Last week, the NAM Executive Committee was in town for a jam-packed one-day meeting. They handled a little business at NAM headquarters first, then headed to the Pentagon for a briefing– first by the Vice-Chair of the Joint Chiefs of Staff, Admiral Edmund Giambastani, then Deputy Secretary of Defense Gordon England and finally Secretary of Defense Don Rumsfeld. All were enormously generous with their time and were candid, frank and insightful with this group of manufacturing leaders. In the evening, over dinner they met with Frank Lavin, Commerce Department Undersecretary for International Trade.
All the sessions were off the record, of course, but Frank Lavin had some good nuggets on trade that we wanted to pass along. He’s a really smart guy who has spent about a quarter century at the highest levels of the trade beat, including a stint as the Ambassador to Singapore. He had two great lines in particular that stuck with us. He talked about the impact of technology on the world trading system and how it had brought about “the death of distance.” What a great concept. Later, asked about the seeming disconnect between the current performance of the economy and the public perception of it, he noted that “anxiety was out-pacing economic activity”. Again, a great and insightful point.
On energy, he said we never want to get to the point where energy availability is an economic restraint, a point we are fast approaching. Finally, he pointed out that 42% of all US exports are with countries with which we have a free trade agreement (FTA), putting the lie to the canard that trade agreements cause trade deficits. Regular blog readers know that over 90% of our manufacturing trade deficit is with countries where we have no FTA. The fact is, despite the naysayers, FTA’s open markets to US-made goods.
All in all, an interesting day.
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