| 
Diane
Ritchey, Editor
|
According to a survey by
Vornado Air Circulation Systems in Andover, KS, U.S., there also appeared
to be a "Made in America" sentiment when it came to purchasing products
that have been manufactured in the U.S.
Approximately 99 percent
of respondents to Vornado's Made In America survey reported they would
purchase American-made products. A significant percentage, 42 percent,
said they would purchase American-made products even if priced higher
than comparable
foreign-made products. In
one of the cities where the survey was conducted, three-quarters of
the respondents said they would purchase American-produced items even
at a higher cost. More than 40 percent of respondents said that buying
American-made products was more important to them now, and 69 percent
said that a purchase of American-made products made a difference both
in an uncertain world and in an uncertain economy.
But what happens when production
for a majority of the goods they are purchasing is taking place outside
of the U.S.? For the past few years, manufacturing in the U.S. has
been experiencing "corporate globalization" - a buzzword that refers
to moving capital, goods, and services across borders. This strategy
can save companies millions, and consumers can reap benefits such as
access to other countries' products, often at lower prices.
The list of companies that
have moved their manufacturing outside of the U.S. is long. Most recently,
compressor maker Tecumseh announced it was moving its production from
the U.S. to India. Earlier this year, Maytag Corp. transferred four
assembly operations to a maquiladora in Reynosa, Mexico and had additional
plans to transfer 12 others. Then there is General Electric Co., a
leading advocate of globalizing production. It uses Mexican factories
to make everything from medical diagnostic gear to appliances.
The reality is that the
manufacturing world is international. But some have trouble stomaching
that belief when it comes to lost jobs for Americans. Such is the case
regarding the North American Free Trade Agreement (NAFTA) of 1994,
which frees up the flow of goods and services between the U.S., Mexico,
and Canada. NAFTA in particular has been singled out as the reason
that some Americans have lost their jobs. According to a report by
the Economic Policy Institute in Washington, D.C., U.S. between 1993
and 2000, NAFTA is said to have claimed 766,030 American jobs. The
state of California reportedly suffered the most, with 82,354 jobs
lost and traditional industrial states such as Michigan, Pennsylvania,
New York, Ohio, Illinois, and Indiana each lost more than 20,000 jobs.
The NAFTA at Seven report says that number does not take into account
the jobs shifted to China, Singapore, Indonesia, the Philippines, and
the rest of the world beyond the NAFTA zone. The report does not take
into account new jobs created by NAFTA.
Proponents of NAFTA, however,
point to how foreign trade is the area of greatest growth potential
for the U.S. According to the Office of the United States Trade Representative,
NAFTA has actually helped to strengthen the U.S. economy. For example,
during NAFTA's first 5 years, U.S. goods exports to U.S. NAFTA partners
Mexico and Canada increased by approximately U.S. $93 billion or 66
percent. Export growth to Mexico and Canada alone accounted for more
than 40 percent of U.S. export growth to the entire world.
Consequently, according
to the USTR Office, formal trading arrangements can ultimately help
the U.S. weather the shifts in the global economy. Therefore, although
in the short term a small number of American employees may lose their
jobs, a greater number can benefit from newly created jobs, an even
greater number may benefit from low-cost products, and everyone in
the U.S. benefits from a stronger economy due to healthy international
trade and strong trading neighbors.
Expanding NAFTA or adding
formal trading arrangements was exactly the message behind Fast Track
trade bill 215-212 in the House of Representatives earlier this year.
In a midnight session at the end of July, Republicans cut a deal, which
led to the passage of the bill, in which President Bush can expand
NAFTA to an additional 31 nations through an agreement called the Free
Trade Area of the Americas (FTAA). Under Fast Track authority, President
Bush can strike trade deals with other countries that Congress could
accept or reject, but not amend. Other nations no longer have to negotiate
twice with the U.S. - once with the President and a second time with
Congress.
The National Association
of Manufacturers (NAM) was a supporter of the Fast Track legislation. "After
eight years without TPA [Trade Promotion Authority], we have a lot
of catching up to do in terms of lowering trade barriers in other countries," said
NAM Executive Vice President Mike Baroody. "Since we started, the world
has enacted 60 new free trade agreements, for a total of 190, of which
the United States is a party to exactly three."
Frank Vargo, NAM vice president
for international economic policy, argued that there are four separate
negotiations that have been stalled waiting for the Fast Track legislation
- with Singapore, Chile, the Free Trade Area of the Americas, and in
the World Trade Organization. The reaffirmation of America's traditional
bipartisan consensus on free trade should help to bolster the nation's
struggling economic recovery, Mr. Vargo noted, by providing a means
for leveling the global playing field. "Exports account for one fourth
of U.S. economic growth," he said. "It's time for us to get back into
the global trade game and begin knocking down the barriers faced by
our products and services abroad."
As we start a new year with
high hopes for an economic recovery, opening new export markets may
be the best medicine. While "Made in the USA" may no longer be the
case for the U.S., American consumers should realize that "Made Elsewhere" may
be the U.S.'s best chances for improving its prospects for economic
growth and a stronger U.S. trade leadership, especially when the rest
of the world - Europe, Japan, China, and others - have accelerated
their regional and bilateral negotiations. The U.S. cannot afford to
fall further behind. |
