Making The Case for International Trade

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When CEO Tom Linebarger looks at the Cummins’ high horsepower plant and tech center in Seymour, Indiana, he sees the critical importance of international trade.

The 800-employee facility produces Cummins’ QSK95, the largest high speed diesel engine in the world. The company has invested about $500 million to launch the engine, and just over two-thirds will be shipped outside the United States.

“So does trade matter to us? You bet,” Linebarger said during a recent speech to the Indianapolis Chamber of Commerce where he was joined by U.S. Assistant Secretary of Commerce Steve Haro. “Eight hundred people (at the Seymour facility) depend on trade, otherwise that engine doesn’t make it.”

Linebarger is working with other business leaders including U.S. Secretary of Commerce Penny Pritzker to promote the proposed Trans-Pacific Partnership Act (TPP), a free-trade agreement that would formalize trade relations between the United States and 11 Pacific Rim countries.

Linebarger and others hope the agreement, which has bipartisan support, can be passed by Congress after the election and before President Obama departs in January, overcoming the negative and misleading trade rhetoric that has been prevalent during the Presidential race.

Haro and Linebarger say bad news about trade gets a disproportionate amount of media coverage in the U.S., while the jobs created by trade are largely ignored. In addition to the 800 employees at Seymour, Linebarger noted there are hundreds of suppliers who contribute to the QSK95 who also benefit from trade. Trade for the company goes well beyond the QSK95. Cummins exports about $3 billion worth of goods annually in the U.S.

Seymour was selected for the QSK95 over potential sites in India, China and the United Kingdom, Linebarger said. “When the rules are reasonably even, U.S. companies can compete quite well,” he added. “That’s my view.”

Linebarger, who has been extolling the benefits of trade in conversations with various groups including employee unions, says continued growth is critical to the company, noting that 95 percent of the world’s potential customers are outside the United States.

What’s become lost in the debate over trade, he said, is that TPP is “the agreement we’ve all been waiting for.”

It includes language to promote and protect the e-commerce and high-tech sectors, intellectual property, food safety and more, while also including labor and environmental standards. TPP also includes language to make it easier to bring enforcement actions when countries don’t abide by the act.

“Issues that people have been bringing up for years (regarding trade) are in this agreement for the first time and nobody’s talking about that,” Linebarger said.

“We’ve got 12 countries in agreement, both political parties, a president who wants to sign it and a Congress that’s got the votes,” said Linebarger, maintaining the time is right to pass the act. “When are we going to see that again?”

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