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Partnerships and Progress of
the Office of Manufacturing
and Services
Promoting
Competitiveness:

Promoting Competitiveness:

Partnerships and Progress of the
Office of Manufacturing and Services

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Table of Contents

Foreword: Enhancing U.S. Competitiveness : 7
Enhancing U.S. Competitiveness Is Our No. 1 Priority : 9

Competitiveness Begins at Home : 9
Critical Economic Data Drives the U.S.
Competitiveness Agenda : 16
Enhancing U.S. Competitiveness Globally : 21
Creating New Opportunities for U.S.
Firms in an Evolving Global Economy : 26

The Way Ahead : 31
Conclusion : 34
Appendix: Contact Information for MAS Offices : 35

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Message from the Secretary of Commerce

In 2004, the Department of Commerce created the
Manufacturing and Services (MAS) unit within the
International Trade Administration to address industry and
congressional concerns about U.S. competitiveness in the
global economy. Over the past four years, MAS has tackled
obstacles facing U.S. industry using vital research and analysis
to help shape and implement trade policy and identify the
impact of regulations on U.S. competitiveness.

As the rate of globalization and integration accelerates, the world landscape becomes
ever more complex. The challenge is for governments to encourage, rather than impede,
opportunities for businesses and their workers so they can improve their futures and thus
the future of the country. MAS meets this challenge by establishing a direct partnership
in the Federal Government to help U.S. manufacturing and service providers navigate this
landscape. The following report provides a brief overview of the work MAS has undertaken
to improve U.S. industry’s competitiveness in a global economy.

Carlos M. Gutierrez
Secretary of Commerce

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Foreword:

Enhancing U.S. Competitiveness

As Assistant Secretary of Commerce for Manufacturing and
Services in the International Trade Administration, I have noticed
two common threads woven into the fabric of America’s private
sector: American industries remain strong because they have
learned, advanced and innovated; and they can compete and
win against anybody if they are given a level playing field. U.S.
companies are global leaders in developing and applying cutting-
edge technology, in providing quality, knowledge-based jobs, and
in creating new value through offering innovative integration of
manufacturing and services.

The U.S. economy is currently facing significant challenges. The
current financial crisis is requiring a powerful response. However, the competitiveness of

U.S. companies is still strong. Our strength is in our people and their ability to overcome
adversity through hard work and innovation. Average productivity has grown 2.5 percent
since 2000 and real exports have risen by 59 percent since the fourth quarter of 2001. The
Manufacturing and Services (MAS) unit was established to give industry a voice within
the interagency process, and as we go forward, that input is essential.

As Figure 1 shows, the MAS unit is one of the four pillars of the International Trade
Administration (ITA). Our efforts and expertise complement the other pillars of ITA, enabling
ITA to work together to further the success of U.S. companies at home and worldwide.

Since MAS was created in 2004,¹ it has responded to the issues faced by U.S.
manufacturers and services providers as new, competitive forces reshape the global
economy. During the last four years, MAS has demonstrated its value to U.S. industry.
We strive to foster a healthy, pro-business, pro-competitiveness environment in which

U.S. companies and workers can compete domestically and globally. Our value added
is our ability to focus on the big picture of U.S. competitiveness, grasping the industry
or sector issues holistically at the domestic and global levels and influencing the policy
debate on behalf of that particular sector.

Every day, MAS industry analysts are in the trenches conducting regulatory analysis,
coordinating strategies to remove non-tariff barriers to U.S. exports, and providing
practicable and actionable data to local and national policymakers. On any given
day, our staff is working to surmount 40 to 50 trade barriers, is analyzing how dozens
of regulations could potentially affect industries’ bottom lines, and is evaluating and
raising industry concerns in the interagency policymaking process. MAS analysts also
take a proactive approach to identify domestic and global regulatory issues related to
competitiveness and to stimulate dialogue among stakeholders.

¹ MAS was established pursuant to the Consolidated Appropriations Act of 2004, and the accompanying House
Appropriations Committee Report, “Department of Commerce, Justice, and State, the Judiciary, and Related
Agencies Appropriations Bill, Fiscal Year 2004,” House Report 108-221, 108th Congress, 1st session, July 21, 2003,
p. 69. It was also a recommendation in the report, Manufacturing in America: A Comprehensive Strategy to Address
Challenges to U.S. Manufacturers (Washington, D.C.: Department of Commerce, 2004), hereinafter referred to as
Manufacturing in America.

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Figure 1: ITA Structure

(center) International Trade Administration
Creates prosperity by strengthening competitiveness of U.S. industry, by promoting
trade and investment, and by ensuring fair trade and compliance with trade laws and
agreements.

(upper left) Manufacturing and Services: Competitiveness
Industry expertise focused on
improving U.S. competitiveness.

(upper right) Market Access and Compliance: Barriers
Country expertise focused on removing market access barriers.

(lower left) Import Administration:
Enforcement Antidumping and countervailing duty expertise focused on identifying and
resolving unfair trade practices.

(lower right) US and Foreign Commercial Service:
Promotion Commercial diplomacy expertise focused on broadening and deepening
the U.S. exporter base.

When issues are related to international competitiveness, government agencies often
turn to MAS for its rigorous, strategic analysis and reliable data. Whether MAS is helping
to determine the economic impact of foreign investment, assisting with the negotiations
of free trade agreements that open foreign markets, or finding the right balance for
reducing import tariffs, our analysts provide essential industry insight and knowledge.

Our perspective of both private enterprise and public policymaking helps shape a pro-
growth environment for U.S. businesses. We recognize the effect that government policies
have on the premiums U.S. companies pay to operate a business—the energy, environment,
health care, legal, and regulatory compliance costs. MAS experts come to the interagency
debate well informed, aiming to reduce unnecessarily burdensome requirements or
procedures that might affect the business climate. Our job bears fruit as U.S. policymakers
increasingly steer the nation with an eye toward improving competitiveness.

Four years ago, we set out on a path to better reflect the needs of U.S. industry inside
the federal government. Today, MAS continues to find new opportunities to apply our
expertise towards enhancing U.S. competitiveness. As MAS evolves and improves, we
will continue to contribute to a positive business environment by influencing the policy
debate in favor of U.S. competitiveness.

William G. Sutton, CAE
Rear Admiral, U.S. Navy (Ret.)
Assistant Secretary of Commerce for Manufacturing and Services

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Enhancing U.S. Competitiveness Is Our No. 1 Priority

"As globalization evolves, our number one export should be our way of doing business."
Assistant Secretary William G. Sutton

The Office of Manufacturing and Services (MAS) is dedicated to enhancing the
competitiveness of U.S. industry. MAS’s work on behalf of the U.S. manufacturing
and services sectors influences domestic and international policy decisions that
affect our nation’s current and future competitiveness.

MAS is comprised of five main offices: Manufacturing, Services, Industry Analysis,
Standards Liaison, and Advisory Committees. Together, these offices cover more than
90 percent of industries in the U.S. economy, making MAS the government’s foremost
concentration of varied industry experts. Its leadership and staff work with private-sector
advisers and counterparts in other federal agencies.¹ By listening to and understanding
the concerns of industry, MAS ensures that the long-range economic
impact of policies on U.S. firms is taken into consideration, whether in
discussions with foreign governments or within the U.S. government.

This report will focus on the myriad of ways in which the MAS staff
works to enhance U.S. competitiveness in both the manufacturing and
services sectors now and into the future. MAS stands ready as the United
States faces economic adjustments that present new opportunities and
challenges. This report presents many examples where MAS has taken
a leadership role—based on industry input—and produced solid results
and progress. If you are interested in learning more about a particular
program or initiative, or if you want to contact an MAS analyst in your
sector, please see the contact list in the appendix.

Competitiveness Begins at Home

A government can be responsive only if it is up to speed on the latest information. MAS’s
analysts closely follow the demands on U.S. industries that affect their competitiveness
domestically and globally, knowing that reducing regulatory burdens while balancing the
needs of the public interest will help create a more positive business environment. MAS
sector experts analyze competing industry interests and study ways of reducing structural
costs, such as energy, health care, environment, legal, and unduly burdensome regulations.
From an overall perspective, MAS facilitates communication between industry and
government, helping other agencies to understand the flow of trade and the factors that
influence U.S. business competitiveness.

Advisory Committees: Listening to the Voice of Industry

MAS works collaboratively with industry to address challenges in the evolving global
marketplace. The Advisory Committees² managed by MAS serve as the primary source
of private-sector advice on competitiveness and trade issues across most sectors of the

U.S. economy. With more than 500 volunteer industry representatives, the committees

¹ For example, MAS administers the work of the Manufacturing Council and the Interagency Working Group
on Manufacturing Competitiveness. Those two groups were established in response to recommendations
from Manufacturing in America.

² For more information, please contact the Office of Advisory Committees (see appendix).


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provide a critical link between the economic interests of U.S. industries and the broader
public policy concerns of the U.S. government, including regulations, trade policies, and
economic policies. In addition to the advice MAS receives through its Advisory Committee
program, analysts are in constant communication with industry representatives,
associations, think-tanks, and other experts. If an issue needs attention, MAS analysts are
likely already aware of and working on it.

• The President’s Export Council (PEC) is the principal national advisory committee on
international trade. The PEC advises the President on government policies and programs
that affect U.S. trade performance, promotes export expansion, and provides a forum
for discussing and resolving trade-related problems among the business, industrial,
agricultural, labor, and government sectors. Since 2001, the PEC has sent 44 letters
of recommendation to the President. PEC recommendations have been thoroughly
considered in the policy process.

• The Manufacturing Council³ serves as the principal private-sector advisory
committee on the U.S. manufacturing sector. The Manufacturing Council ensures
regular communication between the government and the manufacturing sector,
advises the Secretary of Commerce on government policies and programs that affect
U.S. manufacturing, provides a forum for discussing and proposing solutions to
industry-related problems, and recommends ways to ensure that the United States
remains the preeminent destination for investment in manufacturing. To date, the
Manufacturing Council has submitted 13 letters of recommendation to the Secretary
of Commerce on topics that range from corporate tax burdens to health care to
alternative energy. The recommendations form key building blocks for MAS experts
as they work within the policy process.

³ The Manufacturing Council was established in response to the recommendation from Manufacturing in
America.

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• The Industry Trade Advisory Committees (ITACs) were established under the Trade
Act of 1974, which directs the President to seek information from representatives of
the private sector about (a) negotiating objectives and bargaining positions before
entering into a trade agreement; (b) the operation of any trade agreement once it
is entered into; and (c) dealing with other matters connected to the development,
implementation, and administration of U.S. trade policy. The Office of the United
States Trade Representative and the Department of Commerce jointly administer 17
ITACs, including the Committee of Chairs. The contributions that industry has made
to trade negotiations through ITAC activities are numerous. The ITACs play a key
role in developing a positive business environment and a level playing field in the
international trade arena.

• The U.S. Travel and Tourism Advisory Board informs the Secretary of Commerce on
government policies and programs that affect the U.S. travel and tourism industry,
offers counsel on current and emerging issues, and provides a forum for discussing
and proposing solutions to industry-related problems. The board has completed
two major reports: “National Tourism Strategy” and “Gulf Coast Recovery Strategy.”
In addition to those reports, the board has made policy recommendations on
various issues, including visa facilitation and ease of travel. MAS experts have used
the recommendations in policy discussions with the Department of State and the
Department of Homeland Security.

• The Environmental Technologies Trade Advisory Committee has members with
experience in exporting a broad range of environmental technologies, products, and
services. The committee in uniquely qualified to advise agencies of the executive branch
on a variety of issues concerning the industry. For example, the committee addresses
multilateral trade liberalization efforts in environmental goods and services, protection
of intellectual property rights, and U.S. government export programs and policies.⁴

• The Civil Nuclear Trade Advisory Committee is in its formative stage, but proposing it
is an example of how MAS responds and evolves to advance the interests of developing
industries and sectors. This committee will advise the Secretary of Commerce on
developing and administering programs to increase U.S. civil nuclear trade and
investment in global markets.⁵

Public–Private Dialogues: Building Bridges and Stimulating Debate

The establishment of effective, transparent channels of communication with industry
is crucial to MAS’s success. MAS has shown leadership on domestic issues that affect
U.S. competitiveness abroad by organizing public–private dialogues. In some cases,
MAS organizes roundtables on specific problems, bringing the depth of U.S. industry’s
real-world experience to the policymaking process. At other times, MAS identifies new
strategic areas where a larger-scale conference is needed to fully explore all the aspects
of these areas. Either way, MAS is well positioned to determine the relevant scope and
structure for the dialogue and to bring the appropriate stakeholders to the table. MAS
analysts shape the policy dialogues to focus on issues that are critical to U.S. industry
and to facilitate discussion that advances the debate and opens new doors. After the
conferences, MAS follows up with reports to the stakeholders and other activities to
ensure that the spotlight does not fade.

⁴ For more information, please contact the Office of Energy and Environmental Industries (see appendix).
⁵ For more information, please contact the Office of Energy and Environmental Industries (see appendix).

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Enhancing U.S. Competitiveness through Sustainable Manufacturing

Sustainable manufacturing is the creation of manufactured products using processes that
are non-polluting; that conserve energy and natural resources; that are economically sound;
and that are safe for employees, communities, and consumers.⁶ Interest in sustainable
manufacturing practices has grown as companies look for new ways to use resources more

Sustainable Manufacturing American Regional Tours

Online Clearinghouse: MAS worked with other federal agencies to launch an online clearinghouse (located
through one click on www.manufacturing.gov) that U.S. companies can use to identify the U.S. government
programs and resources that meet their needs. The site includes

• Information on programs that offer technical assistance to U.S. businesses on how to develop and
enhance sustainable practices

• Federal incentives and financial resources that U.S. businesses can take advantage of to improve their
sustainable business practices

• Best-practices research that is geared toward helping U.S. companies find information on how they can
cost-effectively improve their global competitiveness through sustainable business practices.

Regional Tours: In July 2008, MAS launched Sustainable Manufacturing American Regional Tours (SMART)
to promote sustainable manufacturing and to share best practices. The tours are a direct response to
industry concerns over the lack of visibility that sustainable manufacturing receives nationwide and the
lack of information many U.S. manufacturers possess in this field, especially small and medium-sized
businesses. By the end of September 2008, the tours reached St. Louis, Missouri; Grand Rapids,
Michigan; and Rochester, New York. SMART events include tours of local manufacturing facilities that
showcased firms that are incorporating sustainable manufacturing techniques into their production processes
or have facilities that are otherwise sustainable. The tours demonstrated that the techniques are not cost
prohibitive and, in fact, can help the long-term economic viability of U.S. manufacturers.

⁶ For more information, please contact the Office of Trade Policy Analysis (see appendix).

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 efficiently, to ensure compliance with domestic and international requirements, to enhance
the marketability of their products and services, and to increase profitability.

The implications for U.S. global competitiveness and firm profitability grow as sustainable
manufacturing practices continue to spread through U.S. industry. Firms that incorporate
environmentally and economically sustainable manufacturing processes can gain
competitive advantages through cost savings and increased positive public recognition of
their environmental stewardship.

To foster a dialogue on sustainable manufacturing, MAS hosted a conference in
September 2007. The participants, including more than 70 industry stakeholders from the
private and public sectors, clearly called for national leadership to help promote future
profitability and competitiveness in sustainable manufacturing. MAS is working with
other federal agencies to implement a Sustainable Manufacturing Initiative and public–
private dialogue. The main goals of the initiative are (a) to identify U.S. industry’s most
pressing sustainable manufacturing challenges and (b) to coordinate public- and private-
sector efforts to address the challenges.

Powering Our Low-Carbon Future

Clean energy technologies could ensure energy security, mitigate climate change, and
provide energy for robust economic growth.⁷ However, many people and companies in
the U.S. clean energy industry feel that numerous unnecessary hurdles still remain and
are hurting their domestic competitiveness.

MAS hosted a one-day conference in February 2008 in which experts from the federal
government, industry, academia, and non-governmental organizations discussed
strategies to promote the rapid uptake of clean energy technologies in the United
States.⁸ The purpose of the conference was to initiate a dialogue between industry
representatives and policy-makers. Through this dialogue, MAS and industry identified
key challenges and opportunities and the necessary actions to overcome any hurdles.
More than 170 representatives from the renewable energy, nuclear, clean coal, and
distributed-generation industry and from the U.S. government participated in the event.
Topics included the current status of low-carbon technologies, clean energy and the U.S.
manufacturing sector, research and development, market adoption and deployment,
financing, regulations, public acceptance, and transmission.

Maintaining U.S. Competitiveness through Access to Raw Materials

Timely and economic access to strategic raw materials is critical to the U.S. economy and
competitiveness of U.S. manufacturers. As economies such as China and India continue
to industrialize and expand, the global competition for access to raw materials will
intensify. In November 2007 MAS brought together industry representatives and officials
of other federal agencies to discuss the impact of timely, reliable, and cost-effective access
to raw materials on the competitiveness of U.S. manufacturers. ⁹ U.S. trade associations
and manufacturers from a wide range of industries expressed concerns about export
quotas, export duties, and related restrictions imposed by some countries on a number of
important raw materials. Through their examples, the industry participants illustrated how

⁷ For more information, please contact the Office of Energy and Environmental Industries (see appendix).

⁸ At the conference, discussions on energy issues furthered the national debate on energy policy and a
comprehensive energy plan, which was the subject of several recommendations from Manufacturing in
America.

⁹ For more information, please contact the Office of Materials and Machinery (see appendix).

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Important Lessons Learned from the Low-Carbon Conference

The Importance of Federal Government Policy: All industry participants addressed the importance
of government policy in creating market demand that will substantially increase manufacturing and
services employment in the United States. Regulatory processes that are inefficient and fail to adapt to
new technological innovations will stymie the development of low-carbon power options. Uncertainty in
technology will always exist, but uncertainty in policy can be avoided.

The Era of Cheap Energy Is Over: Constrained energy supplies and increased carbon constraints will result in
higher energy prices. Promoting many different low-carbon resources will increase energy supplies.

Education Is Critical: Regulators need to learn about new technologies that fall under their jurisdiction.
A new generation of skilled machinists and technicians need training to design, build, and operate low-
carbon technologies. The public must understand the costs and benefits associated with low-carbon
power technologies.

these policies disrupt the functioning of global markets and trade patterns and artificially
increase domestic supplies of raw materials in the country employing the restriction.
Information that MAS analysts gathered at the roundtable supported a submission by the
United States to the World Trade Organization (WTO) regarding such policies.

Domestic Regulatory Analysis: Representing a Pro-Business Perspective
at the Regulatory Table

MAS keeps the focus on the overall competitiveness of U.S. industry by researching
and analyzing competitive factors that affect U.S. business sectors in domestic and
international business environments.¹⁰ One key factor is the competitive impact of
domestic regulations, which impose compliance costs on domestic firms but not on
their international competitors.¹¹ MAS evaluates the effects of domestic regulatory
policies on the ability of U.S. industry to compete in world markets and works with
other U.S. agencies to reduce any unintended impact of these policies on U.S. industry’s
competitiveness. MAS improves federal regulatory outcomes by:

• Supplementing an agency’s regulatory impact analysis with richer industry knowledge
that incorporates macroeconomic international analysis;

• Ensuring that costs associated with a given rule are assessed in the context of the overall
regulatory burden faced by businesses from all existing and proposed rules; and

• Introducing new approaches to regulatory analysis that draw on lessons learned from
past regulatory impact analyses.

The U.S. regulatory review process, which is mandated by law and undertaken by
the rulemaking agencies, is enhanced by additional MAS analysis. Industry expertise
gives MAS the ability to evaluate the regulatory agencies’ impact assessments with an

¹⁰ For more information, please contact the Office of Competition and Economic Analysis (see appendix).

¹¹ MAS’s work in this area is largely in response to recommendations from Manufacturing in America. The
recommendations called for creating an Office of Industry Analysis and completing comprehensive work to
reduce the burden of regulations.

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eye towards businesses’ ability to stay competitive. For example, regulatory agencies
seldom assess the impact of domestic regulations on U.S. companies’ international
competitiveness. In addition, a policy or regulation affects not only the immediate industry
but also other upstream and downstream markets.

Over the past three years, MAS has contributed to the development of more than 25
significant rules, which have provided a number of successful outcomes for U.S. business
competitiveness. In particular, MAS has established itself in the interagency rulemaking
process, which is coordinated by the Office of Management and Budget (OMB).
Depending on the issue, coordination may also include the Occupational Safety and
Health Administration (OSHA), the Department of Homeland Security (DHS), and the
Environmental Protection Agency (EPA). MAS also works with other regulators that have
oversight for specific sectors, such as the Federal Aviation Administration (FAA). MAS’s
regulatory analysis in several specific cases contribute to millions of dollars in cost savings
for the U.S. business community. For example:

• MAS evaluated a rule to establish the permissible level of worker exposure to the
toxic chemical hexavalent chromium. MAS worked with OMB, OSHA, and industry
representatives to identify the compliance cost burdens on U.S. manufacturers for
various exposure levels. The analysis resulted in a final rule that made the U.S. standard
the strictest in the world, fully protecting workers and the environment, but it still
reduced the cost to U.S. businesses by approximately $287 million per year. MAS
has also worked with OSHA on worker safety rules, such as for cranes and derricks
(construction and drilling) and exposure to beryllium.

• MAS works with DHS on rules with major effects on industry, including the
Transportation Worker Identification Credential rule and the Western Hemisphere
Travel Initiative.

• EPA’s rules have some of the highest compliance costs among the rulemaking agencies.
MAS’s work with EPA on the Spill Prevention, Control, and Countermeasures rule is
expected to save U.S. industry more than $100 million annually. Industry estimates that
further revisions to the rule could save the U.S. oil and natural gas extraction industry
more than $1 billion a year.

"We serve as a means of improving communication
between industry and the officials writing the rules.
When we participate in interagency discussions
—for example, with EPA, OSHA, DOT and DHA—
we ask, “did you include everybody who would be
affected?” By providing this kind of information and
analysis in the interagency process, we’re already on
track to achieve our goal of reducing unnecessary
regulatory burdens by $1.4 billion by 2010."

Stefan Osborne, coordinator for the
MAS Regulatory Affairs Program

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• The FAA, to improve safety and traceability of parts, has proposed a rule that would
require every part and subcomponent of an aircraft or engine to be identified – for
example, by laser engraving. Industry has estimated that the proposed rule could
cost as much as half a billion dollars annually to industry, including many small and
medium size companies. MAS is working with the FAA to explore ways that the FAA’s
safety objectives can be fully met in a manner that is the least burdensome to industry
as possible. Publication of the final rule is expected in 2009.¹²

Because of those and other cases, MAS is on target to meet its goal of providing information
and analysis to help lower compliance costs of U.S. businesses by $1.4 billion by 2010—all
without having a negative impact on worker health and safety or other policy priorities.

Miscellaneous Tariff Bills: Helping Congress Find the Right Balance

In every session of Congress, miscellaneous tariff bills (MTBs) are introduced to
temporarily lower or suspend duties on a wide range of imported products. MTBs can
result in hundreds of thousands of dollars in savings to an individual company. The
lower costs from tariff savings can increase a company’s competitiveness by reducing
the overall cost of bringing a product to market. However, when domestic production
of a good is covered under a proposed MTB, it is important to balance the interests of
all companies. A high level of industry expertise is needed to identify and reduce tariffs
that impose an unnecessary burden on U.S. importers, while ensuring that U.S. domestic
producers are not unfairly disadvantaged. MTBs have the potential to enhance the overall
competitiveness of U.S. industry.

At the request of Congress, the administration, led by the Department of Commerce,
undertakes an extensive analysis on the impact of each proposed MTB on the
competitiveness of firms within the relevant industry. MAS industry analysts determine if
the lower duty could potentially harm the ability of a domestic manufacturer to compete.¹³
In addition, analysts also examine the MTB in light of existing U.S. trade laws to establish
how its enactment might affect U.S. trade policy. The investigations conducted by MAS
analysts are crucial to ensuring that MTBs help improve the competitiveness of U.S. firms,
while ensuring that other companies are not negatively affected.

Critical Economic Data Drives the U.S. Competitiveness Agenda

Objective and balanced information is imperative for companies to compete in the global
market. Decisions rendered by the government should be made on the basis of credible,
comprehensive, and comparable data. MAS brings industry knowledge and analytical skills
to assist the President, the Congress, federal and state agencies, U.S. companies, and other
public and private organizations. By providing comparative data on a regular basis, MAS
ensures that the question of “impact on U.S. competitiveness” receives proper emphasis in
any policy discussion.

“Manufacturing Biweekly Update”: Competitiveness Indicators at a Glance

The “Manufacturing Biweekly Update” provides industry and policy decision-makers with
statistical information and analysis on the economic environment facing U.S. industry.¹⁴
This report provides the most recent trends on a wide range of economic indicators,
including wage rates, profits, employment, production, capacity utilization, productivity,

¹² For more information, please contact the Office of Aerospace and Automotive Industries (see appendix).
¹³ For more information, please contact the Office of Trade Policy Analysis (see appendix).
¹⁴ For more information, please contact the Office of Competition and Economic Analysis (see appendix).

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exports, and goods shipments. The “Manufacturing Biweekly Update” is made available
every other Friday on the MAS Web site at www.ita.doc.gov/td/industry/otea/ocea/mbu.

Databases: Online Tools for an Interconnected Economy

In an environment where information is power, access to reliable trade data is crucial. MAS
has created several online databases to provide U.S. companies with the tools they need to
succeed. MAS compiles information that businesses rely on to achieve their goals, from
the minute detail on exports to the demographics of a trillion-dollar industry.

TradeStats Express

TradeStats Express (TSE) is a user-friendly interactive tool that displays U.S.
merchandise trade statistics geographically and in a tabular format.¹⁵ MAS designed and
maintains this system, which uses data from the U.S. Census Bureau in the Department
of Commerce, and data are updated quarterly. TSE presents aggregate and product-
specific U.S. trade statistics, including general imports, total exports, balance of trade,
and state exports (see Figure 2). National statistics are available from 1989, and state
statistics are accessible from 1999. TSE has proven to be a popular and useful tool with
both the government and the public. For example, by providing easy to understand
information about state export activity by product to various countries or geographic
regions, TSE emphasizes the relevance of trade to localities. To use this database, visit
http://tse.export.gov.

Figure 2. Screenshot: State Export Data
Source: MAS, Office of Trade and Industry Information, TradeStats Express, 2008.

¹⁵ For more information, please contact the Office of Trade and Industry Information (see appendix).

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Figure 3. Merchandise Exports for Los Angeles, California,
Metropolitan Area, First Half of 2007

All Others 38%
Transportation Equipment 21%
Chemicals 7%
Miscellaneous Manufactured Commodities 7%
Machinery, except Electrical 6%
Computer and Electronic Products 21%

All Other Destinations 44%
Mexico 12%
Canada 15%
Japan 12%
China 11%
South Korea 6%

Source: U.S. Census Bureau, Department of Commerce,
prepared by the Office of Trade and Industry Information.

Metropolitan Data

As U.S. exports play an increasingly important role in regional economic growth, state and
local officials need to assess U.S. exports at the local level for strategic planning. To meet
this growing need, MAS partnered with the U.S. Census Bureau in the Department of
Commerce to compile that information and to make a database available to the public. ¹⁶

In 2005, the Census Bureau reintroduced export data on a five-digit Zip Code basis.
MAS developed a Web site to package and disseminate the information, which includes
merchandise export values for 369 metropolitan areas. The online database also contains
metropolitan area exports as a percentage of the state total, product-specific exports
to individual countries for the 50 largest metropolitan areas, top global export product
categories, and total exports to 10 regional destinations (see Figure 3 for an example).
Unlike other trade data at a more aggregated state or national level, the metropolitan
data series helps officials at the city and county level to gain a better understanding of the
benefits of trade to their localities.

For additional information and to view the complete data series and methodology, visit
www.trade.gov/metrodata.

Travel and Tourism Statistical System

MAS collects, analyzes, and disseminates official domestic and international travel
and tourism data in support of a more than $1.3 trillion industry. The information, not
available elsewhere, is critical to policymaking and to the travel and tourism industry’s
strategic planning and marketing efforts.

¹⁶ For more information, please contact the Office of Trade and Industry Information (see appendix).

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Did You Know…?
Travel and tourism exports account for 7 percent of all U.S. exports and 25
percent of all U.S. exports of services, which positions travel and tourism as
America’s single-largest exporter of services.
Source: Bureau of Economic Analysis

MAS manages the Survey of International Air Travelers, which
measures quantitative and qualitative aspects of international
travelers. This innovative program is a public–private effort that
involves more than 80 international airlines and numerous destination
management organizations.

MAS has initiated a project to move the survey from the current paper-
based system to the Internet and to major reservation systems. ¹⁷ This
“green” initiative will enhance program efficiencies and reduce unit
costs. The project has been featured in Aviation Daily, Travel Advance,
and Air Transport World. The statistical system produces visitation and
demographic data for the more than 57 million international travelers
from more than 200 countries who visit the United States each year. To
access the statistics, visit http://tinet.ita.doc.gov.

International Trade Guides: Plotting a Course to
Competitiveness

Even companies experienced at competing in the global economy can benefit from guidance
on how to navigate the many different foreign government policies and regulations. MAS
recognizes that industry need, and has used its strategic research and its broad market
intelligence to create “how to” guides to help U.S companies increase their exports.

Trade Finance Guide: A Quick Reference for U.S. Exporters

Many U.S. companies, particularly small- and medium-sized enterprises (SMEs),
have difficulty navigating the complex landscape of trade finance. The Trade Finance
Guide, which is now in its second edition, is a concise and easy-to-understand tool that
specifically aims to boost the competitiveness of SMEs by helping them learn how to get
paid when they expand globally.¹⁸ The Trade Finance Guide has garnered overwhelming
interest from the exporting community. To date, more than 45,000 copies of the guide
have been distributed in print or electronically (available for download at www.trade.gov).

"If you have never exported anything, and you say
to the foreign buyer that you want cash in advance,
they will go elsewhere. We don’t provide financing,
but we can play a role in educating the new
exporters so they have a better understanding when
they apply to the Ex–Im Bank, SBA, or commercial
lenders. The future of U.S. competitiveness depends
on this kind of education. Knowledge is power."

Yuki Fujiyama, MAS analyst in the Office of Financial
Services Industries, who worked on the Trade Finance Guide

¹⁷ For more information, please contact the Office of Travel and Tourism Industries (see appendix).
¹⁸ For more information, please contact the Office of Financial Service Industries (see appendix).

Page 20

Exporters can obtain printed copies from the Trade Information Center at 1-800-USATRAD(
E) (1-800-872-8723) and from the Commercial Service’s network of domestic Export
Assistance Centers.

Clean Energy Guides: China and India

Clean Energy: An Exporter’s Guide to China and Clean Energy: An Exporter’s Guide to
India, which are powered by MAS expertise with resources from ITA’s Market Access
and Compliance unit, each give a clean energy technology market overview for those two
major emerging economies.¹⁹ Those growing sectors include technologies for renewable
energy, hybrid and cogeneration, and energy efficiency for power generation; alternative
fuels; and advanced technologies for transportation. The reports identify opportunities
for trade and investment through 2020.

Competitiveness Papers: Economic Issues in Focus

MAS produces “Competitiveness Papers” to provide the public with detailed information
on current topics in trade. The papers take a variety of formats, including fact sheets,
scene setters for conferences and workshops, and descriptions of trade and investment
opportunities. The papers cover a wide range of topics that include macroanalysis, trade
barriers, market access challenges and opportunities, and emerging issues in various
sectors. Competitiveness papers are available online at www.trade.gov/mas/reports.asp.
Here are some examples of recent papers:

• “Why Privacy Compliance Matters in the Global Economy”
• “Rising Energy Prices and U.S. Industry Competitiveness”
• “Potential Exports of U.S. Clean Coal Technology Through 2030”
• “Energy in 2020: Assessing the Economic Effects of Commercialization of Cellulosic
Ethanol”
• “Visas and Foreign Direct Investment: Supporting U.S. Competitiveness by Facilitating
International Travel”
• “Impact of the Consolidation of the Russian Aerospace Industry”
• “Information and Communications Technology Policy Issues in Vietnam”
• “Islamic Banking Experiencing Rapid Growth”
• “Foreign-Based Companies Investing in the U.S. Auto Industry”
• “Credit Card Market: Economic Benefits and Industry Trends”

“The Port Playbook”: Mitigating Supply Chain Disruptions

MAS provides critical economic data and information for internal use by other federal
agencies that is used to identify roadblocks to U.S. competitiveness. For example, in
2006, MAS combined trade and commercial data with information from the National
Oceanic and Atmospheric Administration to create “The Port Playbook.”²⁰ This document
is a groundbreaking tool that allows the Department of Commerce and other agencies
to track and compare how key categories of goods flow through U.S. ports. Department
of Commerce officials use this tool to quickly identify port-specific conditions that can
potentially disrupt trade, block growth, and reduce U.S. productivity.

¹⁹ For more information, please contact the Office of Energy and Environmental Industries (see appendix).
²⁰ “The Port Playbook” is not available to the public because of national security concerns.

Page 21

Enhancing U.S. Competitiveness Globally

U.S. domestic competitiveness is inextricably linked with the development of U.S. trade
and economic policy for the manufacturing and services industries. MAS’s team of trade
analysts and international economists further U.S. economic interests in such policy
discussions by providing critical information with objective, consistent research and
analysis on issues affecting the competitiveness of U.S. firms in domestic and global
markets. MAS analysts also contribute their specialized knowledge in trade negotiations
and other international arenas to ensure that the outcome will strengthen, not
undermine, U.S. competitiveness.

Trade Negotiations: Leveling the Playing Field

MAS plays a key role in international negotiations²¹ that affect the competitiveness of U.S.
industry. Along with other units of ITA, it serves as a partner with the Office of the United
States Trade Representative in multilateral, bilateral, and plurilateral free trade agreement
(FTA) negotiations on industrial market access, services, government procurement, rules
of origin, and certain non-tariff barriers. ²²

MAS promotes policies to advance U.S. national economic interests by balancing the
international trade and domestic policy interests of U.S. industry. It does so by supplying
industry expertise, providing advanced economic and trade policy analysis, and giving
voice to U.S. industry concerns in trade negotiations. Senior decision-makers rely on
MAS’s analysis to set priorities and to develop negotiating strategies. MAS plays an
important role in FTAs: it serves on the negotiating teams and assists in the follow up to
explain negotiation results to Congress.

MAS staff bring specialized skills and comprehensive expertise to the Non-Agricultural
Market Access (NAMA) negotiations of the WTO. MAS provides vital analysis on U.S.
export priorities and import sensitivities to ensure that the WTO Doha Round genuinely
reflects U.S. needs and interests. When NAMA negotiating group proposals are made in
the WTO, MAS applies advanced statistical software to analyze the effects on the tariff
structure and trade patterns of the United States and its trading partners.

MAS analysts have also developed sophisticated analytical tools that facilitate real-time
analysis of new proposals. From this analysis, MAS determines the potential effect on
the competitiveness of U.S. industries. For example, U.S. export priorities or import
sensitivities may evolve with the introduction of new technologies in production or the
invention of new products. MAS makes sure that the information is accurately reflected
in negotiations so that the United States makes strategic offers and formulates responses
that are in the best interests of U.S. companies and the economy.

Standards and Regulations: Reducing Non-Tariff Barriers

The use of standards and conformance measures in technical regulations is increasingly
scrutinized. Standards-related issues affect virtually all manufacturing and services
sectors, with the potential to negatively affect U.S. competitiveness and to constrain U.S.
exports. Non-tariff barriers to trade, such as problems dealing with varying standards and
conformance, will be one of the greatest challenges in the coming decade of U.S. trade

²¹ For more information, please contact the Office of Trade Policy Analysis (see appendix).

²² MAS works within ITA and with the Office of the United States Trade Representative to help eliminate
barriers to trade in financial services and foreign tariff and non-tariff barriers to U.S. manufactured goods.
This effort is part of the recommendations from Manufacturing in America.

Page 22

Did You Know…?
In the first five months of 2008, compared to the same period in 2007,
U.S. manufacturing exports with FTA countries have swung from a
$12.3 billion deficit to a $2.7 billion surplus. Nearly half of the
$15 billion trade balance improvement is attributable to an increase in
exports to Canada, a partner in the North American Free Trade Agreement.
Source: Bureau of Economic Analysis

policy. U.S. industry is increasingly seeing the impact that standards
and related issues—once viewed primarily as technical issues—can
have on its bottom line and ultimate survival, and it is asking the U.S.
government to play a greater role.

The private sector drives the U.S. standardization system, but the
government has significant involvement. ITA works closely with
all of its standards stakeholders to address trade-related concerns
that affect competitiveness and to ensure consistent messaging.

This public–private cooperation has become even more critical as
standards move beyond merely technical matters and encroach
on issues that involve public policy and as standards issues are
more frequently addressed in government-only fora.

The ITA Standards Liaison’s office is housed within MAS and has
a special leadership role.²³ By coordinating and implementing
activities that are related primarily to how standards and
conformance may be used voluntarily or in foreign technical
regulations, the Standards Liaison keeps an eye toward improving
U.S. competitiveness in the international marketplace. MAS
analysts also work closely with the Standards Liaison to address
particular issues in specific sectors where their expertise is
needed. The Standards Liaison then collaborates with other ITA offices, U.S. agencies,
and private-sector organizations.

In recent years, MAS has addressed standards issues in several areas, including
biotechnology and import safety:

• Biotechnology:²⁴ In 2008, when the International Organization for Standardization
(ISO) announced that it would begin to look at the possible need to develop
biotechnology standards, MAS worked very closely with the American National
Standards Institute (ANSI), which is the U.S. representative body to ISO, to ensure
that the U.S. biotechnology industry’s interests were solicited and concerns
were addressed. MAS helped industry meetings and worked with ANSI to define
important biotechnology industry segments of agricultural biotechnology, medical
biotechnology, and other areas. Those different segments each had different positions
on whether ISO needed to consider standards development its own particular area.
This effort allowed ANSI to push for U.S. industry’s definition of its segments at the
ISO and to focus ISO’s work on areas that would be acceptable to U.S. industry.

• Import safety:²⁵ In late 2007, following a series of highly publicized health-and
safety-related issues affecting imported food, toys, and other products, the
administration established the Interagency Working Group on Import Safety²⁶
to help federal agencies focus on the importance of increasing the safety of both
regulated and non-regulated products imported into the United States. Within
the Working Group, MAS representatives took a leading role in developing import

²³ This office was created because of the Global Standards Initiative, launched in 2003 by Donald L. Evans,
then Secretary of Commerce. Manufacturing in America reemphasized the importance of promoting the
recognition and use of U.S. technical standards.

²⁴ For more information, please contact the Office of the Standards Liaison (see appendix).
²⁵ For more information, please contact the Office of Health and Consumer Goods (see appendix).
²⁶ The Assistant Secretary of Commerce for Import Administration coordinates the Department of Commerce’s
participation in the Working Group.

Page 23

safety-related projects regarding food, toys, medical devices, and pharmaceuticals;
in increasing communication with industry on import safety issues; and in
providing the government with related industry analysis. MAS also supported a
grant from the Market Development Cooperator Program that was designed to
increase the safety of certain foods (for example, dietary supplement ingredients)
imported from China. ²⁷ MAS’s import safety work has resulted in greater global
acceptance of U.S. health and safety regulations.

Anti-Counterfeit Medical Products Task Force: Protecting Both Intellectual
Property and Consumer Safety

The global spread of counterfeit medical products is a serious problem, and losses from
counterfeit medical products continue to grow each year.²⁸ The U.S.–based Center for
Medicines in the Public estimates that global counterfeit drug sales will reach $75 billion
by 2010. Depending on the geographic area, the percentage of counterfeit drugs on the
market varies from less than 1 percent in countries with more effective regulatory systems
and market control to more than 30 percent in Africa and parts of Asia and Latin America.
In many developing countries, where counterfeit medical products account for 10 to
30 percent of the market, a lack of a strong distribution infrastructure and supply chain
management issues can lead to the creation and spread of counterfeit medical products.

MAS and the U.S. Food and Drug Administration lead the Anti-Counterfeiting Medical
Products Task Force, which has meetings four times a year. The meetings include
industry (innovative and generic), other government agencies, and non-governmental
organizations. The groups discuss ways to address the global counterfeit medical products
problem and share information on upcoming anti-counterfeit medical product activities.

Because the problem is global in scale, MAS also spearheads global anti-counterfeit
medical product initiatives in multilateral fora, such as Asia-Pacific Economic
Cooperation’s Anti-Counterfeiting Health Products Seminars, the Enhanced
Association of Southeast Asian Nations–U.S. Partnership, and the World Health
Organization’s International Medical Products Anti-Counterfeiting Taskforce. MAS staff
continue to coordinate with local and foreign officials, industry, and other interested
parties on ways to combat the global spread of counterfeit medical products.²⁹

Innovation Conference: Maintaining Opportunities for U.S. Technologies in China

Innovation is a competitiveness issue for all U.S. industries—not just one specific sector.

U.S. companies have been increasingly concerned about China’s trend toward “indigenous
innovation” policies. Those policies would lead to decreased sales and investment
opportunities, and would deny China access to the world’s best products and services.

To engage China in a dialogue about the benefits of an open and global approach to
innovation, MAS organized the U.S.–China Innovation Conference in December 2007 in
Beijing.³⁰ During the conference, more than 200 attendees heard government, industry,

²⁷ The Commercial Service in China and the Office of the China Economic Area of the Market Access and
Compliance Unit of ITA have also provided valuable support in implementing this grant.

²⁸ For more information, please contact the Office of Health and Consumer Goods (see appendix).

²⁹ Work in this area supports the recommendation from Manufacturing in America to protect U.S. intellectual
property.

³⁰ The conference took place under the auspices of the U.S.-China Strategic Economic Dialogue. The Office of
the China Economic Area of the Market Access and Compliance unit of ITA coordinates the Department of
Commerce’s participation.

Page 24

"Some countries need to understand the trade and
safety implications that counterfeit products have
with drug supply chains and [to] strengthen their
regulatory regimes. …The task force members all
have a common goal to protect both the safety of
the consumer and the IPR of our companies. We
understand and know all the moving parts to the
issue, so if anybody needs to know what’s going on
they come to this office—we’re the first stop."

Tajhesha Howard, MAS analyst in the Office of Health and
Consumer Goods, who works on the Anti-Counterfeiting
Medical Products Task Force

and academic speakers discuss topics such as the problem of government-mandated
technology standards unique to China, the need for strong protection of intellectual
property rights in China, and the importance of letting markets—not governments—decide
how to allocate investment capital in innovative industries.

Conference attendees reached several conclusions, including that the United States
and China should continue to work together to foster innovation through efforts
such as encouraging the U.S.–China Joint Commission on Science and Technological
Cooperation, sharing best practices in measuring innovation, and supporting
technology neutrality. ³¹

U.S.–Vietnam Information and Communications Technologies Commercial
Dialogue: Building Capacity for Trade Growth in Vietnam

American companies that want to do business or invest in Vietnam rely on the
information technology and communications infrastructure. Vietnam has a positive
attitude toward promoting the use of information and communications technology (ICT)
and welcomes technology imports. Vietnam continues to attract investors from the United
States and other countries, but certain long-term challenges remain. While some U.S.
companies are excited about the prospects in Vietnam, they have also been frustrated that
Vietnamese policies are not keeping pace with the country’s own dynamically evolving
economy and rapid integration into the global economy.

As a result of industry input, MAS proposed the U.S.–Vietnam ICT Commercial Dialogue
to the Vietnamese Ministry of Information and Communications. In September 2007 in
Hanoi, with help from the American Chamber of Commerce and the Vietnam Chamber of
Commerce and Industry, MAS brought together government experts and industry leaders
from both countries to consider complex issues in the ICT sector.³² MAS used the first
meeting to foster a spirit of cooperation and to lay the foundation for an open dialogue on
a wide array of topics, including telecom regulation, software intellectual property rights,
network security, and electronic commerce (data privacy for online transactions). The first

³¹ For more information, please contact the Office of Technology and Electronic Commerce (see appendix).
³² The first meeting of the Dialogue was successfully launched through teamwork between MAS and the
Commercial Service in Hanoi.

Page 25

Did You Know…?
One U.S. job was created for every $25,000 of venture capital invested between 1970 and 2006.

Source: National Venture Capital Association

meeting led to the development of a bilateral working group that will coordinate all the
activities that the United States and Vietnam undertake in key areas. The ICT Commercial
Dialogue Working Group will continue to reach out to businesses from both countries for
input and to help prioritize the issues.³³

The dialogue aims to focus capacity-building resources on improving the business and
regulatory climate in Vietnam. For U.S. businesses using Vietnam as an alternative
manufacturing base in Asia, focusing on those long-term challenges is a worthy endeavor
because it boosts the return on investment. The dialogue will both strengthen Vietnam as
an export market for the ICT sector and help U.S. companies maintain
their competitive edge in the global economy.

U.S.–Brazil Commercial Dialogue: Attracting Venture Capital

Secretary of Commerce Carlos M. Gutierrez launched the U.S.–Brazil
Commercial Dialogue to help U.S. firms gain greater market access
to this key market.34 The dialogue includes an agreement to enhance
bilateral entrepreneurial and venture capital ties between Brazil and
the United States. MAS proposed and managed the Working Group on
Private Equity and Entrepreneurship to enhance awareness of Brazil
among key U.S. investment professionals.³⁵

MAS’s strategy began with an effort to introduce U.S. investors to Brazil as a commercially
significant market through an institutional investor learning journey to the Brazilian
cities of Rio de Janeiro and São Paulo. Next, MAS worked to influence the policy dialogue
for venture investing in Brazil by creating the U.S.–Brazil Venture Capital Task Force.
Since the task force’s inception in March 2008, private-sector advisers from Brazil and
the United States have put forth recommendations to help Brazil create a hospitable
environment for venture investment.

Finally, in March 2008 MAS developed and executed, in partnership with Brazil’s Agency
for Industrial Development, two entrepreneurship symposia held at universities in Rio de
Janeiro and São Paulo. Symposia participants compared and contrasted approaches in the
U.S. policy environment in an effort to highlight concrete steps that the Brazilian government
could take to create a business climate that encourages investment in entrepreneurs.

Safe Harbor Certification Mark: Keeping Data Flowing Across Borders

On behalf of ITA, MAS administers the U.S.–European Union (EU) Safe Harbor Framework,
which allows U.S. companies to self-certify that they satisfy the requirements of the EU’s
1998 Data Protection Directive.³⁶ Safe Harbor is critical because it facilitates uninterrupted
transfers of personal information that support billions of dollars in trade from the EU to
the United States. The framework arrangement has been in effect since November 2000,
and it ensures adequate protection for EU citizens’ personal information and builds on
the U.S. self-regulatory approach to privacy, without impeding the further development
of electronic commerce. Nearly 1,600 U.S. companies are now participating in the Safe
Harbor program (see Figure 4).

³³ For more information, please contact the Office of Technology and Electronic Commerce (see appendix).

³⁴ The Office of Latin America and the Caribbean of the Market Access and Compliance unit of ITA coordinates
the Dialogue, with additional logistical support from the Commercial Service in Brazil.

³⁵ For more information, please contact the Office of Financial Service Industries (see appendix).

³⁶ For more information, please contact the Office of Technology and Electronic Commerce (see appendix).

Page 26

Figure 4. Safe Harbor Total Membership by Year

(Bar chart showing steadily increasing membership from inception in 2000 up to nearly
1,600 members in 2008)

Companies that participate in the Safe Harbor program have recently requested a
certification mark (similar to a company having a Better Business Bureau “BBB” logo on
a Web site) to display on their Web sites. MAS responded to those requests by designing,
clearing, and obtaining approval for a new certification mark in July 2008 (see figure 5).
The certification mark will help companies illustrate their commitment to the Safe Harbor
program and their efforts to ensure that EU citizens’ information is
secure. The mark will allow MAS to better serve its customers and to
make the Safe Harbor program even more robust. EU officials have
also noted their support for the certification mark. As the new mark is
put into greater circulation, MAS will obtain more feedback from U.S.
companies about its benefits.

Figure 5. Sample Illustration of the Certification Mark

Creating New Opportunities for U.S. Firms in an
Evolving Global Economy

MAS has a unique role in business development because of its close
interactions with industry and its understanding of the evolution of the
global economy. Applying MAS expertise in creative and innovative
ways opens new doors for U.S. companies overseas.

Market Development Cooperator Program: Above and Beyond Matchmaking

The Market Development Cooperator Program (MDCP), which is managed by MAS,³⁷
builds innovative public–private partnerships by providing federal assistance to nonprofit
export promoters, such as states, trade associations, chambers of commerce, and
world trade centers. Those promoters are particularly effective in reaching and assisting

³⁷ For more information, please contact the Office of Planning, Coordination and Management (see appendix).

Page 27

SMEs. MDCP awards help underwrite the start-up costs of new export ventures that those
groups otherwise might not be able to undertake without federal government support.
During the past 11 years, the innovative partnerships have been credited with more than
$238 million in exports annually—a return of $104 for every $1 invested.³⁸

MAS analysts often work with MDCP grantees to improve the effectiveness of their
programs. For example, starting in 2001, MAS began working with the Evergreen
Building Products Association to promote primary wood and non-wood building
products, systems, and technologies to China. The project, dubbed U.S.–China Build
(USCB),³⁹ offered an integrated approach to export growth of U.S. building materials.
Activities focused on creating market demand for U.S. building materials in China and on
expanding outreach and educating American exporters.

Using its industry expertise and knowledge of the market, MAS made a recommendation
to USCB participants that the MDCP grant should include technical and standards
education for Chinese government officials on building codes and product standards. As
a result of expanding the original plan to include technical discussions, four sections of
Chinese building codes and standards related directly to U.S. building materials, designs,
testing and certification procedures, and fire protection were completely revised.⁴⁰

As the U.S.-China Build project drew to a close in 2006,
evidence of its success included the following:

• An increase of $22 million in exports and other eligible transactions, which represents a 62 to 1
return on the grant

• Participation of 213 companies in USCB program activities, including 197 SMEs that were all nearly
new to the market

• Meetings between more than 300 Chinese government and private enterprise officials and
numerous USCB cooperators and companies.

Source: MDCP Quarterly Performance Reports, 2006

Trade Missions: Making Connections

Trade missions are structured to open markets; to identify and secure export and
investment opportunities for American businesses; and to showcase American
products, technology, and expertise worldwide to increase job opportunities for all
Americans. Typically, a high-level Department of Commerce official takes a delegation
of company representatives from a wide array of sectors to a specific country. However,
MAS recognizes the need to organize industry-specific trade missions to elevate and
demonstrate high-level U.S. government support for growing sectors where U.S.
innovation is competitive. MAS industry experts serve as the primary point of contact
for participating companies and coordinate policy issues; they help business delegates
make the most of their visits.

³⁸ Based on MDCP Quarterly Performance Reports.
³⁹ For more information, please contact the Office of Materials and Machinery (see appendix).
⁴⁰ The Commercial Service in China played a key role in coordinating trade missions, conferences, and

Page 28

outreach; the Office of the China Economic Area of the Market Access and Compliance unit of ITA also
provided support in the form of market research and information on standards.

 • Asia-Pacific Partnership (APP) on Clean Development and Climate:⁴¹ Although
opportunities for cleaner and more efficient technologies to curtail the growth of
greenhouse gas (GHG) emissions are abundant in China and India, many obstacles
remain, both from a business and an environmental point of view. The APP is a joint
effort by the United States and six Asian-Pacific nations: Australia, Canada, China,
India, Japan, and South Korea. The APP’s purpose is to develop a public–private
partnership to accelerate the development and use of cleaner and more efficient
technologies and practices throughout the region. Through the partnership, MAS
developed three Clean Energy and Environmental Trade Missions in 2007 and 2008 to
China and India.⁴²

• Civil Nuclear Trade:⁴³ Interest in expanding capacity to generate nuclear energy is
growing worldwide, and U.S. companies are finding numerous new foreign marketing
opportunities. Industry has expressed concern that foreign competitors are gaining
a competitive advantage over U.S. firms because of advocacy by governments. MAS
will address this imbalance in several ways, including organizing a trade mission
specifically for civil nuclear trade.

Results from the Clean Energy Trade Missions

• In addition to setting up meetings with foreign government decision-makers, MAS helped arrange
numerous meetings for U.S. participants with local firms. Approximately 600 one-on-one meetings
occurred per mission.

• On the policy front, MAS addressed U.S. companies’ complaints about India’s tax laws for wind energy,
which created incentive to install wind turbines rather than actually generate electricity from wind.
The scheme led to the installation of inefficient turbines, which put U.S. companies’ more efficient,
albeit more expensive, wind turbines at a competitive disadvantage. MAS raised the issue with Shri
Vilas Muttemwar, India’s secretary of the Ministry of New and Renewable Energy. In March 2008, he
announced that India was changing its laws to create incentives for wind generation.

Competing for Chinese Visitors: Signed, Sealed, and Delivered

According to the United Nations World Tourism Organization, China is the fastest-
growing travel market in the world, and it will become the world’s fourth-largest source of
outbound travelers by 2020. Figure 6 depicts the forecasted growth of Chinese visitation in
the United States during the next decade. In 2007, more than 28 million Chinese citizens
traveled outside their country, but the United States barely received 1 percent of Chinese
outbound travelers.

Chinese law restricts the sale and marketing of outbound group leisure travel to countries
that do not have an agreement with China. In December 2007 in Beijing, to remove the
barrier, U.S. Commerce Secretary Gutierrez and Shao Qiwei, chair for the China National
Tourism Administration, signed the “Memorandum of Understanding (MOU) between the

⁴¹ For more information, please contact the Office of Energy and Environmental Industries (see appendix).
⁴² MAS partnered with the Market Access and Compliance unit of ITA and the Commercial Service in China
and India to implement these trade missions.
⁴³ For more information, please contact the Office of Energy and Environmental Industries (see appendix).

Page 29

Government of the People’s Republic of China and the Government of the United States of
America to Facilitate Outbound Tourist Group Travel from China to the United States.”⁴⁴
As a result of signing the MOU, Chinese restrictions on outbound group leisure travel to the
United States have been eased, and Chinese leisure travelers may now travel to the United
States in group tours.

The MOU creates a new opportunity for U.S. operators to work with Chinese travel
agencies to create and market U.S. tour packages to Chinese group leisure travelers.
More than 100 U.S. companies have already been approved to work with Chinese travel
agencies under the MOU, and significant increases in the marketing of U.S. destinations
and travel services are expected. ⁴⁵

This MOU opens China’s growing market to U.S.
travel and tourism industries. Now, more Chinese
visitors can experience America’s hospitality,
cultural diversity, and natural beauty. Increased
visitation from China will boost overall visitation
to the United States, strengthen the relationship
between our nations, and forge new friendships
between our peoples.

Secretary of Commerce Carlos M. Gutierrez

U.S. Commerce Secretary Gutierrez and Chair for the National Tourism
Administration of China Shao Qiwei after signing the Memorandum of
Understanding facilitating outbound tourist group travel from China.

International Students: Multimedia Fair Promotes Education as a Services Export

U.S. institutions of higher education currently generate annual revenues of approximately
$14.5 billion from foreign students. MAS developed and runs one of the most innovative
trade expansion projects in the Department of Commerce—the U.S. Electronic Education
Fair.⁴⁶ Beginning in 2006 with programs in China, which were later extended to India,
MAS developed and implemented a technologically diverse program to attract foreign
students to U.S. colleges and universities.47 The innovative public–private multimedia
campaign utilizes television, the Internet, and on-ground activities to showcase U.S.
higher education opportunities. So far, the China Internet landing page (www.LiuXueUSA.
cn) and India Internet landing page (www.namastestudyusa.com) have registered more
than 580,000 visitors combined. The India Internet landing page provides prospective
students with additional information about studying in the United States, contains links
to U.S. institutions, and offers a chance to watch the television documentaries and short
broadcasts. The project has been featured in Seventeen India, as well as related articles in
Newsweek International and Voice of America.

⁴⁴ The Office of the China Economic Area of the Market Access and Compliance unit of ITA and the
Commercial Service in China provided valuable support towards the signing ceremony of the MOU.
⁴⁵ For more information, please contact the Office of Travel and Tourism Industries (see appendix).
⁴⁶ For more information, please contact the Office of Travel and Tourism Industries (see appendix).
⁴⁷ The Market Access and Compliance unit of ITA and the Commercial Service provided valuable support
towards implementing these programs.

Page 30

2007–2017
1997–2007
84% Growth
95% Growth

Figure 6. Chinese Visits to the United States, 1997–2017

(Chart showing Chinese Visits to the Unidted States from 2007 through 2017)

1997-2007 84% Growth

2007-2017 95% Growth

800

Source: Tourism Economics, 2008

Supplying “Transplant” Companies: Using the Home Field Advantage

When market demands change, companies look for new opportunities to sell their
products and services. This is especially true today in industries that are part of the
evolving global supply chain. For example, many companies in the U.S. metalworking
industry no longer supply long-term customers in traditional end-use industries,
such as the domestic automobile industry. However, in recent decades, several
foreign automobile manufacturers have gradually moved operations to the United
States to benefit from the advantages of manufacturing and selling directly in the U.S.
market. While those foreign “transplant” companies have continued sourcing from
some of their traditional suppliers, they do offer an important growth opportunity to

U.S. firms. Since February 2008, MAS has organized a series of industry roundtables
and informal discussions on accessing the global supply chain of foreign transplant
manufacturers with several leading metalworking industry trade associations.⁴⁸ Because
of the dialogue, MAS has identified some common industry objectives and is working
with industry to develop a best practices model for metalworking industry companies
seeking new business from transplant manufacturers.

⁴⁸ For more information, please contact the Office of Materials and Machinery (see appendix).

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 The Way Ahead

Future challenges to U.S. competitiveness lie ahead as the U.S. economy becomes
increasingly globalized, service-oriented, and knowledge intensive. Some of
the challenges include addressing energy and environmental needs, workforce
development, and infrastructure. MAS will continue to promote a pro-business
environment in the United States that reduces the cost of doing business and minimizes
structural and sectoral burdens. In addition to the programs and activities already
described in this report, MAS has begun work in several areas designed to increase the
competitiveness of the U.S. economy for the future, including the projects described below.

Manufacturing 2040

Many critical issues—including community and regional economic development,
health care, social security, education, employment and work opportunities, technology
change, trade and aid agreements, immigration, environmental and climatic concerns,
geopolitical influence, and national security—are intricately entwined with the
performance of U.S. manufacturing. Indeed, policies established in many of those areas
will likely influence the future performance of U.S. manufacturing. At the same time, the
performance of manufacturing may influence the trajectory of policy.

However, policy decisions that make sense in the short term often create much larger
problems in the long term because of the circumstances underlying the policy change.
MAS initiated the Manufacturing 2040 project to consider long-term issues and their
implications for current and future policy.⁴⁹ To frame this discussion, participants
identified a set of scenarios for the future of U.S. manufacturing. The scenarios provide
a framework to map out the future role, importance, and competitiveness of U.S.
manufacturing and the implications for U.S. policy.

MAS launched Manufacturing 2040 by hosting a two-day workshop that brought together
executives and experts from manufacturing, academia, and government. It will continue
to facilitate this public–private partnership and, in particular, will work to catalyze the
national discussion on this critical issue. To further those efforts, the Manufacturing
Council⁵⁰ recently adopted the Manufacturing 2040 project as one of its primary
initiatives. In addition, MAS and the Department of Commerce’s National Institute of
Standards and Technology are creating a Web portal to facilitate the Manufacturing 2040
discussion now and into the future.

Supply Chain Infrastructure

A modern transportation infrastructure is critical to maintaining U.S. competitiveness
in the global economy. Representatives from across the transportation industry have
raised concerns about the capacity, quality, and resilience of the nation’s infrastructure,
and the issue has taken on new significance as the United States enters a world of rising
energy costs and expanding trade. Industry believes that this issue should be treated in an
integrated fashion that recognizes the links between the various elements of the system—
whether maritime, land transport, or air services.

⁴⁹ For more information, please contact the Office of the Assistant Secretary for Manufacturing and Services
(see appendix).

⁵⁰ The Manufacturing Council is a private-sector advisory group that was established in response to a
recommendation from Manufacturing in America.

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Did You Know…?
The United States exports
more than $52,000 of goods
and services every second.

Source: Bureau of Economic Analysis

In order to address these issues, MAS is developing a program of conferences and
workshops to highlight the challenges of fully modernizing transportation infrastructure
in the United States. ⁵¹ MAS will work closely with industry stakeholders and key U.S.
agencies in the transport and security field to identify likely paths of development for U.S
transportation infrastructure, the financing options available, and the policies needed
to move forward. MAS is also working to organize a new industry advisory committee to
ensure that the industry’s concerns about infrastructure are fully integrated into trade
policy planning.

Civil Nuclear Energy

Addressing the nation’s massive energy challenge is important to the economy, the
environment, and national security. Clean and reliable nuclear energy is a critical
component of the U.S. strategy to meet that challenge. Interest in expanding the
capacity to generate nuclear energy is growing rapidly worldwide, and numerous
new foreign marketing opportunities are presenting themselves to U.S. companies.
With renewed U.S. support for global expansion of civil nuclear energy use for
peaceful purposes, increased U.S. government coordination as well as consultation
with industry is needed to strengthen U.S. companies’ prospects in bidding for new
projects, particularly because foreign firms benefit from strategic government support.

The Civil Nuclear Trade Initiative, developed by MAS,⁵² was formally launched in October
2008 at the Civil Nuclear Energy Summit hosted at the Department of Commerce. The
Summit, co-organized with the Department of Energy, was an all-day event focused on
renewing America’s nuclear energy partnership for energy security
and economic growth and included over 200 leaders in the field. The
Initiative is designed to strengthen the competitiveness of the U.S.
civil nuclear industry. In addition to trade promotion events (see page
27 “Trade Missions”) the initiative created a new interagency Trade
Promotion Coordinating Committee Working Group to coordinate
the U.S. government’s international policy and activities affecting the
U.S. civil nuclear industry. MAS will also facilitate industry input to
that process from the newly established Civil Nuclear Industry Trade
Advisory Committee (see page 11 “Advisory Committees”).

Telemedicine

A growing and aging U.S. population, an increased incidence of chronic diseases, slow
growth in the number of health professionals (for example, doctors, nurse practitioners,
registered nurses), and a limited number of health professionals in rural areas are all
factors that drive the need to review and potentially reform the U.S. health care sector.
Telemedicine, which is broadly defined as methods to electronically transmit medical
information to evaluate a patient’s health, is viewed as one of the ways to transform the

U.S. health care system to a patient-centered model with more diverse treatment options.

Telemedicine will contribute to U.S. competitiveness by improving the timeliness and
quality of treatment—for example, remotely linking patients in rural areas to specialists
located anywhere in the United States. This in turn would reduce medical expenditures
overall and could eventually make healthcare more affordable for U.S. workers and
businesses.

⁵¹ For more information, please contact the Office of Service Industries (see appendix).
⁵² For more information, please contact the Office of Energy and Environmental Industries (see appendix).

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Telemedicine issues cut across several sectors, including health, technology, and
services. Being on the forefront of innovation for this field can also bring new
opportunities for U.S. companies in the evolving global economy. The knowledge and
expertise of MAS analysts in those areas makes MAS well positioned to identify the
opportunities or obstacles for this new sector. MAS will work with industry and other
stakeholders in their efforts to explore the future of telemedicine and its contribution to
better, less expensive health care. ⁵³

Metrics for Sustainable Manufacturing

Reducing the cost of doing business and helping the environment at the same time is a win–win
proposition for firms and their communities—and a challenge for industry into the future. Sustainable
manufacturing is the use of processes that are non-polluting; that conserve energy and natural resources;
that are economically sound; and that are safe for employees, communities, and consumers. It holds
the promise for meeting that challenge. But can sustainable manufacturing practices actually help a
company’s bottom line?

MAS listened to industry’s need to measure the benefits of using those practices. MAS has begun working
with other countries to establish voluntary metrics so that businesses can measure cost-effectiveness and
environmental benefits of sustainable manufacturing best practices. The work, which is funded through
contributions from the Organization for Economic Cooperation and Development (OECD) and the private
sector, is scheduled to be completed by the end of 2009.

⁵³ For more information, please contact the Office of Health and Consumer Goods (see appendix).


Conclusion

American industry can look to MAS as a partner and a resource for improving their
competitiveness in an increasingly global market. U.S. industry today has vast
opportunities for innovation, expansion, and job creation, and MAS is committed
to effectively help American businesses succeed. Currently, MAS covers more than 90
percent of industries in the U.S. economy, including raw materials, high-tech products,
and basic construction and environmental services. As these U.S. industries grow, new
challenges will be met by a dedication to increasing comprehensive expertise to keep U.S.
industry competitive.

MAS works daily to enhance U.S. competitiveness. MAS staff understand that U.S. and
global commerce includes traditional competitiveness issues as well as new challenges
inherent in the evolving global economy. From standards and rules of origin, to
reconfiguring supply chains and the interdependence of manufacturing and services,
MAS is delivering results.

In its short tenure, MAS has rooted itself in service to U.S. industry—and to the U.S.
economy as a whole. This foundation is particularly important because the domestic and
international commercial, trade, and investment landscapes are converging; business is
changing; and the premiums are rising. MAS provides sound, practicable, and actionable
analysis and data to influence the policy and regulatory debate on behalf of U.S.
competitiveness.

“There is no one silver bullet for enhancing U.S.
competitiveness, but MAS’s strength is in our
bottom-up approach to understanding business
competitiveness. We respond to an industry or
sector issue by analyzing its consequences in a
holistic manner and providing well thought-out,
objective information for the policy debate."

Deputy Assistant Secretary for
Industry Analysis Praveen Dixit

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Appendix:

Office of Manufacturing and Services Contact Information

www.trade.gov/mas • www.manufacturing.gov

Office of the Assistant Secretary (202) 482-1461 • (202) 482-5697 (fax)

Name of Office (with sample Industries) Phone/Fax

Manufacturing

Office of Energy and Environmental Industries : (202) 482-5225/(202) 482-5665

Clean Energy, Civil Nuclear, Environmental Technologies

Office of Materials and Machinery : (202) 482-0575/(202) 482-1436

Building Supplies, Heavy Machinery, Metals, Chemicals, Forest Products

Office of Aerospace and Automotive Industries : (202) 482-0554/(202) 482-0674

Aircraft, Space Vehicles, Cars, Trucks, Parts

Office of Technology and Electronic Commerce : (202) 482-0216/(202) 482-5522

Computers, Software, Microelectronics, Telecommunications, E-commerce

Office of Health and Consumer Goods : (202) 482-2470/(202) 482-0975

Pharmaceuticals, Medical Devices, Foods, Toys, Motorcycles

Services

Office of Travel and Tourism Industries: (202) 482-0140/(202) 482-2887

Entry/Exit Policies, Tourism Statistics

Office of Financial Service Industries : (202) 482-3277/(202) 482-5702

Banking, Venture Capital, Ex-Im Bank, Export Financing, Insurance

Office of Service Industries : (202) 482-3575/(202) 482-2669

Transportation Supply Chain, Education, Healthcare Services, Express Delivery

Industry Analysis

Office of Trade Policy Analysis ................................................................................. (202) 482-5675/(202) 482-5875

Analysis of Trade Negotiations, WTO, FTAs, Sustainable Manufacturing

Office of Competition and Economic Analysis ....................................................... (202) 482-5145/(202) 482-4614

Analysis - Regulatory, Economic and Exchange Rate; Export Trading Company Act

Office of Trade and Industry Information ............................................................... (202) 482-4691/(202) 482-3968

Trade Statistics Data, Metro Export Data

Standards Liaison ................................................................................................. (202) 482-8164/(202) 482-0382

Standards, Conformity Assessment, Technical Regulations

Advisory Committees.......................................................................................... (202) 482-4501/(202) 482-4452

ITACs, PEC, Manufacturing Council, Travel and Tourism Advisory Board

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Notes

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The International Trade Administration’s mission is to create prosperity by
strengthening the competitiveness of U.S. industry, promoting trade and investment,
and ensuring fair trade and compliance with trade laws and agreements.

Manufacturing and Services
Office of the Assistant Secretary

1401 Constitution Ave., NW
Washington, DC 20230

T
202.482.1461
F
202.482.5697

www.trade.gov

November 2008