Tag: G20

Dispatch from the Front: The Week of November 8

The President travels further in Asia, the lameduck Congress draws closers, and the G20 meets in Seoul. Thursday is a federal holiday, Veterans Day, and the National Association of Manufacturers will be closed.

President Obama’s Trans-Asian Express takes him to Indonesia — barring further volcanic eruptions – South Korea and Japan. The G20 opens Wednesday in Seoul, with the President in attendance. Expect more public comments embracing trade, with the possibility of an announcement about moving forward with the U.S.-Korea Free Trade Agreement after the President parleys with his Korean peer, Lee Myung-bak. The President also attends the APEC summit in Yokohama starting Saturday, a stop that includes a tête-à-tête with new Japanese Prime Minister Naoto Kan.

It is the final week before 111th Congress returns for its first lameduck session on Monday, Nov. 15. Every day that passes brings the Jan. 1, 2011, tax increases closer, so expect more pre-session disputes, arguments, and “partisan squabbling.” But better a lameduck flap than a lameduck flop.

Economic Reports: On Tuesday, the Commerce Department releases wholesale trade inventories for September. Commerce releases international trade figures for September on Wednesday, with economists anticipating a narrowing of the trade deficit.

Executive Branch: U.S. Trade Representative Ron Kirk travels to Yokohama for the APEC summit  (USTR schedule). Fresh off his trip to Scotland and Ireland to promote “clean” energy, Energy Secretary Chu starts a new tour Sunday to China and Japan. Stops  include a visit to Huaneng Power’s carbon capture and storage project and on Monday, a tour of  GE’s China Technology Center. Interior Secretary Ken Salazar and HHS Secretary Kathleen Sebelius on Friday attend a groundbreaking ceremony for a new visitors center at the Tallgrass Prairie National Preserve in central Kansas.

Starting today in Washington, D.C., the National Oil Spill Commission and its Chief Counsel Fred Bartlit hold a two-day hearing on preliminary findings regarding BP’s Macondo well blowout

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As Korea Trade Agreement Waits, U.S. Influence Ebbs in Asia

Ambassador Ron Kirk, the U.S. Trade Representative, and his Korean counterpart, Trade Minister Kim, are meeting in San Francisco today to discuss issues surrounding the automotive and beef provisions in the U.S.-Korea free trade agreement. You will recall that this summer, President Obama met with Korean President Lee and announced the two countries would discuss outstanding issues on autos and beef where the U.S. government had some concerns.

President Obama set the November 11-12 2010 G-20 meeting in Seoul as the date by which these discussions should be concluded and an agreement reached for submission to Congress.

So, there’s a lot riding on the meeting today between Kirk and Kim. As I noted yesterday in a Reuters article, no one expects the two Trade Ministers to come to an agreement today – but it’s a great opportunity for them to have an in-depth, frank and open discussion on what needs to be done and how it can be done. This meeting will, if past history is any guide, be followed by additional discussions and meetings, leading up to an agreement that President’s Obama and Lee can at some point around the G-20 meetings.

The National Association of Manufacturers certainly encourages the two Ministers to keep talking and moving forward. This agreement is extremely important to manufacturing in America – Korea is one of our largest trade partners and an key export market for our manufacturing products. Manufactured goods are almost two-thirds of all U.S. exports of goods and services to Korea.  I don’t discount the key importance the agreement has to our agriculture and services sectors, but this is overwhelmingly a manufacturing agreement.

There are clear economic consequences if an agreement cannot be reached. On Monday, U.S.  columnist Doug Bandow of the Cato Institute had a piece, “Korea Pact Essential to the U.S.” published in The Australian newspaper. He started off by noting:

US unemployment remains high. China is ever more confident and has displaced America as the No 1 trading partner with leading East Asian states. How have the Obama administration and Democratic congress responded to these challenges? By retreating economically from Asia. The US-South Korea Free Trade Agreement sits unratified in Washington. This policy was remarkable for both its economic and geostrategic folly.

My emphasis. I should note the Australians are racing toward the finish line of their own bilateral FTA with Korea. Bandow continues: (continue reading…)

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G20 Ministers’ Agreement: No Magic Wand on Currency

The Group of 20 (G20) finance ministers’ agreement over the weekend is an important step forward on currency relationships and global rebalancing –- establishing a framework that is necessary to move forward in a constructive and cooperative way to resolve significant imbalances among major global economies, but it is not a magic wand resolving the underlying problems.

The communiqué recognizes that trade imbalances must be dealt with and that multilateral agreement is preferable to unilateral action. The communiqué contains a commitment for countries to move toward market determined exchange rates that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies. (News coverage.) All that is to the good, and reflects hard work on the part of the U.S. Treasury.

The key, of course, is implementation of these principles and continued coordination, as large surplus countries like China and Germany need to increase domestic demand and move away from an economic model dependent on exports for growth, and large deficit economies like the United States and some European countries take steps to save and export more. This is not easy, as there are conflicting priorities within countries. (continue reading…)

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In Korea, an Approaching and Crucial Deadline for Trade

Doug Goudie, Director of International Trade Policy for the National Association of Manufacturers, has been reporting from a business and trade mission to South Korea.

This will be my last blog from Korea, as we are completing our final day of meetings. It will not be my last blog ON Korea, however – I will be doing a “macro” kind of blog next week on what we might expect leading up to the crucial KORUS FTA deadline of the G20 meeting in Seoul on Nov. 11-12.

I say “deadline” because, really, it is a very important date set by President Obama. Mr. Obama, at the G20 in Toronto in June 2010, announced he was instructing his negotiators to resolve outstanding auto and beef issues with their Korean counterparts. Mr. Obama noted he wanted this done by the Seoul G20 summit so that when he and President Lee meet there, they can conclude the KORUS and declare it final, and President Obama can then send the completed agreement to Congress for approval in the months that follow.

This is key: While not every “i” needs to be dotted and “t” crossed by the end of G20 on KORUS, if there is no agreement and announcement on resolution of autos and beef, it means the KORUS agreement is in trouble, timing-wise. It means a crucial deadline has been missed. If you want an example of what happens when negotiators miss deadlines, take a gander at the last 10 years of the WTO Doha Round.

That’s an extreme example of course — well, we’ve waited over 3 years on KORUS already — but the G20 deadline is key because it will involve the two Presidents, who agreed to this back in June. Their personal involvement will be crucial to achieving a successful resolution. If they cannot, it is doubtful we’ll see agreement soon, and that could impact Congressional movement on KORUS next year.

After our myriad meetings this week, I continue to be confident that there will be agreement on the outstanding provisions and an announcement at the G20 on KORUS, which clears the way for Congressional approval before mid-year 2011.

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In Korea, Business and Manufacturing Delegation Seeks Trade Opportunities

Doug Goudie, Director of International Trade Policy of the National Association of Manufacturers, is representing manufacturing in America and NAM’s member companies and associations on a U.S. business delegation to Korea this week. The delegation is in Seoul to meet with senior Korean government officials and private sector representatives to demonstrate the commitment of the U.S. business community for passage of the U.S.-Korea FTA. He’ll be posting updates to the Shopfloor blog.

Monday, 6:45 P.M. Seoul (5:45 A.M. in DC)

We’ve arrived in Seoul on a very smoggy day. Not much on tap for this afternoon/evening – recovering from the long flight seems to be first order of business. This week-long visit by a strong representative group of U.S. companies and trade associations will be meeting with very senior Korean government and private-sector officials to show our support for passage of the U.S.-Korea Free Trade Agreement.

Our message is simple and direct – this agreement will benefit both countries, in all sorts of ways. It will drive growth in U.S. exports, it will drive employment growth, it will benefit manufacturing in America. It is a very strong agreement, especially for manufacturing (it is our largest agreement since NAFTA in terms of two-way trade and projected export growth). Nearly 90 percent of all U.S. exports to Korea are manufactured goods. The U.S. International Trade Commission forecasts a growth of $10 billion annually in U.S. exports after the KORUS agreement takes effect.

President Obama has been clear since his statement at the G20 meeting in Canada in June — and the Coalition supports his position — that outstanding issues in automotive and beef provisions must be addressed before this agreement can be sent to Congress for approval. The NAM has been clear from signing of this agreement in June 2007 that there are automotive issues, particularly in the non-tariff area of standards and regulatory actions, which need to be addressed before the agreement can pass Congress. President Obama has set a deadline of the G20 meeting in Seoul on November 11-12 (which he will attend) for resolution of outstanding issues. We are here to ensure that the Korean negotiators are fully aware that the U.S. business community supports this position.

However, first thing tomorrow, we begin bright and early with a breakfast with Kang Man-soo, Chairman of the Korean President’s Council on Competitiveness, some orientation meetings with some of the AmCham Korea company members, and a dinner with the Executive Board of the AmCham Korea. Wednesday we visit the DMZ during the day, among other activities and meetings.

I must say again, we have an excellent and diverse group represented in this U.S. business delegation, organized by the U.S.-Korea Business Coalition for Free Trade. The U.S. Chamber of Commerce serves as the secretariat of the coalition and is represented here, led by Tami Overby, who headed up the AmCham Korea before joining the Chamber. NAM is the Chair of the Manufacturing Committee for the Coalition.

As Bill Lane of Caterpillar has noted on earlier U.S. business delegation visits to Colombia and Panama: Manufacturers represent two-thirds of U.S. exports – and we’ve got the NAM here. Services represent two-thirds of U.S. jobs – and we’ve got the Coalition of Services Industries here. And Agriculture – well, the farmers represent two-thirds of the votes in Congress – and the Farm Bureau is here. All three pillars are represented, as are our member companies.

Tomorrow, I’ll look at why this agreement is so important to U.S. manufacturers and look at how we’re falling behind on trade – and what might happen if we don’t get back in the car and put our foot on the gas.

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President Names U.S.-Korea Trade Pact as Priority. Good!

Following a bilateral meeting with Korean President Lee Myung-bak in Toronto on Saturday, President Obama announced that the United States Trade Representative will work closely with its counterparts in Korea to resolve pending issues in the U.S.-Korea FTA by November so that the administration could submit the agreement to Congress in the following months. As President Obama said:

I want to make sure that everything is lined up properly by the time that I visit Korea in November. And then in the few months that follow that, I intend to present it to Congress. It is the right thing to do for our country. It is the right thing to do for Korea. It will strengthen our commercial ties and create enormous potential economic benefits and create jobs here in the United States, which is my number one priority.

Great news!  Korea is more than a $300 billion annual import market, and we are on the verge of being shut out as the European Union implements its trade agreement with Korea – so if the President sends the agreement up in early 2011, we will be able to avoid the export and job loss.  The National Association of Manufacturers (NAM) has done its Congressional nose count, and the votes are there.  All that is needed is for the President to say this agreement is in our interest and he wants it passed.

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Calling China to Account on the Doha Round

Back in May, the NAM issued a statement on just-concluded WTO discussions in Paris that commented, “The only way that a balanced Doha Round outcome that benefits all nations – including the United States, but especially including the least developed countries – can be obtained is if U.S. Trade Representative Ron Kirk and his negotiating team make it plain that the United States will settle for nothing less.”

As the G-8/G-20 talks begin in Toronto, we are particularly pleased to see a very senior member of Ambassador Kirk’s negotiating team is making it plain.

Deputy U.S. Trade Representative Michael Punke is the U.S. ambassador and America’s top negotiator at the World Trade Organization (WTO). In an interview with Reuters, he quite pointedly blames China for stalling negotiations in the ongoing Doha Round, saying “When it comes to China we’re getting no engagement whatsoever, not even in terms of process.” (continue reading…)

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Revving Up for G20, with Doha Implications

A good Reuters preview of the G20 gathering in PIttsburgh, “ANALYSIS-G20 heads to Pittsburgh with flat tire on trade.” Excerpt:

To bolster chances of meeting the end-2010 target for finishing Doha, the European Union has proposed an interim deadline of the end of 2009 for agreeing on the key formulas for cutting tariffs on farm and industrial goods, as well as reining in domestic farm subsidies.

U.S. businesses fear that could mean a deal without clear new export opportunities for them.

“We have not been seeking meaningful market access for eight years just to throw it away because someone wants an artificial deadline,” said Frank Vargo, vice president in charge of trade for the National Association of Manufacturers.

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A Leader for Our Times, Or At Least the Cherry Blossom Festival

The National Cherry Blossom Festival opened in Washington today, and Pennsylvania Avenue in front of the White House and Treasury was full of tourists this morning despite the cool and damp. Welcome!

Major disruptions on the Metro, of course. From The Washington Post, “2 Trains Derail; Delays Expected.”

In Congress next week, the talk turns to the federal budget where lawmakers have reduced the projected deficit by cutting the President’s 10-year budget to five years. Major tax increases planned on business and individuals. Small businesses to get hammered.

Reasons for optimism, always. Bloomberg, “U.S. Stocks Gain on Bank Plan, Poised for Best Month Since 1991.”

President Obama heads to London this week, and AP reports, “Obama pumps up his policy, regulatory agenda.” Some are predicting anti-capitalist riots and the breakdown of public order. A thought — President Obama could seek input from new Commerce Secretary Gary Locke, who was governor of Washington in 1999 during the WTO debacle. We’d offer our own hard-earned wisdom from Seattle: There’s no appeasing anarchists, yobbos or anything thing inbetween.

At least in the world of finance, there may be lessons to be found further back in history, so we look today to Albert Gallatin and his statue on the north side of the U.S. Treasury Building. The Swiss-born Gallatin settled in Pennsylvania, served in Congress where he helped to found the House Finance Comittee, and eventually became the longest serving U.S. Treasury Secretary (May 14, 1801 to February 8, 1814). As Treasury Secretary he was the Anti-Hamilon, and he helped finance the Lewis & Clark expedition without raising taxes. His contributions to the explorations are marked by the naming of the Gallatin River in Montana.

The inscription on the statue:

ALBERT GALLATIN
SECRETARY OF THE TREASURY
GENIUS OF FRANCE
SENATOR AND REPRESENTATIVE
COMMISSIONER FOR THE TREATY OF GHENT
MINISTER TO FRANCE AND GREAT BRITIAN
STEADFAST CHAMPION OF DEMOCRACY
1761-1849  

 

And yes, that’s a magnolia tree, not cherry, in the background.

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