January 2003 News

U.S. Intention to Enter into Free Trade Agreements with Singapore and Chile

View the texts of White House press releases regarding the President’s notices to Congress that he intends to enter into Free Trade Agreements with Singapore and Chile.

View message to Congress regarding Singapore FTA

View message to Congress regarding Chile FTA

USTR Zoellick Makes Case for Passage of U.S.-Chile Free Trade Agreement

On January 29, USTR Robert Zoellick said that Congressional passage of the recently negotiated U.S.-Chile Free Trade Agreement (FTA) will benefit both countries and establish a standard for future trade agreements. While delivering remarks at the launch of the U.S.-Chile Free Trade Coalition -- an advocacy effort by the U.S. Chamber of Commerce, National Association of Manufacturers, the Business Roundtable, Council of the Americas and other business organizations to secure congressional approval of the agreement -- Zoellick described the U.S.-Chile FTA as a "very modern" agreement that deals innovatively with issues such as intellectual property, regulatory transparency, agriculture, labor, and the environment.

View text of USIS Washington report

Singapore: U.S. Ambassador Calls Singapore-U.S. FTA Model For Future Accords

While attending the U.S ASEAN Business Council on January 28, U.S. Ambassador to Singapore Frank Lavin spoke up for the Singapore-U.S. Free Trade Agreement (FTA). Ambassador Lavin told reporters that the agreement could be seen as a possible template for FTAs with key friends and allies such as Australia, Morocco, and Central America. Backers of the agreement say that it is the most significant FTA the U.S. has undertaken since the signing of the NAFTA. The ambassador said that negotiations with Australia on an FTA will begin in March of this year.

View text of USIS Washington report

Commerce Secretary Evans Talks Trade and Growth, Emphasizes U.S. Commitment to WTO

On January 23, Commerce Secretary Don Evans met with WTO Director General Supachai Panitchpakdi to reaffirm the U.S.’s commitment to the WTO, and particularly the WTO’s role as a vehicle for promoting trade and global economic prosperity. Because trade is a key to restoring economic growth, Secretary Evans emphasized that, “Making progress on the Doha Development Agenda is more critical now than ever. We need to send a clear signal to markets around the world that the talks are on schedule and that members of the WTO are committed to ensuring that deadlines outlined in Doha are met.” View Commerce Department press release (no longer available)

U.S. Official Says Free Trade is Key for Jobs, Investment in Americas

Adolfo Franco, the assistant administrator for Latin America and the Caribbean at the U.S. Agency for International Development (USAID), said that free trade is the best way to ensure increased investment and job creation in the Americas, which is why the U.S. is committed to enactment of the Central American Free Trade Agreement (CAFTA) and the Free Trade Area of the Americas (FTAA). In January 22 remarks at the Pan American Development Foundation, Franco said President Bush has made ratification of the CAFTA by 2003 and the FTAA by 2005 his administration's "highest priority" for the region. View the report (includes text of Franco’s remarks)

WTO: Sri Lanka and Mali Implement Agreement on Customs Valuation

Sri Lanka Customs (SLC) announced the implementation of the WTO Agreement on Customs Valuation on January 7, 2003, and began actual implementation January 13. With the implementation of the Agreement on Customs Valuation, SLC will apply transaction values to imports in place of the normal price method used earlier. The Government of Sri Lanka has sought WTO approval for one exemption from transaction value method--on used motor vehicles. Meanwhile, on December 31, 2002, Mali's minister of economy and finance, Bassari Toure, signed a decree announcing implementation of the Agreement. The decree named an interdepartmental commission to oversee its implementation and enforcement. Implementation of the WTO Customs Valuation Agreement is a critical early step toward Trade Facilitation, and one that will help attract investment and increase economic stability.

Philippines: Slowdown in AFTA Tariff Reductions

On January 9, Philippines President Gloria Macapagal-Arroyo signed an executive order temporarily delaying the tariff reduction schedule on petrochemical resins and certain plastic products applied to its ASEAN neighbors under the Common Effective Preferential Tariff - ASEAN Free Trade Area (CEPT-AFTA) Framework. The move followed pressure from the local petrochemical sector. The action was in line with her comments the next day that the Philippines should more broadly slow down the pace of tariff reductions to the minimum required by AFTA and the WTO. Other sectors, such as vegetable farmers, are beginning to seek similar protections, but pro-trade liberalization groups, such as the US-ASEAN Business Council, have expressed concerns that such tariff reduction slowdowns could hurt investors' perception of the Philippines and ASEAN in general.

Pilot Program to Provide Cheap AIDS Drug to Poor Countries

On January 24, U.S.-based pharmaceutical company Pharmacia announced the launch of a pilot program designed to make its AIDS drug available at a lower price to poor countries stricken by the AIDS epidemic. In a news release issued at the World Economic Forum in Davos, Switzerland, Pharmacia said it would transfer licenses and manufacturing information for the AIDS drug Rescriptor to the International Dispensary Association (IDA), a Dutch non-profit organization that works to get generic drugs into developing countries. IDA will then allow makers of generic drugs to sell cheaper versions of Rescriptor -- known generically as delavirdine -- in countries where the annual per capita income is less than 1,200 dollars or the HIV infection rate is above 1 percent. Up to 78 countries could be covered by the program, including all of sub-Saharan Africa, Pharmacia said.

View text of report

U.S. Poultry Ensured Preferential Access to Mexican Market

According to a January 23 USTR press release, the U.S. has secured continued preferential access to the Mexican market for U.S. poultry. Under the auspices of the NAFTA, Mexican tariffs on U.S. poultry fell to zero on January 1; however, under the NAFTA, Mexico could have imposed a "safeguard," or emergency tariff of up to 240 percent on U.S. poultry imports, significantly disrupting trade. Instead, Mexico will allow 50,000 metric tons of U.S. chicken leg quarters into Mexico duty free for six months and will impose a temporary or provisional safeguard tariff of 98.8 percent on imports of chicken leg quarters above that level. All other U.S. poultry exports will continue to enter Mexico duty free, the press release said. View text of USTR press release (no longer available)

Africa: Commercial Service Officers Work with Partners in Five Sub-Saharan Countries

View the text of Deputy Secretary of Commerce Samuel Bodman’s January 16 address to the AGOA Forum in Mauritius on the importance of making trade a vehicle for development. Mr. Bodman said that the barriers of insufficient infrastructure, inadequate protection for intellectual property and lack of political stability must be overcome before direct investment in Africa would rise appreciably. To assist developing countries as they make this difficult journey, "the Commerce Department has about 50 Foreign Commercial Service officers and staff in sub-Saharan Africa located in five capitals. In addition, our Commercial Law Development Program (CLDP) is working with its African partners to design action plans for legal reform, and offer assistance for drafting laws and regulations, establishing and supporting implementing bodies, and increasing public awareness of laws."

View report (includes text of Deputy Secretary Bodman's remarks)

President Announces Modification of NAFTA Rules of Origin

On January 17, President Bush announced the modification of the North American Free Trade Agreement (NAFTA) rules of origin on seven items. Rules of origin governing petroleum, alcoholic beverages, pearl jewelry, photocopiers, headphones with microphones, chassis fitted with engines and esters of glycerol will be liberalized in an effort to increase trade and ease administrative burdens. The modification is the third of the NAFTA rules of origin regime and first substantive modification.

View text of White House proclamation

U.S., Moroccan Ministers Launch Free Trade Negotiations

On January 21, U.S. and Moroccan ministers launched negotiations on a free trade agreement which the parties hope to conclude by the end of the year. USTR said a free trade agreement would bolster Morocco's economic reform program and initiative to remove barriers to foreign investment.

View the report (includes text of USTR press release)

Asia: Assistant Secretary Lash Praises Thai, Malaysian Anti-Piracy Efforts

According to an Associated Press report, Commerce Assistant Secretary for Market Access and Compliance William Lash praised Thailand and Malaysia for their efforts in combatting bootlegging of U.S. films and counterfeiting of designer clothing, but criticized Taiwan and the Philippines for not doing enough and not taking intellectual property rights (IPR) violations seriously. Assistant Secretary Lash has been speaking out against violations of U.S. intellectual property while visiting Thailand, Malaysia and Thailand; sales of pirated music and videos and counterfeit designer clothing are rampant in the region. He warned the Philippines that it risks having its trade privileges revoked unless it takes tough action against IPR violations. U.S. Warns Asia Over Piracy U.S. official lashes out at Taiwan and Philippines for not respecting intellectual property Piracy In M'sia Robs US' Industry Of US$360 Mln A Year The Philippines remains on piracy list US official goes shopping for pirated goods in Manila US calls on RP to enforce IP rights Philippines on piracy: Many arrests, no convictions

U.S. and Singapore Reach Agreement on Investment Protections in Free Trade Talks

On January 15, the U.S. Treasury and the Monetary Authority of Singapore reached agreement on issues affecting transfers in the investment chapter of the U.S.-Singapore Free Trade Agreement (FTA). The agreement reflects the shared commitment by the U.S. and Singapore to the free transfer of capital and the avoidance of capital controls. The agreement provides for the free transfers of funds related to an investment into and out of a country. Thus, the U.S. has maintained its long-standing policy of assuring that investment flows may move unimpeded by controls.

View Treasury Department press release

Trade and Markets Key to Africa Prosperity, President Bush Says

In a broadcast message that was projected for the delegates at the AGOA Forum in Mauritius January 15, President Bush said, "We look to the day when prosperity for Africa is built through trade and markets." He added, however, that the United States' interest in Africa does not end at trade. He remarked on the new African Millennium Challenge Account, directed "to nations that encourage economic freedom, root out corruption, and respect the rights of their people," saying the Fund will support construction of roads and bridges, canals, and other basic infrastructure to "help make economic growth possible." The President also announced that he will ask the Congress to extend AGOA beyond 2008 in order to give business the confidence to invest in Africa. View text of President Bush’s message Trade, Supportive Aid Policies Key to African Prosperity U.S. Trade Official Sounds The Call For Partnership at AGOA Forum

U.S.-Chile Free Trade Agreement Will Consolidate Reforms

According to DUSTR for the Americas Regina Vargo, the newly completed U.S.-Chile Free Trade Agreement (FTA) represents a U.S. partnership with Chile "that extends beyond the agreement itself, and lends great momentum" to ongoing negotiations toward a Free Trade Area of the Americas aimed at establishing a hemisphere-wide free-trade zone. Vargo described the FTA with Chile as possibly "the most trade-liberating agreement" that the U.S. has negotiated with any of its trade partners.

View the text of the USIS Washington File report

U.S. Eliminates Tariffs on Afghan Products

View the text of a January 13, 2003 White House press statement announcing that President Bush signed a proclamation designating Afghanistan as a beneficiary developing country under the Generalized System of Preferences (GSP) program on January 10. As a least-developed GSP beneficiary country, Afghanistan will be able to take advantage of duty-free tariff treatment into the U.S. on approximately 5,700 products.

USITC Reports on Andean Trade Preferences Act, Biotech Food Products

View the November-December 2002 issue of the International Economic Review, a publication of the U.S. International Trade Commission's Office of Economics, which features reports on the Andean Trade Preference Act and trade in biotechnology food products.

WTO: Supachai Urges Members to Give Major Push to Negotiations

View the text (offsite link) of a WTO report regarding WTO Director-General Supachai Panitchpakdi’s January 8, 2003 speech at the Partnership Summit in Hyderabad, where he urged WTO members to "...give a major push to the negotiations and ensure all areas move forward together in a balanced way." He said, "We need India's constructive engagement and leadership to help guide the Doha Development Agenda towards a successful conclusion that would benefit all members."

View text of Supachai speech

AGOA Forum Opens in Mauritius With Civil Society Meeting

View the text of a Washington File report regarding the beginning of the AGOA Forum in Mauritius. Ambassador Robert Perry, the recently retired U.S. Deputy Assistant Secretary of State for African Affairs, called on leaders of non-governmental organizations (NGOs) to "play a vital role in demanding transparency in government regulations that will provide the predictability that investors seek" before they risk their capital.

Kazakhstan Passes New Investment Law

Kazakhstan’s new investment law was passed on January 8 and will go into effect shortly upon official publication. The new law, which governs both foreign and domestic investments, has adequate protections against nationalization and safeguards the sanctity of existing contracts but does not guarantee stability of new contracts signed after the law goes into force. The new law also narrows the range of disputes that may be referred to international arbitration.

Mexico: Proposed Standards (for January 1 to 10, 2003)

View recently proposed and enacted Mexican Government standards

NAFTA Tribunal Rules in Favor of U.S., Dismisses ADF Claims

View a USIS Washington File news report regarding a NAFTA tribunal ruling in the United States’ favor which dismissed the claims of Canadian steel company ADF Group Inc. According to a State Department media note (which is included in the report), the tribunal found that a "Buy America" clause in an ADF subcontract that stipulated only U.S. steel could be used in a northern Virginia highway improvement project did not violate NAFTA provisions or international law. View text of NAFTA Tribunal decision regarding ADF View NAFTA Investor-State Arbitrations (to view cases filed against the U.S., Canada and Mexico)

U.S. and Central American Nations Launch Free Trade Negotiations

On January 8, USTR Zoellick and ministers from Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua announced the launch of negotiations on an agreement to eliminate tariffs and other barriers to trade in goods, agriculture, services, and investment between the U.S. and Central America. Working-level negotiations on this U.S.-Central American Free Trade Agreement, or CAFTA, will begin in San José, Costa Rica, on January 27. The participants will seek to complete the negotiations by December 2003. View the text of the USTR news item (no longer available)

Request for Public Comments Regarding IPR Protection and Market Access

View the text of a Federal Register Notice issued by USTR requesting written submissions from the public concerning foreign countries' acts, policies, and practices that are relevant to the decision whether particular trading partners should be identified under Section 182 of the Trade Act (i.e., "Special 301" provisions). Submissions must be received on or before 12 noon on Friday, February 14, 2003.

Request for Public Comments on Second Draft Consolidated Texts of FTAA

View the text of the joint Department of Commerce/USTR memorandum to members of the Industry Sector and Industry Functional Advisory Committees (ISACs and IFACs) advising that the second draft consolidated texts of the Free Trade Area of the Americas Agreement (FTAA) have been publicly released and posted. USTR has issued a Federal Register Notice stating that the interagency Trade Policy Staff Committee (TPSC) is requesting written comments from the public on the second draft consolidated texts of the FTAA Agreement. Public comments should be submitted by Friday, January 31, 2003.

USITC Report on U.S. Trade and Investment with Sub-Saharan Africa

On January 6, the U.S. International Trade Commission (USITC) released U.S. Trade and Investment with Sub-Saharan Africa, the third in a series of reports intended to assist the President in developing a comprehensive trade and development policy for the countries of sub-Saharan Africa. Excluding trade in petroleum, the U.S. trade deficit with the region decreased by 73.7 percent from $3.8 billion in 2000 to $1 billion in 2001, while U.S. merchandise exports increased from $5.6 billion in 2000 to $6.8 billion. U.S. imports covered under the African Growth and Opportunity Act (AGOA)--including its GSP provisions--totaled $8.2 billion in 2001. U.S. direct investment flows to the region totaled $798 million in 2001, or less than 0.1 percent of total U.S. direct investment abroad.

View text of USITC press release

Mexico: Proposed Standards (for December 17 to 31, 2002)

View recently proposed and enacted Mexican Government standards

USITC Investigation of Probable Effect of U.S.-Australia Free Trade Agreement

USTR Robert Zoellick requested that the U.S. International Trade Commission (USITC) investigate the probable economic impact of a U.S.-Australia Free Trade Agreement (FTA). USITC is seeking input for this investigation from all interested parties and requests that the information focus on the issues for which USITC is requested to provide information and advice. USITC will hold a public hearing in connection with the investigation on February 6, 2003; it also welcomes written submissions for the record. USITC will submit its report, which will be confidential, to USTR by June 6, 2003.

View the complete text of USITC's announcement

Africa: 38 Sub-Saharan Countries Certified for U.S. Tariff Preferences

On January 4, the White House announced that 38 Sub-Saharan African nations have qualified for preferential treatment regarding U.S. tariffs under the African Growth and Opportunity Act. (AGOA). The annual designation signifies that these countries are making progress in specific economic and social areas, and are thus entitled to greater access to U.S. markets. The Gambia and the Democratic Republic of Congo are new additions to the list of eligible countries.

View the complete text of the report (includes text of White House announcement)

Report to Congress on WTO Dispute Settlement

View the complete text of the U.S. Executive Branch's (submitted by the Commerce Department in consultation with USTR, Office of the Attorney General, and State and Treasury Departments) report to Congress regarding the impact of WTO Dispute Settlement panels and Appellate Body decisions on U.S. obligations and rights. While the report stated that the Dispute Settlement Body (DSB) generally handled disputes "expeditiously and with professionalism," it noted that the U.S. "does not agree with the approach that WTO panels and the Appellate Body have sometimes taken in disputes, and is concerned about the potential systemic implications. In particular, the executive branch views with concern that manner in which WTO panels and the Appellate Body have applied the applicable standard of review in disputes involving U.S. trade remedy and safeguards matters, and instances in which they have found obligations and restrictions on WTO Members concerning trade and safeguards that are not supported by the texts of the WTO agreements."

View Appendix of report to Congress (pdf)

India: Assistant Secretary Lash Requests Greater Market Access

The SIFY News reported on December 18 that, in a series of meetings with Indian government officials and industry representatives, Assistant Secretary of Commerce for Market Access and Compliance William Lash asked India not to depend on high tariffs for revenue and provide greater market access in different areas like medical equipment, textiles and fertilizers. Mr. Lash was quoted as saying that India had become a leading proponent of the anti-dumping mechanism against imports, and added that the U.S. was taking anti-dumping measures in accordance with WTO rules.

View the complete text of the SIFY News report

Sri Lanka: Assistant Secretary Lash Stresses Need for Economic Reforms

According to a Colombo Daily News report, on December 23 Assistant Secretary of Commerce for Market Access and Compliance William Lash stressed the importance of Sri Lanka carrying out its planned economic reforms. These reforms will be critical to opening the country’s markets to foreign business. Mr. Lash said an open and competitive Sri Lanka can attract foreign investment in a variety of sectors and increase the diversity of its export base beyond traditional sectors such as apparel.

View the complete text of the Colombo Daily News report