ThinkGlobal: International Trade News and Information for Importers and Exporters

ThinkGlobal: International Trade News and Information for Importers and Exporters:

"Q&A John Engler, President of the National Association of Manufacturers


John Engler is president and chief executive officer of the National Association of Manufacturers (NAM), the largest industry trade group in America, representing small and large manufacturers in every industrial sector and in all 50 states. Engler became NAM president on Oct. 1, 2004. Here, the former three-term Michigan governor discusses the health of the manufacturing sector and issues related to global competition.

We've been hearing a lot about American jobs being lost to outsourcing. How much pressure is on manufacturers in the U.S.? U.S. manufacturing - standing alone - would be the world's eighth largest economy. Last year, we produced a record volume of manufactured goods. Yet while U.S. manufacturing is more productive and innovative than ever before, and we are on a strong growth curve, fierce global competition now makes it nearly impossible to raise prices to keep pace with rising production costs.

How would you characterize the current health of the manufacturing sector in the United States? U.S. manufacturing finally came out of a lengthy recession and grew faster than the rest of the economy in 2004 for the first time in five years. We account for about $1.4 trillion of GDP, roughly two-thirds of all U.S. exports and three-fifths of private sector R & D. Manufacturing is the seedbed for innovation in our economy. A healthy manufacturing sector is critical to America's overall economic growth and prosperity.

What can be done to help American companies become more competitive in the world market?

We simply must reduce the cost of doing business in the United States. Unfair foreign trade practices are a problem, but some of our biggest wounds are self-inflicted. Health care and legal costs are rising at double-digit rates and energy prices are sky-high. We are doing this to ourselves through unwise policies or, as in the case of energy, absence of policies.

Are you concerned about the growing trade deficit with China?
You bet. That is specifically one of the reasons that we worry about rampant product counterfeiting in China and the Chinese currency valuation vis-a-vis the dollar. The Chinese simply must learn to obey the rules. We can compete with anyone on a level playing field, but the current situation is anything but.

Do we need trade-policy changes?
Our public policies need to reflect the 21st century realities of fierce competition in the global marketplace. On the home front, we simply have to get the external costs imposed on production under control. On trade, the NAM will continue to push for trade agreements that open more markets to U.S. exports. Our nation has lower tariffs than virtually any other country, and a disproportionate share of our trade deficit is with those countries with whom we do not have trade agreements. We are leading a joint effort with the Bush Administration to crack down on international counterfeiting. We also are fighting for currency reforms that lead to a market-based currency in China and other Asian nations.

More information about NAM is available online at www.nam.org