by Rich Lavin, Caterpillar Group President and 2011 ABAC and Host Committee Member
 

It's time to seize the moment. After a frustrating period of silence on the trade front here in the United States, we have finally seen some light, and it's up to all of us to keep the pressure on so we finally see some action.

Since World War II, the United States has led the way on trade liberalization, but in recent years, our trade ambitions have been modest at best. We've fallen behind, while countries like China, India, Korea and Japan are moving forward with Free Trade Agreements with countries other than the United States. As a result, U.S. exports will be at a competitive disadvantage in these important markets. With U.S. unemployment at almost 10 percent, we can't risk allowing our trading partners to gain preferential market access in some of the world's fastest growing markets.

The Korea Free Trade Agreement (FTA) represents an enormous opportunity to regain the momentum. The question is-are we satisfied with opening just one export market, or do we seize the moment? And what do we need to do now?

Embrace a sense of urgency

Congress needs to pass the Colombia, Panama, and Korea Free Trade Agreements (FTAs) early in 2011. Like previous U.S. FTAs, these pending trade agreements would have an immediate, positive impact on U.S. exports and American jobs.  Whenever U.S. manufacturers have been allowed to compete on a truly level field, we do quite well as evidenced by the trade surplus in manufacturing goods that the United States has with its 17 FTA partners. With each passing day, these stalled agreements represent missed opportunities.

Be bold and think big

Individual trade agreements are good-great in fact-but we also need to participate in more multi-lateral agreements like the Trans-Pacific Partnership Trade Agreement (TPP). The TPP will harmonize the current Free Trade Agreements (FTAs) between the United States and Chile, Singapore, Australia, Peru and Malaysia, and the scope could be expanded to include New Zealand, Brunei Darussalam and Vietnam. Even better, success may promote other countries to join, like Japan, who's Prime Minister has made strong statements of support for the TPP. Completion of the TPP will be a major win for all countries involved and companies like Caterpillar will benefit from a comprehensive, high standard and commercially meaningful trade agreement.

But let's not stop there-the real prize would be a comprehensive World Trade Organization (WTO) agreement. We need to make completion of the WTO Doha Development Agenda a higher priority. Again, U.S.-based manufacturers like Caterpillar will benefit, but let's not overlook the fact that this would be a big win for small and medium sized businesses too. That's why we need to engage more people-employees, distributors, suppliers and even community members-in the discussion. It's a once-in-a-generation opportunity to open markets and increase worldwide economic growth.

Focus on the benefits and talk about them far and wide

Trade agreements aren't easy, and they aren't perfect­-but we don't need perfect.  We simply need better market access, with rules that are fairer, more transparent and easy to administer. 

The benefits of free and open trade far outweigh any difficulties. It's not an exaggeration to say that the United States economy depends on trade.  We are the world's largest trading country, exporting $1.6 trillion of goods and services in 2009 and $890 billion in just the first half of 2010. That means jobs-good paying jobs-for Americans. And beyond jobs, trade is critical to fueling economic growth, providing affordable goods and services and generally raising living standards.

When you look at the facts, the case for more trade is strong. However, there are still critics-vocal critics who dominate the discussion. Let's make sure the naysayers aren't the ones leading the discussion. Let's talk about trade and the benefits to our country, to individuals and to our businesses. All of us who are part of APEC have great stories that will only get better if we keep up the momentum and support our leaders who are making trade a priority again. 

President Obama and ABAC Chair Deb Heretta of P&G in Yokohama

The fourth APEC Business Advisory Council (ABAC) meeting of 2010 was held from November 8 - 10 in Yokohama, Japan.  The meeting delivered two main outcomes:

1.       ABAC Members participated in the annual ABAC Dialogue with Leaders and delivered their key recommendations for APEC

2.       ABAC USA presented and received endorsement for ABAC themes for 2011 as well as a restructuring of ABAC's working group structure 

The meeting culminated on November 13 when the ABAC Members met with the Leaders of APEC's 21 member economies for their annual face-to-face dialogue. In the event ABAC urged Leaders to take concrete steps towards the achievement of a Free Trade Area of the Asia Pacific, bolster policies that support the growth and longevity of SMEs, and use fora such as APEC to achieve progress on energy security and food security.

The next ABAC meeting will take place in Guangzhou, China from February 14-17, 2011.  ABAC's theme for 2011 is 21 Economies for 21st Century Prosperity. This will be the first meeting under the Chairmanship of ABAC USA Member Ms. Deb Henretta, of Procter & Gamble.  In addition to Ms. Henretta, the US business sector will be represented by Mr. Peter Scher, of JPMorgan Chase & Co., who will Co-Chair the Finance and Economics Working Group; and Mr. Richard Lavin, of Caterpillar Inc., who will Co-Chair the Regional Economic Integration Working Group.   For more information on the ABAC USA Members, please visit our website.

ABAC Members will be looking to build upon the progress made under the Chairmanship of ABAC Japan during 2010.  For 2011, ABAC will focus on three issues:

1.       Regional economic integration, which will focus on developing pathways to the Free Trade Area of the Asia Pacific, identifying next generation trade issues, facilitating the movement of goods, services, investments and people, and enhancing regulatory convergence

2.       SMME and entrepreneurship, which will encompasses job creation and policies that promote the establishment of new businesses and business models, will focus on promoting the longevity of SMMEs and economic inclusion.
 3.       Sustainable growth will center on developing and advocating policies to enhance energy security and food security, as well as promoting efforts to facilitate trade and investment environmental goods and services.

For additional information on the APEC Business Advisory Council, please contact the National Center.

The National Center for APEC's Energy Policy Support Group is a sectorial committee comprised of energy industry representatives working together to achieve shared goals within APEC.

This year the group is developing a concept for an energy conference in September in San Francisco on the eve of the planned Joint Meeting of the Energy and Transport officials.  The conference will focus on the challenges and the opportunities the industry faces in the APEC region.  Areas of discussion will include natural gas and clean energy, technology innovations, standards harmonization and efficiency.  In addition to senior level industry leaders, APEC Energy Ministers and senior staff will be invited to participate.
 

Another area of work for 2011 is the updating of the Strategic Framework for Energy Security in APEC. Originally published in 2008, the document laid out a long-range vision for prioritizing energy security policy work in APEC with measurable objectives for improvements in the areas of energy security, efficiency and technology development.   The Framework's objectives remain unchanged, but the significant changes that have taken place in the regional energy security picture over the past two years warrant an update of this important report.   The updated report will be released at the Energy event in September.

The Center's Food and Agricultural Industry Consortium has ambitious goals for 2011.  The group is aiming to develop a public-private sector dialogue on food security within APEC to provide sustained high-level support for ongoing APEC work towards a regional food security solution.  This work would include facilitating the reduction of barriers to trade in food, seeking a commitment to end export restrictions among APEC members, and increasing food safety measures and capabilities in the region.