Jake Colvin2013-05-23T14:03:31-04:00Jake Colvinhttp://www.huffingtonpost.com/author/index.php?author=jake-colvinCopyright 2008, HuffingtonPost.com, Inc.HuffingtonPost Blogger Feed for Jake ColvinGood old fashioned elbow grease.Mom and Pop Go Globaltag:www.huffingtonpost.com,2012:/theblog//3.20120142012-10-25T11:22:08-04:002012-12-25T05:12:01-05:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/Towards Commerce 3.0."
Think about that for a moment. Nearly all of eBay's commercial sellers, including micro-enterprises of one or a handful of employees, tap into foreign markets. Eighty percent of those export to at least five different markets. Contrast that with data from the Commerce Department that indicates that, of all U.S. small business that export, 58 percent do so to only one foreign country.
eBay's report is evidence of a broader trend. Small companies are increasingly leveraging internet-enabled advertising, cloud, communications, e-commerce, financial, logistics and search services to export. This development creates new potential for trade to improve economic growth and job creation, and a compelling reason to rethink conventional wisdom about the costs and benefits of trade.
For years, there has been a sense that trade presents a big threat and limited opportunity for American entrepreneurs and small enterprises. Small businesses may have thought twice about looking abroad because of the traditionally time-consuming and often-frustrating nature of customs, logistics, and regulatory and language differences in other markets. On the flip side, U.S.-based manufacturers and mom and pop retailers have often felt squeezed by low-cost producers in countries like China and large, globally-connected corporations that can often price more competitively than smaller retailers.
eBay's report highlights that the opportunity to grow domestically by tapping into overseas demand is becoming much greater thanks to technology and the internet. It is simply much easier to reach the 95 percent of consumers who live outside of the United States because of search engines, online advertising, package delivery companies like DHL, FedEx and UPS, and e-logistics providers who can process and fulfill international orders, such as New York-based Fifty-One. Companies including eBay are now implementing new services to improve the traceability of international shipments, help small businesses navigate customs, and enable buyers to calculate the full cost including duties of purchasing products from overseas.
Chris Chapman, who owns Snow Sport Deals, a Maryland-based business which sells ski equipment via Amazon.com and eBay, says that up to 30 percent of his business relies on international customers. Chapman, whose business Tom Heath of the Washington Post called a "21st century success," said he wanted to be able to grow his business internationally but still faced significant pain points.
"Commerce 3.0" suggests that policymakers can help small business exporters alleviate some of those pain points. It outlines a series of recommendations, including improving cross-border delivery services, reducing customs complexity, harmonizing and expanding trusted trader programs and promoting secure mobile payments. (One concrete way to assist small businesses in the United States and around the world would be to conclude quickly a strong multilateral agreement on trade facilitation under the auspices of the World Trade Organization.)
There are other issues to consider as well. As former United States Trade Representative Susan Schwab noted in a discussion about the paper hosted by the National Foreign Trade Council, the internet presents new challenges for companies who now need to worry about cyber-attacks, handling data appropriately across different countries and combating counterfeiting and piracy in the digital age. Government and private sector efforts to help small businesses navigate and address these issues would give added comfort to those who may look to export.
Overall, eBay paints a remarkable new portrait of exporters in the digital age and should spark a discussion about how policymakers can remove more of the obstacles that would allow exporters like Chris Chapman to meet the needs of international customers.]]>Shipping Bytes Across Borderstag:www.huffingtonpost.com,2012:/theblog//3.19144092012-09-27T18:48:58-04:002012-11-27T05:12:01-05:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/
Recent concern over the future of the internet and information flows has tended to center on renegotiation of the arcane International Telecommunications Regulations. Russia and other countries appear eager to encourage a new, top-down approach that would make it easier for national authorities to tax, control or unplug altogether from the global internet. Preserving the light touch and multi-stakeholder model that allowed the internet to flourish in the first place is critical, but is not the only challenge to the international flow of information and e-commerce.
A variety of countries are considering other policies that would restrict the ability of individuals and businesses to provide or access information across international borders. Several have proposed or adopted measures that would force providers of financial or internet services to process data locally or locate physical infrastructure such as servers within their borders. China put forward a draft requirement that would have forced companies to innovate and develop technologies locally in order to sell to the government. Others, including Egypt, Guatemala, and Vietnam, have blocked access to U.S.-based information services including Facebook, Wordpress and YouTube over the past several years.
These new online roadblocks are proliferating as companies and countries struggle to adapt to an information-based global economy. One difficulty in addressing them is that they are not as clear-cut or easy to object to as a high tax on a wind turbine. In some cases, countries are attempting to address legitimate interests such as consumer protection, national security, privacy, or public morals, but are doing so in ways that unnecessarily restrict or discriminate against international information and services.
Others are simply invoking these concerns as a pretext for shutting the door to global ideas and businesses and to improve their ability to control information or protect local economic interests. For instance, in May, the Ethiopian Government criminalized the use of services such as Skype that use voice over internet protocol (VOIP) technology to protect the monopoly of its sole state-owned telecom provider Ethio-Telecom.
Regardless of the rationale, measures that shut out global internet-enabled services and ideas jeopardize growth across a country's entire economy. From streamlining payroll services to interacting with customers to developing smart power plants that can be monitored remotely, manufacturers, farmers, retailers and other service providers utilize digital information and technologies to innovate and grow their businesses. Entrepreneurs and small businesses use online advertising, e-commerce platforms such as Etsy and South America's MercadoLibre, along with innovative payment and shipping technologies, to access customers and partners around the world. (eBay estimates that in 2010 approximately $4 billion of gross sales on its platform were the result of cross border trade.) Overall, McKinsey suggests that three quarters of the value of the internet accrues to companies that would exist without it, so shutting down global flows of information and services can be a significant drag on growth in the real economy.
There is some evidence that the economic benefit of the internet is increasingly relevant to national policy decisions involving information and the internet. In Cuba earlier this year, I spoke with government officials, academics and citizens who repeatedly emphasized the importance of the internet to economic growth, including to the success of the small-scale entrepreneurs that President Raul Castro is trying to encourage. While officials clearly struggled to reconcile that potential with the political uncertainty that greater access would bring, telecommunication and internet policies in Cuba are, very slowly, beginning to evolve. Texting prices, set by the state agency, have dropped, and the government permits a Cuban version of Craigslist called Revolico.com to function, implicitly acknowledging and facilitating the grey market that has existed in Cuba for decades.
Other countries are working together to create the kind of global digital framework Jobs recommended by applying familiar disciplines that cover international trade in goods to information and electronic products and services. Mauritius and the United States recently signed a joint set of principles signaling that international internet-enabled services and information flows should not be restricted and that foreign companies should be treated fairly when it comes to providing telecommunications and related infrastructure. In the Asia-Pacific region, countries including Australia, Malaysia, New Zealand, Singapore, the United States and Vietnam are negotiating a trade agreement where for the first time discussions are underway to commit to preserve access to information flows within the group.
Over the past 60 years, global trade policy has established basic rules of transparency, fairness and non-discrimination for international transactions involving physical goods while still permitting governments to regulate in support of national interests such as privacy and security. Applying those same concepts to information and electronic services can help create the kind of open, transparent framework that guarantees the ability to access and transmit ideas and services globally.
Talking through these issues internationally can help encourage the development of fair and transparent laws and regulations that refrains from walling off the innovation that comes from open access to global information, digital services and technologies. Small businesses and entrepreneurs in particular would benefit from cooperation among governments to ensure fair, non-discriminatory access to global digital markets and to improve their ability to navigate complex issues surrounding privacy, security, jurisdiction and liability.
As the world increasingly adopts digital technologies and habits, and the companies that provide them are more global in scope, improving the framework for information flows is essential to preserve the ability of innovators and entrepreneurs everywhere to participate effectively in the global marketplace of the 21st Century.]]>One Area Where Republicans and Democrats Can Agree: Promoting Green Exportstag:www.huffingtonpost.com,2011:/theblog//3.9163452011-08-02T16:05:47-04:002011-10-02T05:12:02-04:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/
As evidence, at a lunch last week hosted by the National Foreign Trade Council on Capitol Hill, Democratic Senator Ron Wyden of Oregon and Republican Congressman David Dreier of California spoke about the value of U.S. government efforts to tear down barriers to and encourage better promotion of American clean technologies.
Senior environmental and business groups are also supportive. The Environmental Defense Fund's international climate program director Jennifer Haverkamp suggested that addressing trade barriers and improving commercial diplomacy is important to the U.S. clean energy economy. Tim Richards, managing director for Energy Policy for GE Energy, emphasized the need for U.S. government efforts to help knock down trade barriers abroad and help counter state-owned or state-sponsored competition.
Major U.S. business groups including Business Roundtable, the U.S. Chamber of Commerce and the National Foreign Trade Council are pushing a similar message through a set of principles to encourage Congress and the administration to pursue a more coordinated and aggressive strategy to promote U.S. clean energy exports.
The organizations suggest that worldwide demand for America's clean energy products and services will create jobs and drive U.S. leadership of the 21st century global economy. They list several areas where U.S. government activity could more effectively target activities, including targeted and robust commercial diplomacy, better monitoring of export promotion programs and further developing flexible clean-technology funding mechanisms. The principles also note the importance of protecting American ideas and intellectual property rights globally, which allows companies to create revenue flows that can be reinvested to support further development of innovative solutions to global challenges, such as climate change.
One reason why green export promotion is so important is because the green economy is a large and growing segment of the overall U.S. economy. The Brookings Institution just released a new report, "Sizing the Clean Economy," which suggests that the U.S. clean energy sector is directly responsible for 2.7 million jobs, a quarter of which are involved in U.S. manufacturing. Green jobs are also heavily dependent on exports. In 2009, clean economy firms exported nearly $50 billion in goods and $4.5 billion in service exports. As Ty Mitchell, vice president for LED lighting for Durham, NC-based Cree, noted at last week's lunch, "you can be successful manufacturing technology in the United States" and exports are an important path for creating those jobs.
None of this is to suggest that there are not differences among groups when it comes to domestic policies to support the clean energy economy. At last week's lunch, the Environmental Defense Fund also highlighted the need to craft domestic policies that send the signal to globally-competitive businesses that it makes sense to invest and create jobs in the United States. One suspects their ideas for those domestic policies may differ, at least in part, from those of the U.S. Chamber of Commerce. But when it comes to marketing and selling clean energy technologies globally, senior business and environmental leaders recognize that export promotion efforts can help unlock foreign markets and grow businesses and jobs in the United States.
During his talk, Senator Wyden called for a standalone agreement to eliminate tariffs on environmentally friendly goods and services, an idea that the business groups endorsed in their principles and which is likely to get new traction over the coming months, particularly if other multilateral trade initiatives continue to stall. Last year, Congressman Dreier introduced a resolution along with an unlikely ally, Congressman Dennis Kucinich (D-OH), encouraging the United States to pursue something similar -- "the global elimination of obstacles to the proliferation of technologies and services" to address pressing environmental concerns. Removing tariffs on environmental goods and services could increase global exports by nearly $6 billion and would lead to new jobs and economic activity in the United States.
Strong U.S. Government support for a green trade agreement -- and for more aggressive promotion of U.S. clean energy exports more generally -- has the potential to gain strong bipartisan support on both sides of the aisle, even as we approach an election year. ]]>The End of China's Wind Subsidy Program and the Future of Global Clean Technology Marketstag:www.huffingtonpost.com,2011:/theblog//3.8734232011-06-08T17:10:58-04:002011-08-08T05:12:01-04:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/
Under pressure from the United States, which filed a formal complaint challenging the compatibility of China's Special Fund for Wind Power Manufacturing with global trade rules, Beijing this week agreed to terminate the program. The fund had required manufacturers to use domestically-made parts rather than imports as a condition for receiving government grants.
The end of the subsidy program is good news, and demonstrates the value of strong U.S. economic diplomacy as well as the importance of the World Trade Organization (WTO) as a forum to resolve disputes.
But China's wind subsidy program is symptomatic of a larger issue. Accessing international clean technology markets can be difficult for American exporters, thanks to subsidies and other factors such as tariffs, regulations that favor domestic companies over foreign providers and a lack of transparency in rule-making. Green trade barriers are particularly challenging for small businesses, which have fewer resources to monitor and address changes in overseas markets.
China alone has a "fabric of laws, regulations and directives which provide for preferential financing...tax incentives, procurement preferences, local content preferences, and R&D subsidies for their renewable energy equipment producers," according to a study commissioned by the National Foreign Trade Council last year.
Around the world, high tariffs can impair competition on everything from renewable energy products to smart grid to natural gas. Brazil maintains a 14 percent tariff on certain wind turbines. Russia, which is seeking membership in the WTO, applies a 20 percent tax on foreign solar panels. South Korea places a 6.3 percent duty on large gas turbines. Tariffs raise the cost of adopting environmental technologies and can lock out American exporters.
Other standards and regulations can also affect the ability of exports to compete in local markets. Any lack of transparency in a country's rule-making and notification procedures can cause problems for companies operating in the energy space, as the standards and rules governing emerging technologies and efficiency standards are still under development and can act as barriers to entry.
One example is in Mexico, where the government will require the measurement and labeling of energy consumption for a range of electronics from servers to multi-function printers by September. These requirements are challenging for companies, which will have to alter their global production processes to comply. They are also potentially confusing, and would benefit from further clarification of how the information must be displayed (on the product? on the company's website?) and which products are subject to the requirement.
Advance input from businesses that have to comply with these laws can be valuable to the government, yet in this case Mexico failed to provide proper notifications to other countries about the new rules. Governments as well as companies benefit from transparent processes that encourage and respond to public comments on new regulations, as feedback can improve compliance and highlight potential unforeseen consequences.
Fair rules and green trade aren't just in the interest of American exporters. Creating a level playing global field for clean technologies will help countries around the world develop lower-carbon economies and adopt environmental technologies at a reduced cost. Eliminating tariffs and red tape are good for green and sustainable development as well as for business.
]]>Pack Your Bags for Cuba? Maybe Soon, If You Have a Good Reasontag:www.huffingtonpost.com,2010:/theblog//3.6876972010-08-20T13:23:19-04:002011-05-25T17:25:21-04:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/speculation that the Obama administration will loosen restrictions on the ability of American citizens to visit Cuba has put travel to the island back in the spotlight. If you are hoping that the president's expected announcement will allow you to travel to Cuba, here are a few things to consider:
Ten years ago, Congress passed legislation which restricts the president from allowing "travel to, from, or within Cuba for tourist activities." The president may only license travel under a dozen categories of travel for a particular reason.
Under current law, American citizens may be able to travel to Cuba to visit family, to conduct professional or academic research, for educational or religious reasons, for public performances or exhibitions, to support the Cuban people, to conduct humanitarian projects, or to market or sell certain products. There are also exemptions for journalists, diplomats, and private foundations.
Within these limitations, the president has the ability to get many more Americans traveling to Cuba for activities that would benefit the United States and the Cuban people.
The administration has a great deal of room to expand the number of Americans who would qualify to travel to Cuba. For example, the Bush administration imposed a condition that, in order to travel to Cuba under an academic license, a student had to be enrolled in a degree program and engaged in a course of study that was no shorter than 10 weeks. President Bush also prohibited visits by individuals when a family member is in Cuba, except in "exigent" circumstances and only "in true emergent situations, such as serious illness accompanied by an inability to travel." Restoring flexibility to educational, religious and cultural programs would likely result in more access for U.S. citizens via programs by local churches, schools, museums and other groups.
President Obama could also improve the logistics of traveling to Cuba. Currently, travel to Cuba is limited to a few ports, with most travel originating in Miami via charter airlines. Expanding flights to other air and seaports, establishing regularly-scheduled commercial airline service, and loosening restrictions on travel service providers to book trips to Cuba would lower costs and facilitate the ability of Americans to get to Cuba to engage in the list of activities permitted under current law.
Finally, the president could make a simple administrative change that could have a significant impact on travel. The U.S. Government relies heavily on "specific licenses," which requires the Treasury Department to approve applications to travel to Cuba on a case-by-case basis. The White House has the option of permitting more travel to Cuba under what is known as general licenses, which provide blanket authorization for qualified Americans to declare themselves eligible to travel to Cuba rather than requiring a permission slip from the Treasury Department in advance.
Relying more heavily on general licenses would ease the burden on the Treasury Department. Instead of processing applications for travel to Cuba, the Department would be able to redeploy resources internally to focus on more urgent priorities of tracking terrorist financing.
Changing these rules could have a significant impact on travel to Cuba over time. An announcement from the White House would also be a welcome step in the right direction that would create additional momentum for Congress to end the absurd limits on travel that Washington places on its citizens.
Given that American citizens can get to China, Iran and Vietnam on a U.S. passport, it is a wonder Cuba is still largely off-limits.
]]>White House Green Trade Agenda an Opportunity for Global Leadershiptag:www.huffingtonpost.com,2010:/theblog//3.4991522010-03-15T14:34:38-04:002011-05-25T15:50:25-04:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/
On the heels of the announcement by Wal-Mart Stores that it will push carbon out of its supply chain, the Obama administration sent new signals this month in its annual trade policy agenda that it will use some government muscle to advance a series of environmentally-friendly trade policies. The Office of the U.S. Trade Representative set out an ambitious plan to open foreign markets for U.S. exports, which includes significant mention of policies designed to open and regulate trade for environmental purposes.
One of those efforts is to lower or eliminate barriers to environmentally friendly goods and services. The Obama administration indicated that it would seek "to fast-track the elimination of tariffs on goods directly relevant to addressing climate change, such as solar panels and stoves, and wind and hydraulic turbines," breathing life into an effort that has been languishing in Geneva as part of the long-stalled Doha Round of global trade negotiations. USTR's indication that it would work with "like-minded and ambitious WTO members" suggests they may move forward on a green trade agreement even without the rest of the Doha Round, a move that the National Foreign Trade Council supports.
The administration has also focused on promoting American ideas and protecting the intellectual property behind U.S. clean technologies. Making sure U.S. trading partners enforce IP rules overseas helps spur investment and jobs in the United States and creates the conditions which can facilitate research and sharing of technologies with other countries.
One potential deliverable in this area this year is the establishment of a technology cooperation mechanism, which was written into the Copenhagen climate accord. As negotiators seek to flesh out the idea, U.S. trade policymakers will be called on to propose new forums and financing mechanisms to build trust and spur collaboration between U.S. companies and researchers and counterparts in developing countries. Devising a mechanism which relies on the current system of intellectual property rules, and which uses financing to make up funding gaps and strengthen legal protections abroad, would benefit U.S. exporters and our partners in the developing world.
The trade policy agenda also highlights a host of other environmentally-oriented trade priorities, from promoting sustainable tropical timber trade to reducing subsidies that contribute to overfishing. On paper, the environment is clearly an important part of the administration's trade agenda.
Environmentally-friendly trade policies should be a high priority for the administration this year. Securing access to international markets would help create clean energy jobs in the United States. Lowering trade barriers would reduce the cost of environmental technologies globally and increase access to those technologies, particularly in developing countries where trade barriers are often the highest. Promoting global enforcement of intellectual property rules - and developing new structures that support research collaboration based on compliance with those rules - could benefit U.S. innovators and facilitate better commercial relations between the United States and partners around the world.
Green trade is also bipartisan. Lowering barriers to clean technologies and protecting and promoting U.S. innovation are as American as apple pie. These initiatives enjoy support from a diverse group that includes Senators John Kerry and Richard Lugar and Congressmen Kevin Brady and Rick Larsen. Delivering on a green trade agenda would provide an opportunity to lead on trade without the partisan baggage that is attached to much of the trade agenda.
In a year where progress on domestic carbon-pricing legislation or in global climate negotiations may be slow, green trade also offers chances to demonstrate global leadership on the environment.
This is not to say that fulfilling such an agenda will be easy. Negotiations for a green trade agreement will present a host of complicated questions for the Obama administration, including whether to negotiate lower barriers to sensitive imports like ethanol and automobiles. Collaborating on clean technology development and deployment may require new sources of financing and delicate negotiations with partners in the developing world.
Defending U.S. interests internationally will also be a challenge, given the importance countries like China have placed on developing local industries through a mixture of tariffs, subsidies and standards. (The National Foreign Trade Council today released a lengthy review of China's renewable energy sector, which details promotional measures its government has taken "by directly or indirectly stimulating demand for Chinese-made renewable energy equipment.")
But as the United States seeks to rely less on the U.S. consumer to drive economic growth, the administration will need new mechanisms to help U.S. businesses export more of what they produce. Environmentally-friendly trade policies offer fresh opportunities to deliver benefits for American businesses and workers, provided that the administration is willing to spend some serious time and energy to see them through.
An edited version of this article appeared in The Hill on Friday, March 12, 2010.
]]>Obama vs. Krugman: Five Reasons the President's Right on Carbon Tariffstag:www.huffingtonpost.com,2009:/theblog//3.2876342009-09-16T10:36:00-04:002011-05-25T14:05:19-04:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/New York Times columnist Paul Krugman.
Mr. Krugman has become a proponent of carbon tariffs, also known as "border adjustment measures," which would tax imports into the United States from countries which have not taken sufficient steps to combat climate change. In his most recent New York Timesblog post, he writes that President Obama is "getting it wrong" by expressing skepticism of carbon tariffs and that French President Sarkozy is "entirely reasonable on the subject."
While Mr. Krugman is correct to note that global trade rules may permit the use of carbon tariffs, he fails to provide the economic, environmental and diplomatic contexts that have led President Obama to conclude that, in order to create a level playing field for American manufacturers, "there may be other ways of doing it than with a tariff approach." Here are five reasons why President Obama is right to oppose carbon tariffs:
1. Carbon tariffs are unlikely to advance U.S. environmental goals. A carbon tariff is a blunt instrument which is likely to result in the same tariff being applied to products from both clean and dirty producers in a country such as China or India. As a result, carbon tariffs are unlikely to incentivize the kind of innovation or energy efficiency improvements by foreign companies that will lead to a reduction in global carbon emissions. At the same time, threats by the United States to impose new green tariffs are likely to cause serious diplomatic frictions that will make it more difficult for the Obama Administration to negotiate effectively for a global deal on climate change.
2. Carbon tariffs could ignite a green trade war and harm the U.S. economy. China and India have called U.S. proposals for a carbon tariff unacceptable and protectionist and have hinted at retaliation. Developing countries have pointed to U.S. per capita CO2 emissions, which are dramatically higher than the world average, as a basis for retaliating against any U.S. efforts to place tariffs on foreign goods. As President Obama noted, "we have to be very careful about sending any protectionist signals out there," particularly while the world continues to deal with the ongoing recession. Sparking a trade war is no way to help the U.S. economy.
3. Carbon tariffs are likely to violate global trade rules. While Mr. Krugman correctly notes that global rules provide for the use of trade measures to address environmental issues, they also require that "a connection must be established between the stated goal of the climate change policy and the border measure at issue" and that "the measure must not constitute a means of arbitrary or unjustifiable discrimination" or a "disguised restriction on international trade." It turns out that it is difficult to design a border measure in a way that satisfies these criteria, particularly when you leave it to politicians. As Jeffrey Frankel of Harvard University has written, "border measures to address leakage need not necessarily violate the WTO or sensible trade principles, but there is a very great danger that in practice they will."
4. Other countries are likely to use carbon tariffs against the United States. Mr. Krugman may think that French President Sarkozy is "entirely reasonable" to call for a European carbon tariff, but he fails to note that the French have implied that they might turn around and use it on the United States, as a group of House Democrats warned in a letter to congressional leaders over the summer. "The U.S.," the Members wrote, "must not provide a template to ignite a global trade war."
5. There are less-controversial ways to help U.S. manufacturers transition to a clean energy economy. The European Union and other major developed countries thus far have relied on giving away credits for free to energy-intensive industries that are hit hardest by climate policies. U.S. legislation would provide similar assistance to domestic manufacturing industries including steel, aluminum, cement and chemicals. As President Obama suggested after the House voted on its climate legislation, "there were a number of provisions that were already in place...to provide transitional assistance to heavy manufacturers." He raised the possibility that carbon tariffs are unnecessary, "given all the other stuff that was done and had been negotiated on behalf of energy-intensive industries."
I'm all for not "fetishizing free trade" as Mr. Krugman suggests, but it is often those who are most opposed to open markets who are most hyperbolic about the supposed effects of trade. The United States imposes all sorts of regulations which lead to higher costs relative to other countries, from other environmental regulations to minimum wage requirements and prohibitions on bribery and corruption. The fact that U.S. anticorruption regulations are more stringent than Russia's has not led American businesses to abandon Minnesota for Moscow.
Neither is a U.S. cap-and-trade program likely to cause the kind of "carbon leakage" -- the movement of production from the United States to countries which do not have similar regulations -- that proponents of carbon tariffs warn. In fact, studies of Europe's carbon regulation system suggest that carbon leakage is "unlikely to be substantial" because of factors like transportation costs and differentiation between local markets.
Certain U.S. manufacturing sectors may face a decline in production, but Eileen Claussen, President of the Pew Center on Global Climate Change, points out,
most of the projected decline in production stems from a reduction in domestic demand for these products, not an increase in imports. In other words, most of the projected economic impact on energy-intensive industries reflects a move toward less emissions-intensive products -- as would be expected from any effective climate change policy, even one with global participation -- and not a movement of jobs and production overseas.
President Obama and Congress must make sure that U.S. climate policy efforts encourage other countries to reduce their carbon emissions and spur global demand for U.S. clean energy technologies, which will help to create a new generation of green jobs in the United States. Carbon tariffs are unlikely to advance either urgent priority.]]>Why Can We Visit Kim Jung Il but Not Old Havana?tag:www.huffingtonpost.com,2009:/theblog//3.2181652009-06-19T17:42:13-04:002011-05-25T13:30:21-04:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/El Floridita, the bar Ernest Hemingway made famous in Old Havana. Cuba, it turns out, is the only country on earth that U.S. citizens are largely prohibited from visiting.
Americans are free to travel to countries like Iran, North Korea and Sudan, assuming they can get a visa from their bad actor of choice, but cannot hop on a plane to Cuba thanks to U.S. sanctions. Perhaps it is time to rethink our approach and open Cuba to American tourists.
There is no shortage of good reasons for allowing Americans to travel to Cuba. By far the best is that the United States should not be in the business of restricting the right of its citizens to choose where to travel. As President Reagan liked to say, America is the shining city on a hill and the world's eyes remain focused upon us. Limiting the freedom of American citizens in an effort to advance the cause of liberty in Cuba is an Orwellian anomaly in U.S. foreign policy that ought to be corrected immediately. We undermine the cause of freedom abroad when we restrict it here at home.
Americans are extraordinary ambassadors to the world. Restricting travel to Cuba severely limits the positive impact Americans can have abroad through everyday activities and interactions. Travel promotes understanding, respect and shared values, which is good for Cubans and Americans alike. "Travel," observed Mark Twain, "is fatal to prejudice, bigotry and narrow-mindedness, and many of our people need it sorely on those accounts."
Boost to ordinary Cubans, travel industry
Travel by American citizens would directly benefit the Cuban people. American travelers would help put more money in the hands of ordinary Cubans who work in the hospitality industry in Cuba. While some tourist dollars would undoubtedly benefit the Castro regime, many more would help ordinary Cuban citizens provide for themselves and their families.
From a business perspective, restoring tourist travel to Cuba would benefit U.S. airlines, cruise ships and tour operators and could create thousands of jobs in the travel industry immediately. Estimates suggest up to a million travelers could visit Cuba annually from the United States once restrictions are removed. Resuming travel to Cuba could potentially boost demand for certain American products like beef, soft drinks, wine and potato chips, which are permitted to be exported to Cuba under an exemption to U.S. sanctions.
Current travel restrictions also place a tremendous burden on the same taxpayer dollars that are allocated to investigate al Qaeda and keep international terrorists and criminals out of the United States. A 2007 U.S. Government report concluded that inspections of travelers arriving from Cuba may strain efforts to keep out terrorists and criminals from entering the country. Eliminating the travel ban would allow the U.S. government to redeploy its resources to tackle more urgent pursuits.
Send a positive signal internationally
Finally, changing course on U.S. Cuba policy would boost America's image in the world, particularly in Latin America. Leaders of Argentina, Brazil and other nations have made clear to President Obama that a new U.S. approach to Cuba is a priority for the hemisphere. Removing travel restrictions is an easy way to send a positive signal internationally.
Congress has introduced legislation known as the Freedom to Travel to Cuba Act, which would restore the ability of Americans to travel to Cuba. President Obama should make clear his support for this effort, and leaders in Congress should ensure that the legislation is voted on this year.
Travel writer Bill Bryson once commented that, "I can't think of anything that excites a greater sense of childlike wonder than to be in a country where you are ignorant of almost everything." Decades of restrictions on travel to Cuba have left most Americans with little knowledge of the island, which sits just 90 miles from the shores of the United States.
It is time to unlock the sense of wonder for American citizens and end the ban on travel to Cuba.
This article is cross-posted at blog.opencuba.org.]]>Following the London Summit, What's Next for the World Economy?tag:www.huffingtonpost.com,2009:/theblog//3.1867902009-04-14T17:04:00-04:002011-05-25T13:15:26-04:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/Co-authored by Randall Soderquist, Senior Trade Program Associate with the Center for Global Development.
Now that world leaders and finance ministers have met in London and declared their support for open markets and reform of global financial rules, what's next for the world economy?
Right now, attention is focused largely -- and with good reason -- on the ongoing global financial crisis. But the fate of the global economy may actually rest on the actions of U.S. Trade Representative Ron Kirk and his counterparts around the world. World leaders and their trade ministers must keep in mind the importance of establishing policies for an open and equitable trading system and ensure that history does not repeat itself.
Leaders sent the right message in London, reaffirming their commitment to avoid new restrictions on international trade and support for open trade and investment. The London Summit joint communiqué also calls for hundreds of billions of dollars in trade finance for developing countries. Unfortunately, as a new report by the World Trade Organization notes, protectionist measures have increased since the crisis began. The report also suggests that further risks to trade are increasing.
When the Great Depression unfolded in the early 1930s, the United States and its trading partners responded to global economic uncertainty through isolationism and protectionism, setting off a downward spiral of reciprocal tariff and subsidy increases that required decades to untangle. While the system governing the world economy is much different now than it was then, giving preference to domestic markets and industry in the context of the current crisis could still ignite a global trade war and deepen an already catastrophic economic downturn.
Our organizations have joined with others from the development, faith-based, and business communities to urge President Obama and Congress to reject protectionism and re-claim the mantle of leadership in the global trading system. The groups, which included Business Roundtable, the ONE Campaign, and the United States Conference of Catholic Bishops, also delivered a strong message that forward-thinking trade policy can be a powerful tool to encourage economic growth in developing countries.
Concluding the Doha Development Round at the World Trade Organization, as an example, could open major markets for both developed and developing countries and spur investment and opportunity in the world's poorest countries. A complementary policy would be to review and reform U.S. trade-preference programs to ensure that they are effective and broad in coverage, giving special attention to the least-developed and uniquely vulnerable countries such as those in sub-Saharan Africa.
The time is right for a renewed commitment to trade. The current economic crisis is having a terrible impact on American workers and has brought devastating damage to developing countries. It has led to sharp decreases in investment flows, export demand, export credits, and commodity prices, which reduces export opportunities and economic growth. A recent World Bank report states that for each one percent drop in global economic growth, another 20 million people are trapped in poverty. Millions of families have lost the gains they have made over the last decade.
The current economic climate presents a real danger to international stability and, ultimately, to U.S. national security. As Director of National Intelligence Dennis Blair pointed out to Congress earlier this year, the global economic crisis represents the greatest threat to U.S. national security. A prolonged recession could create political instability and humanitarian crises that would only exacerbate this trend.
This scenario, while alarming, is avoidable. The United States has an opportunity to respond strategically to these challenges by emphasizing a set of innovative policies that offer an economic vision for American workers, open major markets through effective trade agreements, and create the foundation for economic growth, poverty alleviation, and political stability in the international system. Anything less would be short-sighted and counter-productive.
In this globalized world, the fates of working families are inextricably linked. The anxiety we feel in America over jobs, healthcare, and economic security is being replicated in spades around the world. While the instinct to turn inwards in times of crisis is understandable, such "beggar-thy-neighbor" policies will only increase instability and uncertainty. As the United States and the world take additional steps to address the crisis, it is important to remember that economic cooperation offers the only viable path to economic recovery and sustainable growth.
]]>Enough Hand-Wringing Over Cubatag:www.huffingtonpost.com,2009:/theblog//3.1736822009-03-12T12:16:00-04:002011-05-25T13:05:20-04:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/
The Senators had expressed concern with three provisions buried in the omnibus appropriations act which pertain to U.S. Cuba policy.
These provisions would authorize travel to Cuba for the purposes of sales and marketing agricultural and medical products to Cuba and would prohibit the enforcement of some changes to Cuba regulations made by the Bush administration via an appropriations strategy known as "de-funding." (De-funding provisions are largely symbolic, given that they do not change underlying law.)
Geithner's response, in two separate letters , were sufficient to allow Senators Menendez and Nelson to affirm their support for the omnibus spending bill, clearing the way for Senate passage. It also led some to suggest that the Obama administration is somehow limiting the impact of these provisions through a quasi-signing statement -- which President Obama's Press Secretary, Robert Gibbs, did little to dispel in his answer to a reporter's question.
Secretary Geithner's letters to Senators Menendez and Nelson are a far cry from Bush-era signing statements. Indeed, Geithner's clarifications are a straightforward explanation of the Cuba provisions based on a plain reading of the omnibus language. His clarifications regarding the travel and cash in advance provisions appear entirely consistent with the intent of Congress.
Let's be clear what the provisions actually do: One of the provisions authorizes travel via what's known as a general license for the purpose of marketing and selling agriculture and medical goods to Cuba. This provision is important since it authorizes, in perpetuity, a new policy. Secretary Geithner indicated that the administration would create this general license but clarified, correctly, that it is applicable to a narrow set of businesses (i.e. those businesses which are able to sell agriculture, food, medical products or medicine to Cuba).
The other two Cuba-related provisions in the omnibus, which pertain to payments made to U.S. farmers from Cuba and travel by Cuban Americans to Cuba, do not actually change current law or regulation. These provisions "de-fund," or prohibit, the U.S. Government from enforcing the changes President Bush made in 2004 and 2005. The underlying regulations remain the same; the omnibus provisions simply prohibit the Treasury Department from enforcing them. This is essentially the message that Secretary Geithner sent in his March 5 letter.
While some Members of Congress may have wished that the provisions did more, defunding provisions are largely symbolic and do not require Obama to issue new regulations or change underlying policies.
The more important point here is that there was absolutely no move by congressional leadership -- or calls by President Obama -- to remove the offending provisions on Cuba, which is a dramatic change from the past eight years.
The changes to Cuba policy contained in the omnibus appropriations bill are small but important. By including these measures in the bill, Congress has demonstrated a willingness to ease provisions of the embargo on Cuba and a path forward for making future changes.
]]>New Report Hints at Broken Promises and Trouble Ahead for World Tradetag:www.huffingtonpost.com,2009:/theblog//3.1621092009-01-30T11:10:50-05:002011-05-25T13:00:22-04:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/
The report, dated January 23 and elegantly titled "Report to the TPRB from the Director-General on the Financial and Economic Crisis and Trade-Related Developments," has not been made public by the WTO though it has been circulated to reports and has appeared on at least one website.
It catalogues a range of measures which countries from Korea to Ecuador have undertaken in recent months which either complicate or restrict trade. Russia, for instance, has increased tariffs on automobile imports while Indonesia has restricted the means of entry of imports into the country. Overall, the WTO concludes that,
to date, most WTO Members appear to have successfully kept domestic protectionist pressures under control. There has been only limited evidence of increases in tariffs and non-tariff barriers, or of increased resort to trade-remedy actions.
But the report does not capture the universe of trade-restricting or distorting measures that have occurred or are likely to occur.
Brazil just announced new measures which require importers of motor vehicles, wheat, capital and other goods to obtain pre-approval prior to receiving goods from overseas. Japan and other Asian countries may intervene in currency markets to stem the appreciation of their currencies against the dollar, which will have an effect on global trade flows. In the United States and around the world, new "buy national" provisions are being debated as part of stimulus and recovery packages which, depending on their scope and how they are implemented, may (or may not) violate global trade rules and could encourage other countries to adopt similar policies when crafting their responses to the economic crisis.
In addition, demands continue to mount for new and higher levels of protection. India's decision to raise steel tariffs, for example, has been met with calls by Indian industry for even higher tariffs.
And while the report notes some efforts by countries including China and Argentina to facilitate trade by lowering export taxes, such policies are consistent with a mercantilist mindset -- one which attempts to promote exports and limit imports. In fact, the report notes that while Argentina has lowered export taxes on wheat and corn, it has also enacted new licensing requirements on sensitive products including auto parts, textiles, televisions, toys and leather goods.
The problem with supporting export-oriented growth while limiting imports is that such behavior encourages similar strategies by other countries, in the end leaving all export markets closed and all economies worse off.
This is not the way it was supposed to be. In November, leaders of the G-20 nations met in Washington to develop policies aimed at mitigating the impact of the global financial crisis. At that meeting, as well as at other gatherings like the Asia-Pacific Economic Cooperation forum, world leaders pledged not to put in place new protectionist tariff and non-tariff barriers to trade. Participants in the G-20 meeting agreed that,
We underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty. In this regard, within the next 12 months, we will refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports.
By the WTO's count, six members of the G-20 - Argentina, Brazil, India, Indonesia, Russia, and South Korea -- have already broken this pledge. (The European Commission has announced its intention to reinstate export subsidies for some dairy products from the end of January, a move that would seem to break the G-20 pledge made by France, Germany, Italy and the United Kingdom.)
Backtracking on pledges made at the G-20 threatens to undermine the credibility of the G-20 and the global trading system. President Obama and other leaders will have another crack at committing to an open trading system in London this April, when British Prime Minister Gordon Brown hosts the next G-20 summit. Heads of state should use that meeting, as well as the current discussions in Davos in and around the World Economic Forum, to find new ways to inject confidence into the global trading and financial systems rather than erecting new walls that jeopardize trade and economic growth.
A good start would be to agree to enforce the "no new tariffs pledge" and redouble efforts to conclude the Doha Round of trade negotiations. Both would help bolster confidence in, and the stability of, international markets as well as the credibility of global institutions like the G-20.
We are not yet living in the era of another Smoot-Hawley, the disastrous U.S. tariff act which is widely blamed for deepening the Great Depression, but the world's response to the global financial crisis has yet to develop fully. The steps countries take over the coming months to respond to the global financial crisis will help determine whether the world is destined to learn from or repeat past mistakes.
UPDATE: The Government of Brazil announced that it would suspend new licensing requirements for imports "In the face of massive opposition from Brazil's leading business associations."]]>Beating the Drum on Cuba Policytag:www.huffingtonpost.com,2008:/theblog//3.1495792008-12-09T15:23:22-05:002011-05-25T12:55:17-04:00Jake Colvinhttp://www.huffingtonpost.com/jake-colvin/Magazine that history will judge U.S. policy "[b]adly, I think, especially since the end of the cold war." He continues,
if the embargo had come down then, back in 1989, I doubt the [Castro] regime would have survived. But the grudges were too deep, and a mistake was made. Today the policy makes little sense. The United States dislikes Chávez but maintains diplomatic relations with Venezuela. I think Obama should add to the measures he has already announced by offering to open full diplomatic relations with Cuba immediately.
Cohen's article provides a fairly leisurely tour through the politics of Cuba, both in Cuba and in the United States. Having spent some time in Cuba, he also provides an accessible account of daily life there. His thoughts on policy seem like a bit of an afterthought, however, and he stops short of recommending more dramatic policy changes that others have suggested.
The week prior, a group of U.S. business associations, including the one for which I work, wrote President-elect Obama to suggest the need for a more dramatic policy shift.
In the short term, the groups asked for the temporary suspension of certain restrictions on trade that would allow American companies to help Cuba to respond more effectively to the humanitarian crisis in the wake of recent hurricanes and storms in Cuba. The associations also urged President-elect Obama to "immediately remove travel restrictions and allow Americans to act as ambassadors of freedom and American values to Cuba," and to engage in bilateral discussions with Cuban government.
The dozen business organizations which signed the letter are among the largest in the country and include American Farm Bureau Federation, Business Roundtable, National Foreign Trade Council and U.S. Chamber of Commerce. They called for a comprehensive reexamination of policy and eventually the complete removal of all trade and travel restrictions on Cuba.
Earlier in the week, I released a new policy brief, the Case for a New Cuba Policy, which featured calls for new approaches to Cuba from former senior Clinton administration officials who were responsible for U.S. Cuba policy. They included former Senior Director for Inter-American Affairs at National Security Council Arturo Valenzuela; former Assistant Secretaries of State for Western Hemisphere Affairs Jeffrey Davidow, Peter Romero and Alexander Watson; and former U.S. Ambassadors to the United Nations Thomas Pickering and Nancy Soderberg.
Ambassador James Dobbins, another former Senior Director for Inter-American Affairs at the NSC, says in the report that, "Cuba policy is long past due for substantial revision, and domestically there is waning support. Flooding Cuba with American tourists, journalists, and culture is the fastest way to promote change. I'd almost completely reverse current policy."
And, as I wrote last month, the Brookings Institution released a new report, "Rethinking U.S.-Latin American Relations: A Hemispheric Partnership for a Turbulent World."
These are just the latest drumbeats. The Council on Foreign Relations put out a report in May, "U.S.-Latin America Relations: A New Direction for a New Reality," which called for a new approach to Cuba.
The task force, chaired by former U.S. Trade Representative Charlene Barshefsky and former Commander of U.S. Southern Command James Hill, calls for freer travel, more trade, a new U.S. diplomatic initiative and the repeal of the Cuban Liberty and Democratic Solidarity Act of 1996. It also called on the United States to "assure Cubans on the island that the United States will pursue a respectful arm's-length relationship with a democratic Cuba." The report's section on Cuba concluded that,
The time is ripe to show the Cuban people, especially the younger generations, that an alternative exists to permanent hostility between these two nations and that the United States can play a positive role in Cuba's future.
The flurry of reports suggests some pent up interest on the part of policy wonks, educational, religious and humanitarian groups, and the business community. Next January will mark the first time in eight years where there is a chance that the next U.S. President could loosen restrictions on Cuba. A number of groups, who have been noticeably quiet over the past few years, are watching closely.
These are not the last of the drumbeats. Next year, I suspect you will see more calls for changes in policy. (In particular, watch for something from this organization.)
As these reports suggest, a new approach to Cuba is fairly easy to accomplish. President-elect Obama could send a signal to the Cuban people and the world by changing Cuba policy via a simple Federal Register notice and diplomatic outreach. As the Council on Foreign Relations says, the time is ripe.
]]>