Trade Test Teaches Important Lesson

July 29, 2005 - 1 Comment

Last night, the U.S. House of Representatives narrowly passed, 217-215, the U.S.-Central America-Dominican Republic Free Trade Agreement (so-called CAFTA-DR), H.R. 3045. Cisco and the U.S. tech industry supported passage of this bill, which the Senate also passed on June 30, 54-45. Now clear for signature into law by President Bush, implementation of this agreement will result in lowered tariffs on U.S. exports of tech products to CAFTA-DR countries, as well as liberalization of these countries’ telecommunications markets.

The politics of trade legislation have become increasingly complicated since the passage of the North American Free Trade Agreement (NAFTA) in the early 1990s. Ever-increasing global competition and recent fears of offshore outsourcing have heightened political pressures. These politics were evident in last night’s vote: 15 Democrats joined 202 Republicans to pass the legislation. Disappointingly, none of the Silicon Valley members, except Rep. Richard Pombo (R-CA-11), voted in support of the bill.

While speaking with the press about this vote, Ralph Hellman, VP at the Information Technology Industry Council, emphasized that the tech industry needs to do a better job of educating the Congress about the benefits of trade, “It’s incumbent upon the tech community to register our disappointment with those [no-vote] members in a variety of ways but continue the education process about why trade is important so we can have their support on bigger deals down the road.” The U.S. Government is negotiating a number of bilateral, regional and multilateral trade deals, which will eventually come before the Congress for approval.

Looking forward, while congressional passage of CAFTA-DR was ultimately successful, it sends an important message to free trade supporters, like me, that more education and engagement must be done to increase bipartisan support for trade. We’ve got our work cut out for us…

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  1. Trade is so important to the globally-integrated economy. The U.S. is the number one trading country in the world, and China is our third largest trading partner.The need to achieve a “balance” that they look at their economy as a whole and accommodate the interests of import-sensitive industries as well as those U.S. manufacturers that rely on imports to stay competitive worldwide.As the number one trading nation in the world, America needs to keep balance foremost in mind.Boosting U.S. exports to China is the right step to narrow the trade gap.If the U.S. government allows more high-tech products to be exported to China, the trade imbalance could easily be improved. Demand for many US products in China are very strong.Welcome to AmeriChinaB2B(www-acb2b-com) to begin your business trip of China.