Business Leaders Issue 'Protectionism' Warning

June 16, 2009
Free-trade agreements have benefited U.S. manufacturing, say Summit speakers

Business analysts and executives attending an economic forum in Detroit said June 16 that maintaining or increasing trade barriers will only further damage the U.S. economy.

Talk of altering or repealing free-trade agreements in an effort to save jobs will only isolate the United States from other markets, says D. Scott Davis, chairman and CEO of United Parcel Service Inc. He noted during a townhall meeting at the National Summit that the "Buy American" provision originally proposed for the Obama administration's stimulus plan "sent a horrible message" to the rest of the world even though the Senate later softened the language.

Free trade has created more jobs with foreign firms for Americans than those that were lost from outsourcing, said former Bush administration Assistant Economic Development Secretary Sandy Baruha.

"The No. 1 challenge [U.S. manufacturers face] is ensuring that we make something here that somebody else wants," Baruha said.

He noted that Americans purchase foreign cars not because of trade agreements that favor global competitors, rather consumers prefer the products they're making.

One lesson manufacturers have learned from globalization is that cheap labor is not necessarily better and that many companies are starting to bring some jobs home to streamline their supply chains, said Craig Giffi, vice chairman of Deloitte LLP. But he said one trend that is cause for some concern is a movement toward research and development outsourcing.

He said the companies that are moving their R&D operations offshore risk having their product development efforts disjointed from the markets they serve.

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