Emergency Committee For American Trade - Publications

Introduction

This year presents the United States with substantial opportunities to move forward with trade and investment liberalizing policies and legislation that support economic growth and a high standard of living and that benefit U.S. companies and U.S. workers:

The United States can play a leadership role in shaping and propelling negotiations globally, in the Western Hemisphere, in the Asia-Pacific and bilaterally throughout the world.
It can continue its leadership in promoting the protection of international investment worldwide.
It can resist domestic protectionist pressures, thereby setting an example of trade-liberalization for the rest of the world.
It can enable U.S. companies to compete on an equal playing field through the reauthorization of the EXIM Bank and the reform of U.S. export controls and sanctions laws.

Indeed, 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 and after. Over the last decade alone, U.S. exports have accounted for approximately 30 percent 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. Trade and investment not only support U.S. prosperity, they promote greater economic growth, freedom, and stability throughout the world.

U.S. trade policy remains, however, at something of a crossroads. The post-World War II consensus on the value of liberalizing trade and investment policies was shaken in the 1990s by Congress' failure to renew trade promotion authority, so-called trade-negotiating authority legislation or fast track, since its expiration in 1994 and by protests against globalization in Seattle, Washington, D.C., and elsewhere.

Nevertheless, much progress was made last year: Most notably, the House of Representatives passed H.R. 3005, the Bipartisan Trade Promotion Authority Act. As well, Congress approved the U.S.-Vietnam Bilateral Commercial Agreement and implementing legislation to the U.S.-Jordan Free Trade Agreement.

Much remains to be done in 2002. The United States must continue efforts to 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 2002 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.

ECAT is committed to continuing to work with the Administration, Congress, and others in the private sector to help achieve that consensus and promote trade and investment liberalizing policy and legislation. In particular, ECAT will continue its active support for the passage and enactment of H.R. 3005, the Bipartisan Trade Promotion Authority Act. In addition, ECAT will continue its active efforts to ensure that the protection of foreign investment by U.S. companies remains a priority in ongoing and future negotiations despite pressures to curtail such protections.

ECAT will also continue to work on the advancement of trade and investment liberalization through comprehensive and trade-oriented bilateral, regional and global agreements. Chief among these negotiations that ECAT will be supporting in the coming year are the newly launched World Trade Organization (WTO) negotiations, negotiations to complete the Free Trade Area of the Americas by 2005, as well as 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.

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.

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.

In addition, ECAT will continue its unique role in combating efforts to impose protectionist barriers to imports entering the United States. As ECAT has made clear during the debate on whether to impose protectionist tariffs and/or quotas on steel imports, it is far better to promote innovative approaches, such as restructuring and cost competitiveness responses, for domestic industries facing import pressure, rather than limiting imports in a protectionist manner that increases costs for consumers and exporters and has overall negative implications for the U.S. economy.

ECAT also supports policies and legislation that will level the playing field for U.S. companies with their foreign competitors. In particular, ECAT 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 2002 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 the reform of U.S. sanctions laws.

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. In addition, ECAT will release its new study this year that will 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.

ECAT's Priorities

ECAT's priorities for this year are to:

Continue efforts to rebuild the consensus on trade and investment liberalization, including through promotion of Congress' passage of trade promotion authority legislation in 2002.
Promote the protection of investment abroad by U.S. companies as a priority in future negotiations.
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 the negotiation and implementation of comprehensive and trade-oriented bilateral, regional and global agreements that focus on the liberalization of trade and investment, including concrete progress on World Trade Organization and Free Trade Area of the Americas negotiations and new bilateral and regional negotiations and the completion and approval of Free Trade Agreement negotiations with Chile and Singapore.
Support the comprehensive review and transformation of trade adjustment programs to address more fully the needs of today's workers.
Promote innovative and effective strategies to provide support for domestic industries and their customers as a substitute to protectionist responses that would restrict the flow of imports to the detriment of the U.S. economy and U.S. consumers and exporters.


	Introduction This year presents the United States with substantial opportunities to move forward with trade and investment liberalizing policies and legislation that support economic growth and a high standard of living and that benefit U.S. companies and U.S. workers: The United States can play a leadership role in shaping and propelling negotiations globally, in the Western Hemisphere, in the Asia-Pacific and bilaterally throughout the world. It can continue its leadership in promoting the protection of international investment worldwide. It can resist domestic protectionist pressures, thereby setting an example of trade-liberalization for the rest of the world. It can enable U.S. companies to compete on an equal playing field through the reauthorization of the EXIM Bank and the reform of U.S. export controls and sanctions laws. Indeed, 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 and after. Over the last decade alone, U.S. exports have accounted for approximately 30 percent 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. Trade and investment not only support U.S. prosperity, they promote greater economic growth, freedom, and stability throughout the world. U.S. trade policy remains, however, at something of a crossroads. The post-World War II consensus on the value of liberalizing trade and investment policies was shaken in the 1990s by Congress' failure to renew trade promotion authority, so-called trade-negotiating authority legislation or fast track, since its expiration in 1994 and by protests against globalization in Seattle, Washington, D.C., and elsewhere. Nevertheless, much progress was made last year: Most notably, the House of Representatives passed H.R. 3005, the Bipartisan Trade Promotion Authority Act. As well, Congress approved the U.S.-Vietnam Bilateral Commercial Agreement and implementing legislation to the U.S.-Jordan Free Trade Agreement. Much remains to be done in 2002. The United States must continue efforts to 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 2002 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. ECAT is committed to continuing to work with the Administration, Congress, and others in the private sector to help achieve that consensus and promote trade and investment liberalizing policy and legislation. In particular, ECAT will continue its active support for the passage and enactment of H.R. 3005, the Bipartisan Trade Promotion Authority Act. In addition, ECAT will continue its active efforts to ensure that the protection of foreign investment by U.S. companies remains a priority in ongoing and future negotiations despite pressures to curtail such protections. ECAT will also continue to work on the advancement of trade and investment liberalization through comprehensive and trade-oriented bilateral, regional and global agreements. Chief among these negotiations that ECAT will be supporting in the coming year are the newly launched World Trade Organization (WTO) negotiations, negotiations to complete the Free Trade Area of the Americas by 2005, as well as 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. 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. 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. In addition, ECAT will continue its unique role in combating efforts to impose protectionist barriers to imports entering the United States. As ECAT has made clear during the debate on whether to impose protectionist tariffs and/or quotas on steel imports, it is far better to promote innovative approaches, such as restructuring and cost competitiveness responses, for domestic industries facing import pressure, rather than limiting imports in a protectionist manner that increases costs for consumers and exporters and has overall negative implications for the U.S. economy. ECAT also supports policies and legislation that will level the playing field for U.S. companies with their foreign competitors. In particular, ECAT 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 2002 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 the reform of U.S. sanctions laws. 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. In addition, ECAT will release its new study this year that will 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. ECAT's Priorities ECAT's priorities for this year are to: Continue efforts to rebuild the consensus on trade and investment liberalization, including through promotion of Congress' passage of trade promotion authority legislation in 2002. Promote the protection of investment abroad by U.S. companies as a priority in future negotiations. 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 the negotiation and implementation of comprehensive and trade-oriented bilateral, regional and global agreements that focus on the liberalization of trade and investment, including concrete progress on World Trade Organization and Free Trade Area of the Americas negotiations and new bilateral and regional negotiations and the completion and approval of Free Trade Agreement negotiations with Chile and Singapore. Support the comprehensive review and transformation of trade adjustment programs to address more fully the needs of today's workers. Promote innovative and effective strategies to provide support for domestic industries and their customers as a substitute to protectionist responses that would restrict the flow of imports to the detriment of the U.S. economy and U.S. consumers and exporters. 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