At least one moderately good thing is coming out of the ideological sewer that is the House of Representatives these days: legislation that will require the executive branch to develop “a strategy to promote growth, sustainability, and competitiveness in the Nation’s manufacturing sector.”
The legislation, the American Manufacturing Competitiveness Act of 2012, is expected to pass the House of Representatives this afternoon with little fanfare. But it could mark a significant change in how the Unites States competes in the global economy.
The bill would create an “American manufacturing competitiveness board” that would include private sector business leaders with manufacturing expertise and appointees from both the White House and Congress. The board would be charged with holding hearings and then developing a detailed analysis of the state of American manufacturing and “short- and long-term goals for improving the competitiveness conditions of the Nation’s manufacturing environment.”
While governments of other major industrialized countries have a strategy for supporting manufacturing, the United States has had no coherent strategy other than standing back and watch as its manufacturers relocate to low-wage and low-regulation competitors. When we object, the response from the U.S. Chamber-types is that the United States needs to also become a low-wage, low-regulation and low-tax country if it is to restore its manufacturing sector. What has flowed from that is the attack on unions, the efforts to weaken such agencies as the Environmental Protection Agency, and the resistance to even modest efforts to get multimillionaires and big corporations to pay their fair share of U.S. taxes.
A manufacturing competitiveness board could conclude that it doesn’t have to be this way. For example, Germany’s manufacturing sector has not declined in the past decade, even though German manufacturing workers are paid better on average than those in the United States and generally have better benefits and worker protections. The difference is that the German government has had a national manufacturing strategy that guides its support of manufacturers and workers.
The Alliance of American Manufacturing, which has been calling for the establishment of a national manufacturing strategy for years now, calls the legislation “a helpful step in that direction.”
It comes not a moment too soon. Today the Department of Commerce released new trade deficit figures. In July 2012, the U.S. racked up an international goods and services trade deficit of $42.0 billion. Of that, $29.4 billion of that trade deficit was with China.
As Alliance for American Manufacturing director Scott Paul wrote today in response to the trade deficit news, “After five months of rising trade deficits with China, it’s time to face the facts: this trade relationship isn’t working.
“U.S. goods are highly competitive globally, but Chinese imports continue to surge into America. Our elected leaders in Congress and the White House are not doing enough to stop China from flaunting the rules. There’s a deep undercurrent of concern among American voters about the U.S.-China economic relationship, but Congress, President Obama, and Mitt Romney, don’t seem to fully grasp it.”
The steps that America should take to address its trade deficit with China, including calling it out on its currency manipulation and filing trade actions against China for violating trade agreements in particular sectors—would naturally flow from a coherent national strategy in which the United States puts a priority on rebuilding its domestic manufacturing sector and putting Americans back to work making the things America needs. If the Senate also passes this legislation, we will still have to work to make sure that the creation of this panel actually comes up with a meaningful strategy and that it does not end up being yet another Washington report that collects dust somewhere. But at least the House on this one issue is poised to move in the right direction.