December 1972 Home   Newsletters

January 1973

February 1973

People's Conference on Housing
January Calendar
LWV Honolulu Calendar Update January - July 1973
From the President (Dee Lum)
Announcements!!!
State Program Planning
Voter Service - Share Your Dreams
Finance - Mahalo!
Community Page
Membership Memos
Susie Orient Returns to the Voter following 2-Year Vacation
Representative Government (Barbara Nobriga)
Overseas Education Fund of the LWV - Annual Report 1971-72
Foreign Trade Page

Foreign Trade Page

(keep for March Units)

BALANCE OF PAYMENTS

The U.S. balance-of-payments shows all financial transactions - private and governmental - between the United States and the rest of the world. The balance-of-payments statement covers receipts from foreign countries on one side and payments to them on the other. The difference between the two totals represents the balance of payments, On the plus side are export sales; money spent by foreign tourists; payments to the United States for insurance transportation, and similar services; payments of dividends and interest on investments abroad; returns of capital invested abroad; new foreign investments in the United States. (In Hawaii, Japanese tourists and capital invested in real estate, hotels, department stores...abroad...MacDonald's in Tokyo!)

On the minus side are the cost of goods imported, spending by tourists overseas, new overseas investments, and the cost of foreign military and economic aid. (1 U.S. Aircraft Carrier in Hong Kong for 4 days = balance-of-payment deficit!)

Balance of Trade

The relationship between imports and exports.

A country's balance of trade is only one aspect of its balance of payments.

EEC

(European Economic Community)- Regional economic grouping of 6 European states - France, the Federal Republic of Germany, Italy, Belgium, the Netherlands, and Luxembourg....commonly called the "Common Market". It has gradually eliminated custom duties and other trade barriers among its members and the establishment of a common agricultural policy.

Most recently proposed was "Eurodollars" a common medium of exchange.

EFTA

(European Free Trade Association) Regional trade grouping, essentially a free trade area of 6 countries, Norway most recently declining participation...others are Austria, Denmark, Portugal, Sweden, Switzerland and the United Kingdom. Finland is an associate member. Also eliminated gradually custom duties and other trade barriers but unlike EEC, members retain their own individual tariffs against outside countries.

PROTECTIONISM

Refers to attempts to "protect" U.S, products or industries from foreign competition by imposing quotas or tariffs on imported goods so that the U.S. product is more favorably priced than the imported item. (E.G. - sugar!) Tariff schedules imposed to protect domestic industry are called "protective tariffs," e.g. the Hawley-Smoot Tariff of 1930... established the highest-tariff duties in U.S. history, an average of 50% of the value of dutiable imports.


From the Foreign Trade File:

Hawaii is one of the privileged 13 "free ports" designated under the US Foreign Trade Zone Board under the Commerce Dept. Established for the purpose of encouraging foreign trade, four of the leading participating countries have benefitted in several ways: Japan, Brit France and Taiwan only pay duty when their goods are moved from the Zone and into US are and "then only for the amount moved in even if other cargo is stored at the warehouse. we have a strategic mid-Pacific location for shipping and airlines as well as superior pier terminal facilities and storage areas. It means jobs (132 businesses operate there) and hidden date taxes in sales made, income taxes deducted, and diversification of local industry.

SHOULD FOREIGN US INVESTMENT CURBED?

Pro

George Meany: "The multinational is not simply an American company moving to a new locality where the same laws apply and where it is still within the jurisdiction of Congress and the government of the US...the multinationals' global operations are beyond the reach of present US law or the laws of any single nation."

Stanley H. Ruttenberg: "...earnings are not fully repatriated but instead held abroad for reinvestment, contributing further to the deficit in our balance of payments. Second, it is no longer true that the establishment of US subsidiaries abroad generate an automatic demand for machinery and parts which can only be filled in this country. Third, there can no longer be any question that the growth of the multinationals has meant a loss of jobs for US workers.

Paul Jennings: "The US exported 65,000 jobs in the shoe industry between 1960 and 69...Entire industries and thousands of jobs have been exported in such diverse items as typewriters, bicycles, watches, radios, tape recorders and baseball gloves."

Sen. Vance Hartke: "We see no reason to encourage (multinationals") production abroad... This bill makes it equally advantageous to invest in Indiana as it is to invest in Ireland."

Rep. Henry S. Reuss: "Multinational corporations are increasingly taking on the role of super-governments, with no international governmental structure in being to cope with them."

Con

Sen Charles Percy: "Far from depriving Americans of jobs, or acting as a haven for investment capital, our multinational corporations are a positive force both in creating new jobs here and in keeping the US strongly competitive in the world market.

Peter G. Peterson: "The presumption (of proposals such as the Hartke-Burke bill) that these corporations are seriously affecting our export position. Some of the data we have gathered... suggests that say of those fears are certainly exaggerated.

Sen. Jacob K. Javits: "It seems that human nature needs something to rally against and the term multinational corporations creates an effective foreign devil image, when in fact we are talking about the major US corporations which are the most important and growing high-wage employer of the America worker in the private sector of our economy.

Orville L. Freeman: "There is a large body of evidence available which clearly indicates that foreign investment actually creates jobs at home and has other strengthening effects on the US economy."

James M. Roche: "This latest attack on economic freedom is known as the Burke-Hartke bill. Its stated purpose is to stop multinational corporations from 'exporting jobs and technology.' This is a legislative attempt to turn back the clock of history and is the old protectionist threat in a new form."

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