Manufacturing constitutes the economic backbone of an industrialized nation. Labor productivity in manufacturing is generally defined as the ratio of units of output over labor hours of input. Each country has a comparative advantage that helps to sustain its trade relationship. For many years, the export of products was not a strong suit for U. S. manufacturers. Gross domestic product (GDP), represents the estimated total cost of goods and services produced in the U. S. To some economists, GDP is believed to be a measure of the economic welfare of a nation. If so, then the $4,700 GDP per capita advantage held by the U. S. over six of its world competitors indicates that this country must be retaining its competitive advantage in both internal and international markets. Free trade agreements are intended to create a better balance for trade. American manufacturing industries are meeting the challenges of global competition through continued development of machine tools with more advanced digital controls, higher speeds, better accuracy, and greater flexibility. Global competition will require continuous improvements to manufacturing systems and this can only be achieved by the adoption of a consistent manufacturing strategy geared to such improvements.