The World Is Your Oyster!

Baker Donelson
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Dear Exporters,

Trade issues have not been front and center for the last several years.  However, today I saw a bright light. I have been watching trade matters in Washington since the late 1980s. In some ways not that much has changed. Republicans have tended to be free traders with some pro-trade democrats lending support. We have had big fights on large trade Agreements like NAFTA and been able to pass small trade agreements for Israel, Jordan and Oman with little fanfare.* Today I heard something new and different. Senate Finance Committee Chair Ron Wyden has announced he wants to build a bipartisan coalition to create an effective trade policy. Sounds proactive rather than reactive. Wow. Eventually what happens with trade policy in Washington will affect all U.S. exporters. The business community knows that but politicians have been late to the party.

The world is shrinking because of increased trade.  As the United States becomes party to more free trade agreements SMEs will benefit from:

  • Lower trade barriers
  • Better global IP protections
  • Lower import duties
  • Increased cooperation and enforcement (fewer seizures)
  • Improved supply chain security and safety

Here are a few reasons for hope:

  1. Trade Promotion Authority (TPA) will happen in order to pass the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). The TPA provides a fast track process to get the agreements approved with a yes/no vote in Congress so they don’t get bogged down or gutted by amendments.
  2. The Obama Administration really is pushing exports and our States are competing around the world for more foreign direct investment. This won’t change no matter who wins the next Presidential election.
  3. Technology and cloud computing are all slowly being considered and factored into trade agreements.
  4. The World Trade Organization has a green goods initiative aimed at eliminating world-wide tariffs for environmentally friendly products. For example, consider ceiling fans. They face a 4.7% duty right here in the USA. This ultimately raises the cost to consumers for an environmentally friendly product that should be promoted through duty free treatment, not handicapped by a high tariff.  If ceiling fans are included in the agreement fans will be duty free in WTO countries.
  5. The Trade in Services Agreement (TISA) brings together 50 countries representing 65% of the world’s service providers. The agreement intends to level the playing field to increase exports of services.
  6. The Customs-Trade Partnership Against Terrorism program is being expanded to include exporting companies. (See last blog.)

I know these agreements take years to come to fruition. But Senator Wyden’s comments may breath some new air into the dialogue. Trade benefits everyone. And the slow process gives each company plenty of time to plan and form a strategy to take advantage of the opportunities!

*In addition to the three countries named above, the United States has free trade agreements in force with Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Korea, Mexico, Morocco, Nicaragua, Panama, Peru, and Singapore.

Have a great day,

Doreen

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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