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Posted at 02:43 PM ET, 02/15/2012

GE conference: Trade, America's 'wake-up call' and 'the next war’


Governor Bob McDonnell (R-Va.) (MANDEL NGAN - AFP/GETTY IMAGES)
If the United States is going to strengthen its ability to compete on a global scale, what does that mean for the future of the nation's trade agreements?

Two lawmakers, a business executive and the head of the U.S. Chamber of Commerce sat down to discuss the question Wednesday morning in Washington on the third day of a nearly week-long conference on competitiveness sponsored by GE.

The participants -- Gov. Bob McDonnell (R-Va.), Sen. Tom Carper (D-Del.) and Chamber of Commerce president and chief executive Tom Donohue -- discussed trade policy, Congressional and White House relations and China — especially timely given Chinese Vice President Xi Jinping’s visit to the United States this week. John Rice, GE vice chairman, president chief executive for global growth and operations, served as moderator.

“The rest of the world's not just standing still and following America, they’re leading," said McDonnell, citing the “revolution” in technology that had served as a “wake-up call” for the United States.

On the question of international trade policy, the men were all eager to see barriers come down, celebrating the new trade agreement with South Korea. But, as with conference panels earlier in the week, concern about partisanship and rancor in Washington was front and center — seen as a barrier to innovation and needed policy changes. And the lawmaker on the panel didn't hold back when it came to calling for improvements from his peers.

“We could use the two C’s here in terms of communicating and compromise,” Carper said of officials in both the executive and legislative branches. He said companies need an open channel of communication with members of Congress to be able to forge closer relationships and build trust.

"The best lobbyists were people I know and trust," Carper said.

Just as important for lawmakers, said Donohue, was communicating to the American people the ramifications of what he considered to be protectionist policies.

"For the people back home, you have to put it in simple terms," said Donohue, who described the nature of global demand as a landscape where the vast majority of the demand for American products comes from other nations.

But convincing the public on trade policy, Donohue said, was complicated by politicians who herald American industry at the expense of other nations — and are rewarded by voters. Political candidates, he argued, should not win at the ballot box for "dumping all over trade."

But that doesn't mean Donohue believes in an all-carrot-and-no-stick approach to foreign competition, he indicated. "When they don't play be the rules, we have to step on their toes," he said.

The discussion also turned to the role of context in leadership as it related to the crafting of trade policy.

"I'm a recovering governor," Carper said to audience laughter, " I have been for a while." Carper served two terms as Delaware’s chief executive in the 1990s.

"When you have a former governor elected to the Senate," he said, "they get it."

"Former governors make good presidents," McDonnell chimed in. The Virginia governor’s name is considered to be on the informal shortlist for Republican vice presidential candidates.

All the panelists exuded of optimism of U.S. competitiveness, similar to that of earlier panelists. That’s not surprising, given their individual stakes in trade and innovation.

"I'm actually encouraged; I'm more encouraged than not," said Carper said. "I think we have seen a shift on trade in the U.S. Senate."

China, however, was a sore point among the panelists, who admonished those who are urging American business to steer clear of doing business with the country.

"The risk of not doing business in China is greater ... than the risk of doing business in China," said GE's Rice. “To sit it out" would be a "death wish."

Donohue agreed: "We're just shooting ourselves in the foot with this 'Buy America stuff. In the end, good ideas have to sink or swim by themselves.”

But for those ideas to survive, they have to be protected, Carper said.

"We've got to do a better job of protecting our intellectual property," said Carper. "We're always very good at fighting the last war. The next war...will probably be fought over the Internet."

Carper did not mention the debates over the Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) that had all-but-stalled in Congress after an online backlash from opponents who say the bills would authorize online censorship. Supporters counter that the legislation would protect U.S. intellectual property and, by extension, the nation's competitive advantage.

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