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Weekly Trade Spotlight: USTR’s 2011 Year in Review

This week’s trade spotlight summarizes USTR’s successful efforts in 2011 to increase exports of U.S. goods and services in support of additional jobs for hard-working Americans here at home.

In 2011, the Obama Administration continued to advance an ambitious trade agenda that is helping to keep the United States on track to meet President Obama’s goal of doubling U.S. exports by the end of 2014, in support of up to two million additional American jobs.

Ambassador Ron Kirk, the United States Trade Representative (USTR), is helping President Obama pursue a balanced and thoughtful approach to trade that supports American jobs, by opening markets for U.S. exports and leveling the playing field for our producers competing overseas. At the same time, the Ambassador has continued engagement and dialogue with Congress and stakeholders to ensure our trade policy reflects U.S. values and keeps faith with American workers and families.

“In 2011, the Obama Administration achieved unprecedented results on trade,” said Ambassador Kirk. “Our painstaking work on behalf of American businesses, workers, and families facilitated congressional approval of three trade agreements along with legislation to renew two trade preference programs and strengthened Trade Adjustment Assistance – all on one day. We won the largest commercial case in the history of the World Trade Organization against EU subsidies for Airbus, and we’ve used every available enforcement tool to hold China accountable for its commitments to play by the rules, provide a level playing field, and protect intellectual property. In Honolulu last month, we secured the broad outlines of the Trans-Pacific Partnership (TPP) and we concluded a banner host year for the Asia-Pacific Economic Cooperation (APEC) forum. These and many other Administration accomplishments on trade this year are creating more job-supporting opportunities for American exporters.”

 

Growing U.S. Exports to Global Markets and Supporting American Jobs

In concert with Congress and agencies across the Obama Administration, USTR is successfully advancing President Obama’s National Export Initiative (NEI) to double U.S. exports by the end of 2014 and support two million additional U.S. jobs. The latest data (through October 2011) show U.S. exports have increased at an annualized rate of 16.1 percent compared to 2009 – a pace greater than the 15 percent annual growth required to meet the President’s goal. Highlights of our export-boosting, job-supporting accomplishments for 2011 include:

Securing Congressional Approval of the U.S.-Korea Free Trade Agreement. USTR worked with Members of Congress and stakeholders to help secure congressional approval of the United States-Korea Free Trade Agreement (KORUS FTA) with strong bipartisan support, including the largest-ever recorded vote in favor of a trade agreement in the U.S. Senate. This victory followed successful efforts to address outstanding concerns related to the KORUS FTA, including a separate December 2010 agreement that leveled the playing field for U.S. automakers and autoworkers competing for customers in both the United States and Korea. It is estimated that KORUS will increase U.S. exports by $11 billion and support at least 70,000 trade-related jobs in America once it is fully implemented.

Securing Congressional Approval of the U.S.-Colombia Trade Promotion Agreement. The Administration secured congressional approval of the United States-Colombia trade agreement by a strong margin after working closely with stakeholders and the government of Colombia to address serious concerns related to labor rights in Colombia. In April 2011 President Obama and Colombian President Santos announced the Colombian Action Plan Related to Labor Rights, which lays out a road map for the Colombian government to take swift action to better protect labor rights, prevent violence against unionists, and prosecute the perpetrators of such violence. The Action Plan reflects President Obama’s commitment to ensuring that U.S. trade agreements keep faith with workers and reflect U.S. values, including respect for labor rights. The United States will continue to work with the Colombian government to implement both the Action Plan and the U.S.-Colombia trade agreement, which is estimated to increase U.S. goods exports by over $1 billion dollars annually and support thousands of additional American jobs.

Securing Congressional Approval of the U.S.-Panama Trade Promotion Agreement. The Administration also secured strong support for congressional approval of the United States-Panama trade agreement after working with stakeholders and the government of Panama to address concerns related to tax transparency and labor rights. Panama has acted to improve its tax transparency practices, to address impediments in its domestic law to robust tax information exchange, and to enact several reforms related to labor rights. Once fully implemented, this agreement is estimated to support additional American jobs by removing barriers to U.S. exporters, investors, and service providers doing business between the United States and Panama.

Securing Legislation to Renew Trade Adjustment Assistance. USTR and the Administration worked closely with Congress to renew strengthened and streamlined Trade Adjustment Assistance (TAA) at the same time that Congress approved the pending free trade agreements. The TAA renewal was consistent with the goals of the 2009 law that improved the scope and effectiveness of the program – for instance, covering Americans employed in the services sector in addition to U.S. workers in the manufacturing sector. The legislation also renewed TAA for firms, farmers, and fishermen. President Obama insisted that TAA reforms be included as part of a balanced trade package to ensure that workers get retraining and assistance for the 21st-century jobs they want and need.

Securing Legislation Extending Trade Preferences for Developing Countries, Building Better Markets for U.S. Exports. The Administration worked with Congress to pass legislation to reauthorize the Generalized System of Preferences (GSP), which provides duty-free treatment for up to 4,800 products from 129 beneficiary developing countries. The President subsequently signed a bill to reauthorize GSP through July 2013. As part of the same package of trade legislation, the President also signed a bill to extend the Andean Trade Preference Act. The reauthorization of these key preference programs upholds our commitment to partner with the world’s developing countries to promote economic growth and lift people out of poverty, and at the same time builds better global markets for U.S. exports.

Achieving Broad Outlines of an Ambitious, Groundbreaking Trans-Pacific Partnership. In November, the United States and eight fellow participants in the Trans-Pacific Partnership (TPP) negotiations announced achievement of the broad outlines for an ambitious, 21st-century regional trade agreement. The TPP aims to enhance trade and investment among the TPP countries, promote innovation, increase economic growth and development, and support the creation and retention of jobs in America and around the Asia-Pacific region. Also in November, the Administration welcomed the interest expressed by Japan, Canada, and Mexico in joining the TPP negotiations. At that time, the Administration also conveyed that potential new entrants must be able to meet the high standards agreed by all TPP negotiating partners and prepared to address a range of U.S. priorities and issues. In the TPP negotiations, participants are addressing 21st-century trade issues, including many that have not been addressed in previous trade agreements. For example, TPP negotiating partners are seeking new disciplines on cross-cutting issues like increasing regulatory coherence, including ensuring that sanitary and phytosanitary measures are based on science; integrating small- and medium-sized exporters more fully into regional trade; and enhancing supply chain connectivity, competitiveness, and business facilitation. TPP negotiating partners are also considering new ways to address such issues as wildlife conservation, digital technology, and state-owned enterprises.

Hosting a Banner Year of Trade-Enhancing Progress in APEC. As APEC host this year, the United States successfully secured concrete and meaningful outcomes that will increase regional economic growth and create additional export-supported jobs. APEC economies agreed to reduce tariffs on environmental goods to five percent or less by 2015 and eliminate local content requirements that distort trade and investment in these products and services; to implement a set of policies that will ensure innovation policy in the region is market-driven and non-discriminatory, preventing the emergence of barriers to U.S. technology in Asia-Pacific markets; to improve the quality of the regulatory environment in the region for U.S. exporters; to streamline import procedures for energy-efficient test vehicles; to facilitate trade in remanufactured goods by ensuring that they are treated “like new” at the border; to establish commercially useful de minimis values that will exempt low-value shipments from duties or taxes; to break down barriers to small business trading in the region, including by promoting small business engagement in global production chains through regional trade agreements; to establish a permanent Experts Group charged with developing additional APEC activities to combat illegal logging and associated trade in illegally-harvested forest products; and to create a Global Food Safety Partnership at the World Bank focused on strengthening food safety collaboration globally.

Expanding Job-Supporting Export Opportunities for U.S. Suppliers of Goods and Services through Revision of the World Trade Organization Government Procurement Agreement (GPA). Meeting in Geneva on December 15, Ambassador Kirk and fellow Ministers representing Parties to the WTO Government Procurement Agreement reached a landmark agreement to revise the text of the GPA and expand the procurement that it covers. The revised GPA, which had been under consideration for more than ten years, will expand coverage of procurement to include a number of central and sub-central entities, as well as government enterprises, not formerly included in the GPA, and modernize the text to reflect current practices in procurement. Government procurement represents one of the most rapidly expanding areas of opportunity for traders of goods and services. With the revision of the GPA, suppliers in the United States will have the opportunity to support more American jobs with broader, deeper access to government procurement work in many partner economies. In addition, the revised agreement will also provide a strong foundation for China to accelerate its accession to the GPA, which has been a priority for the United States.

Eliminating Discriminatory Innovation Policies to Ensure Access to China’s Government Procurement Market. USTR and the Administration secured China’s commitment to make changes that will knock down important barriers to China’s vast, multi-billion dollar government procurement market. In January 2011, President Hu promised to de-link China’s innovation policies from the provision of government procurement preferences. During the November 2011 Joint Commission on Commerce and Trade (JCCT) plenary meeting, China committed to strike down by December 1, 2011 all provincial and local government measures that are inconsistent with President Hu’s January commitment. Full implementation of these changes will abolish provisions that discriminate against products with foreign intellectual property and will keep a major market open. Implementing these changes will also facilitate China’s accession to the WTO Government Procurement Agreement (GPA) – which would provide even more market access for U.S. suppliers of goods and services.

Winning Commitments from China to Curb the Use of Illegal Software in China. During President Hu’s state visit in January and at the 2011 Strategic & Economic Dialogue (S&ED), USTR and the Administration worked to get China’s commitment to ensure that its ministries budget for the purchase of legal software and use financial audits and strengthened physical inspections to weed out illegal software use. China also launched a pilot project with 30 state-owned enterprises on software legalization. At the November 2011 JCCT plenary meeting, China agreed to enforce its rules for all types of software, applying more resources to the effort, and agreed that its Vice Premier would lead the IP enforcement work using a stronger coordination structure. China also agreed to launch additional software legalization projects with enterprises. According to a study by the Business Software Alliance, the commercial value of pirated software in China exceeded $7.7 billion in 2010.

Signing the Anti-Counterfeiting Trade Agreement to Protect American Jobs and Innovation. On October 1, 2011, The United States and partner countries Australia, Canada, Japan, Republic of Korea, Morocco, New Zealand, and Singapore signed the Anti-Counterfeiting Trade Agreement (ACTA), in Tokyo, Japan. In addition, the European Union, Mexico, and Switzerland have announced that they are making preparations to sign the agreement as soon as possible. Consistent with the Administration’s strategy for intellectual property enforcement, ACTA will modernize the fight against global proliferation of commercial-scale counterfeiting and piracy for the 21st century, which will help sustain American jobs in innovative and creative industries.

Helping to Bring Russia into the World Trade Organization’s (WTO) Rules-Based System. USTR, collaborating with Russia and with other WTO Members, contributed to the completion of Russia’s negotiations for Membership in the WTO after nearly two decades. USTR worked with the Russian government to secure improvements as well as specific and targeted commitments that will protect U.S. intellectual property and secure access to Russia’s large and growing market for U.S. exports of agricultural and manufactured goods. Russia is the largest economy remaining outside the WTO’s framework of rules; its integration into the multilateral trading system will produce important benefits for U.S. exporters of goods, services, and agricultural products, and to the U.S. jobs that lie behind those exports. To ensure that American firms and American exporters will enjoy the same benefits of Russia’s WTO membership as their international competitors, the Administration will work with Congress in 2012 to secure legislation ending application of the Jackson-Vanik amendment and granting permanent normal trade relations status to Russia as soon as possible.

Developing an Initiative with the Middle East and North Africa to Support Reform and Trade and Investment Integration. In response to this year’s historic transitions in the Middle East and Northern Africa (MENA), USTR coordinated with other federal agencies, outside experts, and stakeholders in both the United States and MENA partner countries to develop a trade and investment initiative to spur job growth and enhance regional trade. USTR also re-launched its Trade and Investment Framework Agreement (TIFA) with Tunisia, setting up specific working groups to develop the means of increasing trade and investment, and set up similar working groups with Egypt. USTR is also working in unprecedented collaboration with EU and MENA trading partners to promote common interests in the stability and prosperity of the region.

Launching a High-Level Working Group with the EU to Increase Exports and Jobs. Following the U.S.-EU Summit meeting on November 28, President Obama and EU leaders launched a High-Level Working Group on Jobs and Growth that will identify and assess options for strengthening the U.S.-EU economic relationship. The Transatlantic Economic Council has been successful in increasing the already significant level of trade and investment integration between the United States and the EU. This High-Level Working Group responds to long-standing calls from the public to elevate the U.S.-EU relationship to the next level, and will examine all options to increase this level of integration even further, in order to increase exports and support additional jobs. The group will be co-chaired by Ambassador Kirk, and will report twice to U.S. and EU leaders on its conclusions and recommendations in the middle and end of 2012.

Securing Ratification of the Rwanda Bilateral Investment Treaty (BIT). USTR worked with Congress to secure ratification of the United States-Rwanda Bilateral Investment Treaty (BIT) by the U.S. Senate in September. This modern BIT – the first with an African nation in more than a decade – will provide confidence to U.S. businesses that are investing in or plan to invest in Rwanda.

Launching an East African Community Regional Trade and Investment Initiative. Exploring a new approach to building trade and investment relationships in sub-Saharan Africa, USTR launched a regional trade and investment initiative with five East African Community (EAC) countries – Burundi, Kenya, Rwanda, Tanzania, and Uganda. This regional initiative will consider options for further trade and investment-enhancing agreements that could possibly serve as building blocks for a more comprehensive U.S.-EAC trade agreement in the future.

Advancing Shared Responsibility for the WTO’s Doha Round. During 2011, USTR pushed successfully for a sober, honest assessment of the difficulties confronting the Doha Development Agenda (DDA) negotiations at the WTO. Recognizing that the problems in the DDA reflect deep substantive differences among WTO members, USTR’s negotiators continued to insist that for Doha to succeed, all major members – including successful developing countries – must make contributions commensurate with their roles in global trade. Through its approach to the 8th Ministerial Conference of the WTO, USTR set the stage for consideration of innovative approaches to trade-liberalizing work in the WTO, including with respect to elements of the DDA that continue to hold promise.

Enforcing Trade Agreements to Hold Partners Accountable and Preserve American Jobs

USTR actively asserted Americans’ trade rights, taking appropriate enforcement actions to ensure that our trading partners uphold all of their trade obligations. USTR also vigilantly defended intellectual property rights and the American jobs that depend on them, working with trading partners to strengthen implementation and enforcement of policies that foster job-supporting innovation here in the United States and around the world.

Winning Again at the WTO Against EU Subsidies to Airbus. On appeal of the largest case ever heard by a WTO panel, the WTO Appellate Body upheld that almost $18 billion in subsidies conferred on Airbus by the EU and member countries were illegal, hurting the U.S. aerospace industry and its workers through lost sales in major markets. The Appellate Body decision affirming the United States’ victory should lead to a more level playing field for Boeing and its many small business suppliers across America. Well-paying jobs for U.S. workers from Washington State to Kansas and South Carolina are affected by whether the EU complies with this definitive ruling. The United States remains prepared to engage in any meaningful efforts, through formal consultations and otherwise, that will lead to the goal of ending subsidized financing at the earliest possible date.

Successfully Defending U.S. Aerospace Manufacturers Against EU Claims. In a separate but related case, the EU asserted that the United States provided almost $20 billion in subsidies to Boeing, but the Panel rejected most of the EU claims. The EU has appealed several issues it had lost and the United States has appealed the Panel’s findings with regard to the remaining $2.7 billion, which consists primarily of aeronautics research conducted by NASA.

Winning a WTO Panel Decision Indicating China Must Ensure Access to Raw Materials. In July, a WTO panel agreed with the United States that Chinese export restraints – including export quotas, duties, and minimum export prices – on a number of industrial raw materials violate China’s WTO obligations. Such export restraints can skew the playing field against the United States in the production and export of numerous processed steel, aluminum and chemical products, and a wide range of further processed products. The export restraints can artificially increase world prices for these raw material inputs while artificially lowering input prices for Chinese producers. This enables China’s domestic downstream producers to produce lower-priced products from the raw materials, creating significant advantages for China’s producers when competing against U.S. producers both in China’s market and other countries’ markets. The situation of coke, an important steel input, serves as an example of the market distortions caused by such restraints. In 2008, China limited annual exports of coke to 12 million metric tons, only 3.6 percent of China’s production, and levied additional duties on coke exported. As a result, while coke cost $472 per metric ton in China, world price was $740 per metric ton, providing a dramatic competitive advantage to Chinese companies. China has appealed the panel decision and the United States is vigorously defending its important victory at the panel.

Securing Agreement to Remove Local Content Requirements for Wind Power Equipment in China. Following consultations in February pursuant to a previous WTO dispute settlement request by the United States, China terminated a wind power equipment subsidy program, known as the Special Fund. This resolved a key issue raised in the Section 301 petition submitted to USTR last year.

Cracking Down on Markets Notorious for Job-Stealing Counterfeit Goods. In February, USTR published the first separate Out-of-Cycle Review of Notorious Markets, which identified 34 Internet and physical markets that exemplify key challenges in the global struggle against job-stealing piracy and counterfeiting. Following publication of the Notorious Markets list, several identified markets or local officials took actions intended to curtail distribution of pirated and/or counterfeit goods. Such positive response led to the removal of some markets from the December 2011 Notorious Markets List. For example, the Chinese website Baidu reached a precedent-setting licensing agreement with U.S. and international rights holders in the recording industry. Hong Kong customs officials took action to remove infringing goods from the Ladies Market, which is a popular open market in Hong Kong. And the Savelovskiy Market in Russia implemented an action plan to stop the distribution of infringing goods. USTR also issued its comprehensive “Special 301” report on intellectual property protection and enforcement by U.S. trading partners on May 1, 2011. This year, for the first time, the Report included an invitation to all trading partners listed in the report to develop action plans to resolve intellectual property rights issues that are of concern to the United States. In the past, successful completion of such action plans has led to changes in trading partners listing under Special 301. USTR has begun to work with several trading partners on developing and implementing such action plans.

Securing Passage of Historic Forest Sector Reforms in Peru. USTR worked closely with the Government of Peru to facilitate passage of comprehensive historic forest sector reform legislation in July. The Government of Peru is in the process of developing detailed regulations and building up key oversight institutions. Additionally, USTR convened the Interagency Committee on Timber Imports from Peru to respond to any potential shipments from Peru of illegally-harvested forest products.

Securing Compensation and Continuing to Assert U.S. Rights Under the Canada Softwood Lumber Agreement (SLA). The United States prevailed in a case before the London Court of International Arbitration (LCIA), which found that certain provincial assistance programs put into place by Quebec and Ontario to aid the Canadian softwood lumber industry breached the 2006 SLA. The LCIA ordered compensatory export measures to remedy the breach. The United States also moved forward in a separate case in January 2011, when it requested an arbitration panel with Canada to challenge apparent subsidies given to lumber producers in British Columbia. Allowing Canadian softwood lumber producers to purchase increasing amounts of high-quality timber harvested from public lands at salvage rates would circumvent Canada’s obligations under the SLA. USTR with the Department of Justice continues to prosecute its claims vigorously in this dispute to ensure a level playing field for U.S. softwood lumber products and the communities whose jobs depend on them. Finally, to foster fair trade in lumber well into the future, the United States and Canada are negotiating a two-year extension of the SLA.

Winning at the WTO in Support of U.S. Distilled Spirits Exporters Selling in the Philippines. The United States obtained a victory from a WTO panel in its challenge to discriminatory Philippine excise taxes on imported distilled spirits, which was subsequently confirmed by the Appellate Body in December. The U.S. industry had long raised concerns regarding the market access barriers created by this discriminatory tax regime, which taxes imported distilled spirits, such as whiskey and gin, at significantly higher rates than domestic distilled spirits. USTR will seek prompt implementation of this decision so that American producers and workers can benefit from the elimination of the discriminatory tax treatment of imported distilled spirits in the Philippines market.

Challenging Chinese Duties on U.S. Chicken Broiler Products. In December, the United States requested the establishment of a WTO dispute settlement panel regarding China’s apparent failure to abide by its obligations in imposing antidumping and countervailing duties on chicken broiler products from the United States. Prior to the imposition of duties by China, the United States annually exported nearly a billion dollars’ worth of U.S. chicken broiler products exports to China. The practical effect of the duties has been to severely curtail U.S. exports. This case makes clear that the United States will not permit China to threaten American agriculture jobs by misusing antidumping and countervailing duties to protect its market.

Advancing the U.S. Challenge of Chinese Duties on Grain Oriented Electrical Steel (GOES). Anti-dumping and countervailing duties imposed by China on hundreds of millions of dollars’ worth of American steel exports to China have raised prices and reduced exports to that large and growing market. As previously requested consultations failed to resolve U.S. concerns, the United States elected to move forward and request the establishment of a dispute settlement panel to address China’s apparent failure to abide by its substantive and procedural obligations in imposing the duties. This case remains an enforcement priority, as it makes clear that the United States will act to ensure that China does not misuse antidumping and countervailing duties to unfairly affect sales by American businesses and American steelworkers’ jobs.

Advancing the U.S. Challenge of Chinese Measures Affecting Electronic Payment Services (EPS). After previously requested consultations failed to resolve U.S. concerns, the United States decided to move forward by requesting the establishment of a panel at the WTO over China’s restrictions on foreign suppliers of electronic payment services (EPS) for card-based transactions. EPS are essential for the many millions of payment card transactions that occur every day in China. But China continues to block participation by foreign suppliers of EPS for payment card transactions – including American businesses. This case seeks to secure a level playing field for these companies, which are among the most competitive EPS suppliers in the world.

Exercising Our Rights to Notify the WTO of Trade Subsidy Programs in India and China. In October, the United States utilized a rarely-used provision of the WTO Subsidies Agreement for the first time to “counter-notify” hundreds of subsidies that China and India had failed to report to the WTO for many years. Specifically, USTR submitted to the WTO specific information it discovered regarding more than 200 subsidy programs in China and 50 subsidy programs in India. These efforts are holding China and India accountable for their WTO commitments and increasing the transparency of the Chinese and Indian subsidy regimes. They also enable U.S. industries and workers – and all WTO members – to assess more readily the impact of Chinese and Indian subsidies and to make better informed decisions about potential actions to address subsidized imports.

Taking the Next Step to Enforce Labor Rights Under CAFTA. Following consultations requested last year in the first labor case the United States has ever brought under a free trade agreement, the Administration broke new ground when USTR requested the establishment of an arbitral panel pursuant to the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) for Guatemala’s apparent failure to effectively enforce its labor laws. This enforcement action reflects the Administration’s steadfast determination to protect the rights of workers in America and abroad, and to provide a level playing field for workers here at home.

Avoiding Potential Retaliation Related to Zeroing. Although two WTO panels were scheduled to release reports determining amounts of retaliation that could be imposed on U.S. exports, the United States successfully suspended such findings and avoided retaliation by continuing to seek a final resolution of the so-called zeroing issue. The potential retaliation requested was several hundred million dollars.

Successfully Defending Bold Action Taken by President Obama Under the China Specific Safeguard Mechanism. The United States successfully defended its right under U.S. and international law to impose additional duties on disruptive imports of certain passenger and light truck tires from China. In 2011, both a WTO panel and the WTO Appellate Body rejected all of China’s claims against additional duties imposed by President Obama in September 2009 pursuant to section 421 of the Trade Act of 1974, which implemented the transitional safeguard in China’s Protocol of Accession to the WTO. As a result of this win, the additional duties on imports of tires from China, which have helped to support U.S. tire industry jobs, will continue to be assessed at a rate of 25 percent until September 25, 2012.

Reinstating African Growth and Opportunity Act (AGOA) Eligibility for Cote d’Ivoire, Guinea, and Niger. In October, Cote d’Ivoire, Guinea, and Niger were re-instated as AGOA beneficiaries based on their progress in strengthening democratic institutions and market-oriented economies. This decision resulted from an “out-of-cycle” AGOA eligibility review requested by President Obama.

Working with Partners Worldwide to Seize Job-Supporting Trade and Investment Opportunities

USTR opened up additional opportunities for American farmers, ranchers, companies, and workers to sell more U.S. goods and services overseas by working closely with trading partners to reduce barriers to trade and investment.

Opening Global Markets for U.S. Agricultural Exports. In coordination with USDA and interagency partners as well as key stakeholders, USTR successfully worked with trading partners around the world to restore and expand access to overseas markets for U.S. farmers, ranchers, and agricultural producers. Once implemented, the Korea, Colombia, and Panama agreements are estimated to boost combined U.S. agricultural exports to these three markets by over $2.3 billion annually. USTR made major gains in securing access to Russia’s large and growing market by negotiating tariff-rate quotas (TRQ) for beef, pork, and poultry, and also secured specific commitments from Russia to make improvements in its sanitary and phytosanitary (SPS) regime that will ensure trade flows more smoothly. Additional market-opening accomplishments included improving the trade environment for U.S. wines, supporting specialty crop exports to Japan, and generating further opportunities for U.S. beef exports to Chile.

Securing a Level Playing Field for U.S. Auto Manufacturers Competing in China’s New Energy Vehicle (NEV) Market. During a 2011 JCCT meeting, USTR and the Department of Commerce received confirmation from China that it will not require foreign automakers to transfer technology to Chinese enterprises or establish Chinese brands in order to invest and sell in China. China also confirmed that foreign-invested enterprises are eligible on an equal basis for subsidies and other incentive programs for electric vehicles, and that these incentive programs will meet WTO rules. China plans to manufacture one million NEVs annually by 2015 and five million annually by 2020.

Securing Greater Transparency for U.S. Companies in China. During the 2011 S&ED, USTR and the Administration worked with China to secure their agreement to issue a domestic measure requiring all proposed trade- and economic-related administrative regulations and rules to be published for public comment for at least 30 days from the date of publication, subject to limited exceptions. Increased regulatory transparency is a top concern for U.S. stakeholders dealing with China.

Signing a Mutual Recognition Agreement to Speed U.S. Telecommunications Exports into Mexico. In May, USTR signed a mutual recognition agreement (MRA) with Mexico that will ease burdens on U.S. companies, especially smaller manufacturers, seeking to export telecommunications products to Mexico. This agreement will permit recognized U.S. laboratories to test telecommunications products for conformity with Mexican technical requirements, and vice versa, while maintaining high levels of safety protection. This saves American manufacturers the time and expense of additional product testing in Mexico and lowers prices for consumers. In 2010, two-way trade in products covered by the MRA with Mexico was approximately $25 billion.

Securing Market Access for U.S. Mobile Phone Service and Related Providers Now Competing in Costa Rica. In January 2011, Costa Rica opened its market for mobile phone services, allowing competition with the former state-owned monopoly, in a much-anticipated breakthrough achievement required under the CAFTA-DR Agreement. This market opening also generates new opportunities for U.S. exports and employment by U.S. cell tower companies operating in Costa Rica.

Reducing Tariffs and Eliminating Export Restrictions in India. Working with other government agencies, USTR successfully urged the government of India to lower or eliminate tariffs on several products including pistachios, cranberries, sun-dried dark raisins, aviation parts, and certain medical devices. USTR also successfully worked with India to eliminate export restrictions on cotton that had been in place since 2010.

Concluding an Agreement to Facilitate Trade with the Philippines. In November, USTR concluded a trade facilitation and customs administration agreement with the Philippines. The agreement includes specific commitments on trade facilitation, including on simplified customs procedures and transparency of customs administration. This will promote increased bilateral trade to the benefit of both the United States and the Philippines. The Philippine government has expressed interest in possibly joining the TPP in the future and this agreement is a building block toward that goal.

Restoring U.S. Movie Exports to Indonesia. In early 2011, USTR worked with Indonesian officials and business leaders to resolve a significant disruption in U.S. movie exports that had resulted from several new import regulations in Indonesia. Thanks to successful negotiations, a mutually beneficial outcome was reached allowing the U.S. movie industry was able to resume exports to one of the largest, fastest-growing markets in Southeast Asia.

Creating Action Plans to Accelerate and Increase Trade with Canada. In February, U.S. President Barack Obama and Canadian Prime Minister Stephen Harper announced two initiatives to ensure that the vital economic partnership between the United States and Canada continues to be the cornerstone of our economic competitiveness and security. Since the leaders’ announcement, USTR and federal agencies worked with their Canadian counterparts to formulate the Beyond the Border (BTB) Action Plan and the Regulatory Cooperation Council (RCC) Action Plan, both of which were released in December. BTB and RCC are complementary and promote transparency, efficiency, and the free and secure flow of people and trade across U.S.-Canadian borders while maintaining and expanding already robust relationships that keep people, goods, and services safe and secure. These measures further enhance the largest bilateral trade and investment relationship in the world. The United States and Canada are each other’s largest export market, with roughly 20 percent of all U.S. goods exports destined to Canada. U.S. goods and services exports to Canada support an estimated 1.7 million jobs, and in 2010 U.S. exports to Canada grew faster than U.S. exports to the rest of the world.

Launching an Agreement on Trade and Economic Cooperation with Brazil. In March, Ambassador Kirk and Minister of External Relations Antonio de Aguiar Patriota signed the Agreement on Trade and Economic Cooperation (ATEC), which creates a new bilateral trade dialogue with Brazil. The ATEC provides a framework to deepen cooperation on a number of issues of mutual concern, including innovation, trade facilitation and technical barriers to trade. It will serve as an effective mechanism for managing the bilateral trade relationship and offers a solid foundation for cooperation in other trade fora.

Announcing New Initiatives to Support the Growth of Least Developed Countries (LDCs) through Trade and Investment. In advance of the 8th Ministerial Conference of the WTO in December, the Administration announced new initiatives to boost trade and investment for LDC members of the WTO. These initiatives target ways that the United States can continue to promote development across the world through trade. New measures the Administration will be pursuing include expansion of duty-free-quota-free treatment for Upland cotton grown in LDCs; introduction of a new technical assistance program for West African cotton-producing countries, including the “Cotton Four” countries of Benin, Burkina Faso, Chad, and Mali, which will build on the successful West Africa Cotton Improvement Program (WACIP) that expires in April 2012; and additional help for countries seeking to make maximum use of existing U.S. trade preference programs such as the Generalized System of Preferences (GSP) and the African Growth and Opportunity Act (AGOA).

Launching the African Trade and Competitiveness Enhancement (ACTE) Initiative, Working Energetically with Congress to Extend, Enhance, and Renew AGOA. At the June 2011 AGOA Forum in Zambia, Ambassador Kirk announced the African Trade and Competitiveness Enhancement (ACTE) initiative, a new $120 million commitment over four years that will help Africans produce and export their products both regionally and globally, including to the United States under AGOA . This new initiative reflects a mutual recognition that more can be done to help African producers take full advantage of the opportunities provided by U.S. trade preference programs like AGOA. The Administration has also announced it will be working energetically with Congress to enact legislation extending AGOA’s “third country fabric” provision to 2015 and adding South Sudan as a potentially AGOA-eligible country, while moving toward a seamless renewal of AGOA beyond 2015.

Improving Textile and Apparel Trade and Exports throughout Central America and the Dominican Republic. USTR concluded an agreement on certain technical modifications to the textile and apparel rules of origin in the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). These modifications will promote greater use of regional inputs in textile and apparel trade between the United States and Central America and the Dominican Republic that will help advance American and regional jobs and export opportunities. USTR and the other CAFTA-DR Governments also worked with the Inter-American Development Bank and industry leaders in the United States and Central America and the Dominican Republic to develop for the first time a CAFTA-DR sourcing database. The database will greatly facilitate cross-border industry linkages that enable a vibrant regional supply chain for textiles and apparel.

Helping Afghanistan and Iraq Transition toward Increased Trade and Investment. USTR engaged with Afghanistan, Iraq and their neighbors to strengthen local economies and export markets through trade expansion initiatives. For example, USTR has worked bilaterally to help Afghanistan develop additional trade capacity for women-owned businesses in handicrafts and apparel and advocated for U.S. investors in the agri-business area. USTR also engaged Central and South Asian nations to deepen Afghanistan’s integration in regional trade. These activities complement USTR’s ongoing assistance and support to Afghanistan’s WTO accession efforts.

Signing an Agreement in Principle to Support the WTO Accession of Lao People’s Democratic Republic (PDR). On December 16, U.S. Ambassador to the WTO, Michael Punke, and Lao PDR Minister of Industry and Commerce, Dr. Nam Viyaketh, signed an agreement in principle on bilateral market access, associated with Lao PDR’s accession to the WTO. The agreement reflects an understanding of the industrial goods, agricultural goods, and services market access commitments that are to be reflected in Lao PDR’s market access schedules when it becomes a Member of the WTO. The United States provides extensive technical assistance through USAID to support Lao PDR’s WTO accession and economic reforms, and this agreement is an important step forward in Lao PDR’s WTO accession process.

Energizing More Responsive and Responsible Trade Policy with Comprehensive Outreach and Communication

In 2011, USTR’s ongoing and serious dialogue with the American people about trade and jobs produced real results across a wide range of issues and initiatives.

Leveraging Stakeholder Input to Build Unprecedented Support for Job-Supporting Trade Measures. Trade agreements with Korea, Colombia, and Panama were advanced with an unprecedented level of input from stakeholders, including industry, labor, and Congress. As a result of these consultations and outreach efforts across the United States, all three of these export-boosting, job-supporting trade agreements were approved by Congress and implementing legislation was signed by President Obama. In addition, the Trade Adjustment Assistance (TAA) program was strengthened and streamlined to ensure that workers who are adversely affected by trade can receive the training and benefits they need to find good jobs in growing industries.

Engaging with Stakeholders and Enhancing Transparency in TPP Negotiations. USTR expanded the involvement of stakeholders and Congress in every step of Trans-Pacific Partnership (TPP) activities in 2011. At the Chicago round of talks in September, more than 250 stakeholders were invited to receive briefings and make presentations. More than 50 organizations accepted the offer and made presentations to TPP negotiators from all nine participating countries as well as several hundred registered stakeholders. Diverse groups also made presentations and received briefings from TPP Chief Negotiators, at the four international rounds of TPP negotiations, which took place in Chile, Singapore, Vietnam and Peru. USTR consulted closely with Congress and a wide range of stakeholders in developing U.S. negotiating positions, including on issues related to labor rights, environmental protections, state-owned enterprises, agriculture, and market-driven innovation policies, among others. USTR also undertook creative efforts to develop strategic initiatives addressing critical 21st-century topics such as trade enhancing access to medicines and growing trade in environmental goods and services as well as the conservation of wildlife and wild plants. This dialogue will continue as USTR seeks broad input regarding rapidly advancing negotiations, and the important challenges and opportunities involved with potential new entrants joining TPP.

Creating Tools to Help U.S. Small Businesses Export More Made-in-America Products. In March, USTR and other agencies launched the FTA Tariff Tool, a new, free online tool that helps more small- and medium-sized businesses take better advantage of tariff reduction and elimination under U.S. trade agreements. Through the Transatlantic Economic Council, the U.S. and European Union launched the first-ever Best Practices Exchanges for small businesses in Brussels, Belgium and Washington, D.C.

Deploying New and Dynamic Online Features to Enhance Trade Communications. During two APEC Ministerials – held in Montana in May and Honolulu in November – and the Chicago-hosted TPP round, the USTR blog was a one-stop shop for constituents to receive real-time updates, on-the-ground reports, and stories spotlighting export opportunities for small businesses. Digital newsletters also enhanced USTR’s direct public engagement. The weekly USTR newsletter was revamped to allow more access to blog postings, press releases and information on USTR participation in meetings and events, and USTR’s first-ever enforcement newsletter was created to spotlight the Obama Administration’s vigilant trade enforcement efforts. The USTR website, http://www.ustr.gov/, is continually being developed and maintained as a dynamic online destination for the latest trade news and features.

Building Up Trade Advisory Committees with Broad Representation. This year, the seven agricultural advisory committees that advise USTR and USDA on trade matters were reconstituted to include 72 first-time members, representing a diverse range of stakeholder interests including farmers, ranchers, agribusiness, state government, and public health groups. These new members, together with reappointed members, will provide critical input in the years ahead to help identify and capitalize on new and emerging trade opportunities for America’s farmers, ranchers, businesses, workers, and families. Also this year, the Labor Advisory Committee on Trade Policy and Negotiations was expanded to include representatives from a broader range of labor organizations, strengthening the voice of American workers in shaping U.S. trade policy. These new members played an important role in informing USTR’s efforts to develop trade initiatives that provide benefits to more workers across the United States. This increased outreach was complemented by continuous transparency as readouts of the committee meetings were publicly posted on http://www.ustr.gov/and summarized in the weekly e-newsletter for stakeholders.

“This year, President Obama’s principled and pragmatic leadership paved the way forward for Congress to approve three export-enhancing, job-supporting trade agreements with historic levels of support. Now the path is clear for continued cooperation on critical initiatives to grow U.S. trade and support American jobs,” said Ambassador Kirk. “At USTR, we will continue strong trade enforcement efforts to ensure our trading partners play by the rules. And we will seize every opportunity to increase export-supported jobs for hard-working Americans and their families here at home.”