Bureau of Industry and Security
U.S. Department of Commerce
Where Industry and Security Intersect
What's New | Sitemap | Search

VII. Trade and Competitiveness Impact

A. TSV-Related Industry

Most of the leading components and subsystems comprising each TSV are produced by sectors of American manufacturing that have faced major global competitiveness challenges since the early 1990s. A detailed breakout of TSV content reveals the following to be each vessel's principal components and subsystems measured by share of total costs:

Figure XVI: Breakout of Key TSV Components and Subsystems

Component/Subsystem	% of Total Cost
Relays and industrial controls	7.83%
Fabricated structural metal	7.64%
Internal combustion engines	4.33%
Mechanical power transmission equipment	3.52%
Blowers and fans	2.97%
Pipes, valves and pipe fittings	2.42%
Electric motors and generators	2.34%
Electrical equipment for internal combustion engines	1.71%

Source: U.S. DOC/BIS TSV Site Survey Data

Together, these components and subsystems comprise nearly one-third of each vessel's total cost. U.S. trade figures, however, indicate that each of these sectors faces competitive challenges, save for internal combustion engines.

These breakouts provided by the shipyards can be roughly matched with Census Bureau data to show recent output trends in these sectors. Because the shipyard data are categorized by Standard Industrial Classification (SIC) codes, and the Census data by the newer North American Industrial Classification System (NAICS) codes, the following figures are important not for identifying precise levels and other figures, but for identifying general magnitudes and trends. ¹³

According to the Census data, between 1997 and 2001 (the last year for which detailed output data on U.S. manufacturing are publicly available), domestic production in seven of the TSV component NAICS categories declined from $48.51 billion to $44.2 billion: a drop of 8.9 percent. By comparison, U.S. Gross Domestic Product (GDP) grew by 21.2 percent during that period (in current dollars) and manufacturing output grew by 3.15 percent.

Individual industry data are shown in Figure XVII below:

Figure XVII: Percent Change of TSV Component - by NAICS Category
(1997-2001)

TSV Matching NAICS Category	% Change: 1997-2001
Miscellaneous fabricated metal products	-4.70%
Electric motors and generators	-16.30%
Industrial valves	3.61%
Relays and industrial controls	-14.74%
Other metal valves and pipe fittings	-13.00%
Mechanical power transmission equipment	-6.62%
Industrial fans and commercial blowers	-1.48%

Source: U.S. DOC/BIS TSV Site Survey Data and U.S. DOC/Census, NAICS Data 1997-2001

Domestic exports for these industries increased 8.62 percent from 1997 to 2002. But imports for consumption rose more than four times faster during this period - by over 34 percent. Individual industry figures are shown in the tables below: 

Figure XVIII: Percent Change of Exports for Key Components
Used in TSV Construction(1997-2002)

Export Category	% Change: 1997-2002
Miscellaneous fabricated metal products	23.20%
Electric motors and generators	-3.60%
Industrial valves	12.90%
Relays and industrial controls	11.30%
Other metal valves and pipe fittings	-7.80%
Mechanical power transmission equipment	-1.60%
Industrial fans and commercial blowers	-5.20%

Source: U.S. DOC/BIS TSV Site Survey Data and U.S. DOC/Census Data 1997-2002

Figure XIX: Percent Change of Imports for Key Components
Used in TSV Construction (1997-2002)

Import Category	% Change: 1997-2002
Miscellaneous fabricated metal products	30.10%
Electric motors and generators	50.70%
Industrial valves	31.50%
Relays and industrial controls	27.30%
Other metal valves and pipe fittings	31.70%
Mechanical power transmission equipment	15.00%
Industrial fans and commercial blowers	33.10%

Source: U.S. DOC/BIS TSV Site Survey Data and U.S. DOC/Census Data 1997-2002

In 1997, these sectors ran a cumulative trade deficit of $3.04 billion. By 2002, this deficit had more than doubled, to $6.09 billion. Trade balance figures for each sector are shown below:

Figure XX: Trade Balance Data for Key Components
Used in TSV Construction (In $ millions - 1997 and 2002)

Component Category	Trade Balance: 1997	Trade Balance: 2002
Miscellaneous fabricated metal products	-$1,104	-$1,644
Electric motors and generators	-$567	-$2,469
Industrial valves	-$641	-$1,279
Relays and industrial controls	-$592	-$1,103
Other metal valves and pipe fittings	$195	-$58
Mechanical power transmission equipment	-$147	-$276
Industrial fans and commercial blowers	-$179	$345

Source: U.S. DOC/BIS TSV Site Survey Data and U.S. DOC/Census Data 1997-2002

At least as important, the domestic market share for each of these domestic industries fell between 1997 and 2001 (the last year for which data are available to support such calculations). Domestic market share figures can be even more revealing than trade balance figures, since they compare imports with domestic shipments or products, not simply with the much smaller export totals. Moreover, the U.S. market is not only the world's largest market for these products, it is the market that U.S. producers presumably know best.

The changes in domestic market share for U.S. producers of the seven TSV-related industries are presented below. They show that domestic producers of these products have all lost share in the U.S. market since 1997:

Figure XXI: Domestic Market Share Data for Key Components Used in TSV Construction (1997 and 2002)

Import Category	1997 Domestic Producers' Market Share	2002 Domestic Producers' Market Share
Miscellaneous fabricated metal products	63.2%	54.2%
Electric motors and generators	71.6%	55.0%
Industrial valves	65.6%	59.8%
Relays and industrial controls	75.9%	66.4%
Other metal valves and pipe fittings	75.3%	64.6%
Mechanical power transmission equipment	75.1%	72.0%
Industrial fans and commercial blowers	79.2%	73.3%

Source: U.S. DOC/BIS TSV Site Survey Data and U.S. DOC/Census Data 1997-2002

More precise and longer-term trade figures for these components and subsystems makers can be obtained from the U.S. government's Standard Industrial Classification figures. These data tell a story closely resembling that told by the NAICS data.

Between 1992 and 2001, domestic exports for the eight industries matching up precisely with the TSV content information rose from $11.34 billion to $19.35 billion - an increase of 70.6 percent. Imports of the same goods during this period, however, grew more than twice as fast - from $11.21 billion to $27.4 billion, or 144.4 percent. Export and import figures for the eight individual industries are presented in the table below:

Figure XXII: Percent Change of Exports for Key Components
Used in TSV Construction (1992-2001)

Export Category	% Change: 1992-2001
Internal combustion engines	74.8%
Valves and pipe fittings	107.8%
Electric motors and generators	70.5%
Relays and industrial controls	82.3%
Electrical equipment for internal combustion engines	4.5%
Fans and blowers	88.4%
Mechanical power transmission equipment	96.7%
Fabricated structural metal products	92.6%

Source: U.S. DOC/BIS TSV Site Survey Data and U.S. DOC/Census Data 1997-2002

Figure XXIII: Percent Change of Imports for Key Components
Used in TSV Construction (1992-2001)

Import Category	% Change: 1992-2001
Internal combustion engines	110.6%
Valves and pipe fittings	120.0%
Electric motors and generators	150.9%
Relays and industrial controls	200.6%
Electrical equipment for internal combustion engines	135.5%
Fans and blowers	147.9%
Mechanical power transmission equipment	112.6%
*Fabricated structural metal products	2038.0%

* - Fabricated structural metal products percentage increase is very high because its overall market presence is relatively small and changes therefore are magnified

Source: U.S. DOC/BIS TSV Site Survey Data and U.S. DOC/Census Data 1997-2002

Consequently, sectors whose cumulative trade was in rough balance in 1992 (though much of this was due to a surplus in internal combustion engines) ran a combined $8.05 billion deficit in 2001. Trade balance figures for each sector are shown below:

Figure XXIV: Trade Balance Data for Key Components
Used in TSV Construction (In $ millions - 1997 and 2002)

Component Category	Trade Balance: 1997	Trade Balance: 2002
Internal combustion engines	$1,628	$2,255
Valves and pipe fittings	-$285	-$849
Electric motors and generators	-$177	-$2,028
Relays and industrial controls	-$24	-$1,679
Electrical equipment for internal combustion eng.	-$907	-$4,505
Mechanical power transmission equipment	$25	-$92
Fabricated structural metal products	$37	-$384

Source: U.S. DOC/BIS TSV Site Survey Data and U.S. DOC/Census Data 1997-2002

B. Increasing Trade and Competitiveness in the Global Marketplace

In May 2001, BIS released the report "National Security Assessment of the U.S. Shipbuilding and Repair Industry." The report concluded that shipbuilding and repair is important to the national security of the United States and contained these findings:

• It is essential that the capability and infrastructure needed to build these ships is resident in the United States because it provides added assurance that they can be built, repaired, and maintained during times of conflict.

• Shipbuilding and repair is an important component not only of the nation's defense but also of America's transportation infrastructure.

• Many shipyards have difficulty attracting and retaining an adequate supply of qualified production workers. Shipyard productivity increases could potentially allow for higher pay scales, which could help alleviate this concern.

• Extensive modernization of the commercial shipbuilding industry could improve productivity and thereby reduce the costs for purchasers of American-made vessels.

• The U.S. commercial shipbuilding industry is generally not internationally competitive. Various sources report several reasons for this lack of competitiveness, including foreign government subsidies and other unfair trade practices, exchange rates, and lagging U.S. productivity.

• The United States ranks tenth in the world with about a one percent share in the construction of new commercial vessels over 1,000 gross tons (as of 2001). By this measure, the leading commercial shipbuilding nations are South Korea (43 percent of the market); Japan (26 percent); China (7 percent); and Germany, Italy, and Poland (each with 3 percent).

Shipbuilding World Orders - 2000

Source: U.S. DOC/BIS National Security Assessment of the U.S. Shipbuilding and Repair Industry 2001

One way to meet the crucial needs of enhancing U.S. shipbuilding productivity, maintaining stable workforces, and solidifying the maritime industrial base supply chain is through increased exports of unique U.S. maritime assets.

The 2001 report highlighted the U.S. Coast Guard's innovative Deepwater program as an initiative that could enhance the U.S. maritime industrial base. The Deepwater program is a $17 billion acquisition of cutters, smaller ships, helicopters, airplanes and unmanned vehicles that constitute a suite of assets for deployment in a wide variety of maritime missions. Deepwater's unique and cutting-edge assets and sub-systems provide an excellent export opportunity for the U.S. maritime industrial base. A study conducted for the U.S. Coast Guard by AMI International, a Seattle-based maritime consulting firm, projects a worldwide market of $21 to $47 billion for Deepwater-type assets over the next 10 to 15 years.

Similar to Deepwater, the unique TSV program could also help enhance the U.S. maritime industrial base by creating new opportunities for export. As a possible military export, the TSV is attractive because it has many potential features for additional asset integration (e.g., helicopters, unmanned vehicles, etc.). The TSV also has commercial export potential within the current $400 million annual, and growing, global market for high-speed ferries and transport platform.

---

13. The NAICS system was introduced in 1997. The SIC system was phased out in 2001.

 

 

 

 

---

FOIA | Disclaimer | Privacy Policy | Information Quality
Department of Commerce | BIS Jobs | No FEAR Act | USA.gov | Contact Us