Excerpt: The major breakthrough Friday in free-trade talks between the U.S. and South Korea could pave the way for congressional approval by next spring. U.S. business groups are eager to win passage of the agreement during the first half of the year, since a rival trade pact that South Korea signed with Europe is set to go into effect at the beginning of July. “I would hope that it gets approved by spring,” said Chuck Dittrich, vice president for regional trade initiatives at the National Foreign Trade Council, which represents multinational corporations. “What happened today has created some momentum, and I think the business community is firmly behind it to not only sustain but increase that momentum,” said Dittrich.
http://online.wsj.com/article/BT-CO-20101203-713029.html?mg=com-wsj
Category: NFTC In the News
A Free Trade Agenda For 2011?
Obama: Korean Trade Agreement Finalized
Cuba Travel Ban Won’t Be Lifted This Year
Excerpt: Legislation eliminating a longstanding travel ban to Cuba is dead in this Congress, several senior Democrats said this week. Rep. Bill Delahunt (D-Mass.), a strong backer of lifting the ban, called it “absurd” that Congress would maintain restrictions “predicated on a Cold-War mentality” irrelevant to current events. But with the year drawing to a close — and lawmakers reluctant to tackle yet another thorny topic in a politically polarized environment — the bill won’t come up in the lame duck, he said. “There will be no action,” Delahunt, a senior member of the Foreign Affairs panel, told The Hill… Still, the bill’s supporters are holding out hope that the incoming class of Republicans will feel differently than GOP leaders about the sanctions. Although many conservatives have traditionally supported the ban as a way of pressuring Cuba’s communist dictatorship, the incoming class of Republicans brings with it a libertarian streak that favors individual freedoms above government intrusion, many observers note. That position could place them at odds with GOP incumbents — notably Ros-Lehtinen — who have fought for years to keep U.S. restrictions on Cuba in place. “They might not take kindly to the government telling them where they can and can’t travel, where they can and can’t trade,” Jake Colvin, vice president of global trade at the National Foreign Trade Council, said of the incoming Republicans. “Their perspectives will be much more of a libertarian bent. … The conventional wisdom that Republicans are more hard-lined on Cuba may not play out next year.”
http://thehill.com/homenews/house/131559-congress-wont-lift-cuba-travel-ban-this-year
US Deficit Panel Recommends Lowering Corporate Tax Rates
Excerpt: The deficit commission set up by the White House recommended cutting corporate tax rates to a single rate between 23% to 29%, replacing the current band of rates that peak at 35%. In its final report released Wednesday, the commission said that without a significant overhaul of the U.S. corporate tax system, the country’s competitive position globally would suffer. In exchange for lowering the corporate rate, the panel’s report recommended eliminating all other industry-specific subsidies. Doing so would both help pay for the lower corporate rate, and would end the current system where the government in effect picks winners and losers through subsidies, the report said. But in a move that drew praise from multinational businesses, the commission would end the taxation of overseas profits. The move to a territorial system would bring the U.S. more in line with most other countries which generally don’t tax profits earned abroad. Catherine Schultz, vice president of tax policy at the National Foreign Trade Council, another trade group, said it would depend on how such a territorial tax system was structured. For instance, she said, how would overseas oil royalties be treated and what kind of transition rules would be in place to allow firms to use foreign tax credits they have already accumulated? “There are a lot of territorial tax systems in the world, and none of them would work perfectly in the U.S.,” said Schultz. “People are very interested in looking at it, because it is one of the ways we could be most competitive,” she added.
South Korean ‘No Deal’ May Damp U.S. Trade Accords Prospects
Panel Expected To Push Obama On Iran Sanctions
Master and Commander or Salesman-in-chief?
Excerpt: Barack Obama: master and commander of the world economy, or merely peripatetic salesman-in-chief? So far, it looks more like the latter. During the president’s Asia tour, he has spent more time touting American exports than battering down trade barriers. Mr Obama says the export deal he proudly announced in India, with the spurious mathematical precision often attached to such estimates, would create 54,000 jobs. The US economy generated nearly three times that number last month alone… Negotiators are thrashing out a side letter reassuring American carmakers that Korea will not allow auto standards to become barriers. But enthusiasm for the deal in the new US Congress is still uncertain. In theory, a House of Representatives controlled by the traditionally liberalisation-friendly Republicans should be more willing drive a deal through. But along with the defeat or retirement of several centrist pro-trade deal Democrats in the recent midterm elections, isolationist and anti-corporate rhetoric from the Tea Party movement has some free traders worried. Officials from the National Foreign Trade Council, a business association, bluntly describe the new Congress as “all over the place” on trade issues.
http://www.ft.com/cms/s/0/ffb9d0c8-ecc5-11df-88eb-00144feab49a.html#axzz14tF9r9bj
Obama’s Asia Trip: The Free Trade Conundrum
Excerpt: President Obama’s contention that foreign trade can be a principal engine for creating new jobs and reducing America’s stubbornly high unemployment rate will be put to the test during his two-day visit to South Korea this week… More important still, some political analysts say: The recent midterm elections leave trade as a rare bright spot where Obama and a substantially more Republican Congress may be able to work together. “Trade is an area where both sides can take credit if things move forward,” says Bill Reinsch, president of the National Foreign Trade Council (NFTC) in Washington.
http://www.csmonitor.com/USA/Foreign-Policy/2010/1110/Obama-s-Asia-trip-the-free-trade-conundrum
NFTC: Election Results Likely Mean Export Control Legislation Is Dead
The pending Republican party’s takeover of the House of Representatives after last week’s midterm elections likely means that efforts to pass legislation to reform the U.S. system of export controls will grind to a halt, National Foreign Trade Council (NFTC) President Bill Reinsch said at a Nov. 5 press briefing.
In the run-up to the election, Reinsch said that administration officials were already starting to prepare to alter their strategy on export controls from seeking legislation to purely administrative action, given that Republicans were widely predicted to make massive electoral gains in the House.
One business source said that companies would still welcome administrative reforms on export controls, even if those reforms were not secured more permanently through legislation. Sources have long said that most of what the administration is seeking to accomplish can be done administratively.
Several obstacles sit in the way of export control legislation, according to Reinsch. First, he pointed out that House Foreign Affairs Committee Ranking Member Ileana Ros-Lehtinen (R-FL) is slated to chair that committee starting next year.
Ros-Lehtinen has been critical of the administration’s export control reforms as well as the efforts by Rep. Howard Berman (D-CA), who currently heads up the Foreign Affairs Committee, to write a new dual-use export control law.
Berman has developed a draft bill that would revise the Export Administration Act, which authorizes dual-use export controls. After industry groups criticized a draft of the bill, a scheduled hearing and markup on Berman’s bill were canceled this fall.
Reinsch also signaled that the elections could deflate the ongoing efforts by the administration to draft its own bill. While the administration hopes to have it finalized by April, he speculated that it may not see much action given the more challenging environment in Congress and the fact that most reforms can be accomplished administratively.
Though the Democrats maintained control of the Senate, Reinsch said he did not foresee much support for export control legislation from Sen. Tim Johnson (D-SD), who is expected to take over as chairman of the Senate Banking Committee once Sen. Chris Dodd (D-CT) retires at the end of the year.
Reinsch speculated that export controls would not be high on the committee’s priority list under Johnson, and that it would likely wait for House action before beginning any initiatives on its own.
The election results last week also cast doubt on the future of the Currency Reform For Fair Trade Act (H.R. 2378), which seeks to offset currency manipulation by countries such as China through U.S. countervailing duty (CVD) law, Reinsch said.
Reinsch said it was too early to tell whether Congress will consider currency legislation in the upcoming lame-duck session. He said no one will commit to doing so before seeing the outcome of the G-20 summit of world leaders, which is taking place Nov. 11-12 in Seoul.
The House passed H.R. 2378 earlier this fall. Sen. Charles Schumer (D-NY) has expressed an interest in moving his own currency legislation — which differs from the House version — during the lame-duck session, although some sources believe Schumer may be amenable to moving the House version instead.
Speaking at the same press briefing, NFTC Vice President For Tax Policy Catherine Schultz also suggested that trade issues were unlikely to come to the forefront of the lame-duck session, since Congress must focus on other, more pressing issues, including spending bills for the 2011 fiscal year.
As for next year, Reinsch said it would be “much harder” for the new Congress to pass currency legislation. He highlighted the fact that even though House Ways and Means Committee Ranking Member Dave Camp (R-MI) cast a vote in favor of the House bill in September, he qualified his support for the bill.
In Camp’s floor statement, he stressed that the bill “will not address many more pressing trade concerns with China and will not advance the goal of doubling exports in five years.”
Concerning other trade issues, NFTC Vice President for Regional Trade Initiatives Chuck Dittrich expected that the Republican-controlled House would likely hold more congressional hearings on trade issues, like the three pending free trade agreements, in order to put pressure on the administration to bring them to a vote.
