Excerpt: Twenty-five cents a gallon – that’s about how much some international energy experts say the tough US sanctions on Iran’s oil industry are costing Americans at the pump. As US consumers cope with gas prices that are approaching an average of $4 a gallon, some international trade experts say the cost of the sanctions the US imposes – as in the case of the Iran measures – is something political leaders should discuss more openly. Instead, they say, most politicians act as if sanctions affect only the country targeted – something these experts say isn’t true. “The approach is always that the costs are for them and the benefits are for us,” says Bill Reinsch, president of the National Foreign Trade Council (NFTC), a Washington lobbying organization that generally opposes economic sanctions. “The Iran case is interesting,” he adds, “because of the impact of sanctions on our energy sector.”http://www.csmonitor.com/USA/Foreign-Policy/2012/0405/What-do-Iran-sanctions-cost-you-About-25-cents-a-gallon-experts-say
Category: NFTC In the News
Analysts: Iran Fears Push Up Oil Prices Despite Steady Supply
Fears over the drop-off in Iranian oil supply due to tough sanctions imposed by the United States have pushed oil prices higher year to date, even as actual worldwide production has remained stable, energy analysts said Thursday. Since Congress approved additional sanctions in mid-December aimed at curtailing Iran’s oil and gas sales, Brent crude oil prices have risen around 16%, and WTI crude prices are up close to 8%, according the U.S Energy Information Administration. Iran is OPEC’s second largest oil producer and is currently the third largest oil exporter in the world, so any serious disruptions will impact prices. The European Union’s embargo against Iran’s oil imports will take effect on July 1, but already many of its customers are beginning to curtail oil imports. So far though, actual oil production has not taken much of a hit. U.S. crude inventories rose at their fastest pace in nearly four years this past week, indicating a rather large surplus, at least within the largest energy consumer in the world. Tim Evans, an energy analyst at Citi Futures Perspective old MNI in a phone interview, “In the current markets we have this fear that production will be lost but actual production is rolling along smoothly.” “Total OPEC production is rising. The tightness is all in peoples’ heads; it’s in anticipation that production could drop sometime in the future.” As emerging markets have slowed somewhat and U.S. demand remains subdued, the rise in prices is largely due to geopolitical instability, most notably in Iran. Lou Pugliaresi, the president of the Energy Policy Research Foundation said at a press lunch Thursday, “If oil is 30 dollars higher than it should be, a third of that is probably due to Iran, but it’s extremely tough to document that.” “There’s alot of variance around Iran. Based on the data the sanctions are working in that they have cut down Iranian oil sales.” Still, he noted, “What buyers and sellers are telling us is that the long term looks much better in terms of prices. [They] view the disruption as temporary.” Citi’s Evans sees the Iranian sanctions as having an even stronger effect on prices, saying, “It’s easiest to see the impact of the sanctions and the pending embargo on oil prices, and in my view there is a $25 to $30 a barrel risk premium.” “This has really become a one issue market. Either we get the supply disruption from Iran and prices go up or we don’t get the disruption and prices come back down,” Evans said. “My general opinion is that we basically muddle through, where there is no large disruption but a solution is not quickly found.”
Indian Budget Ruling Alienates Foreign Investors, Creates International Uproar
U.S. hails Myanmar election as step for democratic change
Excerpt: The United States on Monday hailed a strong showing by Aung San Suu Kyi’s pro-democracy party in Myanmar’s by-elections, calling the vote an important step in the country’s democratic transformation. … The U.S. business community, eager not to lose ground to European and Asian rivals as the Myanmar market begins to open, welcomed the election results as an important milestone and said Washington should continue and expand its diplomatic outreach to the country. “We believe that such engagement has been, and will be, crucial in encouraging and supporting further reform,” the National Foreign Trade Council, the US-ASEAN Business Council and the U.S. Chamber of Commerce said in a joint statement.
http://in.reuters.com/article/2012/04/02/myanmar-usa-idINDEE8310IC20120402
Firm Romney Founded Is Tied to Chinese Surveillance
Excerpt: As the Chinese government forges ahead on a multibillion-dollar effort to blanket the country with surveillance cameras, one American company stands to profit: Bain Capital, the private equity firm founded by Mitt Romney. Chinese cities are installing surveillance systems with hundreds of thousands of cameras like these at a Beijing building site. In December, a Bain-run fund in which a Romney family blind trust has holdings purchased the video surveillance division of a Chinese company that claims to be the largest supplier to the government’s Safe Cities program, a highly advanced monitoring system that allows the authorities to watch over university campuses, hospitals, mosques and movie theaters from centralized command posts. The Bain-owned company, Uniview Technologies, produces what it calls “infrared antiriot” cameras and software that enable police officials in different jurisdictions to share images in real time through the Internet. Previous projects have included an emergency command center in Tibet that “provides a solid foundation for the maintenance of social stability and the protection of people’s peaceful life,” according to Uniview’s Web site. Such surveillance systems are often used to combat crime and the manufacturer has no control over whether they are used for other purposes. But human rights advocates say in China they are also used to intimidate and monitor political and religious dissidents. “There are video cameras all over our monastery, and their only purpose is to make us feel fear,” said Loksag, a Tibetan Buddhist monk in Gansu Province. He said the cameras helped the authorities identify and detain nearly 200 monks who participated in a protest at his monastery in 2008. … William A. Reinsch, president of the National Foreign Trade Council in Washington, said it was up to the American government, not individual companies, to set the guidelines for such business ventures. “A lot of the stuff we’re talking about is truly dual use,” said Mr. Reinsch, a former Commerce Department official in the Clinton administration. “You can sell it to a local police force that will use it to track down speeders, but you can also sell it to a ministry of state security that will use it to monitor dissidents.” http://www.nytimes.com/2012/03/16/world/asia/bain-capital-tied-to-surveillance-push-in-china.html?pagewanted=1&%2334&%2339&%2359&_r=1&sq=Romney&st=cse&%2359;&scp=1&%2359;s%20Bain%20tied%20to%20Chinese%20surveillance
Law limits hiring firms with links to Cuba
Excerpt: Florida lawmakers have passed a measure forbidding local governments from hiring companies that do business with Cuba, officials say. The Miami Herald said the law, which governs contracts worth at least $1 million, appears to be aimed at Odebrecht USA of Coral Gables, one of the largest contractors in Miami-Dade County. The company is a subsidiary of a Brazilian conglomerate whose Cuban affiliate is working on a major expansion of the Port of Mariel in Florida. … But experts say the law likely will be challenged in court. States are barred from limiting local governments’ contracting decisions based on contractors’ international work, said Dan O’Flaherty, vice president of the National Foreign Trade Council, based in Washington, which supports trade with Cuba.
Groundhog Day in Florida: Bill Targets Firms Doing Business with Cuba
Excerpt: Only in Florida can you have legislators so obsessed with another country that they routinely pass laws designed to punish said country even (and sometimes especially) when they harm that state’s own interests. On March 9, the Florida legislature passed a law that would ban any of the state’s public contracts to be awarded to companies that also do business with Cuba. The obvious target of the bill is Brazil’s Odebrecht, which has done quite well in Miami over the past couple of decades, and which is also behind the transformation of Cuba’s port at Mariel into a major Caribbean shipping hub (no doubt in preparation for the day when U.S. rules preventing U.S.-bound liners are again allowed to freely stop in Cuba). I’m not in a position to wade into whether Odebrecht should or shouldn’t win public contracts, except to say it seems to me they should win or lose on the merits, not the politics. The National Foreign Trade Council’s Dan O’Flaherty says the just-passed Florida law is unconstitutional – the constitution prohibits states legislating foreign policy matters in conflict with federal laws. O’Flaherty cites a Massachusetts law that would have enforced a similar restriction on companies dealing with Burma. That law was struck down by the U.S. Supreme Court in 2000.
http://www.thehavananote.com/2012/03/groundhog_day_florida_bill_targets_firms_doing_business_cuba
New Florida law prohibits Miami-Dade, other governments from hiring companies tied to Cuba
Excerpt: Delving into Miami-Dade’s tricky exile politics, Florida lawmakers passed sweeping but little-noticed legislation this session prohibiting local governments from hiring companies that do business with Cuba.… Statutes limiting local governments’ contracting decisions based on the vendor’s international work oversteps a state’s power, said Dan O’Flaherty, vice president of the Washington D.C.-based National Foreign Trade Council, which advocates trade with Cuba.”It’s unconstitutional,” he said, citing a 2000 Trade Council case in which the U.S. Supreme Court struck down a Massachusetts law restricting state businesses from dealing with companies with ties to Myanmar, formerly known as Burma.”States are barred by the Supreme Court decision from enacting procurement sanctions targeting companies doing business in foreign country ‘X,’ ” added O’Flaherty, whose organization sent letters to Gov. Rick Scott and House and Senate leaders in opposition.
Obama to Romney: I’m Tough On China, Too
Excerpt: The White House announcement Tuesday that the United States has launched the beginning of a formal complaint over Beijing’s hold on rare earth materials doesn’t only take aim at China. Made just eight months before Election Day, the move has another high-profile target in mind: Mitt Romney. …Obama has always had a weakness with those voters – he won just 40 percent of them against John McCain in 2008 – but his campaign has signaled it believes some of them otherwise inclined to back the GOP nominee might be reluctant to support Romney. That helps explain their move Tuesday to blunt some of Romney’s criticism. The move has a dual benefit for Obama, according to Bill Reinsch, president of the National Foreign Trade Council. It can make him look tough on China but avoid angering the business community at the same time, which is much less alarmed by submitting complaints to the World Trade Organization than declaring China a currency manipulator. In effect, the president is threading the needle between competing interests.”Most responsible incumbents do whatever they can to protect themselves from that charge,” said Reinsch, who called Romney’s position on trade with China “baffling.” “What Obama has done, which makes sense, is to pursue a much tougher line on enforcement.”
Both winners and losers are cool to Obama’s corporate tax reform
Excerpt: Even business sectors that would gain an advantage from President Obama’s corporate tax overhaul have given a cool reaction to his proposal. The poor reviews from groups that might be described as winners under the plan underscores the challenge the administration faces. … With the campaign moving into full swing, many on K Street say November’s election will play a big role in deciding when, or if, policymakers have a breakthrough on tax reform. “Once we get past this year, and if Obama gets reelected, I suspect he will have to come with up a real plan and not something to appease parts of his voting populace,” said Catherine Schultz, vice president of tax policy for the National Foreign Trade Council. And if a Republican takes over the Oval Office, Schultz added, corporate tax reform might be put on the back-burner as a new administration begins to take shape. “If it’s not Obama, we are going to have wait even longer for tax reform because they will have set up their government,” Schultz said.
