TRADEMilken Institute Issues Manufacturing Study A lengthy study by the Milken Institute, commissioned by the National Association of Manufacturers (NAM), was recently released. The "Jobs for America" report provided a prescription for the national beleaguered manufacturing sector based on tax policies, loosening export restrictions and making massive investments in energy, highways and bridges, and other large projects. Combined the initiatives would create more than 11 million jobs over the next decade. Specifically the Institute recommends a 10-year plan that includes:
Support for TRADE Bill Grows A majority of the House Democratic Caucus now supports the TRADE bill that rewrites and/or scraps new trade agreements and a handful of existing ones. That could be bad news for a Trans-Pacific trade accord backed by President Obama, as well as the Doha Round of multilateral trade talks and particularly for bilateral pacts with Colombia, South Korea and Panama negotiated by former President Bush. While the TRADE bill is not expected to become law, it is considered an important barometer on potential trade votes. While enough Republican and business-friendly Democrats could be counted on for majority support, House Democratic leaders are considered unlikely to put forward a party-splitting bill. Business groups argue that shelving the trade deals will do nothing to create jobs and could do the opposite. Buy America Bills Introduced House and Senate allies of labor successfully included in a $150 billion stimulus bill for infrastructure spending "Buy American" requirements. The provision required that American-made materials be used for construction, alteration, maintenance or repair of transportation and infrastructure projects funded in the bill. They also included language tightening what they consider loopholes that help companies get around Buy American rules. Following up on that success, Rep. Daniel Lipinski (D-IL) introduced a broader, stand-alone Buy American bill (HR 4251) that he said would eliminate loopholes in existing domestic sourcing laws and ensure that taxpayer money is used to purchase American-made products and support American jobs whenever possible. Sen. Russ Feingold (D-WI) said he would introduce companion legislation in the Senate. Free-trade advocates argue that Buy American provisions amount to protectionism and can inadvertently hurt US companies, many of which use global supply chains and source their own materials abroad. Update on FTAs There has been talk from both sides of Pennsylvania Avenue on the various pending free trade agreements. USTR Kirk recently delivered a report to Congress on the 2010 trade agenda that emphasizes a successful conclusion to the Doha round of global trade negotiations as well as a regional partnership with Asia-Pacific countries. However, no promises were made regarding languishing bilateral pacts with Panama, Colombia and South Korea. Those agreements, which were negotiated by the Bush Administration and have run into serious opposition among House Democrats, are given only two paragraphs in the 17-page agenda outline. With respect to Colombia, Kirk added that the Obama Administration would finalize a list of requirements for the Colombian government within the next several months in terms of promoting worker rights and reducing violence against labor officials in that country. The Colombia pact has been halted since former President Bush made it one of his top economic and foreign policy priorities, even submitting it for a vote in the House in 2008 without the consent of Democratic leaders. LEGISLATIONBill Introduced to Withdraw from NAFTA Rep. Gene Taylor (D-MS) has introduced a bill (HR 4759) to withdraw the United States from the North American Free Trade Agreement (NAFTA). The bill currently has twenty-two sponsors. While it has no chance of becoming law, the legislation is a clear shot across President' Obama's bow as the White House attempts to figure out its overseas economic engagement strategy. Many Democrats blame Clinton and NAFTA for their loss of control of Congress the following year in 1994. While campaigning in 2008, Obama pledged to renegotiate or pull out of NAFTA, but the realities of governing quickly melted away that promise. Many House Democrats are angry that he hasn't done more to live up to his campaign rhetoric, and Obama's comments on the topic since taking office have been conciliatory to both sides. To solicit co-sponsors for his bill, Taylor circulated a graph showing a 29 percent decline in US manufacturing employment since 1993, or a loss of nearly 5 million jobs. "NAFTA discourages investment in US manufacturing facilities and accelerates the erosion of our industrial base," he stated. House Ways and Means Trade Subcommittee ranking member Kevin Brady (R-TX) said Taylor's approach was misguided. He said NAFTA was the combined largest market for US goods in 2009, with exports to Canada and Mexico totaling $333 billion> Last year actually produced a slight $6 billion combined surplus in manufactured goods with the two countries, he said. "It may be popular to bash NAFTA, but the fact of the matter is that repealing it would kill American jobs, deepen our recession, and threaten our relationship with two key allies," said Brady. NAM Director of International Trade Policy Doug Goudie said over the past decade NAFTA has "brought US manufacturers enormous opportunities for growth, particularly with regard to export-driven jobs." Taylor's bill to scrap NAFTA is aggressive compared to the bill (HR 3012) introduced by Rep. Michael Michaud (D-ME) earlier this year. Michaud's bill calls for a new trade policy that includes a long list of labor, environment, investment and consumer protection standards for trade deals. Several major pacts, including NAFTA, would face renegotiation under the Michaud bill. Kirk Questioned on Trade Talks USTR Kirk was questioned at length by House lawmakers in anticipation of the first round of Trans-Pacific Partnership (TPP) talks. Fifteen to 20 members of the Trade Working Group in the House, mostly Democrats, peppered Kirk for more than an hour about the TPP negotiations. In particular, they took Kirk to task by detailing massive job losses in their districts they say are the result of US trade policies. Kirk stressed White House enforcement actions and efforts to pry open foreign markets. He cited the Administration's moves to slap tariffs on low-cost Chinese tire imports that had flooded the market; efforts to end bans on US poultry exports; and citation of Canada for intellectual property violations. However, he did concede that the Doha Round of world trade talks will likely not reach a successful conclusion this year. Rep. Michaud (D-ME), sponsor of the TRADE Act, said he got the impression the Administration was placing more of a focus on the TPP talks than on moving forward with stalled trade deals with Panama, Colombia and South Korea that were negotiated during the Bush Administration. Trade Working Group members want those agreements renegotiated, even though they incorporated tougher standards sought by Democratic leaders. Other members added concerns about the involvement of Brunei, Vietnam, Singapore and Peru in the TPP, particularly regarding their labor standards. The United States already has a free-trade pact with Peru but that country has gone back on some of the deal's labor provisions. Lawmakers said a major tenet of the deal has to be getting the other countries to agree to the same market-opening steps the United States agrees to which would help to bring labor unions on board. New Leader on Ways and Means, Trade Panels Upon the retirement of Charles Rangel as Chairman of the Ways and Means Committee, Rep. Sander Levin (D-MI) has taken over the gavel for this important panel. Replacing Levin as the Trade Subcommittee Chairman is retiring Rep. John Tanner (D-TN). Tanner's style is markedly different than Levin's on trade policy. Levin is seen as a point man for labor interests on Capitol Hill and is an ardent opponent of a trade deal with South Korea. However, Levin will still hold great sway over the panels trade agenda by virtue of his role as Chairman of the full Committee. Meanwhile the New Democrats released a "White Paper" reiterating their support for the stalled bilateral deals as well as the multilateral Doha round and TPP talks. The New Democrats also called on the Administration to renew "fast track" trade negotiating authority, a measure that was absent from President Obama's 2010 trade policy agenda report.
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