December 2005 News

Uruguayan Congress Passes Investment Treaty with United States

The State Department announced December 28 that the Uruguayan government has ratified a Bilateral Investment Treaty (BIT) with the United States that is intended to enhance bilateral relations as well as trade and investment ties. Upon assuming office earlier in 2005, Uruguayan President Tabare Vazquez asked the United States to renegotiate technical points in the BIT signed by the United States and Uruguay in 2004. The new U.S.-Uruguayan BIT was signed November 4 during the Summit of the Americas in Mar del Plata, Argentina, passed by the Uruguayan Senate December 21 and ratified by the lower house of the Uruguayan Congress early December 28 by a vote of 84-0. he BIT still requires approval by the U.S. Senate. Once it enters into force, it should yield important benefits for both countries, a State Department official said. The United States is Uruguay’s largest trading partner, and U.S. foreign direct investment in Uruguay was $533 million in 2004.

View USIS Washington File report

USTR Statement Regarding Implementation of U.S.–Morocco Free Trade Agreement

In a December 19 statement, USTR spokesperson Christin Baker said that the United States is “… pleased that the Moroccan government has taken the final steps in completing its internal process to implement the free trade agreement and that we are on schedule to have this agreement enter into force on January 1, 2006.” In the statement, Baker said, "This agreement will also strengthen our trading relationship with the Middle East and brings us one step closer to achieving the President’s goal of a US-Middle East Free Trade Area (MEFTA)."

View USTR press release

U.S. Prepared To Implement Central American/Dominican Republic Free-Trade Agreement

In a December 19 statement, USTR spokesperson Christin Baker said that the United States is prepared to implement, as soon as possible, its recently ratified free-trade agreement with the Dominican Republic and the nations of Central America (CAFTA-DR) once those countries "have taken sufficient steps to complete their commitments" under the terms of the trade pact. Baker explained that the United States would like the CAFTA-DR "to start as close as possible to January 1, 2006...but only with countries that have made sufficient progress in adopting new laws and regulations where necessary." Baker stated,  "We will move forward as long as at least one country is prepared, and will accommodate new entrants as they become ready." Meanwhile, "countries can continue to enjoy existing [trade] preferences while they work with the United States to come on board" as full partners in CAFTA-DR, Baker added.

View USTR press release

WTO: U.S. Trade Representative Portman’s Closing Remarks at Ministerial

During his remarks to reporters at the closing press conference after the WTO Ministerial, U.S. Trade Representative Rob Portman stated that members were able to make some progress in Hong Kong. The participants were able to finish work in “a number of areas, particularly in development,” and made “ incremental progress in other respects.” His earlier concern that members would move backward was not realized. Portman noted that many members, in private and public sessions, spoke of the need for increased market access, especially in agriculture, and tariff reduction. He said that, while progress is needed in other areas, “…in order to see the round come together, we have to unlock the agriculture deadlock.” While the United States was striving to secure agreement on ending agricultural subsidies by 2010, he thought it was more important to set a date of 2013 in order to make progress on this issue, and commended the EU for its willingness to “finally set a date.” Regarding industrial goods and services, Portman said that the United States accomplished its goal of working with its trade partners to sustain the achievements from July 2004. He was also proud of the ministerial’s accomplishments with regarding to development assistance and duty-free and quota-free access for least-developed countries.

View text of Portman's remarks at press briefing

View text of Portman's remarks to heads of delegations

WTO: Ministerial Declaration “Puts Round Back on Track”

A December 18 WTO press release stated that ministers from the WTO’s member governments approved a declaration that many described as significant progress both since the July 2004 “package” and after six days of intensive negotiations in Hong Kong. Despite the long hours and hard work, “it was worth it,” WTO Director-General Pascal Lamy told a press conference late in the evening of the final day. “We have managed to put the Round back on track after a period of hibernation.” Hong Kong’s Commerce, Industry and Technology Secretary John Tsang, who chaired the conference, outlined the achievements in the ministerial declaration: securing an end date for all export subsidies in agriculture; reaching agreement on cotton; agreeing on duty-free, quota-free access for the 32 least-developed country members; fleshing out a significant framework for full modalities in agriculture and non-agricultural market access; and agreeing on a services text “that points positively to the way forward.” With the 44-page document now agreed, members face intense pressure in the new year to complete “full modalities” in agriculture and non-agricultural market access by the new deadline they have set themselves--April 30, 2006. Compared to the draft forwarded to Hong Kong from Geneva, a number of issues have been settled or partly settled. The most straightforward is the agreement to end export subsidies in agriculture by 2013, but this was only agreed at the last minute. The declaration makes clear, however, that the agreed date is conditional.

View WTO press release

View text of ministerial declaration

WTO: Ministerial Updates on Trade Facilitation, Duty-Free/Quota-Free Access, Non-Agricultural Market Access, and Services

View the USTR updates from the Hong Kong Ministerial on trade facilitation, duty-free/quota-free access, non-agricultural market access (NAMA), and services.

View update on trade facilitation

View update on duty-free/quota-free access

View update on non-agricultural market access

View update on services

March Date Suggested by U.S. for Next WTO Negotiations Meeting; Report on Day 4 of Ministerial

At a December 14 press conference, U.S. Trade Representative Rob Portman suggested March 31 as a date for the next big meeting to push for quick progress in the WTO negotiations. He stated, "If we cannot make all the progress we had hoped for here in Hong Kong -- and I'm afraid that we won't -- I feel strongly we should set a date before we leave here and put a work plan in place to be sure that we don't take the pressure off after Hong Kong, he said. Portman stated that a meeting at WTO headquarters in Geneva would be preferable to another ministerial. Concluding the negotiations by the end of 2006 with a robust agreement for opening markets is crucial, Portman said, not only to achieve benefits as soon as possible for the world economy but also to give the U.S. Congress time to consider an agreement before the U.S. trade negotiating mandate expires mid-2007. On December 16, WTO negotiators ended the fourth day of the ministerial by working on texts to serve as inputs for a revised draft ministerial text and circulated in the middle of the next day. The core consultations, being held jointly by Chairpserson Tsang and WTO Director-General Pascal Lamy, focused on agriculture, including cotton, and non-agricultural market access, specific development issues and the question of duty-free, quota-free market access for least-developed countries.

View USIS Washington File report

View WTO news item

WTO Deal on Access for Poorest Countries Still in Play; U.S. Willing to Eliminate Tariffs on West African Cotton

At a December 15 press conference, U.S. Trade Representative Rob Portman said he hoped the WTO Hong Kong ministerial meeting could produce an agreement on duty-free/quota-free access for many products from the least-developed countries. Later that day, U.S. trade officials said the United States might not be able to offer such treatment to all textiles from Bangladesh and Cambodia, countries they said are already competitive in many products. Portman said that the United States would have to consider excluding duty-free, quota-free treatment for some textile imports from competitive developing countries because of resistance not only from U.S. producers but also from other countries getting U.S. preferential tariff treatment, especially those in Africa. On December 16, Portman said that the United States is willing to provide duty-free access for cotton from West African countries Benin, Burkina Faso, Chad and Mali as part of any complete agreement reached in the WTO negotiations. He said he hoped to resolve the issue before the meeting ends December 18.

View USIS Washington File report on duty- and quota-free access

View USIS Washington File report on West African cotton

Portman Welcomes Senate Passage of Bahrain Trade Pact

On December 14, U.S. Trade Representative Rob Portman welcomed the Senate’s passage of the U.S.-Bahrain Free Trade Agreement (FTA), saying the new pact is an important step in the creation of a Middle East free trade area. The House of Representatives approved the agreement December 7.  Bahrain will be the third Arab country to have an FTA with the United States, joining Jordan and Morocco. In addition, the United States recently has concluded negotiations for an FTA with Oman and is negotiating an agreement with the United Arab Emirates.

View USTR press release

WTO: Remarks by U.S. Trade Representative Portman, Secretary of Agriculture Johans on Third Day of Ministerial

In remarks to reporters on December 15, U.S. Trade Representative Rob Portman reiterated that agriculture remains the lynchpin to a successful Doha round, with most of the benefits found in market access. He is hopeful that, on a parallel basis, members take a commitment on services to reduce barriers, make a commitment on non-agricultural market access, industrial tariffs, to, at a minimum, to establish a formula to reduce highest tariffs the most and begin the process of truly reducing barriers and therefore achieving these economic gains we talked about. At the U.S. Agricultural Trade Coalition Conference, Secretary of Agriculture Mike Johans stated that the United States is determined to stay on track and urge others to follow the ambitious offer that it tabled recently. Meanwhile, Ministerial Conference Chairperson Tsang reported that consultations continuing into the early hours of December 15 and resuming later in the day have seen some progress on issues concerning least-developed countries.

View text of Portman's remarks

View text of Johans' remarks

View WTO press release

WTO: Ministers Approve Tonga’s Membership

On December 15, the WTO Ministerial Conference approved Tonga’s terms of accession, which paves the way for the South Pacific Island nation to become the 150th member of the Organization. The Kingdom of Tonga applied for accession to the WTO in June 1995, but negotiations effectively started in April 2001. Tonga has agreed to undertake a series of important commitments to continue the liberalization of its trade regime and thereby ensure its full participation in the multilateral trading system. Among its commitments, Tonga has been granted transition periods to implement the WTO Customs Valuation Agreement and WTO Agreement on Trade-Related Aspects of Intellectual Property Rights until January 1, 2008 and June 1, 2008, respectively. It will eliminate all industrial subsidy schemes prohibited under the WTO by the date of accession, but actionable subsidies under the WTO will be allowed.

View WTO press release

WTO: U.S. Doubles Aid for Trade on Second Day of Ministerial

In remarks to the media on December 14, Deputy U.S.Trade Representative Karan Bhatia said that U.S. Trade Representative Rob Portman announced earlier that the United States will more than double its contributions to global aid for trade from $1.3 billion in 2006 to $2.7 billion annually by 2010. Bhatia welcomed the commitments by other countries to contribute additional aid for trade. While noting that the United States believes that aid for trade is an important component of the Doha Development Agenda, Bhatia added, “…It is also important that we have a successful completion to the trade-liberalizing portion of the Doha Development Agenda as well.” In his remarks, USAID Administrator Andrew Natsios called on the EU to provide additional food assistance to the UN World Food Program. He stated that the United States provides nearly half of all emergency food aid donations in all emergencies around the world, which is about three times the level of food assistance provided by the EU and all European aid agencies and donor aid agencies bilaterally. The ministers handling initial consultations on agriculture, non-agricultural market access and development issues reported to heads of delegations at an evening meeting on December 14 that initial consultations show that differences remain on a number of issues. They had been asked to “facilitate” consultations on these subjects by the conference chairperson, John Tsang, Hong Kong’s Commerce, Industry and Technology Secretary. He told the heads of delegations that time is running short, so they need to move quickly to negotiations that are based on a text. At a separate formal meeting on cotton, a number of African countries called for a clear decision on this at the Hong Kong Ministerial Conference, arguing that failure to reach agreement would undermine the credibility of the WTO.

View USTR press release

View WTO news item

China: 2005 Report to Congress on WTO Compliance

On December 11, USTR released its 2005 Report to Congress on China’s WTO compliance. While noting that China has made important progress in implementing specific commitments and in adhering to the ongoing obligations of a WTO member, there are still serious problems in some important areas, especially in the enforcement of intellectual property rights (IPR). Many of the shortfalls in China’s WTO compliance efforts seem to stem from China’s incomplete transition from being a state-planned economy. China has not yet fully embraced the key WTO principles of market access, non-discrimination and national treatment, nor has China fully institutionalized market mechanisms and made its trade regime predictable and transparent. Although it has made some important progress, China continued to use an array of industrial policy tools in 2005 to promote or protect favored sectors and industries, and these tools at times collide with China’s WTO obligations.

View USTR report

WTO: Portman Cites U.S. Leadership on Both Trade and Aid as Ministerial Begins

In December 13 remarks in Hong Kong on the first day of the WTO ministerial meeting, U.S. Trade Representative Rob Portman pressed for reducing barriers to trade in the core areas of agricultural goods, industrial goods and services. He noted that while the United States contributes more money to developing countries for trade capacity building than any other country, it views opening markets as even more crucial for promoting development. Portman cited evidence from the International Monetary Fund/World Bank's Global Monitoring Report showing that the U.S. economy is the most open to imports from least-developed countries. He said he understands some aid to developing countries is necessary for them to build the capacity for trade -- to have passable roads, working ports, credible legal and financial systems. Portman also rebutted EU criticism of U.S. food aid programs, calling it "a sort of European obsession." He noted that the EU has brought up the food aid issue again and again even though it accounts for less than 1 percent of global agricultural trade. Hong Kong, China’s Chief Executive Donald Tsang formally opened the Sixth WTO Ministerial Conference on December 13, 2005, and ministers started consultations on market access for non-agricultural products. Chairperson John Tsang confirmed his earlier announcement in the WTO General Council in Geneva that he had invited six ministers to act as “facilitators� to help him with negotiations on various subjects, including Non-agricultural market access, agriculture and services. At a press conference later, Tsang said he and the facilitators will be holding informal meetings both among the full membership and in smaller groups, ensuring “transparency� and “inclusiveness�, i.e. that all members are informed and are represented in the consultations.

View USIS Washington File report

View USIS Washington File report

View WTO news item

Japan Reopens Market to Imports of U.S. Beef

On December 11, Secretary of Agriculture Mike Johanns announced that the United States and Japan have reached an agreement that will reopen Japanese markets to imports of U.S. beef. Johanns stated, "Resuming beef trade with Japan is great news for American producers and Japanese consumers, as well as an important step toward normalized trade based upon scientifically sound, internationally recognized standards." Japan imposed an embargo on U.S. beef exports in December 2003, after a case of bovine spongiform encephalopathy (BSE, or mad cow disease) was discovered in Washington state, in a cow that had been imported from Canada. Before the ban, Japan was the largest single market for U.S. beef, importing $1.4 billion worth of beef and beef products in 2003. Johanns said he hoped Japan's decision would be an incentive to other nations that still maintain embargoes.

View USDA press release

Commerce Secretary Gutierrez Applauds House Passage of Bahrain FTA

On December 8, Commerce Secretary Carlos M. Gutierrez praised the House of Representatives’ passage of the Bahrain Free Trade Agreement, calling it “a model trade agreement for the Persian Gulf region and beyond.�

View Commerce Department press release

U.S. Promotes Forceful International Anti-corruption Efforts

During remarks to an American Bar Association seminar, the State Department's director for anti-corruption and governance issues, David Luna, said that the United States is aggressively addressing corruption issues at international fora and through domestic initiatives. Luna stated that core areas of U.S. diplomatic efforts include promoting cooperation on anti-corruption and encouraging strong enforcement actions by other countries to prosecute corrupt dictators and officials. He said that the U.N. Convention Against Corruption (UNCAC), which he called the “most comprehensive� anti-corruption instrument, is quickly becoming a focal point for international anti-corruption action. The UNCAC promotes prevention of corruption, changes in domestic laws to make corruption a criminal offense, international cooperation on extradition, mutual legal assistance and the recovery and return of stolen assets. Now, countries need to turn the political will into “demonstrable� action, Luna said, calling the implementation challenge a “hard task.�

View USIS Washington File report

U.S. Eyes Tougher Actions on Intellectual Piracy in China, Russia

In testimony to a House Judiciary Committee panel, Acting Assistant U.S. Trade Representative for Intellectual Property Victoria Espinel stated that the Bush administration is considering stronger actions against China and Russia if those countries fail to fulfill their commitments to protect intellectual property rights (IPR) and to take more decisive enforcement steps against piracy and counterfeiting of goods. The U.S. private sector has claimed that China and Russia are the two countries with the most rampant intellectual property piracy and counterfeiting. U.S. industries most affected by these activities include software and movie producers, who have pressed the administration to use tougher measures against these countries such as filing a case with the WTO against China and denying trade benefits to Russia. In his testimony, Eric Smith, the president of the International Intellectual Property Alliance (IIPA), which represents U.S. copyright-based industries, expressed the U.S. private sector’s disappointment with China’s and Russia’s IPR actions. He said that, while other countries have been able to reduce piracy significantly in a short period, progress in reducing copyright piracy in the China and Russia has been “negligible to non-existent” in the last six months.

View USIS Washington File report

USTR Statement on House Passage of Bahrain Free Trade Agreement

In a statement on the House of Representatives’ passage of U.S.-Bahrain Free Trade Agreement, U.S. Trade Representative Rob Portman stated, “The United States will gain much from this new economic partnership - the U.S.-Bahrain Free Trade Agreement will create jobs and economic growth here at home and promote democracy, prosperity, and hope in the Middle East.”

View USTR press release

United States and Peru Conclude Free Trade Agreement

On December 7, the United States and Peru announced that they have concluded their work on a bilateral free trade agreement. This comprehensive trade agreement will eliminate tariffs and other barriers to goods and services and expand trade between the United States and Peru. The United States will continue to negotiate with Colombia and Ecuador in an effort to broaden the trade agreement. In 2004, total two- way goods trade with Peru was $5.8 billion. The three Andean countries collectively represent a market of over $8 billion for U.S. exports, and are home to close to $8 billion in U.S. foreign direct investment.

View USTR press release

United States Presents Japan with Comprehensive Regulatory Reform Recommendations, Convenes Bilateral Trade Forum

On December 7, USTR submitted to Japan an extensive set of reform recommendations intended to further open the Japanese market to U.S. companies in key sectors. The recommendations include measures to speed the delivery of cutting-edge drugs to patients, streamline customs procedures, and strengthen competition policy in the mobile and wire-line telecommunications sectors in Japan. Assistant U.S. Trade Representative for Japan, Korea, and APEC Affairs Wendy Cutler presented the recommendations at the outset of a U.S.-Japan Trade Forum meeting in Seattle, where the two governments addressed a number of pressing bilateral trade issues, including the prompt reopening of the Japanese market to U.S. beef.

View USTR press release

View U.S. reform recommendations to Japan

Commerce Department Official Promotes U.S.-Hungary Commercial/Trade Relations, Market Access and Compliance Unit

On December 2, Commerce Deputy Assistant Secretary (DAS) for Europe Eric Stewart gave a keynote speech at a seminar on "Hungary: A Regional Hub for Doing Business in Europe," in Cleveland, Ohio. DAS Stewart indicated that U.S.-Hungarian relations were stronger than ever before and as a regional player, Hungary has proven to be an attractive regional hub for many U.S. companies. Bilateral trade and investment continues to grow, with over $3.7 billion in trade in 2004. DAS Stewart noted that Commerce’s Market Access and Compliance unit can help U.S. companies overcome problems with foreign trade barriers, and added that the Hungarian Government “has been an excellent partner in addressing and resolving business problems brought to their attention."

Portman Praises WTO Deal Giving Poor Countries Access to Medicines

U.S. Trade Representative Rob Portman praised the WTO’s approval of an agreement resolving a long-standing impasse over developing countries’ access to inexpensive copies of patented drugs for treating HIV/AIDS and other illnesses. Portman commented, "This is a landmark achievement that we hope will help developing countries devastated by HIV/AIDS and other public health crises." On December 6, the WTO General Council made permanent a waiver from the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) for poor countries with little or no pharmaceutical manufacturing capacity to secure drugs through what is called compulsory licensing. WTO members reportedly were eager to close the deal on pharmaceuticals for developing countries ahead of the December 13-18 Hong Kong ministerial meeting.

View USTR press release

WTO: March Goal Set for Finishing Part of Agriculture Negotiation

At a December 3 press briefing in Geneva, ministers from the United States, EU, India, Brazil, Japan and Australia stated that they set a March 1 deadline for agreeing on a target year for eliminating agricultural export subsidies. The ministers had met to work out whatever progress they could ahead of the December 13-18 WTO ministerial meeting in Hong Kong. They also said they were moving toward consensus on eliminating duties and quotas for nearly all imports from the least developed countries. U.S. Trade Representative Rob Portman stated that concluding the export subsidies negotiation would require agreement not only on the deadline but also on disciplines for state trading enterprises and food aid. Aside from export subsidies, the other major agricultural trade issues are domestic support payments to farmers and tariffs. So far, however, what the EU has offered on tariffs has been rejected by other WTO members as offering no real additional market access.

View transcript of post-meeting press conference

Portman Applauds G7 Statement on Trade Talks, Snow Calls Trade Protection a Risk to Global Economy

U.S. Trade Representative Rob Portman and Treasury Secretary John Snow issued statements at the conclusion of the G7 finance ministers’ meetings in London. Portman said that a statement on the importance of an “ambitious outcomeâ€? for the WTO Doha trade negotiations is “a major shot in the armâ€? for the Hong Kong ministerial meeting. Portman also welcomed a declaration from the group that looks toward increasing spending on aid for trade for the world’s poorest countries to $4 billion annually. Snow stated that he urged the European Union and Japan to “make significant movesâ€? on agricultural market-access proposals at the Hong Kong ministerial, which he called “… a critical next stepâ€? toward trade liberalization. Meanwhile, U.S. Trade Representative Spokesperson Christin Baker stated that the U.S. "⬦welcome(s) the fresh signals of determination from Brazil and India on their readiness to contribute to a major outcome in the WTO Doha Development Round.â€?

View U.S. Trade Representative Portman's statement

View Treasury Secretary Snow's statement

View Baker statement