us chamber's international trade and investment priorities for 2nd obama administration

7/29/2019 US Chamber's International Trade and Investment Priorities for 2nd Obama Administration

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International Trade and

Investment Priorities for the

Second Obama Administration


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International Trade and Investment Priorities

for the Second Obama Administration

Executive Summary

On the basis o ongoing conversations with member companies, chambers o commerce, andassociations, the U.S. Chamber o Commerce urges the administration to ocus on the ollowinginternational trade and investment priorities during President Obamas second term in oce:

1. Secure renewal o Trade Promotion Authority to ensure the president has the authorityto strike new trade agreements in close consultation with Congress;

2. Conclude a comprehensive, high-standard, and commercially meaningul Trans-PacicPartnership trade agreement in 2013;

3. Launch negotiations as soon as possible or a comprehensive Trans-Atlantic Trade andInvestment Agreement that will eliminate taris and non-tari barriers to trade, ensurecompatible regulatory regimes, and liberalize investment, services, and procurement;

4. Strengthen the global rules-based trading system by negotiating an InternationalServices Agreement to urther liberalize trade in services, expanding product coverageunder the Inormation Technology Agreement, reaching a trade acilitation agreementunder the World Trade Organization (WTO), and ensuring robust enorcement o tradeagreements.

5. Negotiate bilateral investment treaties (BITs) with India and China and considerlaunching BIT negotiations with other key markets around the globe such as Indonesia,Russia, and the East Arican Community;

6. Explore the easibility o negotiations or bilateral trade agreements with signicant U.S.trading partners;

7. Modernize export controls to enhance U.S. national security and competitiveness; and

8. Implement the administrations recent executive order on international regulatorycooperation to support U.S. international economic interests.


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Introduction

No priority acing our nation is more important than putting Americans back to work. Nearly 8%o the U.S. workorce is unemployed a gure that soars to 15% when those who have stoppedlooking or jobs and the millions o part-time workers who want to work ull time are included. As anation, the biggest policy challenge we ace is to create the 20 million jobs needed in this decade toreplace the jobs lost in the recent recession and to meet the needs o Americas growing workorce.

World trade is playing a vital role in reaching this job-creation goal. Ater all, outside our borders aremarkets that represent 95% o the worlds consumers. Many Americans are already seizing thesebenets: One in three manuacturing jobs depends on exports, one in three acres on Americanarms is planted or hungry consumers overseas, and U.S. service industries exports reached arecord $600 billion last year.

However, the international playing eld is oten unairly tilted against American workers andcompanies. While the U.S. market is largely open to imports, many other countries continue to levysteep taris on U.S. exports, and oreign governments have erected other barriers against U.S. goodsand services. In recent years, new orms o protectionism have emerged, including discriminatoryindustrial policies and more aggressive use o subsidies; an enhanced role or state-ownedenterprises and other national champions; restrictions on exports o critical raw materials; andorced localization measures including local content rules, perormance requirements, and othermeasures that discriminate against U.S. and other oreign products, services, and companies.

The bottom line is simple: The United States needs a orward-leaning trade policy that recognizesboth the immense opportunities presented by international commerce as well as the challenges U.S.

companies ace abroad. Otherwise, our workers and businesses will miss out on huge opportunities.Our standard o living and our standing in the world will suer. With so many Americans out o work,leveling the playing eld and opening markets abroad to the products o American workers, armers,and companies is a higher priority than ever beore.

80% 92% 95%Outside our borders are markets that represent

of theECONOMICGROWTH

of itsCONSUMERS

The possibiliTies are endless.

of theWORldSpURCHaSINGpOWER


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Trade Promotion Authority

First, the president needs the authority to negotiate trade agreements Trade Promotion Authority(TPA). Congress has granted every president rom Franklin D. Roosevelt to George W. Bush theauthority to negotiate market-opening trade agreements in consultation with the Congress.

The U.S. Constitution gives the Congress authority to regulate international commerce, but it givesthe president authority to negotiate with oreign governments. TPA rests upon this constitutionalpartnership: It permits the executive branch to negotiate agreements in consultation with theCongress; when an agreement is reached, Congress may approve or reject it, but not amend it.

TPA lapsed in 2007. Thats unacceptable; every American president needs TPA, and every presidentshould have it. Potential partners wont negotiate seriously i they know agreements could be pickedapart by Congress.

Without TPA, the United States is relegated to the sidelines as other nations negotiate tradeagreements without us putting American workers, armers, and companies at a competitivedisadvantage. Already, more than 300 ree trade agreements are in orce around the globe, but theUnited States is a party to just 14 such agreements covering 20 countries.

In the past, TPA has been renewed as part o an omnibus trade act. On this occasion, it would makesense to do so alongside a customs reauthorization bill (which exists in an advanced drat) andrenewal o the Generalized System o Preerences (which will lapse on July 31, 2013).

The last time Congress passed TPA, in 2002, it took more than a year or a bill to reach thepresidents desk. The Obama Administration and Congress should begin discussions on newnegotiating authority in early 2013. The Chamber stands ready to work with both to ensure TPA isrenewed as soon as possible.

U.S. actories have nery oue their outut in the past twodecades and today account or

one-ftho world manuacturing value

addeda share greater than that o China, India, Brazil, and Russia combined.

ONE IN THREEmanuacturing jobs depends on exports.


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Asia and the Pacific

Once TPA is renewed, how should the President and Congress use it? Clearly, the United Statesneeds to engage in the Asia-Pacic region as never beore. The region accounts or hal o theworlds population and boasts many o its astest growing economies. Two billion Asians joined themiddle class in the last 20 years. The IMF estimates the world economy will grow by $22 trillion overthe next ve years, and nearly hal o that growth will be in Asia.

The U.S. may be alling behind in the worlds most dynamic region. Over the past decade, the

growth in U.S. exports to Asia has lagged our overall export growth. As the think tank Third Way haspointed out, the U.S. share o the import market o 12 key Asia-Pacic economies actually ell by43% between 2000 and 2010.

Part o this decline can be attributed to the prolieration o bilateral and regional trade accords,which is particularly intense in the Asia-Pacic region. Many U.S. manuacturers and armers arebeing displaced by local competitors or rms based in the EU or Australia, which are orging theirown preerential trade deals across the region. As Asian production chains have expanded to meetbooming regional demand, U.S. suppliers o intermediate goods are being let behind.

In short, Asian nations are designing a new architecture or trade in the global economys mostdynamic region threatening to draw a line down the middle o the Pacic.

This is the case or the Trans-Pacic Partnership (TPP), which is the one trade agreement undernegotiation today in which the United States actually has a seat at the table. The TPP is our chanceto ensure the United States is in the game in Asia. With Canada and Mexico joining the negotiationsin 2012, the TPP today embraces 11 countries.

Working closely with the Oce o the U.S. Trade Representative, the Chamber is leading thebusiness communitys eorts to create new disciplines relating to regulatory coherence, competitionpolicy, and state-owned enterprises. In some o these cases, new rules are being ramed with a viewtoward possibly extending them one day to other nations.

38jObSin the United Statesmore than one

in fve American jobs. The expansion

in trade spurred by U.S. FTAs sustains

more than fve million o those jobs.

Trade supports

million


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The Chambers goal is a comprehensive, high-standard, and commercially meaningul TPP agree-

ment. To reach agreement on the strong rules on intellectual property, investment, and other tradedisciplines we seek, the United States and the 10 other countries will need to make comprehensivemarket access commitments. Negotiators must reject carve-outs or individual sectors and commodi-ties and put everything on the table i the TPP is to achieve its true growth-boosting, job-creatingpotential. The nal agreement should establish a single substantive standard o obligations or allmembers and avoid dierentiating between countries.

In addition to the TPP, Chinas place in U.S. international economic policy will require the closeattention o the second Obama administration. In the view o Chamber members, China presentsboth an opportunity and a challenge. U.S. exports to China are growing signicantly aster than thoseto any other major market, and U.S. companies and workers need this source o growth today morethan ever.

However, China has embraced expanded orms o protectionism against oreign goods, services,and enterprises, while continuing to oster an export-led strategy that leads to unair competition inglobal markets. In particular, Chinese industrial policies oten serve to strengthen its state-owned andstate-infuenced enterprises, avor the development and expansion o national champions, close keysectors to oreign investment, and put oreign companies at a disadvantage. The widespread thet ororced transer o U.S. intellectual property also deprives U.S. companies o a prime source o theircompetitiveness and innovation.

The Chamber urges the Obama administration to work closely with industry to devise new approachesas well as to increase the eectiveness o existing channels or engagement and enorcement toaddress these concerns. We must make the case that the greater openness o the Chinese market is

good or the United States, China, and the world.

U.S.SERvICES ExpORTStop $600 billion dollars annually, with a trade

surplus that approaches $200 billion.

The United States is home to large numbers o world beatingservices frms in such sectors as audiovisual, banking,

energy services, express delivery, inormationtechnology, insurance, and telecom.


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Finally, Japan is the th largest market or U.S. goods and services in the world (ater the EU,Canada, Mexico, and China). However, U.S. companies could do substantially more business itrade, operating, and economic conditions were improved. Accordingly, the Chamber has urgedthe Obama administration to work closely with industry to outline a positive agenda that will boostbilateral trade and investment, enhance collaboration on regional issues, and support private sector-led growth in Japan.

Specically, the Chamber supports the Economic Harmonization Initiative, which was devised totackle impediments to U.S.-Japan commerce. In addition, the U.S. and Japanese governments

are continuing consultations on whether Japan could join the TPP negotiations, starting with acommitment to meet the same high standards, comprehensive scope, and ambitious timetable asthe current participants. This is a challenging prospect due to the need to address issues in severalkey industries, but many Chamber members believe including Japan in the TPP on the right termswould provide the best opportunity to enhance the bilateral economic relationship.

on American arms is planted or export. U.S. armers

and ranchers are the worlds most productive and top

the global export rankings or a host o commodities.

One in three acres


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What Kind of Trade Agreements?

The U.S. Chamber supports the negotiation o comprehensive, high-standard, and commerciallymeaningul trade accords and consistently urges U.S. negotiators to pursue agreements that:

Ensurecomprehensivemarketaccessforgoodsbyeliminatingtariffsandnon-tariffbarriers

and rejecting carve-outs or individual products.

Providemarketaccessandnationaltreatmentforserviceprovidersinsuchsectorsas

audiovisual, banking, energy services, express delivery, inormation technology, insurance,and telecommunications.

Establishahighstandardofprotectionforintellectualproperty(IP)andensureeffective

enorcement on the basis o the U.S.-Korea FTAs IP provisions.

Expandinvestmentopportunitiesbyprovidingbettermarketaccess,stronginvestor

protections, and international arbitration or the settlement o investment disputes.

Setclearrulesontheinternationaldigitaleconomyappropriatefordifferentsectorswhile

prohibiting measures that restrict legitimate cross-border data fows or link commercialbenet to local investment.

Ensureascience-andrisk-basedapproachtohealthandsafetyregulationsrelatingtotrade

in agricultural products and other goods.

Makeavailableprocurementopportunitiesonareciprocalbasiswhilecombatingcorruption

through enhanced transparency.

Combattradeincounterfeitandpiratedgoodsaswellasotherillicitcommerceand

tracking that supports organized crime and terrorism.

Establishtransparentandexpeditedcustomsclearanceandothermeasurestofacilitate

cross-border trade, e.g., by establishing high customs de minimis levels.

Providealevelplayingeldbetweenallcommercialactors,includingstate-owned,state-supported, and private sector enterprises.

Ensuredueprocessinantitrustenforcement.

Finally, trade agreements hold little value or American business i they arent enorced. Thisincludes the wide-ranging body o rules o the World Trade Organization (WTO) as well as bilateraland regional trade agreements. In this vein, Chamber members support the work o the InteragencyTrade Enorcement Center (ITEC) and the additional resources and ocus it provides. The UnitedStates should also set an example o ull compliance with its trade agreement obligations.


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Europe

As we consider new trade accords with our biggest commercial partners, Europe calls out orattention. Indeed, the European Union is by ar Americas largest international economic partner.

Together, the United States and the European Union generate hal o global GDP. More than $1.5trillion in goods, services, and income receipts fow between the United States and the EU annually.U.S. rms have direct investments o nearly $2 trillion in the EU 20 times what they have investedin China. These European investments generate some $3 trillion in annual revenues or Americancompanies that have invested in the European Union to sell their wares to its more than 500million citizens. The numbers are similar or European rms investments in the United States. Oureconomies are so closely integrated that about 40% o U.S.-EU trade is intra-rm.

Further, while polls suggest many Americans have an ambivalent attitude toward trade agreements,a recent Pew poll ound that Americans support increased trade with Europe by a wide 58% to 28%margin.

With this in mind, the Chamber has been pressing proposals to harness the transatlantic economicrelationship to generate jobs and growth. In 2010, the Chamber supported a study to gauge thepotential benets o eliminating taris between the United States and the European Union. WhileEuropean and U.S. taris are oten low, the sheer volume o transatlantic commerce is so large thatone-third o all taris on U.S. exports to the world are paid to the EU.

The study ound that eliminating transatlantic taris would boost U.S.-EU trade by more than $120billion within ve years. It would also generate GDP gains o $180 billion a budget-neutral boost to

the U.S. and EU economies.

The United States has a

TRadE SURplUSwith its 17 FTA partnersin manuactures, services,

and agricultural products. I youre worried about the

trade defcit, FTAs are the solution not the problem.

Free Trade Agreement



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However, a taris-only approach is not enough. The Chamber supports a comprehensivetransatlantic trade and investment agreement, which the U.S.-EU High Level Working Group onJobs and Growth has described as the option that has the greatest potential or supporting jobs andpromoting growth and competitiveness across the Atlantic. Such an agreement will not only eliminatetaris and non-tari barriers but also improve the compatibility o the U.S. and EU regulatory regimesand liberalize investment, services, and procurement. It should cover manuactured goods, services,and agricultural products.

In contrast with some developing countries, the United States and the EU are committed to similarsocial, labor, and environmental standards. Concerns in these areas have made some recent tradeagreements controversial but should not stand in the way o a transatlantic trade accord.

The global context is important as well. The EU has a ree-trade agreement with Mexico and isnegotiating one with Canada. Does it make sense or taris and other trade barriers to remain in orceon the third and largest leg o European-North American trade?

For too long, the United States has ignored the untapped potential o its ties to the worlds othereconomic colossus. For the sake o jobs and growth, its time to turn that around.

The Americas

The ties that bind the United States to its hemispheric neighbors through trade and investment arealready strong. In 2011, the United States exported nearly as much to its neighbors in the Americasas it did to Asia and Europe combined.

This is the result not just o close proximity but o good policy. The United States has FTAs with12 countries in the Americas stretching in an unbroken chain rom the Canadian arctic to ChileanPatagonia. These agreements have turbocharged the growth in hemispheric commerce over the pasttwo decades. Today, 87% o our hemispheric exports are shipped to these FTA partners.

While they represent less than 10% o global GDP,

Americas ree trade agreement (FTA) partners buy more than

45%o U.S. exorts.In other words, FTAs can make

big markets even out of small economies.


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As a result, the United States sells more goods to Canada than to the European Union, which has

15 times as many consumers. The growth in U.S. exports to Mexico in 2011 was greater than thegrowth in U.S. exports to China, India, and Russia combined. U.S. exports to South America grewnearly twice as ast over the past decade as our exports to Asia.

The United States can continue to build on this solid oundation. As a rst step, the United Statesand Brazil should consider negotiating an economic partnership agreement. While two-waycommerce between the United States and Brazil has grown impressively in recent years, it couldexpand even more vigorously i such an agreement served to eliminate the signicant barriers tobilateral trade and investment.

During her visit to the U.S. Chamber in early 2012, Brazilian President Dilma Rousse expresseda clear interest in strengthening bilateral commercial ties. Progress on such business priorities as a

possible tax treaty, energy cooperation, and enhanced commercial aviation links is proceeding apaceand building condence in both Braslia and Washington. The next administration should leveragethis progress to start a serious conversation about a possible trade and investment agreement.

Second, the United States should consider how to stitch together its existing hemispheric tradeagreements. Doing so would enhance their benets on a regional basis, allowing companies tooperate their supply chains more eciently. Goods could move across borders more quickly. Makingproduct design, production, packaging, marketing, and retailing more ecient across markets couldstimulate growth and productivity. Eventual participation in the TPP by more Western Hemispherenations in addition to Canada, Chile, Mexico, and Peru may be one approach.

Finally, the United States should continue the good work underway to address persistent behind the

border barriers to trade in North America. The U.S. Chamber has strongly supported the RegulatoryCooperation Councils launched recently with Mexico and Canada and is working to provide ocialsin all three countries with practical input on how best to overcome the tyranny o small dierencesin regulation. Similarly, the United States is working with Canada and Mexico to better manage ourshared borders based on a risk-based approach to security that also maximizes the eciency ocross-border supply chains.

Imports mean lower prices and more choices or American

amilies as they try to stretch their budgets and or companies

seeking raw materials and other inputs. Access to imports boosts

the purchasing power o the average American household by

out $10,000 nnuy.


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The Middle East and Africa

The U.S. commercial relationship with the Middle East and Arica is characterized by vast, otenuntapped possibilities and a powerul confuence o U.S. geostrategic and economic interests.Across these regions, economic policies or too long have served as a drag on regional trade andinvestment, and exports to the United States and other extra-regional economies consisted largely ohydrocarbons and minerals.

The recent sweeping changes in the Arab world are also bringing change to its internationalcommercial relations. When the Arab Spring began in Tunisia, it was popular discontent withgrim economic prospects that provided much o the impetus or change. Today, as societies seekmore accountable orms o government, new leaders are also gauging whether economic reorm,openness to trade and investment, and ree enterprise can meet the demands or a better lie heard

rom all quarters.

The U.S. Chamber has urged the administration to make closer trade and investment ties a centralpart o U.S. support or reorm in the Middle East and North Arica. Continued oreign assistance isvital, and in the case o Egypt, debt orgiveness will be a necessary part o economic reorm. However,increased international trade and investment, with the private sector helping lead the way, must play amajor role going orward.

At the ore in the Chambers regional priorities is Egypt, the keystone o the Arab world and its mostpopulous nation. The newly elected government has conveyed its keen desire or closer economicties to the United States and has expressed support or market-riendly policies. Circumstances andnecessity suggest the United States and Egypt should consider a trade agreement.

Last year, the Chamber-aliated U.S.-Egypt Business Council supported a study by the Center orStrategic and International Studies assessing the potential benets o a U.S.-Egypt FTA and presentingrecommendations or steps to take that could pave the way or the launch o negotiations. Chambermembers have expressed signicant interest in such an agreement as well as support or closereconomic ties to the region generally.


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In addition, Chamber members have called attention to the strong growth prospects o many

countries in sub-Saharan Arica, where the United States lacks a developed network o tradeagreements comparable to those in, or instance, the Americas. To prepare the ground, ocialsshould continue their ocus on trade acilitation and explore whether countries or blocs, such as theEast Arican Community, are prepared to negotiate a bilateral investment treaty. The Chamber urgesthe second Obama administration to dedicate greater resources and attention to ensure U.S. rmscan get in on the ground foor o Aricas economic development.

The Multilateral Agenda

The U.S. business community remains committed to the World Trade Organization (WTO) and the

global rules-based trading system. However, the WTOs Doha Round has stalled, and its unclear anyearly harvest or limited agreement can be reached.

Negotiators cant let this impasse linger orever. The WTO is too important to leave it tied up in knots.Even i it cant resolve the 20th century issues on display in the Doha Round, it needs to play a rolein the 21st century challenges to the global rules-based trading system.

A new agenda or the WTO is emerging. Interest is growing in the idea o an agreement amonga coalition o the willing that would liberalize trade in services under the WTO. This proposedInternational Services Agreement would go beyond what was achieved in the 1995 GeneralAgreement on Trade in Services (GATS).

A ocus on services is a natural or the United States. America is by ar the worlds largest exportero services, which surpassed $600 billion last year. The United States is home to large numberso world-beating services rms in such sectors as audiovisual, banking, energy services, expressdelivery, inormation technology, insurance, and telecommunications.

More than 97% o the275,000 U.S. comniesthatexport their products are small and medium-sized companies.

While large companies account or a majority o exports,

small and medium-sized companies account or nearly a

third o all U.S. merchandise exports.


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U.S. services companies have seen regulatory barriers multiply in ways that could not be oreseen

when the GATS was negotiated nearly two decades ago. New challenges are particularly prevalent inthe digital economy including cross-border data fows, privacy issues, and cyber security andsupply chain issues that go beyond amiliar customs clearance matters.

Negotiating an International Services Agreement would present opportunities to address theopportunities and challenges o the digital economy and the spread o global supply chains. Asuccessul agreement would strengthen the global rules-based trading system, which some believehas been weakened by the long impasse in the Doha Round.

This approach would also present powerul incentives or countries to join in. Benets would beextended only to those countries that sign up, and there is ample precedent or plurilateralagreements among a set o path-breaking countries expanding over time to cover all or a vast majority

o world trade in the sectors addressed.

The United States should also press orward with other WTO member countries to conclude anagreement on trade acilitation, negotiations or which began as part o the Doha Round and haverecently advanced in hopeul ways. Such an agreement would create enorceable rules or customsclearance as well as support or developing countries seeking to modernize their trade inrastructure.Many observers believe the remaining dierences at the negotiating table can be bridged. There iswidespread agreement about the benets o such an agreement, particularly or developing countries.(Bilateral trade acilitation agreements, such as those recently concluded with the Philippines andUruguay and proposed or ASEAN and the East Arican Community, also enjoy strong support romthe business community.)

In addition, negotiations are under way to expand the product coverage o the highly successulInormation Technology Agreement (ITA). Since it was signed in 1996, the ITA has grown to includemore than 70 countries representing 95% o world trade in inormation and communicationtechnology products. Adding products invented over the past 15 years to the agreement has thepotential to multiply its benets.

Finally, the United States must ensure that WTO accession agreements are monitored, and newparticipants, such as Russia, meet their obligations in law and spirit. The United States should also pressor additional WTO members such as China to accede to the Agreement on Government Procurement.

International Investment

Finally, its clear that the United States must dedicate more attention to seizing the benets ointernational investment. Foreign direct investment (FDI) in the United States supports more than 21million American jobs directly and indirectly, and oreign aliates o U.S. companies last year earnednearly $5 trillion in revenue, underwriting R&D and other important corporate activities back home.

In other words, international investment is a two-way street. The United States must attract oreigninvestment while actively supporting U.S. investment abroad.


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The United States has work to do on international investment. While the need to attract oreigndirect investment to the United States has never been greater, Americas competitive advantages asa destination or FDI have been reduced by growing regulatory burdens at home and an improvinginvestment climate in some other countries. The United States remains a highly attractive investmentdestination, but rapid growth in emerging markets is creating new competition or investment dollars.

At the same time, many oreigners no longer view the United States as ully open to theirinvestments. While the Foreign Investment & National Security Act o 2007 appropriately limited thescope o investment reviews to national security, some oreigners have erroneously concluded rom

rhetoric surrounding that legislation and a small number o high-prole cases that the United Statesis no longer as hospitable to FDI as it once was.

In addition, the United States needs to update its approach to protecting U.S. investments abroadto refect the changing global economy. U.S. rms doing business abroad ace a prolieration orestrictive perormance requirements, local content rules, and other orced localization measuresthat seek to impose controls over investments. It is imperative that U.S. ocials secure bettermarket access and treatment or U.S. investors abroad and level the playing eld or U.S. investorscompeting with state-owned commercial actors.

To that end, the United States needs to negotiate more investment protecting agreements. Americaranks 44th in the world in the number o bilateral investment treaties (BITs) it has in place; by

contrast, Germany and China have 133 and 121 such treaties, respectively. The place to start isby reinvigorating BIT negotiations with key countries such as China and India and consideringlaunching talks with other potential BIT partners such as Indonesia, Russia, and the East AricanCommunity.

Given Americas need to create jobs, rebuild our inrastructure, and remain the worlds pre-eminentinnovation hub, we have no choice but to actively court in-bound investment with a welcomingpolicy environment. American companies seeking to be global players must have the unwaveringsupport o the U.S. government behind them in promoting and protecting their investments abroad.Going orward, the needs o international investment, outbound and inbound, demand greater policyattention rom the Administration and the Congress.

U.S. exports o goods and services reached

$2.1 triion in 2011. In other words,American workers, armers and companies can compete

and win in the worldwide economy.


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Export Controls

The U.S. Chamber has applauded the work o the Obama Administration to modernize the U.S.export control regime with the goal o protecting both national security and competitiveness. Asormer Deense Secretary Robert Gates has explained, the United States needs an export controlsystem where higher walls are placed around ewer, more critical items. Those ew sensitivetechnologies with signicant military applications must be protected, but when technologies arealready widely available rom Americas trade competitors, controls can be eased with no harm toU.S. national security.

The economic stakes are also signicant. A study issued by the Milken Institute ound thatmodernizing U.S. export controls could enhance real GDP by $64.2 billion (0.4 percent), create160,000 manuacturing jobs, and heighten total employment by 340,000. For context, approximately

3.5 million Americans are employed in the U.S. high-tech and deense sectors, and they account orroughly one-third o U.S. merchandise exports.

The potential harm caused by our Cold War-era system o export controls to U.S. national andeconomic security is broad, but Americas high-tech and deense industries are particularly at risk. Ina vicious cycle, the U.S. export control regime puts these industries at a competitive disadvantage inthe global marketplace. In turn, a weaker U.S. deense industrial base poses a long-term risk to U.S.national security.

The detailed technical work the Obama Administration has undertaken in recent years to restructurethe nations export control lists is a signicant step orward. It is essential that this work continue.Implementing the regulatory and process reorms that have been proposed will help create a

predictable, ecient, and transparent export control system that promises concrete benets.

* * *The history o U.S. trade and investment policy has shown that big ideas have a long gestation. Wehope these ideasstretching rom the multilateral arena to regional proposals and possible newbilateral agreementsstimulate the debate and ultimately generate economic growth, spur jobcreation, and enhance the global competitiveness o the United States.


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Copyright 2013 by the United States Chamber of Commerce. All rights reserved. No

part of this publication may be reproduced or transmitted in any formprint, electronic,

or otherwisewithout the express written permission of the publisher.

The U.S. Chamber of Commerce is the worlds largest business federation representing the interests of more than 3 million businesses

of all sizes, sectors, and regions, as well as state and local chambers and industry associations


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1615 H Street NW | Washing ton DC 20062 2000

us chamber's international trade and investment priorities for 2nd obama administration

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