This morning, the Indy Chamber is holding a special Global Indy policy briefing on the Trans-Pacific Partnership (TPP), the 12-nation trade pact that was finalized earlier this year but currently stalled in Congress as anti-trade rhetoric dominates national politics.
The dean of Butler’s Lacy School of Business Stephen Standifird will lead a conversation with Cummins Chairman and CEO Tom Linebarger and U.S. Assistant Secretary of Commerce for Legislative and Intergovernmental Affairs Steve Haro that dives in to opportunities that TPP can bring to the regional economy.
International trade and investment are a key piece of our Accelerate Indy strategy. Indianapolis already ranks high among major metros in exports and employment in foreign-owned companies. But today’s solid numbers ─ $10 billion in annual exports, 100,000 local jobs reliant on trade – don’t reflect our true potential: Only a small fraction of metro employers are engaged in the global economy.
“Through our work with the Brookings Institution, we’ve identified more than a thousand small and mid-sized metro employers - including at least 500 manufacturers – that could be exporters, but haven’t taken the opportunity yet,” said Indy Chamber President Michael Huber said. “Part of Accelerate Indy is helping these companies find new customers and partners overseas – TPP would make our job easier and create even more global opportunities for local firms.
The Indy Chamber is already offering export assistance grants and educational programs for small and mid-sized companies; find out more about ‘Go Global’ grants (presented by the Indy Chamber and JPMorgan Chase) and Export Bootcamp events at www.IndyChamber.com.
More ambitious initiatives are in the works, and approval of TPP would be another catalyst for growth – last year, more than 40% of metropolitan exports were to TPP countries across North and South America and Asia. TPP is the first trade deal to include specific provisions aimed at small and mid-sized enterprises.
Cummins is certainly no mid-sized manufacturer – indeed, as Indiana’s largest automotive component producer, the company is already a major exporter. But CEO Tom Linebarger sees TPP as a key competitive issue for Cummins and its vast network of smaller supply chain partners.
“TPP will open access to millions of customers for U.S. goods and services while boosting foreign investment throughout the United States,” Linebarger recently wrote in a pro-trade op-ed for the Indianapolis Star.
Noting that Cummins sold more than $3 billion worth of products into international markets last year, he added: “These foreign sales don’t just benefit Cummins and its U.S. employees; they also help our 2,500 domestic suppliers...As leaders of manufacturing companies large and small, we know how important trade and U.S. trade agreements like TPP are to the success of our companies.”
Cummins also prides itself on innovation – part of a strong “advanced industry” sector across Indiana and the Indy region (roughly half of all metro manufacturing jobs are classified as “high-tech” by a recent Brookings analysis). Huber noted that global industries are also our most innovative – and high-wage – parts of our economy:
“More than 70% of our exports are in advanced industries – cutting-edge manufacturing, the life sciences, technology goods and services,” he explained. “Global businesses tend to be more productive, to invest more in R&D and in their workforce…Indy’s exporters pay their employees 20% more than their peers.”
With Indy’s tech sector among the fastest-growing of our advanced industries, it’s worth noting that TPP also eliminates high tariffs on U.S. high-tech exports and includes new rules promoting e-commerce and the free flow of digital information across national borders. Overall, TPP would do away with an estimated 18,000 import taxes on products from engines to soybeans – staples of Central Indiana’s economy.
Learn more about the Accelerate Indy strategy – including the Metro Indy Global Trade and Investment Plan – and the Chamber’s Global Indy initiative here and here.