CONTACT:  Lloyd Wood, Dir. of Membership and Media Outreach
(202) 452-0866 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
 
July 2, 2009
 
WASHINGTON, DC – The U.S. Bureau of Labor Statistics (BLS) reported today that the United States lost 467,000 jobs in June.  From December 2007 to June 2009, seasonally-adjusted U.S. nonfarm employment has fallen by 6.46 million jobs.  The U.S. non-farm employment figure of 131.692 million is at its lowest point since September 2004 and even is lower than it was May 2000 when the U.S. population was 25 million people smaller than today as estimated by the U.S. Census Bureau.
 

This is the American Iron and Steel Institute's position on the border adjustment provision in the House-passed climate/emissions bill.  Some the the dynamics between cost, timing and amounts of border adjustments are below the fold.

*******

American Iron And Steel Institute Says Climate Bill As Passed By House Puts Steel Industry At Competitive Disadvantage; Bill Must Have Important Modifications As It Heads To The Senate

June 29, 2009

PR Newswire

WASHINGTON - The American Iron and Steel Institute (AISI) expressed its disappointment today over the House passage of the American Clean Energy and Security Act of 2009.

"We believe this bill has moved at a rushed pace that has not allowed for full debate of provisions that are critical to the steel industry, which was clearly underscored by the fact that the bill passed in the House by only seven votes," said Thomas J. Gibson, AISI president and CEO. "The bill, as passed, will need important modifications as it moves through the Senate.

"We appreciate the hard work of Congressmen Doyle and Inslee and we look forward to continuing our work with them as this legislation moves through the process," said Gibson. "However, we can say - with certainty - that if this bill is enacted as it presently stands, U.S. steelmakers and our workers will be at a significant competitive disadvantage in the global marketplace. Several modifications must be made to achieve the bill's stated purpose of avoiding job loss and emission migration to overseas markets."

I had not heard this one.  Allegedly from Luo Ping, director-general of the China Banking Regulatory Commission in February 2009.

"We hate you guys … we know the dollar is going to depreciate, so we hate you guys, but there is nothing much we can do."

Two days after Obama said we should not have import taxes in the climate/emissions bill because of protectionsim, the wacko free traders at the WTO say just the opposite.

Import taxes on goods coming from countries that fail to meet environmental standards might be among the measures exceptionally permitted under global free trade laws, WTO said.

The principle of establishing import taxes (also known as border adjustments) on cost differentials is an important one.  Whether or not the climate/emissions bill passes, the principle of dealing with regulatory and cost disparities through border adjustments is an important one to balance trade and re-establish credibility in the trade regime.

Trade can only be good if it is balanced.  If it is unbalanced, then the results are disruptive at best and catastrophic at worst.

China is now eyeing oil resources in Iraq.

Chinese oil companies are expected to bid for the rights to develop Iraq’s oil fields in auctions that are set to start Tuesday, although Sinopec, the China National Petroleum Corporation and the China National Offshore Oil Corporation all declined to comment Monday about their bidding strategies.

In another sign of China’s interest in Iraqi oil fields, Sinopec, China’s refining giant, offered $7.22 billion on Wednesday to buy Addax Petroleum, a Swiss-Canadian company with operations in the Kurdistan region of Iraq and in West Africa. If Addax’s shareholders and Canadian regulators approve the deal, which Addax’s board is recommending, it would be China’s largest overseas energy acquisition.

The Australian Rio Tinto deal was blocked by the Rio Tinto board, though the Australian government was for it.  It will be interesting to see what the Canadians do.

Support for currency reform legislation continues increasing in the U.S. House.  This link takes you to a very supportive letter from Congressman Brian Higgins of New York to Jack Davis, President of I Squared R Element Co., Inc. and CPA Board Director.

Duly noted:

Canada's minister of international trade reports there's little progress in discussions with the United States aimed at resolving Canada's concerns over Mandatory U.S. Country of Origin Labelling.

CPA will be submitting hundreds of comments from our members and friends to the Office of the U.S. Trade Representative tomorrow, urging them to vigorously defend country of origin labeling for meat and produce. 

Foreign countries want to pass-off their product as U.S. made, which is what it looks like in the grocery store's meat case because the "USDA-inspected" sticker is applied to all meat, not just U.S. meat.  Multinational agribusinesses get really irritated when consumers want to know where the meat is from.

Green jobs are sure fine to pursue.  But recognize that they don't just appear like those non-existent benefits predicted by the wacko free traders.

Remember the free traders said we don't need a plan, we just need free trade.  If we lose low-tech jobs, we will move up the food chain to high-tech jobs.  That was not true.  It was false.  We have deficits and offshoring in all categories.

The Administration promotes green jobs.  We have a trade deficit in the "green" sector.  The New America Foundation shows a green trade deficit of $8.9 billion in 2008.

The Chinese are very good at muscling our country, and good at influencing our Congress buy purchasing our high-end lobbyists time.  But they are not sophisticated in issuing domestic statements, in an environment where there is no opposition.

The government said Friday it was "a misunderstanding" by some foreign media which had labeled China's latest circular to boost domestic demand and step up supervision on construction projects as "protectionism".

The remarks were jointly made by Yao Jian, spokesman with the Ministry of Commerce, and Li Pumin, spokesman with the National Development and Reform Commission, on Friday.

"Some foreign media" are not on the same talking points as the Chinese government.  Hypocrisy works when you can jail the home-grown folks that point it out.  But when you come here, attack the WTO-legal "Buy American" provisions in the stimulus, then strengthen your own pre-existing "Buy Chinese" programs, eyeballs start to roll.

The following appeared in the Wall Street Journal on June 26, 2009 and was written by Stephen Power and Greg Hitt with contributions from Jonathan Weisman.

WASHINGTON -- House Democratic leaders Thursday weighed tough trade penalties on countries that don't cap so-called greenhouse-gas emissions, while President Barack Obama sought support from wavering lawmakers ahead of a vote on a climate bill.
 
The trade proposal is designed to protect a half dozen trade-sensitive U.S. industries, including steel, cement and chemical manufacturers, from competitors in countries that don't cap their output of greenhouse gases.
 
 Top House Democrats and many members of the Ways and Means Committee, which has jurisdiction over trade policy, led the negotiations and effectively signed off on details of the plan late Thursday.

So much for Obama's "labor and environmental provision" commitment in the context of international trade.  He has rejected his own campaign promise, fully, by opposing a too-meak provision in the recent climate and energy bill.  That provision would impose border charges on goods from other countries - countries without carbon dioxide regulation - in the year 2020.  Yes.  The year 2020.

The climate and energy bill narrowly passed the House, prevailing by 219 to 212 last Friday.  The bill will increase costs of U.S. production in all categories.  China is not debating a climate and energy bill.  Neither is India or Mexico or Canada.  (I make no comment on the wisdom of the bill itself, but only the trade aspects).

The solution to the cost differential between domestic and foreign production is to apply a border adjustment.  "Border adjustment" means that good coming over the border from countries without this new environmental cost would have that cost imposed at the our border.  China was furious with this prospect as per comments a couple of months ago when it said that the consuming countries should bear the cost of their pollution.

Now Obama has essentially said the same thing as China, speaking against the concept of the border adjustment, calling it a "tariff", on Sunday.

Arlen Specter switched from R to D in Pennsylvania and is being challenged in the Democratic primary, apparently, by Congressman Joe Sestak (D-PA-7). 

Pat Toomey is the considered by many as the leading Republican candidate.  Peg Luksik is another Republican candidate.

There are fault lines emerging on the trade issue debate on the Republican side.  Toomey chaired the Club for Growth until he announced his Senate candidacy.  The Club for Growth has vociferously supported current free trade policies and all the currently proposed trade agreements.

Luksik has announced support for a smarter, reformed trade policy by signing on to the Fixing America's Economy plan (which was endorsed by CPA).  This is a good sign that the trade and economic debate will be highlighted during the campaign on the Republican side.  The primaries in Pennsylvania are May 18, 2009.

Luksik's campaign website is here.

(CPA does not endorse or oppose any political candidates).