Modernizing American Manufacturing

If you were to ask Intel engineers about how to modernize manufacturing, they would look at you quizzically. Our facilities are producing the most advanced, highest performing microprocessors in the world, evolving at a pace we call Moore’s Law. Modernization does not need to take place on the manufacturing floor – rather in the laws that enable American manufacturers.

Yesterday, the Senate Finance Committee held a hearing on Trade, Technology and 21st Century Manufacturing. There was complete, bipartisan consensus that Congress has a responsibility to try to keep pace. New and expanded trade agreements are the answer.

Intel started in 1968 with 12 employees as a manufacturer of dynamic memory chips and has evolved — as markets have evolved — into the world’s largest semiconductor manufacturer. Our products power everything from phones and tablets to servers and supercomputers that are sold in more than 120 countries.

Trade agreements, when effective and enforced, provide a foundation for doing business with countries around the world. They provide rules for engagement and protection from bad actors. However, trade agreements have not evolved as markets have evolved.

For example, the WTO Information Technology Agreement (ITA) dramatically increased U.S. exports by eliminating significant duties in many countries on a range of technology products. But it was negotiated in 1997 and does not cover the amazing technologies developed in the last decade. The Information Technology Industry Foundation estimates that ITA expansion could increase direct U.S. exports by $2.8 billion, boost U.S. revenues by $10 billion, and support an estimated 60,000 new jobs.

J Sturm 2Jackie Sturm, vice president of Global Supply Management for Intel, spoke yesterday at the hearing about how Intel’s domestically manufactured and internationally-sold dynamic is fundamental to the growth of our business. In fact, although more than three quarters of our sales are generated outside of the U.S., roughly three quarters of our advanced manufacturing and R&D is done here in America.

Of our now 100,000 employees worldwide, more than half are based in the U.S. The products Intel exports from the U.S. create and sustain U.S. jobs, and not just Intel jobs. Overseas sales of our products support our entire business operation, which includes over 7,000 suppliers in 46 states.

With 95% of consumers living overseas and the global marketplace becoming more and more competitive, it’s never been more important for Congress to come together in support of American manufacturers.

There are several trade agreements in play as well as Trade Promotion Authority (TPA) legislation. TPA is significant for Intel because, among other modern challenges, it can require all future U.S. free trade agreements to strengthen rules on digital trade, develop intellectual property protections for digital trade, and prohibit countries from engaging in forced technology transfer.

The Trans-Pacific Partnership (TPP) Agreement will set the standard for market access in the Asia-Pacific region. The Transatlantic Trade and Investment Partnership (T-TIP) Agreement covers the transatlantic economy, which accounts for nearly 50% of the world’s GDP and 30% of its trade.

Yesterday, Chairman Wyden noted how important it is to not hold back the innovation happening on U.S. factory floors by policies that are out of date. Passing TPA and moving quickly on TPP and T-TIP would be an excellent start.

There is no question that the export of manufactured goods made in the United States creates jobs and prosperity here at home. The question is when will Congress provide the tools necessary for a trade agenda that keeps pace with American manufacturers.

Intel’s testimony can be found on the U.S. Senate Committee on Finance website.  

 

 

 

 

 

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