Giants Players and Fans Understand the Value of a Neutral Umpire; So Do Manufacturers

As the San Francisco Giants walked onto the field at Kauffman Stadium in Kansas City last night, they knew it had been 35 years since a team had won game seven of the World Series on the road.  Yet, the Giant players were confident that their chances of winning were based on their performance and talents – not because the umpires on the field were biased toward the home team and provided special advantages to or favor the home team.

Whether you woke up this morning excited by the Giants win or disappointed that the Royals did not clinch their first World Series since 1985, last night’s World Series game displays a core element of the American psyche – the importance of fair referees that will arbitrate wins and losses without regard to a home field advantage.

And that is ultimately what investor state dispute settlement is all about.

You’ve probably seen lots of blogs and articles in recent weeks, particularly as the controversy over this more than 30-year old enforcement tool has erupted in Europe (even though it was Europe that created it).  For manufacturers, investor-state dispute settlement (or ISDS if you like acronyms) is not really that complicated at all.  It is about making sure that foreign governments keep their international commitments, respect private property and treat American manufacturers fairly and without discrimination.

Whether in countries like Ecuador or Venezuela that rank low on rule of law by Freedom House and Transparency International or well-established democracies where investors are concerned that local courts will give a home court advantage to the government whose actions they are challenging, ensuring a neutral and non-politicized resolution of a dispute is fundamental.

To succeed in an increasingly tough and competitive global economy where growth forecasts are falling, manufacturers oftentimes need to invest to reach the 95 percent of customers that live outside our markets or to be involved in projects and access resources outside our borders. Data collected by the U.S. Bureau of Economic Analysis demonstrates annually that growing investment overseas is a huge driver of exports, higher-paying American jobs and increased research and development and capital investments in the United States.

To succeed and bring benefits back home, manufacturers need to ensure that foreign governments will treat them fairly and respect the most fundamental of rights on which our own Constitution was based.  Investor state dispute settlement is a vital tool because its helps our manufacturers get a fair shake in the global economy.

If you want to learn more about this topic come join me at the Center for Strategic & International Studies tomorrow morning for a reality check on investor-state dispute settlement. And take a look at this piece by NAM President and CEO, Jay Timmons.

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The U.S. Economy Grew 3.5 Percent in the Third Quarter

The Bureau of Economic Analysis said that real GDP grew an annualized 3.5 percent in the third quarter, slightly higher than my forecast of 3.25 percent. This followed a decline of 2.1 percent in real GDP in the first quarter and a gain of 4.6 percent in the second quarter. As such, the U.S. economy grew a frustratingly slow 1.2 percent at the annual rate in the first half of 2014, which was a major disappointment. Still, consumer and business spending strengthened in the second quarter, and we continued to see gains in these areas in the third quarter, albeit with some easing in the pace of growth. In addition, after seeing net exports serve as a drag toward growth in the first half of the year, they were a positive contributor this time around, which was encouraging. (continue reading…)

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The Federal Reserve Ends Its Latest Quantitative Easing Program

The Federal Open Market Committee (FOMC) has decided to end its quantitative easing (QE) program, which means that it will cease its purchases of long-term and mortgage backed securities. This move was expected, as it was largely telegraphed over the summer, and the Fed has continued slowing its purchases since tapering began in December 2013. It also noted its intentions to end QE when outlining its framework towards normalizing monetary policies last month. (continue reading…)

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Congress Needs to Reinstate the R&D Tax Credit: Manufacturers Depend on It

The research and experimentation tax credit — aka the R&D tax credit — is intended to be an incentive for companies to invest in critical domestic R&D, which creates high-wage jobs here in the U.S. and leads to the innovative products and new technologies that are so important to our economy. Unfortunately, it’s been almost a year since the R&D credit expired, increasing costs and creating uncertainty for thousands of manufacturers conducting R&D. (continue reading…)

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Breaking Down Barriers is Key to Building Up India’s ICT Industry

Since Indian Prime Minister Modi took office in May, he has encouraged investor optimism at home and abroad by vowing to open greater opportunities to trade with and manufacture in India. The Prime Minister has outlined several bold pro-growth economic reforms, including a promising “Digital India” initiative, and recently met with President Obama on enhancing trade and investment ties.

Unfortunately, Modi’s pro-growth messages have yet to be translated into concrete actions in the telecommunications sector. (continue reading…)

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Richmond Fed: Manufacturing Activity Continued to Expand at Fastest Pace in Nearly 4 Years

The Richmond Federal Reserve Bank said that manufacturing activity continued to expand at its fastest pace since December 2010. The composite index of general business conditions rose from 14 in September to 20 in October. It was the seventh consecutive monthly expansion since the winter-related contractions in both February and March. Indeed, much like other regional surveys, these data show an uptick in demand and production for manufacturers recently, with a mostly upbeat assessment for the coming months.

Looking specifically at current activity, manufacturing leaders in the Richmond Fed district noted sharply higher paces for new orders (up from 14 to 22) and shipments (up from 11 to 23). (continue reading…)

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Conference Board: After Ebbing in September, Consumer Confidence Rebounded in October

The Conference Board said that consumer sentiment rebounded in October after ebbing in September. The Consumer Confidence Index rose from 89.0 in September to 94.5 in October. This was higher than the 93.4 reading observed in August, and both figures were the highest since October 2007, seven years ago and pre-dating the recession. Overall, Americans have become more confident over the course of the past year. In October 2013, the index stood at 72.0, and the public was worried about economic growth in light of the budget deadlock and the government shutdown. (continue reading…)

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New Orders for Durable Goods Were Surprisingly Soft in September

The Census Bureau said that new durable goods orders were surprisingly soft in September, decreasing 1.3 percent. To be fair, much of that decline stemmed from lower defense and nondefense aircraft sales – a highly volatile segment of the market were orders are often quite choppy. Excluding transportation, new durable goods orders were off 0.2 percent, which was somewhat more favorable, even as it continued to reflect weakness. It is perhaps worth noting that retail sales were also lower in September, with consumer spending quite cautious overall. Therefore, this latest report would be somewhat consistent with that finding. (continue reading…)

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Manufacturing Leaders Deliver Recommendations to Obama Administration

Today, manufacturing thought-leaders, including many NAM-member company CEOs, delivered the Advanced Manufacturing Partnership 2.0 report to the Obama Administration. The report includes recommendations that recognize the importance of advanced technology to manufacturing products and processes as well as the necessity of a skilled workforce to sustain the manufacturing comeback. (continue reading…)

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Leadership Road Show Heads to North Carolina

As the election grows nearer and nearer, the issues facing manufacturers – and the American economy – continue to grow in importance. This week, NAM President and CEO Jay Timmons traveled to Charlotte, North Carolina to discuss with local manufacturing leaders the question of what’s at stake in the upcoming midterm elections, and to consider the role of the Tar Heel State in our nation’s ongoing manufacturing comeback. (continue reading…)

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