Where should local manufacturers stand on free trade?

By Bart Taylor | May 29, 2015

National policymakers align with the outcome of the Trans-Pacific Partnership (TPP) negotiations in fairly predictable ways. Republicans generally support free trade and big business that benefit most from more open access to foreign markets. Democrats value their labor credentials and argue that agreements like TPP sap U.S. manufacturing jobs. Moderates in both parties tend to favor U.S. engagement over protectionism.

Manufacturers are equally divided on the issue of trade, and how free it should be. For every company that supports efforts like TPP, another views it a tangible threat that provides unfair and unreciprocated access to the U.S. economy.

Given the region's manufacturing ambitions, it's fair to ask what position local manufacturers should take on the deal.

Trade agreements are usually never as onerous as detractors suggest or enriching as advocates claim. But I also agree with Jay Timmons, chief of the National Association of Manufacturers (NAM). I asked Timmons about the dissonance among manufacturers, and to his credit he responded with a short and direct answer: With whom most every country the U.S. has a free trade agreement, we also have a positive trade balance. That's apparently good enough for NAM.

Certainly "free trade" can be one-sided. And despite recent gains, domestic U.S. manufacturing hasn't recovered to a level required to be competitive across industry sectors. But in the end, it seems that no amount of tariffs can protect the American economy from quality, global producers.

Competitiveness is the key. If we agree to keep the U.S. market open and available, the competitiveness of U.S. industry must continue to improve. For manufacturers, the formula's not that complicated: ready access to capital; streamlined regulation; a qualified workforce; a world-class innovation ecosystem; modern infrastructure, e.g. roads, airports, and water; and a resurgent cultural emphasis on making things here, and supporting businesses who do exactly that.

Surprisingly, for as much as manufacturers lament the sad state of the manufacturing 'brand', consumers are already leading a quiet but profound manufacturing comeback. In the West, food, lifestyle/consumer and technology manufacturing is being driven by growing demand. American-made is hot; the brand issue may be taking care of itself.

Finance? Not so much. Only this year will a first-ever manufacturing investor conference be held in the region. Workforce? Much has been done but there's more to do. World-class innovation? Check. Infrastructure? Regulatory and tax reform? Pending.

Competitiveness is the key. It's time to acknowledge that manufacturing success is more than just open markets, workforce development and innovation and technology. An embrace of fair and balanced trade first acknowledges that manufacturing's an economic linchpin -- regardless of industry sector. And that at all-out effort to improve competitiveness starts with recognizing what we lack.

Embrace free and open trade -- then develop the most competitive manufacturing economy in the world.