Category: Press Releases and Statements

NFTC Paper Examines Impact of EU Environmental Agenda

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Cautions that EU attempts at ‘enlightened’ environmentalism impede economic growth,

social welfare and public health in developing countries

Washington DC – Obscured by its passionate appeals for safety and global stewardship, the EU’s persistent attempts to apply the Precautionary Principle hurt developing countries’ prospects for economic growth, poverty alleviation, social advancement and even environmental protection, according to the most recent of the National Foreign Trade Council’s white papers on precaution and trade, which  presents three compelling cases that illustrate this situation.

 The paper, ‘Enlightened’ Environmentalism or Disguised Protectionism?  Assessing the Impact of EU Precaution-Based Standards on Developing Countries, offers powerful evidence of the danger and inequity of indiscriminately applying developed nation safety and environmental protection standards to the developing world.

“The three cases outlined in this paper show the conflict that arises between the EU’s precaution-based agenda and the Doha Ministerial Declaration,” said NFTC President Bill Reinsch.  “Doha has a goal of securing for the least developed countries a share in world trade commensurate with their economic development needs.  This goal, as well as the health and environmental protections goals all nations share cannot be achieved if developing countries are saddled with unattainable standards that block their products from EU markets.  Nor can they be achieved if developing economies and industries are denied access to important technologies.”

This most recent NFTC white paper contains three essays with regional implications:

  • Africa — A discussion of the Stockholm Convention on Persistent Organic Pollutants (POPs) and how it adversely impacts the health of millions of Sub-Saharan Africans by effectively banning the use of DDT as part of a comprehensive malaria control program.

  • Asia — An outline of the impact of the Basel Convention’s broad definition of ‘hazardous waste’ and its proposed Ban Amendment on important recovery and recycling industries in Asia. 
  • Latin America and Asia – A presentation of the extra-territorial scope of the EU-REACH Regulation on chemicals and how it threatens the local and global competitiveness of key industries that produce or use chemicals within a number of Asian and Latin American countries.

Two earlier papers in the NFTC series present numerous examples of the EU’s use of precaution to block trade in a wide variety of products ranging from beef to computers.  They also clearly show how the EU has sought to inject the precautionary principle into the WTO system, international standards setting bodies, and bilateral and regional free trade and aid agreements.

  

Reinsch urged representatives of the developing nations to pay particular attention to this third report.  “Many developing countries lack the resources necessary to monitor and comply with the waves of overly stringent health, safety, and environmental regulations and standards being developed.  It’s tempting for them to agree to such rules when the perceived reward is trade and aid agreements or capacity building initiatives.  But, caution not precaution is what is needed.  The development of strong rules to protect health and environment is an important goal for both developed and developing nations, but both are best served – and those goals are best met — by regulatory schemes that also promote economic development, not restrict trade and the growth and jobs it promotes.”

For a copy of the full NFTC paper, please see the NFTC’s website at http://www.nftc.org/default/white%20paper/riskreg3study404_2_Final.pdf. For a copy of the executive summary go to http://www.nftc.org/default/white%20paper/riskreg3execsum2Final404.pdf

 

The National Foreign Trade Council is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves 300 member companies through its offices in Washington and New York.

 

NFTC Disappointed at Senate Passage of Outsourcing Amendment

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Washington, DC – The National Foreign Trade Council (NFTC) today expressed disappointment at the Senate’s action on March 4 in passing an amendment sponsored by Senator Christopher Dodd (D-CT) that would prohibit the performance of any part of any U.S. government contract at an overseas location and restrict federal financial assistance to states unless a state certifies that none of the contract work using federal funds will be performed offshore. 

 

“Even though the amendment was modified to limit its impact, we believe its message that the United States is going to build new walls around our economy is the wrong one,” said Bill Reinsch, president of the National Foreign Trade Council.  “We appreciate Senator Dodd’s motivation – to protect government contracts and domestic workers – but if fully implemented the amendment would complicate our foreign relations, discourage U.S. innovation, and ultimately cost more jobs than it would save.  Offshore outsourcing is an issue that demands careful and thoughtful debate and consideration, and there are many steps the United States could take to address it.  Erecting more barriers to commerce, trade, and investment, however, is not one of them.”

 

Modifications to the Dodd amendment include giving Cabinet agency heads, along with the President, power to decide which contracts are not subject to restrictions due to national security, or due to the availability of resources for the contract only outside the U.S.  Another modification includes a certification from the Secretary of Commerce that the contract would not contribute to a loss of U.S. jobs or that it would not hamper the U.S. economy.  While the provisions attempt to address the complexity of the outsourcing issue, Reinsch contends that they still fall short in repairing the damaging affects the Dodd amendment will have if it remains in the bill.

 

“Naturally, lawmakers and policy makers are concerned with the ramifications of outsourcing on the American worker.  However, tacking on shortsighted, ‘band-aid’ legislation to treat symptoms will only stunt our growth in the long-term.  A better course of action is to remain open to the economic promise of the rest of the world, allowing U.S. businesses to share ideas, technologies and opportunities with their foreign counterparts,” Reinsch concluded.

 

The National Foreign Trade Council is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves 300 member companies through its offices in Washington and New York.

 

Statement Of The National Foreign Trade Council Board Of Directors On Offshore Outsourcing

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The National Foreign Trade Council Board of Directors notes the growing controversy in theUnited States over the movement of jobs offshore. The Board does not view this as a new phenomenon but rather as a continuation of a forty-year trend of global integration that has provided net benefits to the U.S. economy. What is new is that the offshore outsourcing of jobs has moved beyond the manufacturing sector into a growing variety of service sectors, particularly information technology.

The National Foreign Trade Council views this trend as an inevitable component of growing global economic integration. American companies are under increasing competitive pressure to cut costs and improve productivity, and in many cases one way to do that is to transfer some functions outside the United States. While this produces some job reductions here, it also has other, beneficial effects – more competitive companies, lower-priced goods and services for American consumers, and, to the extent offshore outsourcing is part of an overall foreign investment strategy, job creation as well.

These gains, however, are long term and diffuse while the losses tend to be short term and specific. The result is the public controversy we are now experiencing. It is the Council’s position that attempting to stop or limit offshore outsourcing would be counter-productive. It would make our companies less competitive and, as a result, would ultimately cost us even more jobs.

A wiser approach is to adjust the circumstances that lead to offshore outsourcing and deal with the immediate consequences for those that are dislocated. To that end, we support a four part approach:

1) Life-long learning; adjustment assistance.

While there is substantial evidence that foreign trade and investment produce more jobs and growth here as well as elsewhere, it is no secret that the new jobs trade creates are rarely taken by the same people who have lost theirs as a result of trade.

Government policy should address the needs of two groups:

  • Those who have lost their jobs and have limited opportunities for reemployment because their relevant skills are limited and/or their communities provide few opportunities.
  • The next generation of workers – our children – who will confront a working environment that will require more sophisticated skills and more agility and flexibility than any preceding generation has confronted.

To address these needs, we support expansion of the existing trade adjustment assistance program, including covering service workers, and we urge Congress and the Administration to devote more resources to education, particularly in math, science and engineering, and training to better equip future generations with the tools they need to deal with the rapidly changing work environment.

2) Incentives to stay here.

The reasons companies move off shore are largely economic. The creation of a more business-friendly climate here in the United States could alter the calculations companies make and lead to more decisions to maintain facilities here. A number of proposals are pending in the Congress in the tax and regulatory reform areas that could be helpful. In the tax area, we favor legislation that will provide tax relief to businesses in ways that enhance their competitiveness but do not discriminate between companies that operate primarily in the U.S. and those that have substantial foreign operations. Our tax laws should not disadvantage U.S. companies competing in the international marketplace. We also support Congressional action on tort reform and class action litigation in order to gain better control of onshore companies’ rapidly growing litigation costs.

3) Staying ahead.

America‘s strength has always been innovation – our originality coupled with our ability to run faster and stay ahead of our competition. Many of the innovations that have made America the world’s technology leader began with government support, often coming from the Department of Defense. We endorse public policies that encourage innovation, including expanded government support for R&D that will create new, job-providing industries in biotechnology, nanotechnology, and other sectors we have not even contemplated. We also endorse the President’s manufacturing initiative and urge full funding of the proposals contained in that plan.

4) Forward-looking US trade policy.

The U.S. remains one of the most globally competitive economies worldwide. Two central factors are behind this strength: the openness of our economy to international trade and investment and a trade policy that maintains open markets and advances open, rules-based trade in markets overseas through ongoing trade liberalization efforts. It is essential that the US continue to lead in opening markets and establishing transparent, non-discriminatory rules to govern trade and investment. To that end, we reaffirm our support for the Doha round of multilateral trade negotiations as well as for high quality bilateral and regional free trade agreements.

Taken together, we believe these approaches are an effective way to deal with offshore outsourcing constructively as an inevitable consequence of the global economic integration that has been instrumental in our country’s economic growth. We urge Congress and the Administration to consider these approaches and to avoid short-sighted protectionist responses.

Statement Of The National Foreign Trade Council Board Of Directors On Offshore Outsourcing

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The National Foreign Trade Council Board of Directors notes the growing controversy in theUnited States over the movement of jobs offshore.  The Board does not view this as a new phenomenon but rather as a continuation of a forty-year trend of global integration that has provided net benefits to the U.S. economy.  What is new is that the offshore outsourcing of jobs has moved beyond the manufacturing sector into a growing variety of service sectors, particularly information technology. 

 

The National Foreign Trade Council views this trend as an inevitable component of growing global economic integration.  American companies are under increasing competitive pressure to cut costs and improve productivity, and in many cases one way to do that is to transfer some functions outside the United States.  While this produces some job reductions here, it also has other, beneficial effects – more competitive companies, lower-priced goods and services for American consumers, and, to the extent offshore outsourcing is part of an overall foreign investment strategy, job creation as well.

 

These gains, however, are long term and diffuse while the losses tend to be short term and specific.  The result is the public controversy we are now experiencing.  It is the Council’s position that attempting to stop or limit offshore outsourcing would be counter-productive.  It would make our companies less competitive and, as a result, would ultimately cost us even more jobs.

 

A wiser approach is to adjust the circumstances that lead to offshore outsourcing and deal with the immediate consequences for those that are dislocated.  To that end, we support a four part approach:

 

1) Life-long learning; adjustment assistance. 

 

While there is substantial evidence that foreign trade and investment produce more jobs and growth here as well as elsewhere, it is no secret that the new jobs trade creates are rarely taken by the same people who have lost theirs as a result of trade.

 

Government policy should address the needs of two groups: 

 

  • Those who have lost their jobs and have limited opportunities for reemployment because their relevant skills are limited and/or their communities provide few opportunities.  
     
  • The next generation of workers – our children – who will confront a working environment that will require more sophisticated skills and more agility and flexibility than any preceding generation has confronted.    

To address these needs, we support expansion of the existing trade adjustment assistance program, including covering service workers, and we urge Congress and the Administration to devote more resources to education, particularly in math, science and engineering, and training to better equip future generations with the tools they need to deal with the rapidly changing work environment. 

 

2) Incentives to stay here. 

 

The reasons companies move off shore are largely economic.  The creation of a more business-friendly climate here in the United States could alter the calculations companies make and lead to more decisions to maintain facilities here.  A number of proposals are pending in the Congress in the tax and regulatory reform areas that could be helpful.  In the tax area, we favor legislation that will provide tax relief to businesses in ways that enhance their competitiveness but do not discriminate between companies that operate primarily in the U.S. and those that have substantial foreign operations. Our tax laws should not disadvantage U.S. companies competing in the international marketplace.  We also support Congressional action on tort reform and class action litigation in order to gain better control of onshore companies’ rapidly growing litigation costs. 

 

3) Staying ahead. 

 

America’s strength has always been innovation – our originality coupled with our ability to run faster and stay ahead of our competition.  Many of the innovations that have made America the world’s technology leader began with government support, often coming from the Department of Defense.  We endorse public policies that encourage innovation, including expanded government support for R&D that will create new, job-providing industries in biotechnology, nanotechnology, and other sectors we have not even contemplated.  We also endorse the President’s manufacturing initiative and urge full funding of the proposals contained in that plan.

 

4) Forward-looking US trade policy.  

 

The U.S. remains one of the most globally competitive economies worldwide.  Two central factors are behind this strength:  the openness of our economy to international trade and investment and a trade policy that maintains open markets and advances open, rules-based trade in markets overseas through ongoing trade liberalization efforts.  It is essential that the US continue to lead in opening markets and establishing transparent, non-discriminatory rules to govern trade and investment.  To that end, we reaffirm our support for the Doha round of multilateral trade negotiations as well as for high quality bilateral and regional free trade agreements.    

 

Taken together, we believe these approaches are an effective way to deal with offshore outsourcing constructively as an inevitable consequence of the global economic integration that has been instrumental in our country’s economic growth.  We urge Congress and the Administration to consider these approaches and to avoid short-sighted protectionist responses.

Miami FTAA Agreement Should be Only the Beginning

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Statement by Bill Reinsch, President, National Foreign Trade Council

 

Washington DC – In the following statement, Bill Reinsch, President of the National Foreign Trade Council, called on the Western Hemisphere trade ministers to use the framework agreed upon at the conclusion of yesterday’s Miami meetings to move forward toward real progress on the Free Trade Area of the Americas by 2005. 

 

“Establishing this framework for the FTAA gives ministers the leverage they need to move on with this agreement, which has the potential to greatly impact the economies of an entire hemisphere.  While the new agreement unfortunately appears to scale back some of the original goals of the FTAA, we hope that it will be sufficient to keep the negotiations going so that a more ambitious final agreement can be reached before the deadline in 2005.

 

“It is apparent, however, that all of us, including business, industry, and agriculture throughout the hemisphere, have a lot of work ahead of us if the FTAA is to fulfill its original promise.  The NFTC encourages the trade ministers to maintain their strong relationships with the private sector, as we believe business can play a key role in helping to bring the negotiations to a successful conclusion and in ensuring that the final FTAA framework is economically viable.”

 

The National Foreign Trade Council is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves 400 member companies through its offices in Washington and New York.

 

Remarks of Lee R. Raymond, Chairman & CEO, ExxonMobil in acceptance of the NFTC 2003 World Trade Award, November 10, 2003

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“Champion of Free Trade” Award

 

Remarks by Lee R. Raymond

Chairman and Chief Executive Officer

NFTC Award – New York City

November 10, 2003

 

I am truly delighted to be recognized as the recipient of the “Champion of Free Trade” award. In past years this award has been given to several prominent figures in the movement for a more open and liberal trading world. I am honored to be asked to stand among them.

 

The National Foreign Trade Council itself has much to be proud of. For nearly 90 years the NFTC has been a strong proponent of more open trade, and the fundamental wisdom of that advocacy is reflected in the enormous expansion of the world’s prosperity.

 

Yet this is also a challenging time for those of us who support increasingly liberal global trade and investment policies.

 

The Doha round in Cancun provided a stark reminder of the enormous obstacles that must be overcome if trade and investment liberalization is to continue. Governments were unable to find common ground and it remains unclear when or even if a major trade liberalization round can be reinitiated.

 

In Cancun, public advocacy groups were again active in their opposition to trade and investment liberalization. Their arguments may well have influenced some government representatives, and their opposition represents an ongoing challenge to further liberalization.

 

And of course, much has been said publicly about the need for China to advance reforms if it is to faithfully implement the commitments it made when it joined the World Trade Organization. This was the subject of a lengthy letter to President Bush from the President’s Export Council, of which I am a member. Achieving reforms in the areas mentioned in the letter are fundamental to expanding one of the world’s largest and growing markets.

 

So we continue to face a challenging environment in which to pursue trade and investment liberalization, with opposition coming from some commercial sectors, a number of NGOs and from countries slow or even unwilling to progress the changes needed to achieve the wider economic benefits from a more open and liberal system.

 

But the challenges should motivate rather than discourage us.

 

There will clearly be a lot of discussion about what advocates of continued liberalization should do next.  I would suggest a number of steps are needed.

 

The first step, it seems to me, is to ensure we prevent further erosion in the trade and investment system that has been painstakingly created over many decades.

 

As one example, we should be vigilant when countries are suggested as possible targets of sanctions. The NFTC has long understood this and has spoken out against the imposition of unilateral economic sanctions as a foreign policy weapon.

 

The next task is to continue progress on the series of bilateral or regional free trade agreements that are in the pipeline, or are being considered.

 

Following on the recently approved agreements with Chile and Singapore are bilateral negotiations with Australia, Morocco, South Africa and Bahrain. And several other countries are now in line for possible negotiations, including Thailand, Colombia, Peru, Panama, New Zealand and Sri Lanka.

 

Regional agreements underway include one for the Americas in general and Central America more specifically.

 

There has clearly been some controversy over the wisdom of bilateral and regional trade agreements, but that debate must now be viewed in the context of the outcome of Cancun. If multilateral avenues prove unachievable in the near term, bilateral and regional agreements are a sensible approach to further liberalization.

 

And in pursuing bilateral or regional agreements, we should maintain a firm position with regard to the importance of investment protection, particularly through provisions such as the ability of companies to seek international arbitration of any disputes that may arise.

 

By saying this I am not advocating that we give up on a truly multilateral initiative. There are still very good arguments for the broadest possible agreements on liberalizing trade, and there are very good reasons to include in such agreements issues related to government procurement, investment rules, and the like. It’s just that such omnibus agreements are very difficult to conclude successfully because the issues are so diverse and the countries participating are so numerous. Bringing a truly multilateral agreement into being may require some institutional changes in the way such agreements are achieved, and that in itself will take a while, perhaps a long while.

 

Still and all, we must not lose sight of the fundamentals. Trade and investment rules are being liberalized, however slow the process may appear, and attempts to backslide are in most cases being successfully resisted. This is the basic reality.

 

And one of the reasons for this continued progress is the exceptional work that has been and is continuing to be done by the National Foreign Trade Council and the groups allied to it in the common cause of freer trade.

 

That is why I am proud to have been associated with the NFTC for so long, and both proud and honored that you have chosen to recognize me for my involvement in the important mission of this group.

 

Thank you.