U.S. Exporters Points
Negative Impact On Our Exporters:
●
Many U.S. based companies rely on their worldwide operations to make them
competitive in export markets by providing better services at lower costs. This includes
the advantage of a twenty-four hour work cycle for time critical projects and critical
customer service support. Forcing U.S. companies to maintain excess service capacity
where is not needed will only hurt their global competitiveness in major export markets –
which will, in turn, mean fewer jobs for U.S. workers overall.
●
The reality is that these worldwide operations are already in place: to impose restrictions
on their utilization will be asking U.S. companies to turn back the clock on their
investments costing all their stakeholders dearly.
●
Successive state administrations have been major supporters of increasing our state
manufacturing, agricultural and services exports to help grow our economy and jobs.
Changing the rules mid game in not fair to those of our companies that have taken up
this challenge.
●
State Development and Trade Promotion offices also actively seek to lure overseas
manufacturing and services companies to create jobs in their state because of pro
trade/pro growth policies. Restrictions on worldwide sourcing will scare off new
investments and could drive existing jobs to other more pro trade states.
●
U.S. federal trade negotiators have worked for nearly seventy years to open overseas
markets to U.S. exporters, and one of the toughest targets has been in opening
government procurement to fair competition. Through hard work and the simple fact that
free markets provide better products at lower costs, U.S. companies now contract to
build dams in Asia and to provide telecommunications systems in Latin America.
●
The Bush Administration is trying to expand this access for U.S. companies through a
dynamic strategy of national, regional and worldwide trade negotiations, with the goal of
opening overseas markets and leveling the playing field to help U.S. exporters.
Adopting this legislation will shoot these efforts in the foot by freezing U.S. export
opportunities, and will subject U.S. companies that sell overseas to retaliation from
markets they are currently doing business in.
●
Our trade partners will see this as a protectionist move by an isolationism U.S., at a time
when we depend on exports to help grow our economy and where U.S. business is one
of our best international ambassadors. Overseas governments will say fair is fair, and if
the U.S. can sell (insert local product in), then it is only right that we can offer our
services in (insert state).
Trade Agreement Points
Negative Impact on Trade Relations:
-
Trade agreements function on the basis of reciprocity – other countries open their
markets to the U.S. in exchange for us opening our market to them.
-
Other governments have a reasonable expectation that their competitive
opportunities in the U.S. market, including in the area of government procurement
in those cases where the U.S. has made commitments, will not suddenly be
reduced unilaterally. If the U.S. takes action at the federal level to break these
commitments (or the states take such action with respect to state and local
procurement), the federal government could be faced with owing other
governments compensation, or could face trade sanctions that will hurt U.S.
exporters and cost U.S. jobs in exporting sectors. Constitutional issues aside,
from an economic standpoint alone, this is a lose-lose proposition.
-
U.S. international commitments in the trade agreements involved generally fall into
two categories:
(1) Federal government procurement – The procurement restrictions violate the
WTO’s Government Procurement Agreement (GPA), or in some cases,
obligations promised to partners in bilateral free trade agreements (Israel,
Canada, Mexico, Chile, Singapore, and recently negotiated agreements with
Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua). Commitments
at the state level in these agreements vary, but newer agreements (e.g., Chile,
Singapore and the Central American FTAs) obligate a number of the states in
the conduct of their procurement activities; or
(2) Services commitments – Restrictions that require the redirection of calls from
overseas call centers to domestic ones discriminate against trading partners and
break past U.S. commitments covering federal and state activities with respect to
“communications services”, and depending on the sector in which the call
centers are operating, could violate U.S. commitments on a sectoral basis.
State actions that violate federal commitments leave the U.S. vulnerable to
paying compensation to trading partners to make up for the infractions, or give
trading partners reason to retaliate against U.S. producers and service
providers. Again, these actions put additional U.S. jobs at risk, rather than
creating job opportunities.
-
In an inter-connected world, it is necessary to look at the “unintended
consequences” of any policy action and to consider if there are other ways
to address the issue of concern that do not pose economic harms to the
U.S. economy as a whole.
-
For this reason, “trade adjustment assistance” to assist workers with
retraining needs and other transitional programs has been the traditional
domestic measure used to deal with economic changes that are directly
attributable to trade negotiations as the U.S. removes traditional trade
barriers through negotiations.
-
More broadly, the Bush Administration has proposed expanded worker
training and assistance programs as part of an effort to equip the U.S.
workforce to face the pressures resulting from international competition.
We can’t withdraw from the world; we have to improve on our strengths
and keep ourselves ahead of the game. We can’t react by closing our
market – this is a costly strategy that hurts us more than helps us, and
doesn’t make us more competitive in the world economy.
-
It also makes the U.S. look like an unreliable trading partner – this will
discourage other countries from buying from us in the long run and result
in loss of U.S. sales abroad to other countries that are perceived as
“friendlier”. Again, U.S. jobs would be lost as a result.
-
With one-third of the U.S. economy today tied to trade in some way, we
cannot afford to turn our back on the rest of the world.
Procurement Points:
-
37 states have committed themselves to follow the WTO’s rules on state
government procurement procedures. The draft legislative proposals could violate
those commitments, and leave the U.S. open to retaliation from affected trading
partners if the federal government doesn’t compensate them for lost opportunities
in the U.S. market.
-
For the other states, there could be violations of some FTAs – with Chile,
Singapore and the just-completed agreements with Central America, for example.
The U.S. is continuing to negotiate more FTAs – with Morocco, Thailand, Bahrain,
Kuwait, the South African Customs Union, Colombia, Peru, Ecuador and Bolivia at
the moment. The price tag for non-compliance with our international obligations
will only grow.
Services Points:
-
The U.S. economy is heavily dependent today on services. We are efficient, worldclass producers of services, and we need export markets for this largest part of our
economy, just as we did in the past for manufactured goods, so that we create
better economic opportunities at home.
-
More open economies for the flows of services across borders create the most
competitive conditions for U.S. services, and the best prospects for American
workers in the long run.
-
Finding effective ways to address temporary dislocations in the U.S. workforce,
while we successfully adjust to international competitive pressures, is the way the
U.S. economy has always been able to flourish. We’ve done so by not standing
still – by not trying to look back or stop the clock. This economy creates more jobs,
more quickly than any other economy in the world.