Category: Press Releases and Statements

NFTC President Provides Outlook on Future of U.S.-China Economic Relations

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Reinsch Predicts Little Change in Nature of Bilateral Relationship Over Next Few Years,

Says Product Safety Issue May be an Exception

Washington, DC ­ In a speech themed “Promises and Perils: The U.S.-PRC Trade Relationship” delivered today at the Center for National Policy, National Foreign Trade Council (NFTC) President Bill Reinsch outlined the current status and future of bilateral relations between the People’s Republic of China (PRC) and the United States in the context of globalization.

 

 

“China is growing – fast. It is doing what Japan did in the 1950s and 1960s, what Korea and Taiwan did subsequently, and what Malaysia, the Philippines, Indonesia, Thailand and a host of others are trying to do right now,” said Reinsch. “But China is different because of its size and its politics. With 1.3 billion people, there are few limits on its capacity. It will become a true economic rival – not the proverbial 800-pound gorilla but the 800,000-pound gorilla.”

 

 

Using China as an example, Reinsch discussed the political consequences of globalization “as a force for both stability and instability, as it simultaneously pushes countries to conform to market principles and to Western norms of rule of law yet at the same time rides roughshod over deeply ingrained cultural values, exacerbates growing problems of income inequality, exploitation of workers, women, and children, and contributes to environmental degradation and resource depletion.” By accelerating the pace of change, globalization creates massive insecurities about the future, which are evident both here and in China.

According to Reinsch, the Congressional response has thus far been similar to its response regarding Japan in the 1980s – strong rhetoric with little actual action.

 

 

Reinsch discussed the various Congressional proposals regarding trade with China but concluded by questioning their efficacy, since the problems that need to be addressed are primarily U.S. problems rather than Chinese problems. Reinsch detailed the provisions of pending legislation that aims to correct currency misalignment, including:

 

 

  • S.1607 – Currency Exchange Rate Oversight Reform Act of 2007;
  • H.R. 2942 – Currency Reform for Fair Trade Act of 2007;
  • H.R. 1229 – Nonmarket Economy Trade Remedy Act of 2007; and
  • S. 1677 – Currency Reform and Financial Markets Access Act of 2007.

 

 

“From the standpoint of the bilateral relationship, while the Chinese will no doubt complain vociferously about whatever we do, these bills won’t make much difference in the problems they intend to address, which unfortunately means that real solutions will be postponed even longer,” Reinsch stated.

 

 

However, he noted, “Ironically, if you want to focus on what might change the trade relationship most rapidly, it will be if they fail to do a better job on product safety. Far more than Congressional legislation, if the American consumer turns against Chinese products because it believes them to be unsafe or unhealthy, and begins seeking out other products in the marketplace, it could be devastating to many Chinese manufacturers.”

 

 

“The one thing we know for sure is that the rest of the world, particularly China and India, will continue to run faster, so it falls to us to pick up the pace if we want to retain our global position,” 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 Praises U.S. and South Korean Negotiators for Signing KORUS FTA

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Washington, DC – The National Foreign Trade Council (NFTC) today applauded negotiators from the United States and Korea for working together to develop and sign the U.S.-Korea Free Trade Agreement (KORUS FTA). The Council urged Congress to consider and approve the agreement as soon as possible.

 

 

“The Korea FTA is one of the most commercially meaningful agreements ever reached by the United States,” said NFTC President Bill Reinsch. “With more than $80 billion in goods traded between our two countries last year, the reduction and elimination of trade barriers is critical to expanding trade opportunities for U.S. businesses, farmers and workers.”

 

 

One key objective of the FTA will be the substantial expansion of market share for U.S. goods and services. Historically, non-tariff barriers to trade in the Korean market have presented challenges for many U.S. companies. The NFTC will be monitoring implementation of the KORUS FTA, once approved, to ensure that it leads to greater market access and exports for U.S. companies.

 

 

“South Korea is both an important strategic ally in Asia and a beneficial trading partner,” said Mary Irace, NFTC Vice President of Trade and Export Finance. “It is our hope and expectation that the FTA will lead to major new market opportunities for American farmers, manufacturers, service providers, and the workers that drive these sectors of the U.S. economy.”

 

 

With an economy of $1 trillion, Korea is the United States‘ seventh largest trading partner. Similarly, the United States is Korea‘s third largest trading partner, importing roughly 17 percent of Korean exports worldwide. Of the $80 billion in two-way trade in 2006, U.S. exports to Korea totaled $32.5 billion.

 

 

The U.S. Congress must now ratify implementing legislation for the agreement. Once enacted more than half of all current U.S. farm exports to Korea will be traded duty-free. In addition, within three years of enactment, the agreement will result in the duty-free trade of nearly 95 percent of U.S. and Korean consumer and industrial exports.

“The NFTC commends both governments for concluding this comprehensive and high-standard agreement and we look forward to working with Members of Congress and the Administration to ensure its prompt passage,” concluded Reinsch.

 

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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 Applauds Signing of U.S.-Panama FTA

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Council Urges Members of Congress to Ratify Agreement Promptly

Washington, DC ­ – The National Foreign Trade Council (NFTC) today applauded the signing of the U.S.-Panama Free Trade Agreement (FTA) and called on Congress to swiftly approve the trade pact with broad bipartisan support.

“We commend U.S. and Panamanian negotiators for developing a well-crafted agreement that will increase trade and investment opportunities and expand market access for economic sectors vital to the prosperity of both nations, including services, manufacturing and agriculture,” said NFTC President Bill Reinsch. “We now call on Congress to ratify the agreement as soon as possible in the coming weeks.”

The FTA includes provisions to expand market access for U.S. farmers and ranchers through the duty-free trade of more than half of all current U.S. farm exports to Panama. Once enacted the agreement will also result in the duty-free trade of nearly 90 percent of U.S. consumer and industrial goods exports to Panama, with other tariffs being phased out over the next 10 years.

“Panama has historically been an important ally and trading partner to the United States and this agreement will help to solidify our already strong bilateral relations,” said Anne Alonzo, NFTC Senior Vice President and Co-Chair of the Hispanic Alliance for Free Trade. “Enactment of this agreement coupled with the expansion of the Panama Canal will greatly benefit the many workers and corporations that comprise the U.S. and Hispanic American business communities.”

Under the terms of the agreement, Panamanian textiles and apparel exports will be traded duty-free if they incorporate the use of U.S. or Panamanian fabric and yarn. In addition, the agreement will expand the financial services sector in Panama to increase access and investment opportunities for the United States.

The Administration and Panamanian officials began negotiating the terms of the FTA in early 2004 and concluded those talks in December 2006. In 2005, two-way trade between the United States and Panama totaled $2.5 billion.  

 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 Expresses Disappointment Over Outcome of G-4 WTO Talks

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NFTC Urges WTO Members to Make the Multilateral Process Work

Washington, DC – ­ The National Foreign Trade Council (NFTC) today expressed serious disappointment with the failure of the G-4 nations – the United States, the European Union, India and Brazil – to achieve a breakthrough in the Doha Round of WTO multilateral trade negotiations during meetings this week in Potsdam, Germany. In response to news that the G-4 talks have collapsed between trade and farm ministers, the NFTC released the following statement:

“The NFTC is very disappointed by the collapse in discussions by the G-4 countries aimed at achieving a breakthrough in the Doha Round on agriculture, goods and services. After an intensive several months of quiet discussions, we were hopeful that the G-4 countries would reach agreement to enable the negotiations to move to their final stage,” said Mary Irace, NFTC Vice President of Trade and Export Finance. “There is too much at stake in the multilateral trading system to allow these trade negotiations to fail or to go into a deep freeze. The developing countries stand to lose the most if the Doha Round fails.”

According to Irace, “We have been concerned about a lowering of ambition by major WTO members. To be successful, these talks must be concluded at a high level of ambition.”

 

 

“The NFTC and its members have long urged the United States and EU to open their agriculture markets and reduce subsidies, and over the past several months, they have moved in the right direction and progress has been made. This is not, however, a one-way negotiation focused only on agriculture. Goods and services, which account for the overwhelming majority of world trade, are core issues. For success, India and Brazil, as well as other leading developing countries, must be willing to open their markets for goods and services, including by agreeing to a meaningful tariff-cutting formula that will actually lead to new market access,” stated Irace.

 

 

Irace added, “The G-4 process has run its course. We look to the Chairmen of the key negotiating groups to issue texts and for the multilateral process to proceed forward in bringing the Doha Round to a timely and ambitious conclusion.”

 

 

NFTC President Bill Reinsch stated, “We appreciate the tireless efforts of U.S. negotiators to reach a resolution and remain hopeful that a successful conclusion to the Round is still in sight. We urge all parties to step up to the plate and get the job done. We also call on business groups in each of the G-4 countries and in other major economies to urge their trade ministers to put politics aside and achieve a substantial trade liberalization outcome that is in the clear economic interest of all WTO Members.”

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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 Vice President of Trade and Export Finance Discusses the Impact of U.S. Trade Policy on State Economic Growth

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Irace Highlights Importance of Concluding the Doha Round and Extending Trade Negotiating Authority

Washington, DC ­ In a speech delivered today during a meeting of the International Committee of the Council of State Governments, National Foreign Trade Council (NFTC) Vice President for Trade and Export Finance Mary Irace provided a detailed assessment of how U.S. international trade policy benefits state economies. Irace also stressed that a positive way forward on trade includes Congress extending U.S. trade negotiating authority and international trade leaders successfully concluding the Doha Round of World Trade Organization (WTO) negotiations.

“International trade and investment provides major benefits to the United States and is critical to continued U.S. economic growth and prosperity,” said Irace. “A few facts highlight its significance – 25 percent of the U.S. economy is tied to our trade with the rest of the world, and millions of well-paying American jobs depend on trade. One in six jobs is supported by exports and these jobs typically pay 13 to 18 percent more on average than other jobs.”

Irace noted that these and other statistics about the impact of trade on state economies are included in a special report released by the NFTC last month, titled “The United States and Global Trade: A State Legislator’s Guide to Maximizing Economic Opportunity through Trade.” The NFTC guide was distributed to a broad group of state legislative leaders to help shed light on the current U.S. trade agenda and to dispel many of the unfounded myths about the impact of trade on American companies and workers.

According to Irace, contrary to what opponents of trade contend, state exports and imports help to generate jobs across a number of sectors, including services, retail, transportation, manufacturing and wholesale distribution, among others. Irace also highlighted next steps on the U.S. trade agenda, including a successful and ambitious close to the Doha Round, extension of negotiating authority and approval of recently-concluded bilateral free trade agreements (FTA) with Peru, Panama, Colombia and South Korea.

“The U.S. will not be able to conclude the Doha Round nor will it be able to negotiate new FTAs without new Trade Promotion Authority (TPA). As the NFTC guide highlights, renewal of TPA is necessary because the Constitution grants the U.S. Congress the power to regulate foreign trade, but this is not workable in practice,” said Irace. “We learned this the hard way during the 1930s when tariffs across the board were raised higher and higher by Congress due to pressure from special interests that wanted to erect protectionist walls. Other counties did likewise and this deepened and prolonged the global great depression. We learned then that isolationism was not a recipe for growth.”

“The United States cannot afford to be left on the sidelines while other countries are busy negotiating preferential bilateral and regional trade agreements which exclude the U.S. There are 300 in existence today and many more are being negotiated,” Irace stated.

The NFTC guide is available on the NFTC Web site at http://www.nftc.org/default/trade/US%20&%20Global%20Trade%20Report.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.

U.S. Business Groups Urge World Bank to Include International Business Community in Procurement Discussion

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Letter Signed by Key Trade Groups Calls for Transparency

Washington, DC –  The National Foreign Trade Council (NFTC) today joined six other leading trade associations in urging the World Bank to allow feedback from the private sector regarding its new proposal for changes in procurement polices. The World Bank’s “Use of Country Systems in Bank Supported Operations” Status Report dated May 8, 2007, was released to the Bank’s Executive Directors this week without any opportunity for the private sector to review and provide input.

 

 

In a June 5 letter to Bank officials, business groups expressed deep concern about both the process and substance of the major changes contemplated in the new “country system” proposal on procurement. “At a time when the Bank is calling for transparency and good governance from its member countries, it is essential that the Bank avail itself of every opportunity in its operations to display transparency and good governance by requesting comments from the private sector . . . ” Business groups had provided detailed comments on an earlier March 2005 pilot project proposal to use country systems as a substitute for the World Bank’s procurement guidelines, standard bidding documents and international best practices.

 

 

According to the letter, whose signatories include – the Coalition for Employment through Exports, the Emergency Committee for American Trade, the International Association of Drilling Contractors, the National Association of Manufacturers, the National Foreign Trade Council, the U.S. Chamber of Commerce and the U.S. Council for International Business – the Bank should convene a meeting with private sector representatives before the May 2007 Status Report is considered by the Executive Directors. The associations also requested that the report be made available online for public comment “in recognition of the extensive European and other comments received on the March 2005 paper.”

 

 

In addition to calling for substantive consultations, the seven signatories outlined specific concerns with respect to the text of the Status Report. The groups state that in contrast to the March 2005 proposal, the current report fails to include specific details about the methodology that would be used to assess and implement country systems. Another concern raised relates to how country systems will achieve ‘equivalence’ with the Bank’s standards, with the associations asserting that the new report ignores private sector feedback on the shortcomings of previous proposals designed to ensure that individual country systems sync with overarching standards.

 

 

“Concerns from business stakeholders on the impact of this proposal on good governance and procurement best practices are many, which is all the more reason why meeting with Bank officials to discuss the report is so critical,” said Mary Irace, NFTC Vice President of Trade and Export Finance.

 

 

Steve Canner, Vice President for the United States Council for International Business, stated that “At a timewhen developing countries are trying to engage private sector expertise, technology andinvolvementin their development plans, the Bank’sapproach to procurement willsurelylockout private sector engagement.”

Pat Mears, Director of International Commercial Affairs for the National Association of Manufacturers, added that “It is worth noting that the U.S. Congress viewed the March 2005 country systems proposal as such a threat to good governance and the ongoing anti-corruption work of the World Bank and other institutions that it voted to withhold a portion of US funding were it to be implemented. Clearly, any new proposals on this issue deserve a through review by affected parties and an opportunity for affected parties to provide constructive feedback.”

 

 

Please click here for a copy of the letter.

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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.