The Will to Act Drives Corporate Disconnect With Washington

1
The Will to Act Drives Corporate Disconnect With
Washington

• In todays complicated global economy, business
  needs strong, functioning govt that can
  effectively address numerous important issues
• Fiscal and health-care policy
• Pension policy
• Trade and currency policies
• Intellectual-property rights protection
• If Washington cant effectively address these
  issues, business and economy will likely suffer
• Business increasingly frustrated with focus on
  politics rather than policy
• National politicians act as if their job is to
  get nothing done. Instead, they spend their days
  trying to score debating points for the next
  election (Alan Murray, asst mng editor)
• Source Wall Street Journal, 1/18/06

2
Types of regulation and regulatory agencies
Figure 8.1
3
THE WORLD TRADE ORGANIZATION

• WTO imposed penalties 11/26/04 on U.S. exports
  ranging from apples to textiles, escalating trade
  dispute Bush administration has struggled to
  defuse by unsuccessfully urging Congress to
  repeal legislation aimed at protecting American
  steelmakers
• EU joined in complaint by Brazil, Canada, Mexico,
  South Korea, Japan, India, and Chile
• Source Associated Press, 11/27/04

4
U.S. Risks EU Tariffs Over Tax Rule

• U.S. exporters to EU could be forced to pay
  hundreds of millions of dollars in punitive
  tariffs after WTO appeals panel ruled a U.S. tax
  break (on export income) illegal
• Benefits companies such as Caterpillar,
  Microsoft, Boeing
• Punitive tariffs would hit hardest U.S. exports
  of grain, iron, steel, electrical machinery,
  textiles, fruit, footwear, and cosmetics
• Decision comes at delicate time in U.S.-EU trade
  relations
• Each blaming other for stalemate in global trade
  talks (Doha Round)
• Last week, WTO ruled EU had violated trade rules
  btwn 1998 and 2004 by refusing to approve new
  types of genetically modified organisms for sale
• EU and U.S. also in initial stages of dispute
  over state subsidies given to Boeing and Airbus
• WTO ruled Foreign Sales Corporation law illegal
  in 2000, Extraterritorial Income Act illegal in
  2002, and now American Jobs Creation Act in 2006
• Source Wall Street Journal, 2/14/06