Bloomberg | 5 Novemer 2008
General Electric, Caterpillar Push for Free Trade Under Obama
By Rachel Layne and Courtney Dentch
Nov. 5 2008 (Bloomberg) — General Electric Co. and Caterpillar Inc. say the Obama administration should keep trade as open as possible to help boost exports and should resist lawmaker calls for protectionism during the global financial crisis.
``When people are afraid, they want to create barriers to trade,’’ GE Chief Executive Officer Jeffrey Immelt said in an Oct. 27 speech at Columbia University in New York. ``It would be a real crime, I think, if we allowed the current economic volatility to make us move backward in globalization.’’
Exports by companies such as GE and Caterpillar create U.S. jobs and show why President-Elect Barack Obama and Congress shouldn’t put restraints on trade, said Doug Oberhelman, a Caterpillar group president.
``Why are we seeing this rush to protectionism when we’re talking about creating American jobs?’’ Oberhelman, who oversees Caterpillar’s global engine business as well as human services, sustainable development and remanufacturing, said in an Oct. 28 interview.
GE gets more than half of its sales from overseas as the world’s biggest maker of power-plant turbines, jet engines and medical-imaging equipment. Caterpillar, the largest maker of backhoes and excavators, exports half the machines built in some U.S. plants.
Caterpillar, based in Peoria, Illinois, supports a proposed free-trade agreement with Colombia, which Oberhelman said unfairly imposes tariffs on U.S.-made goods entering the country. ``They’re already exporting everything free, and we have to pay to export there,’’ he said.
Obama on Trade
Obama last month said he opposed scheduling a congressional vote on a trade agreement with Colombia before a new administration takes office because any such accord should address issues such as violence against labor leaders in that country. President George W. Bush has made approval for the Colombia deal a priority as he completes his term.
An Obama administration will focus on the enforcement of existing trade agreements, including increasing pressure on China to raise the value of its currency, said Lael Brainard, an adviser who represented the Obama campaign at an Oct. 8 conference sponsored by the Washington International Trade Association entitled ``Trade Policy in the Next Administration: How Would McCain and Obama Differ?’’
The new administration also will ``update’’ the North American Free Trade Agreement to include tougher labor and environment provisions, Brainard said.
Trade issues may matter less at the start of the Obama administration than making sure the economy pulls out of the deepest financial crisis since the 1930s. The first order of business is to stabilize financial systems, said Dennis Slater, president of the Association of Equipment Manufacturers, a Milwaukee-based trade group whose members include Caterpillar and Deere & Co., the world’s biggest maker of farm machinery.
``Until we get that resolved, nothing else matters,’’ Slater said in an Oct. 27 interview. To increase jobs, he said any recovery package should include money for large construction projects.
The U.S. and other developed markets need to trade goods globally to remain competitive because they won’t be able to ``reframe’’ their economies to be services-based, Immelt said in the Columbia University speech. The ``only future’’ for the U.S. and Europe is ``the ability to be able to make and sell products and to be able to do so on a global basis.’’
Obama, 47, financed his campaign mainly through grass-roots contributions instead of the business community and as such he has ``every opportunity to be completely his own man when he gets into the White House,’’ Immelt said in an Oct. 29 speech to more than 100 business leaders in Madrid.
``He really doesn’t owe oil companies anything, the Chamber of Commerce anything,’’ Immelt said.