“After a long winter, the Port of Erie is, once again, a busy place.”
That was the start to a great report from WICU12 News in Erie, Pennsylvania earlier this week about GE locomotive exports to Africa. In short, Port operations have picked up as GE Transportation ships the first 10 of 40 locomotives purchased by a Brazilian company for use in Mozambique. The report noted that “locomotives will be a frequent site at the Port all summer long and perhaps into next year.” GE will ship the trains in batches of 10 between now and September, and is in negotiations to sell the Brazilian company 37 more locomotives, meaning the Port could be busy shipping trains next summer, too. You can watch the full clip by clicking below.
While this is a great local exports and jobs story – both for GE and the Port of Erie – it misses the important role imports, and GSP specifically, can play in making such exports possible. In 2012, GE Transportation’s Erie facility initially* claimed GSP for $4.7 million worth of imported components, waiving $140,000 in import taxes.
The majority of GE Transportation’s imports were parts for motors and generators, but they also included some air blowers, relays, and truck assemblies. India was by far the biggest supplier country, although the Erie facility also imported under GSP from Indonesia and Zambia. The map below is a oversimplification (many components likely come from non-GSP countries – and this represents just one sale), but it does illustrate the global nature of what people often consider “U.S. exports.”
By reducing import taxes on key components, GSP helps make American manufacturers like GE more competitive both at home and abroad. In fact, more than 60 percent of GSP imports are raw materials, components, and parts used to make or grow things in the United States. Yet when GSP is expired – as it has been for nearly 10 months – a wide range of manufacturers face higher costs.
No Member of Congress ever states “raising costs for American manufacturers” as a goal, but by failing to renew GSP, that’s exactly what Congress has done.
*Even the above figures actually understate GSP’s impact, as GE made numerous post-import adjustments claiming GSP benefits that are not reflected. Those adjustments could raise the import values and savings by as much as 25 percent.
