In the Jaws of the Dragon: America's Fate in the Coming Era of Chinese Hegemony

               by Eamonn Fingleton

In his hot-off-the-press book (published March 4, 2008), the author posits that if we remain complacent in our trade policy, the Chinese economy will surpass ours within the next two decades. A former Forbes and Financial Times editor, Eamonn Fingelton has been analyzing East Asian economic developments since the 1980's. 

The Three Faces of Chinese Power: Might, Money and Minds 

              by Professor David Lampton

 "Serious students of world affairs and non-specialists concerned about the outlook for U.S.-China relations will all benefit from the historically-based insights and judgments that fill the pages of this thought-provoking volume. "--
J. Stapleton Roy, former United States ambassador to China

Truck Stop Politics-Understanding the Emerging Force of Working Class America

              by Thomas S. Mullikin

"Truck Stop Politics" examines the key voting block in America that keeps resurfacing with different names--Roosevelt Democrats, Hardhats, Reagan Democrats, and Red-state Republicans--and looks at how the working class is coming to terms with the 21st-century realities of globalization.

100 Million Unnecessary Tax Returns: A Simple, Fair and Competitive Tax Plan for the United States

               by Michael J. Graetz

"Michael Graetz has done the near-impossible. He has come up with a sweeping tax reform plan that would simplify the system and retain the progressivity that is the linchpin of the American tax system. The book ought to appeal to liberals and conservatives and ought to be read by every presidential candidate out there."-Norman Ornstein, Resident Scholar, American Enterprise Institute and co-author of The Broken Branch: How Congress Is Failing America and How to Get It Back on Track (Norman Ornstein )

Dangerous Business: The Risks of Globalization for America

                by Pat Choate

From one of the most respected and vigorous economic thinkers in Washington, a wake-up call about the perils of unfettered globalization. In this impassioned, prescient book, Pat Choate shows us that while increased worldwide economic integration has some benefits for our fiscal efficiency, it also creates dependencies, vulnerabilities, national security risks, and social costs that now outweigh its advantages.

 

Contact: Fred Stokes 662 476 5568, Cell 601 527 2459

March 24, 2008

 The Coalition for a Prosperous America praised the work of the Committee on Foreign Investment in the United States (CFIUS) for helping prevent the acquisition of 3Com by Chinese government-owned Huawei and Bain Capital.  That acquisition, announced last November, was opposed by many lawmakers.  CFIUS is obliged to review foreign investment, whether by private companies or governments, that pose a risk to national security.

“The members of the Coalition for a Prosperous America are very concerned about the geopolitical and economic impacts of foreign government purchases of U.S. companies,” said Fred Stokes, CPA president.  “Just as U.S. citizens are reluctant to allow our government to buy, operate or control private companies, we should be extremely resistant to allowing foreign governments to do the same in our economy, directly or indirectly.” The CFIUS is an inter-agency committee, with representatives from 12 U.S. agencies including the Defense, State, Homeland Security and Commerce departments.  The Treasury Department chairs the committee. As stated on the Committee’s website:

            Section 5021 of the Omnibus Trade and Competitiveness Act of 1988 amended Section 721 of the Defense Production Act of 1950 to provide authority to the President to suspend or prohibit any foreign acquisition, merger or takeover of a U.S. corporation that is determined to threaten the national security of the United States.

“We appreciate the foresight of Congress in 1988 to recognize the risks of foreign investment in the United States.  3Com sells sensitive technology including hacker-prevention hardware sold to the Pentagon.  While foreign direct investment can be beneficial, there are special dangers, especially when there is a connection to another government,” continued Stokes. 

“Foreign governments control the largest financial funds in the world, called Sovereign Wealth Funds, many of which are controlled by geopolitical rivals,” said Stokes.  “The CFIUS has an increasingly important task in examining pending and future foreign investments.”

The  Coalition for a Prosperous America (CPA) is a non-profit coalition, working for new and positive trade policies that deliver prosperity and security to America, its citizens, farms, factories and working people.
 

CPA Statement of Policy 

Position:  CPA supports a comprehensive review and audit of existing trade agreements before approving new trade agreements.  The review and audit should include these objective factors:

1.              Whether goals and objectives for past trade agreements were defined prior to negotiations beginning;

2.              Whether trade negotiators accomplished these defined goals and objectives;

3.              Whether the goals and objectives were consistent with the needs of the American public;

4.              Whether fundamental economic, fiscal and monetary policies of prospective trading partners were considered and resolved prior to and during past negotiations, including policies involving: currency valuation, taxation, subsidies, and regulatory regimes;

5.              Whether the U.S. retained an ability to respond to changes in trading partners’ economic, monetary, and fiscal policies which create trade imbalances;

6.              Whether trade agreements relinquish more political sovereignty of our federal, state, and local governments than necessary for enforcement purposes;

7.              Whether trade agreements give greater legal standing to foreign companies than U.S. companies;

8.              Whether efficient and effective enforcement mechanisms exist in the agreement.

The review process should be clear and transparent.  A moratorium on future agreements should be implemented until this audit is completed and evaluated.

Background:  Existing trade agreements have been debated and passed with a mere simplistic debate – are you for or against trade?  The correlation between a new trade agreement and increased trade has been assumed, but not shown.  The correlation between increased overall trade – including deficits – and improving the nation’s welfare has been assumed but not proven.  Trade agreements cover far more topical ground than mere trade, tariff and subsidy issues.  They constrain domestic policy choices, and impact environmental, safety, investment, and transportation.  Clear goals and objectives have not been set, and thus, trade negotiators were not charged with achieving those goals and objectives.  Congressmen and Senators typically do not read the trade agreements, and the public does not debate the terms of the agreements.  The process has been vague amd opaque.

Rationale:  Trade agreements are business contracts between countries. Business contracts must benefit all parties to succeed.  Businesses have clear goals and objectives when entering into contract negotiations.  If the goals and objectives are not achieved, a contract is not signed.  If a contract is signed, the language of the contract protects the interests of the parties, and there are clear enforcement mechanisms.  Our trade agreements do not have these features, and our trade negotiators are not give clear goals and objectives.

The results are record trade deficits each year, and the loss of the ability to conduct domestic policy in ways many did not intend.  Instituting objective measures of success is necessary for America to succeed.  A comprehensive review and audit of existing trade agreements, prior to approving new ones, is now necessary. 

In the interim, trade will continue because the U.S. needs to buy products and services from overseas sellers, and other countries need goods and services provided by the U.S.

CPA Statement of Policy 

Position:  CPA supports Congress retaining its full authority to review, amend, approve or reject all trade agreements.  CPA opposes re-authorizing Fast Track Authority also know as Trade Promotion Authority.  CPA supports treating trade agreements as treaties.

Underlying CPA Principle: Constitutional Trade Agreement Power - CPA supports Article I, Section 8 of the U.S. Constitution which empowers the Legislative Branch with full authority to regulate commerce with foreign nations. We oppose any transfer of that authority to the Executive Branch.

Background: Article I, Section 8 of the U.S. Constitution says, “The Congress shall have power… to regulate commerce with foreign nations.” “Fast Track” delegates to the President the authority to set the terms of U.S. trade policy independent of Congressional oversight. 

Fast Track creates special rules for Congress’ consideration of trade agreements.  The President negotiates and locks down the terms of the deal and writes the implementing legislation.  The President can pick what countries we're negotiating with, set the substance, and sign the agreement all without Congress ever voting. Congress has 90 days to vote yes or no.  No amendments are allowed.  States have no say at all.

In recent years, the U.S. Trade Representative has used Fast Track to push controversial agreements through Congress including the Central America Free Trade Agreement (CAFTA), and trade agreements with countries such as Chile, Singapore, Morocco, Australia, Bahrain and Oman. 

Rationale:  CPA believes the U.S. Constitution provides the proper allocation of power between the Executive and Legislative branches regarding trade.   The results of Fast Track Authority have been secret negotiations, polarized positions, and quashing debate about U.S. trade policy.  Since Fast Track, the U.S. trade deficit has exploded.  Virtually all industries have negative trade balances.  Millions of workers have lost their jobs.  Tens of thousands of factories of closed.  The U.S. agricultural trade surplus is now gone for the first time.  Currency manipulation continues, while border adjustable taxes prohibit true free trade. 

A full, sensible and nuanced debate on U.S. trade policy must be had in the public eye.  Re-establishing Congressional authority over trade policy and all its subsets is the best manner to achieve this goal.