Boosting manufacturing05/27/2014 03:26PM ● By ACL
By Congressman Joe Pitts
I recently visited the Armstrong World Industries production facility in Lancaster to mark the start of construction on a new line for luxury vinyl tile. Armstrong considered locations around the world for this new line and arrived at the conclusion that there was no better place than right in the heart of the 16th District.
Armstrong isn’t the only company coming to the conclusion that new facilities belong in the U.S. I also recently visited the Alcoa facility in Lancaster. Alcoa is in the process of investing hundreds of millions of dollars in facilities in Iowa and Tennessee to support the new aluminum bodied trucks being built by Ford.
Companies like GE, Apple and Wal-Mart are all making major investments in U.S. manufacturing. After decades where our nation saw manufacturing jobs go overseas, we are now seeing many jobs be created or even come back. Last year, about the same number of jobs came back to the U.S. from China as left our shores for that nation.
Things are turning around because of many factors. Among the most important are increased domestic energy production, the quality of American workers and trade policies that make it easy to ship goods worldwide.
As a member of the Energy and Commerce Committee, I’ve talked a lot about how increased domestic production of oil and gas is helping our country. No sector is more reliant on low and stable energy prices than manufacturing. Factories use lots of energy to run, but many also rely on the various products that are byproducts of oil and natural gas.
Many companies who moved their operations overseas discovered something: cheap labor has its own costs. In the past few years, GE moved production of a water heater back to the U.S. and saved so much money that they lowered the cost of the product.
The rest of the world still admires the American work ethic and Americans still get a lot of satisfaction from their work. When Forbes recently took a look at who the world’s happiest and most productive workers are, America was at the top. The U.S. had both the highest percentage of workers who say they are happy in their job and the highest level of GDP per hour of work.
A third incredible asset we have that can support growing manufacturing are a strong—and hopefully growing—network of free trade agreements. In the past few decades, we have signed major agreement with Canada and Mexico, Australia, Central America, Panama, Columbia, and South Korea.
There’s a lot of misinformation about the value of free trade, but sober analysis demonstrates that trade agreements are a huge boon to our country. In fact, we sell more goods to our trade agreement partners than they buy from us; to the tune of $59 billion a year. For countries that we don’t have a trade agreement with, the opposite is true. Our trade deficit with these partners was $508 billion last year.
There are some major opportunities on the horizon to lower other countries’ barriers to American products. Right now, the Obama administration is negotiating the Trans Pacific Partnership with dozens of Pacific Rim nations and also engaged in talks with the European Union to establish a Trans-Atlantic Trade and Investment Partnership.
While the President recently returned from Japan without a conclusive agreement, I hope that he will continue to push for a deal. Japan is infamously protectionist, and lowering their barriers would mean big opportunities for American companies.
Congress has an important role to play too. Passage of a trade agreement is virtually impossible with Trade Promotion Authority language, a bill that allows the President to submit a new agreement for an up or down vote. The House is ready to pass a bill when the time comes, but Harry Reid and other Democrats have stated their opposition. The President needs to lean on his friends if he wants his trade policies to move forward.
Other nations aren’t sitting on the sidelines. In fact, Japan and Europe are negotiating a trade deal right now. If they reach a conclusion before we do, that could mean big advantages to European nations looking to attract new factories. We need to move forward and support new American jobs.