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TPP Promotes Building Products Exports

February 23, 2016

Joanne Littlefair is a Senior International Trade Specialist at the International Trade Administration

The global trend toward more sustainable construction has created an enormous opportunity for U.S. building product exporters. Across international markets, the recognized impact of the built environment on resource usage, environmental conditions, energy and water consumption, and air emissions links higher performance in buildings to important national priorities. High-quality solutions are in demand, making building products a competitive global industry.

Construction

Building products

Construction is expected to be one of the more dynamic sectors of the world economy over the coming decade, with activity in the Asia-Pacific region driving much of the sector’s growth.  Global construction output is expected to grow in the range of 85 percent by 2030, creating a $15.5 trillion marketplace worldwide.  As American exporters gear up to meet international opportunities, they can expect some traditional barriers to be reduced based on the recently negotiated, Trans-Pacific-Partnership (TPP).

This new trade deal will open doors for U.S. exporters by allowing tariff-free access and easier export pathways to new and emerging economies abroad.  Building products manufacturers across America, including numerous small and medium-sized companies, have helped to build and sustain our homes, schools, medical facilities, and places of work. In 2014, the industry employed more than 753,000 workers. Once enacted, this new agreement will help expand opportunities by leveling the playing field and supporting their interest in reaching new markets.

These exporters currently face up to 60 percent in tariffs when doing business in TPP markets. An estimated $78 million in duties are levied on these exports every year. This sets back a lot of our businesses that manufacture products such as lumber, HVAC equipment, insulation, electrical circuitry equipment and parts, and other building products.

The TPP implementation offers new opportunities for U.S. exporters. For example, the Japanese construction market is large, highly stable, and reflects trends that will continue to drive demand for the advanced building products U.S. exporters offer. Japan’s population has high disposable income, a commitment to energy and other resource conservation, and a strong interest in new technologies to achieve greater environmental friendliness in construction. Since 2012, the Japanese Government has embarked on a focused roadmap for a series of building energy efficiency policies. The Japanese market holds solid prospects for U.S. wood products and innovative U.S. lighting products, in both retrofits and new construction, as examples. U.S.-sourced insulation products make up over one fifth of Japan’s import market.

Another great example is New Zealand. In 2011, earthquakes destroyed approximately 1,000 commercial buildings and 10,000 residences in the southern city of Christchurch. The city’s massive rebuild is anticipated to continue over the next 15 years creating strong demand for building supplies. In particular, non-wood building supplies are anticipated to be in high demand.

American-made building products have captured the attention of architect designers around the globe, particularly in our TPP partner countries. Sixty-two percent of the total U.S. building product exports to the world went to these countries.

Increased global interest in green building and sustainable construction also creates enormous opportunity for U.S. suppliers of architecture, design, and other services.

In an effort to support industry exporters, our Industry and Analysis team recently produced a series of Top Markets Reports that highlights future export opportunities based on a sector-specific methodology.  The 2015 Top Markets Building Products and Sustainable Construction report is available here.

For more information on how TPP impacts American workers and businesses, visit us on the web.

 

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