Recent free trade agreements draw moldmakers' ire

October 28, 2011

Well, you know what they say: If Mama ain't happy, ain't nobody happy! The same can be said of moldmakers.  While the Society of the Plastics Industry (SPI) appears to be happy - "Plastics industry applauds free-trade agreements" read one headline in an online industry trade magazine (PlasticsToday's coverage here)- well suffice it to say that doesn't speak for ALL of the plastics industry. Perhaps the U.S. resin producers, machinery makers and maybe some molders are happy, however the mold manufacturers aren't happy. Anyone who has followed the mold manufacturing industry over the past couple of decades knows that while mold manufacturers are all for "Fair" trade, they are far from being supporters of "Free" trade.

Buzz among mold manufacturers starting going around the e-mail system before the ink was dry on the latest Free Trade agreements with South Korea, Colombia, and Panama. Long an outspoken critic of Free Trade agreements, Steve Rotman, owner and President of Ameritech Die & Mold Inc., in Mooresville, NC, commented, "I would love for someone to challenge these facts [that appear in the SPI's press commentary] and in the next five years track where the actual monetary benefits end up. I actually sent a challenge to SPI to prove all the positives that trade with China has actually had on the plastics industry, but they never responded."

Are the various Free Trade Agreements good for the entire plastics industry? That's what Rotman is asking. When looking at the numbers provided by the SPI, the biggest beneficiaries seem to be the resin producers and machinery and equipment makers. For example, U.S. mold exports to Panama in 2010 totaled $14,495. If that's a mold it's a mighty small mold, and unless Panama has a slew of molding operations and no mold manufacturers, I doubt that the Free Trade agreement with that country is really going to impact the moldmakers in the U.S.

The same for U.S. mold exports to Colombia, which totaled $51,912 in 2010. That's also one or two small molds. However, the U.S. imports of molds from Colombia for last year totaled $216,473, four times the export amount. U.S. exports to South Korea totaled $179,187 in 2010, while imports of molds from South Korea totaled 42,281,116. With that many molds being imported, it's doubtful that a free trade agreement will have much impact among mold manufacturers. 

Rotman, who is a member of the Board of Directors of the American Mold Builders Association, believes these latest Free Trade agreements are just more of the same, and will negatively impact our economy. "We don't have the hearts of people believing in Made In America. That's patriotism and we don't have it in our culture anymore. We're in a war - not for soil but for our economy. What haven't we learned?" commented a frustrated Rotman. "How can we have 10% unemployment and then put in place these free trade agreements? How will that make our economy go again? We need all the components of manufacturing, and the government needs to make laws to keep the whole process going and growing."

According to Zepol Corp., a Minneapolis-based company working to provide the most complete and up-to-date U.S. trade data, the top five countries of destination for U.S. exports of molds are in order:

  1. Mexico
  2. Canada
  3. China
  4. Germany
  5. United Kingdom

Zepol's trade data show that the top five countries of origin for U.S. imports of molds are in order:

  1. Canada
  2. China
  3. Japan
  4. Germany
  5. South Korea

Zepol's data show that the value of molds imported to the U.S. from South Korea through Q2 2011 totaled $22,694,359, while the value of molds exported from the U.S. to  South Korea totaled $1,286,831 - a pretty lopsided figure to say the least. That's definitely a trade deficit that will be nearly impossible to overcome in spite of "Free Trade" agreements with South Korea.

Mexico ranks 10th for U.S. imports of molds, with a total value of $6,380,927 for the first two quarters of 2011, while the U.S. exported molds valued at $177,646,315 to Mexico - a good trading partner considering the number of U.S.-based global corporations that have manufacturing facilities in Mexico. Close proximity to Mexico makes exporting to that country relatively easy as well.

The same can be said for our good neighbor to the North. Canada ranked 2nd in the top five countries of destination for U.S. exports of molds with a total value of $78,841,232 for the first two quarters of 2011. Canada ranked #1 for top countries of origin for U.S. imports of molds with a value totaling $211,471,882. While at first glance there is an obvious trade deficit, the ease of exporting molds to the U.S., and the large number of automotive companies in the U.S. along with the number of mold manufacturers in Canada that specialize in molds for the automotive industry make those numbers more understandable.

While some trade agreements can have benefits to U.S. manufacturers, the SPI shouldn't be jumping up and down with excitement over these last three. The U.S. moldmaking industry stands to gain little from these agreements with Panama, Columbia and South Korea.

"Sorry, but from my vantage point Free Trade Agreements have been the scourge of the U.S. economy," said Rotman. "I am sick about the Free Trade mentality. What it will end up doing is costing us and our heirs their freedom. When we as a society don't feel that it is our right to protect our livelihoods - the economy - and call it protectionism. Well, call me a protectionist all day long. There are a whole lot of unscrupulous countries that will just take away our manufacturing, and laugh all the way to the bank. And our politicians will blame it on someone else."

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