Independent Women's Forum - Research Areas > Globalization and Free Trade

More on Food Prices

info@iwf.org (Allison Kasic) — Fri, 25 Apr 2008 12:55:00 EDT

In today's Wall Street Journal Nancy Birdsall and Arvind Subramanian provide some good insights into the causes of rising food prices. In addition to touching on the important issue of biofuels, as I posted about earlier today, they point out some of the significant trade barriers for food:

Meanwhile in the developing world, tightened restrictions on exports of foodstuffs are obstructing a long-term solution, even as import barriers come tumbling down. Each country is trying to keep domestic supplies high on the justifiable grounds of food security. But by holding prices artificially low, export bans keep the market from sending accurate demand signals to domestic farmers. This penalizes farmers, who can't get the full, world price for their produce. That impairs efficiency, and undermines the incentives for investments that can increase long-term supply. Topping it all off, such measures subsidize high-income households, not just the poor.

Moreover, as more countries implement export controls, global supply contracts even further, pushing prices up by at least 10% and possibly much more. A vicious spiral lurks here, as panic- and policy-induced speculative hoarding drives world prices even higher.

More here.

Free Trade for Services

info@iwf.org (Allison Kasic) — Mon, 14 Apr 2008 10:12:00 EDT

Australia's Minister for Trade Simon Crean and U.S. Trade Representative Susan Schwab had a joint op-ed in Friday's Wall Street Journal talking about the importance of expanding free trade for service sectors:

Communication, finance, energy, transportation and distribution services are essential inputs for the production of goods and services, and are "force multipliers" that expand economic opportunities and increase productivity. An efficient services sector is crucial to the development of vibrant, modern and resilient economies.

In fact, several developing countries have autonomously liberalized certain sectors of their economies as part of their development strategy, recognizing that high services barriers only constrain their economic potential. For example, telecommunication markets have been opened up throughout the developing world, and everywhere this has resulted in greater telephone access and lower charges, with profound positive effects on rural farmers, small businesses and industrial exporters.

This is why services are such an important part of most countries' development strategies, and why they need to be part of Doha's agenda. The Doha negotiations give developed and developing countries a once-in-a-generation opportunity to lock in services liberalization and harness its potential for future growth.

Reforms to trade in agriculture and industrial products have dominated headlines on the Doha Round, and it is true that these reforms will be extremely valuable. But liberalizing global services markets can provide even greater potential economic benefits.

Services contribute more to the world economy than agriculture and manufacturing combined, and are the fastest growing component of global economic growth, according to the World Bank. Comprehensive services-sector liberalization - through open markets and nondiscriminatory treatment of service suppliers - would permanently boost the global economy by more than $1 trillion. This is a greater boost than the full removal of subsidies and tariffs around the world on agricultural and goods markets.

More here.

Who Supports Engagement?

info@iwf.org (Carrie L. Lukas) — Mon, 07 Apr 2008 11:14:00 EDT

In today's Wall Street Journal Condoleezza Rice makes the case for the Congress to pass the Columbian Free Trade Agreement:

The fate of this agreement raises even larger questions: How does the U.S. treat its friends, especially when they are under pressure and attack? Will we remain engaged as a global leader or will we pull back unilaterally? Will we define our role in the world by confidence in our own principles or by capitulation to unfounded fears? The eyes of many nations, particularly those in our own hemisphere, are upon us, and let no one think that the choices we make will not echo around the globe.

For more than a decade, U.S. policy toward Colombia has clearly demonstrated that Republicans and Democrats can work together, elevate the national interest above partisan politics and sustain an effective strategy to achieve critical long-term goals. It is now time to write the next chapter in this venerable bipartisan story. We must approve this free trade agreement with Colombia – for the sake of both of our peoples' success.

Can someone explain to me how those on the Left who always complain about the U.S. refusing to engage in the world or having a "go it alone" mentality can oppose this? Or those who say they are concerned about development in poor countries? It seems a huge lost opportunity if this fails to pass.

Podcast Alert: The Middle Class

info@iwf.org (Allison Kasic) — Fri, 07 Mar 2008 08:15:00 EST

In the latest IWF podcast, Carrie Lukas and I discuss several issues (the economic stimulus package, energy policy, and trade policy) that affect the middle class.

Give it a listen here.

In Case You Missed It

info@iwf.org (Allison Kasic) — Fri, 18 Jan 2008 14:49:00 EST

Video is now available from IWF's bipartisan summit on the global economy. If you were unable to join us in Washington in December, I encourage you to take a look at the videos we have available from the event. On this page you can check out a panel on modernizing our economy for a new era, a panel on ensuring U.S. leadership in innovation, and the keynote luncheon address from Ambassador Susan Schwab, U.S. Trade Representative.

IWF Event:"Success in the Global Economy: An Agenda for the 110th Congress"

Tue, 15 Jan 2008 16:05:00 EST

A Policy Summit Hosted by the Independent Women's Forum

"What does America need to do to succeed in the global economy?" This event will highlight some of the most important policy issues affecting the U.S. economy-from globalization and free trade to our tax code and health and retirement programs, to our educational system and regulatory environment. Panelists will identify the key challenges facing our nation and propose sensible, market-oriented policies to enhance U.S. competitiveness in the global economy. Particular attention will be paid to the effects of the emergence of China as a global economic force. US Trade Representative, Ambassador Susan C. Schwab, will be the keynote luncheon speaker. Luncheon provided courtesy of IWF.

Panel topics will include:

Modernizing the Economy for a New Era
Ensuring U.S. Leadership in Innovation

Video 1:

Panel 1: Modernizing our Economy for a New Era: Republicans and Democrats agree: The United States needs to modernize the major pillars of our economy - including the tax code, regulation, healthcare, and retirement security - to ensure the U.S. succeeds in a competitive global economy. Each panelist will speak for 5 minutes on one of these broad issues, followed by moderator questions, audience comments and Q&A.

Video 2:

Panel 2: Ensuring U.S. Leadership in Innovation: This panel will address how to improve U.S. economic competitiveness, covering such topics as education for science, technology, engineering and math; R&D and commercialization of new technologies; incentives for long-term investment; and competitive threats from countries like China and India.

Moderator: Brenda Buttner

Panelists:

• Stephen Moore, The Wall Street Journal

• Elaine Kamarck, Harvard University

• Karen Tandy, SVP of Government Affairs, Motorola

· Angela Antonelli, Director, Federal Strategy and Operations,

Deloitte Consulting LLP

· The Honorable John Engler, President & CEO, National Association of

Manufacturers (NAM)

Video 3:

Luncheon and Keynote Remarks

Ambassador Susan Schwab, US Trade Representative

A Free Trade Agenda for American Women

info@iwf.org (Allison Kasic) — Wed, 02 Jan 2008 14:13:00 EST

In case you missed it, IWF's Michelle Bernard had a great article in the Washington Examiner last week detailing an economic agenda for American women. First up on that agenda is dealing with free trade agreements:

America's women need what America needs, an administration and Congress committed to working together to ensure that the U.S. remains second to none economically. Free trade must again be a priority. Congress should reauthorize presidential fast-track authority and ratify the three pending FTAs. Then, the president should negotiate FTAs with other interested nations.

The administration should attempt to restart the Doha negotiations by exhibiting greater flexibility in reforming our agriculture policy. Washington also should accelerate discussions with Europe over economic harmonization. The global community will benefit from removing unnecessary barriers to trade and investment.

For the rest of Michelle's prescriptions, read her article here.

A Free Trade Agenda for American Women

info@iwf.org (Michelle D. Bernard) — Wed, 02 Jan 2008 08:29:00 EST

Originally published by The Examiner on December 28, 2007.

"Three centuries ago Thomas Hobbes proclaimed life ‘nasty, brutish and short.' Today, we have Lou Dobbs presenting life as unfair, isolationist and doomed. For people who subscribe to this view, all the ills of protectionism can be cured with more protectionism" said U.S. Trade Representative Susan C. Schwab at an event held by the Independent Women's Forum.

Surveying the challenges the U.S. faces in our increasingly global economy, Ambassador Schwab offered a simple, persuasive prescription: We must "engage and not retreat." We must "seize opportunities to open markets to U.S. goods and services as we stay open to the products of other countries."

Americans always have been a trading people. The early colonists vigorously resisted British import duties. The United States has long led the world in promoting free trade, and U.S. products and services (many of which are provided by women-owned and operated businesses) now dominate the globe. Unfortunately, the bipartisan consensus in favor of an open international economy is breaking down.

Despite fears of lost jobs due to globalization, America employs 16.5 million more people today than a decade ago. Europe has barely treaded water while America has sped ahead.

True, the U.S. has fewer manufacturing jobs - because these industries are more productive and produce more with less. While 3.3 million manufacturing jobs have disappeared over the last 10 years, our nation has enjoyed a net gain of 11.6 million jobs in higher-wage industries. Dan Griswold of the Cato Institute reports that real compensation for American workers is up 22 percent since 1997.

Although the U.S. is the world's economic powerhouse, 96 percent of the world's consumers live outside our borders. Selling to them creates at least 12 million jobs in America today. As they grow wealthier, these billions will have even more money to spend on U.S. goods and services.

An open economy is particularly important for women, who continue to increase their role as business executives and entrepreneurs. A policy of free trade spreads that openness to other lands. Because of numerous bilateral free trade pacts and decades of increasing liberalization abroad, American women enjoy far greater economic opportunities today than even a few years ago.

Yet all of these advantages are at risk today. Interest groups and politicians are undermining America's traditional free trade agenda, treating the international economy as a threat.

First, multilateral negotiations, termed the "Doha round," have stalled over issues such as farm subsidies. Although Europe is the biggest stumbling block, the U.S., too, has sacrificed the interests of consumers to maintain outmoded farm export subsidies. An increasing number of Republicans embrace a protectionist agenda, while the new Democratic majority is even more hostile to free trade. While Congress passed the Peru Trade Promotion Agreement, it has failed to renew the president's "fast-track" authority to negotiate free trade agreements (FTAs), with Congress providing an up or down vote to approve any deal.

Previously negotiated FTAs with Columbia, Panama and South Korea remain stalled on Capitol Hill. All of these agreements offer the U.S. political as well as economic benefits.

American economic predominance cannot be taken for granted. U.S. economic success is threatened not only by a turn away from economic engagement, but also by legislators who are failing to push the domestic reforms necessary to maintain America's competitive advantage abroad.

Corporate taxes are too high. Burdensome federal regulations plague U.S. companies. The public schools fail to prepare many students for a career in a high-tech, global economy. Our health and retirement systems are a costly mess.

America's women need what America needs, an administration and Congress committed to working together to ensure that the U.S. remains second to none economically. Free trade must again be a priority. Congress should reauthorize presidential fast-track authority and ratify the three pending FTAs. Then, the president should negotiate FTAs with other interested nations.

The administration should attempt to restart the Doha negotiations by exhibiting greater flexibility in reforming our agriculture policy. Washington also should accelerate discussions with Europe over economic harmonization. The global community will benefit from removing unnecessary barriers to trade and investment.

Finally, Congress and the president should pursue a concerted policy to further free up the U.S. economy, including lower capital gains and corporate taxes that match economic competitors, and more sophisticated, less costly regulation.

America became a global leader by embracing economic liberty at home and abroad. The American public would be wise to remember that legacy when voting next year.

Michelle D. Bernard is the president and CEO of the Independent Women's Forum and author of "Women's Progress: How Women and Are Wealthier, Healthier and More Independent Than Ever Before"

In the News: GLOBAL COMPETITIVENESS OF AMERICA

Thu, 20 Dec 2007 15:20:00 EST

Campus Report Online

by: Heyecan Veziroglu, December 20, 2007

At the Independent Women's Forum at the Marriot on December 5, 2007, panelists from business and academic circles identified the most significant challenges facing America and suggested rational, free-market policies to enhance U.S. competitiveness in the global economy. "Government shouldn't keep its old-fashioned forms," said Dr. Elaine Kamarck from the Kennedy School of Government at Harvard. "In our era, governments talk about citizens as customers."

"Today, we've reinvented government. Social security system is an example of reinvented efficient bureaucracy," she argued. "Productivity is brought to government services."

"The old-fashioned bureaucracy is not efficient to have productivity."

John Engler, the president & CEO of The National Association of Manufacturers pointed out that "The life blood of the manufacturers is remarkable productivity."

"We've got to have an energy strategy," he insisted. "We have to be smarter about how to use energy."

"Otherwise, this could be a great threat to our economic stability." He emphasized the significance of innovation in the 21st century.

He gave statistical data and said: "Among Organization of Economic Cooperation and Development (OECD) countries, Turkey's corporate tax rate in 2006 has been 30%, whereas in 2007 it was 20%."

Stephen Moore, Editorial Board Member from The Wall Street Journal, stressed the high rate of taxes and remarked "We are the only country in the planet that is raising tax rates. All others reduce taxes! ..."

Karen Tandy, VP of Global Government Relations from Motorola, stated that the U.S.'s strongest performance is in the role of innovation. "That's what our competition comes from," she explained. She went on to say that that is where "the federal funding side comes from."

"We should keep the technology talent in the U.S.," she argued. "The limitation on HB1 visas is limited to 65000 per year," she pointed out about the documentation designed to import technical experts.

"We have to invest to drive innovation at home." Angela Antonelli, Director of Federal strategy & Operations from Deloitte Consulting, LLP, offered some observations about education in America. "Based on the intellectual capital, we have to build a focus on 21st century work force to find skillful people," she observed. "There is a lot of concern about the American educational system."

"Students are not proficient in their math and science classes," she noted. "We cannot rely much on foreign workers to be players in the workforce particularly in finance and business sectors."

Dr. Robert Atkinson, President, Information Technology and Innovation Foundation, stressed the point that tax policies need to focus on enterprises. "We need to invest in IT equipment investments," he said. "That's the engine we have in the U.S..."

"Health care reform must be a top priority," Dr. Isabel Sawhill from the Brookings Institution said. "It should cover the uninsured; improve the efficiency of the system, bring modern technology to the system."

"We need much more research on competitiveness; we need more coordinated care, and better image of chronic diseases," she contended. "We need to learn the prevention of diseases and be careful about health and life styles."

"We need a few more radical policies on Medicare system but there is a strong resistance to income relating benefits," she asserted. "Health care is highly valued for most people."

"Technology is helping us to live longer and healthier, The public sector is going to require higher taxes...." Dr. Atkinson said "We are one of the few countries that are based on employer based health system... This is a huge political challenge."

Heyecan Veziroglu is an intern at the American Journalism Center, a training program run jointly by Accuracy in Media and Accuracy in Academia.

Success in the Global Economy: An Agenda for the Future

info@iwf.org (Mary Arnold) — Tue, 18 Dec 2007 10:10:00 EST

Originally published by the Palo Alto Daily News

Against the backdrop of America's election season, one question should rise to the top of the public debate: What does America need to do to succeed in the global economy? The answers offered by political candidates in the months ahead will have repercussions for decades.

The near-term economic signals are mixed. According to the U.S. Commerce Department, slower sales and higher energy and labor costs are forcing many companies to reduce spending and hiring. Tighter credit policies are making it harder for businesses and consumers to borrow. The long-term outlook is also uncertain, given the inevitable rise in global economic competition.

In such an environment, it is absolutely critical for Democrats and Republicans to offer smart solutions that re-energize the American economy. One set of issues revolves around how to modernize the major pillars of the economy, such as the tax code, regulation, healthcare, retirement security and infrastructure. Most experts agree that our existing policies are better suited to the realities of the 20^th century than the 21^st. The challenge is finding realistic, bipartisan approaches that ensure economic fairness and security for all Americans while simplifying bureaucracy and reducing costs. Increased use of information technology can help make all economic sectors more efficient and productive.

Another set of critical issues is how to improve U.S. economic competitiveness by addressing such issues as education and innovation. Specifically, the US must reverse the troubling shortage of math, science, and engineering talent by taking steps to increase the number of math, science, and engineering graduates, as well as improve the number and quality of K-12 math and science teachers. Congress and the President would also be wise to encourage research, development and commercialization of new technologies, including a permanent extension of the R&D tax credit and stronger protection of patents and copyrights.

One thing the United States must not do is back away from its historic commitment to global trade. The reasons why are very clear. More than 95% of the world's consumers live outside the United States. One-sixth of U.S. manufactured goods are sold abroad. One in every three acres of U.S. farmland is planted for export. The combined effects of the major trade agreements of the 1990s have increased the purchasing power of the typical American family by $1,300 to $2,000 per year.

Any way you look at it, global trade delivers real value to American workers, farmers, and businesses. Congress and the President must work to revive global trade talks, approve two-way trade agreements with key nations, and encourage greater exchange by helping to harmonize technology standards with our trading partners.

Likewise, the United States must not close the spigot of foreign investment in our economy. Despite the occasional controversy about particular mergers and acquisitions, overall, foreign direct investment helps the U.S. economy in many ways. For example, U.S. affiliates of non-U.S.-based companies employ more than 5 million U.S. workers, and an additional 4.6 million U.S. jobs indirectly depend on foreign investment. On average, U.S. subsidiaries of foreign firms pay 36 percent higher wages and salaries than their U.S. counterparts, and such firms invested more than $150 billion in 2005 in U.S.-based research, development, plants and equipment. A recently enacted law should help ensure that foreign investment continues to flow into the United States and should be implemented with care.

Finally, policy makers must continue to maintain a healthy environment for economic growth and job creation, including lowering the overall tax burden, simplifying the tax system, avoiding needless regulation, and relying on market incentives to achieve social goals.

Long after today's "hot button" issues have passed into history, the choices made by elected leaders about how to keep the United States globally competitive will affect the lives of all Americans and billions of people around the globe. For the sake of our own prosperity and that of future generations, we must demand that political candidates present rational, workable solutions to build a stronger America.

Mary Arnold is Vice President for Government Relations at SAP America and a member of IWF's board of directors.

In the News: Schwab Warns Against Using Blunt Tools On China Disputes

Tue, 11 Dec 2007 16:04:00 EST

National Journal Congress Daily

By Martin Vaughan

Trade Representative Schwab said Wednesday it is probable that Congress will address legislation next year to restrict imports from China, and warned lawmakers to "be wary of quick fixes for complex international challenges."

"It is likely that both houses of Congress will grapple with this legislation related to currency, trade remedies, product safety, and enforcement," Schwab said in a speech to the Independent Women's Forum.

"They are crude tools for our complex tasks. They focus on the wrong issues and are likely to do nothing to help or could even hurt American workers, farmers and entrepreneurs that they purport to help," she continued.

As late as June, key Senate sponsors of legislation to spur China to let its yuan rise in value more quickly said a vote in 2007 on Chinese currency legislation was a near-certainty.

"I don't see how this doesn't pass the Senate and the House by a veto-proof majority," Sen. Charles Schumer, D-N.Y., said when his legislation was unveiled.

But a jurisdictional dispute between two key Senate chairmen, opposition from the White House and divisions among supporters of China currency legislation about the best approach combined to slow action on the bill.

The Senate's Finance and Banking committees got as far as marking up competing measures, while the House Ways and Means Committee did not mark up a currency bill this year.

Schwab said congressional inaction on China trade measures might be in part an acknowledgment that administration efforts to negotiate trade policy changes with China are succeeding.

Last week, China announced it would end subsidies the United States challenged in a World Trade Organization dispute case.

She noted that U.S. export growth has accelerated substantially this year, helped by growth in the Japanese and European economies.

"I'd like to think that I'm wrong" about China legislation next year, she said, adding, "There is perhaps a more robust debate going on; we'll see."

In her speech, Schwab urged lawmakers more generally to reject the temptation to blame imports for all economic woes.

"Three centuries ago, Thomas Hobbes proclaimed life 'nasty, brutish and short.' Today, we have [CNN anchor] Lou Dobbs presenting life as unfair, isolationist and doomed," she said.

In Case You Missed It

info@iwf.org (Allison Kasic) — Mon, 10 Dec 2007 10:11:00 EST

If you missed our summit on the global economy last week, you're in luck: U.S. Trade Representative Susan C. Schwab's remarks are now available online. Check out her speech here.

Remarks by U.S. Trade Representative Susan C. Schwab

Thu, 06 Dec 2007 11:00:00 EST

Remarks by U.S. Trade Representative Susan C. Schwab

Independent Women's Forum

Dec. 5, 2007

AS PREPARED FOR DELIVERY

Acknowledgements and Introduction

1) Thank you. What a pleasure to be at Independent Women's Forum, where all issues are women's issues. Thanks to Michele Bernard and Mary Arnold for providing the chance to address all of you on my most pressing women's issue- international trade and competitiveness.
2) The theme of this gathering - what the United States must do to succeed the global economy - is among the most important issues our generation faces. We cannot stem the trend of globalization. Nor would we want to. After all, the United States helped create the post-war international system that has made the flow of goods and services a force for increased peace and prosperity for the United States and most of the rest of the world. Our challenge is to have the vision and courage to adapt to a rapidly changing, more competitive trade arena. Therefore, what I would like to do today is to offer a few suggestions about what we can do in the near term to enhance our prospects for success. Just as important, I will offer suggestions of what not to do.
3) The best way to articulate some of the "do's and don'ts" of global trade is to go through key items on our trade agenda - notably the free trade agreements pending before Congress and our trade relationship with China. How we manage the challenges and opportunities incumbent on that particular trade relationship is instructive to our broader quest to stay successful in the global economy. Therefore, I will devote most of my remarks to that relationship.

The Trade Agenda for the Remainder of the 110th Congress

1) The final session of Congress in the Bush Administration offers unprecedented opportunities for lawmakers to promote continued U.S. success in the international marketplace. I am pleased the Peru Trade Promotion Agreement is on the way to the President's desk with an incredibly strong bipartisan vote of 77-18 last night. But the pending agreements with Colombia, Panama, and Korea are still out there. Here two basic reasons why continued U.S. economic success and political security is linked, at least in part, to their approval.
2) The first -- and perhaps most compelling reason -- are the potential economic benefits from these high quality free trade agreements (FTAs.) Broadly speaking, 95 percent of the world's consumers live outside U.S. borders. Opening new markets is vital to our economic future well-being. Export expansion, in fact, accounted for 40% of U.S. economic growth over the last four quarters. So let's keep exports - and our economy - growing!
3) The Agreements with Peru, Colombia, Panama, and Korea will give U.S. products and services duty-free access to markets with a combined population of 124 million people.
a) It is important to remember that these FTAs will make a one-way street a two-way street, (particularly true of Latin FTA's).
b) In addition, they go beyond cutting tariffs. They also eliminate non-tariff barriers such as tax, regulatory, and procurement policies that make it hard for U.S. manufacturers, farmers, and service providers to compete in these markets.
c) They promote transparency, intellectual property protection, and the rule of law.
d) In addition, these FTAs include enforceable obligations concerning the fundamental rights of the ILO and key multilateral environmental agreements. Lawmakers who have long 3 expressed a desire to shape the terms of U.S. trade agreements have a great opportunity to do just that.
4) Another reason why these agreements are linked to the long-term success of the United States in the international economy has to do with security and foreign policy considerations.
a) They represent a chance to show other countries throughout the world that market-oriented economic growth, political freedom, greater transparency, and respect for the rule of law mark the path to a better life for all people.
b) When our trading partners determine that deeper and stronger trade ties with the United States will benefit their people, the United States must not turn away.
5) In essence, to keep the United States strong and competitive we must engage in trade, improve the terms of trade, and utilize trade to promote stronger economic and political ties.
6) What we must not do is let important opportunities die on the vine.
a) Failure to enact the remaining agreements will not create a single job in the United States, promote labor protection, clean up a 4 single stream, or prevent the extinction of one endangered species in Latin America.
b) Failure to enact them will show the world that the U.S. is an unreliable trading partner and ally.
7) The principles apply to our relationship with China as well. It is this subject to which I devote the remainder of my remarks. The fact that I am not focusing my remarks on the Doha Round reflects only a lack of time - not a lack of will or priority!

Mutual Benefits of Engagement with China

1)The policy of promoting China's active participation in trade and its adherence to the norms of the global trading system -- has worked well for the last 30 years. The economies and people of both our economies have benefited.
a) Over the past 15 years, bilateral trade in goods between our two countries has increased by some 1200 percent! Over the past six alone, bilateral goods trade has nearly tripled and services trade has more than doubled. Investment flows remain strong. 5
b) China's economy has grown by nearly ten percent a year for the past 20 years, and nearly 400 million people have been lifted out of poverty. China has also emerged as an enormous, rapidly- growing market for U.S. goods and services, helping to sustain strong U.S. economic growth rates.
i) U.S. exports of manufactured goods, agricultural products, and services have grown an average of 23 percent a year since China joined the WTO in December of 2001.
ii) China is today our fourth largest export market, and the fastest growing export market for the United States in the world.
c) In addition to specific trade data, there are positive indications of the overall direction of our relationship with China.
i) This includes the growing government-to-government contacts, with new fora like the Strategic Economic Dialogue to complement existing dialogues like Joint Commission on Commerce and Trade
(1) In fact, I will be heading to Beijing next week for the latest JCCT and SED meetings.
ii) It also includes China's substantial achievements in meeting its WTO reform commitments.

Bilateral Trade Challenges

1) These tremendous achievements of bilateral economic engagement notwithstanding, we must acknowledge there are problems in the bilateral economic relationship.
a) Because China's rise has coincided with sweeping changes in our domestic economy, many Americans associate worries about their long-term job and wage prospects with China.
b) In addition, U.S. businesses question whether the playing field is level.
c) Among the chief reason workers and businesses question the benefits of our trade relationship is the bilateral trade deficit. We know our trade imbalance is due to a number of factors, not all of which are trade related -- from differences in savings rates to shifts in assembly to China from other Asian countries. Still, as USTR stated in our Top to Bottom Review of Chinese trade ties 18 7 months ago, we must work for more "equity and balance" in our relationship with China.
d) Another serious matter is intellectual property rights protection. Last year, 81 percent of counterfeit and pirated items seized at the US border were from China, up from sixty-nine percent the year before that. China can - and must - do better. The problem is one of enforcement, which we are attempting to address by working with China and by asserting our rights within the WTO.
e) Yet another area of contention has been government subsidies that violate WTO rules. On this, the wisdom of the Administration's policy with China stands for all to see. Under President Bush, the United States has engaged in dialogue when possible and used legal action when necessary. This is policy that had delivered concrete results.
i) To demonstrate our resolve to stand up for U.S. businesses and workers, we challenged these subsidies at the WTO. I was pleased to announce last week that China has agreed to end these subsidies. 8
ii) This was a major victory for U.S. workers and businesses as well as for the rules-based trading system.
f) These subsidies, which China provided to Chinese and foreign manufacturers in China across a broad range of sectors, created an uneven playing field for U.S. producers trying to sell to China, in the U.S. and third country markets. This hurt U.S. small and medium-sized businesses and their workers the most.
i) The United States was resolute in its determination to stand up for U.S. interests and that resolve paid off. We also believe this was the right decision for China to take in its own interest.
g) Another concern is a systemic lack of transparency and weakness in the rule of law in China. China has improved the transparency of its legal and rulemaking processes, but we'd certainly like to see more progress in this area. Among the steps China could take is to establish a mandatory process for public notice and comment on proposed laws and regulations.
h) As we head into the holiday season, product safety is yet another matter that continues to worry many consumers and draws intense 9 scrutiny from Congress. We expect that the goods we buy are safe for ourselves and our families.
i) The President reacted quickly and thoughtfully and created an inter-agency Import Safety Working Group, of which USTR is a member. This group does not target China. It targets the safety of all products regardless of country of origin.
(1) The working group report came out in early November and will help ensure that the largest open market in the world is also safest market in the world.
ii) After an ill-considered initial response that only enhanced concerns about the "Made in China" label, China has now shown that it is beginning to recognize this issue is about consumer confidence in Chinese products in the largest market in the world.
i) In addressing all these issues, the Bush Administration is using all the tools at its disposal to remedy these challenges with the goal of permitting more trade and investment to occur. That, in a nutshell, is at the core of engagement . And only through engagement with the global economy can the United States 10 succeed in the global economy. As I observed with the subsidies case - we aim for real results for U.S. business and workers - and not political statements.
i) Generally, we will try first to engage through bilateral dialogue, including through fora such as the Joint Commission on Commerce and Trade. Why? Because it is often the most effective means to resolve problems.
ii) But where bilateral dialogue is not successful, we have - and we will continue - to act quickly, firmly, and decisively, using both domestic U.S. trade remedies and dispute settlement before the WTO.
iii) The prohibited subsidies case was one of four formal WTO cases we have brought in the past 14 months and we are determined to press our cases vigorously in the months ahead. Resorting to dispute settlement is itself a form of engagement. It is evidence of two countries working to resolve disputes about obligations through neutral, legal mechanisms. WTO Dispute settlement is designed to prevent trade wars rather than fuel them.

The Biggest Challenges: Economic Fear and Neo-Mercantilism

1) I have gone through some specific issues. But I believe the more important threats to strong and healthy trade ties involve broader issues concerning what I would call the mindsets of our two countries. This gets to the heart of whether the United States and China fully embrace how their success in the global economy is linked to the success of the global economy itself.
2) Both countries, in their own ways, must steer clear of economic retrenchment.
a) In China, economic retrenchment seems to be taking the form of shielding China's economy from some of the very market forces that have allowed it to grow so rapidly.
i) Over the past year or two, we have continued to see signs of slowing or even backsliding in market-oriented economic reforms.
ii) Recent actions by the Chinese government, taken together, provide reason to worry that China will use its regulatory and 12 other policies to develop so-called "national champions" and tilt the playing field against foreign competitors.
iii) There are signs that state planners may seek to steer China down an economic development course that differs from the direction and velocity advocated by Deng Xiaopeng. Protecting national champion industries at home is not in China's best interests. Failures of this approach in other countries are evident, and China's recent history shows that openness yields growth, innovation, and competitiveness. Protectionism and isolation from market forces only yields inefficiency, corruption, and trade frictions - and that is not the path to a more "harmonious society."
3) As I said a moment ago, I am concerned about what I called the mindset of both countries when it comes to the global economy. In the United States, economic retrenchment takes the form of proposed legislation - some of it ill-conceived - to impose tariffs, or opposition to the pending trade agreements before an honest debate on their merits has taken place.
a) Trade has become the poster child of all economic anxiety -- even though economists tell us that trade accounts for only two or three 13 percent of annual job losses. To hear the trade skeptics talk, who would think we have created over 8 million jobs in the last four years and manufacturing output is at an all-time high?
b) Unfortunately, China has become the chief target for this rising sense of angst and the protectionism it seems to breed.
c) The myriad benefits of our two-way trade and investment relationship are drowned out by the drumbeat for legislation to "get tough" with China - often with little regard for the consequences or WTO-consistency of that legislation.
i) It is likely that both Houses of Congress will grapple with bills related to currency, trade remedies, product safety, and enforcement procedures next year. They are crude tools for a complex task. They focus on the wrong issues and are likely to do nothing to help or, even worse, will hurt the American workers, farmers, and entrepreneurs they purport to help.
ii) Three centuries ago Thomas Hobbes proclaimed life "nasty, brutish and short." Today, we have Lou Dobbs presenting life as unfair, isolationist, and doomed. For people who subscribe 14 to this view, all the ills of protectionism can be cured with more protectionism.
iii) Congress should be wary of quick-fixes for complex international economic challenges. Leaders from both parties would be wise to be deliberate and proceed with caution. What they say and do matters - and the markets are watching.

Conclusion

1) What does America need to do to succeed in the global economy?
a) We need to engage not retreat.
b) We needs to seize opportunities to open markets to U.S. goods and services as we stay open to the products of other countries.
c) We need to foster cooperation with loyal allies and not rebuke their efforts to forge closer trade and investment ties.
d) We need to raise the bar for how trade is conducted and shape its terms and standards so that trade's benefits will be broadly shared.
e) We need to tackle thorny problems with diligent dialogue and unbending resolve - and not use political tools for resolving economic disputes.
f) And we need to address many of the issues underlying U.S. competitiveness that the IWF has focused on today.
2) This is the essence of what has been a highly successful seven years in our nation's trade history. We must complete the important work we have started and pave the way for future success.

3) As you grapple with how the United States can succeed in the global economy in this time of rapid change and closer integration, I urge you to keep in mind how important it is for veteran trading powers such as the United States and major new actors, such as China, to champion the benefits of the free and fair flow of commerce.

Thank you.

Success in the Global Economy: An Agenda for the Future by Mary Arnold

Agenda for IWF Policy Summit Success in the Global Economy: An Agenda for the 110th Congress.

In the News: U.S.-China trade ties face rollback risks: Schwab

Wed, 05 Dec 2007 12:35:00 EST

Boston Globe

By Doug Palmer | December 5, 2007

WASHINGTON (Reuters) - The U.S. Congress and Chinese policymakers should think carefully before taking action that could damage the U.S.-China trade relationship, U.S. Trade Representative Susan Schwab said on Wednesday.

Although China has become the "chief target" in the United States for concerns about globalization, both countries benefit from a deepening trade and economic relationship, Schwab argued in a speech to the Independent Women's Forum.

"Both countries, in their own ways, must steer clear of economic retrenchment," Schwab said, just a few days before heading to Beijing with other senior Bush administration officials for high-level economic talks.

She expressed concern about several bills in Congress aimed at addressing concerns about China's trade and currency policies, as well as the safety of Chinese goods.

"They are crude tools for a complex task. They focus on the wrong issues and are likely to do nothing to help, and -- even worse -- could hurt American workers, farmers and entrepreneurs," Schwab said.

Even so, there are signs China is "slowing or even backsliding" on economic reforms in ways that could harm U.S. companies trying to compete in that market, Schwab said.

"Recent actions by the Chinese government, taken together, provide reason to worry that China will use its regulatory and other policies to develop so-called national champions and tilt the playing field against foreign competitors," she said.

LONG LIST

Schwab and U.S. Commerce Secretary Carlos Gutierrez are the U.S. co-chairs of the U.S.-China Joint Commission on Commerce and Trade (JCCT), which is meeting next Tuesday in Beijing.

A second bilateral forum, led for the United States by Treasury Secretary Henry Paulson, meeting next week focuses on longer-term issues in the trade and economic relationship.

The United States is pressing China in the JCCT for action on a long list of market access concerns, including its long-standing ban on imports of U.S. beef, Schwab said.

At the last JCCT meeting in April 2006, the United States trumpeted a Chinese commitment to "reopen the Chinese market to U.S. beef" once final technical issues were resolved.

However, the market remains closed.

The U.S. government said another important achievement of 2006 meeting was a Chinese government decision to improve transparency by publishing all its laws, and regulations affecting trade and control of foreign exchange in a single journal.

But Schwab said in her speech China's opaque rulemaking procedures and commitment to rule of law remained a concern.

She urged Beijing to "establish a mandatory process for public notice and comment on proposed rules and regulations."

Schwab acknowledged the United States would be revisiting some issues next week previously thought to be resolved.

"We'll keep going until we get them done," she said, adding that the United States could possibly take legal action under U.S. and global trade laws if dialogue fails.

(Editing by Eric Walsh)

New at IWF: Global Economy

info@iwf.org (Allison Kasic) — Tue, 04 Dec 2007 12:10:00 EST

To get pumped up for tomorrow's policy summit, I recommend reading Mary Arnold's commentary over on the IWF homepage. Mary does a terrific job of outlining the many challenges facing our economy, which provides a great preview of tomorrow's discussion.

Read her article here.

More information of the summit here.

IWF EVENT: Success in the Global Economy: An Agenda for the 110th Congress

Wed, 28 Nov 2007 16:08:00 EST

Click here to register and view the Summit Agenda.

Success in the Global Economy: An Agenda for the 110th Congress

Tue, 27 Nov 2007 15:26:00 EST

For Immediate Release: Contact: Kate Pomeroy
Date: November 27, 2007 202-631-6704 or kate.pomeroy@iwf.org

Success in the Global Economy: An Agenda for the 110th Congress
What does America need to do to succeed in the global economy?

Washington, DC - As a prelude to the 18^th U.S. - China Joint Commission on Commerce and Trade meeting in Beijing, the Independent Women's Forum will be hosting a summit titled Success in the Global Economy: An Agenda for the 110^th Congress. This is the second event in IWF's signature series.

Date:              Wednesday, December 5, 2007

Time:               8:00am - 2:00pm

Location:         J.W. Marriott Hotel
                      1331 Pennsylvania Avenue, Salon F
                      Washington, DC 20004

This bi-partisan event will highlight some of the most important policy issues affecting the U.S. economy-from globalization and free trade to our tax code and health and retirement programs, to our educational system and regulatory environment. Panelists will identify the key challenges facing our nation and propose sensible, market-oriented policies to enhance U.S. competitiveness in the global economy. Particular attention will be paid to the effects of the emergence of China as a global economic force.

###

If you would like more information about this event, please contact Kate Pomeroy at
202-631-6704 or kate.pomeroy@iwf.org.

Is Globalization Really the Evil Monster People Think it is?

info@iwf.org (Anne Trenolone) — Tue, 27 Nov 2007 13:00:00 EST

I heard an interesting commentary piece on NPR, to be exact it ran on Marketplace, last evening that links in well with IWF's upcoming event: Success in the Global Economy: An Agenda for the 110th Congress which is focusing on the US economy in the context of globalization.

The piece notes an article that ran in The Wall Street Journal, "A Globalization Winner Joins in Trade Backlash" that contains this eyebrow raising statistic:

The latest Wall Street Journal/NBC News poll conducted earlier this month found that 60% of voters nationwide agreed with the statement that "foreign trade has been bad for the U.S. economy.

Of note is that the Marketplace commentary offered up by Paul Krugman was not exactly what I expected. Krugman is a columnist for The New York Times whose latest book is called The Conscience of a Liberal and his warning to Democratic presidential candidates is "Cool the Globalization Rhetoric". The intro to the piece sums it up this way:

A funny thing's happening on the way to the Democratic presidential nomination. The Wall Street Journal pointed it out the other day. Iowa voters are worried about the after-effects of globalization. So worried that the major Democratic candidates are working overtime talking down free trade. Globalization is turning into a hot-button campaign issue. Republicans are having their problems, too.
But commentator Paul Krugman says, its effects on the U.S. economy are overblown.

Krugman himself offers this:

Let's start with the idea that globalization makes it impossible for American workers to earn good wages. The facts say otherwise.

Both pieces offer a good picture of the globalization debate at the grassroots level.

Globalization: Threat or Opportunity to Women in the Developing World?

info@iwf.org (Jo Kwong) — Mon, 07 Mar 2005 00:00:00 EST

As the world becomes more and more integrated through new technologies that enable us to do more, in less time, in more parts of the world, one trend is clearly evident: Women are increasingly becoming an integral part of the global economy. While the impacts of women differ immensely from region to region, sector to sector, and culture to culture, there is widespread controversy about the process and impact of "globalization" -- the phenomenon that is largely viewed as responsible for these changes.

Proponents describe it as a process that generates positive opportunities for woman -- and people in general. Opponents, or anti-globalists as they are often called, worry that globalization acts somewhat like a widespread cancer that harms people, particularly women and the poorest of the poor, by shifting resources and opportunities to those who can most afford them.

Discussions of globalization has taken central stage for many organizations devoted to assisting and developing opportunities for women, causing some organizations to move beyond their traditional hands-on, grassroots effort to grapple with issues of public policy. Self Employed Women's Association, a membership organization of nearly 70,000 women in the informal economy in the developing world, for example, states:

Globalization and the policies of economic liberalization have come to dominate the national and international debate both at the economic and political level. The debate on the issues concerning globalization seem to be polarized with some groups seeing it as leading to growth and development and the way out of poverty, and other groups seeing it as leading to more misery and impoverishment.

It is easy to understand why views on globalization are so wide ranging and why some are sounding alarm bells. As is frequently the case with terms that rapidly become part of our daily vernacular, definitions and understanding of the term are often glossed over. Few people can actually give an accurate definition of globalization -- or agree on a single definition -- leading to the situation in which loudly-proclaimed emotions and reactions become the defining "aura."

This paper first examines the term "globalization," and then reviews some of the prevailing perceptions about globalization, paying particular attention to its impact on women around the world.

The underlying perspective of this paper is that globalization is an integral, inevitable part of human action. We can best improve conditions for women worldwide by facilitating opportunities for people to take actions to improve their individual lives. Through successive experimentation and observation about what works and what doesn't, people naturally adapt and improve their situations, and in so doing, gradually improve conditions for people as a whole. Hence, institutions which afford the greatest latitude for such exchange, discovery and action, offer our best hope for combating poverty, disease, inequality, and other problems that disproportionately impact women around the world. Conversely, institutions that constrain these opportunities, exacerbate poverty and misery, leaving others to control the lives of the poorest of the poor.

Jo Kwong is a visiting fellow with the Independent Women's Forum.

Free Trade: What Global Girls Need

info@iwf.org (Sara Cooper) — Mon, 20 Dec 2004 00:00:00 EST

With the holiday season upon us, American women will be shopping for extra groceries and the special outfits required for endless get-togethers -- not to mention gifts needed for under the tree. Women looking for good deals and savings should recognize that it isn't just coupons and holiday sales that are creating bargains -- free trade is helping to fulfill all of these needs.

In fact, if you've gone shopping lately, you've gone global. American stores are teeming with imported products ranging from Australian lamb and Belgian chocolate to flowers from South America.

Even without the holiday rush, free trade helps make women's day-to-day lives better by offering a greater range of goods at lower prices. Trade allows countries to specialize in what they're best at and purchase the products that they're not as competitive in -- making use of what economists refer to a "comparative advantage." The United States doesn't have a comparative advantage in all of the products that we consume, therefore it's best to export what we specialize in and import what we don't.

As a result of trade, consumers have access to products year round that could only be provided during certain seasons by domestic producers. Consumers can purchase flowers and tropical fruits mid-winter thanks to trade. In fact, according to the Progress Policy Institute, nearly half of all flowers sold in the United States come from overseas.

Yet American women, families and consumers would reap greater benefits if more trade barriers were eliminated. The existing barriers to trade limit our choices, regulate and tax our purchases, and stifle economic growth. These trade barriers come in different forms -- each with their own pernicious effects.

One common trade barrier is a tariff or a tax the government collects on each imported good. U.S. policy has even put a tariff on the shirt on your back. According to Edward Gresser of the Progressive Policy Institute, shoes and clothes face among the heaviest tariffs: they account for one fifteenth of U.S. merchandise imports but for nearly half of U.S. annual tariff revenue. The women who burned their bras in the sixties may have been ahead of their time because current U.S. policy is anti-bra. The United States maintains a 17 percent tariff on imported bras. When you purchase an imported bra for $25.00, the tariff comprises $4.25 of the price.

Barriers to trade don't end there. Quotas regulate the quantity of goods and services imported, which increases the cost of those products. As a result, not only are prices higher, but producers have distorted what they export in order to make the most of the quota regime. For example, according to a study by Consumers for World Trade, as a result of the U.S. quotas on textiles, exporters focus on selling more expensive adult sweaters instead of lower-cost children sweaters since both count against the quota. The good news is that on January 1, 2005, all textile quotas will be eliminated when the World Trade Organization's multi-fiber agreement expires.

The U.S. government also employs tariff-rate quotas (TRQ), a combination of traditional tariffs and quotas. Once the quota limit is exceeded, a tariff is imposed. For example, the U.S. imposes a TRQ on imported sugar, which allows domestic producers to charge high prices for their product. The holiday cookies that you're baking cost more because of this policy.

From the televisions that we watch to the flowers we buy, free trade has lowered the prices we pay. But as the sugar and clothing examples indicate, much work remains to be done. Fortunately, Ambassador Robert Zoellick, the U.S. Trade Representative, cares about the global girl. Since taking office in 2001, Ambassador Zoellick has completed trade agreements with Australia, Bahrain, Central America, Chile, Jordan, Morocco, and Singapore just to name a few. These agreements have given American consumers lower prices and expanded choices while also giving American exporters greater access to foreign markets. Zoellick remains hard at work negotiating more agreements -- and more agreements mean more free trade, which is exactly what the global girl needs.

So this holiday season, while raising your cup of eggnog to toast the benefits of free trade, also be sure to put greater trade liberalization on your wish list for next year. The lower prices and greater variety more trade liberalization would create would make next Christmas even merrier.

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