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2013 Year In Review: A Look Back at USTR’s Work to Support Jobs and Economic Growth Here at Home

The Obama Administration has an ambitious trade agenda for 2014 – and as we pursue it, we’re building on a growing record of strong results for American manufacturers, service providers, workers, farmers, and ranchers. 

In 2013, the Office of the United States Trade Representative (USTR) made great strides in advancing President Obama’s economic agenda of creating jobs, promoting growth, and strengthening America’s middle class. Trade and investment have a critical role to play in promoting economic growth by opening markets throughout the world building ladders of opportunity and higher living standards for families, farmers, manufacturers, workers, and consumers.

This year the United States launched two groundbreaking trade negotiations, made substantial progress towards concluding a third, and secured the first major multilateral agreement in two decades.  In April, the United States and nearly four dozen like-minded partners initiated work on a Trade in Services Agreement (TISA) that will promote fair and open competition across a broad spectrum of service sectors, and are working to eliminate tariff barriers on high-technology goods through an expansion of the Information Technology Agreement (ITA).  In June, U.S. and European Union (EU) Leaders announced the launch of the Trans-Atlantic Trade and Investment Partnership (T-TIP), an effort to strengthen an economic partnership that already accounts for half of global output.  In 2013, U.S. and Asia-Pacific negotiators held four more rounds of Trans-Pacific Partnership (TPP) negotiations, making substantial progress towards completing the landmark 12-country agreement.  And in December, the United States played a leading role in securing a package of World Trade Organization (WTO) decisions to streamline global customs and other border procedures, promote food security, and use trade as a tool to alleviate poverty.

Ninety-five percent of the world’s consumers and eighty percent of the world’s purchasing power are outside our borders. That’s why USTR is seizing on every opportunity to increase our exports, grow our economy, and support job creation aimed at strengthening the American middle class,” said Ambassador Froman.  “We’re selling more Made in America products to the rest of the world than ever before.  But, there is still more we can do to help support the additional job creation our economy needs by harnessing the power of exports.”

The President has laid out one of the most ambitious trade agendas in history, and USTR is committed to getting it right.  This commitment is evidenced by the multitude of accomplishments USTR has secured during the last 12 months.

1.       Supporting More American Jobs Through U.S. Exports

Increased U.S. exports continue to support the growth of good-paying jobs here at home.  In coordination with Congress and agencies across the Administration, USTR actively pursued ambitious major initiatives and opportunities to streamline international trade and boost U.S. exports through dialogue and negotiations throughout 2013.

  • Completed WTO Agreement and Other Actions at the 9th Ministerial Conference in Bali, Indonesia.  The United States led WTO Members in completing a “Bali package” in December 2013.  In doing so, the WTO concluded its first new multilateral trade agreement since the creation of the WTO in 1995.  The Trade Facilitation Agreement will help to open new markets for U.S. exporters by reducing customs barriers they face worldwide; our small businesses will be among the biggest winners, since they encounter the greatest difficulties in navigating the current system.  Importantly, the efficiencies generated by customs reforms associated with the Trade Facilitation Agreement will reduce significantly the costs of trading for all WTO Members, including developing countries. By some estimates, the global economic value of this new WTO deal could be worth nearly $1 trillion.  
  • Significantly Advanced the Trans-Pacific Partnership Negotiations. In 2013, the United States and 11 partners (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) substantially advanced the negotiation of a comprehensive, high-standard TPP agreement that will expand U.S. access to the markets of the dynamic Asia-Pacific region, and support economic growth and jobs in the United States. The large and growing markets of the Asia-Pacific already are key destinations for U.S. manufactured goods, agricultural products, and services suppliers, and the TPP will further deepen this trade and investment while addressing new and emerging 21st century issues of concern to U.S. stakeholders – including trade in a growing digital economy.  TPP negotiators held four formal TPP negotiating rounds and numerous intersessional meetings this year, augmented by a Leaders meeting and four Ministerial Meetings.   Work to finalize the TPP will continue into 2014. 
  • Created Greater Opportunities in TPP through Japan’s Participation.  The potential economic and export opportunities of the TPP for the United States were significantly increased with Japan’s  participation in the TPP negotiations beginning in July 2013, with the twelve TPP countries now representing nearly 40 percent of global GDP and a third of global trade.  The United States was able to support Japan’s entry into the negotiations following the successful conclusion of bilateral consultations that resulted in a series of agreements with and actions by Japan.  Among other steps, this included agreement on the terms for bilateral negotiations being conducted in parallel to the TPP negotiations to address issues related to automotive trade, insurance, and other non-tariff measures (NTMs).
  • Launched Comprehensive Trade and Investment Negotiations with the European Union.  On June 17, at the conclusion of the U.S.-EU Summit meeting in the United Kingdom, President Obama and EU leaders announced that the United States and the EU would launch negotiations on a comprehensive trade and investment agreement to strengthen a partnership that already supports $1 billion in two-way trade, $4 trillion in investment, and 13 million jobs – the Transatlantic Trade and Investment Partnership (T-TIP) agreement.  This launch followed a 14-month intensive analysis of trade and investment options for the EU and the United States under the High Level Working Group for Jobs and Growth, which culminated in a February 13 report recommending a comprehensive negotiation.  After completing the first three negotiating rounds in 2013, USTR plans to conduct five rounds in 2014. Though the U.S.-EU trade relationship is already the world’s largest, the T-TIP holds the potential to further increase economic growth on both sides of the Atlantic.
  • Advanced Negotiations to Expand the Product Coverage of the ITA.  In 2013, the United States led efforts in Geneva to advance negotiations to substantially expand the scope of products covered by the Information Technology Agreement.  As a result of persistent and targeted outreach, the number of Members participating in the negotiations increased from 6 Members at the launch of negotiations in May 2012 to 28 Members by September 2013, representing a critical mass of global Information and Communication (ICT) trade (approximately 90 percent). USTR led the charge for a comprehensive expansion of product coverage, and built a coalition of WTO Members to support a suspension of the ITA negotiations in response to China’s efforts to significantly lower the ambition of the deal. The Information Technology and Innovation Foundation estimates that the liberalization of duties on additional technology products could increase direct U.S. exports by $2.8 billion, and increase annual global GDP by $190 billion.

  • Launched the Trade in Services Agreement (TiSA).  A free-trade agreement focused exclusively on services, TiSA will encompass state-of-the-art trade rules aimed at promoting fair and open competition across a broad spectrum of service sectors.  Presently there are nearly 4 dozen participants in the TiSA negotiations, representing almost two-thirds of world trade in services and a combined services market exceeding $30 trillion – or approximately half of the global economy.  With every $1 billion in services exports supporting an estimated 4,000 U.S. jobs, promoting the expansion of services trade globally will pay dividends for the United States.
  • Saw Key Export Increases Under the United States-Korea Free Trade Agreement.  In 2013, twelve committees and working groups established under the agreement met to monitor the implementation of FTA commitments.  Despite the weak Korean economy that depressed its overall imports of goods from the world, a number of U.S. products that won substantial market access improvements under the agreement posted solid export gains – including manufactured goods, aircraft, electrical equipment, pharmaceuticals, services, and numerous agricultural products from dairy to fruits.
  • Expanded Trade with Colombia The United States - Colombia Trade Promotion Agreement celebrated the first anniversary of its entry into force in May 2013.  U.S. goods exports were up 28.6 percent for the first 10 months of 2013 as compared to the same period in 2011, i.e. pre-FTA.    Transportation equipment exports increased substantially, along with exports of petroleum and coal products, processed foods, and electronics.  USTR also continued its work with the U.S. Department of Labor and the Colombian government to oversee continuing advances in implementation of the Colombia Action Plan Related to Labor Rights.
  • Strengthened our Economic Relationship with Panama.    In November, Vice President Biden traveled to Panama to highlight, among other things, the U.S.-Panamanian economic relationship, including the first anniversary of the entry-into-force of the United States - Panama Trade Promotion Agreement on October 31, 2013.  U.S. goods exports to Panama for the first year following the Agreement’s entry into force (November 2012-October 2013) were 14.6 percent higher than the same period in 2011-12. 
  • Making Progress with China on Key Trade Issues. USTR used the U.S.-China Joint Commission on Commerce and Trade, the U.S.-China Strategic and Economic Dialogue and other bilateral engagement to make meaningful progress on key trade and investment issues, though there is more work to do.  This year, the United States secured China’s commitments to take significant steps on intellectual property and innovation, as China recognized the need to strengthen procedures and remedies against the misappropriation of trade secrets, to enforce requirements on state-owned enterprises to purchase legitimate software, and to take effective legislative and other measures to fight counterfeiting and piracy, particularly on the Internet.  China also confirmed that it would provide patent protection for pharmaceutical inventions in line with international norms.  In addition, China agreed to remove certain barriers associated with 4G telecommunications devices, Chinese government procurement of vehicles and testing and certification organizations, among other areas.  China agreed to adopt the U.S. approach to national treatment in the ongoing U.S.-China bilateral investment treaty (BIT) negotiations, for the first time committing to cover market access issues and explicitly negotiate any exceptions in a BIT.  Finally, China has committed to submit a significantly improved revised offer by the end of this year to join the WTO Government Procurement Agreement (GPA) and to submit an even more ambitious offer in 2014 that is, on the whole, commensurate with other GPA members.
2.       Enforcing U.S. Trade Rights to Support American Jobs, Exports, and Innovation

 Using every tool available, USTR vigorously enforced U.S. rights under our trade agreements, ensuring that more Americans realized the benefits promised by those pacts.  The Administration’s robust enforcement efforts are securing a level playing field for American workers, farmers, ranchers, manufacturers, and service providers, increasing our export opportunities, and helping U.S. producers stay globally competitive in a variety of sectors and industries. 

The President’s comprehensive trade enforcement strategy also promotes and protects innovation critical to U.S. exports and well-paying, 21st century jobs, and upholds key commitments to protect labor rights and the environment.

  • Prevailed Against Chinese Duties on U.S. Exports of Chicken Broiler Products.  In September 2013, the WTO adopted a panel report finding that the United States had demonstrated that China’s antidumping and countervailing duties on chicken broiler products breached WTO rules.  This dispute is a critical win for our poultry industry as the WTO panel rejected China’s approach of refusing to use the companies’ own accounting books and records to establish costs, artificially inflating the dumping.  This dispute is a clear example of USTR’s strategy to fight back against China’s misuse of its trade remedies laws and to seek to ensure that China does not unfairly block U.S. exports.  China will now have a period of time to comply, expiring in July 2014.
  • Challenged Indonesia’s Use of Import Licensing Restrictions.  In August 2013, the United States and New Zealand each requested consultations with Indonesia concerning its non-automatic import licensing requirements and quotas that serve as serious impediments to trade in horticultural products, animals, and animal products.  After the United States filed its original consultations request with Indonesia in January 2013, Indonesia revised its measures, but these changes did not remove the trade restrictions.  Indonesia’s complex web of import licensing requirements, along with quotas, has the effect of unfairly restricting U.S. exports.  Consultations were held in September 2013, and the United States, together with New Zealand, is actively considering next steps to ensure that U.S. exporters can compete without market access restrictions.
  • Challenged India’s Discriminatory Local Content Requirements on Solar Cells and Modules.  In February 2013, the United States requested WTO consultations with India concerning domestic content requirements in India’s national solar program.  India’s program discriminates against U.S. solar equipment by requiring solar energy producers to use Indian-manufactured solar cells and modules and by offering subsidies to those developers for using domestic equipment instead of imports.  These forced localization requirements of India’s national solar program restrict India’s market to U.S. imports.  India has not removed and has even expanded local content requirements in its solar program, and the United States is actively considering next steps.  Tackling these barriers is a top priority of the Obama Administration. 
  • Launched a Section 301 Investigation of Ukraine’s Intellectual Property Practices.  In May 2013, the USTR initiated an investigation under section 301 of the 1974 Trade Act concerning specific acts, policies, and practices of the Government of Ukraine related to the protection of intellectual property rights.   The three critical problems in Ukraine’s IPR regime that are the subject of the investigation are the Ukrainian government’s persistent use of pirated software, failure to combat piracy over the Internet, and non-transparent and unfair administration and operation of royalty collecting societies.  In September 2013, USTR held a public hearing on the issues under investigation.  The investigation is due to be concluded in February 2014.   
  • Monitored Chinese Actions on Duties on U.S. Steel Exports. In November 2012, the WTO adopted panel and Appellate Body reports vindicating U.S. claims that China failed to abide by its substantive and procedural obligations in imposing anti-dumping and countervailing duties on hundreds of millions of dollars’ worth of grain-oriented electrical steel (GOES) made in Ohio and Pennsylvania.  China announced that it had complied with the WTO recommendations in August 2013.  The United States disagreed and is actively evaluating China’s measures and next steps to ensure that U.S. GOES exports regain their access to China’s large and growing market.
  • Monitored Chinese Actions Affecting Electronic Payment Services (EPS).  In August 2012, the WTO adopted a panel report finding that the United States had demonstrated that China’s restrictions on foreign suppliers of EPS for card-based transactions were inconsistent with commitments China made when it joined the WTO.  China announced in July 2013 that it had complied with the WTO recommendations, but the United States disagreed.  USTR considers that China continues to deny market access to foreign service providers, including the American EPS providers who are world leaders in this sector.  The United States has raised its concerns at the WTO and is evaluating China’s actions and considering next steps to insist on the market access to which U.S. EPS suppliers are entitled.
  • Exercised U.S. Trade Rights to Defend and Secure a Level Playing Field for American Aerospace Manufacturers.  The United States continues to pursue compliance panel proceedings launched in April 2012 due to the EU’s failure to comply with the WTO’s 2011 findings that $18 billion in subsidies conferred on Airbus by the EU and member countries were WTO-inconsistent.  The Administration is fighting to protect and promote the jobs of U.S. aerospace engineers and electricians and related suppliers and ensure that U.S. aircraft manufacturers can compete on a more level playing field. The United States participated in a meeting with the compliance panel this year, and a decision is expected in 2014.   In a separate but related dispute, the European Union has initiated compliance panel proceedings, and USTR is vigorously defending U.S. interests.  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.
  • Challenged Argentina’s Widespread Use of Import Restrictions.  The United States continues to pursue WTO dispute settlement panel proceedings to examine Argentina’s import restrictions on all U.S. goods imported into Argentina.  These measures include the broad use of non-transparent and discretionary import licensing requirements that have the effect of unfairly restricting U.S. exports.  Argentina further disadvantages U.S. exports by requiring importers to agree to undertake burdensome trade balancing commitments, such as agreeing to export a certain value of Argentine goods, in exchange for authorization to import U.S. goods.  In coordination with our co-complainants the European Union and Japan, the United States participated in two panel meetings this year, and a decision is expected in 2014.
  • Challenged China’s Export Restraints on Rare Earth Elements, Tungsten, and Molybdenum.  In 2013, the United States continued to pursue its WTO challenge to China’s unfair export restraints on rare earth elements, tungsten, and molybdenum, key inputs in many  U.S. manufacturing sectors and American made products including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum, and chemicals.  These restraints appear to be part of a troubling industrial policy aimed at providing substantial competitive advantage for Chinese manufacturers at the expense of foreign manufacturers.  As a leading global producer of these materials, China’s export restraints provide unfair advantages to China’s downstream producers and create pressure on foreign producers to move their operations, jobs, and technologies to China.  In coordination with our co-complainants the European Union and Japan, USTR participated in two panel meetings this year, and a decision is expected early in 2014. 
  • Challenged India’s Import Ban on Agricultural Products.  In 2013, the United States continued to prosecute its WTO challenge to India’s prohibition on the importation of certain U.S. agricultural products, including poultry meat and chicken eggs.  Although India’s measure purports to be concerned with preventing avian influenza, the measure does not have a scientific basis and is not in line with international standards.  The United States has participated in two panel meetings this year, and a decision is expected in 2014. 
  • Developed and Enhanced the Interagency Trade Enforcement Center (ITEC).  In February 2012, President Obama established the Interagency Trade Enforcement Center (ITEC) to take a “whole-of-government” approach to monitoring and enforcing Americans’ trade rights around the world.   In 2013, ITEC provided research and analysis for new WTO dispute settlement consultation requests regarding Indonesia Import Restrictions and India Solar Local Content.  ITEC also provided substantive support for a variety of ongoing WTO disputes such as China Autos and Auto Parts Export Bases and Argentina Import Restrictions, and WTO compliance matters such as China Raw Materials as well as developing issues for possible future dispute settlement action and enforcement-related negotiations.
  • Integrated Russia into the Rules-Based System of the World Trade Organization (WTO).  During Russia’s first year as a WTO Member, USTR worked to ensure that Russia implemented its WTO commitments so that American firms, exporters and workers can enjoy the full benefits of Russia’s WTO membership.  In September, Russia became the 78th participant of the Information Technology Agreement Committee, ensuring significant market access for our information technology sector.  In response to objections from the United States and other WTO Members, Russia amended its “recycling fee” to address discrimination with respect to imported vehicles.   The Administration will continue to use the tools of the WTO to raise concerns about other Russian policies that appear to discriminate against U.S. exports of goods and services, in such areas as sanitary and phytosanitary measures, intellectual property rights, import licensing of products with cryptographic capabilities and trade remedies.  Reflecting these efforts, USTR issued the first annual Russia WTO Enforcement and Implementation Reports.
  • Leveraged Trade to Improve Worker Rights and Safety in Bangladesh.  After extensive review of a petition filed by the AFL-CIO, USTR recommended that the President suspend Bangladesh’s eligibility for Generalized System of Preference (GSP) trade benefits due to that country’s inadequate provision of internationally recognized worker rights.  USTR prepared an Action Plan for improving worker rights in Bangladesh and is working with the Bangladesh Government on its effective implementation, which would allow reinstatement of GSP benefits. 
  • Strengthened Labor Rights in Guatemala.  The United States and Guatemala signed a robust enforcement plan in April 2013 to resolve concerns that were raised in the dispute settlement case brought by the United States against Guatemala under the Dominican Republic-Central America-United States Free Trade Agreement.   In the Enforcement Plan, Guatemala agreed to take significant actions to strengthen labor inspections, expedite and streamline the process of sanctioning employers and ordering remediation of labor violations, increase labor law compliance by exporting companies, improve the monitoring and enforcement of labor court orders, publish labor law enforcement information, and establish mechanisms to ensure that workers are paid what they are owed when factories close.   
  • Held Bahrain to its Labor Commitments.  In May, the United States requested consultations with Bahrain under the United States – Bahrain Free Trade Agreement to discuss the apparent targeting of trade unionists and leaders for dismissal after a general strike in March 2011 and labor laws that do not provide adequate protection on these issues.  Although the Bahraini government has taken important steps to address labor concerns following the unrest in 2011, problems remain and the trade agreement provides a mechanism for collaborative discussions.  Consultations began in July, and USTR is working with Bahrain toward a positive resolution that includes steps to ensure workers can fully exercise their fundamental labor rights. 
  • Strengthened Labor Rights in Jordan.  The United States worked closely with Jordan to conclude an Implementation Plan Related to Working and Living Conditions of Workers.  The plan includes commitments by Jordan to increase access for unions in garment factories and improve standards and oversight of dormitories for foreign workers.  Since the plan was issued in January, Jordan has published new standards for dormitories and the major garment industry associations signed a landmark collective bargaining agreement with Jordan’s garment union that addresses wages, benefits and representation issues for workers in the entire garment sector.
  • Strengthened Labor Rights in Haiti. USTR obtained improved compliance by several Haitian companies with the labor-related requirements of the Haitian Hemispheric Opportunity through the Partnership Encouragement Act of 2008.
  • Implemented Forest Sector Reforms under the Peru FTA.  Following an extensive investigation the U.S. Government responded to a petition from an environmental group under the Forest Annex of the United States – Peru Trade Promotion Agreement, USTR led negotiations to conclude a five-point bilateral Action Plan with Peru in January 2013 to address key challenges identified in the investigation.  The Action Plan sets forth a targeted set of actions for Peru to undertake, including implementing anti-corruption measures, improving systems to track and verify the chain of custody of timber exports, ensuring timely criminal and administrative proceedings for forestry-related crimes and infractions, and strengthening development of accurate annual operating plans for timber producers.  The United States is supporting Peru’s actions to implement the Action Plan through a number of ongoing environmental cooperation projects as well as planned activities that will further enhance implementation, such as trainings for environmental prosecutors. 
  • Monitored and Implemented FTA Environment Chapters.  USTR developed a whole of government plan for monitoring our trading partners’ implementation of their FTA environment chapter obligations.  The plan entails fact gathering and evaluation of environmental issues in our FTA partner countries.  The new monitoring plan will strengthen USTR’s ongoing efforts to ensure that our trading partners comply with FTA obligations.
  • Extended Additional Market Access for U.S. Beef Exports to the EU. The United States agreed with the EU to revise the Memorandum of Understanding (MOU) between the United States of America and the European Commission Regarding the Importation of Beef from Animals not Treated with Certain Growth Promoting Hormones to extend Phase 2 of the MOU for an additional two years.  Under the extension, the EU will maintain until August 2, 2015, its duty-free tariff rate quota (TRQ) for high-quality beef, established pursuant to the MOU, at the Phase 2 quantity of 45,000 metric tons per year. 
  • Ensured Colombia’s Compliance with its Trade Obligations Involving Exports of U.S. Rice. USTR resolved an issue concerning the administration of the tariff-rate quota for U.S. rice pursuant to the Colombia Trade Promotion Agreement. This outcome addressed concerns of industry stakeholders in both countries.  For the period January-October 2013, U.S. rice exports to Colombia topped $48 million, compared to $7.3 million for the same period in 2012.
  • Led Interagency Annual Review to Monitor Progress on the AGOA Eligibility Criteria.  USTR reviewed whether 46 sub-Saharan African countries are making continual progress toward establishing market-based economies, elimination of barriers to U.S. trade and investment, protection of intellectual property, efforts to combat corruption, policies to reduce poverty, and protection of human rights and worker rights.
  • Saw Settlement of Investment Dispute Awards with Argentina.    In March 2012, Argentina’s eligibility for trade benefits under the Generalized System of Preferences was suspended due to its failure to pay outstanding arbitral awards to two U.S. companies on claims dating from 2001.  Argentina’s suspension from GSP was a critical factor that led to the Argentine government’s settlement of the two awards in October 2013.
  • Initiated Arbitration Proceedings on Canadian Softwood Lumber DisputeThe United States and Canada jointly initiated arbitration under the 2006 Softwood Lumber Agreement (SLA) to resolve a disagreement over the implementation of a prior SLA arbitration award.  In particular, the issue submitted to arbitration is whether Canada must continue to apply export duties to certain softwood lumber during the two‑year SLA extension period (October 13, 2013 to October 12, 2015). 
  • Reversal of Ecuador’s Registration Fee Increase.   Obtained a decision by the Ecuadorian government to reverse the imposition of prohibitive fees for the registration of plant varieties, an important issue for U.S. breeders of roses in particular.

  • Resisted Efforts of Ukraine to Rewrite its WTO Tariff Obligations.  The United States organized and led a coalition of more than 130 Members against Ukraine's highly problematic Article XXVIII request to raise its tariffs above its WTO bindings.  As a result of these efforts and the pressure brought to bear by such a large number of WTO Members, Ukraine has not followed through with its request and has not taken further steps to increase its tariffs.
  • Identified and Reduced Unnecessary Technical Barriers to Trade.  The United States actively engaged in multilateral, regional and bilateral forums to reduce and prevent unnecessary technical barriers to U.S. trade.  To advance our rights under the WTO TBT Agreement, the U.S. monitors and engages with industry on the proposed regulations of U.S. trading partners.  Further, the United States works actively to strengthen implementation of the substantive and transparency obligations of the WTO TBT.  Over the past year, USTR has successfully resolved issues related to Mexican certification of sewer pipes, pushed for delays in implementation of overly burdensome Indian regulations on ICT, and contributed to the adoption of good regulatory practices in China on medical devices. 
  • Removed Telecom, Information and E-Commerce Barriers.  Completed comprehensive annual Section 1377 review of telecom barriers and pursued the removal of major barriers.  USTR efforts included significant engagement with Pakistan to overturn collusive behavior among operators in its market for the termination of international voice calls and pressing China in numerous areas, including foreign investment restrictions, mobile resale services, satellite services, and multiple telecommunications equipment issues.   USTR also opposed the adoption of local content requirements in Brazil, India, and Indonesia.
  • Monitored Intellectual Property Protections and Obligations through the Special 301 Report.  USTR placed Barbados, Bulgaria, and Trinidad & Tobago on the Special 301 Watch List.  USTR also improved the status of Canada and Israel by moving those countries from the Special 301 Priority Watch List to the Watch List, and removed Brunei Darussalam from the Watch List completely, based on improved protection and enforcement of intellectual property rights.  USTR designated Ukraine as a Priority Foreign Country (PFC), the first PFC designation in seven years.  Initiated Section 301 investigation of Ukraine, and held a public hearing in September.  
3.       Engaging with Global Partners to Enhance Trade and Economic Growth 

USTR’s active engagement with international trading partners yielded significant and timely results for American farmers, ranchers, businesses, workers, and consumers. Through dialogue and negotiation, USTR worked with partners to address concerns, reduce trade barriers, and foster mutual economic growth through trade.

  • Strengthened our Economic Relationship with Mexico In May 2013, President Obama and Mexican President Peña Nieto established the High Level Economic Dialogue (HLED).  The HLED, which is led at the cabinet level, is a flexible platform intended to advance strategic economic and commercial priorities central to promoting mutual economic growth, job creation, and global competitiveness.  In September 2013, Ambassador Froman joined Vice President Biden at the first meeting of the HLED.  The United States and Mexico developed an initial work plan laying out potential areas for cooperation under three broad pillars: Promoting Competitiveness and Connectivity; Fostering Economic Growth, Productivity, Entrepreneurship, and Innovation; and Partnering for Regional and Global Leadership.
  • Boosted U.S. Agricultural Exports to Mexico Mexico is our third largest market for U.S. agricultural products.  In 2013, the United States worked with Mexico to remove its barriers to exports of U.S. beef products.  In addition, the United States continues to monitor Mexico’s use of sanitary and phytosanitary measures to ensure that they are science-based and are not unwarranted.
  • Boosted Bilateral Trade with Brazil in Distilled Spirits.  Pursuant to a 2012 exchange of letters between USTR and its counterpart ministry in Brazil, the Department of Treasury’s Alcohol and Tobacco Tax and Trade Bureau published a final rule in February 2013 recognizing “Cachaça” as a distinctive product of Brazil.  Consequently, in March 2013, Brazil recognized “Tennessee Whiskey” and “Bourbon” as distinctive products of the United States.  This positive development is expected to yield significantly increased bilateral trade in distilled spirits.
  • Increased Opportunities for Exports of U.S. Beef and Animals to the EU. Engaged with European Commission to advance the adoption and implementation of new EU regulations allowing the use of lactic acid as a pathogen reduction treatment on beef.  The approval of lactic acid enables more U.S. beef processors to export beef to Europe.  Also engaged with EU and Member State officials to establish requirements for live swine shipments from the United States.  Since the EU’s new import requirements entered into force in February 2013, shipments of live breeding swine have increased 210 percent. 
  • Worked Bilaterally to Strengthen Intellectual Property Protections in Asia.  USTR engaged closely with Thailand and the Philippines as they took steps to bolster IP protection.  Thailand established a dedicated IPR enforcement center, and the Philippines enacted long-awaited amendments to its Intellectual Property Code, including strong enforcement provisions, and significant actions to address piracy over the Internet.  USTR also coordinated with Taiwan on its strengthening of its Trade Secret Act.  The new act included increased deterrent penalties and enhanced penalties to deter cross-border theft of trade secrets.
  • Enhanced Supply Chain Performance and Facilitate Trade in the Asia-Pacific Region.   The United States worked closely with the APEC partner economies to reach agreement on a plan to provide targeted and focused capacity-building to member economies to support achievement of APEC’s goal of a 10 percent improvement in supply chain performance in the region by 2015.  This included establishing and securing the first donations to the APEC Trade and Investment Liberalization Sub-Fund on Supply Chain Connectivity, which will finance cutting-edge technical assistance to make it easier, cheaper, and faster to do business in the Asia-Pacific region.
  • Advanced APEC’s Ground-Breaking Work on Environmental Goods and Services.  APEC economies, spurred on by the United States, advanced their commitment to reduce tariffs on environmental goods to 5 percent or less by developing a capacity-building plan to assist economies with the technical details involved in implementation.  They also established a public-private forum to tackle non-tariff barriers in this sector.
  • Addressed Trade Distorting Local Content Requirements.  The United States spearheaded work in APEC to draw attention to the negative impact of localization barriers to trade and shape a set of APEC Best Practices to Create Jobs and Increase Competitiveness, a trade and investment friendly model that economies can use to pursue their domestic economic objectives without resorting to local content requirements.
  • Expanded Economic Engagement with Association of Southeast Asian Nations (ASEAN). USTR advanced several initiatives with the fast-growing ASEAN countries, which collectively are the fourth largest U.S. trading partner.  In April, the U.S. hosted the ASEAN Economic Ministers Road Show to the United States to promote potential trade and investment opportunities between the U.S. and ASEAN countries.  Ministers also held several meetings under the ASEAN-United States Trade and Investment Framework Agreement to discuss work under the Enhanced Economic Engagement (E3) initiative. This included discussions in the areas of investment, information and communications technology, trade facilitation, the development of a code of conduct for small and medium sized enterprises, and the expansion of cooperative work on standards development and practices.
  • Substantially Increased Market Access for U.S. Beef into Japan.  The United States and Japan agreed in January on new terms and conditions for import of beef from cattle less than 30 months of age, compared to the previous limit of 20 months.  From January to October of 2013, U.S. beef exports to Japan increased $300 million or 33 percent over the same period in 2012.
  • Negotiated an Organic Equivalence Arrangement with the Government of Japan.  This new Arrangement ensures that organic products certified in Japan or in the United States may be sold as organic in either country.  The U.S organic sector is valued at more than $30 billion.  This partnership between two significant organic markets will streamline U.S. farmers and processors access to the growing Japanese organic market, benefiting the thriving organic industry and supporting jobs and businesses. 
  • Re-opened Indonesia’s Market to U.S. Beef.  Following the finding of a Bovine Spongiform Encephalopathy (BSE) case in California in April 2012, Indonesia banned the importation of U.S. meat and bone meal (MBM), bone-in beef, offals, and gelatin.  Indonesia removed the ban on June 25, 2013, following the World Organization for Animal Health recognition of the United States as a negligible BSE risk country.  This action reopened Indonesia’s market.  In 2011, U.S. exports of beef and beef products to Indonesia reached $28.4 million, and exports of MBM and animal feeds containing MBM totaled $223 million, the largest U.S. market for MBM, accounting for 40 percent of all shipments.
  • Removed Restrictive Regulations and Import Duties on Exports of U.S. Soybeans to Indonesia. In September 2013, Indonesia eliminated import quotas, pre-shipment inspection, local soybean purchase requirements, and government-mandated sales at set prices for soybeans, which had been adopted earlier in the year.  The Indonesian Government also temporarily removed the five percent import duty on soybeans.  Soybeans are the top U.S. agricultural export to Indonesia, totaling just under $1 billion in annual exports.
  • Renewed and Expanded Indonesia’s Recognition of U.S. Horticulture.  In January 2013, Indonesia renewed its recognition of the U.S. food safety for fresh foods of plant origin for two years.  The recognition also extended the list of covered horticulture products from 32 to 100.  This recognition also ensured the U.S. and other foreign exporters could continue to enter through the port of Jakarta, which is used for shipments of more than 90 percent of U.S. horticultural exports to Indonesia, valued at over $110 million annually.
  • Reduced Costs and Delays for U.S. Exports of Toys to Indonesia.  In November 2013, Indonesia delayed full implementation of a new toy regulation and adopted a two-year transition period during which it would accept testing from labs accredited under International Laboratory Accreditation Cooperation.  The change will enhance the competitiveness of the U.S. toy industry as it will now not have to undergo in-country, duplicative testing. 
  • Eliminated Discriminatory Barriers to U.S. Exports and Investments in India.  Working with other government agencies to emphasize the possibility of achieving legitimate security objectives without disrupting imports, USTR successfully urged the government of India to remove certain discriminatory domestic purchase mandates in its Preferential Market Access policy. 
  • Signed the United States-Bangladesh Trade and Investment Cooperation Forum Agreement.  On November 25, 2013, the United States and the People’s Republic of Bangladesh signed the Trade and Investment Cooperation Forum Agreement (TICFA) after several years of negotiation.  The TICFA will provide a forum for discussions on a wide range of trade and investment issues, including how to improve worker rights and worker safety issues.
  • Concluded Trade and Investment Framework Agreements with Burma and Libya. The United States signed TIFAs with Burma and Libya in May and December 2013, respectively.  The TIFAs create forums to encourage both countries to adopt rules-based market reforms and further integrate into the global economy, creating a platform for ongoing dialogue and cooperation on trade and investment issues between our governments.
  • Promoted Trade, Investment, and Regional Cooperation in Central Asia.  2013 saw the acceleration of work under USTR’s innovative plurilateral Trade and Investment Framework Agreement with the five countries comprising Central Asia.  With the aim of promoting greater regional Central Asia regional cooperation, the 2013 TIFA meeting in Ashgabat, Turkmenistan made progress in reducing customs delays and other burdensome border measures across the region.  The group also enhanced its cooperation with Afghanistan, which has TIFA Observer status.
  • Used Trade to Empower Women in Central Asia.  Recognizing that trade and the financial independence it fosters can be a powerful instrument for empowering women and raising their status within traditional societies, USTR forged a Memorandum of Understanding (MOU) with Afghanistan that sets out how we will work together to encourage greater involvement of women in trade and investment.  MOUs on women’s empowerment with other regional trading partners are being considered, and women’s issues are an agenda item in all of our TIFA meetings throughout the South and Central Asia region. 
  • Implemented the Middle East/North Africa Trade and Investment Partnership (MENA TIP).  USTR took concrete steps to increase regional trade and investment integration across the Middle East and North Africa (MENA) region.  Following success with Morocco in reaching agreements on trade facilitation, foreign investment principles, and information and communication technology services trade principles, USTR reached consensus with Jordan on the two sets of principles and is working to complete  a trade facilitation agreement with Jordan and make progress on all three initiatives with Egypt, Tunisia, and Algeria.  The U.S. Trade Representative in March advanced the twin goals of increasing Egypt-Israel trade by modifying the Qualifying Industrial Zones in Egypt to make all production facilities, present and future, located in these zones potentially eligible, in cooperation with Israeli firms, to export goods to the United States on a duty free basis.
  • Launched a United States - Tunisia Small Business Initiative under the MENA TIP.  USTR and USAID launched a U.S.-Tunisia Small and Medium Enterprise program to provide training in the U.S. Small Business Development Center model and technical assistance to firms, with the goal of fostering more small business partnerships and trade opportunities between the two countries.  The exchange of best practices to support small business is part of MENA TIP, which aims to enhance our broader economic cooperation with Arab countries in transition.
  • Brought Into Force the United States - Israel Telecommunications Mutual Recognition Agreement.  In November, USTR brought into force the Mutual Recognition Agreement between the Government of the United States of America and the Government of the State of Israel for Conformity Assessment of Telecommunications Equipment.
  • Pursued Enhanced Trade and Investment Relations with Turkey.  In May, President Obama and Turkish Prime Minister Erdogan announced the formation of a bilateral High Level Committee, associated with the existing cabinet-level Framework for Strategic Economic and Commercial Cooperation that the two countries have pursued since 2010.  The High Level Committee, co-chaired by USTR and the Turkish Ministry of Economy, has as its ultimate objective the development of new ways to deepen U.S.-Turkey economic relations and liberalize bilateral trade.  The Committee held its first meeting in September.
  • Strengthened Economic Ties with Iraq.  USTR continued to foster rapidly growing trade and investment with Iraq via meetings under the Trade and Finance Sub-Group of the Joint Coordinating Committee.  2013 saw the entry into force of the U.S.-Iraq Trade and Investment Framework Agreement (TIFA), and preparations are well advanced for the inaugural TIFA meeting and associated “Iraq Business Week” commercial and private sector events in early 2014. 
  • Led U.S. Government Efforts to Develop and Implement Obama Administration’s Trade Africa Initiative.  Played a key role in developing the Trade Africa Initiative prior to the President’s rollout in Tanzania in July 2013.  Subsequent to the President’s announcement, established a Trade Policy Subcommittee on Trade Africa. 
  • Advanced Negotiations with the East African Community (EAC) on the U.S.-EAC Trade and Investment Partnership (TIP).  USTR secured agreement to negotiate a Trade Facilitation Agreement and establish a parallel track on SPS and TBT; explore negotiation of an investment treaty; work with the Department of Commerce on the U.S.-EAC Commercial Dialogue; and with the U.S. Agency for International Development (USAID) on the transformation of the East Africa Trade Hub into a Trade and Investment Center, and the new U.S. Government partnership with Trade Mark East Africa to improve intra-EAC trade and cross border movements. 
  • Launched Negotiation of a Trade and Investment Framework Agreement with the Economic Community of West African States.  In March 2013, on the margins of a visit by three West African Leaders to the United States, USTR announced that it would begin negotiating a TIFA with ECOWAS.
  • Advanced Environmental Objectives in Supporting Global Trade.  USTR participated in negotiations to conclude a legally binding United Nations agreement on mercury use and trade, the first multilateral environmental agreement that the United States has ratified in decades.  The agency also led U.S. Government participation in the Asia-Pacific Economic Cooperation Forum (APEC)  Experts Group on Illegal Logging, and convened the first-ever public-private sector dialogue to discuss challenges, activities, and new technologies in the forestry sector, with participation from a broad range of business and civil society representatives;  USTR also continued to advance efforts to enhance transparency and discipline harmful fisheries subsidies and to combat illegal fishing and associated trade through efforts in APEC, TPP negotiations, and in several regional fisheries management organizations;  USTR also contributed to the development of a national strategy to stem illegal trade in wildlife and wildlife products pursuant to the July 1, 2013 Presidential Executive Order on “Combating Wildlife Trafficking”; and launched a work program on electronics stewardship in APEC to increase understanding of the environmental, economic, and social impacts of trade in used electronics and to promote safe handling of used electronics.
  • Supported WTO Accessions for Prospective New Member Nations.  With strong support from the United States, Yemen became the WTO’s 160th Member in December.  Important progress was also made on the accessions of Kazakhstan, Afghanistan and Bosnia during the course of 2013, with prospects that they may be in a position to complete their accession negotiations and become WTO Members in 2014.
  • Advanced WTO Accession Negotiations in Services.  USTR completed a bilateral services accession agreement with Bosnia, which included the reduction of impediments to energy service and express delivery services.  USTR also began final consolidation of the services negotiations of Kazakhstan, in close cooperation with the EU.
  • Furthered Bilateral Investment Treaty (BIT) Negotiations and Exploratory DiscussionsInitiated exploratory discussions with Cambodia, Gabon, and Kuwait, and significantly advanced exploratory discussions with the five Partner States of the East African Community.  In addition, USTR secured political-level commitment from India to resume formal BIT negotiations, notwithstanding that country’s ongoing BIT review.  USTR also held two rounds of BIT negotiations with China, and secured, as a U.S. – China Strategic and Economic Dialogue outcome, agreement that China will apply the U.S. approach to national treatment for the first time.
  • Launched the Standards Alliance Initiative.  In November 2012, USTR and USAID launched the “Standards Alliance” to provide expert advice and technical assistance to developing countries seeking to strengthen their implementation of the Technical Barriers to Trade Agreement.  The program shifted into high gear in 2013, with new programs starting up in Peru, Colombia and in Southern Africa and additional programs being negotiated. 
  • Negotiated the Protocol to the Agreement on Requirements for Wine Labelling with the World Wine Trade Group.  The Protocol will facilitate trade in wine by creating more uniform labelling requirements concerning information on alcohol tolerance, vintage, variety, and wine regions that are consistent with U.S. efforts to promote international regulatory cooperation.
4.       Developing Inclusive Trade Policy through Communication and Enhanced Public Engagement 

USTR’s extensive outreach to diverse stakeholders informed and improved many job-supporting trade initiatives this year. Creative new approaches enhanced USTR’s public engagement and helped to address important issues appropriately with both trading partners and concerned citizens.

  • Organized Dozens of Stakeholder Events and Calls on Major USTR Initiatives.  USTR hosted a series of stakeholder engagement events to ensure that multiple perspectives and a balance of views informed the U.S. negotiating positions during T-TIP rounds and TPP talks.  Approximately 350 global stakeholders gathered for a series of events and briefings by U.S. and EU Chief Negotiators.  USTR hosted high level briefing calls featuring the USTR and Deputy USTRs for a broad cross-section of stakeholders to provide updates on TPP negotiating rounds; over 150 stakeholders joined the calls. In addition, USTR hosted several high-level roundtables in Washington with NGO’s to discuss topics ranging from agriculture, to the environment, to trade and development.
  • Increased Direct Outreach to State Governments.  USTR strengthened relationships with Governors from across the country, deepening engagement on the benefits of trade to state economies.  USTR held monthly calls with our state points of contact in every state along with the Chairs of the 29 Congressionally-mandated advisory committees.
  • Held More than 1,100 Meetings and Briefings with Congress on Key USTR Initiatives.  Ambassador Froman and USTR staff held more than 1,100 briefings with Members of Congress and their staffs on the Trans-Pacific Partnership negotiations in 2013, ensuring that the people’s representatives in Congress were kept abreast of the content and progress of the talks and had ample opportunity to shape ongoing U.S. negotiating efforts. 
  • Created an Inclusive and Rounded Group of Trade Advisory Experts.  Fostered a robust and balanced advisory committee system by appointing more than 50 new advisors to the Trade and Environment Policy Advisory Committee (TEPAC), Trade Advisory Committee on Africa, and Industry Trade Advisory Committees.  USTR met on more than 50 occasions with members of the TEPAC and other environmental stakeholders to brief them and obtain their input on a range of trade and environmental matters, including with respect to the TPP and T-TIP negotiations, FTA implementation, APEC and WTO initiatives, and relevant UN processes.
  • Completed the TPP Interim Environmental Review.  USTR conducted and released for public comment an interim environmental review of the proposed TPP agreement, which identifies and evaluates potential environmental impacts resulting from the agreement.  The environmental review makes a substantial contribution to the TPP negotiating process and to Congressional and public understanding of the TPP’s potential environmental impacts. 
  • Promoted Environmental Benefits through Trade Agreements.  USTR published a fact sheet outlining the progress that has been made in Peru’s forestry sector pursuant to the PTPA and associated Annex on Forest Sector Governance, key developments, and priority areas for USTR engagement in the coming year.  USTR ensured that all FTA Environmental Affairs Council meetings included sessions open to the public, and used these opportunities to discuss issues and concerns, as well as to convey the benefits of these agreements.
  • Launched a Comprehensive Review of the African Growth and Opportunity Act (AGOA).  Prepared for discussions with Congress and range of U.S.-Africa trade and investment stakeholders regarding AGOA’s renewal post-2015.  USTR senior officials worked with stakeholders including the Corporate Council on Africa, Brookings Institution, Foreign Service Institute, U.S.-West African Chamber of Commerce, School of Advanced and International Studies, Africa-America Institute, and Constituency for Africa.
  • Assessed the Impact of United States - Korea Free Trade Agreement Free Trade Agreement on Small Business. USTR commissioned the first-ever U.S. International Trade Commission (ITC) report to examine the KORUS agreement’s effects on exports by U.S. small and medium-sized businesses, which account for a significant share of U.S. exporters both to Korea and in general. The report found that most small companies responding expressed the view that the agreement had already proven helpful, and would benefit their companies even more over time.
  • Organized Small and Medium Sized Business Roundtables Around the United States. USTR, the Small Business Administration and the ITC teamed up to convene a nationwide series of 20 SME roundtables, to hear directly from small businesses around the country about specific concerns and trade barriers they face in exporting to the EU and how those might be addressed through the T-TIP agreement.

Together with Congress, partner agencies, and a wide range of stakeholders, in 2013 USTR developed and deployed U.S. trade policy to support additional exports and jobs for American businesses, workers, and families.

Trade policy, negotiated and enforced vigorously to reflect both our interests and our values, gives our workers, farmers and ranchers; our manufacturers and service providers; our innovators, creators, investors and businesses of all sizes the best chance to compete around the world.