Manufacturers are expecting to benefit from three bills passed by Congress in a pre-vacation flurry last week.
Before leaving for their August recess, lawmakers approved a trade deal with Central America, major roadway-building legislation and a long-awaited energy bill. President Bush is expected to sign all three into law.
The Central American Free Trade Agreement (CAFTA) drops duties for 80% of consumer and industrial goods exported from the U.S. to the Dominican Republic, Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica, which have a combined GDP of about $92 billion. While commerce between the CAFTA block and the U.S. is small compared with NAFTA trading partners Canada and Mexico (combined GDP of more than US$1.4 trillion), manufacturers still cited the agreement as an avenue to new markets.
"CAFTA will be another tool to help the industry export and sell automotive parts to Central America," said Bob McKenna, president and CEO of the Motor & Equipment Manufacturers Association, in a statement. "The economic growth created by this trade agreement is going to benefit both our industry and the automotive parts and service markets in Central America."
The House and Senate also negotiated a deal on a bill that will provide $286.4 billion for highway and mass transit improvements across the country over the next six years. Business leaders, who have been frustrated over inadequate roads, seaports and airports, applauded its passage. "Businesses and consumers have paid billions of dollars in taxes for a reliable and efficient transportation system," said Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce. "This bill paves the way for better roads and keeping America's economy rolling."
In addition to transportation, rising energy costs and uncertain energy supply have vexed manufacturers recently in the form of higher prices. While provisions of the energy bill, such as an inventory of the country's potential offshore oil and gas reserves, will take a long time -- if at all -- to translate into lower fuel costs, manufacturers-at-large still saw its passage as a positive. Andrew G. Sharkey, president and CEO of the American Iron and Steel Institute, said the bill's provisions that fund R&D of new approaches to providing energy "will facilitate further strides in energy efficiency."