Manufacturing Matters: Ideas for a global economy

August 20, 2013
By Lisa Schroeter
Lisa Schroeter

Chocolate is everywhere in the U.S. It’s nearly impossible to go to a store or restaurant and not find some form of the dessert that would satisfy a chocoholic’s craving. Yet, if you try to find a cacao tree in the U.S., the tree whose seeds are a feedstock for chocolate, you’ll come up emptier than a heart-shaped candy box on February 15.

Cacao trees are native to Central and South America, yet we enjoy the same access to resources as if they were grown in the U.S. Once we have the beans, great American manufacturers can add value by turning beans into a wide range of products – creating jobs right here in the US. Exchanging goods and services through trade is what allows us to create global supply chains, ensuring access to resources, opportunity to add value, and ultimately improve products for consumers.

Using chocolate to illustrate the importance of international trade doesn’t even scratch the surface in terms of how vital trade is to our economy.

As a global company, Dow has manufacturing plants, employees and customers all over the world with products that move fluidly between countries, making trade critical to our company. Dow’s Packaging and Specialty Plastics business alone, operates 11 manufacturing facilities worldwide that deliver more than 300,000 shipments per year to its 2,000+ customers in 100 countries. Our products are an integral part of the global value chain – supplying customers, who in turn make products useful to consumers all around the globe. Trade policies help foster the interaction between countries and businesses.

Trade policies help Americans lead the global economy by setting fair, enforceable commitments between countries, and allowing companies competitive access to the more than 95% of the world’s consumers who live outside of the U.S.

The Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) are two examples of current negotiations that will open free trade agreements between the U.S. and EU and the U.S and 11 Asia-Pacific countries, respectively.

These negotiations would create significant new opportunities for the manufacturing industry. Specifically, the agreements would include the elimination of tariffs, removal of non-tariff barriers, efforts to streamline regulatory practices, more efficient customs processes, and the incorporation of 21st century issues such as investment and the treatment of state-owned enterprises to name a few.

The U.S.-Colombia Free Trade Agreement (FTA) alone saved Dow more than $22MM in tariff reduction on U.S.-manufactured exports to Colombia. TTIP and TPP have the potential to save exponentially more in tariff elimination - moneys that could be better served on R&D, innovation and investment.

These agreements create a level playing field with the same rules, commitments and expectations for trade partners on both sides. And that gives room for companies to be more competitive, efficient and integrate their supply chains with foreign suppliers, domestic producers and ultimately satisfiy the customer.

These trade agreements are critical to manufacturers like Dow where high-tech, sophisticated processes and products are used and shipped all over the world. TTIP and TPP would eliminate major trade hurdles and help expand our capacity to innovate and share products, whether it’s with chocolate, plastics or the manufacturers who make them.

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