The industry´s trade outlook certainly has changed a lot in the past year.
Twelve months ago, industry analysts and trade associations were praising the huge jump in the plastics products trade surplus, to $1.6 billion in 2000. But since then weaker economies and a stronger dollar have cut that by more than half, to about $560 million for 2001.
Mold makers have pushed the government to investigate their industry for evidence of unfair trade. Companies, particularly smaller ones, seem more anxious about the impact of globalization on their business. Some segments of the processing industry are being pinched by rising imports at a time when the overall economy is weak.
The Chinese government announced late last month that it is investigating foreign PVC producers, including those in the United States, for dumping. That seems to be in retaliation for U.S. protectionist measures on steel.
Some plastics industry officials worry about more trade conflicts, and point out that the plastics industry´s large trade surplus can´t help but make an inviting target for another country angered over U.S. government actions on steel. Trade conflicts carry risk for the industry.
Times have changed. The question is what to do about it.
Trade questions are complex, but we remain skeptical of protectionist measures for any plastics industry segment. There´s a strong case to be made for the strong dollar being at the root of many trade problems for U.S. manufacturers.
Take the mold-making industry. There´s a lot of concern about work lost to Asia. The mold-making industry clearly has suffered lately, along with many manufacturers in the slowing economy.
But U.S. government data doesn´t seem to bear out the complaint of Asian mold imports flooding the U.S. market. Clearly, the mold-making industry in that country is developing rapidly and its potential is huge.
Mold makers argue that the problem is manufacturing going to Asia, taking mold making with it. That is happening. But short of revamping the rules of global trade, it´s unclear what the U.S. government can do about that.
Leaders of the mold-making industry are beginning to talk more about tax credits and tax incentives to help make their industry more competitive, although they say tariffs still may be needed.
Help also is available to companies.
Trade groups like the Society of the Plastics Industry Inc. coordinate trade missions and events in other countries.
The U.S. government also has a network of 12 Trade Adjustment Assistance Centers that can help. The centers can provide as much as $75,000 in matching funds, if companies can demonstrate that they have lost business to foreign competition.
Quality Custom Mold Inc. in Youngstown, Ohio, for one, recently was accepted into the Great Lakes TAAC, run as part of the University of Michigan´s business school. TAAC officials say their money can be used to hire consultants on lean manufacturing, marketing or other improvements.
We´re not trying to suggest that concerns about unfair trade aren´t valid. But there are risks that come from pursuing protectionist solutions.