When President Barack Obama attends his first G-20 summit in April, he may have an intriguing discussion item on his plate: The unilateral elimination of tariffs on all U.S. imports from developing countries.
The idea, floated by Ambassador Charlene Barshefsky, U.S. trade representative from 1997 to 2001, was aired publicly last November by FedEx Corp. Chairman Frederick W. Smith at a CEO roundtable sponsored by The Wall Street Journal.
Smith said there was "a lot of thought" given by CEOs to Ambassador Barshefsky's suggestion, which would end U.S. tariffs on imports produced by some of the world's poorest and most politically unstable nations. Citing statistics provided to him by Barshefsky, Smith said about half of the $26 billion the United States collects annually in import tariffs is generated by approximately 5 percent of all imports. Virtually all of those imports come from these so-called developing countries, Smith quoted the ambassador as saying.
Barshefsky told the executives that the current U.S. tariff regime protects markets for goods that have not been made in this country for decades. For example, sneakers have the highest tariffs of any U.S. import, even though the United States has not manufactured sneakers in any meaningful quantity for 30 years, she said.
Barshefsky, currently senior international partner at the Washington, D.C., law firm WilmerHale, told DC VELOCITY that her suggestion was made during a question-and-answer session with executives and that she has no idea if it will gain traction.
In his Nov. 18 comments, Smith said the group of executives strongly believes in the need for an international stimulus package to correlate with similar domestic initiatives, saying it will be difficult to mount a sustainable U.S. economic recovery without a corresponding global recovery.