U.S. Senator Pat Toomey (R-Pa.) and U.S. Representative Charlie Dent (R-Pa.) yesterday led a bipartisan, bicameral letter supporting the growth of Pennsylvania manufacturing jobs. The letter encourages U.S. Trade Representative Ron Kirk to improve the U.S.-Colombia Trade Promotion Agreement by negotiating an accelerated elimination of specific automotive tariffs impacting Mack Trucks, Inc.
"Mack Trucks is an iconic Pennsylvania brand whose ability to grow and create jobs is partly dependent on its ability to export its products from Allentown to other parts of the world," Sen. Toomey said. "Therefore, it's critical for jobs here at home that the Trade Representative negotiate an elimination of these truck tariffs so that the trucks made here in Allentown are given the same access as those made in Mexico."
"It's no secret, especially in the Lehigh Valley, that Mack produces the highest quality trucks on the planet," said Rep. Dent. "If provided a level playing field, Mack's expanded access to the rapidly growing market in Colombia would help create new manufacturing jobs in the 15th District. It is imperative our trade representatives work to eliminate the current truck tariffs, which have placed Mack at a competitive disadvantage simply for maintaining American production."
Mack Trucks, a manufacturing icon in the Lehigh Valley, assembles heavy duty engines and trucks solely in the United States for the North American market. Mack products exported to Colombia currently face a tariff of 15 percent, which provides a distinct advantage to the company's competitors assembling in and exporting from Mexico.
Under the U.S.-Colombia Trade Promotion Agreement, the current 15 percent tariff on various automotive exports, such as heavy duty tractors, will be eliminated upon implementation of the pact. However, the tariff affecting straight trucks (mixers, dumps, concrete pumps, water and fuel trucks, and smaller tractors) will phase out incrementally over a 10 year period. By contrast, tariffs on Colombian exports of similar products will be eliminated immediately.
A copy of the letter is below.
Honorable Ron Kirk
Office of the United States Trade Representative
600 17th Street NW
Washington, DC 20508
Dear Ambassador Kirk:
We write to ask that after the U.S.-Colombia Trade Promotion Agreement enters into force on May 15, 2012, you improve that agreement by securing an arrangement with Colombia to eliminate certain automotive tariffs on U.S. exports sooner than is currently provided. As you know, this type of accelerated tariff elimination is permitted without further legislative action if both participating countries agree following the final implementation of the agreement. Doing so will level the playing field for U.S. manufacturers, increase U.S. exports, and create U.S. manufacturing jobs.
Mack Trucks, Inc. is part of the only truck group (Volvo Group) that assembles its heavy duty engines and trucks solely in the United States for the North American market. Mack exports heavy duty straight trucks and tractors from the United States to Colombia and currently faces a tariff of 15 percent.
In contrast, Mack's competitors in Mexico currently have duty-free access to Colombia due to a trade agreement the countries implemented in 1995. This disparity gives these competitors a 15 percent tariff advantage in Colombia. As a result, Mack's historic 20 to 30 percent share of this market has fallen to approximately two percent. This is unfortunate as the Colombian market for heavy duty trucks has expanded significantly in recent years.
In the U.S.-Colombia Trade Promotion Agreement, the 15 percent tariff applied to many automotive products including heavy duty tractors exported from the United States will drop to zero immediately upon implementation. For other U.S. automotive exports, however, specifically straight trucks such as mixers, dumps, refuse, concrete pumps, water and fuel trucks, and smaller tractors - the 15 percent tariff is set to phase out in equal increments over the course of 10 years. The U.S. tariffs on Colombian exports on these lines, by contrast, are eliminated immediately upon implementation of the Agreement.
We respectfully request that your office seek an accelerated elimination of Colombian tariffs on U.S. exports of straight trucks such as mixers, dumps, refuse, concrete pumps, water and fuel trucks, and tractors under Article 2.3.4 of the U.S.-Colombia Trade Promotion Agreement. This will help to fulfill the stated goal of the President's National Export Initiative, leveling the playing field for U.S. exports by giving U.S. manufacturers better access to this emerging market.
We hope your office will make this action a priority upon full implementation of the Agreement. Please do not hesitate to reach out to our offices for more information.
Thank you for your consideration of this important matter.
Sen. Pat Toomey
Sen. Barbara Mikulski
Sen. Ben Cardin
Sen. Kay Hagan
Sen. Richard Burr
Rep. Charlie Dent
Rep. Roscoe Bartlett
Rep. Bill Shuster
Rep. Lou Barletta
Rep. Pat Tiberi
Rep. Jim Gerlach
Rep. Mel Watt
Rep. Shelley Moore Capito
Rep. Howard Coble
Rep. Steve Stivers