TO THE MEMBERS OF THE UNITED STATES CONGRESS:

On behalf of the U.S. Chamber of Commerce and the National Association of
Manufacturers, we are writing to express our opposition to Congressional proposals, such as the
DeLauro-Doggett and Durbin-Levin “No Federal Contracts for Corporate Deserters Act,” which
would blacklist government contractors solely on the basis of a change in the location of their
corporate domicile.

Enactment of these proposals would reduce overall competition in bidding for federal
contracts while simultaneously placing at risk the jobs of thousands of U.S. workers who provide
goods and services to the U.S. government. Debarring contractors who are in full compliance
with U.S. law (including those paying taxes on income earned in the United States like every
other domestic and foreign company that operates within U.S. borders) eviscerates the principles
of “full and open competition” and best value for the taxpayer which have been the longstanding
cornerstones of U.S. government procurement policy.

These and similar proposals are also contrary to U.S. international obligations contained
in the World Trade Organization’s Government Procurement Agreement (GPA) and in numerous
U.S. free trade agreements (FTAs) with respect to any company that is domiciled in another
GPA or applicable FTA country. The United States has led the world in seeking to expand
procurement markets overseas through reciprocal market-opening agreements such as these to
boost U.S. exports and jobs. Adoption of this legislation would not only put the United States in
violation of such obligations, it would open up U.S. exporters to new forms of discrimination and
potentially retaliatory action.

We believe these punitive proposals take the wrong approach, and we urge that Congress
take this opportunity to enact reforms to make the United States a more favorable location for
investment, innovation, and jobs. To achieve this, we need comprehensive tax reform that
lowers tax rates for all businesses and provides an internationally competitive tax system.

Sincerely,

R. Bruce Josten

Aric Newhouse