Indiana Would Be Hit Hard by NAFTA Pullout

The U.S. Chamber recently released its analysis of which states would be most harmed from a NAFTA withdrawal.

Unfortunately, Indiana would be among the Top 10 most hard hit states, with more than 250,000 Hoosier jobs put at risk.

On top of that, nearly half of Indiana’s exports are destined for customers in Canada and Mexico, generating more than $16 billion in export revenue. Indiana’s farmers and ranchers would also suffer a blow, particularly those with soybean crops exported to Mexico.

Where We’re Importing and Exporting

A glance at two maps – top import and expert country for each state in 2016 – reveals some interesting observations:

  • On the export side, Canada is the leading destination from 33 states (including Indiana and 25 of the other 31 east of the Mississippi River)
  • Mexico (six states) and China (four states) were next on the list
  • Among the more intriguing partnerships: Nevada’s exports are going to Switzerland
  • On the import side, nine countries are represented with China (23 states) and Canada (14 states) leading the way
  • Indiana and Oregon are the two states in which the lead importer is Ireland (Happy St. Patrick’s Day, by the way!)
  • Of Indiana’s four neighbors, China is tops in Ohio, Kentucky and Illinois, while Mexico (think auto industry) is the top partner with Michigan
  • Hawaii stands alone with its top partners of Indonesia (imports) and Australia (exports)

According to the American Enterprise Institute:

Last year, American companies sold $2.2 trillion worth of goods and services to buyers in other countries, and American companies and consumers purchased $2.7 trillion worth of imports from trading partners all around the world. Seven states – Michigan, Louisiana, South Carolina, Tennessee, Kentucky, Washington and Texas – have their international trade represent more than 30% of their economic output.
Together, that volume of international trading activities represented 26% of the value of America’s $18.5 trillion in GDP in 2016. In terms of employment, more than 27 million American workers, about one in five, have jobs that are directly supported by trade with the rest of the world. Some states like California and Texas have more than two million jobs that are directly supported by international trade.

Corporate Tax Reform Would Benefit Nation, Workers

Abstract View of Urban Scene and Skyscrapers

Lawmakers and candidates on all sides of the political spectrum acknowledge reforming America’s corporate tax rate is overdue. President Obama has even suggested reducing the rate from 35% to 28%. Writing for Reason, Veronique de Rugy of the Mercatus Center sums up the necessity for this, concluding it’s an optimal way to benefit both businesses and the workforce:

Even such high-tax nations as France have lower rates. However, the real competition comes from Canada (26.1 percent), Denmark (25 percent), the United Kingdom (20 percent) and the many countries, such as Ireland (12.5 percent), with rates below 20 percent. Moreover, competition is intensifying. Last June, the U.K. announced that it would cut its rate from 20 percent to 18 percent in the next five years. It’s now saying that it will lower the rate even further, to 17 percent. These reductions are the final stage of drastic cuts implemented since 2007, when the country’s companies faced a 30 percent tax rate. That’s a second wave of reduction since the rate was as high as 54 percent in the 1980s.

Now contrast this with the United States. In the 1980s, policymakers responded to the pressure put on by many countries lowering their corporate rates by decreasing America’s rate from 49.7 percent to 33 percent. However, since then, the U.S. has fallen asleep on the switch (and even raised the rate by 1 percentage point in the 1990s) and is now widely out of sync with internal competition. In 2015, the average corporate rate for countries in the Organisation for Economic Co-operation and Development was 25 percent, down from 48 percent in the early 1980s.

As if that were not enough competition for American companies, the U.S. government burdens them with another layer by taxing them on a worldwide basis. In that system, income from American companies is subject to U.S. taxes whether it’s earned in Seattle, Paris or Singapore. By contrast, most wealthy countries don’t tax foreign business income; about half of OECD nations have “territorial” systems that tax firms only on domestic income. In other words, U.S. exporters face a much less competitive tax system than most of their biggest competitors…

Not everyone would like to reduce taxes on corporations, but everyone should. The data show that most of the corporate tax burden is actually shifted to workers, who end up shouldering the tax in the form of lower wages. With the U.K. taking further measures to reduce its burden on corporations, boosting its workers’ wages and inflicting yet another blow to U.S. competitiveness, Congress should do what’s right by reforming the corporate tax. It may be the one bipartisan issue out there. All we need is leadership.

Everest Veteran Elzinga Talks About Safety

elzinga2

Jim Elzinga, founder of Safety Culture Solutions, is known for conquering Mount Everest as one of Canada’s few elite Alpinists. He regaled attendees at today’s 2016 Indiana Safety and Health Conference & Expo in Indianapolis about his experiences during his speech, “Triumph and Tragedy on Mount Everest.”

If Image is Everything, U.S. in Trouble

19218071The Reputation Institute does studies on, guess what, reputations. In this case, its all about countries.

In many ways, countries are like companies; They have “brands” to protect, budgets to adhere to, and many “competitors” vying for their export business, international diplomacy status and tourism dollars — and, as in business, a country’s global reputation can be the pivotal touch point around which those other metrics revolve.

According to new research from the Reputation Institute, Canada has moved back into the leading slot for reputation, having passed Switzerland to regain the top spot in this year’s Country RepTrak, the world’s largest annual survey of country reputations, showing regional trends for North America, Latin America, Europe and Asia. Canada, the United States and Mexico all improved their reputations, according to the survey.

Since the survey began in 2010, Canada has ranked first all but two of those years and never lower than second place. At the top of the list are all of Scandinavia, with Norway in second place, immediately followed by Sweden and Switzerland.

Historically, the reputation of the United States has been poor, even though the country’s image has improved 20% compared to an average reputation. Elsewhere around the world, Latin America is improving its reputation overall, but Brazil is experiencing a decline in reputation. Northern European countries are in the top 10, and Spain, Portugal, Italy and Ireland have improved their reputations due to improvements in certain economic indicators. Japan has the best reputation in Asia and while Asian countries are improving their reputations, theirs are still weak overall. Russia’s reputation is declining due to the crisis in Ukraine and Crimea’s annexation.

The top 10 countries in the 2015 Country RepTrak are:

Canada
Norway
Sweden
Switzerland
Australia
Finland
New Zealand
Denmark
Netherlands
Belgium

Keystone XL Pipeline Defeat Will Likely Be Short-Lived

119744231The Keystone XL Pipeline bill was narrowly defeated Tuesday in the U.S. Senate. Indiana Chamber of Commerce President and CEO Kevin Brinegar offers his thoughts on the policy and the latest activity in Washington:

“Canada is going to continue to develop the oil sands and sell to other nations whether the U.S. allows the Keystone XL Pipeline or not. Whatever the impact that activity has on the environment, the activity is still going to happen. That’s the reality. Continued posturing by the Obama Administration and others amid calls from environmental groups isn’t going to change that.

Other countries are looking out for their energy futures. The U.S. needs to as well. Going forward with the Keystone XL Pipeline is an important part of the mix. It would strengthen and expand our already vital energy relationship with Canada. And sourcing more of our energy from a friendly, North American neighbor will help reduce our reliance on energy resources from less stable areas of the world.

Indiana is fortunate to have two senators – Dan Coats and Joe Donnelly – who understand the pipeline’s importance and have been staunch supporters of the project. It’s too bad the Senate, on the whole, couldn’t get past politics and do the right thing for our nation’s energy security. However, we look forward to early 2015 when this measure seems destined to finally pass the Senate and make its way to the President’s desk.

Background: The proposed Keystone XL project would construct a 1,700 mile pipeline to transport about 800,000 barrels a day of heavy crude oil from tar sand fields in Canada across the central U.S. to refineries on the Gulf Coast.

Time to Talk Area Code Changes

FIt must be a sign of advancing age that I fondly recall the days of three area codes that covered the state of Indiana. Today, that number is six with a seventh set to go into effect next month and public field hearings underway now on 317 area code relief.

Indiana had three telephone area codes (219 for the north, 317 for Central Indiana and 812 in the south) from the mid-1950s until the mid-1990s.

Today, the state has six area codes with a seventh to go into effect in October 2014.

Technology brought pagers, fax machines, wirelese phones and more. The Indiana Office of Utility Consumer Counselor says efforts to conserve existing number supplies and prolong the life spans of area codes have been successful, but the only way to provide new numbers in the long run has been to introduce new area codes.

The number of area codes throughout the United States, Canada and the Caribbean has more than doubled since 1995, with Indiana, 38 other states and eight of the 10 Canadian provinces adding new area codes.

The 317 area code was changed in 1996 with the addition of 765. Now, 317 is projected to run out of numbers in 2017. A hearing took place in Indianapolis last Friday. Four more are scheduled in Carmel (October 1), Franklin (October 14), Danville (October 29) and Greenfield (December 1).

An overlay method is being proposed. A similar procedure is being implemented in the current 812 area code with the new 930 coming into play yet this year.

Full details, including additional opportunities to submit comments.

This is Unique With a Capital U

The Found Elsewhere page of BizVoice, our Indiana Chamber magazine, does as the name suggests — offers interesting information first reported in other places (studies, publications, etc.). After all, we don’t claim to have the monopoly on fascinating facts.

While Found Elsewhere typically appears on the last page of the publication, I’m taking an educated guess that Governing’s Last Look has a permanent home in that spot. The May edition has an entry that we just had to share.

A few clues:

  • International border
  • Library and opera house in the same building
  • Jurisdictional implications

The story can’t be done justice without the photo. Check it out.

Time is Now for Pres. Obama’s Overdue Support for Keystone XL Pipeline

The Indiana Chamber supports the construction of the Keystone XL Pipeline as a means to reduce our national dependence on unstable governments, improve our national security, strengthen ties with an important ally and promote the production of Canadian oil. Based on a recent ABC News/Washington Post Poll, most of the country agrees.

Here’s a recent summary of the Chamber’s position:

Indiana and our country are deeply dependent on foreign oil sources from countries that are typically not our friends. Canada has vast oil reserves and is presently our number one supplier of oil. It is critical that we continue to have a positive relationship with Canada by supporting their oil production and the pipeline that will carry this crude. Many Indiana companies supply various products and materials that will be used to refine this oil and move it through the pipeline.

Additionally, the Chamber agrees with Deroy Murdock’s recent column for National Review Online that President Obama needs to stop wavering and approve this project. Read the full article, but here’s an excerpt:

Five years and five months have passed since TransCanada first asked the State Department to bless KXL. Since the pipeline would cross America’s international border with Canada, it requires presidential approval, typically influenced by the State Department’s guidance. Since TransCanada filed its application on September 19, 2008, State has been very generous with its advice, offering at least five different assessments on KXL:

• On April 16, 2010, State found that KXL would have “limited adverse environmental impacts.”

• On August 26, 2011, State stated that “There would be no significant impacts to most resources along the proposed pipeline corridor.”

• On March 1, 2013, State virtually echoed its previous report when it ruled that “there would be no significant impacts to resources along the proposed Project route.”

• This past January 31, State concluded that “approval or denial of any one crude oil transport project, including the proposed project, remains unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the U.S.”

• On February 26, State’s Office of Inspector General rejected charges that the department’s KXL review suffered ethical lapses: “OIG found that the department’s conflict of interest review was effective and that the review’s conclusions were reasonable.”

Obama’s 61-month-long navel-gaze on KXL (atop the four months that State pondered the pipeline late in G.W. Bush’s presidency) is pathetic when compared with American milestones that were achieved in less time:

• NASA needed four years, from 1979 to 1983, to build the Space Shuttle Discovery.

• As OilSandsFactCheck.org outlines in an excellent infographic, it took just two years (1941 to 1943) to build the Pentagon — the world’s largest office building, and home to 30,000 military and civilian employees.

• The Golden Gate Bridge linked San Francisco and Marin County, Calif., after just four years and four months of work over one of America’s most unforgiving waterways. Construction began on January 5, 1933. Pedestrians first crossed the bridge on May 27, 1937; cars followed the next day.

• Hoover Dam required five years of construction (1931 to 1936). It was finished two years ahead of schedule.

• It took one year, three months, and nine days to erect the Empire State Building. Between January 22, 1930, and May 1, 1931, a force of 3,439 men built what became — at 1,454 feet — Earth’s tallest skyscraper.

Obama’s endless “study” of Keystone is disgraceful. If he believes it should be built, he should approve it. TransCanada will invest $5.3 billion to build the pipeline. Taxpayer cost: $0.00. While some 10.2 million Americans officially are out of work, KXL will offer direct or indirect employment to an estimated 42,100 people.

“These jobs are really good-paying jobs,” says Union Business Manager magazine. “They provide not only a good living wage, they provide health care, and they also provide pensions.” Senate Republican leader Mitch McConnell of Kentucky calls KXL “the single largest shovel-ready project in America.”

Beyond the unemployed, all 315 million Americans would enjoy the steady flow of friendly oil from a NATO military ally. Every petrodollar exported to Canada is one less dollar shipped to overseas oil producers — such as terrorist-funding Saudi Arabia, gay-jailing Nigeria, and the Crimea-invading Russian Federation.

Help Get I-69 Into National Freight Network

The U.S. Department of Transportation (DOT) is currently seeking comments on the Primary Freight Network and National Freight Network designations. The Indiana Chamber believes that I-69 should be included as part of the National Freight Network and is asking DOT to support this effort.

As part of the National Freight Network designation, DOT has the opportunity to identify an additional 3,000 miles of highways that are critical to the future efficient movement of goods; this represents a strategic opportunity for the nation to enhance its freight transportation network.

A national priority over the past 20 years, I-69’s significance as a major freight route will increase as states along the corridor continue making progress toward its completion.

I-69 provides the most direct interstate access to principle international border crossings between the U.S., Canada and Mexico, as well as multiple Gulf Coast ports; the volume of traffic on I-69 is anticipated to dramatically rise as the interstate progresses. For all these reasons, I-69 should be included in the Primary Freight Network.

We urge you to show your support for including I-69 as part of the Primary Freight Network by signing this petition.