Weekly Trade Spotlight: USTR’s Year in Review
Late December is often a time for reflection, as Americans look back at the last twelve months and ready themselves for the New Year. This week's trade spotlight will focus on USTR's 2009 efforts to advance America's economic recovery through trade.
As 2009 draws to a close, United States Trade Representative Ron Kirk today commented on USTR's efforts to deliver the benefits of trade - better jobs, higher wages, and more affordable goods - to American families and communities this year. Since Ambassador Kirk took on leadership of the agency in March, USTR has been an active participant in the Administration-wide economic recovery effort, generating job-creating trade opportunities in keeping with the President's 2009 Trade Policy Agenda.
"We know that trade policy that expands export opportunities can create jobs in American communities and put dollars in the pockets of American families. This year, USTR's efforts have focused on doing just that," said Ambassador Kirk. "We seized new opportunities for American businesses and workers in the global marketplace, tackled long-standing trade barriers and trouble spots, advanced U.S. interests through cooperation with our partners around the world, and sought to open a new conversation on trade here at home. In 2010, we will redouble our efforts to employ trade as a powerful tool for American job creation and economic growth."
Seizing New Opportunities
In 2009, USTR aggressively pursued market-opening opportunities for American businesses and workers in every part of the world, and sought to empower more American workers and businesses to compete in the global marketplace.
Announcing Trans-Pacific Partnership Negotiations. In mid-December, President Obama announced that the United States will negotiate a trade agreement with the Trans-Pacific Partnership that will integrate the Asia-Pacific economies. USTR is now working in consultation with Congress and with stakeholders to create a 21st century trade agreement that reflects American priorities, enhances American competitiveness, and generates job-creating opportunities for American businesses and worke
Launching a New Initiative on Small- and Medium-Sized Businesses. In October, USTR launched a new trade policy initiative to enable SMEs to grow their businesses and generate jobs through international trade. An agency-wide working group is ensuring that policymaking and enforcement better serve small- and medium-sized enterprises. USTR has also requested an investigation by the International Trade Commission on the role of small- and medium-sized exporters, to inform trade policy efforts in 2010.
Expanding Market Access for U.S. Beef. This year, USTR secured expanded market access around the world for U.S. ranchers.
The European Union. In May, Ambassador Kirk announced an historic Memorandum of Understanding between the United States and the European Commission, ending a decades-long disagreement over American beef imports and enabling American ranchers to ship tens of thousands of pounds of high-quality beef to the European Union at zero duty every year. Those exports are expected to generate more than $100 million for American farmers and ranchers in the next three years.
Chile. In March, the United States and Chile reached an agreement allowing the resumption of American beef shipments to Chile. Those shipments represent a growing market opportunity for American ranchers and the U.S. beef industry; beef exports to Chile from January-September 2008, prior to the Chilean halt, totaled more than $1 million.
Taiwan. In October, the United States and Taiwan signed a bilateral U.S. beef importation protocol consistent with science and international standards. USTR is continuing to work with Taiwan to fully implement that protocol. As negotiated, the agreement provides for expanded market access for U.S. beef and beef products.
Expanding Market Access in China. Through this year's U.S. China Joint Commission on Commerce and Trade (JCCT), USTR negotiated increased market access in China for American businesses and workers in a variety of sectors:
China agreed to improve access for U.S. energy companies by removing local content requirements on wind turbines. This agreement will enable more American companies to take advantage of the fast growth of China's wind energy sector, creating high-quality green collar jobs for American workers. China's renewable energy market is expected to reach $100 billion by 2020.
China agreed to accept prior approval of a medical device issued by a foreign country regardless of its exporting origin, country of manufacture or legal manufacture to satisfy any prior approval registration requirement. According to industry, China's prior approval requirement could have impacted over $350 million in U.S. products; a separate new clinical trials agreement with China will save U.S. companies hundreds of millions of dollars.
China gave assurances that it will impose maximum administrative penalties on Internet infringers and began a four-month campaign to clamp down on Internet piracy. This agreement will help to ensure that U.S. copyright holders continue to benefit from their products as internet use expands across China.
China agreed to strengthen oversight and enforcement regarding counterfeit pharmaceuticals. Agreements like this will help American pharmaceutical companies lose less annual revenue and receive the benefits of their research and development.
China gave assurances that it was in the process of concluding its licensing procedures for certain direct selling services companies. One U.S. company has already received its license and other U.S. companies can be encouraged by the prospect of new market access opportunities.
Opening Markets through Better Monitoring and New Partnerships. In July, Ambassador Kirk announced that USTR would focus two new efforts on tracking and reporting of sanitary and phyto-sanitary (SPS) measures that serve as barriers to U.S. agricultural exports, as well as and standards regulations affecting U.S. manufactured goods. USTR is working with other agencies to produce two new 2010 reports that will help target barriers on the ground in trading partner countries, ensuring market access for American workers and businesses.
Addressing Illegal Logging and Trade through a New Asia Pacific Regional Dialogue. In September, USTR brought trade and forest ministry officials from nine countries together in Jakarta, Indonesia to launch a new Asia-Pacific Regional Dialogue to promote trade in legally-harvested forest products. This initiative will provide a platform for collaborative projects and potential negotiations to increase transparency in forest products trade and government-to-government cooperation in combating illegal logging.
Fighting Intellectual Property Infringement. Following a June announcement from Ambassador Kirk that USTR would step up the fight against global counterfeiting and piracy, USTR staff have worked hard to move forward with negotiations of an Anti-Counterfeiting Trade Agreement. Throughout the year, USTR has sought to develop collaborative solutions to intellectual property infringement with partners in the negotiations. By strengthening enforcement of intellectual property rights we can ensure that American rights holders are rewarded for their innovation and creativity, and also help to protect American consumers from potentially dangerous counterfeit products.
Tackling Existing Problems
USTR worked to make sure Americans received the benefits of existing trade agreements through strong enforcement of Americans' trade rights. This work is helping American farmers, ranchers, manufacturers, and service providers to remain competitive despite the difficulties of the economic recession.
Winning Market Access for Creative Industries. On December 21, in a victory for workers and businesses in America's creative industries and in the global fight against international piracy, the World Trade Organization Appellate Body rejected China's appeal and confirmed important panel findings that Chinese restrictions on the importation and distribution of certain copyright-intensive products, such as theatrical films, DVDs, music, books and journals, are inconsistent with China's WTO obligations. The WTO ruling is critical to guaranteeing that legitimate, high-quality American entertainment products have full access to the Chinese market. Getting these products into China's markets promptly is a vital tool in the fight against rampant intellectual property piracy in China.
Imposing Duties for Canada's Violations of the Softwood Lumber Agreement. In April, USTR imposed new customs duties on imports of softwood lumber from four Canadian provinces, following Canada's failure to comply with the Softwood Lumber Agreement - a pact designed to increase industry stability for American softwood lumber producers. The duties will remain in place until the United States has collected $54.8 million.
Standing Up for American Tire Manufacturers and Retailers. In September, the President announced three-year ad valorem tariffs on Chinese tire imports to stop a harmful surge of imports of Chinese tires. This action was taken after more than 5,000 American jobs were lost in the U.S. tire market from 2004 to 2008 and was consistent with China's WTO accession protocol, which allows WTO members to take such action when an import surge from China disrupts the market.
Leveling the Playing Field for American Exporters. In December, USTR announced an agreement between the United States and China confirming China's termination of many dozens of subsidies most of which had been supporting the export of "famous brands" of Chinese merchandise. This agreement will ensure a level playing field for American workers in every manufacturing and export sector, including household electronic appliances, textiles and apparel, light manufacturing industries, agricultural and food products, metal and chemical products, medicines, and health products.
Winning Market Access for American Auto Parts. As a consequence of WTO litigation, China in September eliminated discriminatory charges on imported auto parts, creating increased market opportunities for American manufacturers. China is a key destination for the auto parts produced by nearly 700,000 U.S. workers each year.
Winning on Intellectual Property Enforcement in China. In a dispute brought by the United States, a WTO panel ruled that certain Chinese intellectual property protection and enforcement rules were inconsistent with China's WTO obligations. In keeping with the ruling, China has committed to correct these problems by spring 2010, affording American rights holders new opportunity to protect and profit from their goods, services, and ideas.
Challenging Chinese Export Restraints. In November, the United States, joined by Mexico and the European Union, requested a World Trade Organization dispute settlement panel regarding China's export restraints on a number of raw materials critical to U.S. manufacturers and workers. The materials include key inputs for numerous products in the steel, aluminum, and chemical sectors.
Challenging Use of Mandated Censorship Software. China agreed to indefinitely suspend a regulation mandating installation of internet filtering software, known as Green Dam, on personal computers in June 2009 after Ambassador Kirk and Commerce Secretary Locke, along with a broad coalition of international industry groups, expressed serious opposition to China's plan.
Challenging EU Restrictions on U.S. Poultry Exports. In October, the United States asked the WTO to review a European Union ban on the import and marketing of poultry meats and poultry products processed with pathogen reduction treatments judged safe by U.S. and European food safety authorities. A favorable decision from the WTO dispute settlement process could open up new opportunities for American poultry producers in the 700,000-ton EU import market.
Keeping Markets Open for U.S. Pork and Pork Products In the aftermath of the H1N1 influenza outbreak, USTR fought aggressively to keep world markets open to U.S. pork and pork products. After initially instituting H1N1 related bans, more than a dozen countries have removed those bans - including China, where U.S. pork producers last year sold more than $225 million worth of pork products, and Russia, where 2008 sales totaled more than $300 million.
Solving the Long-Running Bananas Dispute at the WTO. In December, the United States and the EU initialed an agreement designed to lead to a settlement of the longstanding dispute over the EU's discriminatory bananas trading regime. In the agreement, the EU agreed not to reintroduce measures that discriminate among foreign bananas distributors and to maintain a non-discriminatory, tariff-only regime for the importation of bananas. The U.S.-EU agreement complements an agreement initialed the same day between the EU and several Latin American banana-supplying countries. Final settlement of the banana disputes will require the completion of certain ratification steps by the parties and WTO certification of the EU's new tariffs on bananas.
Advancing U.S. Interests through Cooperation
This year, USTR has collaborated multilaterally and bilaterally with trading partners on market access, environmental, and regulatory issues in order to grow economic opportunities for American workers and businesses.
Leading the Effort to Move Forward on the Doha Round of Trade Talks. Under the Obama Administration, the United States brought new ideas and new approaches to the Doha Round of world trade negotiations, which have been stalled for several years. The United States introduced sustained direct bilateral engagement among key partners as a way to achieve needed clarity, close gaps with regard to market-opening contributions by advanced developing countries, and move the Doha Round forward.
Increasing Collaboration through the JCCT and S&ED. Ambassador Kirk co-Chaired the 20th session of the U.S.-China Joint Commission on Commerce and Trade in October. During the session, American and Chinese negotiators struck nine agreements in various sectors. The United States and China announced a new multi-agency working group that will regularly discuss government procurement issues and related topics. In addition, USTR's active participation in the inaugural meeting of the U.S.-China Strategic and Economic Dialogue enabled us to emphasize the benefits of open trade and investment regimes and helped lay the groundwork for market access improvements with China over the longer term.
Making it Cheaper, Easier, and Faster to Trade in the Asia-Pacific through APEC. At the November APEC Leaders Summit in Singapore, the United States worked with other APEC members to break down barriers to trade and investment in a number of areas that are slowing economic integration in the Asia-Pacific. USTR will carry this work forward to strengthen economic integration and create an environment conducive to trade in the Asia-Pacific region when the United States hosts APEC in 2011 - a rare and important opportunity to push forward a bolder vision for this critical organization.
Supporting Services Trade in the Asia-Pacific. This year, Ambassador Kirk and fellow trade Ministers endorsed principles to govern the trade of cross-border services. These steps will make it easier than ever for American service providers to do business in some of the world's fastest-growing markets.
Promoting Environmentally Sustainable Growth in the Asia-Pacific. The United States and its APEC partners this year agreed on an ambitious plan to address barriers to trade and investment in environmental goods and services. At the same time, USTR and its APEC partners also announced the launch of EGSIE, a new website that provides information-sharing and collaboration related to cutting-edge environmental technologies and services in the Asia-Pacific. The website will also promote the global dissemination of such technologies, helping to facilitate green growth around the world.
Taking Concrete Steps to Facilitate Trade by Eliminating Obstacles to the Flow of Goods. The United States worked to reduce the time, cost, and uncertainty of moving goods and services through the region by improving logistics and transportation networks. USTR also worked to simplify rules of origin documentation and procedures to make it easier to take advantage of preferential trade deals in the region and improved the transparency and accessibility of APEC economies' customs information and regulations.
Gathering Support for an International Environmental Trade Consensus. At year's end, USTR staff at the Copenhagen Climate Conference and in the Doha Round of world trade negotiations were working towards possible early action on climate-friendly technologies that would support green collar jobs in America and around the world, and contribute to a positive agenda on trade and climate change.
Achieving Regulatory Reform in Japan. In July, the United States and Japan announced successes under the U.S.-Japan Regulatory Reform and Competition Policy Initiative. This work, led by USTR, streamlined regulatory reviews for pharmaceuticals and medical devices, strengthened copyright protections, removed other non-tariff barriers to trade, and improved transparency. Japan is America's fourth largest trading partner and goods export market.
Resolving Issues through Regular Trade Consultations with Korea. USTR worked closely with Korea through regular quarterly bilateral trade consultations to resolve issues and improve U.S. firms' market access in Korea. Successes included Korea's decision to allow U.S. labs to perform testing related to Korea's safety regulations for lithium-ion batteries.
Serving as a Strong Partner to the Developing World. This year, USTR expanded America's relationships with developing countries, seeking to create paths of opportunity for the developing world and to gain job-creating market openings for American businesses.
Afghanistan and Pakistan: As one of our top national security priorities, we are working closely with other U.S. government agencies to help the people of Afghanistan and Pakistan as they fight extremists who threaten their lives and those of their development partners. Ambassador Kirk discussed a range of trade issues with the Afghan and Pakistani Commerce and Finance Ministers at April and October TIFA meetings with both countries. USTR is working to maximize trade opportunities for Afghanistan and Pakistan under the U.S. GSP program, and we have asked the U.S. Congress to pass Reconstruction Opportunity Zone (ROZ) legislation that would provide additional duty-free benefits to both countries. We continue to help Afghanistan with its accession process to join the World Trade Organization. We also have helped to facilitate Afghanistan and Pakistan's negotiation of a modern transit trade agreement.
Angola: In May, the United States signed a Trade and Investment Framework Agreement with Angola that will serve as a foundation for enhanced trade and investment relations between the United States and Angola. In 2008, U.S. exports to Angola totaled about $400 million; U.S. imports from Angola were about $4 billion. More than 95 percent of that trade is related to the oil and gas sector, and Angola is considered a strategic energy partner for the United States.
Central Asia: In October, Ambassador Kirk and ministers from Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, with Afghanistan as an observer, agreed to new mechanisms for increasing trade and investment among U.S.-Central Asia TIFA nations. Those mechanisms include a new mid-year meeting of a regional TIFA working group that will support regional cooperation, as well as new bilateral dialogues between the U.S. and each Central Asia TIFA partner which will focus on country-specific issues. We also have made special efforts to include Afghanistan in the U.S.-Central Asia TIFA process, to help Afghanistan better link economically with its neighbors.
Egypt: In May, Ambassador Kirk signed the Plan for a Strategic Partnership with Egyptian Minister of Trade and Industry Rachid Mohamed Rachid, to strengthen economic cooperation between the United States and Egypt. In 2008, goods exports from the United States to Egypt totaled $6 billion; the Strategic Partnership will help to grow that number for American businesses and workers.
Maldives: In October, the United States signed a Trade and Investment Framework Agreement with the Maldives, to increase commercial and investment opportunities. In 2008, U.S. goods exports to the Maldives were $20 million, an increase of 5% from 2007, while U.S. goods imports from the Maldives were $4 million.
Mauritius: In August, USTR announced that the United States would begin formal negotiations toward a Bilateral Investment Treaty with Mauritius, to strengthen investor protections and encourage the continuation of market-oriented economic reforms in Mauritius. Bilateral investment treaties are one tool that the Obama Administration is using to assist reform-minded African countries.
Mongolia: In June, USTR commenced negotiations with Mongolia for a U.S.-Mongolia Transparency Agreement that will provide a clear understanding of trade policies and practices. This is the first time the United States has sought to conclude a stand-alone agreement on transparency.
Sri Lanka: USTR, in cooperation with the State and Commerce Departments, in October recruited 40 U.S. companies to participate in a conference focused on investment and business opportunities in post-conflict Sri Lanka, in particular possibilities for fostering national reconciliation through economic development and employment creation. The conference, which took place in Colombo, Sri Lanka, included U.S. participants from small- and medium-sized firms as well as representatives from Fortune 500 companies. The conference, which included visits to war-affected areas in the Eastern Province, was designed to help attract U.S. investment for the economic development of war-affected areas as Sri Lankans return to their homes in these places.
Turkey: In December, Ambassador Kirk and Commerce Secretary Gary Locke, in a joint press conference with Turkish Deputy Prime Minister Ali Babacan, launched a new Framework for Strategic Economic and Commercial Cooperation. The Framework aims to help enhance the already robust economic and trade relationship between the United States and Turkey. The Framework was developed following President Obama's commitment to Turkish President Gul to find new ways to promote bilateral trade relations. In 2008, U.S. exports to Turkey totaled nearly $10 billion while imports totaled $4.6 billion.
Greater Engagement with Trade Partners on Labor Rights. USTR negotiated a strong package of labor commitments by the Government of Panama to ensure respect for labor rights consistent with the obligations of the FTA. USTR ensured that a Better Work Program and labor ombudsman were established as required by the HOPE II Act, thereby ensuring Presidential certification of Haiti's continued eligibility for tariff preferences under that act. USTR took steps to include a commitment by China for a dialogue on labor issues among the joint outcomes of the U.S.-China Strategic and Economic Dialogue. And USTR included labor issues on the agendas for discussion at FTA Joint Committee meetings with Chile, Bahrain, and Jordan and led Interagency teams to Guatemala, Peru, Jordan, Bahrain, and Oman to monitor labor rights in and engage those FTA partners.
Protecting U.S. Pay TV Content in The Bahamas. In October, a new law went into effect in The Bahamas restoring copyright protection for U.S. pay television content. Industry estimates indicate American cable companies generate approximately $250 million in annual Caribbean revenue; this law will enable them to capitalize further on U.S. programming within that region. The new law fulfills a commitment made by The Bahamas in a November 2000 Letter of Understanding with the United States.
Opening a New Conversation on Trade at Home
This year, USTR achieved unprecedented transparency through new tools designed to make trade policy more accessible, accountable, and responsive to the needs and ideas of American businesses and workers.
Identifying and Addressing Outstanding Issues on Pending Free Trade Agreements. The Obama Administration inherited three pending free trade agreements, which await Congressional approval. USTR is consulting closely with Congress and with stakeholders to find a way forward for the Colombia, Panama, and South Korea pacts, with the goal of identifying and resolving outstanding issues and seeking solutions with input from the public and Congress. USTR is working to finalize these agreements in a way that will provide all Americans with unprecedented economic opportunity in the Colombian, Korean, and Panamanian markets, while being responsible to American workers and ensuring respect for American values.
Greater Transparency in Anti-Counterfeiting Trade Agreement (ACTA) Negotiations. USTR released a detailed summary of the state of the ACTA negotiations in April and again in November. These summaries set out the specific topics of discussion in the negotiations as the United States and its trading partners work toward a new agreement to combat counterfeiting and piracy.
Strengthening Public Engagement. Throughout the year, USTR has built and strengthened broad coalitions with labor, business, environmental, small businesses, faith based groups, local activists, consumer, state and local governments. USTR has continued to develop a robust advisory committee system and provide the public and interested stakeholders opportunities to engage with USTR.
Inviting Public Participation in the Model Bilateral Investment Treaty Review. In July, USTR and the Department of State hosted a public hearing regarding the Administration's review of the model Bilateral Investment Treaty, which was last updated in 2004. In addition to the hearing, USTR also welcomed comments from stakeholders and the public through the Federal Register process. USTR is taking these steps to ensure that a new model BIT is in keeping with the public interest as well as large-scale economic policy.
Sharing Information through New Media. In June, USTR launched a new website which enables Americans to follow trade policy news and updates, as well as to share their questions and their trade stories with USTR. USTR also launched social media outreach including Facebook and Twitter feeds, where Americans across the country and people around the globe can get the most up-to-date information about USTR's actions.
"These accomplishments represent USTR's first steps under President Obama. USTR will continue to build upon this work in the next year and throughout the Obama Administration. In 2010, we hope to bring some of our most promising initiatives to fruition, with our trading partners around the world and here at home," said Ambassador Kirk. "This Administration is committed to a robust agenda that can and will bring the benefits of trade home to every family in America."