Category: Press Releases and Statements

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.

 

Remarks of The Honorable John D. Negroponte, U.S. Ambassador to the UN, Keynote Speaker, NFTC 2003 World Trade Dinner

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Remarks of

The Honorable John D. Negroponte

U.S. Ambassador to the United Nations

Keynote Speaker

at the National Foreign Trade Council

2003 World Trade Dinner

November 10, 2003

 

 

Thank you very much for that kind introduction.

 

I’m delighted to be here again at the National Foreign Trade Council’s annual dinner—an event that has become a welcome and elegant New York tradition.  Diana and I were here as guests two years ago, and I’m honored that you have asked me to address you this evening.

 

Before proceeding to the heart of my remarks,  I’d like to acknowledge the NFTC leadership, including its board of directors; its chairman, Michael Jordan; its president, Bill Reinsch and NFTC’s hardworking staff including my former colleague, Anne Alonzo.  Anne worked with me in Mexico city to help ensure the successful negotiation of NAFTA while I served as U.S. Ambassador to Mexico.  

 

For almost a century, of course, American business has used the NFTC to champion global commerce and open foreign markets to American trade and investment.  

 

Your fundamental belief – that America’s values and interests require active involvement in world affairs by an engaged private sector—has sustained you and the American economy through some stiff challenges and tough times.  The fact that you have seen more ups than downs proves that you have been, and remain, 100% right. 

 

There is no better, or even plausible, alternative to American business doing its utmost to shape an increasingly globalized world according to the principles of a free marketplace.

 

This is good for the United States in more ways than I can enumerate.  It is good for American investors; it is good for American workers; and it is good for our broader national ability to promote peace, security, and stability—in a word, democracy—abroad.

 

 As we seek to advance the full range of U.S. interests at the UN, therefore, I want to recognize the substantial contributions U.S. business and the National Foreign Trade Council make to America’s standing in the world every day of the week and every week of the year.

 

A cornerstone of U.S. involvement in the UN is promoting fundamental freedoms, and one of the most basic catalysts of economic growth and development in the developing world is trade liberalization—allowing free markets to work to create jobs and opportunity for all elements of society.  That is a cardinal principle of the president’s millennium challenge account, which will enhance core development assistance fifty percent by fiscal year 2006. It is also the foundation of what the NFTC has advocated for almost 90 years.

 

In this regard, I thank you for your leadership of business coalitions supporting free trade agreements between the U.S. and Morocco and the Southern Africa Customs Union. These FTAs are a priority of the administration.  Business support is vital to their successful negotiation.

 

Here let me note that Morocco’s Ambassador to the United States, His Excellency Aziz Mekouar, is with us tonight.  Mr. Ambassador, you deserve a special round of applause for your leadership in the U.S.-Morocco free trade agreement negotiations.

 

The NFTC itself deserves high praise for its important work on the WTO Doha Development Agenda. Your leadership in pushing all nations to seek bold outcomes will increase economic opportunity everywhere, especially in parts of the world that need it most.

 

This is enormously important to us at the UN, where we have worked hard to build a strong partnership to fight famine.  As I noted in a speech before the UN Economic and Social Council in Geneva last June, over 800 million people are malnourished around the globe.  Nearly 80% of these hungry souls are women and children.  This is intolerable.  Answers have to be found, and found quickly.

 

The administration believes that increased agricultural productivity is a critical component of fighting poverty and hunger. As a consequence, we took action last year when we rolled out the “initiative to end hunger in Africa,” augmenting funding for African agriculture by 25%. 

 

The U.S. is pleased that the African Union Heads of State and Government are addressing the critical agricultural and rural development sectors.  Our commitment to implementing the initiative to end hunger in Africa rests on the recognition that success requires sustained investments in agriculture-based strategies, programs, and policies, in conjunction with improvements in health, education, infrastructure, environment, and public policy management.

 

Science and technology, in particular, offer tremendous potential for increasing productivity and income for the poor without further degradation of the environment.  Biotechnology, for example, is capable of boosting the nutritional value of foods, increasing crop yields, reducing pesticide use, making crops disease and drought resistant, generating income in rural areas, and even vaccinating infants against diphtheria, tetanus and measles.

 

Sadly, some in the world use campaigns of misinformation and fear in an attempt to squelch this promising technology’s usage.  In our view, decisions about food safety should be based on scientific fact, not political conjecture or public hysteria.

 

I therefore applaud the NFTC’s leadership in bringing together business groups concerned about the growing use of non-science based risk regulations as disguised protectionist trade barriers. Your efforts to make sure that sound science remains the benchmark for international trade regulation are enormously helpful in keeping hope alive for the world’s malnourished millions.

 

Another important feature of the president’s Millennium Challenge Account is its emphasis on transparency in government and fighting corruption.  I know NFTC shares his concern, so I am pleased to highlight for you last month’s adoption by the General Assembly of the United Nations Convention Against Corruption.

 

Like other anti-crime treaties before it, the new convention establishes commitments to criminalize certain undesirable and harmful conduct – in this case, corrupt actions such as bribery, embezzlement, and money laundering.  But the convention does not stop there.  It also requires that governments take action in a number of areas – for example in public procurement, public financial management, and in regulating their public officials — that will help prevent corruption from happening in the first place.

 

This is vital not only to the rule of law, but to the fundamental confidence citizens must have for representative government and private enterprise to succeed.

 

Corruption and democracy are incompatible; corruption and economic prosperity are incompatible; and corruption and equal opportunity are incompatible.

 

But our work at the UN and NFTC’s efforts are compatible, and so I am sure we can count on your support for the new convention just as we count on you to keep making the case for free trade and scientific and technological innovation.

 

I’d like to conclude my remarks this evening by noting that even as we face critical challenges in places like Iraq, we must always remember that real peace, real freedom, and real opportunity are ultimately created through commerce, once the guns have been silenced. 

 

Men and women living ordinary lives do the most extraordinary things.  Our soldiers in Iraq know this.  They are making incalculable sacrifices so that Iraqis—and all the citizens of the Middle East—can join the rest of us who rejoice in the blessings of an ordinary life, giving them the chance to rebuild their destroyed institutions and fix their broken economy.

 

This is where the NFTC’s policies and initiatives come in.

 

 By helping develop a world built on free market principles, you are doing nothing less than helping develop a world built on freedom itself—and a free world will be a peaceful, well-fed, and well-educated world as well.

 

Again, I appreciate the opportunity to speak here this evening, and I am grateful for your support of what America is trying to accomplish at the United Nations.

 

Thank you very much.