My company was founded in 1801 by Paul Revere, and we believe we are the oldest basic manufacturing company in the USA. Revere Copper Products no longer produces pots and pans but we do continue to manufacture copper and brass coils, sheet and strip as well as copper bar and copper alloy extruded shapes.
This means most of our customers are other manufacturing companies, largely in North America. Since the year 2000, Revere has seen over 30 percent of the manufacturing facilities that we ship to in the USA shut down and move offshore. During the same period, manufacturing employment in the USA has declined just over 30 percent.
Now, our country is in the process of negotiating the biggest Free Trade Agreement in its history: the Trans-Pacific Partnership, or TPP. Twelve trading partners are finalizing an agreement that will affect almost 40 percent of the global economy. Some of the more controversial hidden issues include currency manipulation, border adjustable taxes, environmental protection, and market access for agricultural products.
It seems our leaders believe that the only way to achieve such an agreement is through secrecy to such an extent that its provisions are hidden until negotiation is complete, and then demand a congressional “Fast Track” up or down vote with no possibility of amendment. Allowed only minimal access to its voluminous pages, those who must vote on the TPP find themselves in a dark room with no way to read between the lines.
The beneficiaries of all this secrecy are the multinationals and foreign nations who can afford expensive Washington DC lobbyists. The entities that suffer the consequences are domestic manufacturing companies like mine, our workers, and their families — in short, the American people.
We all hear a lot about the weakness of US GDP during this debate but few pundits take time to explain that GDP growth is a cumulative measure of the sum of consumption, investment, and government spending plus net exports. Even fewer focus on the critical importance of the last component of GDP growth — net exports.
The term net exports assumes the value of goods that our country exports is higher than the value of goods we import. That was true for most of our history. But in recent years, the US has imported a higher value of goods than we export. That deficit trade balance is known as net imports.
It seems our plan to grow trade is simply to negotiate free trade agreements (FTAs) with as many countries as possible — indeed, the more the better. But what if the FTAs we are negotiating actually hurt rather than help US GDP growth?
The most recent FTA negotiated with South Korea started almost two years ago in March, 2012. During the two years prior to this FTA, our nation’s trade deficit with South Korea ran $1 billion a month. It has been almost two years since and our monthly trade deficit with South Korea has increased over 50 percent to $1.6 Billion.
The rest of the countries in the world have international trading policies with pretty simple objectives. They want national security, economic power, and jobs.
The best way for a multinational to maximize earnings is to persuade the US government to accept the subsidies of other nations who want national security, economic power, and jobs. So we negotiate trade agreements that position our country to import subsidized goods and export high paying jobs, economic growth, and national security.
When I served on the Board of Directors of the National Association of Manufacturers (NAM), I asked the multinationals to recuse themselves from voting on an international trade issue because they were conflicted. They had to choose between their company and their country.
In a recent national poll sponsored in part by the U.S. Business and Industry Council, voters oppose fast-track authority by more than two to one. That opposition was strongest amongst Republicans with an overwhelming 87 percent oppose giving fast-track authority to the president. 64 percent of voters believe it will hurt small businesses, the very businesses that represent a majority of all employers. Only 11 percent of voters said they would be more likely to support someone who voted for fast tracking, while 43 percent said they would be more likely to oppose them.