This report from the bipartisan Congressional Research Service analyzes Japan’s possible entry into the Trans-Pacific Partnership (TPP), a potential regional free trade area, and the implications. TPP participation is under debate in Japan, with opposition from agriculture and others with vested interests. The United States has said it will support Japan’s entry if Tokyo lowers restrictions on beef imports, increases access to its car market, and reduces preferential treatment for Japan Post’s express delivery and insurance businesses. Read more »

The opportunity to save on taxes continues to attract firms to re-incorporate overseas (WSJ). The IRS recently tightened rules regarding relocation, but an exception for mergers will allow Eaton, a Cleveland-based manufacturer, to move its legal home to a law office in Dublin to save $160 million annually. Eaton’s CEO has argued for corporate tax reform: “We have too high a domestic rate and we have a thoroughly uncompetitive international tax regime.  Let’s not wait for the next presidential election [to change the rules].” Read more »

Stephen Smith contrasts efficiently managed transit construction projects in Europe and Asia with costly and lengthy U.S. projects (Bloomberg). Depleted staffs have made it difficult for transit agencies to effectively manage private contractors, while bureaucratic red tape drives other potential bidders away. Poor priorities also hamper progress; New York is building a single, elegant subway station for the same price that Paris or Tokyo would pay for an entire subway line. Read more »

In May, the Commerce Department announced provisional antidumping duties of between 31 and 250 percent on solar cells imported from China, and gave many U.S. solar installation firms large retroactive taxes (WSJ).  The decision to apply tariffs retroactively on purchases in the prior 90 days caught many businesses off guard.  One CEO commented: “If I had any clue that I would be on the hook for a 200-plus percent duty on this order, I would be a crazy man to make it.” Read more »

The nonpartisan Congressional Budget Office (CBO) predicts a recession in 2013 with an economic contraction of 0.5 percent if the “fiscal cliff” is not addressed (TheHill). The CBO director implored Congress to pass legislation by September and said “the stakes of fiscal policy are very high right now.”  The Washington Post discussed the CBO report in the context of increasing signs that the Federal Reserve may initiate further monetary stimulus. Read more »

Residents of Manhattan’s Upper East Side often are often inconvenienced by the $4.45 billion project to build the Second Avenue subway line, but yesterday an intentional underground explosion brought debris and smoke to ground level (NYT).  A spokesman for the Metropolitan Transportation Authority explained: “We were doing a controlled blast, when clearly something went awry and an explosion was felt at street level.”  Stunning photos are available from NY Daily News. Read more »

The Oracle of Omaha is pulling back from a multibillion dollar bet on the solvency of more than a dozen states (WSJ). Warren Buffett decided to terminate credit default swaps (CDSs) issued by Berkshire Hathaway to insure $8.25 billion in municipal debt. The CDSs were sold in 2007 to Lehman Brothers, and have been ended five years early. While the world’s richest octogenarian remains tightlipped, speculation spreads about what this move signals regarding his faith in local governments and the broader U.S. economy. Read more »

With less than eighty days before the U.S. presidential election, columnist David Rohde argues that immigration is the most important issue Obama and Romney are not debating (TheAtlantic). While both candidates propose policies to address other economic issues, immigration seems to make an appearance only to placate each candidate’s supporters. As Mayor Bloomberg’s chief policy adviser put it: “I think the campaigns each want to play to their bases and are ignoring mounting evidence that shows immigration should be part of our economic policy.” Read more »

In the past decade, Amtrak has increased its share of travelers between New York and Washington, DC from around 30 to 75 percent (NYT). The launch of its Acela service in 2000 and increased airport security are seen as drivers for surging ridership. Amtrak’s national ridership is at a record 30 million with a third of that in the northeast, the only region in which Amtrak turns a profit. Read more »

Urban planners and federal grants are increasingly encouraging cities to embrace streetcars (WSJ). Proponents look to Portland’s experience and see an opportunity to attract young people and revive neighborhoods, while detractors see high costs and little benefit for systems that do not reach beyond the city. “I would love a rail system that actually gets people to work, not just to buy a sandwich,” offered the director of Cincinnati’s Homeless Coalition. Read more »