From the San Jose Mercury News, “China delays requirement Web-filtering software on PCs“:

Under pressure from the U.S. government, the global tech industry and its own citizens, the Chinese government has delayed a controversial mandate set to kick in today that would require all new personal computers to be loaded with Web-filtering software capable of blocking pornography and objectionable political sites….[snip]

The Chinese government has insisted the software is a tool for parents to prevent children from viewing pornography and other offensive Web sites. But civil liberty activists, international tech associations and the U.S. government, as well as many Chinese bloggers, oppose the measure

The National Association of Manufacturers last week joined other business and trade associations in taking the unusual step of sending a letter directly Chinese Premier Wen Jiabao opposing the demand that so-called Green Dam software be installed on every PC. (Letter here.)

BusinessWeek’s regional editor for Asia, Bruce Einhorn, suggests China’s leaders may learn for this policy incoherence, maybe. From “China Censorship: After the Green Dam Fiasco“:

Maybe China’s top officials will realize that this pattern - announce a draconian new policy, prompt an international outcry and then reverse course - is just too embarrassing for an economic super power.

From President Obama’s joint news conference Monday with Colombia’s president, Alvaro Uribe. President Obama:

We discussed, most prominently, the interests of both countries in moving forward on a free trade agreement.  This is something that has been discussed for quite some time.  I have instructed Ambassador Kirk, our United States Trade Representative, to begin working closely with President Uribe’s team on how we can proceed on a free trade agreement.  There are obvious difficulties involved in the process and there remains work to do, but I’m confident that ultimately we can strike a deal that is good for the people of Colombia and good for the people of the United States.

Indeed it IS something that has been discussed for quite some time. At some point, soon, the President will need to say, “I call on Congress to enact the U.S.-Colombia Free Trade Agreement,” or the discussions will go on ad infinitum.

Delay might be a defensible strategy if the goal is to satisfy U.S. political constituencies like organized labor, but it does nothing for the U.S. exports and the economy. In the meantime, other countries like Canada will gain market share in Colombia at U.S. expense.

NPR’s “Morning Edition” program last week featured an informative interview with Jeff Immelt, CEO of General Electric, emphasizing GE’s support for trade as an engine of economic recovery and emphasizing the need for government policies that foster U.S. competitiveness.

From “GE Calls For More Exports To Aid Economy“:

Immelt tells host Renee Montagne that the U.S. consumer can’t be the “sole engine of economic growth” in the same way they’ve been over the past two decades. “And for this economy to recover fully, it’s got to be led by business investment, and it’s got to be led by exports,” he says.

Trade deficits and the erosion of the manufacturing base in the U.S. are among the things that have to be fixed, he says. Immelt says the government will also have to focus on improving exports. …[snip]

Immelt says: “In the places where you have relatively high labor costs, they’ve got to be more productive.” The labor in any facility, he says, has to be able to compete on a “global basis.”

Immelt says the government can take steps to help improve productivity. “My sense is that there should be a real definitive desire to make the country more competitive and to try to make sure that we can export more because that’s where the growth is going to be.”

So that’s the big policy picture. Then there’s what the company itself is doing, as described in a GE news release from Friday, “GE To Open Advanced Manufacturing Technology & Software Center in Michigan“:

FAIRFIELD, Conn.–26 June 2009– The General Electric Company (NYSE:GE) today announced that it will open an advanced manufacturing technology and software center in Michigan. The center is expected to grow to more than 1,100 GE employees over the next few years.

The Advanced Manufacturing and Software Technology Center will include a GE research and development facility that will be part of GE’s Global Research network. It will house scientists and engineers who will develop next generation manufacturing technologies for GE’s leading renewable energy, aircraft engine, gas turbine and other high-technology products. Such work will include development of composites, machining, inspection, casting and coating technologies for GE’s Aviation and Energy businesses.

GE is constructing the new, $100 million facility as Visteon Village site in Van Buren Township, Wayne County, about 25 miles from Detroit. News coverage…

• Reuters, “GE sets Michigan research site, calls for renewal“
• Detroit News, “GE to bring high-paying jobs“
• Bloomberg, “GE to Open Michigan Center, Add at Least 1100 Jobs“

Very good news and excellent corporate leadership.

President Uribe of Colombia meets with President Obama in the White House Monday. The Obama Administration has embraced trade as an impetus for exports and jobs, much more than one would have expected based on the 2008 campaign rhetoric. U.S. Trade Representative Ron Kirk especially has emerged as a consistent and clear advocate of trade agreements to boost the U.S. economy.

Now it’s time for the President to be just as clear, by making this statement: “I call on Congress to enact the U.S.-Colombia Free Trade Agreement as soon as it returns to Washington from the Fourth of July break.”

For more, see this paper from the Heritage Foundation, “President Obama and Colombia’s Uribe Meeting: A Pivotal Hemispheric Encounter.” The National Association of Manufacturers has a fact sheet and materials on the U.S.-Colombia FTA here.

From the AP, “Companies appeal to China to drop Web filter plan“:

BEIJING (AP) — Global business groups have made an unusual direct appeal to Chinese Premier Wen Jiabao to scrap an order for PC makers to supply controversial Internet filtering software, citing security and privacy concerns.

Just days before the deadline to comply with China’s order, the letter from 22 chambers of commerce and trade groups representing the world’s major technology suppliers adds to pressure on Beijing to halt the plan following an official protest by Washington.

The order requires manufacturers to pre-install or supply “Green Dam Youth Escort” software with PCs made for sale in China beginning Wednesday.

John Engler, president of the National Association of Manufacturers, was one of the signers of the letter. (Letter here.) The core argument:

China’s recent decision to mandate the inclusion of Green Dam Internet filtering software in all computers sold in China effective July 1, 2009, however, raises serious concerns for us and seems to run counter to China’s important goal of becoming a vibrant and dynamic information-based society. More specifically, the Green Dam mandate raises significant questions of security, privacy, system reliability, the free flow of information and user choice.

We want to underscore that we recognize and support the use of effective and responsible parental controls. Yet the breadth, scope and technology-specific nature of the mandate veers markedly from global approaches and solutions.

Human rights group also object.

From the Heritage Foundation, Foundry blog, “Waxman-Markey Cap and Trade’s Biggest Losers: Manufacturing“:

[Politicians] want to protect manufacturing jobs, yet they are hastily moving forward with a cap and trade bill that will deal a crushing blow to the U.S. manufacturing sector. The higher energy costs from cap and trade will kill economic activity and jobs. This is particularly true of manufacturing jobs.

Just how bad will it be? Economists in The Heritage Foundation’s Center for Data Analysis estimate that manufacturing jobs will fall on average by 400,000. Peak year unemployment in the manufacturing sector alone rises by almost 1.4 million.

The United States and the European Union today initiated World Trade Organization (WTO) dispute settlement procedures against China for it trade-distorting export restrictions on critical raw materials. Those materials, such as coking coal, are vital inputs to U.S. and other manufacturing, and China’s action has hiked world prices for those inputs while holding China’s internal prices down. That gives China an unfair competitive advantage and is directly contrary to the promises that China made when it joined the WTO. (See Ambassador Kirk’s statement, USTR materials.)

America’s manufacturers have been hurt by these practices, and the National Association of Manufacturers (NAM) has pressed the U.S. Government to take action to get China to stop. As our press release today indicates, we strongly support the action taken today.

I am surprised, though, at some of the press reaction feeling this is a negative step. For example, the Guardian’s website has a headline screaming, “China and U.S. head for trade war.” Ridiculous. The WTO dispute settlement mechanism is in effect the international trade court for the world — the impartial place you go to resolve trade disputes so you don’t have to have a trade war.

While I am sure China will say they haven’t done anything wrong and will contest the charges before the WTO, China’s past record on settling and complying with WTO cases has been pretty good. I expect that they will abide by whatever decision the WTO makes this time, though it would be really good if China recognized they are in the wrong and voluntarily came into compliance.

An e-mail from the USTR:

Ambassador Kirk to Make Trade Announcement: US to File WTO Case Against China
 
Five minutes from now, U.S. Trade Representative Ron Kirk will announce to the press that the United States has requested World Trade Organization (WTO) dispute settlement consultations with the People’s Republic of China regarding China’s export restraints on numerous important raw materials.
 
For American industrial manufacturers, this is a critical step toward market equality.  China’s export restrictions on a broad range of raw materials have given unfair competitive advantages to their own manufacturers while raising the costs of doing business for U.S. companies, and we believe they violate bedrock WTO rules.
 
As this case proceeds, American businesses can expect U.S.T.R. to press vigorously for redress that will balance the scales and create high-quality opportunities for American workers. 
 
Ambassador Kirk will outline the details of the case in his announcement.  Full video of his remarks will be posted on the U.S.T.R. website as soon as it becomes available. 

The movie “Crude” uses documentary film techniques to launch a one-sided, fact-challenged but well-crafted attack against Chevron for environmental damage supposedly caused by the operations of Texaco in Ecuador. (Chevron bought Texaco in 2001.) The directors have been showing the movie to friendly audiences around the film-festival circuit, including last week at the American Film Institute’s “SilverDocs“* festival in Silver Spring, Md.

Perhaps despite themselves, the moviemakers reveal an awful lot about the nature of the litigation scheme.

The photo shows U.S. trial lawyer Steven Donziger, the moving force behind the lawsuit filed on behalf of the Frente de Defensa de la Amazonia (AKA Amazon Defense Coalition), being introduced to Rafael Correa, the president of Ecuador. As the post immediately below describes, Correa is a radical, anti-American politician in the mode of Venezuela’s Hugo Chavez and Bolivia’s Evo Morales.

In the movie Donziger and his Ecuadorian colleague, Pablo Fajardo, fly to Philadelphia to solicit more financial support for their litigation from Joe Kohn, a partner in Kohn, Swift and Graf. Kohn cheerfully explains to the camera that the lawsuit is, indeed, intended to be a money-making venture. (Photo below: Kohn, left, chats with Donziger in the Philadelphia law offices.)

And here’s the House lobbyist registration form from 2008, in which über-lobbyist Ben Barnes signs his firm up to lobby for Kohn, Swift and Graft on issues related to Ecuador and the environment. Which would be…

The campaign against Chevron rests on a foundation of falsehoods, misrepresentation and emotional appeals.

But when you have the Ecuadorian government, self-styled documentarians, big-time lobbyists, not to mention Sting’s wife Trudie, all on your side, who needs the facts?

More on the film and the alliance against a U.S.-based energy company soon.

* The SilverDocs prizes were announced today. “Crude” did not win any awards.

Disclosure: I recently traveled to Ecuador on Chevron’s dime to get a first-hand view of the territory over which the lawsuit makes numerous claims. Chevron is a member of the NAM. But I’ve been posting on this lawsuit since September 2008.

The Wall Street Journal’s Mary Anastasia O’Grady cites recently captured documents from Colombia’s FARC guerillas  to demonstrate what was already clear to any dispassionate observer of South American politics: Ecuador’s president, Rafael Correa, is no friend of the United States — or of freedom, for that matter. From “The FARC’s Ecuadorean Friends“:

Previously undisclosed documents, fruits of the Colombian military’s raid on a Revolutionary Armed Forces of Colombia (a.k.a. FARC) camp in Ecuador in 2008, came into my hands last week.

The FARC’s second in command, Raúl Reyes, was killed in that raid. But he left behind laptop computers containing correspondence detailing a cozy relationship not only with Venezuelan President Hugo Chávez but also — the fresh documents reveal — with the government of Ecuadorean President Rafael Correa.

Someone should tell the White House. Ten days ago, President Obama called Mr. Correa to, according to a spokesman, “congratulate him on his recent re-election.” Mr. Obama also wanted to “express his desire to deepen our bilateral relationship and to maintain an ongoing dialogue that can ensure a productive relationship based on mutual respect.”

Mr. Correa is anything but respectful of U.S. interests in the region. He’s more like Fidel Castro — albeit with a Ph.D. in economics from the University of Illinois. Under his rule, liberty has been evaporating faster than you can say bolivariano. Now the Reyes letters provide strong evidence that he has been actively supporting the Marxist FARC guerrillas, who see the U.S. as a major enemy.

For some reason, Correa’s radicalism has escaped the same sort of media scrutiny in the United States that Chavez and to a lesser extent Bolivia’s Evo Morales have received. But like the other two, he’s debased the rule of law and governs an an explicitly anti-American leader.

Ecuador’s policies have flown in the face of the mutually beneficial trade relationships that the United States seeks to engage in. Major U.S. business groups, including the National Association of Manufacturers, recently wrote U.S. Trade Representative Ron Kirk highlighting the country’s growing disrespect for the law and asking for a review of Ecuador’s continued eligibility for U.S. trade preferences under the Andean Trade Preference Act (ATPA).

From the letter, which was signed by the NAM, Business Roundtable, Emergency Committee for American Trade, National Foreign Trade Council, United States Council for International Business, and the U.S. Chamber of Commerce:

While both Peru and Colombia have successfully used this program to promote economic diversification and new opportunities, while also strengthening their own legal systems and respect for the rule of law, the same cannot be said of Ecuador.

In particular, there are serious concerns within the U.S. business community about breaches of the basic rule of law that are occurring in Ecuador, contrary to the basic eligibility requirements of section 203(c). As found by the State Department in its annual human rights report on Ecuador released in February 2009, there are concerns with “corruption and the denial of due process within [Ecuador’s] judicial system.” U.S. businesses have also continued to see Ecuador’s repudiation of its legal obligations to U.S. investors and a politicization of the judicial system.

Given these basic gaps in the rule of law, we believe that the automatic renewal of Andean preferences for Ecuador would send the wrong message to other developing countries in the hemisphere and throughout the world that have worked to meet the basic eligibility criteria to qualify for U.S. trade preferences. We note that Bolivia has already lost its ATPA benefits as a result of its failure to meet the ATPA eligibility criteria and that Bolivia’s actions continue to worsen.

O’Grady notes that Colombia’s President Uribe visits Washington next week. Indeed, Colombia has built on APTA to broaden and strengthen its economy and expand democratic liberties in the country. If Congress is serious about expanding U.S. exports, creating more jobs in the U.S. export sector, and supporting a democratic ally in a troubled region, it would immediately pass the U.S.-Colombia Free Trade Agreement. It’s that clear.

The wall poster of Cuban murderer Che Guevera is on the side of a building on the major route from downtown Quito to the international airport. I shot it during a recent trip to Ecuador as a guest of Chevron, a U.S. company being attacked by a coalition of U.S. trial lawyers, environmental activists and political forces in Ecuador.