3 Ways the Trans-Pacific Partnership May Be Good For Small Manufacturers

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Twelve million. That was the number of manufacturing jobs in the United States in 2014, just above the roughly 11 million average per year since 2010. According to data from ReshoreNow, there's been a 400% growth in reshoring activities since 2003, bolstering the slow but steady upward trend in bringing manufacturing jobs back to the United States.

From CNC machining and fabrication to injection molding and metal stamping, manufacturing alone supports more than 17 million jobs in the United States -- many deeply dependent on foreign trade. And that's not to mention how many have benefited from collaborating with foreign markets

Whether we like it or not, today's economy is a global one.  

Enter the Trans-Pacific Partnership, a historic trade agreement that intends to bolster international trade growth for companies in 12 countries -- the United States, Malayasia, and Japan among them. 

Check out our map of all the countries currently involved. 

But what does the agreement mean for the small-to-medium-sized manufacturer?

More offshoring? Not so fast.

Of course some jobs will be offshored. That's the collatoral damage. But the rate at which those jobs are moved overseas doesn't look to be more or less pronounced than it has been in the last several years. Looking at the state of the industry, it's obvious there's an upward trend in "quality over quantity," meaning the benefits of offshoring really depend on the products you're manufacturing. 

From cost to ship and increased lead times to an escalating focus on American-made, more companies are rediscovering the advantages of strategic domestic sourcing. The TPP does not seek to undermine that trend, but enhance it, helping small-to-medium-sized manufacturers stay competitive at home and penetrate new markets abroad. 

Here are the 3 Ways the Trans-Pacific Partnership May Be Good For Small Manufacturers:

  • Strengthening Intellectual Property Rights for Manufacturers

    U.S. companies exert a strong knowledge-based advantage over competing countries in many industries, particularly manufacturing. Bringing an invention to market usually entails disclosing some or all of its features. That can be a problem for inventors and manufacturers who fear their ideas could be stolen. And from time to time, it happens.

    But the TPP raises the IP-protection bar for partner countries, striving to eliminate the proliferation of IP theft and wrongful dissemination across online channels. 

    According to, "Under laws mandated by the treaty, ISPs will have to remove cached copies of infringing material and search results pointing to such material upon receipt of a complaint, and they will be required to enforce court orders by removing or disabling access to infringing material stored by others."

    What's does that mean for you? Your data and proprietary designs and CAD files will be more secure moving forward. 

  • Helping Manuafacturing Companies Penetrate New Global Markets

    Jay Timmons, President and CEO of The National Association of Manufacturers, recently said:

    "From the beginning, manufacturers have been loud and clear on the TPP: A strong agreement must embrace priorities that will grow manufacturing in the United States. Those priorities include concrete new market access, the protection of intellectual property, provisions to enable e-commerce and a level playing field, fair treatment, and strong property and investment protection standards, all of which must be enforceable for all industries."

     A 2012 government report -- the last available date for data -- showed more than a third of U.S. manufacturing jobs were supported by exports.

    Helping small-to-medium-sized businesses become more efficiently involved with international trade and new markets by clarifying murky customs regulations and paperwork, while also speeding up the current methods of part delivery and reducing tariffs, will only strengthen these numbers. Increased competitiveness in foreign markets will open the door for more manufacturers across the board. 

  • Increased Regulatory Standards Helping Small-to-Medium Sized Manufacturing Companies Get Competitive

    Today, trade barriers unfairly challenge small-to-medium-sized business owners. With TPP, there's now a level playing field for U.S. manufacturers when competing with their counterparts overseas. Government-subsidized companies will have a much harder time undercutting manufacturers in TPP member nations. 

    Essentially, this helps these types of manufacturers become more competitive and ultimately, make better informed decisions about going global. The TPP increases transparency within member nations, allowing these nations to work jointly to amend and draft more cohesive regulatory standards, circumventing, in theory, protectionist measures, such as those widely practiced by certain nations in the region. 

    Manufacturers would be better able to determine the economies of scale needed to better compete. 

Related:Read the full details of the trade agreement here

While some point to NAFTA as an example of how the TPP could go horribly wrong for U.S. manufacturers, others look at TPP as a way to benefit not only the American economy as a whole, but also the American small-to-medium-sized business owner. From proposing to eliminate foreign taxes on U.S. manufactured goods into and out of TPP countries to helping prevent delays in customs processing, the TPP looks to strengthen a growing U.S. manufacturing industry that saw exports reach $1.4 trillion in 2014.

Only time will tell if the agreement truly meets its lofty goals. 

What are your thoughts on the TPP? How will it affect your business? Let us know in the comments below. 


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