Domestic trade agreements should be a priority for Congress after recess

At Voith Hydro’s York, Pennsylvania facility, we utilize GSP to import a very specific component from Brazil that is required to manufacture our world-class hydropower turbines. This part is not available in the United States, but is nonetheless critical for the turbines we install at projects across the country that bring safe, clean, and affordable energy to millions of homes and businesses.
 
Unfortunately, the GSP program was allowed to expire at the end of 2010, leaving many companies such as Voith Hydro uncertain about the price of doing business. Businesses that have remained competitive due in part to their use of the program are now burdened with significant – and unexpected – costs. These new expenses could create cash-flow difficulties that slow business, impede growth, and potentially lead some companies to close their operations.
 
As you could imagine, the nature of the hydropower industry requires long-term contracts that are secured years in advance. You would expect nothing less for massive turbines that remain operational for 50 years and longer. As a result, GSP’s expiration is causing cost increases on our products that we cannot pass on to our customers – approximately $1,000,000 this year alone.
 
Despite bipartisan support, GSP has not yet been extended. Without question, these unplanned-for tariffs impact our bottom line, but the more troubling aspect of GSP’s expiration is the uncertainty it creates when negotiating future contracts and making strategic business decisions. Without a clear understanding of how Congress will proceed on this important issue, employers like Voith Hydro lack the certainty needed to invest in our businesses, workers, and the U.S. economy.
 
Pennsylvania Sen. Bob Casey (D) has been working diligently to ensure that GSP and the Trade Adjustment Assistance (TAA) program are extended. We applaud his efforts, and hope he will continue his hard work on behalf of Pennsylvania workers and manufacturers to see that this very important program is extended for years to come.
 
In recent weeks, there has been a push by Congressional leadership and the White House to allow both TAA and GSP to be extended in a timely fashion. I look forward to seeing progress made on these negotiations in the coming weeks and urge Congress to swiftly consider GSP’s extension when it returns in September.
 
In the last three years, Voith Hydro has experienced significant growth, adding 126 jobs during a time in which many companies were forced to cut back. We now employ over 500 people in the U.S. Voith Hydro is prepared to continue expanding our business and create jobs across the United States, but we must have some certainty about the costs we face both upfront and in the future. Extending GSP will go a long way to alleviate our concerns, as well as those of businesses across the country.
 
In these tough economic times, let’s focus on the programs and policies that have a proven track record of success, such as the Generalized System of Preferences program, and make sure they are extended. Providing a level of certainty will go a long way in helping American manufacturers produce their products and create jobs across the country.
 
Kevin Frank is president and CEO of Voith Hydro’s North American operations, which is based in York, Pa. Voith Hydro manufactures hydropower turbines and employs over 500 people in the United States.