Wednesday, January 25, 2012 by
In his fourth State of the Union speech last night, President Barack Obama laid out his blueprint for the nation’s economy, starting with manufacturing.
“We will not go back to an economy weakened by outsourcing, bad debt and phony financial profits,” he said. “Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that’s built to last—an economy built on American manufacturing, American energy, skills for American workers and a renewal of American values.”
The president also tipped his cap to a recent trend among businesses bringing jobs back from other countries historically thought of as sources of cheap labor. As previously reported
, “insourcing” is now frequently taking the place of “outsourcing.” “We can’t bring every job back that’s left our shore. But right now, it’s getting more expensive to do business in places like China. Meanwhile, America is more productive,” said Obama. “A few weeks ago, the CEO of Master Lock told me that it now makes business sense for him to bring jobs back home. Today, for the first time in 15 years, Master Lock’s unionized plant in Milwaukee is running at full capacity.”
“So we have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it. Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed,” he added.
Obama went on to suggest tax reforms that would incentivize companies to bring jobs back to the U.S. and relocate to recession-hit communities. Exporting, which figured heavily into last year’s speech, also received a small amount of attention, mostly as the president burnished his credentials and highlighted the success of the past year’s free trade agreements (FTAs).
In essence, the speech focused on the idea of economic fairness. “The debate now will be over what constitutes fair,” said NACM Economist Chris Kuehl, PhD. “The speech had very little to do with the current condition of the U.S. and its economy, but that was expected in an election year. The overarching message is that the wealthy should be taxed more.”
“The fundamental issue driving the two sides remains how to deal with the debt at the same time the nation has to expand economic growth,” he added. “Without more revenue, the government can’t sustain current spending. Some would have that spending curtailed further while others assert that austerity is already compromising growth. The reality is that taxation and differing concepts of fairness will be at the heart of the election for the duration.”Jacob Barron, CICP, NACM staff writer
Monday, November 28, 2011 by
With the lengthy holiday being celebrated in the United States, a few stories may have slipped past usually eagle-eyed credit professionals. Here are some happenings of note:
The “Big Three” credit ratings agencies (Standard 7 Poor’s, Fitch Ratings, Moody’s Investment Services) experienced a significant legal setback last week in the U.S. Supreme Court. It was ruled that the ratings agencies were not protected from lawsuits based on invoking rights under the First Amendment. The three had tried to use such a defense to protect itself from suits brought by investors who were burned after using the companies’ ratings information, which turned out to be far from accurate, about a half-decade ago. Still, two of the three agencies (Moody’s, Fitch) were cleared in said suit because of a lack of evidence.
In the Harrisburg Chapter 9 bankruptcy case, Judge U.S. Bankruptcy Judge Mary France found the Pennsylvania state law (Act 46) to be constitutional, ending the council's hopes of continuing the bankruptcy proceedings and avoiding state conservatorship. Act 46 forbids “third-class” (by population totals) Pennsylvania cities from declaring municipal bankruptcy prior to July 2012. (Story at http://blog.nacm.org). A judge also intimated that a lack of cooperation/aggrement on the filing between the council and the embattled mayor made the filing inappropriate.
In Jefferson County, AL, where the largest U.S. bankruptcy filing the nation’s history is proceeding, Judge Thomas Bennett said he will not remove an appointed receiver charged with working on the county’s massive debt tied to a sewer renovation project. However, the judge intimate he could limit the receiver’s powers somewhat to give the county a little more influence over the Chapter 9 proceedings.
In the area of free trade agreements, South Korean lawmakers ignored a significant portion of the voter base fighting its pact with the United States over in fear of job losses or economic hits, and its ruling party called a hasty, surprise Wednesday vote. As a result, the FTA, one started during the Bush Administration and signed by President Barack Obama about one month ago, passed overwhelmingly but not before some unrest, including one opposing politician allegedly letting off some form of tear gas or pepper spray in parliament’s chambers. The deal’s value is estimated at nearly $90 billion. (Story at http://blog.nacm.org).
Struggling newspaper publisher Tribune Co., which has become a symbol of struggles in the newspaper/old media industry as well as a bit of a laughing stock based off of what looked like reckless and “old-boys’ club” internal policies, saw yet another reorganization plan filed in its bankruptcy. There’s no telling at this point if its prospects are any better than several other failed efforts of the past in the languishing proceedings.
Brian Shappell, NACM staff writer
Wednesday, November 23, 2011 by
Amid a surprisingly chaotic scene that puts the U.S. Congress’ bickering to shame, South Korea’s parliament voted overwhelmingly to approve a U.S.-South Korean free trade agreement (FTA) that has been in the works for some five years.
Though a significant portion of the voter base is against the measure in fear of job losses or economic hits, South Korea’s ruling party called a hasty, surprise Wednesday vote on the FTA, one started during the Bush Administration and signed by President Barack Obama about one month ago. One opposing politician even let off some form of tear gas or pepper spray in parliament’s chambers, reports indicate. The deal’s value is estimated at nearly $90 billion.
After years of languishing and political one-upmanship on both sides of the political aisle, the pact was among three Free Trade Agreement (FTAs) passed by Congress in October. Approval of the FTAs with South Korea, Panama and Colombia has long been seen as important to boost business for U.S.-based companies feeling the pinch of lower domestic demand. The FTAs, in theory, will significantly expand U.S. exports in those markets, help small businesses and lower tariffs on American goods.
Getting the measure through though saw U.S. supporters and opponents alike coming from both political parties as the idea of job protectionism divided lawmakers more on regional lines than the usual partisan ones. In South Korea, the divisions seemed to come from a two groups: big business versus the middle class and working poor. Some paint the deal as more beneficial to the United States and more of a move for the sake of appearances and posturing on the part of Seoul.
The Korean vote was seen as the last significant hurdle to implementation of the FTA, widely regarded as the most significant of the three new U.S. pacts.
Brian Shappell, NACM staff writer
Monday, October 24, 2011 by
President Barack Obama signed three free trade agreements (FTAs) with Panama, Colombia and South Korea into law last Friday. The three agreements had been pending since their original establishment during the Bush Administration.
Each FTA was enacted in its own bill, clearing the way for each of them to enter into force and make exporting to these three countries easier than ever. Including Panama, Colombia and South Korea, the U.S. has now negotiated FTAs with 20 nations.
The agreements could potentially generate a windfall for several industries and create several thousand new jobs. “We’re eager for American businesses and workers to begin reaping the benefits of these hard-won agreements,” said United States Trade Representative Ron Kirk following the President’s signature. “We know that more exports of Made-In-America goods and services flowing to consumers and Korea, Colombia and Panama can support tens of thousands more jobs here at home. Supporting more American jobs with responsible trade policy has always been our goal.”
Responses from Congress were also uniformly ecstatic over the passage of FTAs that were considered by many to be long overdue. “Today’s signing of three jobs bills passed by Congress last week shows America is getting back in the game. Finally, we are sending a signal to our competitors and allies alike that the United States is committed to a robust trade agenda that levels the playing field for workers in Michigan and across America, consumers and businesses and creates new markets for our goods and services,” said Rep. Dave Camp (R-MI), chairman of the House Ways and Means Committee. “But it’s more than that—with 95% of consumers living outside of the United States, we have to move ahead with such agreements or else our competitors in Europe and Canada will seize these markets from us and from our workers.”
“I commend the President for realizing that these trade agreements are a catalyst for creating hundreds of thousands of American jobs, something our economy desperately needs right now,” he added.
Jacob Barron, CICP, NACM staff writer
Thursday, October 13, 2011 by
The Export-Import Bank of the United States Reports authorized $32 billion in export financing in FY 2011 (Oct. 1, 2010-Sept. 30, 2011), which supported more than $40 billion worth of exports, according to statistics unveiled Thursday by the organization.
Fred Hochburg, Ex-Im Chairman/President, noted the particular growth in authorizations for small businesses to $6 billion for the year, about double the level posted just three years ago. He said small businesses were a key part of President Barack Obama’s loft goals for exporting through 2014.
“We’re not going to double exports unless we double small business exports,” he said. “We’re leveling the playing field and making sure small companies and large companies can go toe-to-toe with foreign companies, and we do it at no cost to the U.S. taxpayer.”
Hochburg said among other considerable increases in Ex-Im funding was one in the renewable energy sector, up from $30 million three years ago to $720 million in FY2011 for financing for foreign buyers to purchase from U.S. companies in the industry, largely on projects/partnerships in areas of Canada, India and Turkey. Mexico, however, remains the largest national market for Ex-Im authorizations. Columbia grew the most in 2011, a point not lost on Hochburg during a question-and-answer session Thursday, one day after Congress passed a free trade agreement between the Latin nation and the United States among a trio of pacts.
“Of the three, Columbia offers most promise where we [Ex-Im] can play a role,” he told NACM. “There’s a lot of promise, the business community leans forward and it’s right in our back yard.”
Ex-Im authorizations for 2010 of about $24.5 billion, a record until the latest statistics, supported $34.4 billion worth of exports and 227,000 American jobs at more 3,300 U.S. companies.
Brian Shappell, NACM staff writer
Thursday, October 13, 2011 by
After years of languishing and political one-upmanship on both sides of the political aisle, three Free Trade Agreement (FTAs) were passed Wednesday by both houses of Congress and awaits what should be a rapid signature by President Barack Obama.
Approval of the FTAs with South Korea, Panama and Colombia has long been seen as important to boost business for U.S.-based companies feeling the pinch of lower domestic demand. The FTAs, in theory, will significantly expand U.S. exports in those markets, help small businesses and lower tariffs on American goods.
Getting the measure through though has seen supporters and opponents alike coming from both political parties as the idea of job protectionism divided lawmakers more on regional lines than the usual partisan ones.
Obama submitted the nation's three pending free trade agreements (FTAs) to Congress earlier last week amid growing support for the measures. Obama, branded by some in the past as anti-business, has become increasingly pro-exporting and is in the midst of a federal push to double exports within five years.
Congressional leaders have been quick to laud the FTAs’ passage while lamenting the lengthy delay between their creation and their submission for approval. Among reasons for disappointment is that other agreements that, despite being started at a later date, were enacted months before Wednesday’s eventual positive vote. Among them was a European Union deal with South Korea.
Submission of the FTAs by the president was previously contingent on Congress' renewal of the Trade Adjustment Assistance (TAA) program, which trade workers perceived to be negatively affected by international competition. After a pared-down version of the TAA was approved in the Senate, however, the president submitted the agreements to the House, which somewhat begrudgingly followed through on the TAA renewal in addition to the FTAs.
Brian Shappell and Jacob Barron, NACM staff writers
Tuesday, October 4, 2011 by
A happy U.S. Chamber of Commerce has weighed in on the White House's move Monday to send three long-delayed free trade agreements (FTA's) with South Korea, Panama and Columbia -- featured as story #4 in last week's NACM eNews at www.nacm.org/enews.html -- on to Congress for what appears to be an imminent vote, applauding the action.
From U.S. Chamber of Commerce:
"'America is finally getting back in the game,' said U.S. Chamber President and CEO Thomas J. Donohue. 'These agreements are about creating jobs and ensuring a level playing field for trade.'
The trade accords will immediately eliminate tariffs on most U.S. exports to the three countries. Colombia currently collects $100 in tariffs on U.S. exports for every $1 the United States levies on Colombian goods, and a similar lopsidedness holds back U.S. exports to South Korea and Panama as well.
In addition to ensuring fairness and accountability, the agreements will open services markets and strengthen intellectual property rights.
The European Union-Korea Free Trade Agreement and the Canada-Colombia FTA entered into force on July 1 and August 15, respectively. Korea has eliminated tariffs on more than 90% of EU goods, leading to increased sales and market share for European companies while U.S. market share has declined."
Friday, September 23, 2011 by
The Senate recently approved an extension of the Trade Adjustment Assistance (TAA) program, which trains American workers affected by global competition.
While the program’s renewal is notable, given that it also streamlines previous changes made to the TAA in 2009 and represents a rare instance of compromise in a sharply divided Congress, its passage is perhaps more important for exporters because it paves the way for action on the nation’s three pending free trade agreements (FTAs), with Panama, South Korea and Colombia. President Barack Obama had considered TAA renewal a condition that had to be met before those FTAs were sent to Congress for approval.
Now that an agreement has been reached, little stands between the agreements and their entrance into force.
“Today’s long-awaited Senate action should clear the path for consideration of our pending trade agreements,” said Rep. Dave Camp (R-MI), chairman of the House Committee on Ways & Means. “The next step is for the president to promptly submit the pending free trade agreements with Colombia, Panama and South Korea, which also enjoy bipartisan, bicameral support, to the House and bring us one step closer to passage.”
While President Obama set TAA passage as a precondition for the FTAs, Republican leaders demanded the opposite, that the FTAs be submitted prior to their approval of the TAA bill. Now that the Senate has approved the TAA extension, the GOP hopes that the President will relent, and submit the FTAs to the House, trusting that TAA approval would follow shortly after their arrival.
“The Senate today will have acted on trust in passing TAA even before we received the agreements,” said Senate Minority Leader Mitch McConnell (R-KY) after the vote. “But the White House has refused to show the same trust in Congressional Republicans who’ve assured them that TAA will move along with the FTAs.”
“I kept my promise that I would allow TAA to move forward in the Senate as long as Republicans had a chance to amend it. It is time for the administration to deliver on theirs. It’s time for the President to send up these long-pending FTAs without delay,” he added.
Stay tuned to NACM’s blog
and NACM’s eNews
for any future updates on the pending FTAs.Jacob Barron, CICP, NACM staff writer
Wednesday, September 14, 2011 by
Despite growing whispers of concern over asset bubbles and inflation, a member of the of the Federal Reserve Bank of New York has retained an optimistic view regarding the BRICs Nations and their economic prospects.
Matthew Higgins, vice president of the Federal Reserve Bank of New York told NACM there has been a commodities-fueled inflation problem brewing within some of the emerging economies. However, such issues have started to ease somewhat in places like Brazil and India, among others. Higgins, who is the featured speaker at FCIB’s New York International Roundtable event on Sept. 21, noted the situations there and in Brazil, as three of the hottest economies in the world, obviously are worth watching, but there is little reason for businesses involved in global trade to have deep concern or panic at this time.
“All of the emerging economies are navigating a fairly difficult global environment,” said Higgins. “Those examples have been the most dynamic part of the global economy, and most observers think that is going to continue. Even in a rather troubled global economic environment, the projections are for good growth.”
Higgins also weiged in on the ongoing situation with three languishing free-trade agreements involving the United States. He said the agreements -- with Columbia, Panama, and South Korea -- would be helpful to U.S.-based exporters, but "nothing is a panacea. He noted that exporting still accounts for little more than 10% of the economy.
For more information or to register for the FCIB New York International Roundtable event at which Higgins is speaking next week, visit FCIB's webpage at www.fcibglobal.com
or by clicking here. Brian Shappell, NACM staff writer
Wednesday, June 29, 2011 by
Tell us if you’ve heard this one before: three long-delayed free trade agreements (FTAs) finally appear ready for Congressional votes this summer. Key Congressional lawmakers from both sides of the aisle and the Obama Administration reported Tuesday that they have forged a deal to put up the FTAs up for House and Senate floor votes. However, a late inclusion from President Barack Obama in the form of a renewed assistance program could threaten the deal’s safe passage.
A push by several Democrats to include an extension of the Trade Adjustment Assistance program, designed to provide aid and unemployment benefits for workers affected by increased foreign competition, apparently was a sticking point for some in getting the FTA’s to a vote. Though many hard-line Republicans are said to oppose this, key GOP figures compromised on the issue. Lawmakers including Senate Finance Committee Ranking Member Orrin Hatch (R-UT) warn that the decision to attach the assistance program onto the FTA vote could jeopardize GOP support despite its longtime interest in passing the trade pacts, especially one with fast-emerging South Korea.
The FTA's are key to Obama's stated goal to double U.S. exporting levels by 2015.
Brian Shappell, NACM staff writer
Wednesday, May 25, 2011 by
With small business exporting becoming an increasing important element of the majority of U.S. commerce, attendees at NACM’s 2011 Credit Congress in Nashville flocked by the dozens to the first sessions in a series of five on “Doing Business in ___” series hosted by FCIB.
The first of which, “Doing Business in Canada” drew well in excess of 100 people and became one of the first standing room only, so to speak, sessions of Credit Congress this year. Hubert Sibre, of Davis LLP, described Canadian business terms as extremely varied depending on the province. For example, Alberta is considered very liberal from a pro-debtor standpoint, while Quebec is considered much more conservative on matters of business and credit.
Sibre suggested registering one’s business in every province is almost essential because it greatly improves their position to protect intellectual property in Canadian courts, among other things. It also helps to have a subsidiary based there because bankruptcy judgments made in the United States are unenforceable without a Canadian court officially recognizing it.
A subsequent session on South Korea was led by Kyle Choi, Esq. of Bluestone Law Ltd. Choi spoke the various aspects of why the nation’s stock is rising in the international business community, which includes a highly evolved infrastructure, a wealth of available credit information available on companies there and business-friendly law. Also helpful is its prestigious business quality rating by the World Bank and, according to Choi, that its free-trade agreements with the United States and the European Union will increase competitive fairness by reducing the gap in tariffs, estimated by some at 10%. Also, he contends it will force South Korean companies to produce better products, components and services across the board.
But there are many cultural differences and barriers that need to be taken into account, such as a desire for officials at companies to speak directly with employees on their level with your company (don't pawn her off on the secretary) and the need for formality even in e-mail correspondence.
(Note: Subsequent sessions on Doing Business in Chile, China and Brazil had not been completed at the time of this posting. More coverage is coming to NACM’s blog, eNews and the July/August edition of Business Credit Magazine in the coming days and weeks).
Brian Shappell, NACM staff writer, can be reached email@example.com
Friday, April 8, 2011 by
Following a meeting of leaders at the White House April 7, the long-delayed free trade agreement (FTA) between the United State and Columbia looks to be on the way to completion, much like an agreement worked out with South Korea before it. The president believes it will be a boon for small business exporting efforts.
President Barack Obama and Columbian President Juan Manuel Santos reached to an agreement on labor improvements, such as rights of those who unionize and labor workers’ safety in once crime-plagued Columbia, long seen as a significant stumbling block to completing the FTA. Perhaps buoyed by China’s attempts to build trade inroads with the nation, it’s now the second of three trade agreements started during the Bush Administration. The framework of the Columbian FTA was forged in 2006.
“The United States has an enormous interest in the development of Latin America and an enormous interest in progress in Colombia,” said Obama. “President Santos I think is at the forefront of a progressive and thoughtful agenda within Colombia. He’s obviously initiating a whole range of reforms…This [FTA] represents a potential $1 billion of exports, and it could mean thousands of jobs for workers here in the United States. And so I believe that we can structure a trade agreement that is a win-win for both our countries, and I’m looking forward to working with President Santos to ensure that both countries benefit. And this will help me meet my goal of making sure the United States has doubled exports over the coming years and that we’re as competitive as we can be in a global marketplace in the 21st century.”
(Note: To view the White House-approved details of the now imminent FTA, see the fact sheets by clicking the highlighted link).
Brian Shappell, NACM staff writer
Thursday, March 17, 2011 by
As a long languishing/unfinished free trade agreement (FTA) between the United States and Colombia continued to draw attention from trade advocates, China has unveiled vague plans to build a rail link through the same nation. It is seen as a direct attempt to compete with the Panama Canal on the world trade states and would be a slap to the United States by grabbing a larger piece of the South American Market. Colombia already conducts more trade with China than any other nation than the U.S., and the Asian economic powerhouse already has substantial presence in emerging economic power Brazil, the pearl of its continent.
The news has given pro-trade advocates and lawmakers, largely Republican, another weapon with which to proverbial bash President Barack Obama and his White House that, despite various recent attempts to extend an olive branch, have been vilified by the American business community.
During last week's FCIB New York International Round Table event, panelist Josh Green, CEO of Panjiva, said he could see the Colombia FTA becoming a casualty of partisan Capitol Hill fighting in the coming months.
Brian Shappell, NACM staff writer
Thursday, March 17, 2011 by
President Barack Obama delivered the annual State of the Union address with a bit less of a partisan, pep-rally atmosphere than has been present at the speech in recent years, and it certainly carried far from celebratory tone over achievements of the last year. Much of the speech read like jet another open love letter from the president to the business community, especially smaller operations, that White House is serious about improving conditions for U.S. industry.
Though much of the speech revolved around looking forward, "doing better" and "reinventing ourselves, Obama quickly and decisively pointed out ways the administration was willing to extend the olive branch to businesses. Key among them was restating the plan unveiled in January to eliminate unnecessary regulatory overlap, such as 12 different agencies having a hand in certain business mandates or, in a somewhat joking aside, that two departments are responsible for salmon, pending on what part of the production process the industry is in.
Additionally, Obama shined a light on an issue dear to the GOP: trade. He made no less than four references in the speech to South Korea, with whom the United States just signed a new free trade agreement. He also strongly reaffirmed the plan to step up exporting activity not just in the long-term, but right now. The president also all but promised a huge push to amend last year's health care legislation to remove 1099 provisions that would lead to a heap of unnecessary, unwanted paperwork by U.S. businesses.
Brian Shappell, NACM staff writer