Daniel R. DiMicco loosened his tie as he stood behind the podium to speak at Bryant University’s 21st annual World Trade Day. He took off his jacket because “in a steel mill you don’t wear suit jackets,” he said. And then he took off his tie and unbuttoned his collar.
“We tend to be very practical and realistic in the way we look at things,” DiMicco said on behalf of the 11,300 people employed by Nucor Corp., the largest producer of steel in the United States, with annual net sales of about $13 billion. DiMicco is chairman and CEO of the North Carolina-based company, which shipped 20 million tons of steel last year.
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DiMicco said he didn’t come to World Trade Day to “make friends,” but to talk about serious issues affecting world trade and the global economy, which affects the U.S. economy.
About 550 people attended the daylong event May 25 hosted by The John H. Chafee Center for International Business at Bryant, said university spokeswoman Janet Proulx. Providence Business News was a sponsor of the event.
Several leaders of global trade, including CEOs of large importing/exporting companies, publishers of trade and foreign policy magazines and international manufacturing consultants spoke to the theme, “Global Issues: Focus on the Future.” The conference lasted from breakfast through the afternoon, with morning and afternoon keynote speeches, along with four breakout sessions on global topics. But the main event was the lunch, where DiMicco and UPS Chairman and CEO Michael L. Eskew gave twin keynote speeches.
DiMicco said in his perspective, the concept of free trade is broken. Free trade is actually rules-based trade, he said, citing government, monopolies and the World Trade Organization as major regulators of trade among countries.
The difference between the United States and other countries, he said, is that other countries “manage” trade for a national advantage. For example, the Chinese government gives subsidies for energy and raw materials. Its banks give loans that are never repaid.
A steel manufacturing company in China recently completed a three-year expansion, he said. It now has the capacity to make as much steel as the United States, Canada and Mexico combined, even though China is probably the most expensive place in the world to make steel because of a lack of natural resources such as iron ore.
“It’s not a matter of [cheap] labor,” he said of how the company in China managed to become the largest producer of steel. “The expansion was done at an enormous cost to the environment. There are no environmental regulations.”
Currency manipulation and “unfettered access to our markets” have contributed to making it easier for other countries to “manage” trade for their advantage, DiMicco said.
“Free trade is anything but free,” he said, noting that overseas holdings of U.S. debt equaled $5 trillion in the first quarter of this year, accruing interest at about $250 billion a year. Even Wal-Mart’s “everyday, low prices” are an illusion, he added, because “we are borrowing to keep those prices low.”
“How long until we’re broke?” DiMicco asked. “We’ll be indentured to foreign competitors if this madness persists.”
Eskew, head of the $36 billion package delivery company, said one reason the United States is losing in the world trade market is because “we in the business community are not doing a good job of promoting the benefits of world trade.”
Improving education about international trade in schools could be one solution, he said. Eskew said foreign languages, math and science and overall ethics are other subjects that need strengthening in schools.
“Fewer than 50,000 students in the U.S. study Chinese,” he said. “In a very short time we will be the third-largest English-speaking country – behind China and India.”
In addition to improving its educational infrastructure, Eskew said, the United States needs to improve its physical infrastructure, specifically its transportation system.
Increased global trade means more pressure on the country’s highways, railways, waterways and aviation system, he said. And he’s not sure they can handle more pressure.
“We have to act, and we have to act now,” Eskew said.
Solving the United States’ educational and physical infrastructure problems to improve its competitive edge in world trade would involve partnerships between companies and government, he said.
Bryant President Ronald K. Machtley earlier in the day announced that the university was being responsive to one of Eskew’s points. From May 21 through June 4, Bryant hosted a dozen students from Lingnan College, a part of Sun Yat-sen University in Zhongshan, China.
At the end of that period, the students, along with the 13 Bryant undergraduates who have been hosting them, will return the favor by hosting the Americans in Zhongshan. The program, which entailed classes and cultural events, including a Pawtucket Red Sox game, is a pilot for a much broader initiative that Machtley wants to undertake.
The next step in that program is a two-week period during the winter break next year that will see about 150 Bryant students travel on one of three trips – to Europe, Latin America or China – for cultural enrichment. Machtley hopes that within a few years, the entire sophomore class (which stands at about 700 students today) will take part in what would be called the Sophomore Experience, and travel to one of the three locales for those two weeks, further marking Bryant’s commitment to preparing its students for a more interconnected world.
China and its neighbors also formed the core of the conference’s morning speakers, Erik R. Peterson, a senior vice president with the Center for Strategic and International Studies in Washington, D.C., and William R. Evans, senior vice president for Bank of America.
While Evans gave an overview of the economy of China and its position relative to the United States, Peterson spoke of the “Seven Futures.” His speech was an analysis of the forces driving change over the next two decades and beyond in seven regions of the world that will have a great impact on the United States – East Asia and South Asia, as well as Latin America and the Caribbean, Europe, the Middle East, Sub-Saharan Africa and Russia. A core point of his message was that population growth, and the pressure on resources that it brings, is happening largely in the regions of the world least able to handle it, namely the poor countries of the Third World.
The picture Peterson painted of the coming years was sobering, and made clear the interdependence of the world’s economies, and why global trade is a complex dynamic.
In closing his speech, DiMicco offered another solution to help the United States meet those free-trade challenges. “We live in a world of managed trade,” he said. “We need to change our approach and stop calling it free trade.”
In addition, people need to “wake up” elected officials to level the playing field for U.S. manufacturers, he said. It should be a grassroots movement.
“Shame on our government if they don’t do it,” DiMicco said. “It’s time for China to act responsibly. … If we don’t hold them accountable, then shame on us.”
