Archive for November, 2009

On 10th Anniversary of Seattle WTO, Let’s Move on Trade Liberalization

(Frank Vargo, the National Association of Manufacturers’s vice president for international economic affairs, is blogging from Geneva this week at the ministerial meeting of the WTO. This is his first report.)

This afternoon, Monday, November 30, 2009, marks the official start of the 2009 Geneva Ministerial Meeting of the World Trade Organization (WTO). Whether by design or coincidence, the Ministerial starts on the 10th anniversary of the failed Seattle Ministerial, which opened on November 30th, 1999. November 2009 is also the 8th anniversary of the launch of the Doha Round of trade negotiations.

I am in Geneva, and I was at Seattle. There are similarities and differences. The anti-globalization protests at Seattle were vicious, lengthy, and very destructive. So far, the protests in Geneva have been relatively mild, with some destruction, but limited to a small minority of the demonstrators. We’ll see what happens today.

There are also similarities in the status of the negotiations. The Seattle Ministerial failed not because of the demonstrators but because of failure to reach agreement – principally between the United States and Europe over agriculture and sectoral agreements in industrial trade. Agriculture seems, after eight years of negotiation, to be agreed but for a handful (albeit a difficult handful) of issues, but the sectoral trade agreements (eliminating tariffs in major industrial sectors) is still an unresolved issue.

The Ministerial meeting that starts today ostensibly is not for the purpose of negotiating the Doha Round. Instead the official focus is on reviewing the WTO’s activities and its contribution to development. In talking with people, though, it is clear that Doha is the big undercurrent. The hope is that with so many trade ministers gathered in one place, informal discussions can lead to a narrowing of differences among countries that can clear the way for negotiations early next year.

If those differences are not narrowed, it will be extremely difficult to wrap up the Doha Round in 2010, which is the current objective (the first goal was 2005). The differences are still profound. In the key area of manufactured goods, which comprise about 70 percent of world trade in goods and services, the gulf that has been there since the round started is still there: The advanced developing countries are unwilling to provide major cuts in their tariffs and trade barriers.

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Dispatch from the Front: The Week of November 30

Congress returns from the Thanksgiving recess to act on health care and the death tax, and the economy dominates the week with concern about jobs, jobs and jobs. And Dubai debt. And jobs. And Afghanistan. And jobs.

President Obama meets with Australian Prime Minister Kevin Rudd today, with troop commitments in Afghanistan on the agenda. The war is the topic of the President’s primetime speech at West Point Tuesday evening. On Thursday, the President holds a White House forum to talk about jobs, and then he heads to Allentown and Lehigh Carbon Community College for the first stop of a “listening tour.” Did someone say carbon? The week also sees the President and Cabinet secretaries prepare to fly to Copenhagen for climate-and-economy-control talks next week.

The Seventh Session of the WTO Ministerial get under way in Geneva today. U.S. Trade Representative Ron Kirk’s statement.

The U.S. Senate convenes at 2 p.m. today and at 3 p.m. turns to the health care bill, H.R. 3590, starting with amendments. For Senate hearings, go here.

The House convenes at 2 p.m. Tuesday. Among the 17 bills on suspension are two with R&D implications: H.R. 3029, establishing a demonstration program for gas turbines in combined cycle power generation, and H.R. 3598, the Energy and Water Research Integration Act. The major bill of the week is H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act — establishing a 45 percent rate with a $3.5 million exemption.

House Hearings: House Financial Services on Wednesday marks up H.R.2609, the Federal Insurance Office Act, and H.R. 3996, the Financial Stability Improvement Act. (Details.) House Transportation’s aviation subcommittee holds a hearing Wednesday on commercial space transportation. A House Science subcommittee separately considers the safety of human space flight. A House Agriculture subcommittee eyes the potential economic impacts of climate change on the farm sector. The House Select Committee on Energy Independence and Global Warming holds a hearing, “The State of Climate Science.” Financial Services on Wednesday considers the FHA’s 2009 actual report. A House Ed & Labor subcommittee, a hearing, Examining the Delphi Bankruptcy’s Impact on Workers and Retirees.” An Energy and Commerce subcommittee on Wednesday considers the impact of H.R.3795, the Over-the-Counter Derivatives Markets Act, on energy markets. (Details.)

Senate Hearings: Senate Agriculture holds a hearing on OTC derivatives on Wednesday, with Treasury Secretary Geithner testifying. Also Wednesday, Senate Energy and Natural Resources Committee reviews policy options for reducing greenhouse gas emissions. (Details.) The committee on Thursday considers H.R. 3276, the American Medical Isotopes Production Act. The Judiciary Committee on Wednesday holds a hearing, “Has the Supreme Court Limited Americans’ Access to Courts?” Those who answer yes want to ease pleadings standards in federal civil litigation, that is, to allow the filing of civil suits by just making a claim, reversing Supreme Court rulings in Iqbal and Twombly. On Thursday, Judiciary holds a business meeting on S. 448, the federal media shield, and the nomination of the controversial, liability-expanding Louis Butler to be a U.S. District Court judge in Wisconsin. Senate Environment and Public Works on Wednesday holds an oversight hearing on the Federal Toxic Substances Control Act, expected to be a big issue in 2010. Senate Banking on Thursday holds a confirmation interrogation of Fed Chairman Ben Bernanke.

Executive Branch: Education Secretary Arne Duncan speaks this evening in D.C. at the opening of “The Innovation Economy Conference” sponsored by Intel and the Aspen Institute. Last week Duncan outlined the Obama Administration’s program for improving science and math education.

Economic Reports: The world watches Wall Street this week, rooting against the sentiment, “Dubai? Do sell!” AFP further reports: “Investors will have a full economic calendar to digest, including the ISM manufacturing index and construction spending on Tuesday, and the Federal Reserve’s Beige Book on the economic outlook on Wednesday. The key monthly unemployment rate and payrolls data caps the week Friday.” See also Washington Post’s week ahead.

And! CNBC at 8 p.m. Wednesday broadcasts an hour-long special from Pittsburgh about the manufacturing economy, “Meeting of the Minds: Rebuilding America.” Panelists are: Bill Ford of Ford, Dan DiMicco of Nucor, Leo Gerard of United Steelworkers; Jeff Immelt of General Electric; Secretary of Labor Hilda Solis, and the NAM’s John Engler. More from CNBC.

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Justice on the Side of Power, Power on the Side of Justice

Needed electricity? Good jobs? Economic growth in a struggling area of Virginia?

Old Dominion Electric Cooperative’s proposed Cypress Creek Power Station in Dendron, Va., would accomplish all those good things. According to ODEC’s thorough website for the project, www.cypresscreekpowerstation.com (and fact sheet), the project entails constructing a one- or two-unit base load electric generation facility yielding 750 MW to 1,500 MW of power by 2016. Peak construction would put more than 2,000 people to work, and permanent operations would require 200 full-time employees, with potentially 160 being local hires.

The plant would be fueled by coal and biomass, i.e., wood waste. Of course, coal invites reactive opposition — but mostly from outside the immediate region. (Driving through that part of Southeastern Virginia last weekend, we saw many more signs supporting the plant than opposing.)

The Smithfield Times covered the Surry County Planning Commission’s five-hour hearing Monday, leading the week’s paper with the story, “Marathon hearing on coal plant“:

Many of the plant’s outspoken opponents were from outside Surry County. A sizeable number were students at The College of William and Mary and environmentalists with groups such as the Sierra Club.

Some plant supporters complained about the high number of non-Surry residents at the meeting.

“I’m sick and tired of outsiders coming in here and telling us what to do,” Surry resident Barbara Seward said.

She and other supporters said that the environmental and health risks were being exaggerated, that they trusted ODEC to be a good corporate citizen, and that the community in a time of economic hardship.

Of course, you don’t have to be a local resident to exercise your First Amendment rights, but the outside opposition still seems arrogant and elitist. Critics show no sensitivity to important “environmental justice” issues.

You know, “environmental justice?” It’s usually the rallying cry of those who claim businesses construct operations in poor or minority communities to exploit the communities’ powerlessness. It’s divisive class warfare, often part of a shakedown for government largess, and unfortunately given a federal imprimatur going back to the George H.W. Bush Administration in 1992 and most lately reaffirmed by President Obama’s Environmental Protection Agency. But since the slogan is what counts for argumentation these days …

  • It’s a just cause to support jobs, strong communities and the supply of reliable baseload electricity.
  • OEDC is not-for-profit, member-owned cooperative, meeting the public’s demand for power.
  • We know the Sierra Club’s goal is a world with no coal, making electricity more expensive and hurting low-income ratepayers.
  • But who in the hell do the pampered kids at William and Mary think they are?

The conclusion is clear: It’s the supporters of the Cypress Creek Power Station who have “environmental justice” on their side.

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John Engler: For More Jobs, Enact U.S.-Colombia Free Trade Pact

John Engler, president of the National Association of Manufacturers, has an op-ed marking the third anniversary of the signing of the U.S.-Colombia Free Trade Agreement. From The Bradenton Herald, “U.S.-Colombia free trade pact will boost employment, if passed“:

With unemployment topping 10 percent nationally, President Obama has increasingly stressed the importance of manufacturing and U.S. exports in creating jobs.

In an early November meeting with his Economic Recovery Advisory Board, the president called for “mechanisms that we can start putting in place where we see the kind of growth that used to characterize the U.S. economy — export-driven growth, manufacturing growth.”

One mechanism is already in place, and in fact, has been for three years: the U.S.-Colombia free trade agreement. If exports and jobs are truly priorities, it’s time for the White House to finally submit the agreement to Congress for enactment.

The argument is especially timely this week as President Obama holds a White House jobs forum. A Reuters headline characterized the goal, “Obama jobs forum to seek growth boost on the cheap.” Enacting a Free Trade Agreement with Colombia certainly fills the bill.

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Two Other Obituaries of Note — Men Who Protected Lives

The Virginian Pilot has an excellent obituaries page. From Friday:

Robert A. Fuhrman, 1925-2009, “Lockhead executive led missile programs“:

Robert A. Fuhrman, a pioneering Lockheed engineer who played a central role in the creation of the Polaris and Poseidon missiles before rising to the top of the aeronautics and aerospace giant, died Saturday in Pebble Beach, Calif. He was 84.

Fuhrman, a longtime resident of Pebble Beach, had blood clotting in his lungs, said Sherman N. Mullin, former president of Lockheed’s Skunk Works, the division that produces top-secret military aircraft.

During more than three decades at Lockheed, Fuhrman served as president of three of its companies: Lockheed-Georgia, Lockheed-California and Lockheed Missiles & Space. He became president and chief operating officer of the corporation in 1986 and vice chairman in 1988 before retiring in 1990.

Lester Shubin, 1925-2009, “He showed that fabric meant for tires could stop bullets“:

 

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RIP, Edward Stimpson, Who Helped Save an Industry

From The Associated Press, “Edward Stimpson, aviation advocate, dies at 75

BOISE, Idaho — Edward Stimpson, an aviation advocate who pushed to rejuvenate struggling small aircraft manufacturers in the 1990s by limiting lawsuits against them, has died after a five-month illness. He was 75…

Stimpson, president of the General Aviation Manufacturers Association for 25 years, was a major proponent of legislation signed by President Bill Clinton in 1994 to prevent general aviation companies from being named as defendants in lawsuits in crashes of small planes 18 years old or older.

The legislation that Stimpson was such an effective advocate for was the General Aviation Revitalization Act, or GARA. The General Aviation Manufacturers Association explains the importance of the law and its 18-year statute of repose:

The General Aviation Revitalization Act (GARA) created an 18-year statute of repose for general aviation aircraft and reinvigorated the industry, creating jobs and inspiring the development of new products, while making general aviation safer and more reliable than ever.

In 1994 when GARA was signed into law by President Bill Clinton, airplane shipments had declined 95 percent from the previous decade and the industry had lost over 100,000 jobs. Cessna Aircraft Company, the largest general aviation manufacturer in the world, had stopped making single-engine piston airplanes. Piper Aircraft Company was in bankruptcy and Beech Aircraft had shut down most of its piston production lines. A review of all the lawsuits defended by one company over a ten year period found that the NTSB had not attributed the cause of these accidents to design defects. Yet, that company had paid nearly $535,000 per accident in litigation costs. In 1994 Congress, airplane manufacturers, owners, and pilot groups all finally agreed that GARA was the only solution to solving the frivolous lawsuit problem.

We honor a man who represented manufacturers so ably while improving the quality of life for Americans. His achievements were many, marked in 1998 by his receiving the Wright Brothers Memorial Trophy for public service in aviation.

More …

 

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Responding to China, Copenhagen

In today’s Wall Street Journal, “China, U.S. Square Off on Climate Proposals“:

The world’s top two greenhouse-gas-producing countries for the first time offered specific targets for controlling their emissions, but their broad promises ahead of a United Nations climate summit merely set the terms for a high-stakes struggle over money and future economic growth.

The NAM is cited:

The National Association of Manufacturers said Thursday in a statement that it wants additional details on the Obama administration’s pledge: “As we evaluate this proposal, we will do so with an eye toward its impact on American jobs, our economic recovery and long-term growth.”

 

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If Jobs Are the Issue, Why the New Taxes, Regulations?

From The Washington Times today, “Health, climate bills seen to stifle hiring“:

While President Obama and congressional leaders say they would like to do more to spur job creation, economists and business executives warn that their plans to impose new health care and climate-change costs on corporations would have the opposite effect.

The initiatives, according to this analysis, are likely to overwhelm any positive impact on jobs from stimulus measures by giving businesses a reason to keep laying people off.

Seems painfully obvious. Or prospectively painful, obviously.

The NAM’s John Engler is quoted on taxes included in the health care legislation:

While President Obama and congres — sional leaders say they would like to do more to spur job creation, economists and business executives warn that their plans to impose new health care and climate-change costs on corporations would have the opposite effect.

The initiatives, according to this analysis, are likely to overwhelm any positive impact on jobs from stimulus measures by giving businesses a reason to keep laying people off.

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Falling Down, Falling Behind, Losing Out on Trade

Investor’s Business Daily editorializes on the United States falling behind as a nation and economy benefitting from trade, arguing in “Losing Out Big Time” that the decline must be reversed quickly or become a permanent disadvantage.

Tuesday, Cato Institute economist Daniel Griswold took issue with U.S. Trade Representative Ron Kirk’s congratulatory claim that the U.S. is “the most open market in the world.”

Actually, it slipped from No. 2 in 2000 to No. 26 in 2007, the last year for which data are available, in Cato’s 2009 Economic Freedom of the World annual report.

“If an Olympics were held for the most open economy, the United States would be out of medal contention,” Griswold wrote, citing tariffs, regulatory barriers and other factors.

It’s reportedly down to No. 28 in 2008 data, and getting worse. Given that size of government, freedom to trade internationally and regulation are the criteria used in Cato’s index, you can bet that the U.S. ranking will drop even lower in 2009.

It puts the U.S. behind Hong Kong, Singapore, the United Arab Emirates, Chile, the Netherlands, Ireland, Switzerland, Slovakia and Estonia, all nations that have seen their living standards rise based on an aggressive strategy of free trade.

Here’s Griswold’s column at Cato@Liberty, “U.S. ‘the Most Open Market’? Not Even Close.

Investor’s Business Daily also cites the NAM’s Frank Vargo, who has analyzed export data and finds that the United States ranks last among 15 industrialized countries in the percentage of its manufactured goods exported. (See this Shopfloor.org post.) The editorial concludes:

Competitiveness isn’t lost through a single event; rather, it’s lost over time as the effects of many bad policies are felt. Right now, on trade, the U.S. is going in the wrong direction. It could turn things around quickly by getting back on the free-trade bandwagon.

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Debased Climate Science and EPA Endangerment Findings

Kim Strassel’s “Potomac Watch” column in today’s Wall Street Journal is based on an interview with Sen. Jim Inhofe (R-OK), ranking member of the Senate Environment and Public Works Committee, reacting to the climate science e-mail controversy. It’s Inhofe who gives Strassel’s column its title, “‘Cap and Trade Is Dead’,” arguing that politics and the now the scientific scandal from East Anglia makes climate-control legislation impossible. That’s Congress, but …

There’s still the EPA, which is preparing an “endangerment finding” that would allow it to regulate carbon on the grounds it is a danger to public health. It is here the emails might have the most direct effect. The agency has said repeatedly that it based its finding on the U.N. science—which is now at issue. The scandal puts new pressure on the EPA to accede to growing demands to make public the scientific basis of its actions.

Mr. Inhofe goes so far as to suggest that the agency might not now issue the finding. “The president knows how punitive this will be; he’s never wanted to do it through [the EPA] because that’s all on him.” The EPA was already out on a legal limb with its finding, and Mr. Inhofe argues that if it does go ahead, the CRU disclosure guarantees court limbo. “The way the far left used to stop us is to file lawsuits and stall and stall. We’ll do the same thing.”

An EPA endangerment finding and implementation of CO2 emission limits through a “tailoring rule” is legally suspect, to be sure, as an attempt by the Executive Branch to rewrite the Clean Air Act. Still, all the statements from the EPA and Administrator Lisa Jackson have pointed in that direction.
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