Trade policy expert gives uncensored take on what's going on in Washington

Peter A. Friedmann's rapid-fire rundown of issues affecting international traders is one of the highlights of the Coalition of New England Companies for Trade's (CONECT) Northeast Trade and Transportation Conference each year. Friedmann, a trade attorney, represents CONECT in Washington.

Here are a few observations from this year's address, delivered in Newport, R.I., in mid-March:

• Bottleneck in Congress. Congress is too busy with the health-care debate to tackle issues like transportation infrastructure and confirming a new commissioner of Customs and Border Protection (CBP). And because Rep. Sander Levin of Michigan, the new chairman of the House Ways & Means Committee, is close to labor and the auto industry, it's doubtful that any free trade agreements will be signed this year. Although the Generalized System of Preferences (GSP) will be renewed, action may be delayed by debate over whether India and Brazil should "graduate" from the preferential tariff program. "But sometimes gridlock in Washington isn't a bad thing," Friedmann said, because it means "foolish" legislation, such as a current proposal to repeal NAFTA, won't get passed.
• Battle on the border. When Congress suspended a cross-border trucking program, Mexico retaliated by slapping $2.4 billion in tariffs on U.S. goods. As a result, U.S. jobs have been lost. One example: Mary Kay Cosmetics, which went from zero duties to $400,000 per month on imports into Mexico. Mary Kay is still selling in Mexico, Friedmann noted, "but [it's] now manufacturing in China instead of in the United States."
• Be green—or else. Industry can't afford to watch passively while the federal government forces businesses to reduce emissions. "If we don't do it ourselves, [Congress and the EPA will] do it for us, and it won't be the right way," Friedmann said. "It will be unwieldy and burdensome, and it will impede world trade."
• ACE: The saga continues. CBP's Automated Commercial Environment (ACE), the whiz-bang IT system that will replace the current overburdened system, is still a work in progress some 20 years after its conception. Congress won't provide more money for ACE this year, Friedmann predicted. "A lot of people on Capitol Hill are asking, 'How many billions does it take to write a software program?' Even its defenders are embarrassed."