For 125 years, Baltimore has been home to Ellicott Dredges, a heavy equipment manufacturer and the world's oldest and largest builder of medium-sized cutter suction dredges, which are used for everything from harbor maintenance to beach restoration and environmental cleanups.
As a manufacturer of such a specialized product, we have to look for opportunities to market anywhere there may be a demand — which is usually outside the state of Maryland and often far beyond the borders of the United States.
In our early years, the U.S. government selected Ellicott to build all of the dredges used in the original construction of the Panama Canal. Ever since then, our company has been the global market leader, and today more than 2,000 American-made Ellicott Dredges can be found in 80 countries around the world.
I recount the history of Ellicott to highlight the importance of U.S. international trade policy — a policy that, at best, is currently unclear. Officially, President Barack Obama has called for the doubling of U.S. exports over the next five years as a way to create and support 2 million U.S. jobs. It's a laudable goal but one that will require an aggressive U.S. policy of lowering foreign trade barriers and forging new trade agreements if it is to have any chance of being achieved.
An important first step the administration could take is to submit the pending United States-Korea Free Trade Agreement to Congress for approval. For Ellicott and other American firms, South Korea has proven to be a lucrative market. In fact, we've been doing business there for more than 50 years, and we've made multiple sales in the past two years. Most recently, we've been tapped to supply dredges for the $18 billion Four Rivers Restoration Project, which is designed to provide flood control and ensure ecosystem vitality.
If Ellicott is already doing well in South Korea, however, you might ask: Why do we need a free trade agreement? The answer is simple. South Korea is negotiating an FTA with the European Union — and Ellicott competes with European companies on a global basis, including in South Korea. Currently, South Korea places a 5 percent tariff on all imported dredging equipment. This tariff hits both Ellicott and its competitors alike, so we're on a level playing field. However, once the EU-Korea FTA is enacted — absent movement on the U.S.-Korea pact — our products will be placed at a significant disadvantage. A European manufacturer will be able to undercut our prices consistently, which could lead to a long-term decline for our sales there.
The really alarming fact is that South Korea is not the only market we're in danger of losing. Throughout the world, major economies are actively forging bilateral and multilateral trade agreements that exclude the United States. The World Trade Organization estimates that close to 400 free trade agreements involving countries in all parts of the globe are scheduled to be in effect by the end of 2010. Of this number, the United States is currently party to only 11 (with 17 countries). Clearly, we are being left behind.
The longer the United States puts its trade policies on hold, the more we put American companies in danger of losing market share in vital, growing markets throughout the world. With 95 percent of the world's consumers living outside U.S. borders, it should be clear to U.S. policymakers — including Congress — that a key component of any policy designed to return America to strong economic growth and job creation is to forge the trade agreements that will maximize our potential to sell our products abroad.
Peter Bowe is president of Baltimore-based Ellicott Dredges.