The possibility of a free trade agreement between the United States and the European Union brought Sen. Lamar Alexander to Chattanooga Wednesday, as he listened to the needs and concerns of manufacturers in the greater Chattanooga area.
The senator also discussed possibilities for regional manufacturing—including the chance of an additional vehicle that could be produced at Volkswagen's Chattanooga plant.
Alexander hosted the roundtable gathering with members of the Chattanooga Regional Manufacturers Association. The small group included representatives from Siskin Steel, Koch Foods, Lodge Cast Iron, Davron Technologies and ArtTech.
Seated at a board table on the top floor of the EPB building, the senator and former Tennessee governor asked leaders how issues such as having a skilled workforce and maintaining intellectual property would affect their ability to do business.
But Alexander took extra time to emphasize the importance he saw in encouraging a market for exports, in both Tennessee and the nation at large. The senator said he estimated that one in five manufacturing jobs in Tennessee were export-related, adding that he would like to see the number increase.
"I'd like to see more free trade agreements," he said.
Alexander recalled when Audi passed on bringing an auto manufacturing plant to Chattanooga last year, instead opting for Mexico. He suggested the outcome may have been different had the U.S. had a free trade agreement with Brazil.
"A lot of people hoped [the plant] would come to Chattanooga," he said. "But one main reason it went to Mexico instead of Chattanooga was the lack of a free trade agreement with the United States and Brazil. [Audi] wanted to sell cars in Brazil, and Mexico had a free trade agreement with Brazil, so there wasn't any tariff. If the car had been built in Chattanooga or anywhere else in the United States, we would have had to pay a 55 percent tariff in order to sell the cars in Brazil."
The senator said that Tennessee sells approximately $6 billion worth of cars and auto parts to other countries annually.
Officials for Volkswagen—which has been rumored to be considering adding an SUV to the production line in Chattanooga—said Wednesday that it would welcome an expansion of free trade agreements between the U.S. and other countries, including the 27-member European Union.
Guenther Scherelis, spokesman for Volkswagen Chattanooga, said the lifting of tariffs would play a factor in any decision.
"A free trade agreement between the European Union and the United States would make the land here in Chattanooga more competitive when it comes to competition with Mexico," Scherelis said. "Mexico has free trade agreements with many countries that are in our major markets, including Europe and Brazil. So when Sen. Alexander says that a free trade agreement would be good for a plant in Chattanooga, he is right. We would be grateful if he could support this initiative."
Scherelis added that soon after a free trade agreement was passed between the U.S. and South Korea in 2011, VW began exporting Chattanooga-built Passats across the Pacific to Asia.
"Of course, more cars means more jobs," he said.
Despite having no representatives from auto manufacturers or suppliers at the roundtable, Alexander suggested that streamlining business options for all manufacturers was in his interests.
Nearing the end of discussion, Alexander recalled visiting Japan during his time as governor. The senator said that when discussing Tennessee's prospects for manufacturers looking to build facilities in the U.S., he would show them a satellite image of America at night—dotted with glowing lights of major cities.
"'Tennessee is right in the middle of the lights,' I would tell them," he said. "Tennessee is in the ideal location."
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