Smoky Mountains Sunrise

Saturday, March 21, 2020

Punish Putin, But Not at the Expense of South Carolina’s Business Community

By Tom Swatzel

South Carolina has a strong tradition of supporting our national security, and no one embodies that heritage more than Sen. Lindsey Graham. His efforts to crack down on Russia for election interference and other bad behavior are motivated by the best of intentions.
But economic security is an increasingly important part of national security, especially in this era of cross-border travel and trade. Unfortunately, a bill in Sen. Graham’s committee — the Defending American Security from Kremlin Aggression Act — would imperil our economic security, especially in South Carolina.
DASKA does the opposite of its stated purpose: it would actually target U.S. companies instead of the Kremlin. As it is written, DASKA would force many of the nearly 3,000 U.S. companies doing business in Russia to leave joint ventures with Russian firms or exit the Russian market. The Russians would then take over those projects, enriching them at our expense, or partner with other U.S. adversaries like China.
How does that help our economic and national security?
Even worse, DASKA’s effects would ripple down the global supply chain, disrupting and damaging the tens of thousands of small U.S. businesses that equip major companies with supplies and parts. Many of those companies are in South Carolina.
Take Boeing suppliers, for starters. Boeing’s decision in 2009 to choose South Carolina for its first commercial airplane assembly plant outside of Washington state was a huge development. 
The aerospace giant has since followed through by investing more than $2 billion in South Carolina, building a vast presence that includes a 787 Dreamliner assembly and delivery facility; a research and technology center; and a decorative paint facility.
But DASKA would undo much of that economic progress. With Boeing having also invested billions of dollars in Russia, the legislation would make it much harder for the company to acquire crucial titanium needed to build its planes, since Russia is the source for the vast majority of that titanium.
That would mean negative effects for Boeing and for the nearly 300 South Carolina firms that are Boeing suppliers and vendors. Among them are Safran Electrical and Power Charleston, which doubled its square footage and moved into a new facility to accommodate Boeing work, and Composite Resources, a 50-employee Rock Hill-based Boeing supplier that has hired new workers in recent years.
Why would we hurt vital South Carolina small businesses in the name of punishing Vladimir Putin?
Aerospace is not the only crucial South Carolina industry that DASKA would target. The bill would also severely damage the agribusiness sector, especially firms such as Cargill, which has a major presence in Russia.
As employers across our state know, agribusiness is “the true homegrown industry of South Carolina,” with an annual economic impact of more than $41 billion. Cargill is among the agribusiness players in South Carolina which in 2016 purchased a Columbia-based beef processing plant, then invested further in the same facility.
As if all that weren’t alarming enough, DASKA would also significantly harm U.S. energy companies that employ hundreds of thousands of Americans and help ensure our energy security. Among them are ExxonMobil and other American energy companies, which have extensive business in Russia. 
That won't help the largest energy economy in the eastern United States - located right here in the Carolinas.  With South Carolina’s economy booming and the state’s unemployment rate significantly below the national average, it makes little sense to put at risk all we have accomplished with a well-intentioned but deeply flawed sanctions bill. Congress can and should fix DASKA. We need to sanction Putin, not U.S. companies.
Tom Swatzel is a former Georgetown County councilman and county Republican Party chairman who lives in Murrells Inlet.

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