Sen. Evan Bayh, D-Ind., stopped at Muncie's Twoson Tool Companyon Wednesday to announce his plan to introduce a Get Tough on TradeAct in the U.S. Senate next week.
The Act is designed to strengthen federal laws that govern U.S.foreign trade in order to create a level playing field for Americanbusinesses, Bayh said.
As a precision metal stamping company that has lost more than$3.5 million in sales to foreign companies, Twoson employees have anatural interest in trade laws, Darrell Turpin, Lean ManufacturingManager at Twoson, said.
Turpin said he was eager to voice his concerns about foreigntrade to the senator.
"Companies [in other countries] are able to escape . . . a lotof regulations that will enable them to make a better profit,"Turpin said. "We'd just like to have an opportunity to tell Mr.Bayh that we're not opposed to fair trade, we're opposed to freetrade."
Bayh's act will reinstate the Super 301 provision, which wasoriginally introduced during President Ronald Reagan'sadministration. The provision calls for the top trade official tosubmit a report every year on how foreign countries are doing withU.S. trade policies, Bayh said. According to the provision, if acountry is reported for conducting illegal trading, it has 90 daysto fix the problem before a lawsuit will be filed.
The act will also give $4 million to the U.S. TradeRepresentatives, the government organization that enforces U.S.trade policies, to hire an additional 15 members and to "identifycheating, unfair practices and take care of lawsuits," Bayhsaid.
Bayh said he predicts consequences for younger generations downthe road if trade policies aren't enforced because American jobs,especially those involving technology, will move overseas to remaincompetitive in the market.
"Young people should be more concerned than anyone else," Bayhsaid. "The jobs that [college] students are preparing themselvesfor are going to be gone. It's the economic future of the thiscountry that's at stake."
However, Cecil Bohanon, Ball State economics professor, seespotential problems with Bayh's act.
"I'll bet dollars to donuts that the implication is increasedtariffs on foreign products and that's not the best way to generateeconomic development," Bohanon said. "Foreigners can sell us goodsat lower costs and . . . this benefits the economy."
While strict trade regulations may save a few American jobs andgenerate some extra profit because companies can increase prices,it handicaps consumers Bohanon said, which also handicaps theeconomy.
Bayh has already introduced legislation for more strictanti-subsidy laws, namely against China. The stricter laws willprevent foreign governments from granting monetary assistance tocompanies, such as free rent and free electricity, meaning thegoods would be sold at almost the cost of material. This issomething U.S. companies cannot compete with, he said.
"When you get up in the morning you're already at a 20 to 45percent disadvantage before you even come to this company," Bayhsaid to the Twoson employees.
He attributed this disadvantage to China being able to sellmerchandise for half a penny above the cost of material because ofits government subsidies.
Bayh continued his discussion of international trade withHoosiers in Indianapolis and Mishawaka on Wednesday.
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