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      - page 32 / 47

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U.S. market as a base for supply chain operations is but one consideration in a range of factors pushing health care reform high onto the agenda of many interest groups. Organizations representing international business agree that something needs to be done to reduce the cost of health care paid by businesses, but there is less of a consensus on the specifics of how that could be achieved. 56

 

As with labor issues, environmental regulation both as applied to businesses in the United States and as contained in various international trade and other agreements tends to be quite controversial. The issue for governments is how to find a balance between three potentially conflicting objectives: security of supply, industrial competitiveness, and environmental sustainability. 57

For the U.S.-based part of global supply chains, environmental regulation may affect costs of production58 as well as consumer perceptions and demand. Foes of globalization and international supply chains, moreover, sometimes accuse U.S. businesses of sourcing products overseas where environmental requirements may be less stringent and compliance less costly. One solution proposed is to harmonize environmental regulations across countries.

The May 2007 “Bipartisan Agreement on Trade Policy” between Congressional leaders and the Bush Administration contained key provisions related to the environment. In the agreement, the Administration and Congress agreed to incorporate a specific list of multilateral environmental agreements in free trade agreements. The list included the Convention on International Trade in Endangered Species, Montreal Protocol on Ozone Depleting Substances, Convention on Marine Pollution, Inter-American Tropical Tuna Convention, Ramsar Convention on Wetlands, International Whaling Convention, and Convention on Conservation of Antarctic Marine Living Resources.

The competitiveness of U.S. industry often is raised in debates over environmental policy. The policy discussion on greenhouse gasses, for example, turned partly on the effect of environmental policy on the ability of companies to compete in the global marketplace. If a country has legally binding carbon control restrictions while others do not, the potential exists that the country with the restrictions will find itself at a competitive disadvantage vis-à-vis countries without comparable policies and could lose global market share for certain carbon emitting production. In addition, this potential shift in production could result in some of the U.S. carbon reductions

56 For further information, see, for example: CRS Report RL34389, Health Insurance Reform and the 110th Congress, by Jean Hearne. National Association of Manufacturers, The NAM’s Health Care Agenda, Policy Issue Information/Human Resources Policy/ Health Care, accessed through Internet on January 2009.

57 For a European analysis of this issue, see EurActiv.com PLC. Fifth Report of the High Level Group on Competitiveness, Energy and The Environment, Contributing to an Integrated Approach to Competitiveness, Energy and Environment Policies, November 8, 2007. Available at http://ec.europa.eu/enterprise/environment/hlg/doc_07/hlg- fifth-08-11-07.pdf. For a review of pertinent U.S. environmental law, see CRS Report RL30798, Environmental Laws: Summaries of Major Statutes Administered by the Environmental Protection Agency (EPA), by Susan R. Fletcher et al.

58 See, for example, CRS Report 98-738, Global Climate Change: Three Policy Perspectives, by Larry Parker and John Blodgett.

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