WWEMA Window: A Retrospective View From Washington
By Dawn Kristof Champney, President, Water and Wastewater Equipment Manufacturers Association
With 2012 upon us, it is a good time to reflect on what has been accomplished over the course of the past year. As the principal advocate for water and wastewater solution providers to legislative and regulatory bodies, WWEMA dedicates significant resources to tracking, analyzing, and reporting on the inner workings of Congress as it relates to issues that may impact future market opportunities and the ability for companies that manufacture and sell products and services to the water and wastewater industries to compete effectively in the domestic and global arena.
Last year presented several excellent opportunities to enact legislative proposals that will help expand business for our members, while at the same time prevent onerous federal requirements that stifle their competitiveness.
On the domestic front, the U.S. House of Representatives passed a U.S. Coast Guard reauthorization bill containing an important provision that would establish a national treatment standard for ballast water discharges and require vessels entering U.S. ports to install treatment technologies produced by our members to meet that standard. While the bill works its way through the Senate, the U.S. Environmental Protection Agency (EPA) has taken its own action by issuing a proposed rule mandating the same. This has been a decade-long effort to establish a uniform, national standard to prevent invasive species from entering U.S. waterways through ballast water discharges. With 68,000 vessels expected to be equipped with treatment technology at an estimated cost of $1 million each, the enormous market potential speaks for itself.
The all-important clean water and drinking water State Revolving Fund (SRF) programs were spared the fiscal rod by Congress just before adjournment when it enacted a bill to fund most federal government operations for the balance of fiscal year 2012. Suffering a slight cut (3.9%) from prior year's funding, the clean water SRF received $1.469 billion and the drinking water SRF another $919 million.
Momentum continues to build for alternative funding measures to address the nation's deteriorating infrastructure, including one that would remove water and wastewater projects from state caps on issuance of tax-exempt private activity bonds. WWEMA, along with a coalition of several key industry organizations, has been working aggressively on Capitol Hill to generate support for the "Sustainable Water Infrastructure Investment Act of 2011" (H.R. 1802 / S. 939). By year end, 56 congressmen and seven key senators have sponsored this bipartisan bill. This measure could conservatively generate an additional $5 billion being invested annually in water and wastewater infrastructure projects, and create more than 135,000 jobs, at a nominal cost to the U.S. Treasury of $35 million annually in lost tax revenue. An all-out effort will be made to secure passage of this critical legislation in 2012.
On the international front, WWEMA was enthusiastic with congressional passage of free trade agreements with Korea, Columbia and Panama — another effort years in the making. Once implemented by the respective countries, U.S. producers of water and wastewater products will have a competitive edge through the reduction of export tariffs. In Columbia alone, tariffs for environmental goods range from 9% to 20%. Tariffs on 56% of U.S. water and wastewater equipment exports will be immediately eliminated with an additional 4% over five years and the balance over 10 years. Similar reductions will occur in Korea and Panama.
Potential gains made by Congress to find new sources of funding of water and wastewater infrastructure and open up markets for U.S. water and wastewater equipment suppliers could be severely undermined by attempts to enact protectionist trade measures, such as Buy American, under the guise of job creation. While the sentiment may be valid, the reality is destructive.
U.S. manufacturers that depend on international supply chains to offer the highest-quality, cost-effective technologies are unable to compete at home, or must raise costs to find alternative suppliers. Municipalities have fewer, more costly choices, reducing the return on their limited capital investment dollars. U.S. companies further face the real risk of being locked out of foreign markets that implement their own domestic content rules in retaliation. Unfortunately, many in Congress still don't understand that international trade agreements do not cover municipal procurement, where most of our business is conducted, thus we do not enjoy the privileges afforded others engaged in federal procurement who can continue to do business with global trade partners and be assured that foreign markets will remain open.
May 2012 bring us enlightenment, encouragement, and endurance for what no doubt will be an entangled process as we move closer to the November elections!
What do you think about the views shared in this article? Were objectives met in 2011, and what should the focus be for 2012? Please share your comments below...