UPDATE:UPS Executive Warns Congress Against Free-Trade Curbs
February 26 2009 - 3:33PM
Dow Jones News
United Parcel Service Inc. (UPS) Chief Executive Scott Davis on
Thursday warned lawmakers against implementing trade protectionist
measures and called for advocates to increase lobbying efforts
favoring trade.
"Global trade has become the emotional punching bag of many
politicians and protectionists," Davis said.
In an address to the U.S. Chamber of Commerce, Davis said
America and its trading partners would be "making a huge mistake"
by employing trade restrictions as a strategy to weather the
economic downturn. "Increased global trade could be the number one
antidote to the current financial crisis," he said.
Davis' comments follow passage of President Barack Obama's $787
billion economic stimulus package, which contains a provision that
requires U.S. companies to buy only American materials purchased
for construction projects receiving stimulus funds - including
bridge repairs, new schools and upgrades to government office
buildings.
After several U.S. trading partners expressed concern about
trade protectionism, lawmakers amended the measure to ensure it
wouldn't violate any international trade obligations. Moving
forward, Davis said it's imperative that free-trade advocates
adequately inform Congress on trade issues and take advantage of
the administration's transition.
"We have to reach out and engage with the administration, the
Legislature, the labor unions, and all other engaged in the
process," he said.
According to Davis, myths about globalization and the perceived
tone set by the buy American measure are core reasons businesses
remain concerned about the state of free trade.
"The facts are clearly on the side of trade, but popular
perception clearly is not. And it's no surprise that politics
follows closely on the heels of perception," he said.
Davis, describing free trade as compelling, said trade
proponents have previously been unable to "clearly articulate the
facts" favoring global transactions.
Davis said international trade isn't the major contributing
factor to U.S. job reduction, rebutting a notion held by some
free-trade rivals. Using his company as an example, Davis added,
"Each time we add 40 new international packages in the U.S. - in
other words, 40 packages imported or exported by our customers - we
create another new U.S. job somewhere in our system. Last year we
grew the international portion of our business by more than 10
percent, creating thousands of new job opportunities at UPS for
U.S. citizens."
Davis later added, the World Trade Organization estimates that
eliminating one-third of trade restrictions throughout
manufacturing, agriculture and service sectors "would add $613
billion to the world economy." He also noted that the U.S. service
sector - which includes financial services, telecommunications and
express delivery services - had a trade surplus of $144 billion
last year.
Nonetheless, lawmakers continue to face public scrutiny and
pressure from companies on various trade issues.
A top political task, among several, left for the Obama
administration is getting U.S. trade representative-designee Ron
Kirk appointed. Kirk's confirmation hearing will be held March 5,
the office of Senate Finance Committee Chairman Max Baucus,
D-Mont., said Thursday.
A longtime free-trader, Kirk's nomination tilts against Obama's
pick for Labor secretary, Hilda Solis, a free-trade opponent. Solis
was confirmed as Secretary of Labor on Tuesday.
-By Darrell A. Hughes, Dow Jones Newswires; 202-862-6684;
darrell.hughes@dowjones.com