Category: Press Releases and Statements
NFTC President Provides Outlook on the Future of U.S. Export Controls, Proposes a New System
Washington, DC – National Foreign Trade Council (NFTC) President Bill Reinsch spoke today to the American Conference Institute’s 11th National Forum on Export Controls, during which he discussed the future of U.S. export controls and outlined a set of recommendations to substantially reform the system.
To provide perspective on the current system, Reinsch stated, “Export controls are not a new concept. In the beginning, control policy was easy. We knew who the enemy was and where he was, and there was an allied consensus on what to do about him…. Now it is different. Adversaries are diffuse and are not always even states. While there is a degree of allied agreement on rogue states, most of the tough decisions relate to gray area states like China and India that are neither close friend nor determined foe and which are significant economic entities.”
Reinsch noted that current proposals to deal with this new reality, “aim at real problems but in the wrong way,” and argued, “there are essentially three approaches to export control reform. The first is tweaking the current system – applying duct tape and wire to keep it operating… The second is to eliminate interagency squabbles by creating a unitary, independent agency to administer both dual use and weapons programs. This approach would abolish completely the current authorities in Defense, State, and Commerce and create a new independent office reporting directly to the President and the National Security Council.”
He pointed out that although this second approach is well-intentioned, it “cannot be enacted as proposed. At some point during Congressional consideration of such a bill, the Secretaries of State, Defense, and Commerce would each approach their authorizing committee chairmen and argue that while they could live with an independent agency, there is a small set of licensing decisions that require their direct involvement…. and in five years the system will look very much like it does now but with an extra layer of bureaucracy.”
Noting the weaknesses of those options, Reinsch recommended a third approach – “a unitary system that operates within an interagency framework. The distinction between military and dual use items would be abolished – all would be subject to the same procedure, thus eliminating the commodity jurisdiction issue that has plagued the current system while still ensuring that all relevant parties are able to participate in the process. Since weapons and dual use items are subject to different multilateral obligations, the distinction between them cannot be abolished, but processing them the same way would be a significant simplification…[Further], by building in innovations like project licenses and the identification of trusted end users and implementing a robust list review program, we could reduce the volume of applications that are routinely approved and increase efficiency.”
In conclusion, Reinsch stated, “This is clearly not a debate we are going to have this year, but the arrival of a new administration next year creates an opportunity for long overdue reform. Past efforts have foundered on politics and legitimate deeply held differences of view, but the law is so out of date and the process so creaky that even Congress is becoming embarrassed. I plan to spend a good part of my time trying to promote change, and I hope you will too.”
To read the full remarks, please visit http://www.nftc.org/default/export%20controls/Reinsch%20Speech%20Export%20Controls.pdf
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Advancing Global Commerce for Over 90 Years
The National Foreign Trade Council (www.nftc.org) 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 hundreds of member companies through its offices in Washington and New York.
NFTC Sends Letter to Dutch Finance Officials Cautioning Against Introduction of Deductibility Restrictions
Washington, DC – National Foreign Trade Council (NFTC) President Bill Reinsch today sent a letter to Dutch Finance Minister Wouter Bos, and State Secretary for Finance Jan de Jager, cautioning the Netherlands against introducing German-style interest deductibility restrictions.
“Our members are concerned that overly restrictive rules on interest deductibility will prevent them from growing their businesses in an efficient way,” said Reinsch. In the letter, Reinsch also pointed out that raising debt is essential for growth in both local and multinational companies.
“We believe that a country is entitled to protect its tax base, specifically from artificial stripping of that base. However, a country’s tax system needs to take into account the importance of debt to the growth of both national and multinational companies,” wrote Reinsch. “Also, decisions should only be taken on the basis of hard evidence of what is occurring. A recent U.S. Treasury Department study showed that, contrary to expectations, companies were not (apart from a very small category of specific types of companies) using interest to reduce the U.S. tax base. We do not believe the situation in the Netherlands is any different from that in the United States.”
Reinsch also noted that the Netherlands has greatly benefited from substantial amounts of foreign investment because of its reputation as a stable and welcoming place to business. “We urge the Dutch government not to throw away its hard won reputation, built up over decades, for being a good place to do business by the hasty introduction of these rules,” Reinsch concluded.
To read a full copy of the letter, please visit: www.nftc.org/default/tax/Letter%20to%20Dutch%20Finance%20Officials.pdf
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Advancing Global Commerce for Over 90 Years
The National Foreign Trade Council (www.nftc.org) 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 hundreds of member companies through its offices in Washington and New York
NFTC, USA*Engage and Other Key Groups Seek Enforcement of Anti-Bribery Convention
Washington, DC – The National Foreign Trade Council (NFTC) and USA*Engage joined four other leading associations in sending letters late yesterday to U.S. Secretary of State Condoleezza Rice, Secretary of Commerce Carlos Gutierrez, and Attorney General Michael Mukasey, urging the Administration to take specific steps to help ensure that members of the Organisation for Economic Co-operation and Development (OECD) are adequately enforcing the OECD Anti-Bribery Convention. In addition to NFTC and USA*Engage, the American Society of Civil Engineers, the National Association of Manufacturers, Transparency International-USA and the United States Council for International Business signed the letter.
“This landmark agreement is important because it imposes a foreign bribery prohibition on competitors from most of the major industrialized nations simultaneously. Unless there is consistent enforcement, contracts may go to competitors from countries with weaker enforcement records, and efforts to bring China and India under similar foreign bribery constraints will be undermined,” wrote the associations in the letter.
“The United States has been the driving force behind the OECD Convention, but, if it is not fully enforced, transnational bribery will continue to undermine fair competition, penalizing U.S. companies that operate with integrity. It will also undermine effective use of resources, investment and economic development, the rule of law and democracy as well as energy security and national security,” the letter continued.
The associations outlined six recommended steps the Administration should take to make certain that OECD member nations are fulfilling their obligations with respect to the Convention. Noting, “foreign bribery will only abate if there is a credible threat of enforcement and dissuasive sanctions in all major exporting nations,” the groups strongly recommended that the United States urge the United Kingdom to “enact during the 2008 parliamentary session a foreign bribery law fully compliant with its Convention obligations.” They also recommended that the Administration call for a G-8 report “detailing each Party’s progress on OECD Convention enforcement and encourage those which have not brought cases to do so,” in addition to calling for an OECD annual report “listing all foreign bribery prosecutions, including convictions and other dispositions.”
The groups called on the Administration to support accession to the Convention by China, India and Russia, to insist on high-level participation in the OECD Working Group, to urge the OECD Working Group to “reaffirm Article 5 of the Convention subject only to a narrowly drawn and reviewable exception based on the ‘necessity doctrine’ as recognized under international law.”
“We believe that the OECD Ministerial Meeting on June 4-5, 2008, is a crucial opportunity to elevate attention and pressure on all OECD members to fulfill their commitments, and we urge the United States to take the lead in this effort,” the associations concluded.
To read the full letters, please visit www.usaengage.org.
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USA*Engage (www.usaengage.org) is a coalition of small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad. Established in 1997 and organized under the National Foreign Trade Council (www.nftc.org), USA*Engage leads a campaign to inform policy-makers, opinion-leaders, and the public about the counterproductive nature of unilateral sanctions, the importance of exports and overseas investment for American competitiveness and jobs, and the role of American companies in promoting human rights and democracy world wide.
The National Foreign Trade Council (www.nftc.org) 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 hundreds of member companies through its offices in Washington and New York.
NFTC Statement on the Issuance of New Agriculture and NAMA Texts in Doha Round Negotiations
Washington, DC – The National Foreign Trade Council (NFTC) today released the following statement regarding the introduction of new agriculture and non-agricultural market access (NAMA) texts in the Doha Round of World Trade Organization (WTO) negotiations:
“The National Foreign Trade Council remains hopeful that member countries of the WTO will make the hard choices necessary to substantially complete the Doha Development Round this year,” said NFTC President Bill Reinsch. “We welcome the issuance of the new negotiating texts on agriculture and NAMA as an important next step in the process.”
“Though more time is needed to review the texts in detail, real progress seems to be reflected in the text on agriculture – a product of intense senior level negotiations over the past several months. The same cannot be said of the NAMA text, which remains heavily bracketed,” said NFTC Senior Vice President Catherine Bennett. “While the NFTC supports the concept of linking proposed coefficients with the degree of flexibility to continue to protect certain tariff lines, it remains concerned that the level of ambition in the NAMA negotiations will fall short of expectations. There also seems to have been little progress on non-tariff barriers and sectoral negotiations, which are very important to American businesses and could help them accept less ambitious tariff cuts.”
Bennett continued, “While the stage has been set for a breakthrough on agriculture, NAMA seems to be a text in search of a negotiation. The time for serious senior level negotiations on NAMA, which is a prerequisite for moving to the horizontal negotiating process, is long overdue. The third pillar of this Round – services – must also not be forgotten. Without a strong services outcome, it will be difficult for the American business community or the Congress to support the deal.”
“There are only 226 days left in 2008. Let’s hope that negotiators in Geneva make good use of them. WTO Members, including the advanced developing economies, need to step up to the plate and show leadership commensurate with their stake in the global trading system,” Reinsch concluded.
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Advancing Global Commerce for Over 90 Years
The National Foreign Trade Council (www.nftc.org) 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 hundreds of member companies through its offices in Washington and New York.
NFTC Commemorates World Trade Day, Urges Congress to Take Action on Pending FTAs, Trade Adjustment Assistance
Council Calls for Committees of Jurisdiction to Schedule Hearings on Colombia FTA
Washington, DC – The National Foreign Trade Council (NFTC) today commemorated World Trade Day by calling on Congress to take action on pending free trade agreements (FTAs) with Colombia, Panama and South Korea. The Council urged committees of jurisdiction to schedule hearings on the U.S.-Colombia Trade Promotion Agreement, and pressed lawmakers to pursue legislation to expand the Trade Adjustment Assistance program.
“Congress has an opportunity right now to help stimulate the U.S. economy and export growth by approving trade agreements currently awaiting a vote, starting with the U.S.-Colombia FTA,” said NFTC President Bill Reinsch. “The Colombia agreement deserves prompt consideration, and we urge the committees of jurisdiction, their chairmen and ranking members, to act expeditiously in working together to schedule hearings on the FTA as soon as possible in the coming weeks.”
“We also encourage Members of Congress to engage in a substantive dialogue about ways to enhance and improve the Trade Adjustment Assistance program, to ensure that U.S. workers are able to compete and succeed in the 21st century global economy,” said Reinsch.
Under the terms of the agreement, there will be continued and increased market access for U.S. goods, including medical and construction equipment, chemicals, agricultural exports, plastics and other products. Upon its entry into force, the FTA will ensure that over 80 percent of U.S. consumer and industrial product exports will be traded duty-free, with all remaining tariffs being phased out over the next 10 years. In 2007, U.S. exports to Colombia accounted for $8.6 billion, and are expected to increase by $1.1 billion following the agreement’s entry into force.
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Advancing Global Commerce for Over 90 Years
The National Foreign Trade Council (www.nftc.org) 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 hundreds of member companies through its offices in Washington and New York.
NFTC Warns New Farm Bill May Not Comply with WTO Obligations, Exacerbates U.S. Sugar Program Problems
Council Cites Missed Opportunity for Real Reform
Washington DC ¬ The National Foreign Trade Council (NFTC) today released a statement expressing concerns about the 2008 Farm Bill and its failure to include provisions that would adequately reform U.S. agricultural policy and eliminate or reduce export subsidies, tariffs and other trade distorting policies, specifically with regard to the U.S. sugar program.
“By proposing a Farm Bill that merely exacerbates existing trade distorting policies on agricultural goods, our bargaining power on a multilateral level is markedly weaker than if Congress proposed true reforms,” said NFTC President Bill Reinsch. “Congress had a real opportunity to significantly reform the U.S. sugar program and do away with a number of trade distorting subsidies, but they chose not to do so.”
Nearly one year ago, the NFTC expressed support for alternative Farm Bill proposals that would have helped reduce or even eliminate tariff and non-tariff barriers to trade. The NFTC believed that these reforms would have helped to better position the United States in the Doha Round of World Trade Organization negotiations.
“The problem with our current sugar policy and provisions included in the new Farm Bill is that they do a major disservice to the U.S. economy – namely the American farmers and workers that power the agriculture and related services industries,” said Reinsch.
“Market distorting agriculture subsidies like those engrained in the U.S. sugar program are problematic because they limit export opportunities and consumer choice, and leave American taxpayers with a hefty price to pay. In turn, over time these distortions result in job loss and the inability of American farmers to remain competitive in the global marketplace,” Reinsch concluded.
Advancing Global Commerce for Over 90 Years
The National Foreign Trade Council (www.nftc.org) 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 hundreds of member companies through its offices in Washington and New York.
NFTC Urges President, Speaker and Congressional Leaders to Take Bipartisan Action on U.S.-Colombia FTA, TAA
Calls on Policymakers to Return to Bipartisan Spirit Embodied in May 10 Agreement, Presses Ways and Means to Schedule Hearings
Washington, DC – With Saturday marking the one-year anniversary of the May 10 consensus on trade reached between Congress and the Administration, the National Foreign Trade Council (NFTC) today sent letters to President Bush, Speaker Pelosi and House and Senate Majority and Minority Leaders to press for timely, bipartisan consideration and approval of pending free trade agreements and Trade Adjustment Assistance (TAA) legislation. In similar letters to House Ways and Means Committee Chairman Charles Rangel and Ranking Member James McCrery, the NFTC urged the committee to begin scheduling hearings on the U.S.-Colombia Trade Promotion Agreement. The NFTC also sent letters to Senate Finance Committee Chairman Max Baucus and Ranking Member Chuck Grassley.
“During this time of economic uncertainty, it is critical that Congress and the Administration engage in a robust, bipartisan dialogue about how best to advance the U.S. trade agenda and expand and enhance important domestic programs, including Trade Adjustment Assistance (TAA),” wrote NFTC President Bill Reinsch.
“At its core, the May 10 agreement was a commendable bipartisan effort to ensure that U.S. free trade agreements (FTAs) contain strong labor rights and environmental protection provisions,” Reinsch continued. “One year later, Congress has an opportunity to consider and approve the U.S.-Colombia FTA. The economic and social arguments for the Colombia agreement are clear, as the FTA will afford U.S. exporters reciprocal access to the Colombian market and provide a structural framework to help Colombia continue its progress forward as a stable, democratic, economically viable global stakeholder.”
Reinsch also wrote to policymakers about the importance of Congress and the Administration working together to approve an expanded and enhanced TAA program, stating, “While the Colombia agreement, as well as those negotiated with Panama and South Korea, will help to boost U.S. economic growth, it is equally important to ensure that American workers adversely impacted by trade and technological advancements have the social safety net they need to succeed in the 21st century global economy.”
“Moving forward on both fronts will require Congress and the Administration to return to the spirit of bipartisanship embodied in the May 10 agreement, and we hope you will do your part to revitalize that spirit,” Reinsch concluded.
For a copy of the letters, please visit
http://www.nftc.org/default/trade/2008/US Colombia FTA TAA Ltr.pdf
Advancing Global Commerce for Over 90 Years
The National Foreign Trade Council (www.nftc.org) 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 hundreds of member companies through its offices in Washington and New York.
Business Community Letter Regarding Preferences for Haiti
NFTC, USA*Engage Urge House Energy and Commerce Committee to Explore Trade, WTO-Related Implications of Legislative Proposals on Climate Change
Associations Say Some Policy Proposals Will Adversely Impact Trade and U.S. Competitiveness
Washington, DC – The National Foreign Trade Council (NFTC), USA*Engage joined seven other prominent trade associations today to send a letter to Chairman of the House Energy and Commerce Committee John Dingell (D-MI) and other members of the committee, to urge them to explore fully the potential trade and World Trade Organization (WTO) related implications of legislative proposals aimed at addressing climate change. The associations sent the letter in response to the committee’s recent White Paper on various approaches to climate change. In addition to Chairman Dingell, the letter was also sent to Ranking Member Joe Barton (R-TX), Chairman of the Subcommittee on Energy and Air Quality Rick Boucher (D-VA) and the subcommittee’s Ranking Member Fred Upton (R-MI).
“Every nation in the international community has a shared interest in mapping a path forward on global climate change, and the United States has an opportunity to take the lead on these efforts,” said NFTC President and USA*Engage Co-Chair Bill Reinsch. “However, if we are to lead the international community in developing related laws and regulations, we must do so in accordance with WTO rules and multilateral commitments.”
In the letter, the trade associations discussed the importance of finding a global solution to climate change, and also expressed concern about the “adverse impact that some mechanisms could have on global trade, jobs and the competitiveness of U.S. industries.” For example, “If the United States were to impose emissions legislation that levied tariffs against certain goods from another country based on environmentally-unfriendly production practices, that country could respond by taxing all goods made in the United States by pointing to U.S. per capita CO2 emissions, which are dramatically higher than the world average,” wrote the associations.
The groups underscored the importance of ensuring that U.S. laws to address climate change are compatible with WTO rules, highlighting the potential consequences of incompatibility. “To the extent that U.S. climate change proposals do not adhere to basic WTO principles such as most–favored-nation and national treatment, they run the risk of being found to be inconsistent with our obligations and subject to permissible trade retaliation by other countries,” the groups stated in the letter.
Further, the associations noted that if the United States were to take action viewed by our trading partners as unilateral or discriminatory, countries might retaliate against U.S. exports, which would “impose substantial costs on American businesses and workers, and undermine the international economic opportunities that are vital to promote greater growth in the U.S. economy. Such actions would also make it more difficult to reach consensus on a multilateral approach to climate change.”
In closing, the associations encouraged members of the committee to work with the House Ways and Means Committee to further explore the international trade implications of proposed climate change legislation. Other signatories on the letter included the American Apparel & Footwear Association, the American Farm Bureau Federation, the National Retail Federation, the Retail Industry Leaders Association, the Travel Goods Association, the U.S. Council for International Business, and the United States Association of Importers of Textiles and Apparel.
In December 2007, the NFTC released a report, titled “WTO-Compatibility of Four Categories of U.S. Climate Change Policy,” which examines energy and climate related bills introduced in the 110th Congress from the perspective of their compliance with World Trade Organization (WTO) rules.
For a copy of the report, please visit http://www.nftc.org/newsflash/newsflash.asp?Mode=View&articleid=1917&Category=All.
To read the full association letter, please visit www.usaengage.org.
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USA*Engage (www.usaengage.org) is a coalition of small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad. Established in 1997 and organized under the National Foreign Trade Council (www.nftc.org), USA*Engage leads a campaign to inform policy-makers, opinion-leaders, and the public about the counterproductive nature of unilateral sanctions, the importance of exports and overseas investment for American competitiveness and jobs, and the role of American companies in promoting human rights and democracy world wide.
The National Foreign Trade Council (www.nftc.org) 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 hundreds of member companies through its offices in Washington and New York.
