President Announces New Trade Enforcement Unit in State of the Union Address
During his January 24, 2012 State of the Union address, President Obama announced the creation of a new Trade Enforcement Unit to investigate unfair trade practices in countries like China, reported that his administration is on track to double exports in less than five years, and mentioned his request for authority to consolidate the federal bureaucracy and his tax proposals to promote insourcing.
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Efforts to Double U.S. Exports Boosted by FTAs
The President noted that in 2010, he set a goal of doubling U.S. exports over five years. According to the President, with the Korea, Colombia, and Panama free trade agreements (FTAs), the U.S. is on track to meet that goal ahead of schedule.
(The President first announced his administrations’ National Export Initiative (NEI) and his goal to double U.S. exports in five years during his 2010 State of the Union address. See ITT’s Online Archives 10012805 for summary.)
New Trade Enforcement Unit to Investigate Unfair Trading Practices in China, Etc.
In his speech, the President vowed action against the unfair trading practices of other countries, noting that his administration has brought trade cases against China at nearly twice the rate as the Bush administration.
In order to strengthen those efforts, the President announced the creation of a Trade Enforcement Unit1 that will be charged with investigating unfair trading practices in countries like China. According to the President, there will be more inspections to prevent counterfeit or unsafe goods from crossing U.S. borders. The President then called on Congress to ensure that no foreign company has an advantage over U.S. manufacturing when it comes to accessing financing or new markets in countries like Russia.
(See ITT’s Online Archives 11122224 for summary on how U.S. firms will not benefit from Russia’s World Trade Organization accession unless Congress acts.)
Consolidation of Federal Bureaucracy
The President also briefly addressed his request that Congress grant him authority to consolidate the federal bureaucracy.
(The President recently announced that his first proposal under such authority would be the consolidation of six trade and commerce agencies (or parts of them) into one entity. See ITT’s Online Archives 12011711 for summary of the President’s proposal.)
Tax Incentives for Insourcing
The President also advocated tax benefits for insourcing. He noted that the tax code should be revised so that tax deductions go to companies that insource jobs, not to companies that outsource jobs.
(At a recent Insourcing Forum, the President announced that he would be putting forth new tax proposals that (i) reward companies that choose to bring jobs and invest in the U.S. and (ii) eliminate tax breaks for companies that move jobs overseas. See ITT’s Online Archives 12011218 for summary of President’s remarks at the forum.)
1Subsequently termed an "Interagency Trade Enforcement Center"