APEC Members Pledge Effort to Avoid Trade Protectionism: Are President-elect Obama and the US Congress Listening??

http://www.smh.com.au/news/world/apec-leaders-vow-to-stick-with-free-markets/2008/11/23/1227375062156.html


APEC leaders vow to stick with free markets




Mark Davis Political Correspondent in Lima



The Sydney Morning Herald



November 24, 2008

ASIA-PACIFIC political leaders have promised not to resort to protectionism as the world's economies slow sharply in coming months after hearing a strong plea from the outgoing US President, George Bush, to maintain their commitment to free markets despite the global financial turmoil.

In a statement last night, the leaders of the 21 member economies of the Asia-Pacific Economic Co-operation forum also agreed to the recovery plan endorsed a week earlier by the G20 grouping, which calls on governments to stimulate their economies to insulate them from the global slowdown.

The Prime Minister, Kevin Rudd, joined his counterparts from the US and China in pressing hard for the annual APEC summit to make a commitment in favour of free trade because of concerns that a revival of protectionism could turn the global financial meltdown into a deep recession as occurred in the 1930s.

Australian officials attending the summit in Lima, Peru, said the APEC statement was significant because it extended the commitment to the G20's Washington Declaration to the 11 APEC countries that are not also members of the G20 group.

They said the language of the APEC leaders' statement was even stronger than the Washington Declaration because it gave a "commitment" to achieve a break-through by the end of the year in the Doha round of multilateral trade talks, which aim to free up trade in agricultural products, manufactured goods and services.

The statement acknowledged that in many countries, slowing economic growth would lead to political pressure to erect trade barriers to protect local companies but said protectionist measures would only worsen the economic situation. "We strongly support the Washington Declaration and will refrain within the next 12 months from raising new barriers to investment or trade in goods and services [and from] imposing new export restrictions," it said.

Australian officials believe the pro-free trade statement will send a message to the US president-elect Barack Obama, who will ultimately, with the European Union and the developing countries of Brazil, India and China, be the big players in securing a new free trade deal in the Doha talks.

[See, e.g.: Congressman Rangel and Other House Ways & Means Committee Majority Members Provide Political Cover for Clinton & Obama to Promote Trade Protectionism, ITSSD Journal on Disguised Trade Barriers, at: http://itssddisguisedtradebarriers.blogspot.com/2008/04/house-ways-means-committee-chairs-play.html ];

[See, e.g.: Trade Expert Criticizes Obama & Blue Party's Prescription for Economic Change: Adoption of the European Trade Strategy Known as 'Export-Protectionism', ITSSD Journal on Disguised Trade Barriers, at: http://itssddisguisedtradebarriers.blogspot.com/2008/09/trade-expert-criticizes-obama-blue.html ];

[See, e.g.: Africa Suffers From European Protectionism Yet Again: Is This What EURObama's Embedded Carbon/ Carbon Tariff-Focused US Trade Policies Would Achieve?, ITSSD Journal on Disguised Trade Barriers, at: http://itssddisguisedtradebarriers.blogspot.com/2008/09/africa-suffers-from-european.html ];

[See, e.g.: Princeton University Global Governance Advocate Calls for New Wave of American Regulatory Socialism in the Image of European Protectionism, ITSSD Journal on Disguisted Trade Barriers, at: http://itssddisguisedtradebarriers.blogspot.com/2008/06/princeton-university-global-governance.html ];

[See, e.g.: OBAMA-BROWN-MICHAUD Non-Tariff Trade Barrier Act Likely to Devastate US Economy, Trigger a Global Trade War & Endanger World Peace, ITSSD Journal on Disguised Trade Barriers, at: http://itssddisguisedtradebarriers.blogspot.com/2008/06/us-trading-partners-beware-obama.html ].

The APEC summit is likely to be Mr Bush's last international gathering before he hands over to Mr Obama in January. He urged the gathering not to lose faith in free markets and called for an Asia-Pacific region of "free markets, free trade and free people".

"It is also essential that governments resist the temptation to overcorrect by imposing regulations that would stifle innovation and strangle growth," he said. "One of the enduring lessons of the Great Depression is that global protectionism is a path to global economic ruin."

The financial crisis is widely regarded as the most severe since the stockmarket crash of 1929. Economic historians believe it was the outbreak of "tit for tat" protectionism later which turned that crash into a global depression by stifling trade.

Earlier yesterday, Mr Rudd and Indonesia's President, Susilo Bambang Yudhoyono, announced their governments would set up a disaster reduction facility in Jakarta to help the region's poorest countries prepare for natural catastrophes.

Research commissioned by the two leaders found the Asia-Pacific faced an era of big disasters as urbanisation, climate change and food shortages magnified the effect of events such as earthquakes, volcanic eruptions and storms.

An assessment by Geoscience Australia said there were likely to be several disasters each year killing more than 10,000 people and there was great potential for huge catastrophes affecting more than one million people.

Mr Rudd said the Government would spend $67 million over the next five years on the disaster reduction facility.

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http://www.msnbc.msn.com/id/27858912/

APEC leaders: No new trade barriers



President Bush: ‘Global protectionism is a path to global economic ruin’



The Associated Press


updated 10:32 p.m. ET, Sat., Nov. 22, 2008

LIMA, Peru - Leaders who oversee half the world’s economy pledged Saturday to avoid protectionism but shied away from any new proposals on the financial crisis because of somebody who wasn’t there: U.S. President-elect Barack Obama.

The 21 leaders endorsed last weekend’s agreement by major world economies to resist domestic pressures to protect industries, while ensuring that small and medium-sized companies have enough credit to stay afloat.

“We strongly support the Washington Declaration and will refrain within the next 12 months from raising new barriers to investment or to trade in goods and services (and from) imposing new export restrictions,” leaders of the Asia-Pacific Economic Cooperation forum said in a joint declaration.

They also pledged to reach agreement next month on the outlines of a World Trade Organization pact that collapsed in July after seven years of negotiations. Concern over the global financial crisis injected new urgency into the so-called Doha round of trade talks.

The leaders called for greater APEC participation in the International Monetary Fund and other multilateral lenders. Japan said last week it was ready to lend up to $100 billion to the IMF, but

China has so far resisted entreaties to dig into its $1.9 trillion in reserves.

Leaders speak out against protectionismDelegates said, however, that there was little incentive to propose more concrete action without the support of Obama, who takes office in January and did not send representatives to Lima.

“The next U.S. administration must assume leadership in a very firm manner — not just for Americans but for the whole world,” Mexican President Felipe Calderon said in a speech before heading into closed-door meetings that produced the resolution.

Even people who work for the White House’s outgoing occupant, George W. Bush, acknowledged that tough issues such as a stalled U.S.-South Korea free-trade agreement would likely have to wait.

However, Bush did attempt to persuade allies to secure a North Korea disarmament deal before he leaves office, pushing hard for a late, legacy-shaping win. The White House announced that all nations engaged in the showdown with North Korea would meet in China in early December.

That nudge in the process alone was a boost to Bush, whose government is eager to lock in an international agreement on how to accurately verify North Korea’s nuclear capabilities.

Leader after leader at Saturday's forum spoke out against protectionism, saying it would bring devastating consequences.

“Companies will go bankrupt and countless jobs will be lost, and poor nations and poor people will suffer the most damage,” South Korean President Lee Myung-bak told business executives.

Bush said nations must not respond to the crisis by “imposing regulations that would stifle innovation and choke off growth.”

“One of the enduring lessons of the Great Depression is that global protectionism is a path to global economic ruin,” he said.

Free-trade success stories

The leaders argued their case with free-trade success stories. Lee, former head of the Hyundai group, said open markets were central to boosting his nation’s per-capita annual income from $100 in the 1960s to $20,000 today. Canadian Prime Minister Stephen Harper said the North American Free Trade Agreement has tripled trade and created 40 million jobs.

But Nick Reilly, president of General Motors Corp. Asia-Pacific, said the leaders all will face intense pressure at home to protect their most vulnerable markets.

[U.S. GOVERNMENT PROTECTION OF THE U.S. AUTO INDUSTRY WOULD BE UNNECESSARY IF GENERAL MOTORS MANAGEMENT HAD DONE ITS JOB CORRECTLY WHICH IT HAS LONG FAILED TO DO. IF GENERAL MOTORS MANAGEMENT HAS ANY KNOWLEDGE OF THE U.S. & GLOBAL AUTO MARKETS, IT CERTAINLY HAS NOT BEEN REFLECTED IN MOST OF THE PRODUCTS IT HAS MANUFACTURED DURING THE PAST 40 YEARS!! ITS MANAGEMENT HAS REPEATEDLY TAKEN THE U.S. CONSUMER FOR GRANTED AND ASSUMED THE AMERICAN MARKETPLACE WOULD CONTINUE TO ACCEPT LESS THAN MARKET-STANDARD QUALITY PRODUCTS. SUCH MISCALCULATION HAS BEEN VERY COSTLY, AS MANIFESTED MOST RECENTLY WITH THE SUV CRAZE OF THE PAST DECADE. THE ONLY WAY GENERAL MOTORS CAN IMPROVE IS TO OUST ITS CURRENT CROP OF MANAGEMENT EXECUTIVES AND REPLACE THEM WITH NEW OPEN-MINDED ENTREPREURIAL BLOOD. WHILE NOT THE FOCUS OF THIS BLOG ENTRY, THE BUSH ADMINISTRATION AND 110TH CONGRESS ARE 100% CORRECT IN INSISTING THAT GENERAL MOTORS CORPORATION PROVIDE A VIABLE RESTRUCTURING PLAN SUBJECT TO SUBSEQUENT PERIODIC FINANCIAL REVIEWS, THAT WOULD RESULT IN COMPETENT, CAPABLE DECISIONMAKING AND PROFITS IN THE SHORT & LONG TERMS, BEFORE IT COULD BE ELIGIBILE TO RECEIVE U.S. TAXPAYER MONIES. SHOULD THE U.S. GOVERNMENT DECIDE TO ASSIST GENERAL MOTORS CORPORATION, IT WOULD EFFECTIVELY SERVE AS THE FINANCIAL LENDER 'OF LAST RESORT', AND THUS, BE ENTITLED TO BASE ITS LOANS ON STRICT CONDITIONALITIES. 'HE WHO HOLDS THE PURSE, DETERMINES THE RULES'. IF STRUCTURED PROPERLY, THIS SHOULD NOT CONSTITUTE AN ILLEGAL GOVERNMENT SUBSIDIES UNDER WTO RULES. SO, EUROPEAN AUTOMAKERS SHOULD CALM DOWN & TAKE A DEEP BREATH.]

“The economies haven’t yet seen the full impact of unemployment hit. So domestically, the leaders are going to be facing that,” Reilly told The Associated Press.

Indonesia’s trade minister, Mari Pangestu, told the AP that some protectionist measures are inevitable in the coming year or two. The secret, she said, is to not make them open-ended.

“You will have to end up protecting particular groups,” Pangestu said in an interview, giving the example of the agriculture sector in Indonesia, which accounts for 60 percent of its 237 million people.

Canadian Prime Minister Stephen Harper alluded to the tough decisions ahead when he described his recent re-election in terms that could just as easily apply to Obama.

Getting elected these days, he said, “is like winning a vacation to the Caribbean during hurricane season.”

© 2008 The Associated Press

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http://www.apec.org/apec/enewsletter/nov_vol18/onlinenewsa.html

Perspectives on 2008: A Dialogue With Peru's Ministers

APEC - E Newsletter

Leaders' Week Edition - Vol18, November 2008

In an interview with the APEC Secretariat, Peru's Ministers for Foreign Affairs and Trade shared their priorities for APEC Economic Leaders' Week which will occur in Lima between November 16-23, 2008. As co-chairs of the meeting, they previewed what will be on the agenda and expressed their hope that Ministers would be able to come to agreement on a wide range of issues.

Identifying regional solutions to the financial crisis which continues to unfold, bringing together diverse interests to achieve a conclusion for the Doha Development Agenda, and supporting structural reform and capacity building as well as new issues like corporate social responsibility all remain on the agenda.

Peru's Minister for Trade, Mercedes Araoz and Minister for Foreign Relations, José Antonio García Belaunde, discuss below their perspectives on the issues.

APEC E-Newsletter (APEC E): What are the most important issues Leaders and Ministers will focus on this November?

José Antonio García Belaunde (JAGB): We are facing the most challenging economic circumstances that we have seen in decades. Leaders will focus on shaping a regional response to the crisis. A strong economy is fundamental to achieving results in many other areas of the APEC agenda. That will also be discussed by Leaders and Ministers in November.

Mercedes Araoz (MA): The high level of the Leaders' Meeting creates a great scenario for the discussion of priority issues in the region. On November 22-23, Leaders will discuss the progress towards greater economic integration in the Asia-Pacific region, the current economic situation in the Asia-Pacific as a result of the global financial turmoil; and the important issue of climate change.

At the APEC Ministerial Meeting, to be held on 19-20 November, Ministers, will cover the main issues of this year's APEC agenda. Progress on economic integration in the Asia-Pacific region is the most important issue, as we have received from the APEC Economic Leaders in 2007, very specific instructions on how to advance this work in the current year.

Another important issue is the progress on APEC's Second Trade Facilitation Action Plan (TFAP II), which by 2010, aims to reduce transaction costs by a further 5%. It is worth noting that APEC is a world leader in trade facilitation.

Besides these two issues, it is important to mention the importance of APEC adopting the Investment Facilitation Action Plan during the Ministers Responsible for Trade Meeting held on 31 May - 1 June in Arequipa, Peru; and on progress on behind-the-border reforms, or as it is also known, the Leaders' Agenda on Structural Reform (LAISR).

APEC E: What impact will the current financial turmoil have on the Asia-Pacific region and what, if there are any plans, does APEC have to address this issue?

MA: I am afraid that there are going to be very significant impacts in the region and in the world. A generalized reduction in the rate of growth, that I hope will be short lived, could be the most important one for all of us. Trade flows will decrease and credit will tighten.

In these dire circumstances, APEC members should reiterate their commitment to open markets and free trade as the best tools to quickly overcome this financial turmoil. A positive message that APEC could send to the rest of the world could be, for example, a declaration stating that we will not increase our barriers to trade until the financial problem is solved.

Another message could be the reiteration of APEC´s strong support for the prompt finalization of the Doha Development Round.

JAGB: The Asia-Pacific has played a pivotal role in sustaining world economic growth rates over many years and many APEC economies have experienced solid economic growth for over a decade. The problems in the financial markets may soon reach the real economy, consequently impacting on future economic growth. APEC Finance Ministers met in Peru on November 5-6. They analyzed the financial crisis and how to coordinate a response. APEC economies can support the excellent work undertaken by the Financial Stability Forum which is examining how to enhance market and institutional resilience.

APEC E: Leaders have consistently supported a successful conclusion to the Doha Round. What actions do you expect APEC Ministers and Leaders to take this year to create urgency for concluding these negotiations?

JAGB: We are very disappointed that it has not been possible to reach an agreement until now. The Round is likely to be complicated by the ongoing political and financial uncertainty. Nevertheless, the WTO has made very good progress so far on many aspects of Doha and we should keep working to achieve a result.

MA: I think that all APEC economies are disappointed by the impasse that the Doha Round had reached in July, but we believe in the early revival of negotiations. I am sure that, as APEC, we can work together to achieve an ambitious and balanced outcome of the Round.

Since its inception, support for the multilateral trading system has been a key priority in APEC´s work agenda. At this year's APEC Ministers Responsible for Trade Meeting in Arequipa, Peru, we decided to adopt a stand-alone statement to demonstrate our commitment to progress towards an early and successful conclusion of the Doha Round.

APEC E: Can you discuss the progress made on the priorities that Peru set earlier in the year?

JAGB: At the beginning of the year, Peru took responsibility for leading the implementation of the APEC agenda set out in the Sydney Declaration of 2007. These priorities included regional economic integration (REI), trade and investment liberalization and structural reform.

We are especially pleased that we have been able to raise the level of awareness of Corporate Social Responsibility (CSR) within APEC this year. Leaders will be discussing this issue in November. This year's theme for APEC is "A New Commitment to Asia-Pacific Development" and improving levels of CSR in the region promote that goal.

MA: I really believe that this year has been a very successful one because APEC has made great progress on the main 2008 priorities.

We have advanced the regional economic integration agenda, including the prospects for a Free Trade Area of the Asia-Pacific (FTAAP).

We have continued with the implementation of actions to advance trade and investment liberalization and facilitation: for example, the completion of model measures for RTAs/FTAs, the endorsement of the Investment Facilitation Action Plan, the development of Key Performance Indicators for the Second Trade Facilitation Action Plan and the discussion on the rationalization of rules of origin.

We've also been working on strengthening the policy agenda on ECOTECH; especially in the areas of education, small and medium enterprises, tourism, information and communication technologies, anti-corruption and transparency.

APEC E: For the first time ever, APEC Ministers met to discuss structural reform issues this year. What approaches do you expect APEC to take in order to advance this agenda item?

JAGB: We all know that implementing structural reforms can be very difficult, but the benefits speak for themselves. APEC can support individual member economies in several ways.

The Structural Reform Ministerial Meeting held this year in Melbourne approved a Good Practice Guide on Regulatory Reform. This will help economies to voluntarily review existing regulation and assess the impact of new regulation. Most importantly, ministers agreed to voluntary reviews or self-reviews of member economies' institutional frameworks that support structural reform. I think this process will help economies focus on priority areas for reform and is a good way to exchange information on how to best tackle this challenging area.

MA: Structural reform must remain at the top of the APEC agenda. We have advanced on the implementation of the Leader's Agenda but further work is necessary.

We need to work on strengthening cooperation and coordination between the Economic Committee (those who are in charge of the structural reform issues), the Committee on Trade and Investment and the Finance Ministers' Process, as well as with the private sector.

A good step has been the establishment of the APEC Policy Support Unit which will strengthen the capacity of the APEC Secretariat to assist member economies in policy dialogue on structural reform and in strengthening domestic institutions and policies that support the reform process.

APEC E: What do you think will be Peru's main contributions to the APEC agenda this year?

JAGB: We have been committed to implementing the decisions made by Leaders last year, but additionally this year, Peru wanted to emphasize the social dimension of the APEC agenda with the inclusion of Corporate Social Responsibility, besides other issues such as education, reducing the digital gap, support for small and medium enterprise and joint efforts in anti-corruption matters. Two successful Ministerial meetings in education and in small and medium enterprises have contributed to this cause.

Regarding corporate social responsibility, Peru is keen to ensure strong compliance with labor and environmental standards but also to involve the private sector in a partnership to ensure sustainable development where they have operations.

MA: We have chaired many meetings, including Sectoral Meetings of Ministers responsible for Trade, Tourism, Small and Medium Enterprises, Education and Finance.

In the area of trade and investment, we have assumed a leading role on the discussion of a Free Trade Area of the Asia-Pacific. Peru has conducted a study of existing bilateral and plurilateral free-trade agreements in the region with the aim of increasing knowledge of their similarities and differences, thereby enabling economies to identify possible ways in which the FTAAP concept could be furthered. New Zealand, the United States, Japan and Chile, as well as the IADB, have also contributed to this important activity. Moreover, we are collaborating with Korea and Indonesia on a review of existing analysis relevant to a possible FTAAP and are assessing the need for future work.

APEC E: In your view, how has APEC made progress on its issues under the theme, "A New Commitment to Asia-Pacific Development?"

MA: Peru proposed the theme "A New Commitment to Asia-Pacific Development" in order to give APEC the opportunity to work on the social dimension of its agenda. The objective is to encourage initiatives on the social issues that have a substantial influence on the advance towards the goals of trade and investment facilitation. To this end, we have highlighted the role of education in the social and economic development of member economies and have supported the development and modernization of small and medium enterprises.

JAGB: This theme reflects our approach to bridging the development gap in the region. I consider it essential to show how an open trade and investment policy can make a positive impact on economic development. But at the same time, we have to take account of the social dimension of trade, and that is why we have been promoting a greater uptake of corporate social responsibility in the region.

APEC E: How has APEC's capacity building program prepared member economies to better participate in the global economy?

MA: Capacity building programs are a vital part of the APEC process because they allow capacity to be developed in key priorities areas regarding trade and investment liberalization and economic and technical cooperation. These programs cover a wide range of activities, such as seminars, publications and research.

They allow developing economies such as Peru to learn from developed economies' experiences, in order to reduce the technological gap and enhance the economic growth and prosperity of the region.

This year, APEC has financed 21 Peruvian projects, which have been implemented successfully. They have allowed us to strengthen our knowledge of key areas of common interest in the region, such as the single window initiative and the data privacy pathfinder. For 2009, 16 projects were approved by the Budget and Management Committee meeting last October.

JAGB: Economic and technical cooperation is critical to APEC's work. This is especially true in areas such as the competitiveness of small and medium enterprises, and human resources development. APEC's commitment to capacity building demonstrates how the region as a whole works together to address the gap in the various levels of development.

APEC E: Corporate social responsibility has made it to the APEC agenda. How does this issue contribute to the economic growth of the region?

JAGB: I think CSR plays a key role at the local level to promote sustainable development. We have seen this in some projects undertaken by mining companies in remote communities of Peru, where the firm has invested in local infrastructure and development. I think it is clear that this has a positive reward for the individual company - it can improve the local workforce and promote better relations with local communities. [SORRY. CSR DOES NOT, BY ITSELF, CONTRIBUTE TO COMPANY PROFITS, REVENUE GROWTH OR EVEN MACROECONOMIC GROWTH.]

MA: We have introduced the issue of Corporate Social Responsibility on a voluntary basis to encourage the incorporation of social and environmental concerns into business operations, as a complement to existing public policies and programs.

As an example of our efforts in advancing this issue, we held the 5th Tourism Ministerial Meeting under the theme "Towards Responsible Tourism in the Asia-Pacific Region" to promote continuous sustainable growth in the tourism industry. We hope that the meetings' outcomes will help to generate income and employment in local communities and to promote the conservation and preservation of our environment, including the social and cultural aspects.

I am sure that a strong discussion on this issue could address challenges of great significance in the achievement of socio-economic development and equitable and sustainable growth.

[WE BEG TO DIFFER. THIS SOUNDS A LOT LIKE THE EUROPEAN UNION SPEAKING. THE EUROPEAN UNION HAS PERFECTED THE USE OF CORPORATE SOCIAL RESPONSIBILITY STANDARDS SCHEMES, WHICH THE SOCIALIST PARTY WITHIN THE EUROPEAN PARLIAMENT SEEKS TO CONVERT INTO REGULATORY MANDATES, AS ANOTHER NEW FORM OF DISGUISED TRADE PROTECTIONISM THAT ENABLES GOVERNMENTS TO DISTINGUISH THEIR CHAMPIONED COMPANIES BASED ON NON-TECHNICAL, NON-PERFORMANCE-BASED PROCESS GROUNDS. CSR SCHEMES HAVE ALREADY RESULTED IN THE 'SOCIAL BLACKLISTING' OF COMPANIES, LET ALONE, IN LEGAL LIABILITY FOR COMPANIES, BOARD MEMBERS AND MANAGEMENT WITHIN THE U.S. THIS IS LIKELY TO OCCUR WHERE NONGOVERNMENTAL ORGANIZATIONS DECIDE FOR THEMSELVES THAT COMPANIES HAVE FAILED TO TRUTHFULLY REPORT THEIR ACTIVITIES AS SET FORTH IN NONFINANCIAL ANNUAL REPORTS PREPARED AND SUBMITTED TO NONFINANCIAL REPORTING MECHANISMS SUCH AS THE GLOBAL REPORTING INITIATIVE AND THE UNITED NATIONS GLOBAL COMPACT OFFICE. See, e.g.: ITSSD JOURNAL ON CSR (CORPORATE SOCIAL RESTRICTION) at: http://itssdjournalcsr.blogspot.com ; ITSSD JOURNAL ON INTERNATIONAL STANDARDS, at: http://itssdinternationalstandards.blogspot.com/2008/07/absurdity-multitude-of-european-fruit.html].

What Type of 'SEAT at the Table' Will Be Reserved for an EURObama Administration??

http://online.wsj.com/article/SB122591746511102337.html


And the Winner Is . . . Europe?

Firms on the Continent may gain the most under Obama.



By KYLE WINGFIELD

Wall Street Journal Europe

November 6, 2008

Amid all the celebrations in Europe of Barack Obama's election as the American president, one wonders how many glasses were clinking in boardrooms across the Continent. The early guess: a lot.

[THE LONG HIDDEN COMMON AGENDA OF THE ELITIST LIBERAL PROGRESSIVE WING OF THE U.S. DEMOCRATIC PARTY AND THEIR EUROPEAN WELFARE STATE-MINDED COUSINS IN THE EUROPEAN COMMISSION & THE SOCIAL DEMOCRACIES OF FRANCE, GERMANY AND GREAT BRITAIN IS NOW PALPABLE & VISIBLE, AS THEY EACH SIP THEIR FRENCH & CALIFORNIA WINES AND CHAMPAGNES AND 'PURE' GERMAN BEERS IN CELEBRATION OF THE OSTENSIBLE COLLECTIVE VICTORY OF 'SOFT' SOCIALISM OVER 'COWBOY' CAPITALISM.]

Many U.S. companies will be apprehensive about what an Obama administration coupled with a strongly Democratic Congress will mean for them: higher tax rates, or certainly not lower ones; greater power for trade unions after a decades-long pendulum swing toward management; stricter environmental regulations and possibly a cap-and-trade system; less inclination to negotiate meaningful free-trade agreements; a spate of new federal judges who are hostile to business interests. European firms can view these developments as a leveling of the playing field -- or even a tilting of the field in their favor.

[See ITSSD Press Release: Putting Country First Means Defending America's Sovereignty, Constitution and Free Enterprise System Against Foreign Incursion, PR Newswire (Sept. 6, 2008) at: http://www.reuters.com/article/pressRelease/idUS134761+08-Sep-2008+PRN20080908 ].

[See Lawrence A. Kogan, Exporting Europe's Protectionism, The National Interest (Fall 2004), accessible on ITSSD Main Website at: http://www.itssd.org/Publications/Kogan%20TNI%2077FINAL.pdf ].

[IT IS NO LONGER A SECRET THAT THE LIBERAL WING OF THE DEMOCRATIC PARTY HAS ACHIEVED ITS LONG-TERM GOAL - OF RETURNING THE U.S. TO THE TRANSATLANTIC NEGOTIATING TABLE TO HARMONIZE AMERICA'S ENLIGHTENMENT ERA-INSPIRED FREE ENTERPRISE SYSTEM & COMMON LAW-BASED LEGAL SYSTEM WITH CONTINENTAL EUROPE'S SOCIAL WELFARE STATE ECONOMIC & CIVIL LAW-BASED LEGAL SYSTEMS. HOWEVER, THE TABLE AT WHICH THEY NOW CELEBRATE AND THE SEAT EACH NOW OCCUPIES WILL CERTAINLY BE DIFFERENT FROM THAT AT WHICH THEY ALL ROLL UP THEIR SLEEVES TO DO THEIR 'DIRTY' WORK.]

New regulations will play a large role in this leveling exercise. For instance, trade unions are licking their chops at the prospect of Democrats running both the executive and legislative branches. One of the items on their wish list is "card check," which would eliminate secret ballots among employees deciding whether to join a union.

Should card check help unions to boost their membership substantially from its current trough, American companies will be forced to make some of the same concessions that European firms have been making all along. Part of the trans-Atlantic competitiveness gap would be erased.

Environmental laws are another area where American competitiveness could fall toward European levels. Businesses in the EU already have to deal with a cap-and-trade system to curb carbon emissions. It's a good bet that the same will be true in America within the next four years, and the U.S. will probably work closely with Europe to create a successor to the Kyoto Protocol.

While the faulty construction of the first phase of the European Union's Emissions Trading Scheme limited the impact on businesses, the screws are being tightened in the second phase and more industries (e.g., airlines) are being sucked in. Any hit to European industry's global competitiveness, though, will be greatly softened if the U.S. introduces its own cap-and-trade system.

And as we've already seen in the automotive industry, a Washington that's determined to subsidize companies' transition to the low-carbon economy will only encourage European capitals to do the same.

Thus the $25 billion in public loans that have already been granted to Detroit, with another $25 billion possibly on the way once Mr. Obama takes office, have spurred Europe to consider a €40 billion loan program for its own car makers. The manufacturers will gladly take this taxpayer money.

[YES. THIS IS THE ULTIMATE GOVERNMENT APPROVED AND INDUSTRY LOBBIED 'SUBSIDY'!]

Both environmental laws and labor regulations are ways in which European firms wouldn't necessarily improve themselves, only see their American rivals become less competitive. A more positive benefit for Europe could come in the trade arena.

Those who hope Mr. Obama will breathe new life into a multilateral trade deal like the Doha Round are likely to be disappointed. There are trade experts who believe the president-elect and his advisers have more free-trade instincts than they've let on -- witness the brouhaha earlier this year over whether talk about a President Obama unilaterally rewriting the North American Free Trade Agreement was just a way of winning over protectionist-minded Democrats during the primary campaign.

The problem with that optimistic view is that Mr. Obama will face a Congress that views trade liberalization as anathema. Democrats on Capitol Hill haven't blocked bilateral trade deals with the like of Colombia and South Korea because George W. Bush wanted them, but because their trade-union supporters did not want them.

Democrats' refusal to approve those deals, alongside America's inability to push through a Doha deal, has opened the door for the EU to take the lead in bilateral free-trade agreements. Since lifting its self-imposed moratorium on bilaterals once it became clear that Doha was going nowhere, Brussels has been aggressive on this front. It has courted Canada, India, South Korea, the Association of Southeast Asian Nations and others.

Bilateral trade deals can mean administrative headaches for companies that do business in a number of countries. But however imperfectly, they do open markets. In just about anywhere outside U.S. borders, European industry could gain from American protectionism.

None of these gains will materialize, though, if European governments take the Obama era of "change" as an excuse to halt their slow crawl toward economic reform. Other countries or regions outside Europe could also choose to take advantage of a fall in U.S. competitiveness.

It would make no sense to react to an upswing in American trade-union power, for instance, by freezing the liberalization of Europe's still-rigid labor markets. This is one time it might not pay to follow America's lead.

Mr. Wingfield edits the Business Europe column.

Trade Expert Criticizes Obama & Blue Party's Prescription for Economic Change: Adoption of the European Trade Strategy Known as 'Export-Protectionism'

http://www.ft.com/cms/s/0/43cac9fc-6ded-11dd-b5df-0000779fd18c.html?nclick_check=1

The selfish hegemon must offer a New Deal on trade


By Jagdish Bhagwati


Financial Times


August 19, 2008


In the 1980s, Japan was feared in the US to be a lethal combination of Superman and the evil genius Lex Luthor in a classic case of what I have called the Diminished Giant Syndrome.


Members of Congress famously smashed a Toshiba radio cassette recorder on the steps of Capitol Hill in protest in 1987. Great Britain at the turn of the 19th century had been marked by similar diffidence, despair and recrimination when Germany and the US were emerging on the world scene. There, Sir Howard Vincent entered parliament festooned with mops, pails and brushes marked “Made in Germany”.


US hegemony survived the exaggerated threat from Japan. But the US is now once again a fearful giant. Many Americans see trade as a peril rather than an opportunity. This has turned the US from what the economist Charles Kindleberger famously called an “altruistic” hegemon into a “selfish” hegemon.


On the back of economic anxiety in the country, many in both political parties (although far more among Democrats) see freer trade now as a costly giveaway to others at the expense of the US. They ask: “What is in it for me?” Only an agenda for institutional change, one that addresses the true causes of the anxiety in the US today, has a chance of returning trade policy to sanity.


The US role in the failed Doha trade talks illustrates the collapse of American leadership. Here, the US has been the central spoiler, refusing to cut its trade-distorting subsidies significantly even though they are universally recognised as intolerable. Its latest offer was to cap them at $14.5bn (€9.84bn, £7.76bn) but that well exceeded current payouts, estimated at $9bn. With only 2m farmers in the country, the US still attacked India for asking for an enhanced “special safeguard mechanism” to be used in case of an import surge, when India has far smaller, often subsistence, farms and nearly two-thirds of its population in rural employment.


While making negligible concessions itself, the US was insisting on difficult concessions from India, made even more troublesome politically because of the insubstantial offer on US subsidies. Besides, when the Doha talks started, the developing countries were not even supposed to be making concessions in agriculture. Throughout the Doha negotiations, the office of the US trade representative and US Congress pointed a finger at others – at Brazil, then at India and then also China – but have never considered their own roles.

The US has also muscled in to its bilateral preferential trade agreements (nearly all with small, developing nations) conditions unrelated to trade at the expense of their partner nations.


[THE EUROPEAN UNION INNOCENTLY REFERS TO SUCH CONDITIONS AS 'CULTURAL PREFERENCES']


Thus a country [the US] that is hardly an exemplar on labour rights, where the right to strike has been severely restrained since the Taft-Hartley legislation more than half a century ago, where union membership in the private sector has declined to less than 10 per cent of the labour force, and which has not ratified all the International Labour Organisation’s core conventions, has had the effrontery to impose standards on others in these PTAs. Why?


It is evidently not because it practises what it preaches and demands. Rather, it is because the labour lobbies believe, without any compelling evidence, that American wages have been stagnant because of competition from the developing nations. Further, they believe that if one could only stand Thomas Friedman of “flat earth” fame on his head and flatten the earth by raising these countries’ labour costs up to US levels, that would help reduce competition. In short, this is what economists call “export protectionism”.


What is doubly offensive about this exercise of political muscle is that it is advanced in the language of altruism: not by saying frankly that it is because “our unions are worried about competition” but by pretending that it is “in your workers’ interests”. An altruistic hegemon would not be playing these games; a selfish hegemon will do little else.

Senator Barack Obama does not quite get this. By asking, as part of his agenda for change, that the US should now impose even more draconian labour requirements in future PTAs, and that the North American Free Trade Agreement should be revised to incorporate yet tougher labour requirements, he is making export protectionism, and the reputation of the US as a selfish hegemon, worse, not better. Some change.


Change is indeed in order, although along totally different lines. It must reflect a holistic view of the new reality that the US confronts. In particular, the economic anxiety that overwhelms US workers today stems from the increased fragility of their jobs.


First, as with Japan in the 1930s, when one-dollar blouses flooded the world, India and China today are growing and exporting rapidly. They are like Gullivers in a Lilliputian world economy. They create tsunamis for specific industries where their exports concentrate.


Second, competition has intensified. As exemplified by the Boeing-Airbus saga, the margins of competitive advantage have shrunk. No chief executive or any of his workers in tradable industries leads a happy life any more as there is always someone, from somewhere, breathing down his neck. I call this new phenomenon “kaleidoscopic comparative advantage”. It leads to volatility of jobs, as you have an advantage today and can lose it tomorrow.


Third, labour-saving technical change continuously threatens assembly-line jobs for the unskilled. The assembly lines continue but increasingly do not have workers on them; they are managed from a glass cage by skilled operators whose jobs increase instead.


The agenda for institutional change has to address this fragility of jobs, enabling unskilled and skilled workers to face the new uncertainties. To illustrate: higher education will have to be recast to reduce the proportion of time spent on specialisation: this would enable an easier response to shifting skill requirements as the kaleidoscope turns. Unskilled workers will have to be helped and encouraged to acquire skills and therefore increase their ability to shift to other jobs, even as they continue to work.


Senator Obama promises change but he needs a deeper understanding of the anxiety-causing “new epoch” to define his new agenda shorn of protectionism. John McCain, the Republican presidential candidate, admirably stands for free trade but shows no evidence whatsoever of comprehending that this needs to be situated in an institutional context that requires a serious overhaul. Who will ultimately offer us the right New Deal?


The writer, university professor, economics and law, at Columbia University and senior fellow in International Economics at the Council on Foreign Relations, has just published ‘Termites in the Trading System: How Preferential Agreements Undermine Free Trade’. His next book on US trade policy, ‘Terrified by Trade: Institutional Change to Address Anxiety and Contain Protectionism’ (Oxford) is to be published in spring 2009

Africa Suffers From European Protectionism Yet Again: Is This What EURObama's Embedded Carbon/ Carbon Tariff-Focused US Trade Policies Would Achieve?

http://www.ippmedia.com/ipp/guardian/2008/08/23/121114.html

Africa to Pay for Europe's Green Policies


UK Guardian Reporter


2008-08-23


In efforts to make quick and symbolic gains in Europe`s otherwise failed policies to curb climate gas emissions, environmental and anti-globalisation politicians are aiming at Africa`s few economic success stories.


Campaigns to buy locally produced food and travel to local destinations particularly hit out against African products.


Consumers in Europe are again growing more environmentally conscious and are willing to use their purchasing power to assist in what is widely seen as their era`s most pressing problems.


Problems include overspending of energy and global warming. Meanwhile, European politicians have been those pressuring strongest to gain support for the Kyoto Protocol while having totally failed to lower emissions of climate gases in their own countries. In every country, emissions have steadily increased.


Populist solutions that are to satisfy costumers, politicians and the European industry alike are therefore surfacing all over Africa`s neighbour continent and the main market of its products.


And the solutions seem neat and nice - easy to understand and with the potential of creating more work locally. Even the industry starts propagating these solutions.


The victim mainly is Africa, because the message is that, as longer as a product or person is transported, the more energy is wasted unnecessarily.


Worst of all is airborne transport, having the highest emissions of climate gases such as CO2.


Unluckily, Africa is far away from European markets and poor transcontinental infrastructure puts most products and travellers on an airplane.


All over Europe, therefore, home-grown campaigns are being promoted, attacking Africa's newest and most successful export products.


Anti-globalisation activists, ``green`` politicians, local industry and even occasional experts and scientists head these ``buy local`` campaigns.


One of the latest campaigns is being launched in Germany, Europe`s most populous state and biggest single market. The campaign goes ``Sylt instead of Seychelles``, referring to a fragile German North Sea island with an overstretched and environmentally damaging tourism industry.


Tourism and climate expert Dr Manfred Stock developed the slogan and told the daily newspaper `Berliner Zeitung` that consumers worrying about global warming should avoid intercontinental flights and rather take the train to a German or European destination.


The much-quoted researcher is in line with policies promoted by Germany's Federal Environment Agency (UBA).


UBA President Dr Andreas Troge has made the climate change issue his agency`s foremost focus, and one of the ways consumers could ``do something on your own`` is by changing their travel behaviour, UBA says.


A single traveller flying to an intercontinental destination produces more than five tonnes of CO2, he told the German press, while someone travelling by train within Germany only had the emission of ten of kilograms of CO2 to account for.


Some even go further and have started penalising air travellers. In Norway, flyers have started paying for their CO2 emissions.


So far, only domestic flights are penalised to make sure Norwegian airliners are not losing out in competition with other companies on international flights.


But Norway is among many countries working for a CO2 tax on world-wide flights, which of course in particular would make long distance flights much more expensive.


This comes as most African states are investing massively in their nascent tourism industry and as Africa is surfacing as a modern and exciting travel destination in most Western markets.


Some sub-Saharan states, in particular Seychelles, Mauritius, Cape Verde and The Gambia, already see tourism as their greatest foreign exchange earners.


In Kenya, Tanzania, Senegal, Namibia, Botswana and South Africa, the travel industry by now is a vibrant success, while newcomers as Mozambique, Ethiopia, Gabon and Burkina Faso pin great investments and development hopes to the industry.


Ironically, much of Africa's new tourist destinations are focusing on eco-tourism, searching for modes that can guarantee the protection and good management of wildlife and habitats and local community development based on the new tourism revenues.


In Gabon and Madagascar, vast landscapes have been protected to be able to promote eco-tourism.


No measure in African history has proven so successful in stopping tree cutting and forest conservation than prospects of tourism revenues.


Mature markets like Seychelles, Mauritius and South Africa are already world leaders when it comes to conservation and management, knowing that their tourism industry depends on a sound nature.


At the same time, African destinations like Seychelles are demonised as anti-environmental by European ``experts``.


If successful, these campaigns could have a severe effect on the European market, which for the first time is experiencing a positive image of Africa as a must-see travel destination.


But also other African success stories are threatened by this new ``stay local`` trend. During the last decade, African agricultural products are increasingly admitted into the protectionist European market, even when also produced in Europe.


This includes beef from Namibia and Botswana, fresh flowers, fruit and vegetables from Kenya and even processed food products from South Africa and Ghana.


None of the few African countries that have managed to enter European markets with agricultural products that compete with local producers have had an easy path reaching their position.


Food quality and hygiene standards in Europe are extremely rigid and to a large degree designed to exclude foreign competition.


To be able to reach sceptical European consumers, African producers mostly also have been obliged to follow strict environmental and social guidelines.


Also, African food products for years had to fight against false prototypes promoted by seemingly well-meaning anti-globalisation activists that to a great degree were funded by local farmer organisations.


Development specialists - who do not get much air-time in European media - had to explain on and on again that European consumers were not ``stealing food from starving Africans`` when buying their products, but that these imports indeed would promote wealth and empowerment in rural Africa.


But in country after country, also these hard-bought gains are now under attack.


Britain is the country where consumers so far have had the strongest focus on how far the food basket has travelled before reaching supermarkets.


``Fresh vegetables from Africa" have for several years been one of the main focuses of environmental and anti-globalisation activists. They have even produced research claiming that the further foods have travelled, ``the more their vitamin and mineral content deteriorates.``


Already in 2003, airlifted baby carrots and garden peas from South Africa were highlighted in energy budgets of imported foods. For carrots, ``it will have taken 68 calories of energy in the form of fuel to air freight each calorie of carrot energy,`` while ``fresh peas require approximately two and half times the energy to produce, package and distribute as those sourced locally,`` the British daily `Guardian` reported.


South African wine, which is mostly shipped, however was praised for its ``tiny`` CO2 emissions. Of all the African products scrutinised, only wine is not produced Britain.


Years of campaigning against African agricultural products in the UK - whose funding has yet to be revealed - has already left its mark on British consumers.


The easy-selling ``fact`` that locally produced vegetables, meat, flowers and fruits are more environmentally fit than African imports has made many consumers look for ``low emission products``.


That this trend is significant was demonstrated by a surprise marketing campaign by Britain's largest supermarket chain, Tesco, in February 2007. The retailer was to introduce ``carbon counting`` labelling to let consumers see for themselves how far their food basket had travelled and how much CO2 emissions had been needed.


Tesco is one of the main channels for Kenyan products to European consumers - indeed half of Kenya's agricultural exports go to Britain.


Naturally, the surprise marketing stunt caused frustrations at the Fresh Produce Exporters Association of Kenya (FPEAK), which had not been consulted on the move.


While Tesco promised to keep on importing Kenyan products, ``carbon counting`` labels on these goods from 2008 will tell a one-sided story to British consumers.


From Britain, this trend is spreading to all over Western Europe.


In Sweden, the leading daily `Aftonbladet` attacked local supermarkets for not following Tesco\'s example ``despite the fact that one fourth of climate gases emitted by Swedes originate from our food.``


Ecologist Annika Carlsson-Kanyama enthusiastically helped the Swedish daily to make a parallel guide for consumers, where ``airborne tropical fruits`` were labelled as no-goes for conscious consumers.


In other countries, old arguments against food imports from Africa are resurfacing.


In the programme of Nature and Youth, one of the environment groups gaining most media attention in Norway, new and old ``facts`` are mixed: ``Locally produced food is more environmental, safe and solidary,`` it says, claiming solidarity with African producers ``for not spending the resources of others.`` Norway is a main importer of Namibian beef.


While the great focus on ``environmentally damaging`` food imports from Africa and flights to Africa is even increasing, less and less attention is given to the positive environmental balance of this trade.


Forgotten is the fact that almost 100 percent of input factors in African agriculture are locally made and almost no machinery is used in production, while European farmers import fertilisers, pesticides, seeds, seasonal workers and oil-consuming machineries from all over the world.


Forgotten is also the fact that food exports and tourist destination developments empower Africans to protect and manage their environment and even reduce African-induced CO2 emissions.


Eco-tourism has greatly promoted the protection of forests, mangroves, savannas and coral reefs in Africa - which also are key environs when it comes to storing CO2. A larger and more diversified food production in Africa also reduces the dependence on imports to supply African consumers.


And the greatest irony [HYPOCRISY] of all is that, while imports from Africa again are demonised, exports from Europe to Africa causing the same CO2 emissions are promoted as ever before.


Subsidies are paid to promote the consumption of Spanish biscuits, French dairy products, European wheat instead of local staple foods, European tropical fruit juices, trawler caught fish dishes and, of course, all kind of industrial products.


Even Tesco, being concerned about CO2 emissions of transported foods, shows its real face when it comes to exporting from Europe.


Only two weeks before its much-publicised marketing campaign on ``carbon counting`` labels, the UK retailer issued a less-publicised statement.


It announced the opening of ten supermarkets in China, where it will be selling popular European grocery products.


Political support in Beijing was bought by promising to buy Chinese products worth euro 3.3 billion annually for exports.


In China, Tesco meets competition from the giant chains Carrefour of France and Metro of Germany, already assuring a European export of products and lifestyle to the world`s fastest growing market.


Who would come up with a silly idea of starting to count CO2 emissions when Europe`s super retailers are taking up competition with America`s Wal-Mart, thus promoting French, German and British products among China`s 1.3 billion inhabitants?

Uninformed Vermont Legislator Makes Big Stink About China's WTO Objections To State's Waste Rules

http://www.wptz.com/news/17172503/detail.html













For Sending A Letter, Vt. Lawmaker Says China Overstepped Its Bounds

5 WPTZ.com


BURLINGTON, Vt. -- A state senator from Chittenden County said a letter received from a Chinese official criticizing legislation she has pending in Montpelier "flies in the face of state sovereignty and democratic principles."
http://www.wptz.com/video/17173558/index.html


Sen. Virginia Lyons of Chittenden County chairs the Natural Resources and Energy Committee. Lyons held a news conference Tuesday to discuss the implications of the undated letter she said she received in April.


The three-page communication, in both English and Chinese, was signed by "Wang Ni Ni" who identified himself as director general for the "China WTO/TBT National Notification & Enquiry Center" and listed an address in "Hai Dian District, Beijing."


The letter opened by saying "we appreciate the opportunity to submit comments on the regulation under the notification proposed by the State of Vermont."


Wang then outlined objections to Lyons' bill that would impose fees on manufacturers of electronic goods sold in Vermont. The fees, which would be calculated based on the weight of an item, would establish a fund for eventual recycling of e-waste. Wang suggests the mechanism would affect manufacturers unevenly and amount to an "unfair restriction of trade."


Lyons said her bill would effectively reduce the volume of electronic waste now winding up in Vermont landfills. Her proposal has yet to see debate at the state capital. But most of her ire focused on what she considers an unwelcome intrusion.





"It's simply not OK for other governments, foreign national governments, to feel they have a right to intervene in our state legislative process in the way China has," Lyons said.


[MAY WE SUGGEST THAT SENATOR LYONS TAKE A WTO COURSE FROM THE USTR?? HOW ABOUT A REFRESHER COURSE IN THE U.S. CONSTITUTION FROM NONE OTHER THAN THE FACULTY OF VERMONT LAW SCHOOL??]




She said Maryland and Missouri legislators have also felt "push back" from the Chinese over proposals they don't like. Lyons said she recently sent a complaint to the U.S. Department of Commerce. A spokeswoman there - and at the Office of the U.S. Trade Representative - both declined comment.


Lyons said she worries Vermont lawmakers would feel a "chilling effect" from the Chinese official's letter. She said she was "a little unnerved" the communication listed her home phone and address.




[WE SUGGEST THAT VERMONT STATE SENATOR LYONS WAKE UP FROM HER DEEP SLEEP OR SELF-IMPOSED STUPOR AND LOOK OUT OVER THE GLOBAL HORIZON TO SEE A BRAVE NEW WORLD OF INTERNATIONAL TRADE, THE INTERNATIONAL LEGAL FRAMEWORK OF WHICH HAS CONTINUED TO EVOLVE SINCE 1947. WITH THE CONCLUSION OF THE URUGUAY ROUND OF TRADE NEGOTIATIONS DURING 1994, AND THE CREATION OF THE WORLD TRADE ORGANIZATION AND ITS BINDING DISPUTE SETTLEMENT MECHANISM, AS WELL AS, THE EXECUTION OF NEW MULTILATERAL TRADE AGREEMENTS, INCLUDING THE TECHNICAL BARRIERS TO TRADE (TBT)AGREEMENT, THE FEDERAL, STATE & LOCAL GOVERNMENT TECHNICAL REGULATIONS OF ALL WTO NATIONAL MEMBERS, AND EVEN THE PRODUCT & PROCESS STANDARDS OF RECOGNIZED PRIVATE STANDARDS BODIES OPERATING WITHIN THE JURISDICTIONS OF WTO MEMBERS, ARE NOW SUBJECT TO INTERNATIONALLY AGREED UPON RULES.]

---------------------------------------------------------------------------------------

http://www.worldtradelaw.net/chinavermont.pdf


115 STATE STREET STATE OF VERMONT PHONE: (802) 828-2228

MONTPEUER, VT 05633-5201 FAX: (802) 828-2424


SENATE CHAMBER


For Immediate Release Contact: Katie Manaras
August 12, 2008 (802) 828-3806


Senator Virginia Lyons Statement on Chinese Objection
to Proposed Environmental Legislation in Vermont

Vermont State Senator Virginia Lyons held a press conference on Tuesday, August 12, 2008 at 2:30 p.m. at Main Street Landing in Burlington, Vermont to make a statement regarding a letter she received from a foreign nation, asking her to "cancel" or "revise" a bill she had introduced during the legislative session. The subject of the bill is control and disposal of electronic waste. The nation complaining about the Vermont bill is the People's Republic of China.


In an official communication-which was sent to the home address of this citizen-legislator- China asserted that Senator Lyons' bill (S.256) presents an obstacle to international trade. In its letter, China cited an existing U.S. commitment under World Trade Organization (WTO) rules as a reason why Senator Lyons should withdraw her bill.


This wasn’t the first such occasion in which the People's Republic of China has 'pushed back' on state legislation they didn't like. China earlier had complained about state bills dealing with lead, phthalates, and other toxic materials found in children's toys. On that occasion, federal trade negotiators in Washington told the state legislator who introduced the bill that the communication from China was a 'mistake' and wouldn't be repeated.


However, the 'mistake' was repeated-this time in relation to a proposed Vermont law on electronic waste-and Senator Lyons felt it was extremely important to address this problem now.


According to Senator Lyons, "The People's Republic of China questions the authority of the Vermont legislature to enact legislation to protect human life and the environment. This attempted interference by the People's Republic of China in the democratic process in Vermont is alarming and threatens basic principles of our system of government. Common sense solutions to health issues at the state and local level should not be subject to international pressure."


She stresses that, "This is part of a disturbing trend toward undermining state's rights. Its simply not OK for other governments to feel that they have a right to intervene in our state legislative process in this way. It wouldn't matter whether the bill addressed by the Chinese government was about health care, workers benefits, land use permitting, or in this case, electronic waste recycling, the underlying principle is the same: respect for democratic decisionmaking. And so, we have to let folks in Washington DC and in Beijing know that this an unacceptable intrusion."


Senator Lyons was taken aback by how quickly China obtained the information about an introduced bill. "It appears that the Bush Administration alerted the Chinese," Lyons said. In a letter to Bryan O'Byrne, at the Department of Commerce's Trade Compliance Center, Senator Lyons asked about how-and why-this notification took place. See attached letter.

[DEAR MS. LYONS: IT IS THE LEGAL OBLIGATION OF THE U.S. GOVERNMENT TO NOTIFY OTHER WTO PARTIES IF U.S. FEDERAL, STATE OR LOCAL LAWS AND REGULATIONS BEING PROPOSED, ADOPTED and/or APPLIED (ENFORCED) WILL AFFECT THE FLOW OF TRADE FROM THAT OTHER WTO PARTY AND IMPACT THE RIGHTS OF THEIR CONSTITUENTS.]

Whatever the case, it appears that China is taking an aggressive stand to push back on recycling and product-registration requirements for consumer electronics-and the push-back has now 'gone global.'

[DEAR MS. LYONS, YOU SHOULD GET OUT MORE AND READ THE NEWSPAPERS. FOR EXAMPLE, CHINA IS NOT THE FIRST WTO MEMBER TO CHALLENGE THE FEDERAL LAWS OF OTHER NATIONS ON WTO GROUNDS. SINCE THE MID-1990'S, THE U.S. GOVERNMENT UNDER THE ADMINISTRATIONS OF TWO PRESIDENTS (DEMOCRAT & REPUBLICAN) HAVE CHALLENGED THE NON-SCIENCE AND NON-ECONOMICS-BASED ENVIRONMENTAL & FOOD SAFETY LAWS OF THE EUROPEAN UNION and ITS MEMBER STATES, ALLEGING, AS HAS CHINA, HERE, THAT THE FAILURE OF THE EUROPEAN LEGISLATURE TO SUBJECT THE PRODUCTS IT WAS SEVERELY RESTRICTING OR OUTRIGHT BANNING TO A SCIENCE-BASED RISK ASSESSMENT, AND THEN TO EMPLOY ECONOMIC COST-BENEFIT ANALYSES IN ASCERTAINING WHICH OF THE AVAILABLE RISK MANAGEMENT MEASURES THAT ARE LEAST TRADE RESTRICTIVE COULD BE ADOPTED IN LIEU OF THE DISPUTED MEASURES. IN PARTICULAR, THE U.S. GOVERNMENT OBJECTED TO THE EU REGULATIONS ON CHEMICALS ('REACH'), AND ITS DIRECTIVES ON WASTE RECYCLING, 'TAKE-BACK', E-WASTE, HAZARDOUS SUBSTANCES ON ELECTRICAL AND ELECTRONIC EQUIPMENT, ETC. THE U.S. GOVERNMENT ALSO PREVIOUSLY RAISED OBJECTIONS CONCERNING CHINA'S ADOPTION OF SIMILAR RULES.]

[See Lawrence Kogan, Exporting Precaution: How Europe's Risk-Free Regulatory Agenda Threatens American Free Enterprise, Washington Legal Foundation (Nov. 2005), at:

http://www.itssd.org/White%20Papers/KoganMonograph.pdf ].

"Electronic products, such as computers and televisions, contain lead, mercury, cadmium, and similar hazardous materials," Lyons explained. "My bill simply provides a system for the recycling of electronic products as a means of limiting the release of these dangerous heavy metals from landfills and thereby protecting the environment and public health in Vermont."


"After S256 was introduced and was under consideration in committee, I received an e-mail from Beijing. The e-mail included a World Trade Organization document indicating that the U.S. federal government had notified a WTO Committee that S256 could be in violation of international trade law. Also attached was a cover letter from Wang Ni Ni, Director General of the China WTO Notification and Enquiry Center, and official comments by the Peoples Republic in response to the U.S. notification to the WTO regarding S. 256."


"And right on the front of that mailing from China was my home address and telephone," Lyons added, "which wasn't exactly what I would expect from an official communication regarding a WTO matter. It was a bit unnerving."


Two weeks ago, at the Annual Meeting of the National Conference of State Legislatures, Senator Lyons introduced a resolution deploring China's action, and alerting other state legislators to this new pushback. [The text of this Resolution can be found at
http://www.ncsLorg/printlstandcommlsclaborecon/ChinaLyons.pdf ] The resolution passed unanimously from the initial committee of jurisdiction and is now pending in a second committee.


"This was an important step to educate legislators about what's at stake here. I understand that the global trade rules mean that the United States is supposed to notify the WTO about major regulatory changes. How the Chinese concluded from this that they had a right to intervene in a state legislative process, long before new regulations are written, is quite beyond me.

[WAKE UP MS. LYONS!!!!]

"I just hope the Chinese weren't being encouraged to file complaints against state legislation by our own federal trade officials in Washington," concluded Senator Lyons.


WTO/TBT
China WTO/TBT National Notification & Enquiry Center
No.7, Ma Dian Dong Ac, Uai Dian District, Beijing, China, TeL 86 10 8226 0618 Fax: 86 0 8226 2448


FAX
TO.
National Center for Standards and
Certification Information (NCSCI)
National Institute of Standards and
Technology (NIST)
100 Bureau Drive
MS-2 160 Gaithersburg, MD USA
20899-2160
Tel:-i-(1301)975 4040
Fax ±(1 301)9261559
E-mail: ncsci@nist.gov
Website:http:/!ts.nist.gov/ncsci

Senator Virginia Lyons
241 White Birch Lane
Williston,VT 05495 USA
Tel: +(802) 863 6129
Email: vlyons@leg.state.vt.us
url: http://www. legstate.vt.us

Date: , 2008
Number of pages: 2+3
Copies:

Department for WTO Affairs, Ministry
of Commerce of P.R.China
Fax: +86 10 65 197726;65 128304
E-mail: wtonoti@mofcom.rnv.cn
liuna@mofcom.gov.cn
Permanent Mission of P.R. of China to WTO
Fax: +41-22-9097699/9097688
E-mail: guoxueyan9999@gmail.com

WTO Affairs Office, General,
Administration for Quality, Supervision, Inspection and Quarantine, PR.C.

Fax: +86 10 82260553
E-mail: jo@atsig.gov.ca
xuj @aqsiq.gov.cn

Department for Supervision on Inspection, AQSIQ of P.R.China
Fax: +86 10 82261949
E-mail: ijusy@agsig,gov.cn
From:

China WTO/TBT National Notification & Enquiry Center, Standard and Regulation Researching Center, AQSIQ, P.R,China
Tel: 86-10-82260618
Fax: 86-10-82262448
E-mail: tbtP aqsiq.gov.c n
Subject:

Comments on USA Notification G,TBT/N/USAJ34O
An Act Relating to the Disposal of Electronic Waste. S256

Comments on USA Notification G/TBT/N/USA/34O

An Act Relating to the Disposal of Electronic Waste, S256

Dear Sir or Madam,

We appreciate the opportunity to submit comments on the regulation under the notification proposed by State of Vermont.


Enclosed please find comments in English and Chinese.


Please acknowledge receipt of the comments by e-mail to tbt@agsig.gov.cn. Thank you very much in advance for State of Vermont consideration of our comments.


Formal reply from State of Vermont will be appreciated.


Best regards


Wang NiNi
Director General
China WTO/TBT National Notification & Enquiry Center
No. 9 Ma Dian Dong Lu, Hai Dian District, Beijing
Post Code: 100088
Tel: 86-10-82260611/0619
Fax:86- I 0-82262448
E-mail: 4kt@aqsiq.gov.cn


Comments from China on USA Notification
G/TBTIN/USA/340

An Act Relating to the Disposal of Electronic Waste, S256


China appreciates U.S. for fulfilling WTO transparency obligation, to notify Notification G/TBT/N/USA/340. After careful study, we hereby put forward the following comments on the notified regulation.


I. China thinks the registration fee referred in Article 7303-(a) of the notified regulation lacks science, which is likely to result in unfairness, and will create unnecessary obstacles to the trade. The article is not in consistency with Article 2.2 of TBT Agreement, "Members should ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade." Therefore, China suggests canceling or revising the article of the regulation. Specific reasons are as follows:


a) In Article 7303(a) (2) of the notified regulation, "The registration fee for the initial program year during which a manufacturer's video display devices are sold is $5,000.00. Each year thereafter, the registration fee is equal to a base of $2,500.00, plus a variable recycling fee calculated according to the formula in subdivision (3) of this subsection."; as wet! as in Article 7303-(a) (6) of the notified regulation, "The registration fee for the initial program year and the base registration fee thereafter for a manufacturer who produces fewer than 100 video display devices for sale annually to households is $1,250.00."


b) The manufacturer pays the "variable recycling fee" according to provisions of the proposal, and both registration fee for the initial program year and the base registration fee thereafter added based on this are unreasonable. Difference in the market sales amounts results in difference in unit cost increase of the manufacturer. which is obviously unfair. Therefore, we don't think it is scientific for the determination of above registration fees. b) What's more, similar proposals involved in the notifications of US confederation member states Missouri and Virginia, G/TBTINIUSAI332, G/TBT/N/USA1333, G/TBTINIUSAI342, all don't provide for payment of registration fee.


c) In Article 7303-(a)-(3)(E) of the notified draft, E (the estimated per pound cost of recycling used to calculate the variable recycling fee) is set at 0.5 dollar per pound. which may obviously increase the cost of the video display devices sold to households. Take CRT display devices as an example, it is estimated that the cost will increase by IO3O%. Please provide detailed scientific basis for such determination of the value, taking account of reducing the value as much as possible.

d) d) In Article 73O3(a)(3) (C) of the notified regulation, it is provided that, "C = the number of pounds of recovered electronic devices recycled by a manufacturer from households during the previous program year, as reported to the agency under section 7305 of this title", it is lack of science and operability to determine the data, which is likely to create unfairness. Reasons are in below:


i For small manufactures newly entering into the market of the state, compared with large and local manufactures in the terms of recovery and collection channels or recovery technology control and use, they are obviously in an inferior position, which may likely result in more cost for them to obtain pounds for equivalent recovery designated electronic devices.


ii. The value relies on statistics and feedback of the recycler, while there isn't any provision relating to obligation of the recycler to provide true and comprehensive recovery data in the regulation, which is likely to result in incorrect value statistics as well as bad operability.


2. Effective date and approval time limit


a) It is stipulated in Article 73O2(b)-(5) that, "A registration is effective upon receipt by the agency and is valid until July 1 of each year". We think it is inappropriate to fix the effective date of registration to a fixed date, and it is suggested for U.S. to revise this article.


b) It is suggested to clearly define the acceptance and approval time limit of the agency of natural resources after the manufacturer applies for registration with the agency,


3. It is suggested to consider adding in Article 73O5(b): the recycler should cooperate with the manufacturer in the inspection and tracking, and provide the evidence indicating the recycling and disposal of covered products by the manufacturer and whether the product of the manufacturer is recycled without permission or sold after simple repair.


4. The responsibility of the collector throughout the recycling link is not stated in the regulation. It is suggested that the responsibility of the collector be added in the article.

Comments in Chinese are as follows…

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Forum on democracy & trade


Preliminary Analysis of Allegations by the Peoples Republic of China (PRC) Regarding S.256 (2008) Introduced by Senator Virginia Lyons


Introduction


International trade agreements are negotiated by the United States Trade Representatives (USTR). Individual states are not involved in the negotiations, although trade agreements are presented to Congress. The 1974 Trade Act gives states very little policy input on trade, despite the fact that economic decisions regarding trade have powerful consequences for cities and states. There is only one advisory group to USTR that includes representatives from states.

States have not found this limited input to be sufficient to protect state interests. As a result, several states, including Vermont, Maine and New Hampshire, have created special Commissions to explore the impacts of international trade agreements on state sovereignty and to communicate state interests with USTR, other states, and Congress.


Analysis of Objections


The United States sent a notice to the World Trade Organization (WTO) about Senator Lyons bill, S,256. Based on a notification document issued by the WTO Committee on Technical Barriers to Trade, it appears that the PRC allegations are a response to a U.S. notification filed with the WTO related to Senator Lyons' bill.


The WTO Agreement on Technical Barriers to Trade contains various rules governing "technical regulations." The term "technical regulation" is defined as a "document which lays down product characteristics or their related processes and production methods...." (TBT Agreement, Annex 1). The proposed Vermont legislation, it might be argued, constitutes a "technical regulation" because it is related to product characteristics - i.e. specified types of electronic products containing heavy metals and other dangerous substances. At the same time, it might be argued that the essential thrust of the bill, to establish and finance a system of electronic product recycling, is not "technical regulation." Furthermore, it is not even clear that Chinese manufacturers are covered by the definition of "manufacturers" in S25, although any additional regulatory and financial burdens carried by their U.S. distributors as a result of the legislation might have some impact on the volume of sales in Vermont that could indirectly reduce the profits of Chinese firms. Nonetheless, the PRC, the U.S. federal government, and the WTO are treating it as a technical regulation subject to WTO jurisdiction.


Under Article 3.2 of the TBT Agreement, WTO member nations, including the United States, are required to notify other members whenever a state or provincial government such as Vermont proposes to enact a "technical regulation" that is not based on international standards and that will have a "significant effect on trade of other IWTOI Members." See Articles 3.2 and 2.9.2.


The notification is required to be made "at an early appropriate stage, when amendments can still be introduced, and comments taken into account." It seems that the U.S. federal government notified the WTO of the Lyons legislation pursuant to Article 3.2 of the TBT.


The WTO notification on S256 cites the "protection of human life and health" as the 'objective and rationale' of the legislation. Unlike several other WTO agreements, the TBT does not have a 'general exception' regarding the "protection of human life and health." A country might attempt to challenge such a legislative measure by claiming that the regulation will not be implemented in the 'least trade restrictive' way possible; is discriminatory against foreign commerce; does not follow international standards; gives too much discretion to regulators; etc.


These are the kinds of complaints that might be made by the PRC.


The PRC alleges that the Lyons bill violates WTO law, Without much explanation, the Peoples Republic declares that Senator Lyons' bill is inconsistent with Article 2.2 of the TBT Agreement, which states that "Members should ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade." Under this strict "necessity test," trade values arguably trump other public policy values unless there is no conceivable alternative policy that is less burdensome on trade. The PRC asserts, also without much factual or legal explanation:


• That registration fees and recycling fees paid by manufacturers under S256 are unfair and not determined on a scientific basis;

• That similar regulatory proposals in Missouri and Virginia do not require payment of a registration fee by manufacturers (perhaps suggesting that a registration fee is an "unnecessary obstacle" to international trade?);

• That the variable recycling fee may increase the cost of video display devices by 10 to 30 percent;

• That the annual administrative process for calculating the pounds of electronic devices recycled by a manufacturer from households has no scientific basis, is unfair to small manufacturers entering the Vermont market, and relies on statistics and feedback from recyclers who are under no obligation to furnish reliable data; and

• That revisions are needed in the bill related to the effective date for registration by manufacturers, a more clearly defined time schedule for agency acceptance and approval of a registration, and greater specification of the responsibilities of collectors and recyclers.


Conclusion


As illustrated by this event, other countries could and are beginning to use the trade system to apply pressure to state legislatures and to impact the state legislative process. Since trade promotion authority has expired, states see an opportunity to evaluate the process for providing input on trade issues and to improve federal-state communication. A new system for improving communication between states, USTR, and Congress should be a strong priority for the next Congress and President to ensure that out democratic system of government is protected.


For more information, contact Peter Riggs, dggs@forumdemocracy.net or William Waren, wtw2@law.georgetown.edu

[APPARENTLY, FORUM FOR DEMOCRACY, A POLITICALLY MOTIVATED DEMOCRATIC PARTY NON-GOVERNMENTAL ORGANIZATION, IS ADVOCATING U.S. TRADE POLICIES THAT CLOSELY RESEMBLE A BILL THAT WAS PROPOSED DURING SPRING-SUMMER 2008 IN CONGRESS, WHICH WOULD HAVE CAUSED GREAT HARM TO U.S. INTERNATIONAL TRADE AND FOREIGN RELATIONS. See OBAMA-BROWN-MICHAUD Non-Tariff Trade Barrier Act Likely to Devastate US Economy, Trigger a Global Trade War & Endanger World Peace, ITSSD Journal on Disguised Trade Barriers, at: http://itssddisguisedtradebarriers.blogspot.com/2008/06/us-trading-partners-beware-obama.html ].

[STATES MUST REMEMBER THAT THEY CANNOT ENACT INITIATIVES THAT INTERFERE WITH THE CONSTITUTIONAL AUTHORITY OF THE PRESIDENT AND THE CONGRESS TO CONDUCT FOREIGN COMMERCE AND FOREIGN AFFAIRS, OR OTHERWISE IMPAIR THE TREATY POWER ENJOYED BY THE EXECUTIVE & LEGISLATIVE BRANCHES OF THE FEDERAL GOVERNMENT. See New Jersey, Other States Tread on Thin LegaI Ice: Declare Right to Impair President's & Congress' Constitutional Authority to Conduct Foreign Commerce, ITSSD Journal on Disguised Trade Barriers, at: http://itssddisguisedtradebarriers.blogspot.com/2008/08/new-jersey-other-states-tread-on-thin.html .]

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115 STATE STREET STATE OF VERMONT PHONE: (802) 828-2228
MONTPELIER, VT 05633-5201 SENATE CHAMBER FAX: (802) 828-2424


7 August 2008


Bryan O'Byrne
Trade Compliance Center
International Trade Administration
Deartment of Commerce
14 Street and Constitution Avenue NW
Washington, D.C. 20230


Dear Mr. O'Byrne,


During the 2008 Vermont legislative session, I put forward a bill designed to regulate the movement and handling of toxic materials from used electronics, a so-called se-waste bill.' Imagine my surprise when several weeks later I received a threatening notice [???] from the People's Republic of China's WTO Compliance Center in Beijing, attempting to dissuade me from pursuing this bill in the Vermont Senate. Given your role in the Department of Commerce's Trade Compliance Center I am wondering if you could shed some light on this turn of events.


I chair the Vermont's Senate Natural Resources Committee. I have a Master's Degree in Nutritional Biochemistry (Rutgers) and a Doctorate from the University of Vermont in Planning and Administration, and consequently am very familiar with both the science and legislative politics of electronic waste disposal debates. As a board member of Parent to Parent Vermont and mother of two daughters, I am also deeply concerned about the impact of toxics in our environment. The e-waste bill (S. 256) was designed to address those concerns in a manner that in no way discriminates against foreign electronics manufacturers, or impacts negatively on international trade in any way.

[MS. LYONS - YOU WOULD NEED TO PROVE IT, IF YOU CAN.]

The bill was published in committee on January 7. It notes that "the establishment of a system to provide for the collection and recycling of electronic devices in Vermont is consistent with the state's duty to protect the health, safety, and welfare of its citizens; maintain and enhance the quality of the environment; conserve natural resources; prevent pollution of air, water, and land; and stimulate economic growth." The bill did not pass during this legislative session-due to limited time available during the legislative session, rather than any local opposition.


Opposition, it seems, has come from a very different quarter. By following the 'paper trail' back from China, we have found that the Department of Commerce, and/or the Office of the United States Trade Representative (USTR), notified Beijing of the August 7th 2008 existence of this bill by January 10th -just a couple days after the bill would have been published on a state website. The China WTO-TBT Compliance Center sent a letter challenging provisions of my bill in early April of this year. Most disturbingly for me, China referenced my home address in making their complaint.


I would very much appreciate it if you could respond to these questions and concerns:


a) Is your office designated the national inquiry point' for the WTO-TBT agreement? How do you and your staff interact with other 'national inquiry points', such as the one that wrote me from China?


b) Do you prepare a listing of proposed state laws with any new regulations potential impacts on international trade to notify other countries? Does the Trade Compliance Center have dedicated staff working to review state laws and proposed technical standards?


c) How do you interpret the phrase, "draft regulations"? We understand that the United States has an obligation to notify other WTO member states if the U.S. has proposed changes in regulations that could impact on international commerce. Is it standard procedure to notify trading partners before such laws are passed-that is, well in advance of the actual drafting of regulations?


d) How does the Department of Commerce interpret the provision in the TBT that allows for a comment period before the publication of new technical standards and regulations? Is it Commerce's position that foreign trading partners should be allowed to comment on proposed state laws prior to their debate on the floor of the legislature?


e) Does the Department of Commerce have resources available to assist state legislatures, executive agencies, and offices of attorney general to respond to comments submitted by U.S. trading partners?


The Commerce Department website indicates that the United States previously raised concerns about China's regulatory environment regarding toxic chemicals. Could you briefly state what those concerns were? Do you feel that China's action against Vermont's law-making powers could be a form of retaliation against the US inquiry?


Knowing that China pushed back' on the 2003 European Union-Directive on Waste Electrical and Electronics Equipment-and that most of the action in addressing c-waste concerns within the U.S. is happening at the state level-I am concerned that China's TBT notification to Vermont was an attempt to weaken emerging global standards on e-waste and on cradle-to-cradle' manufacturing standards. A weakening of these standards may very well provide international competitive advantage to Chinese firms, given that they do not have strict c-waste standards to adhere to in their home markets.


Let me close by stating how much we appreciate the work that you do on behalf of American exporters. As a percentage of total exports by value, Vermont is more dependent on 'high-tech' exports than any state in the nation. The Department of Commerce's support of marketing opening efforts, and its 'US Notify' website, are important tools in expanding opportunities for U.S. companies. We are concerned about the competitiveness of our own electronics firms; we wish to maintain the high standards of environment and public health which are a key part of Vermont's market 'brand' and its attractiveness as a business destination; and at the same time, we intend to take every democratic measure necessary to keep e-waste out of our landfills and to protect our environment and the health of Vermont's children.


Thank you very much for your kind attention to these matters, I look forward to hearing from you in writing via my legislative office:


Sincerely yours,


Senator Virginia Lyons


cc: Dana Eidsness, Vermont International Trade Director, USTR State Point of Contact
Kay Wilkie, Chair, InterGovernmental Policy Advisory Committee (IGPAC)
Tiffany Moore, Director, Public Liaison Office, USTR
Peter Shumlin, Senate ProTem, Vermont Legislature
Hon. Peter Welch, Representative
Hon. Bernie Sanders, Senator
Hon. Patrick Leahy, Senator

[HALLELUJAH!!! MS. LYONS IS LEARNING!!]