Global Manufacturing Economic Update: December 2015

A Publication of the National Association of Manufacturers

MONDAY ECONOMIC REPORTNAM/IndustryWeek Survey of Manufactures Business Outlook by Quarter, 2012-2014

The latest National Association of Manufacturers (NAM) quarterly survey found that 59.6 percent of respondents were positive about their own company’s outlook, down sharply from 91.2 percent one year ago. Export expectations help to explain much of the deceleration in the economic outlook for the sector. Of those companies that anticipated increased exports over the next 12 months, 75.4 percent were positive in their outlook in this survey. In contrast, the percentage of respondents who were positive fell to 61.7 percent for those expecting their exports to remain the same and to 39.1 percent for those predicting decreased exports over the next year. Overall, respondents expect relatively flat export growth in 2016. Along those lines, 57.9 percent said that the recent slowdown in global growth had negatively impacted their international sales. Indeed, manufactured goods exports have declined 6.1 percent year-to-date through October in 2015, including to our top four markets.

In addition to the stronger U.S. dollar, the weaker international demand in large part reflects soft economic conditions abroad. Manufacturing activity expanded in half of the top 10 markets for U.S.-manufactured goods exports for the month, with the other half experiencing contractions. This has been unchanged since July, and the challenge remains that many of the nations in negative territory have been there for much of this year. Manufacturers in Brazil, for instance, reported a further deterioration in new orders and output, with its PMI falling to its lowest level since March 2009. Activity continued to decline in Canada, China, Hong Kong and South Korea. Moreover, the emerging markets have now contracted for eight straight months, with only the Czech Republic and Poland standing out as bright spots.

Overall, manufacturing activity continued to expand, albeit at a pace of growth that remains far from robust. The J.P. Morgan Global Manufacturing PMI edged slightly lower, down from 51.4 in October to 51.3 in November, but each month reflected improvements after softer data in August and September. The October reading, for example, had represented a six-month high, and in November, output picked up a little, expanding at its fastest rate since March.

One area where conditions appear to be moving in the right direction overall is Europe, but even there, global challenges persist. The Markit Eurozone Manufacturing PMI increased to its highest level since April 2014, with key indicators higher across-the-board. With the exception of Greece, manufacturers reported expanding levels activity in every major market, even for those which experienced some easing in growth rates in November. Sentiment in Germany, Italy and Spain improved for the month on decent demand and production growth. With that said, real GDP grew 0.3 percent in the third quarter, slowing from 0.4 percent growth in the second quarter, and retail sales were off by 0.1 percent in October. In addition, the unemployment rate remained highly elevated despite falling to 10.7 percent in October, its lowest rate since January 2012.

Along those lines, the European Central Bank (ECB) remains concerned enough about sluggish growth and a very low annual inflation rate to lower its key interest rate and expand its quantitative easing program through March 2017. These moves were less than financial markets anticipated, however, prompting speculation of further ECB moves down the line. In contrast to these moves (and similar stimulative moves in other nations), the Federal Reserve is likely to begin raising short-term interest rates at its next meeting, with further increases expected in 2016. More than half of respondents to the most recent NAM survey worry about such a move at the December 15–16 Federal Open Market Committee meeting, hoping that the Federal Reserve would wait for better manufacturing data before acting. More than anything, this likely speaks to current concerns over the global economic outlook, and it also speaks to the strength in the U.S. dollar, something that is exacerbated by the diverging monetary policy strategies of the Federal Reserve and its foreign counterparts.

After more than a five-month lapse, the president signed into law a multi-year reauthorization of the Export-Import (Ex-Im) Bank of the United States. Congress is preparing to act this week on new trade facilitation and enforcement legislation. Congress may also potentially repeal provisions on Country of Origin Labeling (COOL) for meat that are contrary to international rules. Next week, the World Trade Organization (WTO) holds its 10th Ministerial Conference in Nairobi, Kenya, with few concrete outcomes likely. Discussions continue between the Obama administration and Congress on the path for the Trans-Pacific Partnership (TPP) agreement, while the next round of the Transatlantic Trade and Investment Partnership (TTIP) talks will await the new year.

Chad Moutray, Ph.D., CBE
Chief Economist
National Association of Manufacturers

Global Economic and Trade Trends

There were signs of progress in the global economy in November, even as growth worries remain ever-present among manufacturers.
The J.P. Morgan Global Manufacturing PMI edged slightly lower, down from 51.4 in October to 51.3 in November. The October reading had represented a six-month high, and manufacturing activity has improved from softness in August and September, albeit with growth that has been at a far-from-robust pace. The data for November were mixed. Output (up from 51.9 to 52.3) picked up a little, expanding at its fastest rate since March. However, new orders (down from 52.0 to 51.5), exports (down from 51.2 to 51.0) and hiring (down from 50.7 to 50.6) each eased a bit for the month.

The country-by-country analysis was little changed once again in November. Manufacturing activity expanded in half of the top 10 markets for U.S.-manufactured goods exports for the month, with the other half experiencing contractions. This has been unchanged since July, and the challenge remains that many of the nations in negative territory have been there for much of this year. Manufacturers in Brazil (down from 44.1 to 43.8) reported a further deterioration in new orders and output, with its PMI falling to its lowest level since March 2009. Other nations with contracting levels of activity were mixed in November, including Canada (up from 48.0 to 48.6), China (up from 48.3 to 48.6), Hong Kong (unchanged at 46.6) and South Korea (unchanged at 49.1).

In contrast, the other top markets continued to expand modestly. Growth in manufacturing activity in the United Kingdom (down from 55.2 to 52.7) slowed somewhat in November after reaching the largest monthly PMI gain in the survey’s history in October. At the same time, the monthly performance in the remaining four nations was more varied, including Germany (up from 52.1 to 52.9), Japan (up from 52.4 to 52.6), Mexico (unchanged at 53.0) and the Netherlands (down from 53.7 to 53.5).

Global headwinds continue to dampen U.S. manufacturer enthusiasm.
The latest National Association of Manufacturers (NAM) quarterly survey found that 59.6 percent of respondents were positive about their own company’s outlook, representing the fourth consecutive easing in sentiment and down from 91.2 percent one year ago.

Export expectations help to explain much of the deceleration in the economic outlook for the sector. Of those companies that anticipated increased exports over the next 12 months, 75.4 percent were positive in their outlook in this survey. In contrast, the percentage of respondents who were positive fell to 61.7 percent for those expecting their exports to remain the same and to 39.1 percent for those predicting decreased exports over the next year. Overall, respondents expect exports to grow by just 0.02 percent over the next 12 months, essentially predicting no growth in 2016. Along those lines, 57.9 percent said that the recent slowdown in global growth had negatively impacted their international sales (see the figure above).

Canada, our largest trading partner, continues to struggle due to lower crude oil prices.
In fact, manufacturing activity has contracted in 8 of the 11 months so far in 2015. At the same time, the RBC Canadian Manufacturing PMI improved from 48.0 in October, the lowest PMI level in the survey’s five-year history, to 48.6 in November. Canadian exports (up from 48.2 to 50.9) returned to positive territory for the month, and the pace of decline for output (up from 46.0 to 48.9) slowed. Each helped to improve the headline number. Still, new orders (down from 49.2 to 48.1) and employment (down from 48.0 to 47.9) continued to reflect weak economic growth overall. Conditions remained soft in Alberta and British Columbia (up from 42.5 to 43.4) and Quebec (down from 49.4 to 49.1), but there was slight progress in Ontario (up from 53.9 to 54.6) and the rest of Canada (up from 51.3 to 51.7).

The macroeconomic data in Canada provided mixed news for manufacturers. On the positive side, real GDP grew 0.6 percent, or 2.3 percent at the annual rate, in the third quarter, rebounding after declines in the prior two quarters on stronger export activity. Nonetheless, manufacturing output fell 0.6 percent in September on reduced output for both durable and nondurable goods firms, with output down 0.9 percent year-over-year. Retail sales were also lower, down 0.5 percent in September, and the unemployment rate inched up from 7.0 percent in October to 7.1 percent in November. Despite the increase, manufacturers added 17,400 employees for the month, with 24,000 more workers on net over the past 12 months.

Demand and production picked up a little in November in Mexico.
The Markit Mexico Manufacturing PMI was unchanged at 53.0, with new orders up from 54.1 to 54.4 and output up from 53.6 to 54.1, but with easing in exports (down from 52.2 to 51.2) and hiring (down from 53.8 to 52.2). Overall, manufacturing activity has improved from the summer, the headline index bottoming out at 52.0 in June, but has decelerated from more robust growth earlier in the year, including a PMI value of 56.6 in January. Two months ago, the largest concern was rising input prices, which had risen to a two-year high. In this report, raw material costs (down from 61.0 to 57.0) decelerated for the second straight month, even as they remained elevated. The strength in the U.S. dollar could explain at least part of this inflation.

Real GDP grew 2.6 percent at the annual rate in the third quarter of 2015, its strongest pace since the fourth quarter of 2014. New industrial production data will be released on December 11, and it is expected to show modest growth for manufacturers in Mexico. In the prior report, industrial production picked up somewhat, up from 1.0 percent year-over-year in August to 1.7 percent in September. On the other hand, retail sales decelerated from 6.4 percent at the annual rate in August to 4.9 percent in September. The unemployment rate inched up from 4.5 percent in September to 4.6 percent in October.

China has contracted in all but one month in the last year.
The Caixin China General Manufacturing PMI increased for the second straight month, up from 48.3 to 48.6, but overall activity remained in negative territory once again in November. On the positive side, output (up from 48.1 to 50.0) stabilized after six consecutive months of declines, and exports (up from 50.7 to 51.6) picked up a little. Yet, the pace of new orders (down 48.0 to 47.8) fell at a faster rate, and employment (up from 47.2 to 47.4) has contracted now for 25 straight months, albeit with a slight easing in this latest report. Meanwhile, the official manufacturing PMI data from the National Bureau of Statistics of China also reported contracting activity in November, down from 49.8 to 49.6, with weaker activity seen at small and medium-sized enterprises than for their larger counterparts.

In general, Chinese economic growth continues to decelerate. While real GDP grew 6.9 percent at the annual rate in the third quarter, down from 7.0 percent in the second quarter, other indicators suggest that activity is downshifting even faster than that. New data on industrial production, retail sales and fixed asset investment will be released on December 12, but each is expected to ease from prior months. In October, industrial production slowed to 5.6 percent year-over-year, down from 5.7 percent in September and 7.9 percent in December 2014. Earlier in the week, we learned that Chinese exports fell 3.0 percent year-over-year in November, declining for the fifth straight month. Perhaps more troubling (and a sign of softness in the Chinese domestic economy), imports have fallen 15.1 percent year-over-year. Its trade surplus narrowed from $61.6 billion in October to $54.1 billion in November.

Japanese manufacturing activity expanded at its fastest pace since March 2014.
The Nikkei Japan Manufacturing PMI increased from 52.4 to 52.6, a twenty-month high. Stronger output (up from 52.4 to 53.9) and exports (up from 52.2 to 53.2) helped to push the headline index higher. At the same time, new orders (down from 54.2 to 53.6) and hiring (52.4 to 52.3) each grew at a slightly slower (but still decent) pace for the month. Overall, these data suggest that manufacturers in Japan have improved since the spring and early summer, when activity stagnated in the nation.

This mirrors the most recent real GDP data. The Japanese economy growing 0.3 percent in the third quarter, rebounding from a decline of 0.2 percent in the second quarter. Expressed in annual terms, real GDP grew 0.7 percent and 1.6 percent in the second and third quarters, respectively, improving from four straight quarters of decreasing output prior to that. Along those lines, industrial production grew 1.4 percent in October, up from 1.1 percent in September. This reflects progress from decreases observed in three of the four months from May through August. Yet, production has declined 1.4 percent year-over-year, indicating softer-than-desired growth in output despite recent gains.

The Eurozone economy continues to move in the right direction overall, even amidst global challenges.
The Markit Eurozone Manufacturing PMI increased from 52.3 to 52.8, its highest level since April 2014. Key indicators were higher across-the-board, including new orders (up from 53.2 to 53.5), exports (up from 52.7 to 53.0), output (up from 53.6 to 54.0) and employment (up from 51.1 to 51.9). The European Central Bank has worried about deflationary pressures in the economy, and input prices (up from 44.3 to 45.6) remained negative, albeit with some easing in the rate of decline for the month.

The country-by-country analysis reflect modest expansions in most markets. Manufacturing activity improved in Germany (up from 52.1 to 52.9), Italy (up from 54.1 to 54.9) and Spain (up from 51.3 to 53.1), with each notching decent demand and production growth for the month. In addition, manufacturers in France (unchanged at 50.6) cited growth in their sector for the third consecutive month, a sign that their economic conditions have advanced from challenges earlier in the year. At the same time, activity eased in Austria (down from 53.0 to 51.4), Ireland (down from 53.6 to 53.3), the Netherlands (down from 53.7 to 53.5) and the United Kingdom (down from 55.2 to 52.7), but manufacturing remained at a decent pace in each. Meanwhile, Greece (up from 47.3 to 48.1) continued to contract, even as it notched its best reading since March and progress from July’s miserable 30.2 reading. Still, it was the 14th consecutive monthly contraction, reflecting continuing challenges.

While the European economy appears to be on the right path long-term, current macroeconomic data indicate that manufacturers on the continent are not immune from global challenges. On the macroeconomic front, real GDP grew 0.3 percent in the third quarter, slowing from 0.4 percent growth in the second quarter. On a year-over-year basis, the Eurozone region expanded by 1.6 percent. While retail spending has increased modestly over the past 12 months, up 2.5 percent, sales were off by 0.1 percent in October. A similar trend is expected for industrial production data for October, which will be released on December 12. In September, industrial production was soft, with year-over-year growth of 1.7 percent. On the positive side, the unemployment rate has declined from 10.8 percent in September to 10.7 percent in October, its lowest rate since January 2012. Nonetheless, the European Central Bank (ECB) remains concerned enough about sluggish growth and a very low annual inflation rate to lower its key interest rate and expand its quantitative easing program through March 2017. These moves were less than financial markets anticipated, however, prompting speculation of further ECB moves down the line.

Emerging market economies contracted for the eighth straight month.
The Markit Emerging Markets Manufacturing index edged slightly higher, up from 49.0 in October to 49.2 in November. This represented a slight improvement from September’s 48.5 reading, which had been the lowest level since March 2009. Yet, the underlying data also indicate continuing weaknesses overall, even with some stabilization in production and exports. Output (up from 48.9 to 49.9) was only barely negative on net, and exports (up from 50.0 to 50.2) expanded ever-so-slightly for the first time since January. However, new orders (up from 48.8 to 48.9) and employment (unchanged at 48.7) remain in contraction territory. At the same time, manufacturers continue to be cautiously positive about the coming months. The forward-looking composite index for future output (down from 59.4 to 58.4) indicates decent growth ahead even with optimism pulling back significantly over the course of this year.

The Czech Republic (up from 54.2 to 54.0) and Poland (up from 52.1 to 52.2) remain bright spots in the emerging markets, with India (down from 50.7 to 50.3) and Russia (down from 50.2 to 50.1) also seeing expanding levels of manufacturing activity in November, albeit with the latter two slowing somewhat for the month. At the same time, Turkey (up from 49.5 to 50.9) rebounded to its strongest pace of growth year-to-date, and South Africa (up from 47.5 to 49.6) and Taiwan (up from 47.8 to 49.5) moved closer to stabilization, even as they continued to have declining levels of activity overall. In contrast, reduced new orders and exports pulled Vietnam (down from 50.1 to 49.4) back into contraction for the second time in the past three months. Beyond those nations, several countries have been persistently mired in contraction territory for much of this year, with little expectation of that changing in the near future. Those markets include Brazil (down from 44.1 to 43.8), China (up from 48.3 to 48.6), Hong Kong (unchanged at 46.6), Indonesia (down from 47.8 to 46.9) and South Korea (unchanged at 49.1).

Manufactured goods exports have declined so far this year.
Overall, this report continues to show how much manufacturers have struggled from global headwinds through the first ten months of this year. Manufactured goods exports totaled $937.3 billion year-to-date using non-seasonally adjusted data, which is down 6.1 percent from the $998.18 billion in the same time period last year.

This trend extends to the top four markets for U.S.-manufactured goods: Canada (down from $262.25 billion year-to-date to $236.78 billion), Mexico (down from $201.80 billion to $198.86 billion), China (down from $99.39 billion to $95.38 billion) and Japan (down from $55.99 billion to $52.76 billion). In addition, exports of manufactured goods to the Europe, our second largest region after North America, were also lower year-to-date (down from $279.64 billion to $$269.53 billion).

The U.S. trade deficit widened slightly in October.
The trade deficit widened slightly, up from $42.46 billion in September to $43.89 billion in October. These data have been highly volatile over the course of this year, ranging from a low of $38.54 billion in February to $52.16 billion in March, but year-to-date, the trade deficit has averaged $44.50 billion in 2015. That is somewhat higher than the $42.36 billion average observed in all of 2014. The October increase in the trade deficit stemmed from a decline in goods exports (down from $126.88 billion to $123.76 billion) that was enough to offset a decline in goods imports (down from $187.85 billion to $186.81 billion) and an increase in the service-sector surplus (up from $18.51 billion to $19.16 billion).

At least part of the decline in goods trade could be explained by petroleum. The petroleum trade deficit has declined significantly over the course of the past year, when it measured $15.41 billion. In this report, it decreased from $5.56 billion to $4.47 billion, with petroleum imports at their lowest level since November 2003.

Overall, goods exports were down across-the-board, including for industrial supplies and materials (down $1.61 billion), capital goods (down $928 million), foods, feeds and beverages (down $598 million), consumer goods (down $516 million) and automotive vehicles and parts (down $162 million). At least half of the decline in industrial supplies and materials stemmed from petroleum. Likewise, crude oil also accounted for the bulk of the $2.04 billion decline in imports for industrial supplies and materials. Looking at the imports for other goods sectors, the data were mixed. Imports were higher for capital goods (up $538 million), automotive vehicles and parts (up $287 million) and consumer goods (up $245 million), but lower for foods, feeds and beverages (down $430 million).

International Trade Policy Trends

President Obama signs long-term reauthorization of Ex-Im Bank.
On December 4, the president signed into law a bill that included a multi-year reauthorization of the Ex-Im Bank, effectively re-opening the bank’s doors after a five-month lapse. The Ex-Im Bank is now transitioning back to normal operations and accepting new applications. As NAM President and CEO Jay Timmons put it, “This is a victory for manufacturers of all sizes as well as for workers here in the United States. Earlier in the week, the House approved the conference report for a multi-year surface transportation reauthorization bill—the Fixing America’s Surface Transportation (FAST) Act (H.R. 22)—that included a long-term reauthorization of the Ex-Im Bank. The Senate approved the bill soon thereafter. Division E of the FAST Act is identical to the Export-Import Bank Reform and Reauthorization Act of 2015 (H.R. 3611) that previously passed the House as a stand-alone bill and to S. 819, which the Senate adopted as an amendment (S.A. 2327) to the long-term highway bill in July. Last month, the House rejected 10 amendments that would have altered that language.

The legislation reduces the Ex-Im Bank’s lending authority to $135 billion from $140 billion, increases the agency’s small business lending target to 25 percent from 20 percent and prohibits Ex-Im Bank from promulgating policies that discriminate against any type of energy source solely based on the industry involved in the application. It also extends the Ex-Im Bank’s authority through September 30, 2019. The legislation contains additional reforms to ensure risk-management of the agency’s loan portfolio and encourage international negotiations to limit official export credit agency (ECA) activity.

The NAM led the business community’s multi-faceted advocacy effort to secure a long-term reauthorization for Ex-Im Bank. If you need more information about the Ex-Im Bank, please visit the NAM’s Ex-Im Web page or contact NAM Director of Trade Facilitation Policy Lauren Wilk.

Congress moves to act on trade facilitation and enforcement package.
After months of informal discussions on the Trade Facilitation and Trade Enforcement Act of 2015 (H.R. 644), the House appointed conferees on December 2 to negotiate formally with the Senate conferees appointed over the summer. After meeting earlier this week, the conferees announced a deal, and the conference report to H.R. 644 was filed on December 9, along with a Joint Explanatory Statement of the Committee of the Conference. The final conference report, which is summarized here, contains several NAM priorities including the following:

  • New customs modernization provisions to eliminate red tape and unneeded border delays. including provisions related to automated processing, raising the de minimis level to eliminate taxes and unnecessary paperwork on low-value shipments, changes to reduce the record-keeping burden on goods returned to the United States without improvement abroad and an exemption from import taxes on empty containers containing only residue.
     
  • The Enforcing Orders and Reducing Customs Evasion Act (ENFORCE) that provides basic due process and time-limited procedures subject to judicial review for Customs and Border Protection to investigate allegations of the evasion of trade remedy rules.
     
  • New provisions to advance global intellectual property protection and improve trade agreement enforcement.
  • A reauthorization of the State Trade and Export Promotion (STEP) program for small business exports.

The House and Senate are preparing to take up this legislation this week, and the NAM will be working strongly for its quick approval and implementation by the Administration.

Congress squanders opportunity to move forward new Miscellaneous Tariff Bill (MTB) process.
Although the Senate had included a new regularized MTB process in its customs package last spring, the House rejected the process and conferees were unable to agree on a concrete path forward. The conference report to H.R. 644 includes “sense of Congress” language urging the advancement “as soon as possible” of a “regular and predictable legislation process for the temporary suspension and reduction of duties.” The last MTB Congress passed expired on December 31, 2012. Since then, companies have faced an annual $748 million tax hike on manufacturing in the United States and a $1.857 billion economic loss to the U.S. economy. Congress’ failure to act on this important issue is inexplicable given the broad bipartisan support for eliminating import taxes on products not even produced in the United States.

Uncertain outcome for WTO at 10th Ministerial Conference in Nairobi.
The U.S. and other WTO countries continue to wrangle over possible concrete outcomes (so-called “deliverables”) at the 10th Ministerial Conference to be held in Nairobi, Kenya December 15-18. Among the items being discussed are a small agriculture package designed to benefit developing countries, agreement on an expanded Information Technology Agreement (ITA), a way forward for the WTO as a forum for trade negotiations (including whether or not to continue Doha Round discussions and possible new plurilateral agreements). Efforts to produce agreement on product coverage of the Environmental Good Agreement (EGA), is unlikely.

Country-of-Origin Labeling (COOL) reform awaits Senate action.
The NAM is continuing to co-lead the COOL Reform Coalition and end the threat of retaliation against U.S.-manufactured exports to Canada and Mexico following a final judgment on May 18 by the WTO finding that the United States had violated its international obligations through the COOL legislation. On December 7, the WTO panel found that Canada and Mexico may impose retaliation levels of $777 million and $228 million, respectively. Summaries of the WTO’s key findings for Canada can be found here, and key findings for Mexico can be found here. The WTO’s Dispute Settlement Body will officially authorize Canada and Mexico to retaliate against the United States at a special meeting to be held December 18.

Environmental Goods Agreement (EGA) talks continue in early December.
The 11th round of EGA negotiations took place November 30 to December 4 in Geneva, Switzerland, where discussions continued on the products nominated for duty-free treatment by the United States and other countries. Negotiators continued to discuss where convergence may exist in terms of export priorities, countries’ import sensitivities and customs-related challenges. The Coalition for Green Trade, of which the NAM is a co-chair, released a global business letter on December 1 calling for substantial progress on EGA by the WTO’s 10th Ministerial Conference. The NAM, on behalf of the coalition, also has organized meetings with Washington, D.C., embassy representatives of countries negotiating the EGA.

Administration and Congress continue discussions on Trans-Pacific Partnership (TPP).
Following the conclusion of the TPP negotiations on October 5 and the release of the TPP text on November 5, the Administration and Congress have engaged in significant dialogue on the details of the deal and next steps regarding its implementation. Concerns have been expressed by the Senate Finance Committee Chairman Hatch and new House Ways and Means Committee Chairman Kevin Brady (R-Texas), among others, regarding several aspects of the agreement, including weaker than sought intellectual property protections and other provisions. The TPP parties appear to be preparing to sign the agreement on February 4, which is consistent with the Trade Promotion Authority procedures enacted earlier this year. On December 4, the Office of the U.S. Trade Representative (USTR) released publicly the statutorily required advisory committee reports on the TPP. The Department of Commerce has also issued updated sector-specific reports. Let us know if you need more information on the TPP by contacting NAM Vice President of International Economic Affairs Linda Dempsey and NAM Director of International Trade Policy Ken Monahan.

TTIP talks on hold until early 2016.
Following positive U.S.-EU negotiations in Miami, FL in October, the EU finalized its investor-state dispute settlement (ISDS) proposal in November, paving the way for U.S. and EU negotiators to discuss investment during the next round of talks expected to take place early next year. The NAM had submitted comments to EU and U.S. negotiators expressing concerns with several aspects of the proposals. The U.S. and EU also are expected to continue talks during the next round on other key manufacturing priorities, including tariffs; EU regulatory provisions (e.g., technical barriers to trade, sanitary and phytosanitary, regulatory coherence and sectoral regulatory convergence); intellectual property and geographic indications; customs and trade facilitation; rules of origin; small businesses; and services.

U.S.–EU negotiations continue on updated Safe Harbor Framework.
Following the October 6 European Court of Justice decision to dismantle effectively the U.S.–EU Safe Harbor Framework, U.S. and EU negotiators continue to seek an agreement on an updated framework prior to January 31, 2016, after which EU regional data-protection authorities have indicated enforcement actions could be undertaken against companies found to be in breach of the EU’s 1995 Data Protection Directive. The NAM continues to work closely with the Obama Administration and the EU Commission to address this substantial new challenge to transatlantic trade and investment. Please contact NAM Director of International Trade, Ken Monahan if you have examples of how the lack of a safe harbor framework is affecting your company.

Congressional action required for PNTR with Kazakhstan.
Kazakhstan acceded to the WTO as its 162nd member on November 30. For U.S. companies to benefit fully from the market-opening commitments to which Kazakhstan has committed, Congress must approve Permanent Normal Trade Relations (PNTR) with Kazakhstan. To that end, in July Rep. Dana Rohrabacher (R-Calif.) introduced H.R. 3400, which would extend PNTR to Kazakhstan, Tajikistan (already a WTO member) and Uzbekistan (not a WTO member). The NAM and its allies will continue to advocate for Kazakhstan PNTR in the weeks and months ahead.

Exports in Action

WEBINAR: “Hannover Messe: How to Capitalize on Pre-Show Marketing to Reach Your Customers in Germany and Beyond”

December 16
This free webinar will highlight the benefits of participating at Hannover Messe, the world’s largest industrial trade show. For the first time, in 2016 the United States will be featured as a partner country, offering a chance to highlight America’s most innovative technologies. Seasoned exhibitors and U.S. government officials will provide an overview of value-added programs available to domestic businesses and teach the best pre-show sales techniques.

WEBINAR: “WIPP-Export NOW: Trans-Pacific Partnership with Focus on Small Businesses”

December 17
Women Impacting Public Policy (WIPP) will host a webinar to provide insight into the TPP trade agreement. Officials from the Department of Commerce will explain the potential impact and opportunities of TPP for specific industries and small businesses.

For a listing of other upcoming Commerce Department trade missions, click here.

Questions or Comments?

Contact Chief Economist Chad Moutray at cmoutray@nam.org.