Congressman Rangel and Other House Ways & Means Committee Majority Members Provide Political Cover for Clinton & Obama to Promote Trade Protectionism

http://waysandmeans.house.gov/


U.S. Must Enforce Laws to Break Down Trade Barriers


March 28, 2008


Committee on Ways and Means, U.S. House of Representatives


WASHINGTON, DC – Senior House Democrats today sent a letter to President Bush, renewing their call for stricter enforcement of U.S. rights under trade agreements. The letter was sent in anticipation of the Administration’s annual "National Trade Estimate" (NTE) report listing barriers to U.S. exports.

[The 2008 National Trade Estimate (NTE) Report is accessible here:
http://www.ustr.gov/assets/Document_Library/Reports_Publications/2008/2008_NTE_Report/asset_upload_file365_14652.pdf ].

In their letter, the Democrats expressed hope that the Administration would move past merely inventorying the systemic, recurring trade barriers that U.S. companies face, and, and to take a positive step forward and begin enforcing U.S. rights more vigorously."


In the Democrats’ view, stricter enforcement of trade laws would avoid further growth of the U.S. trade deficit and unsustainable levels of foreign-owned U.S. debt.


In 2007, the U.S. trade deficit was $711.6 billion – the third highest in history and a shocking five percent of the U.S. economy. Over the past six years alone, foreign-owned debt has more than doubled, currently standing at $2.4 trillion or 17 percent of U.S. gross domestic product (GDP). As noted in the letter, the Bush Administration has accumulated more debt to foreign governments and individuals than all previous administrations combined.


The Democrats' letter is accessible here: http://waysandmeans.house.gov/media/pdf/110/cbr%20potus.pdf .


[A REVIEW OF THE POINTS MADE IN THIS LETTER WILL REVEAL CERTAIN TRUTHS, THEY BEING: 1) THE ADMINISTRATION ARGUABLY HAS FAILED TO PROTECT U.S. PROPERTY RIGHTS BY NOT VIGOROUSLY ENFORCING WORLD TRADE ORGANIZATION (WTO) RULES AGAINST VIOLATING WTO MEMBER NATIONS; 2) THE U.S. TRADE DEFICIT NO LONGER REFLECTS STRICTLY LOW-COST, VALUE-ADDED IMPORTS - RATHER IT NOW INCLUDES ALSO HIGH TECHNOLOGY IMPORTS DUE TO CORPORATE OUTSOURCING/ OFFSHORING; AND 3) THE RESULTING TRADE DEFICITS FROM NONENFORCEMENT OF WTO LAWS AND THE GROWING HI-TECHNOLOGY IMPORTS ARGUABLY CREATES MORE FOREIGN-OWNED U.S. DEBT AS U.S. CITIZENS BUY MORE & MORE OF PRODUCTS DESIGNED, DEVELOPED & MANUFACTURED FROM OVERSEAS SOURCES ON CREDIT. ]


[AND, ARGUABLY, THE USTR SHOULD HAVE LONG AGO BEGUN CONSULTATIONS WITH VARIOUS U.S. KEY TRADING PARTNERS, AS A PRESAGE TO COMMENCING A POSSIBLE WTO ACTION AGAINST PARTICULAR WTO MEMBER GOVERNMENTS IF U.S. CONCERNS ABOUT MARKET ACCESS TRADE BARRIERS ARE NOT ADEQUATELY ADDRESSED.


THE QUESTION, HOWEVER, IS WHICH KEY TRADING PARTNERS HAVE IMPOSED THE MOST EXTENSIVE, SYSTEMIC AND DAMAGING TRADE BARRIERS AGAINST CRITICAL U.S. PRODUCTS AND PROCESSES, OR HAVE DIMINISHED THE VALUE OF OR OTHERWISE EXPROPRIATED KEY U.S. ASSETS UNDERLYING HI-TECHNOLOGIES WHICH SERVE AS THE CORE OF AMERICA'S 21ST CENTURY ECONOMY?? HERE IS WHERE THE RANGEL REPORT GOES ASTRAY AND IS ARGUABLY DISINGENUOUS. THE RANGEL LETTER FOCUSES ON THE FOLLOWING U.S. TRADING PARTNERS: CANADA, CHINA, THE EUROPEAN UNION, JAPAN, KOREA, MEXICO RUSSIA AND THE UNITED KINGDOM].


[IT IS INTERESTING TO SEE IN THE RANGEL LETTER THAT WHILE THE EUROPEAN UNION (EU) IS INCLUDED AS A KEY U.S. TRADING PARTNER WITH WHICH THE USTR SHOULD ENGAGE IN CONSULTATIONS TO PROTECT U.S. RIGHTS, NOT MUCH IS MENTIONED ABOUT THE MANY VERY EXPENSIVE AND COMPLEX NON-TARIFF ENVIRONMENTAL AND HEALTH (SUSTAINABLE DEVELOPMENT)-RELATED SANITARY AND PHYTOSANITARY, LABELING & TRACEABILITY, PRE-MARKET REGISTRATION, CONFORMITY ASSESSMENT REGULATORY-BASED TECHNICAL BARRIERS TO TRADE WHICH THE EU HAS ADMITTEDLY ERECTED AGAINST THE U.S. SINCE AT LEAST 2002. THESE REGULATORY RESTRICTIONS WHICH DOUBLE AS DISGUISED TRADE BARRIERS, HAVE AFFECTED BILLIONS OF DOLLARS $$$$ OF U.S. EXPORTS, AS WELL AS, DIMINISHED THE EXERCISE AND VALUE OF U.S. PROPERTY RIGHTS. CONSEQUENTLY, THEY HAVE RESULTED IN A SIGNIFICANT TRADE DEFICIT WITH EUROPE, WHICH THE RANGEL REPORT FAILS TO MENTION.


APPARENTLY, THERE IS A 'GOOD' REASON FOR THIS. MR. RANGEL AND HIS COLLEAGUES ARE UNLIKELY TO ADMIT IT, BUT THEY WISH TO ADOPT THESE VERY SAME EXPENSIVE AND COMPLEX REGULATORY REQUIREMENTS HERE IN AMERICA SO THAT AMERICAN BUSINESS ARE PLACED ON THE SAME COSTLY FOOTING AS THEIR EUROPEAN COUNTERPARTS. THIS IS WHAT THE DEMOCRATS AND THE EUROPEANS REFER TO AS 'LEVELING THE PLAYING FIELD' OR TRANSATLANTIC 'REGULATORY HARMONIZATION'. PERHAPS, THIS IS LARGELY WHY CONGRESSMAN RANGEL AND HIS COLLEAGUES HAVE EFFECTIVELY GIVEN EUROPE A 'PASS'.


INDEED, REGULATORY RESTRICTIONS NOW LOOK POLITICALLY PALATABLE TO THE DEMOCRATIC PARTY PRESIDENTIAL CANDIDATES AS A 'QUICK FIX' FOR THE CURRENT TRADE DEFICITS, EVEN THOUGH THEY KNOW FULL WELL THAT EARLY 20TH CENTURY HISTORY HAS SHOWN HOW TRADE PROTECTIONISM BY ONE COUNTRY CAN DEVOLVE INTO A SERIES OF SIMILAR PRACTICES EMPLOYED BY OTHER NATIONS THAT RESULT IN MORE & MORE TRADE PROTECTIONIST DEVICES BEING ERECTED. IN FACT, THE TRADE PROTECTIONISM OF THAT ERA WAS PARTLY RESPONSIBLE FOR THE EVENTS THAT LED TO WORLD WAR II!!! THE INTERNATIONAL TRADING SYSTEM WAS CREATED TO PREVENT THAT FROM EVER OCCURRING AGAIN.


[IN ADDITION, THE RANGEL LETTER FAILS TO MENTION EITHER BRAZIL OR THAILAND, TWO OF THE LEADING NATIONS RESPONSIBLE FOR TRYING TO CHANGE THE INTERNATIONAL LEGAL PARADIGM FOR INTELLECTUAL PROPERTY - PATENTS, COPYRIGHTS & TRADE SECRETS, SO THAT THEY MAY ACQUIRE U.S. SCIENCE & TECHNOLOGICAL KNOW-HOW AT CONCESSION-RATE PRICES!!! DOCUMENTARY EVIDENCE DEMONSTRATES HOW THESE TWO NATIONS HAVE, FOR AT LEAST 8 YEARS, LED AN INTERNATIONAL GROUP OF DEVELOPING COUNTRIES, WITH THE ASSISTANCE OF WELL-FUNDED HEALTH & INFORMATION ACTIVIST GROUPS, TO CHANGE INTERNATIONAL TRADE, INTELLECTUAL PROPERTY AND HEALTH LAW. THEY HAVE UTILIZED A NUMBER OF DIFFERENT UNITED NATIONS AGENCIES & ORGANIZATIONS TO CONVERT PRIVATE INTELLECTUAL PROPERTY RIGHTS INTO THE PUBLIC INTERNATIONAL GOODS OF FREE HEALTHCARE AND FREE DIGITAL KNOWLEDGE. BRAZIL AND THAILAND HAVE WORKED TOGETHER IN THE WTO, WORLD HEALTH ORGANIZATION (WHO), WORLD INTELLECTUAL PROPERTY ORGANIZATION (WIPO), THE UN COMMISSION ON HUMAN RIGHTS (UNCHR), THE UN DEVELOPMENT PROGRAM (UNDP) AND UN EDUCATION, SCIENCE & CULTURAL ORGANIZATION (UNESCO). IN FACT, BOTH BRAZIL AND THAILAND HAVE, WITHOUT LEGAL JUSTIFICATION, ISSUED COMPULSORY LICENSES AGAINST U.S.-OWNED DRUG PATENTS, WHICH IS ESSENTIALLY THE SAME THING AS A GOVERNMENT DECLARING EMINENT DOMAIN ON ONE'S PRIVATELY OWNED HOME. INTERESTINGLY, U.S. SENATOR PATRICK LEAHY AND OTHER CONGRESSIONAL DEMOCRATS HAVE PROPOSED LEGISLATION WHICH WOULD ALLOW THE U.S. GOVERNMENT TO DECLARE COMPULSORY LICENSES ON THE PATENTS AND COPYRIGHTS OF U.S. TAXPAYER-OWNED HI-TECHNOLOGIES!!! PERHAPS, THIS IS LARGELY WHY CONGRESSMAN RANGEL AND HIS COLLEAGUES HAVE GIVEN BRAZIL AND THAILAND A 'PASS'.


[INSTEAD, MR. RANGEL AND HIS COLLEAGUES DEVOTE CONSIDERABLE INK TO 'BASHING CHINA' WHICH, FOR SOME UNEXPLAINABLE REASON, DEMOCRATIC POLITICIANS ARE OBSSESSED WITH, AS ARE THEIR EUROPEAN COMMISSION COUNTERPARTS.]


[A CLOSE REVIEW OF THE NATIONAL TRADE ESTIMATE REPORT WILL REVEAL THAT EUROPE IS SECOND ONLY TO CHINA IN THE NUMBER OF 'TRADE BARRIERS' LISTED AND DESCRIBED. THE REPORT DEVOTES 45 PAGES TO EUROPE, AND 67 PAGES TO CHINA, BUT EUROPE IS NOT REALLY BEING FOCUSED ON BY MR. RANGEL!!].


FURTHERMORE, THE NATIONAL TRADE ESTIMATE REPORT SHOWS THAT THE FOLLOWING COUNTRIES HAVE BETWEEN 10 and 20 PAGES OF DESCRIBED TRADE BARRIERS, BUT ONLY JAPAN & RUSSIA ARE MENTIONED, NOT TAIWAN, SOUTH AFRICAN CUSTOMS UNION OR INDIA. HAVE MR. RANGEL AND HIS COLLEAGUES GIVEN THESE COUNTRIES A 'PASS' AS WELL???


[THE FOLLOWING COUNTRIES HAVE FEWER THAN 10 PAGES ALLOCATED TO THEM, BUT THEY ARE ALSO INCLUDED ON MR. RANGEL'S 'BAD BOY' LIST:

- KOREA – 5 PAGES;
- CANADA – 10 PAGES;
- UNITED KINGDOM – ¼ PAGE.

WHAT IS INTERESTING HERE IS HOW THE U.K. IS CITED FOR PHARMACEUTICAL MARKET ACCESS BARRIERS BASED ON OVERLY CONTROLLED PRICING SCHEMES: THIS PROVIDES ONE MAJOR EXAMPLE OF WHY U.S. DRUG PRICES ARE SO HIGH – NAMELY, B/C U.S. PHARMA COMPANIES FIRST SUBSIDIZE THE COST OF DRUG DEVELOPMENT IN OTHER COUNTRIES WHICH DO NOT PAY HIGH ENOUGH PRICES FOR APPROVED DRUGS THAT WOULD PROVIDE THESE SAME U.S. COMPANIES WITH ADEQUATE RETURN ON INVESTMENT (ROI) TO REINVEST INTO NEW INNOVATIVE PRODUCTS.


ARGUABLY, IF MR. RANGEL AND HIS COLLEAGUES ON THE COMMITTEE ON WAYS AND MEANS FOCUSED INSTEAD ON ASKING THE ADMINISTRATION TO NEGOTIATE WITH OTHER COUNTRIES, INCLUDING THOSE IN EUROPE, TO RAISE THE ACCEPTABLE LEVEL OF DRUG PRICES PER THEIR GOVERNMENT-RUN MEDICINE REIMBURSEMENT PROGRAMS, SAY 10-15%, THIS WOULD EASE PRICE PRESSURES IN THE U.S. SOMEWHAT, AND MOST LIKELY RESULT IN MORE AFFORDABLE, CUTTING-EDGE MEDICINES].


[The OECD nations, including the United States, have effectively been subsidizing the health care costs of developing country governments and citizens. Unfortunately, this subsidization has not occurred with all OECD members paying their fair share. Considering the extent of pharmaceutical price controls currently being imposed in countries such as Australia, Canada, Japan, and the Member States of the EU, some of which are extremely proud of their social welfare systems, it is arguable that Americans are likely to bear most of these costs, especially in the near term.


In fact, this concern was duly noted within a recent 2004 United States Commerce Department study evaluating pharmaceutical pricing in high income countries. It called for higher patented drug prices in Canada, Europe, Japan, Australia and other OECD countries in order to reduce the degree to which American consumers subsidize global drug development costs.


The report concludes that these countries have been free-riding off American patent rent extraction by setting government reimbursement prices too low. . . A recent speculative estimate, based on industry data and calculations . . . suggests that eliminating OECD price controls on patented drugs would increase revenues by $17.6 to $26.7 billion per
year, with additional R&D of $5.3 to $8 billion per year. Implicit in this estimate is the assumption that about a third of incremental revenues would be spent on R&D. . . ."

See Kevin Outterson, Nonrival Access to Pharmaceutical Knowledge, Submitted to the CIPIH (Jan. 3, 2005), at note 190, ¶ 7.2., available at: http://www.who.int/intellectualproperty/submissions/KevinOutterson3january.pdf. ]

Moscow Mayor's Myopic Motivations for Banning GMOs Reflects Political Protectionism at Work; Will Also Harm Russian Biotech Market Advances

http://www.eurasiabio.org/media/news/moscow_mayor__going_to_exclude_transgenes_from__muscovites_ration/


Moscow mayor going to exclude transgenes from Muscovites’ ration


Source: AMI TASS


March 20, 2008


Jury Lushkov has proposed to completely ban the sale of GMO containing products in Moscow.
He pointed out that about 6 per cent of products in sale in Moscow contain GMO. Indicating that such products are prohibited in many countries and cities. .Moscow mayor insists this dangerous and still not fully investigated component to be expelled from the capital.


Over 12,8 thousand titles of products have been checked. The GMO level exceeding the 0.9 per cent mark was revealed in 750 articles, mostly diary products.


The bans and limits for transgene cultures in several EG countries are linked to the ecologists' doubts that their uncontrolled dissemination can endanger the ecology balance in Europa.


At the same time the representatives of Institute of Nutrition, Moscow State University, Gamaleja Institute of microbiology and epidemiology stress, that there exists no study proving the GMO danger for the human health.


[MOSCOW STATE UNIVERSITY SCIENTISTS ARE CORRECT IN CITING THAT THERE ARE NO PROVEN HUMAN HEALTH OR ENVIRONMENTAL RISKS POSED BY GMOS]


[See, e.g., LA Kogan Presentation at Moscow State University – BASIC DIRECTIONS OF MODERN BIOTECHNOLOGY: BIOTECHNOLOGY - A SCIENTIFIC & PRACTICAL PRIORITY OF THE RUSSIAN FEDERATION (June 29, 2007), at:
http://www.itssd.org/Programs/BasicDirectionsofModernBiotechnology-KOGANPresentationMoscowConferenceJune29,2007.ppt

US Presidential Politics Could Derail Mexican Economic and Social Progress

http://www.gfmag.com/index.php?idPage=777


NEIGHBORHOOD UNREST - MEXICO


Mexico’s recent economic progress could be derailed by turmoil in the US economy and the outcome of the US presidential election.


Global Finance Magazine


By Antonio Guerrero


March 2008


The last time the US economy posted a slowdown, after the 2001 terrorist attacks, the Mexican economy contracted by 0.2%, nearly crushing its industrial sector. With the threat of a US recession looming large and uncertainties over what US-Mexican relations will look like once a new occupant moves into the White House next year, the outlook is beginning to look gloomy south of the border. However, Mexican government officials say the country is better prepared this time around to meet the challenge.


Mexico’s finance ministry estimates assume the US economy will grow by a meager 1.8% this year, prompting officials to reduce their own 2008 GDP forecast in February to 2.8% from the 3.7% forecast the ministry included in the federal budget last September. This would be Mexico’s slowest expansion in three years, after posting 3.2% GDP growth last year. Local banks had already adjusted their forecasts ahead of the government. Banamex, Citi’s Mexican subsidiary, cut its 2008 growth outlook to 2.9% from a previous 3.6%, while BBVA Bancomer slashed its prediction to 2.7% from 3.4%.


With 80% of Mexican exports going to the United States and domestic capital markets moving nearly in tandem with their counterparts in New York, a US recession would have a swift impact on Mexico—and perhaps test many of the structural reforms implemented by the Felipe Calderón administration that have helped to at least partly decouple the two economies. Calderón has tried to ease Mexicans’ fears about a potential US slowdown, saying, “We will seek growth opportunities from within ourselves, in our internal market, in the strong productive apparatus and in the country’s competitiveness.”


Calderón’s reform package includes a fiscal overhaul launched last September that should boost federal revenues by 1.5% of GDP this year, as well as labor reform to introduce greater flexibility. The next hurdle is energy reform, which legislators say should be ready by April. The controversial plan would open the Pemex state-owned oil monopoly to partnerships with private investors to inject capital into a company struggling with rising debt and dwindling oil reserves. Oil accounts for 40% of federal revenues, and, with its output of 1.3 million barrels a day, Pemex is the United States’ third-largest oil supplier.


The Mexican government’s 2008 budget will boost investment by 45%, the biggest increase in 45 years, with most additional spending earmarked for infrastructure projects that will boost competitiveness and create jobs. The aim is to spark 5% annual GDP growth by 2012, falling short of the 6% growth that analysts say is needed to generate the 1.3 million new jobs Mexico requires each year to absorb workers entering the job market. But the Calderón administration counters that its $295 billion public-private infrastructure investment program approved last year should alone create 800,000 jobs.


According to a Merrill Lynch report, “A positive political agenda should create three positive effects in the medium-term: (1) reduce the country’s growth dependence on US activity and oil prices; (2) reinforce domestic engines for growth: credit, domestic consumption and productivity gains; and (3) promote GDP per capita growth, also addressing Mexico’s social agenda: improve social services and decrease poverty.” Merrill Lynch expects economic growth will be supported by 22% credit growth this year, along with a 4.1% expansion in domestic consumption.


US Election Raises Tension


While Mexico is hoping to shield itself from a US recession, it may be harder for it to stay out of the US presidential election as Republican and Democratic candidates alike tackle the issues of immigration, drug trafficking and free trade. Calderón recently asked US presidential candidates to tone down the anti-immigrant and anti-Mexican rhetoric in their campaigns. But candidates may be responding to genuine concerns, as a recent Zogby poll in the US shows more than 76% of respondents said a candidate’s position on immigration will be a “very important” or “somewhat important” factor in deciding whom to vote for this year. Another 36% said “job creation to stem migration” is the most important foreign policy measure the US should take toward Latin America.


The fight against drug trafficking, likely to be a key concern for the next US president, is already being tackled by the Mexican government, with the Calderón administration deploying more than 24,000 troops to regions with high drug production and trafficking activity, as well as extraditing drug lords to the US and seizing large amounts of illicit drugs. The moves have been well received in Washington, where the White House last October announced a $1.4 billion military and security package designed to help Mexico and Central America tackle drug cartels.“


Given the dimensions of the problem, cooperation with the government of the United States is indispensable,” Mexico’s foreign minister Patricia Espinosa told the press. The US aid package is made more politically palatable to Mexican authorities by, unlike the controversial Plan Colombia, not involving any deployment of US military personnel to Mexico.


Both governments may find themselves embroiled in a less congenial dialogue this year over the future of trade between the two nations. In January the last remaining exceptions to the North American Free Trade Agreement (Nafta) were lifted, allowing US corn, sugar, beans and milk to enter Mexico under the pact. While the measure could help lower food prices, Mexican farmers are less than thrilled and not only have unleashed street protests but have called on their government to renegotiate the treaty, which went into effect in 1994.


According to Lawrence Kogan, president and CEO of the Institute for Trade, Standards and Sustainable Development (ITSSD) in Princeton, New Jersey, the controversy may lead to “managed” trade, which he feels is a euphemism for quota-like restrictions on trade in selected agricultural products. “Mexican farmers may end up receiving the short end of the stick here,” says Kogan. “We must wait and see what is ultimately agreed to and then wait to see how it is actually applied in practice.”


Kogan, also a professor of International Trade Law and Policy at Seton Hall University, says the impact on Mexican exports to the US could be determined by who wins the presidency. “A Democratic Congress would likely become emboldened if a Democrat were in the White House. Assuming the Republicans fail to retake Congress, Congress would be more inclined to impose new environmental, health and safety, and labor standards through Nafta and the WTO to raise the cost of Mexican goods and services so that they no longer could compete effectively with US products,” he says.


Meanwhile, capital market investors remain cautiously bullish on Mexico. Merrill Lynch predicts a 23% total return on Mexican equities this year, below the 26% Latin American average and 28% for Brazil, but higher than Chile’s 22% and Argentina’s 19%—adding that the appreciation will be driven by 16% earnings growth (in US dollars) in 2008 and 11% in 2009. Citi upgraded Mexican shares to overweight, arguing that a US recession has been nearly fully priced into Mexican stocks. The sovereign also set a new fixed-income benchmark in January that extended its yield curve to 2040 and saw the order book soar to $3 billion for a $1.5 billion issue that had been upped from an initial $1 billion.


Mexico’s central bank governor Guillermo Ortiz remains more cautious, saying at the World Economic Forum in Davos that Mexico has not yet felt the full impact of the global economic crisis, and there could be more pain ahead. “We’re in round one or two,” he said, “but this is a 15-round fight.”