Here's the Friday podcast. Enjoy.
http://washingtontradedaily.com/podcast224.MP3
Friday, February 24, 2012
Tuesday, February 21, 2012
Re-inventing the Wheel
In what was billed as far-reaching remarks and an ensuring President Memorandum to agencies issued after a swing across the west coast, "King" Obama issued his directive to his subjects to do what is right.
Below is a point-by-point description of how the pronouncements are far from revolutionary and amounts to simply "re-inventing the wheel."
Export Promotion Cabinet – already established as part of the 2010 National Export Initiative. As far as I could find out the cabinet has met once or twice since its inception. When first created, I immediately thought this would be a good way to hold "cabinet" meetings on trade without the President actually attending. President Reagan – who took trade seriously – had a better idea. He would call occasional cabinet meetings – that he attended – devoted to the topic of trade.
Last week the President also cited his previous idea of creating a super Department of Trade – which would integrate at least a half dozen US trade agencies, including the US Trade Representative. He also admits that Congress is not likely to give him that authority. Already on the books is a subcabinet-level coordinating structure known as the Trade Policy Review Committee. WTD was told recently that the committee has not met during the Obama Administration.
A Presidential memorandum to agencies released during his west coast visit also suggests greater "on the ground" coordination among the four major export and investment promotion agencies. Well, several years ago the Bush Administration established so-called "one-stop" shops whose responsibilities would be divvied up and shared among the various Commerce Department and Small Business Administration regional offices – and Ex-Im Bank’s two regional offices. As the case for most initiatives developed in Washington, the effort had a good start – and even a restart – a few years back, but succumbed to the fate of the Washington bureaucracy.
Budget constraints resulted in cut-backs on the ground. There was less and less money for Commerce/SBA officials to travel back to Washington to learn the inner workings of how to fill out applications the Export-Import Bank, for example. When push came to shove, international lending programs at the SBA came in low on the list of priorities, falling behind domestic lending programs. So that dried up a well.
The Friday memorandum also calls for a "consolidated" export budget that would compare spending – hence priorities – across agencies. Guess what? That law – drafted under a Congressional directive – is still on the books. But, the Office of Management and Budget has never implemented it because it would screw up the decades-old method of writing agency-centric budgets.
As an afterthought, the President announced in his speech in Seattle establishment of a new small-business direct lending program run by Ex-Im Bank – which has been under the Bank’s consideration for some time. A new revolving credit fund of up to $500,000 would be provided in six- to 12-month terms to qualified small business exporters. Well, that program – at least in theory – already is in place. There has been an understanding for years between policy-makers at Ex-Im and SBA that very small small business loans would be provided by SBA and Ex-Im would do the bigger small business business. One problem is the inadequate administrative budget at Ex-Im which limits the time personnel can spend on scrutinizing and approving applications.
As a footnote in the piles of paper coming out from the White House last week was something billed as the first major overall of the Foreign Trade Zones program in 40 years. A read-through indicates that application approvals for full trade zones should be shortened from 12 months to four months. Applications of subzones would be done in five months instead of 10. The real problem with the Commerce Department-run FTZ program is that it is situated in the department’s import administration – with its unique mind set – even though the great bulk of manufacturing and assembly taking place in those zones are directly exported and never enter the country. One big flaw in the program requires zone-based firms to pay antidumping and countervailing duties on their "imported" inputs. The National Association of Foreign Trade Zones has been fighting unsuccessfully for years to get both aspects of the program changed.
Friday, February 17, 2012
Wednesday, February 15, 2012
Another Kirk Failure
CAUTION! The following is the second in a series of hyper-critical blogs on why US Trade Representative Kirk is a woeful failure at his job.
Congratulations are in order for US Trade Representative Ron Kirk for achieving another milestone toward his ultimate goal of dismantling his office.
The latest success came in the introduction this week of the President’s fiscal 2013 government-wide budget. Billed as a trade enforcement budget by Administration officials, the money proposal to Congress suggests a boost in trade enforcement funds by $26 million – of which $24 million will go to a new trade enforcement center within the Commerce Department’s International Trade Administration. Two million dollars – a little less than 8 percent of the increase – will be allocated to USTR.
The last I’ve heard is that USTR’s job is to negotiate new trade rules – either bilaterally, regionally or multilaterally – and then enforce those rules through the World Trade Organization or other tribunals. Commerce’s ITA has a hard-working staff within its foreign commercial service which quietly and effectively resolves some real-time problems that US exporters have on the ground. But, except for litigating import cases, it has no real expertise in trade warring.
Under terms of the new budget proposal, USTR – along with other agencies, including the Small Business Administration, the US Export-Import Bank, the Overseas Private Investment Corporation and the tiny US Trade and Development Agency – will feed into the new coordination role of Commerce.
So USTR becomes a bit player in the process?
The last self-destructive move by USTR Kirk was his failure to even moderate President Obama’s "brain-child" of an idea to construct a super Commerce Department, which would encompass the other trade-related agencies – minus those in the Agriculture Department and State Department. USTR would be a subservient part of that restructured bureaucracy with no special role.
The singular – and initial – mistake made by Mr. Kirk was to pull the rug out from under the 10-year-old Doha Development Agenda multilateral trade negotiations. By doing so he essentially undercut his own agency’s reason for being.
The only optimistic scenario that can be seen for the near future is the election of a Republican to the White House. Leading Republican candidate Mitt Romney has already said as President he would move quickly to call a summit of Western Hemisphere leaders because the region has been largely ignored by the current Democratic Administration. Under "Republicanship" you can also look to US strong backing for a real re-start to the Doha trade round in Geneva.
Any comments?
Jim Berger
Congratulations are in order for US Trade Representative Ron Kirk for achieving another milestone toward his ultimate goal of dismantling his office.
The latest success came in the introduction this week of the President’s fiscal 2013 government-wide budget. Billed as a trade enforcement budget by Administration officials, the money proposal to Congress suggests a boost in trade enforcement funds by $26 million – of which $24 million will go to a new trade enforcement center within the Commerce Department’s International Trade Administration. Two million dollars – a little less than 8 percent of the increase – will be allocated to USTR.
The last I’ve heard is that USTR’s job is to negotiate new trade rules – either bilaterally, regionally or multilaterally – and then enforce those rules through the World Trade Organization or other tribunals. Commerce’s ITA has a hard-working staff within its foreign commercial service which quietly and effectively resolves some real-time problems that US exporters have on the ground. But, except for litigating import cases, it has no real expertise in trade warring.
Under terms of the new budget proposal, USTR – along with other agencies, including the Small Business Administration, the US Export-Import Bank, the Overseas Private Investment Corporation and the tiny US Trade and Development Agency – will feed into the new coordination role of Commerce.
So USTR becomes a bit player in the process?
The last self-destructive move by USTR Kirk was his failure to even moderate President Obama’s "brain-child" of an idea to construct a super Commerce Department, which would encompass the other trade-related agencies – minus those in the Agriculture Department and State Department. USTR would be a subservient part of that restructured bureaucracy with no special role.
The singular – and initial – mistake made by Mr. Kirk was to pull the rug out from under the 10-year-old Doha Development Agenda multilateral trade negotiations. By doing so he essentially undercut his own agency’s reason for being.
The only optimistic scenario that can be seen for the near future is the election of a Republican to the White House. Leading Republican candidate Mitt Romney has already said as President he would move quickly to call a summit of Western Hemisphere leaders because the region has been largely ignored by the current Democratic Administration. Under "Republicanship" you can also look to US strong backing for a real re-start to the Doha trade round in Geneva.
Any comments?
Saturday, February 11, 2012
Friday, February 3, 2012
Thursday, February 2, 2012
Steve Lande -- A Consummate Negotiator
WTD published last week an extensive "interview" with consummate US trade negotiator and long-time Washington advisor on trade policy Stephen Lande. To say that it was an interview is a misnomer. It was really like a negotiation which took over two months of going back and forth until both sides got it right – and Mr. Lande was happy.
But that is what Mr. Lande has been all about during his 40-plus years of trade negotiating.
I first met Steve during the Reagan Administration when he was assistant US Trade Representative for the Americas – and one of the chief authors of the revolutionary Caribbean Basin Initiative program for poor countries in the Caribbean area and later Central America.
As a young reporter I had tried repeatedly – but unsuccessfully – to contact Mr. Lande at USTR to find out more about the initiative. I got used to "answers" from his secretary that he was not in, or busy with something else or otherwise unavailable.
Then I discovered a copy of a Presidential Action Memo (something or other) which outlined the new CBI program, leaving a few square brackets for decision by the White House or the President himself.
I made a call again to Mr. Lande, telling his secretary that I had a copy of the memo and just had one questions relating to one of the square brackets – which appeared to leave it up to the White House to pick one alternative over the other. One alternative, to me, seemed to be very protectionist.
About five minutes later I got a return call from Mr. Lande himself. I immediately suggested that the first – less restrictive – alternative would likely be more appropriate. Without caution, he said "yes," and then jumped in to ask where I got that memo.
To this day it remains a secret.
Since then, we have been good friends as I followed him from one public forum – some tiny – to another to explain the CBI initiative once it broke out of the White House and had the strong backing of President Reagan.
Another story. A year or so ago I had an opportunity – quite by accident – to sit at a table at the National Press Club during one of its luncheon speeches with several USTR staffers including its head at the time of the Caribbean/Central American office. I mentioned that I had known Steve Lande for quite a long time. They asked me who he was.
I conveyed that response to Steve, who I bumped into later in the day. In his own manner, he expressed surprise and immediately got on the phone to the Caribbean office to reintroduce himself.
Another long-time Washington trade guru – also a former official of USTR – whom I talked to recently about the incident said he not surprised. It unfortunately is too often the case at USTR – where there is a very serious lack of institutional memory.
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