The US is caught is somewhat of a discrepancy in its foreign trade policy.  On one side, the House stimulus package has a very protectionist “Buy American” clause.  Among other things, the clause requires any projects funded by the stimulus package to utilize American iron and steel.  The clause has met with such foreign opposition that President Obama has vowed to review the policy.  In fact, a European Commission spokesperson said the clause was “the worst possible signal” the Obama administration could send out.  The Commission went on to call the clause protectionist and would trigger retaliatory moves.  In addition, they would file a grievance with the World Trade Organization if the clause were to be included in the final package.  Vice President Joe Biden feels that the clause is somewhat justified and said it was “legitimate” to have some portion of it in the final legislation.

Were charges to be brought in front of the World Trade Organization, the US might be caught in an awkward position.  Just this month, the US filed charges with the World Trade Organization against China for using WTO-illegal protectionist policies.  In regards to those charges, Trade Representative Susan Schwab said, “We are going to the WTO because we are determined to use all resources available to fight industrial policies that aim to unfairly promote Chinese branded products”.  The US asserts that the Chinese government has provided numerous subsidies including incentives, grants, and preferential loans to companies in an effort to increase exports of China made products.  Schwab goes on to say, “China’s policies favoring domestic brands also raise questions regarding China’s commitment to providing a level playing field for foreign owners of important intellectual property rights, namely the trademark rights of US brand owners”.

The Stimulus Bill “Buy American” clause amounts to little more than the same type of subsidy, incentive or preferential loan that the US accuses China of.  I am doubtful that, “do as I say, not as I do” will end up being a successful foreign policy dogma for the US.

The Link: LINK

The Story: Belgium based International Container Lines (ICL) announced that it will stop using the Port of Richmond to load and unload Mid-Atlantic cargo.  Effective March 2009, the company will instead use the Port of Wilmington in North Carolina.  Unfortunately, ICL accounts for approximately 75% of the traffic at the Port of Richmond.  Obviously, this is a tremendous blow to what is an incredibly valuable asset to the Commonwealth of Virginia.  ICL believes the Wilmington location will be a better compliment to its Philadelphia operation and will allow them to compete against South Carolina ports.

The Port of Richmond is obviously disappointed in the announcement, but remains hopeful that it can bounce back.  The port has a number of benefits to offer potential clients including barge service to the Port of Virginia in Hampton Roads and immediate access to I-95, I-85 and I-64.  Finally, the port is hopeful that it may receive some of the stimulus funds to increase the channel depth in the James River to allow transit of bigger ships.  As the farthest inland port in the US, and with excellent transportation access, the Port of Richmond has alot to offer. Now it can add “excess capacity” to that list of advantages.

Four Virginia companies announced further layoffs today.

Qimonda, the computer chip manufacturer, announced this morning that they will be shuttering their Richmond manufacturing facility and laying off 1,550 of the remaining 1,600 employees.  The 1,550 employees will not receive any severance.  The first batch of 500 employees will be terminated immediately, with the balance leaving over the next month or so.  Production at the facility will cease within the week.  The company, which has filed for bankruptcy protection in Germany, previously announced the loss of 1,200 jobs.  Those 1,200 received severance and will continue to do so.

LandAmerica, the venerable and now bankrupt title company, announced that it will be closing its Richmond headquarters location and eliminating all 291 remaining positions.  The cuts will come in stages, but should be complete by the end of 2009.  Additionally, the company will not be offering any severance packages to these employees.

On the other side of the state, TMD Friction Group, the automotive brake manufacturer, announced that it will be closing its Dublin Virginia (near Roanoke) manufacturing plant.  All 140 positions will be eliminated by May 31, 2009.  TMD is based in Leverkusen, Germany and is currently in bankruptcy proceedings.

Volvo Truck North America, located in the same industrial park as TMD, annouced last week that it will be laying off 650 employees.  Both TMD and Volvo cited a bad economic environment and limited capital (auto) spending as the reasons for the layoffs.   TMD and Vovlo are especially painful because they are located in the Southwest region of Virginia which is already enduring numerous layoffs and plant closures.