Dredging Case Neg Case Frontlines Agriculture Advantage

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Heg Advantage

The plan isn’t key to growth

Tate 12 (Curtis, McClatchy Washington Bureau, “As states seek funds for deeper ports, will ships come in?”, http://www.mcclatchydc.com/2012/05/02/v-print/147455/as-states-seek-funds-for-deeper.html, ZBurdette)
A wider, deeper Panama Canal will open in 2014, meaning that bigger cargo ships filled with more containers of consumer goods can move directly to the population centers of the East Coast instead of stopping on the West Coast and sending the goods across the country.

States with seaports along the Atlantic are asking for hundreds of millions of federal dollars to deepen their harbors and shipping channels to accommodate the bigger ships and capture a slice of the growing traffic.

But some global supply-chain experts say the optimistic pre-recession projections of a huge shift in cargo from West Coast ports to East Coast ports no longer add up. Even the U.S. Army Corps of Engineers, which conducts feasibility studies for such projects and often does the dredging, expects little change in cargo volume at those ports.

John Lanigan, the chief marketing officer for freight rail hauler Burlington Northern Santa Fe, which runs dozens of double-stacked container trains every day from West Coast ports to the Midwest and Southeast, said he didn’t expect a major diversion of cargo to the canal.

The opening of the canal is not going to make it any faster for freight to get to the East Coast,” he said. “The only thing that really changes is that bigger ships will be able to go through the canal.”

Even so, Republican governors in South Carolina, Georgia and Florida, who were elected on platforms of fiscal conservatism, are still hoping that the federal government will pay for some of the cost of the harbor-deepening projects. But just in case the federal funding doesn’t come through, these states have a backup plan: Spend state taxpayers’ money.

Currently the biggest ships that can fit through the Panama Canal can carry only about 4,000 containers, metal boxes full of consumer goods that can be transferred from ship to train to truck. The new, so-called post-Panamax ships will carry double or triple that volume. But because the ships are bigger and heavier, they also require water depths approaching 50 feet.

The ports of Norfolk, Va., Baltimore, and New York and New Jersey have that depth now or will soon. Farther south, the ports in Charleston, S.C., Savannah, Ga., and Miami don’t want to see the bigger ships pass them by.

“I don’t know too many ports that have gambled on shallow water that have stayed in the game,” said Kevin Lynskey, the assistant director for seaport business initiatives at the Port of Miami. “If we didn’t dredge and other people did, we certainly would lose more containers.”

Proponents of harbor-deepening projects say they’re vital for local and state economies and will create thousands of jobs in a country that’s still reeling from the deepest economic downturn since the Great Depression.

“It’s the biggest strategic issue for South Carolina today,” said Jim Newsome, the chief executive of the South Carolina Ports Authority, which needs $300 million to deepen the 45-foot harbor in Charleston to 50 feet by 2020. “Businesses locate near ports; that’s the bottom line.”

But Jean-Paul Rodrigue, a transportation scholar at Hofstra University, said it didn’t make sense for Charleston, Savannah and Miami all to have deeper harbors without more business.

You need a lot of volume,” he said. “It’s not certain those ports can generate that level of volume.”

Several factors make a significant shift from one coast to the other unlikely. The first is speed. It’s less expensive for a ship to go the all-water route to the East Coast instead of docking on the West Coast and offloading containers onto trucks or trains, but it also takes at least a week longer. For consumer electronics and other high-end goods that need to get to store shelves quickly, retailers will pay more for faster transit times.

Second, ports in Los Angeles, Long Beach and Oakland, Calif., and Seattle and Tacoma, Wash., are deep enough to handle the bigger ships. They have warehousing space for containers, and they have highly developed rail connections to the Midwest and Southeast.

“Why not just unload all of it here?” asked Art Wong, a spokesman for the Port of Long Beach, which is second only in volume to Los Angeles in the U.S. “We hope to maintain those kinds of advantages.”

Third, the Panama Canal authority must pay off billions of dollars in construction costs, and it’s unknown how much the canal will charge the bigger ships in tolls. Last, the Suez Canal can handle any size ship, and some cargo ships bound from Asia to North America already use it.

“Depending on what Panama Canal charges in fees, it still makes economic sense to hit LA-Long Beach and be in Kansas City, Chicago or Louisville pretty darn quick,” said Charles Clowdis, the managing director of North American markets at economic forecaster IHS Global Insight.

Rodrigue said the Atlantic states were using the canal as a rationale for their own port expansion plans.

“If I was a port authority, I would be doing the same thing,” he said. “They want to do what they perceive is best for their own ports.”

Newsome is banking on Charleston’s strategic position in a growing Southeast market, and he says the port could feed the region’s bigger population centers such as Charlotte, N.C., and Atlanta.

We think we’re the only harbor in the Southeast where it makes sense to go 50 feet or deeper,” he said.

South Carolina Republican Gov. Nikki Haley has lobbied President Barack Obama for $120 million for the Charleston harbor but received only enough to complete a study of the project. The state Legislature is considering a bond issue to pay for the federal portion in case the funds don’t come through.

“Gov. Haley has been working on securing funds to dredge Charleston since she was elected governor,” said Rob Godfrey, a spokesman, “and she is confident we will get our federal match and that Charleston will be as deep as necessary to make it the best port in the Southeast."

Georgia also isn’t waiting. Republican Gov. Nathan Deal’s budget now includes about $180 million in state funds for the port of Savannah. He said the state would pay for all of it if necessary, then seek a reimbursement from Washington.

Savannah is 100 miles south of Charleston and boasts the busier of the two ports, but it also has a shallower channel depth of 42 feet. Dredging the Savannah River would cost more than twice as much as Charleston, and would give the port only a 47-foot depth, though the river’s high tides would help accommodate bigger ships, as they do now.

“If you compare the cost of the two projects, they have a lot more to fund,” Newsome said.

Much of the $650 million cost is environmental mitigation. Billy Birdwell, a spokesman for the Army Corps of Engineers Savannah District, said that included the impact on marshes and a wildlife refuge and protecting endangered sturgeon. History also gets in the way: A sunken Confederate vessel that’s in the channel would have to be removed.

An Army Corps of Engineers study, released in January, concluded that the cost of deepening the channel to the port in Savannah is justified in part because it would generate $174 million in annual economic benefits. However, the report also said that no changes in cargo volume were expected as a result of the deeper channel.

Birdwell said economic benefits would come from the efficiencies of the larger ships. Larger ships mean fewer ships, and less congestion getting in and out of the port.

Stephanie Mayfield, a spokeswoman for Deal, said Georgia supported the expansion of both Savannah and Charleston.

“Both ports are of regional and national significance, and there is plenty of business to go around,” she said. “Gov. Deal is committed to funding the state’s share of 40 percent and expects that the federal government will live up to their commitment and fund the remaining.”

Florida Republican Gov. Rick Scott didn’t wait for an answer from Washington on the state’s request for $77 million for the Port of Miami. Just two months after he took office, Scott decided that the state would pick up the tab.

We chose to self-fund,” said Lynskey, the assistant director at the Miami port. “We do want to get reimbursed by the federal government, but we’re going ahead without knowing.”

On Florida’s west coast, Port Manatee is nearing the end of a decade-long, $200 million expansion and has dredged to accommodate ships that have passed through the Panama Canal.

Miami’s project is less expensive than Savannah’s or Charleston’s, and it might be complete by the end of 2014, Lynskey said. A rail link to the port was rebuilt recently, and a $1 billion road tunnel to reach the harbor will be finished soon. Last month, the port authority reached a deal with environmental groups that had opposed the dredging project out of concern for its impact on coral reefs. Lynskey said the construction bid for the project should be ready by August.

Lynskey said that 60 percent of Florida-bound consumer goods from Asia didn’t come through the state’s ports, instead reaching Florida through Southern California or Savannah. With the deeper port, Lynskey expects Miami cargo volumes to double in the next decade.

“If we get no more than recapturing Florida, we’re going to get our investment back,” he said.

No-Link Increased Global Competitiveness not key to heg,-desperate policy making fails

Robert Pape. University of Chicago professor of Political Science and founder of the Chicago Project on Security and Terrorism.2009. [“Empire Falls”. The National Interest.] http://findarticles.com/p/articles/mi_m2751/is_99/ai_n32148803/?tag=content;col1
The days when the United States could effectively solve the security problems of its allies in these regions almost on its own are coming to an end. True, spreading defense burdens more equally will not be easy and will be fraught with its own costs and risks. However, this is simply part of the price of America's declining relative power.¶ The key principle is for America to gain international support among regional powers like Russia and China for its vital national-security objectives by adjusting less important U.S. policies. For instance, Russia may well do more to discourage Iran's nuclear program in return for less U.S. pressure to expand NATO to its borders.¶ And of course America needs to develop a plan to reinvigorate the competitiveness of its economy. Recently, Harvard's Michael Porter issued an economic blueprint to renew America's environment for innovation. The heart of his plan is to remove the obstacles to increasing investment in science and technology. A combination of targeted tax, fiscal and education policies to stimulate more productive investment over the long haul is a sensible domestic component to America's new grand strategy. But it would be misguided to assume that the United States could easily regain its previously dominant economic position, since the world will likely remain globally competitive. To justify postponing this restructuring of its grand strategy, America would need a firm expectation of high rates of economic growth over the next several years. There is no sign of such a burst on the horizon. Misguided efforts to extract more security from a declining economic base only divert potential resources from investment in the economy, trapping the state in an ever-worsening strategic dilemma. This approach has done little for great powers in the past, and America will likely be no exception when it comes to the inevitable costs of desperate policy making

Alt cause – employee skills deficits

Fifth Third Bank 6/13 (United States Bank, “Greater Employee Training Is

Vital to Global Competitiveness”, https://www.53.com/doc/cm/2Q12-employee-training-vital.pdf, 6/13/12, JNP)
To gain a competitive edge, companies in the United States ¶ and around the world are increasingly specializing in their core ¶ competencies and outsourcing non-core functions. To succeed, ¶ this requires more knowledgeable workers with deeper skill sets ¶ and the means to manipulate sophisticated new technologies. ¶ Since skills cycles have been significantly shortened—from ¶ years to just months—the ability of employees to continually learn and welcome life-long educational programs is key. And the willingness of employers to frequently upgrade their employees’ skills and invest in corporate training programs is critical.¶ In light of the demands placed on today’s workers, it is not surprising that a skills deficit exists. In fact, this situation ¶ has occurred for years. For example, prior to the global financial crisis, in 2007, Manpower Group, a leader in the ¶ employment services industry, said 41 percent of U.S. companies surveyed indicated difficulties filling positions. ¶ Although current global unemployment levels remain high, the problem has not abated. ¶ According to the Washington, DC-based Manufacturing Institute, last year 67 percent of American survey respondents ¶ reported a moderate to severe shortage of qualified labor; they also anticipated the problem to worsen. And recently, ¶ the University of Michigan indicated that 600,000 American manufacturing jobs are unfilled due to a lack of employee ¶ qualifications. This shortage is further intensified due to U.S. labor mobility being at a 50-year low, McKinsey Global ¶ Institute said. This means fewer workers are able to relocate to seek or accept employment. This has a significant impact on competitiveness. Why?¶ For hundreds of years, nations with an abundance of natural resources were considered to have a competitive ¶ edge. Today, this is no longer the case. Human knowledge and skills have taken the front seat. In turn, a company’s only sustainable advantage is the ability of its employees to learn faster, apply new technologies better, and boost productivity more quickly than the competition.¶ This is not new. Several years ago Federal Reserve Chairman Ben Bernanke said, “Education fundamentally supports ¶ advances in productivity, upon which our ability to generate continuing improvement in our standard of living depends.”

Alt Cause – U.S. regulatory system

NCF 7/28 (National Chamber Foundation, “SERIES: The Eight Factors of American Competitiveness - Chapter Three: The Cost of Doing Business”, http://www.freeenterprise.com/economy-taxes/series-eight-factors-american-competitiveness-chapter-three-cost-doing-business, 7/28/12, JNP)
Ruling out common sense. Besides our costly and complex tax code, job creators consistently view the severe inefficiencies of the U.S. regulatory system as a major competitive impediment. Like taxes, regulations are a vital part of providing for a well-functioning society; but when they are unnecessary, unduly burdensome, result in administrative delay, and costly paperwork they represent an enormous drag on economic growth and competitiveness. The European Commission summed up the formula succinctly in its campaign to reduce the excessive regulatory and administrative costs burdening the European Union: “Less Paperwork = More Jobs.”[x]¶ The World Economic Forum finds that 57 countries have less onerous regulatory systems than the United States. The OECD has found U.S. regulations to be among the most complex and costly of those in the developed economies, in many cases failing to produce the public benefits intended. [xi] MGI warns that precisely because of undue regulatory burden “the relative competitiveness of the U.S. business and regulatory environment is declining—at a time when many international jurisdictions are aggressively adjusting their regulatory environment and streamlining processes for working with business to attract new investment.”[xii]¶ The U.S. Small Business Administration reported that by 2008 the cost of regulations had reached more than $1.75 trillion per year, or the equivalent of over $10,500 per employee for small business—36 percent more than for large companies.[xiii] Each year the federal government issues some 4,000 new regulations.[xiv] The accretion of these rules issued by a multitude of federal agencies (sometimes pursuing conflicting missions), combined with the rules imposed by multiple layers of state and local jurisdictions, creates a complicated regulatory patchwork of administrative burden inhospitable to enterprise.[xv]¶ Despite the competitive damage the United States has no process for routinely reviewing regulations to determine which can be improved and which others should be eliminated. As the Brookings Institution observes in a Hamilton Project report, " [Regulations] . . . are rarely (if ever) evaluated or fine-tuned after they are issued. . . . A more effective regulatory system would continually evaluate regulation's impact and identify areas where reform would be beneficial."[xvi] This includes not only the regulations themselves but the procedures for administering them.¶ In a fast-moving global economy, bureaucratic inertia and timewasting procedural delays, particularly in permitting, are daggers in the heart of enterprise. As a recent OECD report stated, “Red tape is costly, not just in time and money spent filling out forms but also in terms of reduced productivity and innovation in business.” To make a start on remedying this competitive shortcoming, says McKinsey, “the United States could significantly reduce the complexity of regulations and streamline the process of resolving disputes.”[xvii]

Alt Cause – lack of higher and equal education

NAICU 7/8 (National Association of Independent Colleges and Universities, citing information from Economic Survey of the United States, written by the “Organisation for Economic Co-operation and Development”, “Greater access, more equal higher education are key to U.S. competitiveness”, http://www.naicu.edu/news_room/greater-access-more-equal-higher-education-are-key-to-us-competitiveness, 7/8/12, JNP)

The United States is at risk of losing its competitive advantage in the global marketplace unless it ensures greater and more equal access to higher education, according to a survey released by the Organisation for Economic Co-operation and Development. The Paris-based think-tank’s Economic Survey of the United States found that there is more demand for university-educated workers than meets supply. As a result, US companies are no longer more likely to innovate than companies in the other 33 OECD member countries.

Alt cause – export industries

Del Gatto et al 5/30 (Massimo, CRENOS - Centre for North South Economic Research; “Gabriele d’Annunzio” University of Chieti-Pescara - Faculty of Economics, also work by: Joseph W. Gruber,

Federal Reserve Board - Trade and Quantitative Studies Section, Benjamin R. Mandel

Federal Reserve Banks - Federal Reserve Bank of New York, Filippo Di Mauro

European Central Bank (ECB), “The Structural Determinants of the US Competitiveness in the Last Decades: A 'Trade-Revealing' Analysis”, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2070554##, 5/30/12, JNP)

This paper analyzes the decline in U.S. export share. To tackle these issues, we begin¶ by decomposing the decline in share into detailed industry groups and find that only a¶ few of these industries contributed to the decline in any meaningful way. A large part of the drop was driven by the changing size of U.S. export industries and not the size of U.S. sales within those industries. In particular, U.S. exporters appear to have specialized in industries that happen to have been growing relatively slowly as a share of world trade. These observations offer our first suggestion that the fall in¶ aggregate U.S. share has little to do with the underlying productivity of U.S.¶ exporting firms.¶ To corroborate this argument, we estimate the effect of national income and¶ geography on export shares in a modified gravity equation, in which export flows to a¶ given country are divided through by the entire world export to that country. Such¶ preliminary analysis reveals that the majority of the decline in export shares is in fact¶ due to a declining share of world income.¶ This type of analysis offers potential for a better understanding of the drivers of the¶ U.S. export performance, as the residuals embody precious information on countrysector¶ underlying productivity. However, the latter is mixed with other unmeasured¶ components, such as relative trade costs and idiosyncratic shocks, making the residual¶ a poor measure of competitiveness.¶ We thus take a structural approach aimed at identifying relative cost competitiveness¶ across countries by modeling the micro-foundations of trade shares explicitly. The¶ model allows us to derive a measure of country-sector (relative) real marginal costs¶ which, insofar it is inferred from actual trade flows, we refer to as revealed marginal¶ costs (henceforth RMC). This (inverse) measure of competitiveness is endogenous to¶ the model, being the outcome of a process of firm selection driven by: (1) the degree¶ of 'accessibility' (i.e. trade costs) of the country and the size of the market, as well as¶ (2) the exogenous ability of the country to generate low cost firms (exogenous¶ marginal costs), which depends on structural and technological factors such as the¶ entry costs and the productivity distribution of firms.¶ When brought to the data, for the period 1980-2004, our measure suggests that,¶ notwithstanding significant heterogeneity across sectors, U.S. marginal costs have¶ generally kept decreasing, in absolute terms. However, relative to their main competitors, U.S. manufacturing industries are also suffering from problems of competitiveness, as we find that marginal costs have grown by more than 38\%, on¶ average, relative to the other G20 countries. At the sectoral level, the "Machinery" industry is confirmed to be the most critical, followed by "Non-ferrous metals", "Industrial chemicals", "Professional and scientific equipments". On the other hand, in¶ sectors like "Petroleum and coal", "Plastic products", "Printing and publishing",¶ reported RMCs decreased significantly, i.e. the respective competitiveness increased. With respect to the main trading partners of the US, two groups can be identified. For¶ the countries in which RMC decreased the most relative to the US (i.e. their relative¶ competitiveness increased) higher trade freeness (relative to the U.S.) appeared to be¶ an important factor, irrespective of the negative (India) or positive (China) variation¶ in market size. On the other hand, there was another group of countries in which the¶ degree of trade freeness decreased respect to the U.S. In all these countries, except for¶ Korea, trade freeness has been the main driver of a worse performance, in terms¶ of RMC, compared to the U.S. Korea, instead, compensated the decrease in trade¶ openness with a substantial increase in market size which, via increased competition,¶ produced a beneficial effect on competitiveness.¶ Overall, our analysis suggests that market share performance is not a sufficient¶ statistics for competitiveness, as witnessed by the very low correlation between our¶ RMC measure and the export shares. Market size is definitively the main responsible¶ for the dismal performance of the U.S. market share. On the other hand, trade freeness¶ increased substantially in the countries in which RMC decreased the most (India,¶ China, Germany) relative to the U.S.

Alt cause – tax system and internal tax revenue code

NCF 7/28 (National Chamber Foundation, “SERIES: The Eight Factors of American Competitiveness - Chapter Three: The Cost of Doing Business”, http://www.freeenterprise.com/economy-taxes/series-eight-factors-american-competitiveness-chapter-three-cost-doing-business, 7/28/12, JNP)

Taxing U.S. competitiveness. When comparing the cost structures of competing locales, job creators look especially at tax rates and trade policies.[ii] In this influential category, the United States does not stack up well. We now possess the highest corporate income tax rates in the Organisation for Economic Cooperation and Development (OECD). From 2000 to 2010, average national corporate tax rates worldwide dropped from 32.8 percent to 25.7 percent. The United States, however, has remained unchanged at 40 percent, when federal, state, and local taxes are taken into account.[iii] The World Bank, McKinsey Global Institute (MGI), World Economic Forum (WEF), and PricewaterhouseCoopers (PwC) each have reported on the chilling effect America’s tax system has on the U.S. business environment.[iv]¶ As the National Small Business Association notes, “The corporate tax rate is just one small piece of the equation—the overwhelming majority of small businesses are pass-through entities and therefore pay business taxes through their individual income tax. America’s small businesses need broad, comprehensive and fair tax reform.” That’s why, according to the NSBA, “Small business consistently ranks reducing the tax burden among their top issues.”[v]¶ Moreover, America remains one of only five major economies that continue to tax the overseas earnings of domestic earnings when the proceeds are brought back home.[vi] According to Cisco Systems CEO John Chambers and Oracle Software President Safra Cayz, “This means that U.S. companies can, without significant consequence, use their foreign earnings to invest in any country in the world—except here.”[vii] And, to a large extent that is exactly what is happening.¶ Added to high, the complexity of the internal revenue code and the enormous cost of tax compliance damage the appeal of our business environment significantly. The U.S. tax code is among the most complicated in the world—a 71,500-page behemoth, twice as large now as it was in 1984, and growing by nearly 3.28 percent per year.[viii] National Small Business Association notes, “Although the actual out-of-pocket cost is a huge issue, the sheer complexity of the tax code has been an ever-increasing thorn in the sides of small-businesses.”[ix] The cost of compliance exceeds a staggering $168 billion per year (approximately 15 percent of annual income tax receipts). These outlays, of course, are passed through to consumers here and abroad, and every dollar that business must spend navigating an outsized tax code is one less dollar available for payroll, R&D, and other productive investments.

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