U.S. Chamber puts trade, transportation high on 2007 agenda
The U.S. economy is fundamentally strong but will grow at a slower rate of about 2.5 percent this year compared to 3.3 percent in 2006, the U.S. Chamber of Commerce predicted in its annual 'State of the American Economy' report released Thursday.
Inflation will remain moderate at about 2.7 percent and the housing market is expected to stabilize in the second half of the year after a weak start, the largest U.S. business federation said.
The Chamber listed among its legislative goals for 2007 pro-growth policies such as immigration reform, free trade and expanding infrastructure. The Chamber said it will also work beyond Washington to harmonize regulatory frameworks around the world that act as a drag on trade, create an institute to develop solutions for energy independence and climate warming, expand its battle against international counterfeiters, and launch an infrastructure capacity initiative to draw attention to the need for new investment in transportation, logistics, energy and telecommunications systems.
In addition to building coalitions to promote its business agenda, the Chamber said it would seek to dislodge members of Congress that advocate anti-business policies that dampen job growth or the global competitiveness of U.S. companies. Types of legislation the Chamber said would trigger a fight are 'Buy America' provisions in government contracts; restrictions on global sourcing, investment and U.S. exports of widely available technology products; and homeland security and border control measures 'that fail to strike a commonsense balance between safety, mobility, and global commerce — such as inspection of all 11 million to 12 million cargo containers entering the United States each year before we have the technologies and systems in place to handle this undertaking.'
Among the Chamber’s trade priorities are passing free trade agreements with Colombia, Korea, Malaysia and Peru; reaching a global trade agreement; renewal of fast-track presidential trade promotion authority; and winning Russian accession to the World Trade Organization. The Chamber will devote major new resources to an education program promoting the benefits of free trade across the country.
Progress on trade can be made this year despite a Democratic-controlled Congress, the Chamber said. It will work to modernize the rules governing foreign investment, with emphasis on the Committee for Foreign Investment in the United States (CFIUS) that passes judgment on the national security implications of any asset transfer to foreign entities.
CFIUS, which includes representation from several executive branch departments, was at the heart of the Dubai Ports World controversy last year. Lawmakers criticized it for not conducting a thorough review of the security threat posed by the sale of marine terminal rights to the Dubai company. But CFIUS reform legislation was never passed.
The Chamber supported a bill that passed the House and opposed the Senate version that never got to a floor vote because it included criteria for reviewing foreign investment that went beyond national security, said Bruce Josten, executive vice president for government affairs, at a press conference to unveil the report. He said that Rep. Barney Frank, the new chairman of the House Financial Services Committee, and Sen. Christopher Dodd, the new chairman of the Senate Banking Committee, favored legislation that focuses on the national security aspect instead of using the process to protect U.S. industries.
The Chamber said it would fight non-tariff regulatory barriers at home and abroad because divergent regulatory approaches make it difficult for companies to operate in other markets.
'In some cases, what are purported to be philosophical differences in regulatory approaches are, in fact, thinly disguised efforts to deny competitors fair and equal access to markets,' the Chamber said.
The Chamber’s initiative will 'also target regulations in the United States that, intentionally or unintentionally, favor domestic participants and squeeze out foreign competitors.
'We will fight the rise of economic nationalism as manifested by the increasing number of investment restrictions and hurdles under consideration in our country as well as in both developing and developed economies,' it said.
The Chamber said immigration reform is critical to keeping the economy going in the face of changing demographics, and called for a guest worker program, expansion of visa programs, effective employee verification and a pathway for current undocumented workers to earn legal status subject to a criminal background check. In the logistics sector, many workers from Mexico, Central and South America work in the warehouse industry, and trucking companies are increasingly looking to tap another labor pool as the driver shortage among white males increases.
President Thomas Donahue said the Chamber is optimistic such legislation can pass this year 'because the shortage of workers is getting critical.
'People that oppose guest worker programs are as dumb as a box of rocks because you just have to look at the numbers showing low unemployment, 77 million people getting ready to retire and only 12 million undocumented workers here now. Let's quit the baloney and get a system that's going to support our economy or companies only have one choice, and that's take some more of their business and take it somewhere else,' Donahue said.
On the transportation front, the business group said it will take a lead role in the reauthorization of the Federal Aviation Administration, call on Congress to pass the Water Resources Development Act, and work to make sure that the funding commitments made in the 2005 surface transportation spending bill are kept. The infrastructure initiative will include organizing a high-powered coalition of senior executives of major transportation users to educate the public and policymakers about the $60 billion impact on the economy from congestion and capacity constraints.
'There's a fundamental change in American companies. The issues of transportation and logistics has moved up to the executive suite,' because of the productivity benefits the system provides, Donahue said.
'We're getting to the point where we are running out of capacity for east-west trade, north-south trade, railroad capacity, waterway capacity, roads, bridges. You don't have to be the smartest guy on the team to figure out that we're going to have to move forward with a whole series of activities to keep our transportation system as effective as it is today,' he said.
To galvanize support and pressure politicians to act, the Chamber said it will rate state and local infrastructure systems, explore innovative financing and building strategies, and enlist business and labor backing for its efforts.
'I think we can build a consensus in business. Clearly we can build a consensus in the states. And I do believe if something might come out of this new Congress, it might be in this area,' Donahue said.
But time is running out, he added. 'This is an issue that you can't fix by passing a piece of legislation ' because you wait 15 years to get it done. It has a great sense of urgency.
'We're going to get very retail on this. We need to explain what's going to happen in the districts and states — where governors, senators and congressmen can begin to understand about the integrated transportation system. This is a national effort to understand we're about to get into gridlock in a big way. Every day we wait to do something the hole is getting deeper and the ladder is getting shorter,' Donahue said.
The organization's energy policy calls for expansion of domestic oil, gas and coal production, as well as nuclear power; investment in alternative and clean energy technologies; boosting U.S. refinery capacity and improving energy infrastructure.
To read the full report, go to: http://www.uschamber.com/NR/rdonlyres/elxzdn52g23srgmu3xy7gvgixvholay2lo4copunmwu2ujptdyi7wdxbv2vlv2ncliiq23r6bhzpxlhjvy6fausrhkc/07sab.pdf .