July 2001 News

Aldonas Cites Corruption as One Element Affecting U.S. Aircraft Industry’s Competitiveness

On July 26, Commerce Under Secretary for International Trade Grant Aldonas testified on trade and the competitiveness of the U.S. aircraft manufacturing industry. In his opening remarks to the House Transportation and Infrastructure Committee’s Aviation Subcommittee, Mr. Aldonas identified a number of factors which are affecting the ability of U.S. aircraft manufacturers to compete internationally, including corruption. The Under Secretary said, “Bribery by foreign companies can have important consequences for U.S. competitiveness...this (aircraft) sector has been especially vulnerable to trade distortions involving bribery of foreign public officials.” While the establishment of the OECD Antibribery Convention has been a major step in remedying this imbalance, Mr. Aldonas stated that “there continue to be credible reports implicating competitors in the bribery of foreign public officials as a tool to get the contract.” Mr. Aldonas stated that he has directed ITA staff “to redouble efforts aimed at obtaining our trading partners' full compliance with this important anticorruption agreement.”

Singapore and United States Conclude Latest Round of FTA Talks

On July 20, 2001, Singapore and the United States concluded the fourth round of negotiations on the U.S.-Singapore Free Trade Agreement (FTA). The two sides continued intensive negotiations on a wide range of issues, and achieved significant progress in services and rules of origin. View the USTR press release (no longer available)

China: Increasing Foreign Investment Flows

The Chinese National Bureau of Statistics announced a significant surge in foreign direct investment (FDI) during the first half of 2001. According to Chinese statistics, 11,973 projects were established between January and June, an increase of over 18 percent over the first half of 2000. The total amount of realized FDI was US$20.7 billion, a 20 percent increase over the first half of 2000. The total amount of contractual FDI (a harbinger of future investments) was US$33.4 billion, a 38 percent increase over the same period in 2000. The newly released statistics suggest that flows of FDI to China continue to increase after a slump in 1998-99.

Canada: 20-Year Patent Protection Enters into Force

Bill S-17, an amendment to Canada's Patent Act that will provide 20-year patent protection measured from the date of filing to all patent holders, entered into force on July 12, 2001. The new law entered into force one month before the WTO’s deadline of August 12, 2001. The new 20-year patent protection law, which brings Canada into compliance with its obligations under the agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPs), was not made retroactive. Therefore, there is no provision for grandfathering, and a number of pharmaceutical patents expired during the lengthy process to get the bill passed into law. The United States filed a WTO case against Canada in 1997, when Ottawa revised its Patent Act but did not extend 20-year patent protection to patents filed prior to 1989, in accordance with its TRIPs obligations. Subsequently, USTR placed Canada on its Special 301 watch list for three consecutive years. Canada then lost a WTO challenge by the United States and an appeal of the WTO ruling that sided with the United States.

USTR Zoellick Outlines U.S.-E.U. Cooperation on New Trade Round

On July 17, USTR Zoellick released a statement detailing U.S. cooperation with the European Union on launching a new round of global trade negotiations in November. Ambassador Zoellick noted that the United States and the European Union have a "high degree of convergence" on a number of issues for the new round, including market access negotiations for non-agricultural products and transparency in government procurement, and in areas such as services, trade facilitation, and strengthening the WTO system View USTR press release and statement HTML View USTR press release and statement PDF View Washington Post op-ed by USTR Zoellick, E.U.'s Pascal Lamy

Bahamas to Apply for Full WTO Membership

Minister of Economic Development Laing announced July 12 that the Bahamas will apply during the week of July 16 to join the WTO. The Bahamas has been an observer in the WTO since July 2000, and would be the last CARICOM nation to join. The accession process is expected to take five years. Laing said that, when tempered by the correct economic, social and political policies, freer trade leads to economic growth and development. He emphasized that isolation in world trade is no longer an option, and said that the WTO offers protection for developing countries. Laing promised to engage the private sector during the accession period to ensure favorable terms for the Bahamas.

WTO: Countries Notify Customs Valuation Legislation

The Dominican Republic, Albania and Cote d'Ivoire submitted to the WTO their national legislation implementing the WTO Agreement on Customs Valuation. Notification of domestic legislation, along with the Customs Valuation Committee checklist of implementation measures, is evidence of a member's implementation of the Agreement.

China: Number of Prices Controlled by Government Dwindles

State Development Planning Commission (SDPC) Vice Chairman Wang Yang held a July 11 press conference to highlight an SDPC policy document which slashed the number of commodity and services prices controlled by the state to a mere 13. Liberated commodities included: auto engines, power generation equipment, herbal medicines, and newsprint. Wang noted that governments in market economies around the world maintain price controls on almost all of the remaining 13 categories -- from postal rates to natural gas. After this latest round of price reforms, over 90 percent of retail, agricultural, and capital products have prices set by the market, the SDPC calculated. According to the SDPC, this "marks the fundamental change of the government function in pricing management....SDPC will move its focus from 'pricing' to 'setting rules and acting as judge.' " Soon the SDPC will issue a decree on public hearings for future adjustments on prices still subject to government regulation. While price controls for most commodities have already been lifted over the last decade, and even without direct price controls, various arms of the Chinese state -- via ownership of large corporations, control of the banking sector, selective enforcement of regulations -- remain a powerful force in many parts of the Chinese economy for both foreign and domestic firms.

United States Wins WTO Challenge of New Canadian Dairy Export Subsidies

The United States won an important agriculture case before the WTO. The U.S. challenged Canadian dairy export subsidies as a violation of WTO rules. A WTO dispute settlement panel found that the steps Canada took to address an earlier adverse ruling regarding its dairy export practices were insufficient. View the USTR press release (no longer available)

USTR Zoellick, African Leaders Discuss AGOA and Africa's Importance to Launching New Round

On July 5, USTR Zoellick concluded a series of meetings with African leaders on U.S.-Africa trade and the important role Africa will play in the launch of a new round of global trade negotiations later this year. Ambassador Zoellick stated, “The United States and African countries...have many common interests in the WTO, and we will work together to help launch a new global trade round.” These discussions with African leaders focused on specific increased bilateral trade and investment opportunities under the African Growth and Opportunity Act (AGOA), enacted last year to promote U.S.-Africa trade. (links no longer available) View USTR press release HTML View USTR press release PDF

China: Testing/Quarantine Agencies Merged for WTO

China's entry/exit quarantine agency has recently merged with its domestic counterpart testing agency. The union is intended to bring China's testing regimes into compliance with WTO rules by removing double testing burdens on imports. The effect of the merger on foreign imports will not be clear until the State Council approves the new agency's administrative structure.

Indonesian Parliament Passes New Patent and Trademark Laws

The Indonesian parliament has approved amendments to the current patent and trademark laws. These drafts have been pending before the parliament in various forms for over two years. The amendments create two new laws consolidating all previous amendments of each law. Key provisions of the new laws include the establishment of an independent patent commission and increased maximum fines for patent and trademark infringement.

Update on China’s WTO Accession

Considerable progress has been made in Geneva on China's accession to the WTO. On July 4, the last day of the meetings, the Chair announced "effective completion" of work on a large number of issues, including trading rights, industrial policies, quantitative restrictions, TRIPs and certain insurance and distribution services. At the next meeting, July 16-21, members will attempt to close out all remaining issues and begin reviewing comprehensive drafts of the Working Party Report and Protocol and attempt to reconcile China’s schedules of commitments in goods and services.

WTO Director General Moore welcomes progress on China’s WTO accession

USTR Announces Lifting of EU Banana Sanctions

On July 1, USTR Zoellick announced the United States is lifting retaliatory duties on $191 million worth of European Union (EU) products effective July 1 because of the steps taken by the EU to increase market access for U.S. banana distributors. (links no logner available) View the USTR press release HTML View the USTR press release PDF Formal notice (PDF)

U.S. Government Achieves Progress on Mexican Standards Issue

The Commerce Department (DOC) has received complaints from U.S. exporters regarding exorbitant costs associated with Mexico's redundant product testing and certification requirements and has been working with Mexico for nearly a decade to resolve this issue. While Mexico revised its product certification procedures in an attempt to address these concerns in 2000, private sector conformity assessment bodies in Mexico misinterpreted the procedures--nullifying potential benefits. DOC was able to obtain a clarification from the Government of Mexico, and obtained a commitment at a NAFTA trilateral standards meeting that it would revise its procedures to include the clarifications. For more information about the revised certification procedures, please contact Geri Word at (202) 482-1545.