IHS Chemical Week


Proposed Merger Would Weaken Credibility of USTR

10:31 AM MST | February 22, 2012 | By LAWRENCE SLOAN

By Lawrence Sloan, President and CEO of Socma

The Obama administration recently announced a proposal to merge the Office of the U.S. Trade Representative with five other agencies responsible for business and trade into one single cabinet-level department. The Society of Chemical Manufacturers and Affiliates (SOCMA) certainly applauds the initiative to create a more efficient and leaner government that will better advance U.S. competitiveness in the international economy.

However, one aspect of the trade-agency reorganization proposal concerns us – the apparent elimination of the Office of the United States Trade Representative (USTR) as a separate entity under the Executive Office of the President. USTR’s unique and important role stems in substantial part from its position within the Executive Office of the President, which lends it credibility with foreign trading partners, Congress, other U.S. government entities and private stakeholders. Most developed economies have a direct counterpart to the USTR that reports to the head of government, which lends the position enormous credibility. Subsuming USTR into a broader trade and business government department will severely harm that credibility and USTR’s ability to play its unique coordinating role within the U.S. government. As a result, we believe that such a move will weaken the ability of USTR and the United States to pursue effectively a strong trade policy that is responsive to Congress, business and other stakeholders and meets our country’s important objectives.

This extremely efficient, focused and effective entity was first created in 1962, at the request of Congress, and then expanded in 1974 when Congress officially created USTR, where it negotiates, enforces and administers the U.S. trade agreements program and is directly accountable to both the President and Congress. USTR also plays an invaluable role in coordinating the many different entities within the U.S. government that have specialized trade functions based on their own expertise. This role in balancing the interests of various constituencies and agencies helps provide assurance to all stakeholders that no one has a thumb on the scale, or that important commercial interests will be traded for other unrelated policy objectives, including foreign policy. 
Congress and the business and agricultural communities have often noted the importance of having USTR as a separate entity within the Office of the President, so that it can act responsively to negotiate, implement and enforce U.S. trade objectives. For the U.S. agricultural and business community, USTR has played a highly important role that has grown U.S. exports, eliminated foreign market barriers and improved the overall competitiveness of U.S. farm and manufactured goods and services in the international economy.

Socma’s 225 members represent an important segment of the chemical industry. Entrepreneurial by nature, SOCMA members are predominantly small family owned and managed enterprises. Most are under $50 million in revenue and engage in international trade. The United States is the world’s largest trading nation and has enjoyed enormous prosperity in large part because of policies on trade and investment liberalization adopted in 1934 and thereafter, which is the mission of the USTR to pursue.  With 95 percent of the world’s population and about 80 percent of the world’s purchasing power outside U.S. borders, trade and investment are vital to grow America’s industries, jobs and economy. The U.S. government’s role in international trade policy, negotiations, enforcement and promotion is highly important and raises very complex issues on which a broad range of stakeholders within government and outside has strong interests.

At a time when our nation is expanding its trade policies as a means to create jobs at home, the utmost care must be exercised to protect recent gains achieved through efforts by our trade agencies. Right now, the fear is that many countries are doing commercial diplomacy much better than we are, so it is crucial that potential changes to the USTR are done right and without negatively impacting efforts currently under way.

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