“The Will to Act Drives Corporate Disconnect With Washington” In today’s complicated global economy, business needs strong, functioning gov’t that can effectively address numerous important issues Fiscal and health-care policy Pension policy Trade and currency policies Intellectual-property rights protection If Washington can’t effectively address these issues, business and economy will likely suffer Business increasingly frustrated with focus on politics rather than policy “National politicians act as if their job is to get nothing done. Instead, they spend their days trying to score debating points for the next election” (Alan Murray, asst mng editor) Source: Wall Street Journal, 1/18/06

Types of regulation and regulatory agencies Figure 8.1 Types of regulation and regulatory agencies

THE WORLD TRADE ORGANIZATION WTO imposed penalties 11/26/04 on U.S. exports ranging from apples to textiles, escalating trade dispute Bush administration has struggled to defuse by unsuccessfully urging Congress to repeal legislation aimed at protecting American steelmakers EU joined in complaint by Brazil, Canada, Mexico, South Korea, Japan, India, and Chile Source: Associated Press, 11/27/04

“U.S. Risks EU Tariffs Over Tax Rule” U.S. exporters to EU could be forced to pay hundreds of millions of dollars in punitive tariffs after WTO appeals panel ruled a U.S. tax break (on export income) illegal Benefits companies such as Caterpillar, Microsoft, Boeing Punitive tariffs would hit hardest U.S. exports of grain, iron, steel, electrical machinery, textiles, fruit, footwear, and cosmetics Decision comes at delicate time in U.S.-EU trade relations Each blaming other for stalemate in global trade talks (Doha Round) Last week, WTO ruled EU had violated trade rules btwn 1998 and 2004 by refusing to approve new types of genetically modified organisms for sale EU and U.S. also in initial stages of dispute over state subsidies given to Boeing and Airbus WTO ruled Foreign Sales Corporation law illegal in 2000, Extraterritorial Income Act illegal in 2002, and now American Jobs Creation Act in 2006 Source: Wall Street Journal, 2/14/06