Emergency Committee For American Trade - Publications

Introduction

The United States faces crucial choices in 2001 on whether our trade and investment policies will continue to support our economic growth and high standard of living. Over the last century, the United States, now the world's largest trading nation, has enjoyed enormous prosperity in large part because of the open trade policies it adopted in 1934. Over the last decade alone, U.S. exports have accounted for one-quarter of U.S. economic growth and have contributed significantly to the high standard of living enjoyed by American workers and their families. Imports have improved the variety and availability of products throughout the United States, have increased the competitiveness of U.S. companies, and have been a significant factor in dampening inflationary pressures. As emphasized in the 2001 Trade Policy Agenda released by the United States Trade Representative, trade and investment not only support U.S. prosperity, they promote greater economic growth, freedom, and stability throughout the world.

In 2001, the United States has an important opportunity to move forward with trade and investment policies that continue to support U.S. prosperity. It can play a leadership role in shaping and propelling negotiations globally, in the Western Hemisphere, in the Asia-Pacific and bilaterally throughout the world.

Yet, U.S. trade policy is at a crossroads. The post-World War II consensus on the value of liberalizing trade and investment policies has been shaken in recent years as is evident from Congress' failure to renew trade promotion authority, so-called trade-negotiating authority legislation or fast track, since its expiration in 1994 and protests against globalization in Seattle, Washington, D.C. and elsewhere. Nevertheless, much progress was made last year, as the 106th Congress passed more trade legislation than any Congress in the last decade, including the authorization of Permanent Normal Trade Relations for China. The deep divides that exist on the objectives and scope of U.S. trade policy may limit, however, the United States' ability to play a leadership role in negotiations to create the Free Trade Area of the Americas (FTAA), in the World Trade Organization and elsewhere

It is critical, therefore, that the United States rebuild a national and bipartisan consensus on the value of trade and investment liberalization both as the foundation for Congress' passage of trade promotion authority in 2001 and to regain U.S. leadership on trade and investment liberalization. We must effectively make the case that expansionary trade and investment policies are essential to U.S. economic growth, including the growth of the new economy, and the high U.S. standard of living.

In particular, ECAT is committed to continuing to work with the Administration, Congress, and others in the private sector to define a set of concrete trade and investment liberalization objectives that will promote U.S. prosperity, including the specific benefits that the United States can reap from ongoing negotiations to conclude the FTAA, as well as other regional and bilateral pacts, and from the launch of broad negotiations in the WTO. These objectives must also recognize the importance of expansionary trade and investment policies as essential components in the continued growth of the new economy. To support that effort, ECAT has commissioned a new study on the linkages between the growth of the new economy and trade and investment policies.

These efforts will be integral to promoting actual trade and investment liberalization through comprehensive and trade-oriented bilateral, regional and global agreements. Chief among the trade liberalization objectives that ECAT will be supporting in the coming year are the completion of China's negotiations to enter the WTO and concrete progress at the Quebec Summit of the Americas in April on expediting negotiations to complete the FTAA before or by 2005. ECAT will also continue to support Congress' early approval of the U.S.-Vietnam Bilateral Commercial Agreement, the launch of a broad round of WTO negotiations encompassing agriculture, services, and industry, bilateral negotiations with Singapore, Chile and other countries, and further trade liberalization by the Asia Pacific Economic Forum (APEC). ECAT also supports unilateral efforts by the United States to promote trade liberalization, including through the renewal and expansion of the Andean Trade Preference Act and full implementation of the benefits for sub-Saharan Africa and the Caribbean Basin that were enacted as part of the Trade and Development Act of 2000. In order to facilitate the trade that promotes economic growth, ECAT is also committed to supporting efforts to modernize the operations of the U.S. Customs Service, particularly through the acquisition of a new automated system.

In supporting new liberalization, we also must reaffirm U.S. support for the multilateral trading system that has been the primary catalyst for global economic growth for the last half century. Global economic integration cannot continue to thrive and face the challenges ahead without strong rules-based global institutions built on international consensus. Greater transparency and further dispute settlement process reforms can strengthen the multilateral trading system. While the United States continues to face serious challenges in WTO dispute settlement cases, the United States continues to be the major beneficiary of the dispute settlement process.

ECAT also supports the reauthorization of the Ex-Im Bank's charter this year and full funding of Ex-Im, at least at FY 2001 levels. As well, ECAT supports ongoing efforts to re-authorize the Export Administration Act in 2001 and other revisions to U.S. export control laws in a manner that promotes U.S. technological leadership, while protecting national security.

ECAT also supports efforts by the Administration and Congress to extend and reformulate the three Trade Adjustment Assistance (TAA) programs -- TAA for workers, NAFTA-TAA and TAA for firms. As the U.S. economy has changed since the enactment of the original TAA programs, so have the needs of the U.S. workforce, particularly as technological development accounts for a substantial proportion of the dislocations experienced in the U.S. workforce. ECAT supports, therefore, an extensive review and transformation of these programs to address more fully the needs of today's workers. These programs are currently slated to expire on September 30, 2001.

ECAT will continue its trade education program to foster greater public understanding of the major role that trade and investment play in generating domestic and global economic growth. There will be two primary avenues for this program. First, ECAT has commissioned a new study to examine the nexus between the growth of the new economy and trade and foreign direct investment liberalization to help reinvigorate the debate on the importance of trade and investment liberalization. Second, ECAT will continue to expand its Trade: Discover the Opportunity (TDO) website-based employee trade outreach program launched in 1999. ECAT's messages were used in 1999 by the U.S. Alliance for Trade Expansion in preparing the business community materials for the Seattle WTO Ministerial and in 2000 in preparing business community materials and advertising in support of passage of Permanent Normal Trade Relations with China. This year ECAT will continue to expand its TDO program and again lend a hand to the broader business community trade outreach effort by assisting in the preparation of employee outreach materials on the importance of specific trade and investment liberalization objectives as the foundation for passage of trade promotion authority legislation.

ECAT's Priorities

ECAT's priorities for this year are to:

Rebuild the consensus on trade and investment liberalization as the foundation for Congress' passage of trade promotion authority legislation in 2001.
Reinvigorate the debate on trade and investment liberalization, including through the release of ECAT's upcoming study on the nexus between the growth of the new economy and trade and investment policies.
Promote comprehensive and trade-oriented bilateral, regional and global agreements that focus on the liberalization of trade and investment, including the completion of China's WTO accession negotiations, concrete progress on negotiations to complete the Free Trade Area of the Americas before or by 2005, Congress' approval of the U.S.-Vietnam trade agreement and the launch of comprehensive global negotiations as part of the WTO in 2001.
Support the comprehensive review and transformation of trade adjustment programs to address more fully the needs of today's workers.
Expand ECAT's employee trade outreach program and share ECAT's trade education messages with the broader U.S. business community in its efforts to rebuild support for trade expansion and to support efforts to pass trade promotion authority legislation.


	Introduction The United States faces crucial choices in 2001 on whether our trade and investment policies will continue to support our economic growth and high standard of living. Over the last century, the United States, now the world's largest trading nation, has enjoyed enormous prosperity in large part because of the open trade policies it adopted in 1934. Over the last decade alone, U.S. exports have accounted for one-quarter of U.S. economic growth and have contributed significantly to the high standard of living enjoyed by American workers and their families. Imports have improved the variety and availability of products throughout the United States, have increased the competitiveness of U.S. companies, and have been a significant factor in dampening inflationary pressures. As emphasized in the 2001 Trade Policy Agenda released by the United States Trade Representative, trade and investment not only support U.S. prosperity, they promote greater economic growth, freedom, and stability throughout the world. In 2001, the United States has an important opportunity to move forward with trade and investment policies that continue to support U.S. prosperity. It can play a leadership role in shaping and propelling negotiations globally, in the Western Hemisphere, in the Asia-Pacific and bilaterally throughout the world. Yet, U.S. trade policy is at a crossroads. The post-World War II consensus on the value of liberalizing trade and investment policies has been shaken in recent years as is evident from Congress' failure to renew trade promotion authority, so-called trade-negotiating authority legislation or fast track, since its expiration in 1994 and protests against globalization in Seattle, Washington, D.C. and elsewhere. Nevertheless, much progress was made last year, as the 106th Congress passed more trade legislation than any Congress in the last decade, including the authorization of Permanent Normal Trade Relations for China. The deep divides that exist on the objectives and scope of U.S. trade policy may limit, however, the United States' ability to play a leadership role in negotiations to create the Free Trade Area of the Americas (FTAA), in the World Trade Organization and elsewhere It is critical, therefore, that the United States rebuild a national and bipartisan consensus on the value of trade and investment liberalization both as the foundation for Congress' passage of trade promotion authority in 2001 and to regain U.S. leadership on trade and investment liberalization. We must effectively make the case that expansionary trade and investment policies are essential to U.S. economic growth, including the growth of the new economy, and the high U.S. standard of living. In particular, ECAT is committed to continuing to work with the Administration, Congress, and others in the private sector to define a set of concrete trade and investment liberalization objectives that will promote U.S. prosperity, including the specific benefits that the United States can reap from ongoing negotiations to conclude the FTAA, as well as other regional and bilateral pacts, and from the launch of broad negotiations in the WTO. These objectives must also recognize the importance of expansionary trade and investment policies as essential components in the continued growth of the new economy. To support that effort, ECAT has commissioned a new study on the linkages between the growth of the new economy and trade and investment policies. These efforts will be integral to promoting actual trade and investment liberalization through comprehensive and trade-oriented bilateral, regional and global agreements. Chief among the trade liberalization objectives that ECAT will be supporting in the coming year are the completion of China's negotiations to enter the WTO and concrete progress at the Quebec Summit of the Americas in April on expediting negotiations to complete the FTAA before or by 2005. ECAT will also continue to support Congress' early approval of the U.S.-Vietnam Bilateral Commercial Agreement, the launch of a broad round of WTO negotiations encompassing agriculture, services, and industry, bilateral negotiations with Singapore, Chile and other countries, and further trade liberalization by the Asia Pacific Economic Forum (APEC). ECAT also supports unilateral efforts by the United States to promote trade liberalization, including through the renewal and expansion of the Andean Trade Preference Act and full implementation of the benefits for sub-Saharan Africa and the Caribbean Basin that were enacted as part of the Trade and Development Act of 2000. In order to facilitate the trade that promotes economic growth, ECAT is also committed to supporting efforts to modernize the operations of the U.S. Customs Service, particularly through the acquisition of a new automated system. In supporting new liberalization, we also must reaffirm U.S. support for the multilateral trading system that has been the primary catalyst for global economic growth for the last half century. Global economic integration cannot continue to thrive and face the challenges ahead without strong rules-based global institutions built on international consensus. Greater transparency and further dispute settlement process reforms can strengthen the multilateral trading system. While the United States continues to face serious challenges in WTO dispute settlement cases, the United States continues to be the major beneficiary of the dispute settlement process. ECAT also supports the reauthorization of the Ex-Im Bank's charter this year and full funding of Ex-Im, at least at FY 2001 levels. As well, ECAT supports ongoing efforts to re-authorize the Export Administration Act in 2001 and other revisions to U.S. export control laws in a manner that promotes U.S. technological leadership, while protecting national security. ECAT also supports efforts by the Administration and Congress to extend and reformulate the three Trade Adjustment Assistance (TAA) programs -- TAA for workers, NAFTA-TAA and TAA for firms. As the U.S. economy has changed since the enactment of the original TAA programs, so have the needs of the U.S. workforce, particularly as technological development accounts for a substantial proportion of the dislocations experienced in the U.S. workforce. ECAT supports, therefore, an extensive review and transformation of these programs to address more fully the needs of today's workers. These programs are currently slated to expire on September 30, 2001. ECAT will continue its trade education program to foster greater public understanding of the major role that trade and investment play in generating domestic and global economic growth. There will be two primary avenues for this program. First, ECAT has commissioned a new study to examine the nexus between the growth of the new economy and trade and foreign direct investment liberalization to help reinvigorate the debate on the importance of trade and investment liberalization. Second, ECAT will continue to expand its Trade: Discover the Opportunity (TDO) website-based employee trade outreach program launched in 1999. ECAT's messages were used in 1999 by the U.S. Alliance for Trade Expansion in preparing the business community materials for the Seattle WTO Ministerial and in 2000 in preparing business community materials and advertising in support of passage of Permanent Normal Trade Relations with China. This year ECAT will continue to expand its TDO program and again lend a hand to the broader business community trade outreach effort by assisting in the preparation of employee outreach materials on the importance of specific trade and investment liberalization objectives as the foundation for passage of trade promotion authority legislation. ECAT's Priorities ECAT's priorities for this year are to: Rebuild the consensus on trade and investment liberalization as the foundation for Congress' passage of trade promotion authority legislation in 2001. Reinvigorate the debate on trade and investment liberalization, including through the release of ECAT's upcoming study on the nexus between the growth of the new economy and trade and investment policies. Promote comprehensive and trade-oriented bilateral, regional and global agreements that focus on the liberalization of trade and investment, including the completion of China's WTO accession negotiations, concrete progress on negotiations to complete the Free Trade Area of the Americas before or by 2005, Congress' approval of the U.S.-Vietnam trade agreement and the launch of comprehensive global negotiations as part of the WTO in 2001. Support the comprehensive review and transformation of trade adjustment programs to address more fully the needs of today's workers. Expand ECAT's employee trade outreach program and share ECAT's trade education messages with the broader U.S. business community in its efforts to rebuild support for trade expansion and to support efforts to pass trade promotion authority legislation. 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