NFTC Forum Brings Together Business Leaders, Policymakers and Experts to Discuss Ways to Raise Standards

Washington, DC  – The National Foreign Trade Council (NFTC) and Waters Corporation today hosted a one-day Global Food Safety Policy Forum, during which representatives from the food industry, policymakers and thought leaders in international affairs discussed policy solutions to help ensure the safety of the world’s food supply. The NFTC forum, “Raising Food Safety Standards Worldwide,” focused on how to raise food safety standards both in the United States and among our foreign trading partners.
 
“Ensuring the safety of the global food supply chain is critical to the strength of our international trading system,” said NFTC President Bill Reinsch. “If families in the United States and across the globe have to approach the kitchen table with trepidation because of concerns about the safety of the food they are eating, it could have a huge negative impact on the international food market and raise broader concerns about the entire world trading system.”
 
With food safety as one of the many issues atop the international community’s agenda, the forum was an effort to build a bridge between industry and public policy leaders to outline solutions to the global food safety challenge. The forum featured three panel discussions with public and private sector experts, and two keynote addresses, delivered by Rep. Diana DeGette (D-CO), the Deputy Whip of the U.S. House of Representatives and European Union Ambassador to the United States John Bruton.
 
“A strong Food and Drug Administration (FDA) is in the best interest of consumers and businesses alike; however the agency has been starved for resources in recent years,” said DeGette. “By having an agency that is better able to monitor imports, set enforceable standards, and prevent contamination, we will not only prevent illnesses but restore consumer confidence in the food industry. That is why I have been proud to champion two important food safety priorities – mandatory recall authority that will give the government the power to quickly remove tainted food products from our store shelves , and a national, comprehensive food traceability system, which will enable us to track food products from the ‘farm to the fork.’ These two initiatives will go a long way in ensuring the safety of our nation’s food supply.”
 
During his remarks, Ambassador Bruton discussed a number of ways the international community can come together to achieve strong global food safety standards, including through international harmonization and on a bilateral basis, by establishing standards of equivalence. “We, the EU support the multilateral system of harmonization and we are quite happy about the cooperation which we have with the U.S. in many instances, helping to move things along. But if we are seeking more immediate solutions to imminent trade problems, harmonization cannot be the answer – at least not the only one,” said Bruton. “We need to find ways to build into our bilateral trade regulations the concept of ‘equivalence’ – accepting the idea that safe food can be produced by different combinations of measures.”
 
The first panel discussion, titled “Perspectives From Multinationals Amid Reform and Globalization,” was moderated by Bob Brackett, Chief Science Officer and SVP, Grocery Manufacturers Association (GMA) and the panelists were Henry Chin, Senior Director, Global Scientific and Regulatory Affairs, The Coca-Cola Company, and Tres Bailey, Sr. Manager of Agriculture and Food, Wal-Mart Stores Government Relations.
 
The second panel,  “Harmonization, a Comparison of Legislative Approaches and Capacity Building Efforts,” was moderated by Paul Young, Waters, Former EU Food Safety Inspector, and featured commentary from three panelists: Wolf Maier, EU Agriculture Attaché; David Acheson, Deputy Commissioner FDA; and Caroline Smith Dewaal, Director Food Safety, Center for Science in the Public Interest.
 
The final discussion, titled “Impact of China’s Food Safety,” was moderated by Jennifer Turner, Director of the China Environment Forum and the panelists were Drew Thompson, Director of China Studies and Starr Senior Fellow, Nixon Center, and Fred Gale, Senior Economist with the Market and Trade Economics Division of the Economic Research Service, U.S. Department of Agriculture.

The Impact of Corruption on Global Business
William A Reinsch
President, National Foreign Trade Council
September 17, 2008

I appreciate the opportunity to speak to people in the legal and business community on corruption and its impact on business. This is an area where the NFTC is increasingly turning its attention because it constitutes a major barrier to global economic growth. It is bad for the people who suffer under corrupt governments, it is bad for business, and it is bad for the development of rule of law in these countries, which is an integral part of attracting foreign investment.

For those of you not familiar with us, the National Foreign Trade Council is the premier business organization advocating an open, rules-based world economy. Founded in 1914 by American manufacturers and shippers who supported an open world trading system, the NFTC and its affiliates now serve some 300 member companies through offices in Washington and New York. Our issues include trade, investment, tax, and human resources issues affecting the ability of our members to compete effectively abroad.

The NFTC’s affiliate organization, USA*ENGAGE, is a broad-based coalition representing Americans from all regions, sectors and segments of our society concerned about the proliferation of unilateral sanctions at the federal, state, and local level. Despite the fact that unilateral sanctions rarely achieve our foreign policy goals, they continue to have political appeal. USA*ENGAGE promotes responsible alternatives to sanctions that actually advance US humanitarian and foreign policy goals, such as intensified US diplomacy, corporate social responsibility and multilateral cooperation.

There is no doubt that corruption, endemic in emerging economies around the world and not unknown in more developed countries, throws economic development into chaos and discourages foreign investment. For example, Transparency International’s (TI) most recent Global Integrity Report cites Vietnam, one of the world’s fastest-growing economies, as having the second weakest overall anti-corruption framework of the group of countries assessed by TI in 2006. This should be a serious cause for concern to prospective investors, particularly since the findings suggest that governance and corruption challenges in Vietnam and similarly ranked countries are deeply rooted and systemic. And indeed, the Department of Justice announced last week the arrest and indictment of four individuals on charges that they and their company, Nexus Technologies, Inc., paid at least $150,000 in bribes to Vietnamese officials to obtain contracts to supply the Vietnamese government with technology and equipment.

Any ethical prospective investor in these countries must expend significant resources to avoid corruption with no guarantee that perfect compliance can be achieved, given the ambiguities and moving goalposts that frequently characterize enforcement today. Nor can a prospective investor that plays by the rules be assured that it can compete fairly on a level playing field for public sector projects that could benefit the populace at large and provide access to Western technology and management. When corruption is endemic, the people, the country’s infrastructure, its government institutions and companies that strive to comply with good business practices all lose out.

For many years, as you know, the U.S. stood alone, having criminalized transnational bribery in 1977 with the Foreign Corrupt Practices Act. The OECD Anti-Bribery Convention, now ratified by 37 countries, criminalized transnational bribery in 1996 for the first time for its members. The Organization of American States’ Inter-American Convention against Corruption, signed by most countries in the Americas in 1996, also requires members to criminalize transnational bribery.

In 2003, the United Nations Convention against Corruption was adopted by the General Assembly. To date, 140 member nations have signed and 122 have ratified it. Interestingly, countries that have not yet ratified the Convention, include Vietnam, Saudi Arabia, India, Malaysia, Japan and Germany amongst others. The efficacy of the Convention depends upon the strength of the signatories’ implementing legislation, relevant legal infrastructure of the member states and most importantly, enforcement against corrupt officials. As the Convention entered into force in December 2005, it is too early to know how effective it will be in strengthening global efforts.

The NFTC led the effort in the business community to support the UN Convention. Our efforts fostered successful government – business cooperation to ensure that US implementation appropriately addressed the treaty’s requirement for a private right of action. Our suggestions were adopted by the Administration in its explanatory language submitted to the Senate along with the convention, and that enabled me to testify in support of it before the Foreign Relations Committee.

Despite these multilateral efforts, however, corruption remains endemic. In a recent article, Wharton Legal Studies professor Philip M. Nichols said, “Corruption and bribery have moved to the forefront in discussions about business. The list of countries that have been politically or economically crippled by corruption continues to grow, and businesses with long-term interests abroad will ultimately be harmed by any plans that include bribery.” TRACE International, a non-profit organization that tracks anti-corruption efforts, launched a confidential bribe solicitation reporting network in 2006. According to TRACE’s most recent report, more than 1,500 reports by TRACE members were made to its BRIBEline in the five months following its inauguration, documenting bribe demands in 136 countries.

Further evidence of the problem corruption poses for international trade and investment is found in the rising level of U.S. prosecutions brought by the Department of Justice (DOJ) and the Securities Exchange Commission (SEC). Over the past six years, the number of new enforcement actions has risen at least five-fold, many involving significant companies that have made major investments in compliance. According to recent press reports, Justice and SEC officials indicate that at least one hundred investigations are now in progress. Another data point: since 1990, there have been 78 SEC dispositions of FCPA cases and nearly 20 percent of them took place in 2007.
These enforcement actions involve foreign as well as U.S. firms. Although the FCPA has always applied to issuers that are neither incorporated nor headquartered in the United States, 2007 saw new efforts to enforce the law against foreign issuers, even if the activities in question occurred entirely outside the United States. Mark Mendelsohn, the Deputy Chief of the Fraud Section at Justice has stated publicly that his prosecutors are focusing on foreign issuers.

The first major prosecution was against Norway’s Statoil ASA in late 2006, with the company settling charges for a fine of $10.5 million and surrendering another $10.5 million in profits. Statoil had entered into a consulting contract with an offshore intermediary entity controlled by an Iranian government official in an effort to develop portions of the South Pars oil field. Statoil agreed to pay $15 million in consulting fees over 11 years and obtained a contract to develop the field.

In June 2007, a former Alcatel executive, Christian Sapsizian, pled guilty to two counts of violating the FCPA. Sapsizian is a French citizen working for a French firm who was charged with paying bribes in Costa Rica. His sole connection to the United States was that Alcatel stock is listed on an American exchange. By the end of 2007, high-profile FCPA investigations were underway with respect to several other foreign corporations including Siemens, BAE, and Panalpina plus a host of companies implicated in the Oil for Food scandal.

2007 was also remarkable for the largest penalty levied by the U.S. government as subsidiaries of Baker Hughes received a combined penalty/fine of $44 million. In addition to financial penalties, Justice/SEC have a clear preference for requiring offending firms to retain outside compliance monitors. Half a dozen cases that concluded in 2007 included such a provision, often mandating the monitor for a period of three years.

Monitors are outside compliance experts, mostly members of the FCPA defense bar and frequently former prosecutors, who are charged with overseeing the company’s compliance efforts and reporting back to the U.S. government on any new issues they might discover. As Alexandra Wrage, President of TRACE, pointed out recently in an article in Federal Ethics Report, as monitorships appear to be limited to a small cadre of FCPA practitioners, often an attorney is working “for” government prosecutors as a monitor in one case, while defending other clients before the same prosecutors who must approve a company’s choice of monitor. With the revolving door between SEC, Justice, and the FCPA defense bar in full swing, this clearly has potential for abuse and cronyism.

Indeed, Congressional scrutiny of the selection of John Ashcroft’s consulting firm at a cost of up to $52 million as a monitor resulted in DOJ “guidelines” for the selection and use of monitors being issued in March 7, 2008, four days before a hearing on the subject by the House Judiciary Subcommittee on Commercial and Administrative Law. We believe that the process remains flawed however, and support the recommendations Rep, Bill Pascrell, Jr. (D-NJ) outlined in his testimony before the Subcommittee on March 11, 2008. These include full disclosure of fees and taking the selection of monitors out of the hands of U.S. Attorneys.

Unfortunately, the scope of FCPA enforcement is such that financial burdens generated by corruption in international trade are not borne solely by the guilty. Reputable companies in the course of proposed acquisitions have uncovered problems in the company being acquired. Titan, InVision and ABB-Vetco-Gray cases are recent examples. Resolution of these problems through negotiation with the government or abandonment of the acquisition is not cheap—tens of millions of dollars of legal fees on the part of the proposed buyer if the anecdotal evidence is correct.

Despite a plethora of multilateral and U.S. based efforts, corruption remains a serious problem. Be assured that the NFTC fully supports vigorous and even-handed enforcement of anti-corruption measures. As I said at the beginning, we view corruption as a serious trade barrier. At the same time, however, we are concerned about the ambiguous scope of some enforcement trends, the significant amounts companies must spend on compliance with no assurance that even best efforts will prevent major fines or expenditures, the chilling effect that government action can have on bona fide corporate social responsibility, and finger pointing at the business community as the main source of the problem.

For example, the 2004 prosecution of Schering Plough in a civil action by the SEC involved corporate donations to a bona fide Polish charity engaged in historic preservation headed by a civil servant with whom Schering did business in another capacity. The civil nature of the prosecution meant that it focused on Schering’s internal controls and accounting for the expenditure, not on whether something of value was received by the government official. Nonetheless, this settlement and other threatened prosecutions involving bona fide charitable contributions –with no apparent element of personal gain for the foreign official –have cast a chilling effect on corporate social responsibility.

Our members and most members of the US business community want to comply with the law, but they have to know what it is before they can do that effectively. The deliberate expansion of the FCPA by Justice and SEC through targeting new areas such as charitable contributions and foreign company operations outside US jurisdiction may be warranted by public policy, but expansion driven by prosecutions and not by amendments to the law raises questions of basic process. Companies do not have notice of the expanded scope or changed policy and an opportunity to comment before they can be penalized. Finally, emphasizing draconian enforcement against corporations as the principal means of eradicating global corruption is not enough to put a meaningful dent in the problem as some of my earlier remarks have made clear. Other, less scrupulous companies from jurisdictions with weak anti-corruption laws simply fill the gap where the playing field is skewed. If the OECD and UN Conventions do not raise the overall level of global compliance, then the United States may have to seriously consider whether a government’s failure to enforce its own laws or multilateral obligations it has undertaken against endemic corruption should be actionable under either WTO rules or U.S. trade law.

The NFTC is in the process of initiating a new project to examine both U.S. enforcement issues and global compliance in greater detail, so you should expect to hear from us on this in the near future.
Thank you for the opportunity to speak to you today.

Washington, DC – National Foreign Trade Council (NFTC) President Bill Reinsch today underscored the harmful impact corruption has on global commerce in a speech delivered during a one-day conference hosted by international law firm McKenna Long & Aldridge LLP, themed “Combating Corruption,” which focused on the transatlantic anti-corruption legal framework and compliance issues facing multinational companies. During his remarks, Reinsch noted that the NFTC, which led the U.S. business community effort to support the United Nations (UN) Convention Against Corruption, has increasingly become engaged on the issue, as corruption continues to be a major barrier to the open, rules-based world trading system.
 
“There is no doubt that corruption, endemic in emerging economies around the world and not unknown in more developed countries, throws economic development into chaos and discourages foreign investment,” said Reinsch. “When corruption is endemic, the people, the country’s infrastructure, its government institutions and companies that strive to comply with good business practices all lose out.”
 
Reinsch made the case that in countries where corruption exists there are no assurances for investors seeking to comply with rules. “Any ethical prospective investor in these countries must expend significant resources to avoid corruption with no guarantee that perfect compliance can be achieved, given the ambiguities and moving goalposts that frequently characterize enforcement today,” said Reinsch.
 
In addition, Reinsch discussed the United States’ leadership in the development and implementation of various international anti-corruption agreements, including the UN Convention Against Corruption adopted by the General Assembly in 2003. He pointed out that to date 140 member nations have signed and 122 have ratified the agreement, but that Vietnam, Saudi Arabia, India, Malaysia, Japan, Germany and others have yet to ratify it. “The efficacy of the Convention depends upon the strength of the signatories’ implementing legislation, relevant legal infrastructure of the member states and most importantly, enforcement against corrupt officials,” he said.
 
Reinsch also outlined evidence that the problem of corruption continues to pose a serious threat to international trade, highlighting a recent report by TRACE International, a non-profit organization that tracks anti-corruption efforts, which documented bribe demands in 136 countries over a five-month period. He also cited a five-fold increase in enforcement actions by the Department of Justice and Securities Exchange Commission in cases brought under the Foreign Corrupt Practices Act (FCPA).
 
With regard to FCPA cases, Reinsch said, “Unfortunately, the scope of FCPA enforcement is such that financial burdens generated by corruption in international trade are not borne solely by the guilty.  Reputable companies in the course of proposed acquisitions have uncovered problems in the company being acquired leading to the expenditure of millions of dollars of legal fees to resolve them and/or the termination of the acquistion.” He also cautioned, “The expansion of the FCPA by Justice and SEC through targeting new areas such as charitable contributions and foreign company operations outside US jurisdiction may be warranted by public policy, but expansion driven by prosecutions and not by amendments to the law raises questions of basic process.  Companies do not have notice of the expanded scope or changed policy and an opportunity to comment before they can be penalized.”
 
In closing, Reinsch said, “If the OECD and UN Conventions do not raise the overall level of global compliance, then the United States may have to seriously consider whether a government’s failure to enforce its own laws or multilateral obligations it has undertaken against endemic corruption should be actionable under either WTO rules or U.S. trade law.”
 
To read the full remarks, please click here.

Washington, DC – The National Foreign Trade Council (NFTC) today announced that Congressman Gregory Meeks (D-NY) is the recipient of the association’s 2008 World Trade Award. Rep. Meeks officially received the Award last night at the NFTC’s 94th Annual World Trade Dinner and Award Ceremony held at the Newseum in Washington, D.C.

“During his decade-long tenure on Capitol Hill, Congressman Meeks has been a champion of trade and diplomacy, and has led efforts to forge a bipartisan U.S. trade agenda that provides economic opportunity not only to America’s workers and businesses but also brings hope and prosperity to the citizens of our trading partners,” said NFTC President Bill Reinsch. “Congressman Meeks has on many occasions taken an independent stance in support of such objectives because of his convictions, and we are pleased to have this opportunity to honor his public service.”

The NFTC’s World Trade Award recognizes individuals who are respected for proven lifetime leadership in building consensus and promoting the benefits of open trade and investment. This year marks the first time in the past six years that the World Trade Award honoree is a policymaker and not a member of the U.S. business community. The Award was established in 1937 by the Dollar Family of San Francisco in memory of
Captain Robert Dollar, pioneer in American shipping and world trade and a charter member of the National Foreign Trade Council. In 1938, Cordell Hull, then-Secretary of State, was the recipient of the first Award.

“I am honored to have been the recipient of the 2008 National Foreign Trade Council World Trade Award,” stated Congressman Gregory W. Meeks.  “Trade is a critical issue to the constituents of the 6th Congressional District, New York and the Nation. John F. Kennedy airport located in my district has not only brought new work opportunities and economic growth locally, but has become a successful hub for international trade as well.  Trade is a necessary tool as we continue to work together to reduce global poverty and find solutions that will enable those who are less fortunate to rise to the top and those on the top continue to prosper.”

Now serving in his sixth full-term, Meeks was elected to the House on February 3, 1998. Representing New York’s Sixth Congressional District in the United States House of Representatives, Meeks’ district covers all towns of Southeast Queens, Far Rockaway and Howard Beach. He is a member of the House Committee on Financial Services and the Committee on Foreign Affairs.  Meeks is a Member of the Congressional Black Caucus (CBC), New Democrats Caucus and the Democratic Leadership Council (DLC).  He serves as the Co-chair of the Malaysia Caucus, Services Caucus, Dialogue Caucus and the Middle East Economic Partnership Caucus. 

AMBASSADOR SUSAN SCHWAB

Bill, thank you very much… thank you again for the invitation to join you all at the National Foreign Trade Council dinner. This is an event that I enjoy every year or as often as I… as I can get here.  And I just want to speak very, very briefly tonight about a couple of themes that will color our activities through the balance of this administration.  One, getting things done, we have as you all know, a very ambitious trade agenda and the rest of the world isn’t stopping for our election and neither are we.  So we have free trade agreements that need to be enacted into law.

 We have Doha round negotiations that continue, we have enforcement activities, a veritable sprint to the finish.  And the second theme therefore is bi-partisanship and Bill mentioned that he and I go backs aways.  Bill and I go back so far that I remember when Bill a Republican  and we met 25 years ago or started working together some 25 years ago on Capitol Hill and I will tell you that the National Foreign Trade Council could find no more honest broker, pro-US, active leader than Bill Reinsch. And this organization reflects the great work of its members, of its leadership and we very much appreciate both.
 But since there’s no such thing as a free lunch or a free dinner in this town, here are your assignments going forward.  One, you need to keep government, Congress accountable when it comes to trade.  There can’t be passes for bad behavior, for promises not fulfilled.  So you need to keep us accountable, that’s both parties accountable.  And ultimately you will serve as the continuity when it comes to the trade agenda.  The National Foreign Trade Council, other trade associations, the business community, after I step down from my job in January, you will be there and it is up to you to carry a trade agenda, a pro-trade agenda, an agenda that is in the interests of the US economy and the global economy of US workers and farmers forward into the future.

 As I said, the world’s not going to pause for our election and so I thank you for this invitation, I offer you this challenge and look forward to working with you as we sprint to the finish, thank you. 

STEVEN PEARLSTEIN

Well the moderator story is a good story because nobody’s  was a town of that time of about 4000 people, including 3900 Republicans and a Jewish guy from Brookline and in New England as some of you may know, the legislative authority is vested in the town meeting which is everybody who’s a registered voter who comes together once a year in March at town meeting.  And the guy who presides at the town meeting is called the moderator who’s elected.  And I ran against Jeremiah F. Mahoney the Third, who had been planning board chairman for many years and he thought he had the election sewn up so he didn’t bother campaigning.

And I got in good with the with the garden club…  which was mostly women over the age of 70.  At the time I had a very full hair, I know it’s hard to imagine, of curly blond hair and a beard and they thought I was really cute.  And anyway the garden club got me elected and Jeremiah F. Mahoney the Third never realized what hit him, I got 66 percent of the vote and was twice re-elected.  And the reason I was a good moderator is that I really did not care what went on in the town of West Newburg, so I could be very impartial. 

Secretary Gutierrez, Ambassador Schwab, Congressman Meeks, Bill Reinsch, members of the council, ambassadors whoever you are, I’m honored that you’ve asked a scribbler to speak to you tonight, to a group with such deep roots in Washington and such a long, distinguished history and such a high median income.  Some of you maybe have come to town specially for this and I want to tell you that I hope you noticed the weather out here tonight cause I want you to know it’s like that all the time here, everyday.  Bill has arranged for me to be served up here between the main course and the dessert, so I’m sort of something liked a digestive, but I’m not sure that I’m going to settle your stomach so I apologize for that in advance.

Obviously we meet here at a difficult time for a group that’s interested in furthering the cause of free trade.  We meet here at a time of financial crisis of an unknown dimension, of a domestic slowdown in economic growth not only here but through much of Europe and Japan and even in the fast developing world.  And we meet here only a few years after the Washington consensus had thought that it had achieved success, a consensus which is now frayed both here and abroad and at a time when bipartisan support for the free flow of goods and people and capital across borders has evaporated.

But then you didn’t need me to tell you that.  The way I think I’d put it is that globalization is taking a timeout, a timeout in terms of policy anyway even as globalization continues on the ground in the real economy.  I realize that the council and its members would like dearly for the timeout to be over and that you think that if we could only get our views and our facts across that the consensus would reemerge and the globalization’s pace would resume.  My message to you tonight is that that’s not going to do it.  These several things need to happen and I have listed three of them since when you give a speech you’re always supposed to say three things.

So let me suggest what the three things that need to happen are.  One is that the huge and destabilizing and unsustainable macro economic imbalances that have…we’ve lived with, have to be corrected.  Currencies have to be better aligned, mercantilist policies in China and other Asian countries have to be reined in and the United States most importantly has to learn to live within its means.  Only then can record trade deficits be brought under control.  Obviously fixing those kinds of problems is complicated and difficult, we’ve been trying to do it for a decade now and we haven’t made very much progress. 

And in the meantime we now see the consequences of running a global economy on a basis that you might call no money down, seller financing.  The consequences are asset bubbles, runaway inflations, and in a large part of the world, volatile and unstable financial markets and now decelerating growth.  We can’t just keeping keep kicking the can down the road in terms of currency misalignment, on fair trading practices, huge current account deficits and surpluses.  And suggesting and having more globalization is not going to cure those things, in fact, I think what we know now is that having more globalization will tend to make them worse and contribute even more to the erosion of the political support for globalization, not just here, but elsewhere.

Second point I’d make is that is more focused here in the United States and that is that we need to find mechanisms so that the costs and the benefits of globalization are more widely shared and disbursed.  There’s nothing in macro-economic theory that predicts that this kind of more even sharing will occur naturally, that I think what we know about markets is that markets don’t care about the fairness and sharing things equally, that’s not something markets produce, not something they’re supposed to produce.  And indeed our experience of the last 30, 30 years is just that. 

Obviously the costs of globalization are born by workers and companies and communities that find themselves disadvantaged by the rearrangement about of how work is done, while the benefits are spread quite widely to all consumers.  But the benefits are also enjoyed disproportionately by those who gain commercial or market advantage of the companies and their employees and their shareholders and the communities in which they operate.  And I don’t think it’s really saying anything extraordinary to note that we don’t have very good mechanisms yet for capturing the benefits now enjoyed by the biggest winners of globalization and redirecting at least some of them to the biggest losers.

And until we do, I think it’s fair to say the timeout will continue, not because that required by anything about economics, but it’s sort of a practical political reality.  The answer seems to me is a new social contract particularly with workers, a contract that provides them with a credible economic safety net.  I think you probably know what’s on that list, guaranteed portable and affordable healthcare, safe and guaranteed and portable pensions, a more generous and flexible unemployment insurance program that covers more then one-third of the workers in the United States, wage insurance that takes the sting out of taking a new job at a lower wage, a better system of public education right through the university, including lifelong learning and training.

And this safety net would have to be available not just for those directly effected by a plant closing but for everybody, a universal program because globalization’s effects as we know, are not just direct, but they’re also very indirect.  Trade by its nature, by its… by its very nature is disruptive.  It means rearranging where and how work is done and disruption makes people feel insecure.  As long as trade is connected in people’s minds with the risk of loosing their jobs… and the risk of loosing your job means loosing your healthcare, draining your pension account, telling your kid that she may not be able to go to college, well people will be unenthusiastic about any plan for more trade.

And no matter and that’s true no matter how cheap the towels are down at the Wal-Mart.  So how do we move ahead, how do we move ahead to correct the macro-economic imbalances and how do we move ahead to insure that the costs and benefits of globalization are more evenly spread? 

Well that brings me to my third point, which is particularly relevant to those of here…to those of you who are here tonight.  I don’t know whether you like what I’m going to say, but I think it’s important for me to say it.  The business community, it seems to me, needs to resume what had always been a crucial role in this town.  The role is as a trusted political broker on an economic policy.

Over the last decade maybe a little longer then that, much of the business community has been lulled into the fantasy that by joining themselves at the hip with the Republican leaders in Congress and with the Republican administration, you could realize your entire policy agenda while ignoring the other party and their legitimate interests and concerns that they represent, not just the legitimate interests and concerns that they represent, but even some of the illegitimate interests and concerns that they represent.  After all Republicans delivered to you the regulatory relief and the tax relief that you asked for.

And they invited you and this is literally true, they invited you into their weekly strategy sessions at the White House and at the majority leader’s office at the Capitol, right down the street there.  But in return it turns out that they demanded uncompromising loyalty and fealty.  They didn’t want you to give money to Democrats, they don’t want you to hire Democrats, they don’t want you to support them, they don’t even want you to talk to them.  And what happened is that business and by that I mean really big business and the major business associations here in Washington, lost their ability to become the honest broker on these issues.

Democrats came to see business as part of an uncompromising, ideologically driven opposition that was not only determined to push a pro-business agenda which you would expect, but which was also determined to starve government of funds for domestic programs and initiatives. 

I should be clear here that I’m not talking about the National Foreign Trade Council, but I am talking about the US Chamber of Commerce, the National Association of Manufacturers and a number of this city’s largest trade associations.  And here’s the problem which is a political problem, not an economic problem.  As companies blindly supported the Republican cause or are perceived to have supported the Republican cause, when you show up at the office of the centrist Democrat, good evening Congressman, and you say hey, you know we really need your support on Doha, it’s going to really help this company and that company in your district and it’s good for consumers.

It turns out that you don’t have any credibility and you don’t have any leverage with them.  Why?  Well to be blunt about it, because they think you’ve given up your traditional bipartisan neutrality, which was very carefully maintained for many years here through the ‘50s and the ‘60s and the ‘70s and that you’ll be there with the Republicans to try to beat them in the new, in the next election even if they do support you on Doha or on trade.  They also know that you’re going to oppose them on everything else because the majority leader insists on that. They’re also not going to be with you because by being seemed as blindly supportive of Republican leadership you’re supporting a party that not only won’t do anything to strengthen the social safety net that would make trade a little bit more easy for them to sell to their constituents. But in fact, the party that’s rather eagerly set about trying to destroy that safety net even to the degree that it exists. So they say to themselves, why should they follow your advice and risk getting the stuffing kicked out of them by their own left wing party, left wing of their own party, to help guys that aren’t going to help them? It’s really not that complicated.

I think it’s great that you’re tonight going to give an award to Greg Meeks. I think it’s great that you support organizations like the NFTC which along with the Business Roundtable, another good organization, came very close to laying the foundation for a grand bargain about trade this past spring, that involved Secretary Paulson of the Treasury and Charlie Rangel, the Democratic chairman of the Ways and Means Committee.  And it was the AFL-CIO that cut the legs out from under that one, not the business community.  That’s too bad, but I think it’s also crucial that you take a next step and make clear to the Republican leadership that they no longer have your proxy, that you don’t accept the idea that the only domestic policy priority is to cut taxes and privatize everything and that it’s not acceptable to go another decade without doing something about healthcare and unemployment insurance and the minimum wage.

Even if that’s not what you want but because that’s what the deal is, that’s what the political deal is.  And that you won’t allow organizations, like the Chamber or the NAM, that supposedly represent you in Washington and your shareholders, align themselves with just one party, cause guess what, it doesn’t work, irrespective of whether it’s their right or not, it doesn’t work.  I’m not saying these things because I am a Democrat, although that is actually true. And I’m not saying these things because I think you should… be Democrats or support Democrats.  I’m saying these things because hyper bi-partisanship is the enemy of what you seek to accomplish, which is continued globalization.

Hyper partisanship has poisoned the politics of this town, it’s poisoned Washington policymaking and it’s poisoned the Washington consensus that you’re seeking to restore.  The business community, it turns out, is not only in a good position, it’s in the best position that I know of, to bring this era of hyper partisanship to a close.  You have the money, you have the muscle, you’re articulate, you can get what you say put in the newspaper and on the television and you have a good reason to do it.  So I wish you well with that and I hope you do it.  Thanks.