's international trade policy is to strengthen manufacturing in America and improve the competitiveness of American manufacturing in the worldwide economy. Fairly conducted trade provides opportunities for growth and expansion of manufacturing in America, increases the range of goods and services available to consumers, enhances market-based production globally and contributes to closer understanding and cooperation among nations. The NAM believes this objective can best be achieved by limiting costs and other impediments imposed on U.S. manufacturers and by pursuing and utilizing a rules-based international trading system that enhances the role of free market forces while seeking to eliminate market-distorting governmental intervention.

1.01a. International Trade Negotiations

Free and open market-based trade is often seriously distorted by governmental intervention. In seeking a level playing field for manufacturing in America, the NAM advocates initiatives that obtain genuine market access for U.S. manufacturers, including trade agreements that offer mutually beneficial opportunities. These should seek the elimination of market-distorting governmental intervention in international trade and should promote effective and enforceable compliance to agreed-upon and transparent rules of fair competition. In this process, the effectiveness of U.S. trade laws must not be diminished.

While the NAM prefers that trade negotiations be conducted multilaterally in the World Trade Organization (WTO) where possible, the NAM also believes that bilateral and regional agreements have an important role in opening markets for American manufacturers.  The NAM seeks to have the Office of the U.S. Trade Representative funded adequately to enable effective negotiation and enforcement of multilateral, regional and bilateral agreements.

It is generally impractical for the NAM to attempt to speak for its many diverse members regarding individual sector priorities in international negotiations, unless such specific matters are non-controversial and are broadly supported by NAM membership.

1.01b. Multilateral Negotiations

The NAM strongly supports the rules-based, enforceable international trading system embodied in the WTO and its various components. In addition to reducing tariffs and non-tariff barriers, areas in the WTO where the NAM feels improvements are necessary include:

"¢ The development of new understandings regarding industrial and investment policies with implications for international trade, including trade facilitation;

"¢ Further progress in addressing non-tariff barriers to trade, both long-standing barriers and emerging barriers, including those affecting digital trade;

"¢ Greater protection for intellectual property rights;

"¢ Expanding membership in the Government Procurement Agreement; and

"¢ The adoption of agreed rules governing trade in services that affect manufacturing.

The NAM supports consideration of new negotiating approaches in the WTO, including stand-alone sectoral negotiations, expansion of the successful Information Technology Agreement, plurilateral agreements among wiling countries and other new directions that would generate greater market access and facilitate trade expansion. 

1.01c. Bilateral and Regional Negotiations

The NAM also supports mutually beneficial and comprehensive bilateral and regional trade negotiations that will reduce tariff and non-tariff barriers to U.S. exports, expand bilateral commercial relations and provide for WTO-plus trade relationships. Such negotiations should establish a strong set of rules that govern and protect trade and investment, reflect the realities of modern supply chains, address trade-distorting practices of state-owned and state-influenced enterprises and result in the United States obtaining concessions that are at least equivalent to the concessions granted by the United States. Impartial reviews of the effectiveness of these agreements should be conducted periodically.

The negotiation of any new bilateral or regional agreements that supersede earlier agreements must preserve the strongest market access of either the new agreement or existing trade agreements. There should not be any lessened market access or erosion of concessions in existing trade agreements.

1.01d. Small and Medium-Sized Exporter Needs

The NAM believes that trade negotiations can play a vital role in lowering the transaction and opportunity costs of foreign trade, a process that is especially critical to the ability of smaller companies to engage in international trade. By reducing tariffs and non-tariff barriers""particularly unnecessary fixed cost trade barriers like regulatory, licensing and physical presence requirements""trade agreements make more transactions and smaller sales profitable. Customs harmonization, financial services liberalization, the enabling of electronic commerce and the harmonization of international standards also help to create an environment in which small and medium-sized manufacturers (SMMs) can actively participate in international trade. The NAM supports the inclusion of such features in trade agreements.

1.01e. Trade Promotion Authority (TPA)

The NAM believes durable negotiating authority for any Administration is a fundamental requirement of an effective U.S. negotiating structure. Such authority has been demonstrated in the past through Fast Track and TPA legislation.

The NAM believes that TPA should be renewed, and that the negotiating objectives and procedures embodied in the Trade Act of 2002 and the bipartisan May 2007 agreement on trade policy between Congress and the Administration (except for the language on intellectual property rights for pharmaceuticals) should serve as the foundation for that renewal.

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1.02. Eliminate Trade-Distorting Practices and Defend, Preserve and Enhance the Effectiveness of WTO-Consistent U.S.Trade Law

To build and enhance public confidence in an open trading system, the U.S. government must maintain a level playing field that yields recognizable gains for manufacturing in the United States. The U.S. government must ensure that market-distorting trade practices are addressed effectively under internationally agreed-upon rules and bilateral agreements. The NAM believes that artificial competitive advantages arising from governmental distortions should be vigorously opposed using dispute settlement, application of trade laws and negotiated remedies.
The NAM also supports the principle of soundly applied and effective trade adjustment assistance as a means of alleviating trade displacement and developing broader public support for trade.

1.02a. Elimination of Trade-Distorting Subsidies

The NAM supports elimination of trade-distorting subsidies in both market and non-market economies and the development of stronger WTO disciplines against subsidies or restrictions that have the effect of subsidizing local production at the expense of imports, including non-security related export restrictions.

1.02b. Enforcement of WTO-ConsistentU.S. Trade Remedy Laws

The NAM supports the effective enforcement of U.S. trade remedy laws to counteract unfair foreign trade practices on the part of both market and non-market economies, including circumvention of countervailing duty and anti-dumping orders. The NAM also encourages greater transparency of trade remedies internationally to help achieve equity in competitive conditions and strengthen international trade disciplines. The NAM encourages the Administration and Congress to work together to ensure the effectiveness of U.S. trade laws and the overall competitiveness of the U.S. manufacturing economy.

The NAM also seeks greater access to U.S. trade remedy laws for SMMs, including recourse to governmental self-initiation of trade cases. The NAM is committed to ensuring its members are fully informed of the options available under U.S. trade laws.

The NAM urges the U.S. government to adequately fund the agencies responsible for enforcing U.S. trade laws.

1.02c. WTO Dispute Settlement

The WTO dispute settlement process is the key enforcement mechanism for ensuring compliance with multilateral trade obligations. The NAM believes all WTO member economies, including the United States, should comply with WTO agreements, including the Dispute Settlement Understanding.

The NAM favors aggressive U.S. government use of WTO dispute settlement procedures to obtain foreign compliance with multilateral obligations and eliminate unfair practices. The NAM also believes that the United States should seek further improvement and reform of the existing WTO dispute settlement procedures, including measures to expedite the dispute settlement process, and should consult with industry on specific priorities.

1.02d. Compliance with Bilateral/Regional Agreements

The NAM supports effective compliance with all provisions of bilateral and regional agreements negotiated by the United States. Signing trade agreements is only the first step in obtaining more open markets. Implementation of agreements with follow-up, monitoring, enforcement and periodic review is essential to obtain full benefits.

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1.03. Intellectual Property Rights (IPR) Protection

TheftTheft of intellectual property in all forms has become an epidemic around the world and accounts for a rising portion of world trade. Fake products and other forms of IPR violations undermine innovation, impose a staggering cost in terms of lost sales and jobs, undercut brand reputations, increase risk and create real and actionable liabilities, and create serious health and safety hazards. Increasingly, the value of American manufacturing companies is becoming more aligned with their intellectual property, i.e., the patents, trademarks, trade secrets, mask works and copyrights they hold. For U.S. companies to thrive in the global economy, a new commitment must be undertaken to address all forms of intellectual property theft.

In addition to outright theft, there is also a growing trend among some emerging countries to accelerate technology transfer by forcing the licensing of patents for "essential" technologies and the disclosures of trade secrets as a condition of market access. The NAM opposes this trend and is strongly supportive of U.S. and international efforts to prevent erosion of IPR.

The NAM supports reform and harmonization of the global patent and trademark system in a way that improves global IPR protection, ensures robust enforcement of IPR rules, educates developing nations on the importance of enforcing IPR rules, and reduces costs and increases efficiencies in establishing global IPR protections in all nations.

The NAM encourages U.S. government interagency coordination and cooperation to maximize the effective use of U.S. resources aimed at preventing IPR erosion and enforcing IPR protections globally. The NAM also encourages U.S. government outreach and cooperation with other trading partners to prevent IPR erosion and enhance IPR enforcement.
The NAM urges the U.S. government to enforce customs laws aggressively, ensure customs officers have all necessary authorities to seize counterfeit and pirated goods and fund adequately the agencies responsible for enforcement and application of IPR protection.

The NAM supports public policy measures in the United States and abroad that remove obstacles to full adherence to bilateral and multilateral conventions on intellectual property, provide improved access for U.S. copyrighted works and trademarked goods in foreign markets, and increase assurance of nondiscriminatory (national) treatment for U.S. patents, trade secrets, mask works and trademarked and copyrighted works.

Trade secrets are increasingly important to U.S. manufacturers, but they receive inadequate protection in many markets.  Full implementation of WTO provisions and expansion of protections in ongoing and future trade agreement negotiations will help ensure fair treatment for U.S. firms and prevent the forced disclosure of proprietary information as a condition of market access.

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1.04. Technical Standards

Technical Technical standards and regulatory policies can serve to increase the cost of exporting and importing, and at times can prevent market access altogether.

1.04a. Harmonization and Other Facilitating Solutions

The NAM supports the maximum harmonization of standards and regulatory requirements and also seeks the adoption of global standards where possible. Where this is not possible, the NAM seeks other pragmatic solutions, such as acceptance of functional equivalence of standards and mutual recognition of conformity assessment tests. The NAM also seeks to prevent and reverse the proliferation of unique regulatory and technical standards as trade barriers. The NAM believes that reliance on the WTO Technical Barriers to Trade (TBT) principles for the development of international standards and the principle of national treatment for conformity assessment bodies should serve as the foundation of an effective solution.

The NAM also believes bilateral and regional arrangements can reduce the use of technical standards as trade barriers. Standards, technical regulations and conformity assessment procedures should be applied evenly to both imported and domestic goods. These processes should be transparent and allow reasonable opportunities for public access to all stakeholders.

1.04b. Voluntary Standards

Voluntary standards""developed by industry through trade associations, technical societies and accredited standards development organizations and approved as American national standards""have made a major contribution to orderly industrial development without impairing the flexibility of enterprise or the generally desirable diversity of industry products available to the public. We believe that American industry should continue to build comprehensive, integrated standards consistent with its advancing needs. The NAM also endorses having these accepted as globally recognized standards as widely as possible.

The U. S. system of voluntary standards depends on the ability of the United States to assure its trading partners that non-tariff barriers are not created by such voluntary standards. The NAM supports cooperation between standards development organizations and U. S. government agencies to ensure that this is the case.

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1.05. Preferences

The NAM is very concerned about the large U.S. trade and current account deficits, which threaten both continued growth and standards of living in the United States and could well undermine global economic stability. However, the application of U.S. trade sanctions against others solely on the basis of their bilateral trade surpluses with the United States runs counter to the letter and spirit of the WTO, and the NAM is opposed to amending U.S. law so as to force action against our trading partners solely on the basis of their trade balances with this country. Where foreign unfair trading practices that injure U.S. commerce can be identified, those practices themselves are the proper focus of U.S. government attention, and not the foreign trade surpluses with which they may be associated.
1.06. Export Promotion

The NAM is very concerned about the large U.S. trade and current account deficits, which threaten both continued growth and standards of living in the United States and could well undermine global economic stability. However, the application of U.S. trade sanctions against others solely on the basis of their bilateral trade surpluses with the United States runs counter to the letter and spirit of the World Trade Organization, and the NAM is opposed to amending U.S. law so as to force action against trading partners of the United States solely on the basis of their trade balances with this country. Where foreign unfair trading practices that injure U.S. commerce can be identified, those practices themselves are the proper focus of U.S. government attention, and not the foreign trade surpluses with which they may be associated.

1.07. Export Promotion

The NAM supports a strong U.S. government export promotion program aimed at helping U.S. companies, particularly smaller and medium-sized companies, find new customers and markets for their exports.

1.06a. Export Promotion Programs

The NAM urges adequate funding of export promotion programs sufficient to provide full export assistance for all significant markets, with particular attention to dynamic growing markets. The NAM believes that an effective export promotion program must be affordable, particularly for small and medium-sized firms. Such a program can pay for itself by generating a future stream of export earnings that will also result in higher tax revenues for the U.S. government. The NAM believes this program should be flexible, with resources being moved to facilitate exports to the most rapidly growing markets. The NAM also urges close coordination among the export promotion organizations and export financing organizations. There should be close consultation between the export promotion agencies and the NAM and other private sector organizations to ensure the maximum effectiveness of the programs.

1.06b. Joint Export Ventures

The NAM supports the continuation and promotion of joint export trade by entities organized pursuant to the Webb-Pomerene and Export Trading Companies Acts that are openly transparent, registered with U.S. government authorities, and generate efficiencies and economies of scale to the benefit of U.S. exports, overseas consumers and global competition. The Webb-Pomerene and Export Trading Companies Acts authorize the formation and operation of U.S. export joint ventures, whereby registered associations and corporations are granted limited exemption from U.S. antitrust laws provided they operate solely in export or the course of export, are not in restraint of the export trade of any domestic competitor and do not substantially lessen competition in the United States.

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1.07. International Business Conduct

The NAM believes that companies must maintain high standards of ethical business conduct abroad as well as at home. The legal requirements in a host country should be strictly observed, even if local authorities are unable or unwilling to enforce them. Companies should respect relevant international instruments where national law is absent. To the maximum extent feasible, international agreements should be sought that would place U.S. firms in comparable positions to firms of other countries with respect to the conditions of doing business.
In today's global economy, there is a need to reaffirm commitment to fair and ethical competition in all commercial settings. Bribery and extortion are often difficult to disentangle, but both are obviously harmful and dangerous to private enterprise and should be vigorously prosecuted under applicable national laws. Bilateral or multinational agreements, such as the Organization for Economic Cooperation and Development's (OECD) Anti-Bribery Convention, which help advance the objective of full and fair enforcement of effective national laws in all trading nations, should be implemented by more countries. Corporate management should also take international measures necessary to ensure company adherence to the highest standards of international business practice.

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1.08. Relations with Emerging Economies

The NAM believes that maximum reliance on free private enterprise and market forces will provide the best economic development results. At a minimum, the private sector requires an adequate system of laws and regulations affording protection of contractual and industrial property rights and a fair dispute settlement mechanism in order to contribute the type of long-term trade and investment benefits most needed in a developing country.

The governments of the advanced or more affluent countries should recognize the special needs of less affluent countries and seek ways to cooperate effectively in their development needs, encouraging the optimal use of private sector resources wherever possible.

The NAM should be viewed as a partner in the effort to reduce poverty in developing countries. With more economic growth and less suffering there will be new markets and opportunities for NAM members. The NAM recognizes that in many of world's poorest countries, humanitarian and development assistance is necessary to improve living conditions, combat corruption and provide the "know-how" to drive economic growth and trade. We support those efforts.

The NAM supports encouraging emerging economies to participate in the rules-based world trading system and to take on increasing commitments consistent with their international obligations. This must include providing effective market access to U.S.-made goods and services. The United States and other developed economies should also provide greater market access for the goods and services produced by developing countries. In this regard, particular emphasis should be given to the poorest countries that currently barely participate in world trade.

We also recognize that transformational development is primarily a function of enlightened leadership within developing countries that embraces good governance, the rule of law, and free enterprise. So wherever practical, aid should be given in a manner consistent with the development of private enterprise and free markets. We support well run capacity building programs to help make trade possible. We also encourage developing countries to further open their markets to imports. To remove physical trade barriers we urge the donor community to devote more resources to infrastructure lending and investment -- particularly in landlocked countries.

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1.08a. Preferences

The NAM supports the U.S. preferences programs as a means of aiding economic development in developing economies, reducing U.S. producer and consumer prices, and providing an inducement to those countries to respect the norms of international commerce. This should include due regard for property owned by U.S. citizens including intellectual property, equitable and reasonable access both to markets and basic commodity resources, adequate observance of labor and environmental provisions, and actions to reduce distorting investment practices and policies. Preferences programs should not be viewed as an entitlement, and a recipient's eligibility should be reviewed regularly and rigorously.

1.10. Access to Basic Manufacturing Inputs

The NAM supports efforts to facilitate legitimate trade, reduce costs and streamline procedures at U.S. borders, without in any way diminishing trade, customs and other law enforcement. The NAM believes that increased security at our borders and the efficient flow of goods across our borders are not mutually exclusive objectives. While fully recognizing the need for enhanced security, the NAM believes it is important to seek a better balance of trade and security objectives at U.S. borders.

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1.11. Inequity in WTO Tax Provisions

The NAM believes that there is no sound economic rationale for the WTO to allow border-adjustability for "VAT" and other indirect taxes used by other governments, but not to allow such border-adjustability for corporate and other direct taxes used in the United States. Fixing this WTO provision has long been a goal of U.S. trade policy. The NAM believes that this WTO provision harms the competitiveness of U.S. goods, and supports determined efforts by the U.S. government to end this inequity.
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1.12. Trade-Related Aspects of Climate Change

The NAM believes that mitigating the impact of global warming by reducing greenhouse gas emissions is a significant and important goal for all nations. Any initiatives to achieve this goal, however, must not put American manufacturers at a relative competitive disadvantage. If actions are not taken by all significant emitters, there is substantial risk of carbon leakage that could nullify the effects of unilateral domestic action.

1.12a: Multilateral Framework Agreement

The NAM believes that a WTO-consistent, comprehensive global framework agreement should be sought to determine rules governing any border measures. If such a comprehensive agreement proves impossible, then a WTO-consistent plurilateral agreement should be sought with as many participants as possible. Any international agreement must take into consideration the methods that will be used to enforce commitments, and these must be fair, transparent and effective.

If unilateral measures by the United States prove necessary, they should comply with our international obligations, give careful consideration to the potential for harmful effects on U.S. manufacturers of possible reciprocal actions by our trading partners and take into particular account the vulnerability of SMMs. The goal of any agreement or unilateral measure should be to prevent carbon leakage by ensuring that no country gains a competitive advantage by failing to take action to reduce carbon emissions.

1.12b: Protection of Intellectual Property Rights (IPR)

The NAM also believes there needs to be a careful balance on the part of the United States and other developed nations in how intellectual property-related issues are treated in a global or plurilateral climate change agreement. It is vital that the IPR of manufacturers be fully protected. The United States should not enter into any commitments that would require non-voluntary transfers of technology relevant to the achievement of greenhouse gas emissions or other environmental goals. Compulsory transfers of technology would seriously threaten both the future competitive position of the United States and the development of new technologies to achieve environmental objectives, while also putting at risk U.S. green jobs.

1.12c: Trade in Environmental Goods & Services

The NAM urges the U.S. government to accelerate efforts to obtain an Environmental Goods and Services Agreement in the WTO""or with willing trading partners""that would eliminate all possible tariff and non-tariff barriers to the purchase of environmental goods, services and technologies, and that would fully protect the IPR rights of U.S. manufacturers. Eliminating such barriers would substantially reduce the cost of investments to improve the global environment, increase the use of environmental goods and services, and provide an incentive for the more rapid development of more technologies.

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