Blog - July 2009

This week, in preparation for the annual African Growth and Opportunity Act (AGOA) Forum, USTR.gov is reviewing trade preference programs for a look at how developing countries can use trade to help alleviate poverty and raise living standards.

Part of President Obama's Trade Policy Agenda is focused on "upholding our commitment to be a strong partner to developing countries, especially the poorest developing countries." That is why USTR has invested so much time and energy into the African Growth and Opportunity Act (AGOA) - a trade preference program that works to bring African countries into the global market.

AGOA is helping to expand and diversify trade between the U.S. and sub-Saharan Africa and to build partnerships between U.S. and African businesses.

Now in its tenth year, AGOA expands on the Generalized System of Preferences (GSP) Program by providing eligible African countries with duty-free access to the U.S. market for nearly 6,400 eligible items.

Since its inception, AGOA has helped to increase U.S. two-way trade with sub-Saharan Africa. In 2008, U.S. total imports from sub-Saharan Africa were more than four times the amount in 2001 - exceeding $86 billion - while U.S. total exports to sub-Saharan Africa more than doubled during this period, reaching $18.6 billion.

Thanks to AGOA, imports of non-traditional and value-added products from Africa have increased dramatically. These include manufactured goods from South Africa, apparel from Lesotho, jams and jellies from Swaziland, cut flowers from Kenya and Ethiopia, and processed cocoa products from Ghana.

Countries are eligible for the AGOA program if they have established or are making continual progress toward establishing the following: market-based economies; the rule of law and political pluralism; elimination of barriers to U.S. trade and investment; protection of intellectual property; efforts to combat corruption; policies to reduce poverty, increase availability of health care and educational opportunities; protection of human rights and worker rights; and elimination of certain child labor practices. Forty of the 48 sub-Saharan African countries are now eligible for AGOA benefits.

Through its trade arrangements, USTR works together with other U.S. agencies to coordinate trade capacity building in the region. For example, the U.S. Agency for International Development (USAID) maintains four regional trade hubs throughout the continent that provide training and technical assistance to help African exporters make the most of trade opportunities under AGOA. The preferences supported by trade capacity building assistance are a multi-pronged approach to economic growth and poverty alleviation throughout sub-Saharan Africa.

AGOA eligible countries are:

• Angola

• Benin

• Botswana

• Burkina Faso

• Burundi

• Cameroon

• Cape Verde

• Chad

• Comoros

• Republic of Congo

• Democratic Republic of Congo

• Djibouti

• Ethiopia

• Gabon

• The Gambia

• Ghana

• Guinea

• Guinea-Bissau

• Kenya

• Lesotho

• Liberia

• Madagascar

• Malawi

• Mali

• Mauritius

• Mozambique

• Namibia

• Niger

• Nigeria

• Rwanda

• Sao Tome and Principe

• Senegal

• Seychelles

• Sierra Leone

• South Africa

• Swaziland

• Tanzania

• Togo

• Uganda

• Zambia

To keep track of USTR at the AGOA Forum, be sure to check out USTR's Facebook and Twitter page next week.

Today, the Office of the U.S. Trade Representative (USTR) and the Department of State hosted a public meeting concerning the Administration's review of the U.S. model Bilateral Investment Treaty (BIT). USTR and the Department of State co-lead the negotiation of BITs for the United States.

The Administration is reviewing the U.S. model BIT, last updated in 2004, to ensure that it is consistent with the public interest and the overall U.S. economic agenda. More than 70 members of the public attended the public meeting and 17 people made statements.

On July 15, the United States and Peru held the first meeting of the Forest Sector Sub Committee established under the United States - Peru Trade Promotion Agreement (USPTPA) as a specific forum for the Parties to exchange views and share information on any matter arising under the Annex on Forest Sector Governance. The following article from Sociedad Nacional de Industrias highlights the meeting. You can read the article in Spanish here.

The governments of the United States and Peru agreed to create a Subcommittee on Forest Sector Governance, under the Annex on Forest Sector Governance, under the environment chapter of the U.S. - Peru FTA.

Installation of the subcommittee, which took place at the National Society of Industries, was attended by Dr. Alfredo Biasevich, Chairman of the Committee for Wood Products and Derivatives Sector of the NSI, a representative of business.

Before an audience comprising representatives from the U.S. government and Peru, as well as national and foreign organizations, Mara Burr, a specialist in environmental issues from the Office of the United States Trade Representative and Ernesto Guevara, an environmental specialist at the Ministry of Foreign Trade and Tourism (MINCETUR), explained the functions of this important working group.

This subcommittee aims to facilitate the cooperation envisioned in the aforesaid Annex on Forest Sector Governance and in turn create a forum for both countries to exchange views and information on any matter related to the Annex.

One of the resolutions adopted by this working group is that parties regularly consult and exchange important, non-confidential information on bilateral trade of wood products to the extent that is consistent with their respective laws and regulations, as authorized by them. Such information includes: customs data, information on efforts to combat illegal logging and associated trade (including measures of interdiction, seizure, arrests, prosecutions, and convictions), the implementation of the requirements of the CITES Convention, and any other relevant information.

The representative of the U.S. government as the representative of MINCETUR agreed that there is currently a major, global concern for environmental issues and in particular the future of forests. This issue is predominant in Peru and other nations that are suffering from illegal logging and land use change for more lucrative activities than forest and lower risk activity, such as those of Agriculture and Livestock. Moreover, Ernesto Guevara asserted that Peru also suffers from the effects of poverty and the presence of drug trafficking.

Among the positive aspects of forestry, the representative of MINCETUR recalled that Peru has about 70,000,000 hectares of forest and occupies ninth place in the forest area, but for its flora and fauna richness occupies fourth place in importance.

He further reported that as a result of the environmental concerns, the governments of the United States and Peru have signed a trade promotion agreement and an addendum to the TPA regarding environmental and forestry issues. "This addendum establishes numerous measures to combat illegal logging and some measures to promote legal forestry activity," he added.

Finally, the representative of the U.S. government exhorted those involved in this issue so that this subcommittee can be a forum whose axis is the promotion of legal forest activity as the main method by which to combat illegal logging, deforestation, drug trafficking, and poverty.

For his part, Alfredo Biasevich, President of the Committee for Wood Products and Derivatives Sector of the NSI, maintained that the Peruvian businesspeople have a great concern for the future of forests, and are committed to the fact that this activity could be viable in a social, economic, and environmental point of view.

It should be mentioned that the Subcommittee on Forest Sector Governance will meet bi-annually and the next two meetings will happen in Peru in 2010. They will be the same as before the eighteen month deadline for compliance of much of the forestry legislation, included in the annex immersed in the Environment Chapter of the FTA with the US.

Visit the Peru Trade Promotion Agreement (PTPA) page to learn about the environmental section of the agreement.

Recently, Assistant U.S. Trade Representative for African Affairs Florie Liser sat down with America.gov writer Charles Corey to talk about how trade is helping countries in sub-Saharan Africa. Read the article below.

Trade is the key to long-term, sustainable economic growth and development in sub-Saharan Africa, says Florizelle Liser, assistant U.S. trade representative for Africa.

Because trade is vital to sub-Saharan Africa's economic future and to improving lives and livelihoods, the 8th Annual African Growth and Opportunity Act (AGOA) Forum, to be held in Nairobi, Kenya, August 4-6, is an important venue for cultivation of trade opportunities, Liser said in a July 21 interview with America.gov.

"Trade is critically important to economic development. Right now, Africa has about 2 percent of all world trade, which is hard to believe when you think about all of the tremendous resources that they have - oil, diamonds, gold ... not to mention all the agricultural products such as coffee, tea, cocoa - and to think that Africa still only has 2 percent of world trade is really incredible. But the power of trade is that if the Africans were able to increase their share of world trade from 2 to 3 percent, that 1 percentage increase would actually generate about $70 billion of additional income annually for Africa," or about three times the total development assistance Africa gets from the entire world, Liser said.

Many countries in Asia and Latin America, she said, "don't have even one smidgen of Africa's natural resources - a country like South Korea, for example - yet they are huge players in the global trading system. This is why having AGOA as one initiative aimed at expanding the U.S. aspect of our economic relationship with the Africans" is so important.

Liser said the United States needs to work with the countries of sub-Saharan Africa in many areas so they can take full advantage of both AGOA and worldwide trading opportunities and send exports to emerging markets such as China, India and Brazil.

And Africans must begin trading more with each other. "Africans trade the least with each other than all the other continents. It is improving. We are seeing a greater increase in intra-African trade, but," she emphasized, "the reason that that is important is that you are unlikely to be competitive globally if you are not competitive regionally. So until they open their borders with each other and trade with each other, you are not going to get the level of competition that will allow them to be major providers of any product globally."

For that reason, the United States strongly encourages all African countries to develop an "AGOA strategy" based on export promotion and competiveness, she said.

"You look at the products you have, and you determine the three or four particular products or sectors [where] you have a comparative advantage,"
she explained. "Then you look carefully at what are the challenges that face those three or four products or sectors and what would the country have to do to make them more competitive." Some countries are employing this strategy and bringing together their trade, finance, transport and energy ministers and investment promotion experts. "You sit all of these people around the table and you have them ... determine, step by step, what they have to do to advance the competitiveness of those three or four products or sectors."

Recently, Liser talked to the Tanzanians about the AGOA strategy they are developing. Tanzania produces the cotton for the Venus Williams line of tennis shirts, which also is manufactured at a plant in Tanzania. "I challenged them. I said you only have one plant. You have all this cotton. You have cotton farmers who would benefit if you could create more of these factories," which in turn could employ many more people. "The problem is that, as is true with most of the AGOA countries, you have huge potential but you don't have the investment and the focus on how to take that and duplicate and multiply that." The apparel industry, she added, is a "gateway to industrialization."

Africa's share of the U.S. import apparel market is less than 2 percent. By comparison, she said, depending on the product, Bangladesh exports to the United States three to five times the amount of apparel that is exported to the United States by all sub-Saharan African countries combined. "That shows you that they [the Africans] have huge potential but somehow that is not being advanced." U.S. imports under AGOA in 2008 totaled $66.3 billion, with $5.1 billion in nonoil trade, a sector that Liser says the United States wants to further expand.

Another issue, she said, is the need for much more domestic and foreign investment on the continent: "Without that investment, these factories that we are talking about building simply will not be built." She added that "it is not just about foreign direct investment, but also about domestic investment and government investment in the infrastructure that supports trade."

Acknowledging that there is confusion, Liser said it is important to understand what AGOA really is.

"AGOA is essentially a trade preference program which adds about 1,800 products to the list of about 4,600 products that are already eligible to enter the United States duty free under the Generalized System of Preferences. The purpose of AGOA in adding those 1,800 products was to give the Africans a competitive advantage in the U.S. market for additional value-added products. ... So AGOA is important because it is one of the major ways that we have to help encourage greater value addition to Africa's production of agricultural and manufactured products."

Often, she added, people think AGOA is just about textiles and apparel. It is not. "So ... the first thing we need to understand is what it does, and that it is working. We are getting a greater number of value-added nontraditional products entering the U.S. under AGOA. But again," she acknowledged, Africa is "starting from a very small base. So even though we have seen growth, we have not gotten anywhere near the potential."

The Office of the U.S. Trade Representative and the Department of State will host a public meeting concerning the U.S. model Bilateral Investment Treaty (BIT) review on July 29, 2009 from 9am-5pm (with a two-hour break from 12:00 p.m. to 2:00 p.m.) in the Loy Henderson Auditorium of the Harry S. Truman Building.

The Administration is reviewing the U.S. model BIT to ensure that it is consistent with the public interest and the overall U.S. economic agenda. The key question is whether the current model text, last updated in 2004, achieves these objectives or whether there are changes that should be made.

According to a Federal Register notice published on July 14, 2009, persons wishing to speak at the meeting are requested to provide a written summary of their remarks in advance; however, failure to do so will not bar a person from speaking. Speakers will be asked to limit their remarks to five minutes.

Admittance to the State Department building will be by means of a pre-arranged clearance list. In order to be placed on this list, please provide your full name, date of birth, and driver's license state and number or passport number to Model_BIT_RSVP@state.gov or, by fax, to (202) 647-0320 by 5:00 p.m. on July 23.

The building is located at 2201 C Street, NW, Washington, DC, 20520. Attendees must enter through the 23rd street entrance.

For further information, contact Jonathan (Josh) Kallmer, Deputy Assistant U.S. Trade Representative for Investment, at (202) 395-9451 or Michael Tracton, State Department BIT Coordinator, at (202) 736-4060. Members of the press may also contact Jeffrey Jamison, Deputy Director of the Economic, Energy and Business Affairs's Office of Economic Policy Analysis and Public Diplomacy at (202) 647-4864.

Every week, the USTR website will explore a new trade topic, with background information and current trade data. On July 21 and 22, U.S. Trade Representative Ron Kirk will be in Singapore at the annual Asia-Pacific Economic Cooperation (APEC) Ministerial meeting - so this week's trade topic is U.S. trade relations with APEC member economies.

Weekly Trade Focus: APEC

Earlier today, Ambassador Kirk announced new trade enforcement measures aimed at saving jobs and creating new jobs in the United States by leveling the global playing field for American workers and businesses at U.S. Steel's Mon Valley Works - Edgar Thomson Plant in Pittsburgh, Pennsylvania.

Please see below some of the statements issued following Ambassador Kirk's announcement.

House Ways and Means Chairman Charles Rangel (D-NY) and Trade Subcommittee Chairman Sander Levin (D-MI)

National Association of Manufacturers

Senate Finance Committee Chairman Max Baucus (D-Mont.)

United Steelworkers

U.S. Chamber of Commerce

Ambassador Kirk announced a number of new trade enforcement measures aimed at saving jobs and creating new jobs in the United States by leveling the global playing field for American workers and businesses this morning in a visit with Pennsylvania Steelworkers. He spoke at U.S. Steel's Mon Valley Works - Edgar Thomson Plant about the Obama Administration's commitment to better enforcement of America's trade rights around the world.

Read excerpts of the speech below...

"I can tell you with no reservations: the Obama Administration is both willing and able to enforce our trade agreements. American workers deserve no less.

Today, on behalf of President Obama, I am here to affirm this administration's commitment to trade enforcement.

I am announcing several concrete new measures that will help to guarantee America's workers, businesses, and families a fair deal.

We will take new steps to protect the rights of American farmers and small business owners. We will hold our trading partners to their word on labor standards. And we will use work we're already doing to fight even harder for the men and women who fuel our economy and support their families.

That's the mission of USTR. We're here to help Americans grow their farms, build their businesses, and support their families through trade.

...The Office of the United States Trade Representative is strengthening trade enforcement efforts because we will do everything we can to support those jobs and the workers who hold them.

President Obama and I believe that on a level playing field, Americans can compete in any sector - from manufacturing to services to agriculture. Just enforcing the rules on the books can win our workers and companies the benefits of trading as fully, fairly, and freely as our agreements allow.

Our new approach to enforcement is simple. We will deploy our resources more effectively to identify and solve problems at the source. But make no mistake: we will pursue legal remedies when other options are closed.

...So, in this administration, we will break down trade barriers that confront American workers and businesses.

First, we will build on what works. One of the best ways we guarantee America's trade rights is by consistently monitoring our partners' trade practices. If they know we are holding a magnifying glass up to their actions, they'll be less likely to break the rules. So, we will use that magnifying glass on behalf of more American businesses.

...We're going to apply the lessons of those successful programs to address other, equally important trade barriers. Two new, innovative tools will provide strong support for U.S. farmers, ranchers, and industry.

The first new tool will confront barriers that other countries raise to prevent our farmers and ranchers from marketing their products abroad. We must more strongly address sanitary and phytosanitary barriers, like the restrictive regulations some countries slapped on American pork because of the H1N1 flu scare. And we must address them across the board, as well as on a case by case basis. This will ensure our agricultural producers see their rights restored abroad, and their businesses saved here at home.

The second new tool will take on one of the biggest obstacles our manufacturers face: technical barriers to trade, such as technical regulations and standards that restrict U.S. exports of safe, high quality products. Now, we will seek out these barriers and tackle them head-on.

Next, we will leverage these new efforts and existing USTR work to better enforce America's rights around the world. The trade reports that go to Congress will be more than paperwork. We will use them in new ways to spur real actions with real impact for American workers and businesses.

...Finally, we will hold our trading partners to their commitments on workers' rights.

...These are the steps that USTR must take, and will take, to save American jobs and make trade work better for America's families.

The high-quality jobs that U.S. exporters can create here at home are our number one priority. Those jobs are the reason that USTR is on the case."

Read the full remarks, as prepared for delivery.

Ambassador Kirk will travel to Singapore next week, July 21-22, to attend the Asia Pacific Economic Cooperation Forum's (APEC) Ministers Responsible for Trade Meeting. While in Singapore, Ambassador Kirk will hold numerous bilateral and multilateral meetings with fellow APEC Ministers to discuss ways of advancing APEC's initiatives and agenda.  He will be joined by Deputy U.S. Trade Representative Demetrios Marantis.

This year marks the 21^th annual meeting of APEC member economies coming together for an open discussion on trade and investment.

This year's theme is "Sustaining Growth, Connecting the Region." Members at the week-long meeting will focus on support economic growth, address the global economic crisis, support the multilateral trading system, accelerate regional economic integration, and strengthen APEC.

APEC is comprised of 21 countries, most of which have a coastline on the Pacific Ocean. These countries - Australia, Brunei Darussalam, Canada, Chile, People's Republic of China, Hong Kong, China, Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, The Republic of the Philippines, The Russian Federation, Singapore, Chinese Taipei, Thailand, United States and Viet Nam - account for approximately 40 percent of the world's population, 54 percent of the world gross domestic product (GDP), and 44 percent of world trade.

The United States had a $2 trillion in total (two way) goods trade with APEC countries during 2008. Goods exports totaled $753 billion; goods imports totaled $1.3 trillion.

Visit the APEC page to learn more about U.S.-APEC trade facts.

The Office of the United States Trade Representative and the Department of State, co-leads of the U.S. bilateral investment treaty (BIT) program, are soliciting written comments and will hold a public meeting on July 29, 2009, concerning the Administration's review of the U.S. model BIT. The review is intended to ensure that the model BIT is consistent with the public interest and the overall U.S. economic agenda. The key question is whether the current model text, last updated in 2004, achieves these objectives or whether there are changes that should be made.

For further information, please view the Federal Register notice announcing the public meeting.

The World Trade Organization (WTO) just announced the Tariff Download Facility, a comprehensive database of WTO members' customs tariffs and, where available, imports. The data allows you to find tariff information by country, year and product, and includes the duty rates actually charged to import a product (applied rates) and the specific countries' committed maximum duty rates (bound rates).

The USTR office of Market Access and Industrial Competitiveness works to tackle tariff and non-tariff issues facing U.S. manufacturers. Eliminating tariff and non-tariff barriers is part of this administration's goal to advance and defend the interests of American manufacturers and their workers by expanding export opportunities and strengthening enforcement of trade rules.

Currently, the United States has a trade-weighted average import duty rate of two percent on non-agricultural goods. Industrial tariffs are customs duties on non-agricultural merchandise imports, charged either by percentage of value or on a specific basis. Approximately 96 percent of U.S. merchandise imports are non-agricultural goods.

If you are involved with exporting, be sure to visit the WTO's Tariff Download Facility to see how tariffs vary from country to country and product to product. Also, let us know how our market access and industrial competitiveness office can help you by continuing to break down tariff barriers.

Ambassador Ron Kirk and Swiss Federal Councillor Doris Leuthard met today to discuss bilateral U.S.-Swiss trade relations and the status of the Doha Development Agenda negotiations. They agreed to explore joint cooperation in areas of mutual interest. Ambassador Kirk also explained his efforts to ensure that trade policy plays a positive role in the recovery of the U.S. economy.

Ambassador Ron Kirk and Swiss Federal Councillor Doris Leuthard

Agricultural trade issues were on the agenda when Ambassador Ron Kirk met with Australian Agriculture Minister Tony Burke today in Washington. They reviewed the ongoing success of the U.S.-Australia trading relationship and the importance of continued bilateral efforts to advance the Doha trade negotiations. Ambassador Kirk and Minister Burke also discussed specific agricultural trade issues where both sides are seeking to achieve additional progress in the bilateral trade relationship.

Ambassador Ron Kirk with Australian Agriculture Minister Tony Burke

Every week, the USTR website will explore a new trade topic, with background information and current trade data. On July 8, President Obama will join world leaders at the 2009 G8 Summit in Italy, so this week's trade topic is trade with G8 members.

This week, Italy's Prime Minister Silvio Berlusconi will host President Obama along with the Heads of State and Government of Canada, France, Germany, Japan, Russia and the United Kingdom at the 2009 G8 Summit in L'Aquila, Italy. The G8 is a summit between the main industrial countries of the world, intended to create an open dialogue on major world issues. During the G8, President Obama will be reviewing the Doha round negotiations and the international trading system. The Obama Administration is committed to a successful and balanced conclusion of the Doha round negotiations.

The G8 countries make up the United States' largest trading partners, with Canada being our largest goods trading partner. The U.S. and Canada traded $597 billion in total goods during 2008. In 2008, the U.S. exported $261.4 billion in goods to Canada. The largest exports of goods were vehicles at $45.2 billion.

Germany, France, Italy and the United Kingdom are all members of the European Union (EU). Trade between the U.S. and EU member countries constitutes the most complex and expansive trade relationship in the world. Trade between the U.S. and EU countries constitutes $2.7 billion in trade daily and supports 14 million jobs. In 2008, the U.S. purchased 19 percent of all EU exports and supplied 12 percent of all EU imports.

Japan is currently the United States' fourth largest overall trading partner trading $206 billion in two-way trade. The largest export commodity to Japan in 2008 was machinery, constituting $7.8 billion in export trade. In 2008, the U.S. imported $139.2 billion in goods from Japan.

In 2008, the U.S. imported $28.6 billion in goods from Russia, making Russia our 17th largest supplier of goods. The largest import from Russia was Mineral Fuel (oil), totaling $17 billion. Russia imported $1.8 billion in American agricultural goods during 2008, making them the 10th largest U.S. agriculture export market.

To learn more about the 2009 G8 summit you can visit its webpage here.