ICYMI: Business Roundtable Weighs In With USTR on Advancing U.S. Supply Chain Resilience
Business Roundtable recently submitted comments to the Office of the United States Trade Representative (USTR) in response to its request for stakeholder views on strategies to advance supply chain resilience through U.S. trade and investment policy.
In the comment letter, Business Roundtable encouraged USTR to work closely with the private sector and Congress when pursuing a supply chain resilience strategy.
“Business Roundtable believes that building resilient, diverse, and secure supply chains is critical to U.S. national security and economic competitiveness.
“… [T]he Roundtable submits that any such [supply chain resilience] strategy should be developed in close coordination with, and when appropriate approved by, Congress through legislation to provide the business certainty necessary to influence supply chain decision making.”
The Roundtable advises further that “USTR should not close any international trade negotiation designed to promote supply chain resilience without meaningfully considering input from relevant private sector advisory committees as prescribed by statute, as well as all other interested stakeholders.”
The Roundtable also outlined how U.S. trade policy supports supply chain resilience, U.S. competitiveness, and social and economic mobility.
“U.S. trade and investment policy has evolved against the backdrop of an increasingly competitive and integrated global economy. … Improvements in transportation and communication networks, lower tariff and non-tariff policy barriers, and technological innovations have expanded production and growth in the United States and abroad, catalyzing greater trade in goods and permitting previously non-tradable services to be traded internationally.
“… CEA [Council on Economic Advisers] emphasizes that global economic integration provides numerous benefits to Americans, including good jobs for American workers, lower inflation, greater choice for consumers, additional innovation, and increased productivity.
“… Furthermore, large U.S. employers which tend to engage in significant cross-border economic activity provide millions of American workers with a meaningful path for social and economic mobility.
“… Global supply chains are a natural function of the success of U.S.-based multinational companies within the global economy. … Research has shown that when U.S. companies expand abroad, they generally also expand at home because their foreign activities complement their U.S. activities, rather than substitute for them.”
In addition, the Roundtable highlighted how high-standard free trade agreements (FTAs) promote supply chain resilience.
“U.S. FTAs contain numerous chapters and provisions that can help strengthen supply chain resilience. Our FTAs make it easier for U.S. companies to regionalize their manufacturing capacity in countries susceptible to less geopolitical risk with investment chapters that prevent trading partners from discriminating against U.S. investors when they establish operations in-country.
“Our FTAs also make it possible for our financial service providers to finance these capital-intensive projects. … Furthermore, through high-standard intellectual property chapters, our FTAs protect our innovative manufacturing processes when facilities are relocated in the market of FTA partners. … Through high-standard digital trade disciplines, our FTAs ensure that U.S. supply chain executives can monitor and adjust production facilities to prevent disruption.”
For these reasons, the Roundtable advises that “USTR should return to its statutory mandate of negotiating trade agreements that make it easier for U.S. producers and service providers to access and operate in foreign markets so that they can create supply chain redundancies and reduce their dependence on China for critical imports.”
The Business Roundtable letter provides detailed information about how U.S. multinational companies are working to create more resilient supply chains, as well as additional trade and investment policy tools that can support those initiatives. For the full text, click here.