Momentum Building for Hunter-Ryan China Currency Bill

A recent Cleveland Plain Dealer article detailed how African-American workers are suffering more than their share in our globalizing economy.  A factor neglected in this article about the loss of manufacturing jobs is our stubborn commitment to obsolete trade policies (“Black factory workers hit hardest”, 2/25/06.  Click here for a link to the original study, The Decline in African-American Representation in Unions and Auto Manufacturing, 1979-2004 by John Schmitt and Ben Zipperer, January 2006.).  These policies are eroding the economies of communities across NE Ohio, particularly in Ohio Congressional District 11, represented by Stephanie Tubbs-Jones.  This was the topic of a Chinese Currency Policy Briefing sponsored on Thursday, February 23 by the NE Ohio Campaign for American Manufacturing.

 

The Chinese government is perfecting the practice of currency manipulation – which is in effect an illegal export subsidy under World Trade Organization rules.  Manufacturers know that manipulation of the Chinese currency gives products made in China a 30-40% cost advantage compared to products made here.  This hidden tariff contributes to the hemorrhaging of US manufacturing jobs, the dislocation of US production, and erodes the living standards of working families -- white, Hispanic and, especially, African-Americans, as your article noted.  Since China entered the WTO, Ohio has lost over 14,500 manufacturing jobs due to our trade deficit with China – fueled by their policy of currency manipulation.

 

Congress can change this.  The China Currency Bill (HR 1498, introduced by Democrat Tim Ryan of Youngstown and Republican Duncan Hunter of California) would help US based manufacturers remain competitive around the globe.  This is needed nowhere more than in Ohio’s 11th District, which has a large number of manufacturing firms, particularly in steel and related sectors that have been under attack from Chinese based competitors maximizing the unfair advantage of an undervalued Chinese Yuan.  Tubbs-Jones is familiar with the problem, as she joined with others to challenge China’s currency manipulation in 2005.

 

Now it is time for Congresswoman Tubbs-Jones to join Northern Ohio’s congressional delegation, Democrats and Republicans alike, all of whom are cosponsoring the Hunter-Ryan bill.  Doing so would bring the number of cosponsors to well over 150, the most bipartisan trade bill ever, and would send a clear signal to Chinese officials that the US wants action to end currency manipulation, leading to a more level international trading field.  Click HERE to send a message to Congresswoman Tubbs-Jones.  Phone calls to her Ohio office are preferred over faxes or emails.

 

WIRE-Net Cited as National Model

A coalition of older cities has published a “guidebook” or manual on effective strategies to arrest and reverse urban decay.  WIRE-Net was one model that is highlighted in the report, published by PolicyLink on behalf of the Community Development Partnerships’ Network.  Other efforts in Cleveland were also highlighted.  For example, the City of Cleveland’s landbank.  Click here for a description of the citation and a link to the publication:  http://edpro.blogspot.com/#innovolder

 

 

Protecting Ohio's Tool and Die Industry

The tool and die industry is a crucial one. It creates the tooling needed to make almost every manufactured product, including products used in our national defense. It has long been considered a "strategic industry", which is why many nations have targeted the US industry, using government supports and market interventions to weaken US based companies while giving their own tool and die sector an advantage.

Since 1996, Michigan has been able to designate "Tool and Die Renaissance Recovery Zones" to provide up to 15 years of tax relief to tool and die firms with fewer than 50 employees that are participating in a qualified collaboration with similar firms. Tax relief is coupled with an approach linking small firms together to compete for larger jobs. The collaborative approach ("inter-firm collaborations") has been used by WIRE-Net for many years to help frequently isolated firms learn better and faster about how to effectively overcome challenges and compete globally.

In Cuyahoga County, 122 firms employing over 1500 people would match the Michigan criteria. This includes firms in metal cutting, metal forming, special tool & die, die set, jig and fixtures, and cutting and machine tool accessory makers. They have had a tough time of it, particularly given China's strategic targeting of this sector and the numerous advantages the Chinese government has given its own industry (everything from a currency that is 40% undervalued, to provision of loans that are rarely repaid, not to mention health care costs and the environmental and other protections that do not exist in China).

Isn't this worth a look in Ohio?

For information on the Michigan program, click here.

WIRE-Net's Purpose

WIRE-Net's mission was last reviewed in 2001, and just slightly edited at that time. Upon review this year during our Strategic Planning, one telling comment was that "you cannot tell how WIRE-Net does its work from the existing mission statement." After discussion and review, WIRE-Net's Board approved the following Mission and Vision statement for the organization:

WIRE-Net’s Mission

WIRE-Net strengthens manufacturing to create healthy communities and fuel economic growth. We provide expertise that is responsive to manufacturing related businesses and their employees. WIRE-Net connects leaders to each other and engages them in their communities.

We support, we connect, we partner.

WIRE-Net’s Vision

We envision a region where manufacturing matters, a region that values and invests in manufacturing companies. Across our region, manufacturers embrace innovation to compete globally, work together to drive economic health locally, invest in their employees, and work together for stronger communities.

WIRE-Net: Where Manufacturing Matters.

Mfg Leaders See Hope in CAFTA Defeat

Cleveland, July 28, 2005: The Northeast Ohio Campaign for American Manufacturing today said that Congress' vote on the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) reflects the growing lack of confidence in the direction of US trade policy.

Peter Accorti, VP of Talan Products in Cleveland, and Co-Chair of NEOCAM said, “Despite over a year of lobbying by global corporations and tremendous pressure from the Administration, CAFTA squeaked through with just a 2-vote margin. This shows that the time has come to recast the debate over US trade policy. There is serious division in Congress when it comes to US trade policy.” This view was echoed in a front-page Wall Street Journal article on July 29th entitled, "Cafta Vote Clouds Prospects for Other Trade Deals".

Nowhere is this more evident than among the congressional delegation of NE Ohio. “We found champions for a 21^st Century trade policy on both sides of the aisle,” Accorti said, and pointed to the heroic stance of Congressman Bob Ney (R-18), as well as Congresspersons Kaptur, Kucinich, Tubbs-Jones and S. Brown – all Democrats. Ney joined 26 other Republicans in voting against the bill.

“We are very disappointed in the position taken by Congressman Steve LaTourette (R-Painesville). He has been a strong defender of US based manufacturing up until last night,” Accorti said. “As late as Friday of last week he was a firm ‘no’ on CAFTA. But literally at the 11^th hour he buckled, despite the urging of leaders from business, churches, unions and other constituents to vote against CAFTA. We are very disappointed.” Accorti was also disappointed in Ralph Regula’s vote. “We thought getting Regula’s support was a long shot,” he said, “and at least he didn’t play both sides of the fence, but given the economic strain his district is under we thought we had a shot at getting him to vote no as well.”

According to Accorti, “The outmoded allegiance to an 18^th century theory of so-called ‘free trade’ is not in the best interests of American communities or our national or economic security,” Accorti said. “We need a comprehensive approach that results in reciprocal trade, and that creates jobs, with family-supporting wages, wealth and opportunities in American communities. As we’ve learned with NAFTA, and will see with CAFTA, the current trade regime does not accomplish this.”

Healthcare Costs

The rising cost of health care...

...in the US is driven by several forces. WIRE-Net members have complained for years to COSE, to the Legislature, to Congress (yes, even to WIRE-Net) about double digit increases in insurance for their employees, about passing those costs on to employees or trimming benefits. They've gone to high deductible plans, and shared cost information with employees, rewarded wellness...but the rates keep climbing.

WIRE-Net itself saw a 60% increase in our premium with Kaiser (thru COSE) this year.

So whats behind this? Several factors:

• Waste (up to 40% of health care costs is estimated by Industry Week to go for duplicative, or unnecessary procedures, wasted overhead, etc.).
• Expensive technology driven procedures that fix problems that were basically unsolvable in the "old days".
• Aging of the population, driving ever larger share of GDP being spent on health care...just wait a few years for the boomers to start retiring!
• Poor feedback: as Michael Porter puts it, the system is competing on the wrong levels.

My immediate question is this... given the complexities, can't the various key stakeholders in holding the line on health care costs agree that cutting out waste is a good first step? Lets form a NE Ohio "Lean Health Care" initiative, organize some big corporations, the unions, public agencies, one or two key insurers and help the health care providers streamline their operations. As I said above, Industry Week estimates that up to 40% of the bill is for wasted procedures, overhead and inefficiencies.

Even modest progress would give NE Ohio a competitive advantage over other regions in the US, and would help products made here be more competitive around the world to boot.

Where Manufacturing Matters

This is a new blog focused on the importance to the U.S. and communities across the nation of a strong, growing manufacturing base.

It will draw on the connections established by the staff and leadership of the Westside Industrial Retention & Expansion Network (WIRE-Net), in Cleveland, Ohio, USA, over the past 19 years.

For a glimpse of the work we do at WIRE-Net, see our website at www.wire-net.org.

More to come!

Defeating CAFTA is important to US Manufacturers

WIRE-Net is a founding member of the NE Ohio Campaign for American Manufacturing (www.neocam.org). Several leading Ohio manufacturers recently joined NEOCAM's Advisory Committee. Here's what one of them wrote in an open letter to Congress about the need for a new debate about US International Trade Policy.

Dave Johnson is President of Summitville Tiles, Inc., and also Chair of the Ohio Manufacturers Association. July 12, 2005
An Open Letter to Congress:

Is there anybody in Congress that is concerned about the economic consequences of our already astronomical and still growing trade deficit ($618 Billion in 2004) and the continuing loss of U.S. manufacturing jobs? This year, the trade deficit is already running $100 Billion above last year. Next year’s trade deficit will grow higher yet. I believe that a significant source of this serious problem is the nation’s continued commitment to poorly designed “free trade” agreements. The Dominican Republic – Central American Free Trade Agreement (DR-CAFTA) currently being considered is an excellent example. While its proponents argue that it will stimulate the U.S. economy, the reality is that CAFTA is little more than an outsourcing agreement for multinational corporations that will cost additional American factories and jobs. There are a number of reasons this for this:

1. The six countries involved with CAFTA have a combined GDP of $85 Billion…about the size of New Haven, Connecticut! Over 40 percent of the population of these countries live in poverty. These countries simply lack the purchasing power to become net consumers of U.S. goods. Even the most optimistic forecasts predict that DR-CAFTA will only add $1 Billion in U.S. exports, a drop in the bucket of our current trade deficit. Yet, DR-CAFTA would open up the U.S. market to more and more cheap imports, further undercutting American manufacturers.

2. CAFTA would allow for more “turn-around” exports – products shipped south for assembly and then back north for sale in the U.S. The result would be a net loss of U.S. textile and apparel jobs. Already one third of our trade with these countries is in “turn-around” exports.

3. Chapter Nine of CAFTA invalidates “domestic procurement” laws. This means that, at a time when many middle class American jobs are being outsourced, state and federal agencies would be barred from legislating “buy American” guidelines in their purchasing decisions.

4. Passage of CAFTA would greatly influence future U.S. economic policy. If Congress, the Executive Branch, and the multi-national corporate lobbyists are able to pass this trade agreement, the momentum in Washington will swing to those seeking further outsourcing agreements, such as the Free Trade Area of the Americas, the Doha Round, a new Andean Free Trade Agreement, and a host of new bilateral free trade agreements. We need to stop DR-CAFTA and start to re-think American trade policy so that our trade policies benefit all Americans, not just the WallMarts and the multi-national corporations.

In the final analysis, DR-CAFTA is nothing but a further assault on an already imperiled American middle class. If we are to realize our potential as a country, and retain the strong, broad middle class that is America’s singular political and economic achievement, we must fight to keep a vibrant manufacturing base and good jobs here in America. This means that we must resist the perceived short term benefits that cheap foreign goods bring to WalMart shoppers and instead focus on a national trade policy that ensures America’s long term viability as a manufacturing based world power.

Sincerely,

David W. Johnson

CEO ~ Summitville Tiles, Inc.
Chair ~ Ohio Manufacturers Association

Can the Yuan Float?

MANUFACTURERS CALL FOR CONTINUED U.S. PRESSURE ON CHINESE GOVERNMENT TO REVALUE CURRENCY

The Northeast Ohio Campaign for American Manufacturing (NEOCAM) calls on Congress to keep the pressure on the Chinese government to end currency manipulation. China announced on July 20th that it was revaluing the Yuan by 2 percent, and tying the Yuan’s value to a basket of currencies that will be evaluated daily, ending its longstanding peg against the U.S. dollar.

NEOCAM is a coalition of 900 Northeast Ohio manufacturing companies, industry and labor organizations that represents 90,000 Ohio workers and their families. NEOCAM has been calling for vigorous enforcement of fair trade laws and agreements. John Colm, Secretary of NEOCAM, states, “A mere 2 percent adjustment with a currency that is 40% undervalued means little. Every product made in China starts off with as much as a 40% cost advantage compared with U.S. made products – even before the product is shipped. This advantage has little to do with Chinese ingenuity, productivity or efficiency -- hallmarks of “free trade” -- and everything to do with government intervention in currency markets. This translates in the U.S. to lost sales and jobs, a weaker domestic manufacturing base, and a growing and unsustainable trade deficit.”

Colm said that NEOCAM’s concern now is that the turn of events in China becomes a distraction from other current global issues. “This is not a meaningful revaluation, and will only give apologists for the Chinese government ammunition in their campaign to persuade the public and Congress that China is ‘playing by the rules’. It will take the focus off the other key trade issue on the table, the Central America Free Trade Agreement (CAFTA).”

CAFTA is expected to come to the floor for a vote before the end of July. There is has been considerable pressure building about the need to put the so-called “free trade” agenda aside in order to develop a new approach to international commerce that results in reciprocal trade. The road we started down with NAFTA and now CAFTA is not working for American communities.”

NEOCAM is urging Congress to keep the pressure on China for meaningful revaluation and to vote against CAFTA. Both are crucial to preserving U.S. domestic manufacturing strength and maintaining our competitive advantage.

NE Ohio Campaign for American Manufacturing is a coalition representing over 900 NE Ohio manufacturing companies, the United Steelworkers of America, District 1 and 90,000 workers.

For information: www.neocam.org

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