Business Beyond the Reef

Coming to Hawaii

I was overjoyed at President Obama’s announcement that the 2011 APEC Summit would be in Hawaii, his home state – and have been doing a lot of thinking about ways in which Hawaii can take advantage of having APEC here (other than the obvious publicity of being the host – and filling 20,000 hotel rooms).  I really want to suss out how to use APEC to encourage more Hawaii companies to go international.  Too many of our small companies think that “exporting” means selling in California!  If any of you have ideas, please share them with me.

While thinking about APEC, I happened on a promising new website the APEC secretariat has put together about trade in environmental goods and services (EGS, they call the sector).  Any of you in EGS or related businesses should take a look at egs.apec.org.  The site functions as a portal to environmental laws and regulations of all the APEC member states, has considerable market research and makes available official reports that would be otherwise very difficult to find.

The EGS site is still being developed and has much room for improvement.  The project information is a bit thin and general, but I suppose that depends on what the APEC governments are giving the secretariat.  And I wasn’t able to use the APEC tariff database.  Don’t know if that is a temporary glitch, or a bigger problem.

The most disappointing part of the site is the EGS business directory, very sparsely populated.  It contains only about three dozen environmental companies, mostly from Australia, though some come from Singapore, Canada and China.  Surely APEC’s 21 members can muster a few more firms in this industry!  Of course, this is also an opportunity: get your company listed before everybody else does it.  It’s a good site and you don’t know which decision makers are going to see it.  Time for action.

Unless something catches my wandering eye, I may not post for a day or so.  Thursday is Thanksgiving Day in America, a good time to relax with family and friends, and to ponder all sorts of things we should be thankful for.  Besides, good wine and turkey on the grill make me sleepy.

The glimmering is faint, but do I spy signs of a trade policy in the Obama Administration?  The President actually called for increasing U.S. exports to Asia in his radio address last week!  I hadn’t realized that this White House knew that trade involves more than imports.  (Some in the Administration do know – and even know that profit is not necessarily a dirty word – for instance, Secretary of Commerce Gary Locke.)  It will be interesting to see if the radio address was more than rhetoric, but it is a start.

I am not one of those who argue that this Administration hasn’t had a trade policy, but the outlines have been faint and skewed.  So far, the Obama Administration has stopped Mexican truckers at the border and has made headlines for imposing penalties on Chinese tires.  The Congress hasn’t helped with its insistence on “Buy America” clauses in the stimulus package and continuing bleats to punish China for currency manipulation.  And the budget for the U.S. Commercial Service, my former employer and the country’s top export promotion agency, is still plummeting.  One would have reason to believe that America’s trade policy is being dictated by certain labor unions, if one were in a cynical frame of mind.

Exports Are Good

Don’t get me wrong.  I like the guy, but Ron Kirk was not an inspiring choice to be America’s lead trade negotiator.  His background in trade is, shall we say, limited.  He was mayor of Dallas and worked as an energy lobbyist before being tapped for the USTR job.  Ambassador Kirk spoke to a conference I recently attended in Washington, the annual national conference of District Export Councils.  DECs are advisory committees to the Federal Government about how to conduct export promotion and trade policy, so it’s a knowledgeable bunch, mostly private sector businesspeople.  Kirk’s speech was entertaining and witty, but he said … nothing.  He said it well, but information content was near zero, telling a room full of believers that exports are good.  And there was no opportunity for questions, sometimes a sign that his staff either expected hostile questions or that the boss wouldn’t be able to handle them.  One wonders, and hopes it was simply due to too tight a schedule.

Fellow attendee Johnson Choi, vice chair of the Hawaii Pacific Export Council, made the photo.

I am less than excited.  One of the ballyhooed announcements that came out of President Obama’s trip to Asia was that the United States would take a look at joining the negotiations of the Trans-Pacific Strategic Economic Partnership Agreement (mercifully, the world seems to have shortened this to TPP).  Three years of talks to establish the TPP were completed in 2005, when Singapore, Brunei, New Zealand and Chile signed up.  It is not an inconsequential agreement.  Customs duties among the four members will be largely eliminated by 2017, and there are binding environment and labor agreements as part of the deal (I don’t know the details of these).

There are three prime reasons my heart did not begin to pound when President Obama said that the United States would think about signing on.

1. We seem to have forgotten that this is old news.  Negotiations for the United States to join the TPP were first announced on September 22, 2008.  But that was under the Bush Administration, so it obviously doesn’t count.  How silly of me!  Time for a memory wipe.
2. Obama didn’t say that the United States would join TPP.  He only said we would think about it.  I think about a lot of things.  That’s exciting.
3. The United States already has free trade agreements in force with Singapore (which doesn’t charge duties anyway) and Chile, and has little trade with Brunei.  Perhaps the TPP could resolve all those bitter trade problems with New Zealand.  We must guarantee our sources of chardonnay.

Preserving Sources?

Actually, I suspect that TPP is a good framework to work within, but the outpouring of enthusiasm by trade organizations is a bit premature.  This is going to take a long, long time, and the inclusion of more countries in the mix will  likely complicate things.  Australia, Vietnam and Peru have announced that they want to negotiate to join TPP.  Australia and Peru shouldn’t pose insurmountable issues, since the United States already has FTAs with them, too.  But it is going to be a long tough slog to convince the Congress that free trade with Vietnam is a good thing.  I’d love to see it, but … it’s hard to get excited.