Blog - August 2009

Welcome to the Ask the Ambassador portion of our blog. We have received many questions and comments from not just across the United States, but also from different regions of the world. This blog will feature questions that express common themes running throughout the questions we receive.

This week, Gohar from Miami, Florida asked the Ambassador about specific trade relationships and quota restrictions. He asks:

"I was wondering if there are any apparel quota restrictions for Sweden/EU? What are the trade relationships with Sweden? Are there any specific trades and investments between the US and Sweden?"

Ambassador Kirk responds:

"There are no quota restrictions for apparel imports from Sweden or the European Union. Sweden is our 34th largest goods trading partner.

There are numerous Swedish companies invested in the U.S., providing jobs for American workers. The Department of Commerce estimates that approximately 179,000 jobs in the U.S. are provided by Swedish companies. Some examples, according to FDI markets, are below:

• Dometic, an international manufacturer of recreational vehicle accessories, will soon be opening a plant in LaGrange, Indiana. This new manufacturing operation will create 116 positions.

• Nova Bus recently opened a new bus manufacturing plan in Plattsburgh, New York. This plant will eventually employ over 400 American workers.

• The retail store Hennes & Mauritz (H&M) will open their first store in Kentucky in October. The store, located in Florence, will provide various retail positions.

• Swebo Bioenergy, a heating and electricity production company, will open its first store in the U.S. this fall. The office, located in Annapolis, Maryland, will be the U.S. headquarters for the organization. Shortly after opening, the office will employ up to 25 positions, with expansion in the future.

• The city of Flint, Michigan recently signed a 21-year agreement with Swedish Biogas to build a biogas city wastewater treatment plant. The plant will also work in conjunction with car companies to use the biogas to power automobiles. The organization began construction on the plant this month, and it will be completed in June 2010. The biogas production side of the plant will begin fall of next year.

In 2008, the U.S. imported $12.5 billion worth of goods from Sweden, and exported $5.0 billion worth of goods to Sweden.

Gohar, thank you for your question. As you can see, there is a strong trade relationship between the U.S. and Sweden."

Thank you for the questions this week. We look forward to continuing our open dialogue on trade.

Every week, the USTR website explores a new trade topic, with background information and current trade data. This week's trade topic focuses on Montana and the softwood lumber industry, and how trade helps Americans in states across the country.

Montana and Softwood Lumber

If your house has a wooden deck for outdoor relaxation, or your garden is edged in treated timbers, or you've bought 2 x 4's from your local home supply store, softwood lumber is a part of your life. It is also one of the largest commodities we trade with Canada, and has been a major trade issue over the years.

The 2006 Softwood Lumber Agreement (SLA) is a bilateral trade agreement between the United States and Canada, two of the largest lumber-producing countries in the world. USTR is committed to leveling the playing field for the American worker by enforcing trade agreements, including the Softwood Lumber Agreement (SLA). Strong trade enforcement allows American workers to compete with anyone in the world.

Background on Softwood Lumber

In October 2006, the United States entered into the SLA with Canada to create a fair trade deal for U.S. softwood lumber producers. The SLA settled massive litigation in U.S. and international venues and resulted in the revocation of antidumping and countervailing duty orders on softwood lumber from Canada. The SLA is designed to create a downward adjustment in softwood lumber exports from Canada into the United States when demand in the United States is low through the imposition of export measures by Canada.

The SLA also provides for binding arbitration to settle any disputes about interpretation and implementation of the Agreement. On August 13, 2007, the United States requested an international arbitration under the SLA to resolve concerns regarding Canada's implementation of the export measures, in particular the operation of the Agreement's surge mechanism and quota volumes. On March 4, 2008, the arbitral tribunal agreed with the United States that Canada violated the SLA by failing to properly adjust the quota volumes of the Eastern Canadian provinces in the first six months of 2007. In a February 2009 decision, the tribunal ordered Canada to cure the breach within 30 days and prescribed compensatory adjustments to the export measures to remedy the breach. Canada failed to cure its breach within the time prescribed or make the compensatory adjustments determined by the tribunal. As a result, in April, USTR imposed a ten percent ad valorem customs duty on lumber imports from four Eastern Canadian provinces effective April 15, 2009. The duties will remain in place until the United States has collected $54 million dollars or until Canada acts to correct the situation. Canada has asked that arbitral panel, now reconstituted, whether a settlement offer it made but the United States rejected is sufficient.

The United States filed a second request for arbitration on January 18, 2008, challenging a number of assistance programs implemented by Quebec and Ontario, which the United States believes are inconsistent with Canada's obligations under the anti-circumvention provision of the SLA.

Awards on both arbitrations are expected in late 2009.

Montana Trade Facts

Montana exported $1.4 billion worth of goods and services in 2008. This export total represents a 146% increase over 2004 levels, the third largest percentage increase in the 50 states over this period.

Over 691 Montana businesses exported goods in 2006. Small and medium-size businesses made up 87 percent of total business exports. These same small and medium size companies accounted for 62 percent of total exports for Montana.

Manufacturing exports directly and indirectly supported 6,900 jobs in 2006. Many of these jobs are a result of foreign investment from the UK, France, Canada, and Switzerland.

In addition to manufacturing, agriculture represents a key industry in Montana. In 2007, the state's farm receipts totaled $2.3 billion, as agricultural exports boosted both farm prices and income while supporting about 7,705 jobs. Agricultural exports equaled 31 percent of Montana's farm cash receipts in 2007.

The largest countries receiving exports from Montana in 2008 were:

• Canada ($696 million)

• Japan ($131 million)

• Taiwan ($75 million)

• South Korea ($67 million)

• China ($61 million)

2008 top exports were:

• chemical manufactures ($353 million)

• machinery manufactures ($185 million)

• transportation equipment ($150 million)

• primary metal manufactures ($115 million)

Welcome to the Ask the Ambassador portion of our blog. We have received many questions and comments from not just across the United States, but also from different regions of the world. This blog will feature questions that express common themes running throughout the questions we receive.

We received many questions about the selection process for posting questions that we receive on our blog. Jeffrey, from Texas, asked us why we only select specific questions to feature.

Ambassador Kirk responds:

"Since the creation of the "Ask the Ambassador" feature, USTR has received many questions and comments from around the world. USTR responds directly to every submission. However, as Jeffrey noted, we are only able to feature a handful of questions every week on our blog due to the high volume of submissions. We review every submission and then choose to feature entries that touch on currently active trade police issues, that offer opportunities to further explain various trade policy initiatives and decisions, or submissions that contain common themes and questions. It is our hope to have a robust conversation on trade with USTR.gov visitors across America and the world."

Thank you for your questions and comments this week. We hope that this is just the beginning of a great conversation on trade.

Every week, the USTR website explores a new trade topic, with background information and current trade data. This week, U.S. Trade Representative Ron Kirk is joining U.S. Senator Chuck Grassley (R-IA) and Ambassadors from more than 60 countries on a tour of Iowa. This week's trade topic focuses on finding how trade helps Americans in states across the country.

Since 1986, Senator Grassley has invited all United States Ambassadors with embassies in Washington D.C. for a tour of Iowa. The tour delineates the many resources of the state, including its potential for international trade. This year, along with Ambassador Kirk, there will be 66 countries represented. You can track Ambassador Kirk's travel in Iowa on our blog.

USTR.GOV has a special feature that gives Americans data and information on how trade helps your individual state - your family, your neighbors, and your local businesses. At the grocery store, American consumers can find more affordable products due to international competition. With 95 percent of the world's consumers located outside of the United States, American businesses can expand their enterprises beyond our borders, providing better-paying jobs for all Americans. As Ambassador Kirk travels in Iowa this week, USTR.GOV is featuring trade information for that state. To find trade facts for your state, please visit ustr.gov.

Iowa Trade Facts

In Iowa, businesses are actively engaged in trade. More than 2,248 Iowa businesses exported goods in 2006. Small and medium-size businesses made up 81 percent of total business exports. These same small and medium size companies accounted for 21 percent of total exports for Iowa.

Manufacturing jobs supported by exports make up over seven percent of Iowa's private sector employment. Of all manufacturing jobs in Iowa, over 16 percent of workers rely on exports for their jobs.

Iowa's exports totaled $12.1 billion in 2008.

The largest countries receiving exports from Iowa in 2008 were: Canada ($3.8 billion), Mexico ($1.9 billion), Japan ($824 million), Germany ($573 million), Russia ($379 million)

The top export industries in 2008 were: Machinery manufactures ($3.5 billion), processed foods ($2.2 billion), chemical manufactures ($1.1 billion), computers and electronic products ($740 million)

Ambassador Kirk visited Kenya, Ethiopia and Senegal during his nine-day official visit to Africa. See pictures of his trip below. Click on the picture for more information.

United States Trade Representative Ron Kirk has concluded his two-day visit to Dakar, Senegal. This was Ambassador Kirk's first time visiting Dakar, Senegal as the United States Trade Representative and it gave him an opportunity to discuss ways to improve the US.-Senegal trading relationship.

While in Dakar, Ambassador Kirk met with Prime Minister Ndene Ndiaye and Trade Minister Amadou Niang as well as other government and private sector representatives with whom he discussed a range of issues such as trade under AGOA, the Doha negotiations and efforts the government of Senegal is taking to improve the business environment and attract investment. He also met with Millennium Challenge Account (MCA) staff about a potential U.S.-funded MCA compact that will have an impact on trade and the people of Senegal.

As well, Ambassador Kirk met with Senegalese producers and exporters to discuss the successes and challenges they face exporting to the United States under AGOA. Additionally, he toured the Port of Dakar and was able to see the advances made at the port to promote Senegalese and regional trade.

Before leaving Dakar, Ambassador Kirk visited Goree Island, a historical site, and talked to Mayor Augustin Senghor about the importance of tourism and trade.

"Trade continues to play an important role in economic growth and development in the United States and Africa. I have spent the past few days in Dakar because the Obama Administration is very interested in enhancing the U.S.-Senegal trade investment relationship, including greater trade under AGOA. Senegal's exports to the U.S. are modest but we recognize the potential for Senegal to increase its AGOA exports and to become a hub for trade between the United States and countries in West Africa."

Earlier today, Ambassador Kirk arrived in Washington, D.C. Prior to his visit to Senegal, he visited Ethiopia and Kenya. Follow all of the Ambassador Travels on his travel page.

Deputy U.S. Trade Representative Demetrios Marantis spent today in Mumbai, India as part of his official visit to the country. During this week, Ambassador Marantis will be working with the Indian government on trade and investment matters under the Trade Policy Forum (TPF).

An interagency collaboration, the USTR-led TPF is the principal trade dialogue between the United States and India. It has five Focus Groups: Agriculture, Investment, Innovation & Creativity (intellectual property rights), Services, and Tariff & Non-Tariff Barriers. U.S. and Indian Focus Group chairs meet periodically to work towards resolution of issues that impede trade and investment flows.

This morning Ambassador Marantis met with Dr. Ashok Ganguly, one of three members of Prime Minister Manmohan Singh's Investment Commission to discuss India's dynamic investment climate, challenges for foreign investors, and the work of the commission to advise the government on investment policies.

Then Ambassador Marantis met with the managing directors of Cipla, an Indian manufacturer of largely generic pharmaceutical drugs. He also met with John Deere Vice President Sidharth Mande who gave an excellent assessment of the Indian economy, an overview of the agricultural sector and introduced John Deere's vision for capturing more market share in tractor sales while also extending into other important products and services, such as micro-irrigation.

Finally, Ambassador Marantis addressed bachelor and masters students at the Burhani College of Commerce and Arts, founded by the Bohra-sect of Islam, about the U.S.-India relationship and the Trade Policy Forum strategy to enhance trade. He then answered questions ranging from U.S. efforts on economic recovery, the U.S. trade policy with respect to China, and what the U.S. is doing specifically to promote investment. Burhani College was founded in 1976 and is affiliated with the University of Mumbai. Currently, over 4,000 students are attending the college.

"Today, I am in India thinking about the future. ...As Deputy U.S. Trade Representative, I am meeting with India's government ministers, American and Indian businesses, and non-governmental organizations. And perhaps most important, I am talking to you. Because you are not just thinking about India's future, you are India's future.

The United States and India begin this new era of engagement with the wind at our backs. Trade in manufactured goods, services, and agriculture has doubled in last three years and grown exponentially over the past decade. American companies are investing in India to create jobs, and Indian companies are investing the United States to put Americans to work. You have heard of IBM, Dell, Citibank, John Deere and UPS. These are just a small fraction of the major corporations that have invested millions of dollars and created thousands of jobs in India.

...I am here to work with the Indian government to devise a Trade Policy Forum (TPF) that is better equipped to facilitate greater two-way trade and investment. As you may know, the TPF was launched in 2005 and is the focus of our dialogue on trade policy matters. In the past, the TPF concentrated on agriculture and services trade, investment, intellectual property protection, and tariff and non-tariff barriers. But we can do more. I believe that we can reinvigorate the TPF by exploring other areas of cooperation and binding ourselves to meet more often and advance our common interests.

For example, can we do more to promote trade in environmental goods and services trade? Can we improve trade in health and education services? Is there a better way for us to resolve the tough persistent issues, and is there a better way to measure our progress? These are some of the questions I will be discussing with Commerce Secretary Khullar. And they are ones on which I would also like to hear your views.

We expect to convene the Trade Policy Forum later this fall and send a signal to U.S. and Indian companies that our governments are serious about giving traders the tools they need to expand their commercial opportunities. Last year, India was our 17th largest trading partner. That rank should - and hopefully will be - improved to the top ten in the next decade."

Ambassador Marantis will travel to New Delhi tomorrow to continue his visit. Be sure to check back for more coverage of his trip.

Ambassador Kirk was in Axum, Ethiopia yesterday touring the Almeda Textile Factory. Almeda exports to the United States under African Growth and Opportunity Act (AGOA), and has benefited from U.S. trade capacity building assistance.  Almeda's workers produce yarn, fabric, and apparel, design apparel, and manufacture aprons for Starbucks and sportswear for Champro - among other U.S. customers.

Today, Ambassador Kirk toured the Peacock Shoe Factory in Addis Ababa - one of Ethiopia's largest shoe manufacturers. It employs 400 people fulltime and begins exporting this product to the US under AGOA this year.

After touring Peacock Shoe Factory, Ambassador Kirk met with the American Chamber of Commerce (AmCham) in Ethiopia. Below is a picture of Ambassador Kirk and the President of AmCham Ethiopia, Ato Getachew Ayele.

He then held a media roundtable with Ethiopian reporters.

AGOA was enacted in May 2000 to expand U.S.-sub-Saharan African trade and investment, stimulate economic growth, promote a high-level dialogue on trade and investment-related issues, encourage economic integration, and facilitate sub-Saharan Africa's integration into the global economy.

AGOA has helped increase U.S. two-way trade with sub-Saharan Africa. In 2008, U.S. total imports from sub-Saharan Africa were more than triple the amount in 2001, and U.S. total exports to sub-Saharan Africa more than doubled during this period.

After spending two days in Ethiopia, Ambassador Kirk is now traveling to Dakar, Senegal before returning to Washington, D.C.

Ambassador Ron Kirk just arrived in Addis Ababa, Ethiopia for his first visit to this country as the U.S. Trade Representative.

In Addis Ababa, Ambassador Kirk will meet with senior Ethiopian officials as well as other stakeholders to discuss U.S.-Ethiopia bilateral trade relations as well as Ethiopia's bid for accession to the World Trade Organization.

On Saturday, August 8, 2009, Ambassador Kirk will visit a shoe factory in the Addis area - a company exporting footwear, a new and growing product area under AGOA.

Today United States Trade Representative Ron Kirk toured the Memorial Park Embassy bombing site in Nairobi, Kenya.

The Memorial Park Embassy bombing site, which was opened in 2001, was designed to honor those who were injured and killed in the August 7, 1998 terrorist bombing on the U.S. Embassy in Nairobi. The bombing killed 207 Kenyans and 12 Americans.

During the visit, Ambassador Kirk talked to bombing survivors, including Michael Macharia, a 14-year-old, whose father died in the bombing when he was only 3 years old. See pictures of the visit below.

The African Growth and Opportunity Act's (AGOA) main purpose is to bring African countries into the global market. The success of the program has not only increased African exports into the U.S., but has provided the relationships necessary for American businesses to export to African countries.

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.

Companies across America have been taking advantage of AGOA to expand and grow. Among those companies is American Augers Inc., of West Salem, Ohio. American Augers Inc. took advantage of the success of the program in 2005 by contacting the U.S. Commercial Services office of the Department of Commerce to find out how they could expand into the South African market. The manufacturing company, a unit of Astec Underground of Loudon, Tennessee, worked with the local Commercial Services office to provide opportunities for the Astec Underground organization as a whole. The office contacted potential agents interested in working with U.S. companies, and meetings were put in place for Astec.

Dan Sharpe, Astec's Vice President of Sales and Marketing, took the opportunity to travel to South Africa and meet with the business leaders. The trip was a success, and Dan signed an international manufacturer's representative agreement.

The company is now working to expand across the continent through participation in programs like the World Bank's $500 Million (USD) project to connect all of Africa with fiber optic cable.

"Our products, both HDD and Trenchers are ideal for the laying of fiber optic cable, and with our dealer in place we are in a perfect position to have our products provide this valuable service in laying the fiber optic infrastructure for Africa," he says. "We are very excited and pleased with the opportunities that lay ahead, not only for us, but for our South African dealer, overall African customers, and the future of the African economy.

"Our export sales to South Africa have contributed to our company's overall export growth, enabling us to add new jobs at our factory in West Salem, Ohio; and Loudon, Tennessee," Sharpe continued. "With more exports, we hope to see even more job growth in the future."

Ambassador Kirk believes that "when we work to strengthen our partners, we strengthen America and the world economy." The story of Astec Underground and American Augers is just one example of how trade can help grow the world economy.

Be sure to visit USTR's Facebook and Twitter page to follow Ambassador Kirk at the AGAO Forum this week.

On Wednesday morning at the 8th Annual African Growth and Opportunity Act Forum in Nairobi, Kenya, United States Trade Representative Ron Kirk led a plenary session on the effects of the global economic crisis on AGOA.

Joined onstage by United States Representative Jim McDermott (D-WA) and Donald Payne (D-NJ), as well as African Development Bank President Donald Kaberuka, Ambassador Kirk discussed current slowdowns in US-sub-Saharan trade and investment, and the need to restore global trade for the sake of worldwide economic recovery - as well as to increase regional trade within Africa to boost economies there.

Participants from numerous AGOA-eligible African nations, civil society, and the private sector took part in the plenary session, raising issues related to the future of AGOA and its implementation to the greater benefit of participating African countries and their citizens.

In advance of the formal opening of the 8th Annual African Growth and Opportunity Act (AGOA) Forum in Nairobi, Kenya, Deputy U.S. Trade Representative Demetrios Marantis today met with African exporters participating in the official AGOA Forum exhibition. At the center of AGOA are substantial trade preferences that, coupled with those under the Generalized System of Preferences (GSP), and most-favored-nation provisions, allow most goods produced in AGOA-eligible countries to enter the U.S. market duty-free.

Ambassador Marantis also spoke today with Joseph Bonya, a reporter with the major Kenyan newspaper The Daily Nation, about the economic opportunities that U.S.-African trade offers both to African nations and to American businesses and consumers.

United States Trade Representative Ron Kirk will arrive in Nairobi shortly for the AGOA Forum - keep checking back throughout the week for USTR news and information from Nairobi.

This week, Ambassador Kirk will travel to Nairobi, Kenya for the African Growth and Opportunity Act (AGOA) Forum. As part of the U.S. delegation, Ambassador Kirk will focus on how to help improve the world economy through trade.

Joining him will be Assistant U.S. Trade Representative (AUSTR) for African Affairs Florie Liser. AUSTR Liser recorded a video for USTR.gov on the importance of AGOA. She talks about how the program is helping African countries can use trade to help alleviate poverty and raise living standards.

Watch the video, and read the transcript below.

"Next week, Ambassador Ron Kirk, Deputy U.S. Trade Representative Demetrios Marantis and I will travel to Nairobi, Kenya for the annual African Growth and Opportunity Act Forum.

At the AGOA Forum, we'll talk about how the United States and Africa countries can work together to recover from the global economic crisis.

Many economists speculated that sub-Saharan Africa would remain insulated from the effects of the global economic crisis - but, as we all know, African countries too have been affected and have seen their trade decrease.

President Obama, Ambassador Kirk and I believe that trade is an important ingredient for growth, both in Africa and here at home.

AGOA can help. It provides African countries with special, preferential access to U.S. markets. Nearly all goods from eligible countries are allowed to enter the U.S. duty-free.

When that happens, everyone wins.

Since AGOA began nine years ago, all kinds of imports from AGOA countries have increased - including flowers from Kenya, apparel from Lesotho, and processed food items from West Africa. Americans are seeing more of what Africa can bring to the global market.

Last year non-oil imports from AGOA countries were nearly four times what they were in 2001.

That growth is the product of a lot of hard work.

Through AGOA, exporters across sub-Saharan Africa have access to training and technical assistance through four regional trade hubs funded and managed by USAID.

Forty sub-Saharan African countries are now eligible for trade benefits under AGOA.

This year's Forum is about realizing the full potential of AGOA. Our goal is to ensure that all 40 of those countries have the ability to realize their potential.

At the AGOA Forum we will discuss ways to build on AGOA's success and encourage the new trade flows that will hasten global economic recovery.

Check back at ustr.gov to follow our progress throughout the week."