11:02 am: Closing remarks — Lawton says Cisco, Polycom, and a few others have implemented interesting risk mitigation initiatives, as examples of which companies are doing things well in this sphere. Join the live simulcast here!
10:55 am: Speaking of Jason, here’s his latest dispatch from Spend Matters live coverage of the conference (just as if not more substantive for our supply chain and procurement audience), complete with photo! Join the live simulcast here!
10:51 am: Question from Jason Busch: What are tactics for bridging the risk gap between different functions inside companies given the context of general declining risk skill sets in procurement and supply chain (e.g., these functions used to be about “keeping the line running” but they’re now about “reducing costs”)? Is this a double whammy? Gambardella: it’s a team effort. Join the live simulcast here!
10:50 am: There also comes a point when it’s time to stop thinking and planning, and start executing. Join the live simulcast here!
10: 47 am: Lawton: the key to managing risk? Implementing a strategy that is reasonable for your organization. More details: Join the live simulcast here!
10:44 am: Gambardella: Combination of how transparent the rules are, and the enforcement of the rules and administrative and judicial appeals process. Many countries/economies don’t have access to this. Join the live simulcast here!
10:42 am: Lawton’s all over the global and regional risk examples. HP laptop/battery examples. It all comes down to information and anticipation. Check it out firsthand: Join the live simulcast here!
10:39 am: Lawton: Commercial credit risk. Extending customer credit — Should i continue doing it? How much? Join the live simulcast here!
10:37 am: Lisa brings it all back — What about the solutions, guys? How do businesses think about geopolitical stability? Join the live simulcast here!
10:36 am: The truly risky thing in this room right now is Gambardella’s mic. He deserves to be heard. Join the live simulcast here!
10:34 am: Just got sucked in to listening and watching McGroarty’s incredible storytelling and diagnosis of how to stay ahead of the risk curve; so much so that I don’t know that I can remember it to repeat it. Tune in now!!! Join the live simulcast here!
10:30 am: Lawton on HP supply chain: outsourcing. Control gets further and further away, lead times getting shorter and shorter. There are categories of risk that are near impossible to anticipate. Getting better information for tomorrow than the info you have today is key. Join the live simulcast here!
10:25 am: Gambardella on types of geopolitical risks: significant costs of moving in and out of countries (vat charges, freight, etc.). Managing cost is one side, the flip side being risks associated with it. Most people don’t know how to manage these risks in his view. “No such thing as a free lunch? Well, there’s no such thing as free trade.” Join the live simulcast here!
10:23 am: Time for Dom to put on his “consultant hat.”
10:20 am: “We’re chronically behind — geopolitical risk is only good if you can be in front of it.” McGroarty is a self-described skeptic of the model approach. Join the live simulcast here!
10:18 am: Interesting factoid from McGroarty — Bit.ly bought the domain suffix in 2007 for 75 bucks! (.ly stands for Libya.) How many servers are in Libya that we depend on? Back then, it was cool, thought to be stable — but now? Join the live simulcast here!
10:14 am: Crisis averted; Dom’s got a brand new mic. Meanwhile, Jim Lawton talks risk wearing his “D&B hat” then his “HP hat”, as he worked for Hewlett Packard as well. Join the live simulcast here!
10:13 am: Technical difficulties — Dom’s lav mic down! (Gotta check those double A batts, crew guys!)
10:12 am: Dom Gambardella, holding it down — agrees with the other two panelists, and looks good doing it. Join the live simulcast here!
10:10 am: Jim Lawton: Positioning ourselves for the changes. Expanding our opportunities, opening up new markets, but it’s “incredibly fraught with risk.” How do we instill discipline and structure within our organizations to decide when to go after opportunities and how to go about it? Join the live simulcast here!
10:06 am: “Harmonic convergence,” according to McGroarty — we understand there’s no reverse movement on globalization. Elites move forward, but the public does not offer that room to move, and that requires education and leadership to create space for the positive reform. Join the live simulcast here!
10:03 am: First set of solutions stems from “What do you think about more/increased trade?” with a set of countries. (First graph.) Secondly, FTAs over nearly a decade — more good than bad? We’re trending toward “free trade” being good, but “free trade agreements” maybe not so good (second graph). “We’re generally more Adam Smith about it when we talk about free trade in general,” McGroarty said. Join the live simulcast here!
10:01 am: To the slides, Dan McGroarty! Capturing the context around trade.
9:56 am: Coming up next — Panel #2 — Minimizing Risk in Tomorrow’s Global Trade Arena: Scenarios and Strategies with Dom Gambardella of PWC and Jim Lawton of D&B, and Dan McGroarty of Carmot Strategic Group (and advisor to US Chamber of Commerce International Division). Join the live simulcast here!
9:43 am: First Panel Wrapup — “We’re just trying to keep the federal government up running for the next two weeks,” quipped Diggins.
9:40 am: Last question: where does inflation stand on all this?
9:36 am: Q: Room for fiscal stimulus? A: Nucor gives students a chance to learn and get into metallurgy and provides opportunity for internships and future jobs, says Diggins. Bill Strauss: if the believe that manufacturing is declining continues, why would people get into it and try to get jobs in it? Brightbill: all this costs money, but dealing with China currency issue does not. Investigations are hitting a wall.
9:33 am: Where does labor stand in all of this? Brightbill: Safeguards case filed by the United Steelworkers is one to watch.
9:31 am: Audience question time. First question prize goes to Michelle Applebaum.
9:30 am: Brightbill: all three deals – Korea, Colombia/S.A., Southeast Asia – will likely go through, and this is a good thing.
9:29 am: Diggins: there’s a sea change in how US deals with other economies, and an upcoming deal with Vietnam — which is classified as a non-market economy — could be a watershed deal. Many think “Doha round is dead.”
9:27 am: Fed outlook: Unemployment is still going to be high, slightly getting lower: just under 9 percent by end of 2011, and under 8 percent by 2012.
9:26 am: Strauss and the Chicago Fed see the US economy growing at a 4 percent rate in 2011.
9:23 am: Lisa to Bill Strauss: Effect of NAFTA on the current trade landscape? “We have a surplus in services. For example, our net exports of higher education” are most impressive. Brightbill: investment protection is one benefit under NAFTA that you don’t have under the WTO.
9:21 am: “All businesses and industries are helped by having fair and enforced trade rules. The US, therefore, has the most to lose as being the freest market in the world,” Brightbill says. Companies can best benefit by addressing where unfairness exists outside their home market and filing claims to resolve this.
9:18 am: Strauss says that “close to the consumer” will be helpful in the future for the US economy. Brightbill — China has a labor advantage, but not a comparative advantage, especially in terms of steel production. Strauss’ rebuttal: Yes, but subsidies can’t last forever; it’s not sustainable. Diggins — raising exports are great, but it’s not entirely the solution. “We have neglected overarching policies.”
9:12 am: Currency debate, commence!
9:11 am: Strauss is definitely a free trader — “I’d like to think that markets work.” He maintains that markets will correct themselves, but as long as we keep free trade rules in place and not approach protectionist policies, the ship will right itself. He mentioned currency effects may be slightly overblown, and perhaps secondary to opening up markets. However, Brightbill says, currency is the main issue: “Even if you look at a range of numbers, there’s a concern” with how much currency China is buying up. (By Brightbill’s count, about a billion dollars a day.)
9:07 am: Trade deficit — what’s the deal? What are the factors? Strauss: China gets a lot of the blame; a share of imports from China has risen from less than 5 percent in 1990, now represented one of every five dollars of goods coming into the country. What’s made in China is not necessarily Chinese, but Taiwanese or Vietnamese, for example, because China is becoming a massive component-assembler as well as manufacturer. When it gets to US shores, it’s classified as Made in China, and this overstates the case slightly.
9:03 am: It’s not just “Buy American,” it’s “buy from anyone we have trade agreements with,” because this is the most important tool to open up markets.
9:02 am: Answer is a tough one; that’s to say, yes and no. But ultimately the US must abide, just as China must. It has been said that “the WTO dispute process is the most powerful tribunal in the world,” says Brightbill.
9:01 am: Lisa poses an interesting question: is the US guilty of anything?
9:00 am: Tim Brightbill on the WTO perspective and the Doha round: “The WTO is at a critical point in the negotiation process.” (The Doha Round has been going since 2001.) How to cut tariffs, remove subsidies, and improve rules of trade for all countries is key. Agriculture and market access, among other tenets, are the focus of the WTO’s work. Deadlines are in danger of slipping away, as the 2012 election among other landmarks, looms. Restrictions on raw materials exports that China has imposed went away — new subsidies and intellectual property infringements are especially important. Example: US and Mexico challenged China duties in a very recent case.
8:54 am: Jennifer Diggins — an accomplished lobbyist — on the current legislative landscape from Washington, D.C.: “This is the first time we’re debating trade” substantively in Congress. A total of three separate bills, in both House and Senate, are moving along, with an outlook towards consolidating them in the near future. The China currency manipulation issue is what’s “nearest and dearest” to the heart of companies like Nucor, which must deal with import/export inequities. That sets the stage for Obama’s unveiling of the NEI — National Export Initiative — with goal of doubling exports within five years. “We would like to see that coupled with a transportation bill or an energy strategy that doesn’t solely rely on the exports.”
8:46 am: Strauss: We’ll continue to see strong gains for manufacturing sector, but at the same time, matching or exceeding economic growth is being driven by productivity — gives your industry a real competitive advantage. “Doing more with less; often, the ‘less’ means labor.” But we’ve seen this in the past, i.e. in the 70s, everyone was working on farms and the manufacturing sector was the evil one. Now, agro sector is highly productive, and it’s vibrant, but we’re producing it with less than 2 percent of the employed workforce in our country. Issue is: how do we be competitive with a leaner workforce?
8:41 am: Strauss: Auto industry and primary metals took deep drop after the recession, and began recovering in mid-2009. “It’s a tennis-ball type of bounce.” Next year we’ll be at all-time high levels for manufacturing output. Those two sectors are key for the Midwest economy, Strauss said.
8:39 am: First question to Bill Strauss: what is your outlook on manufacturing?
8:35 am: Lisa Reisman, our editor, sets the stage with introductions, highlighting the range of companies joining us.
8:33 am: Everyone, guests and speakers, are excited. And they look great. First panel: Trade Policy Debate with Tim Brightbill, Jennifer Diggins who works for Nucor and Bill Strauss, chief economist from the Chicago Fed.
Welcome to the live blog for the International Trade Policy Breaking Point!