March 2005 News

2005 Review of Telecommunications Trade Agreements

On March 31, USTR announced the results of its 2005 annual review of foreign compliance with telecommunications trade agreements, the “Section 1377 Review.” The report both identifies barriers facing U.S. telecommunications services and equipment providers, and lays out the specific telecommunications-related issues on which USTR will focus its efforts this year. The main issues identified in this year’s review include existing practices or prospective concerns relating to: 1) excessive interconnection rates for mobile networks in Germany, Japan, Mexico, Peru and Switzerland; (2) restrictions on access to and use of leased lines in Germany and submarine cable capacity in India; (3) excessive regulatory requirements in China, Colombia and India; (4) burdensome testing and certification requirements in Mexico and Korea; and, (5) limitations on suppliers’ choice of technology in China and Korea. Commenting on the report, Acting U.S. Trade Representative Peter Allgeier noted the U.S.’s “deep concern” over its trading partners’ “tepid commitment” competition in the telecommunications sector.

View USTR press release

View Results of 2005 Section 1377 Review

Zoellick Comments on Boeing-Airbus Trade Dispute

During his visit to Hungary, Deputy Secretary of State Robert B. Zoellick commented on the US-EU trade dispute over alleged subsidies to rival aircraft makers Boeing and Airbus. Based on his most recent conversation with EU Trade Commissioner Peter Mandelson, Zoellick said he did not believe the launch subsidy issue will be resolved by the April 11 deadline set in the January 11 agreement. “The United States has said that we would be willing to maintain the standstill that we had in the January 11th agreement, and so I guess that it will be up to Europe to decide what it wants to do,” he said. On January 11, the US and the European Commission set out a framework for moving ahead on the dispute, he explained, with the U.S viewing that framework’s goal as the elimination of subsidies as defined by the WTO, including launch subsidies.

View USIS Washington File report

2005 National Trade Estimate Report on Foreign Trade Barriers

The 2005 National Trade Estimate Report on Foreign Trade Barriers (NTE) is the twentieth in an annual series that surveys significant foreign barriers to U.S. exports. The report provides, where feasible, quantitative estimates of the impact of these foreign practices on the value of U.S. exports. Information is also included on actions taken to eliminate barriers.

2005 Report to Congress on Extension of Trade Promotion Authority

View the 2005 Report to Congress regarding extension of Trade Promotion Authority.

China's Food Import Standards Often Unclear, U.S. Officials Say

According to a USIS Washington File report, U.S. Agriculture Department economists Fred Gale and Francis Tuan stated that, while China is making progress toward meeting its WTO agricultural policy commitments, bringing substantial benefits to U.S. farmers, full implementation of WTO commitments would bring even greater benefits. Nontransparent agricultural standards and procedures for distributing grain import quotas still pose a strong challenge for U.S. exporters, Gale and Tuan said. They added that China's provincial governments apply agricultural standards that conflict with each other and with national government standards. Of particular concern for U.S. exporters is an evolving set of standards related to labeling requirements for bioengineered agricultural products, the economists said. Gale stated that another area of concern to U.S. farm producers is China's inconsistent use of sanitary and phytosanitary (SPS) standards at ports to reject grain shipments. USTR reported in its 2004 foreign trade barriers report that the conflicting standards "could create significant barriers to entry into China's markets because of the high cost of compliance for foreign exporters.”

View USIS Washington File report

USITC Reports on Global Issues Affecting U.S. Industries, U.S. Technological Competitiveness

Radioisotopes and U.S. manufacturing integration are among the topics examined in the current issue of Industry Trade and Technology Review (ITTR), a periodic publication of the U.S. International Trade Commission's (USITC) Office of Industries.

View text of current Industry Trade and Technology Review

Security and Prosperity Partnership of North America Prosperity Agenda

View the text of the Security and Prosperity Partnership of North America Prosperity Agenda, which was issued by Presidents Bush and Fox and Prime Minister Martin in Texas on March 23. The goal of the Prosperity Agenda is to enhance the competitive position of North American industries in the global marketplace to provide greater economic opportunity for the U.S., Canada and Mexico while maintaining high standards of health and safety for the citizens of the three countries. View Joint Statement by President Bush, President Fox, and Prime Minister Martin

Commerce Secretary Gutierrez Announces Expedited Monitoring Of Textile and Apparel Imports

On March 21, U.S. Secretary of Commerce Carlos M. Gutierrez announced the initiation of a new system to monitor imports of textiles and apparel products. The system will allow the Department and the public timely access to preliminary textile and apparel data from U.S. Customs and Border Protection (aggregated on a category basis), allowing decision makers to more quickly analyze the impact of imports on the U.S. market. “This action demonstrates the commitment of this Administration to put in place the tools necessary to enforce our trade agreements and level the playing field to support our domestic textile and apparel industry,” said Gutierrez. “We will continue to work with our domestic manufacturers and workers to give them the tools they need to compete internationally.”

View Commerce press release

Latest Round of U.S.-Andean Trade Talks Concludes in Washington

U.S. and Andean trade officials convened March 14-18 in Washington to continue efforts to craft a U.S.-Andean Free Trade Agreement. These talks focused on a select set of issues that merited greater attention, according to Assistant U.S. Trade Representative for the Americas Regina Vargo. These issues included discussion of the structure of the agreement and of how it would mesh with the structure of the Andean Community, a subregional organization made up of Bolivia, Colombia, Ecuador, Peru, and Venezuela. Investment, intellectual property rights, textiles and rules of origin were also among the important issues addressed, said Vargo. On the difficult issue of agriculture, Vargo noted that U.S. officials have adopted a different approach in an effort to advance agricultural talks with their Andean counterparts, conducting a separate series of two-day bilateral sessions with each Andean nation in March. The next round of U.S.-Andean free-trade negotiations is scheduled to take place April 18-22 in Lima, Peru.

View USIS Washington File report

State's Mermoud Outlines U.S. Economic Policy Goals in Asia

In a March 16 speech in Guangzhou, China, at the annual meeting of the Asia Pacific American Chambers of Commerce (APCAC), Frank Mermoud, the U.S. Department of State's special representative for business affairs, said that Asian markets account for nearly one-fifth of U.S. exports, and trans-Pacific trade totals some three-quarters of a trillion dollars a year. Mermoud outlined four broad goals of U.S. economic policy in Asia, including opening markets for U.S. goods and services; improving Asia's overall business environment; maintaining a stable macro-climate favoring open trade and growth; and encouraging regional cooperation. He noted opening markets for U.S. goods and services was a top economic priority for the Bush administration. Mermoud discussed the improvement of Asia's business climate through developing secure transportation links, opening Asian civil aviation and telecommunications industries, improving intellectual property rights and combating corruption.

View USIS Washington File report

U.S. Says EU Unwilling To End Aircraft Subsidies

In a March 18 statement, USTR spokesperson Richard Mills said that the EU appears "unwilling" to end subsidies for the development of large commercial aircraft despite a January 11 agreement for negotiations with the U.S. to avert litigation at the WTO. As part of that agreement there was to be a three-month "subsidies standstill" and "litigation standstill" while the talks were ongoing. While the subsidies standstill does not apply to current aid programs to Airbus and Boeing, it would prevent European governments from committing subsidies to their new Airbus A350. Mills said that, during the past two months of negotiations, the EU "has been backtracking and seeking to change the terms of that agreement." Mills said the U.S. will adhere to the terms of the January 11 negotiating agreement that precludes further subsidies, but would return to WTO litigation "if the EU either breaks or refuses to extend the terms" of the agreement. View USTR press release (no longer available)

President Nominates Rob Portman as U.S. Trade Representative

On March 17, President Bush announced his intention to nominate Congressman Rob Portman of Ohio to be U.S. Trade Representative. A White House press release stated that, throughout his 12 years in Congress, Portman has authored numerous bills that have become law, including legislation regarding pension laws, capital gains taxes, IRS reform, and community anti-drug efforts. Congressman Portman is a member of the Ways and Means Committee and its subcommittee on Trade. He is also Vice Chairman of the Budget Committee, and he serves as the Chairman of the House Republican Leadership. View White House personnel announcement View transcript of Remarks by President Bush and U.S. Trade Representative Nominee Rob Portman

U.S-Bahrain Free Trade Agreement Protects Labor Rights

View the USTR fact sheet outlining the provisions of the U.S.-Bahrain Free Trade Agreement relating to labor issues.

U.S. Wins "Food Name" Case in WTO Against EU

On March 15, Acting U.S. Trade Representative Peter F. Allgeier praised a WTO panel decision siding with the U.S. in its case against the European Union regarding geographic food names known as "geographical indications." Geographical indications, or "GIs", are protected geographic names that have a particular association with a food product, such as Idaho potatoes or Florida oranges. In its report, the WTO panel agreed with the U.S. assertion that Europe’s regulation for protecting "GIs" discriminates against U.S. products and producers and is therefore contrary to WTO rules. The panel also agreed with the U.S. that Europe could not, consistent with WTO rules, deny U.S. trademark owners their rights. Allgeier stated that the U.S. is “very pleased” with the WTO ruling, calling it “a clear win for American farmers and food processors.” He added, "We also welcome the panel’s findings that protecting GIs need not and should not harm the rights of trademark owners. These findings are important to the rights of U.S. companies protecting their trademarks in Europe."

View USTR press release

Free Trade Talks with Oman, U.A.E. Off to Rapid Start

Assistant U.S. Trade Representative for Europe and the Mediterranean Catherine Novelli, who is the chief U.S. negotiator in the free trade agreement (FTA) talks with the United Arab Emirates (U.A.E.) and Oman, told reporters that the first round of bargaining with each country has gone smoothly. She expects that agreements with both countries will be concluded and signed by the end of 2005. Novelli attributed the rapid progress to thorough preparations and clear understandings reached before the negotiations got under way. She said the second round of talks is planned to begin in Washington on April 18 for Oman and on April 25 for the U.A.E. Novelli stated that protecting intellectual property is a key U.S. demand because of the comparative advantages enjoyed by U.S. companies in this area, but added that those protections offer benefits for other countries.

View USIS Washington File report

U.S. to Lift Objections Against Iranian Bid to Join WTO

During a March 11 interview with Reuters, Secretary of State Condoleeza Rice said that the U.S. is prepared to lift its objection to an Iranian application to join the WTO and allow the sale of spare parts for Iranian commercial aircraft. The Secretary said that these steps do not reflect a change in U.S. policy toward Iran, but rather a desire to support European diplomatic efforts aimed at encouraging Iran to renounce its ambitions to obtain a nuclear weapon. Ms. Rice noted that, because it will be necessary for Iran to meet certain standards to accede to the WTO, it may have the effect of opening up some aspects of Iranian society. She added, however, that there is still an accession process to which the United States would have to agree separately. View USIS Washington File report (includes transcript of interview)

Statement from Acting USTR Allgeier Regarding Guatemala's Passage of CAFTA

View the text of Acting U.S. Trade Representative Peter Allgeier’s statement regarding Guatemala’s passage of the Central America Free Trade Agreement (CAFTA).

U.S. Begins Free Trade Negotiations with UAE and Oman

The U.S. began negotiations on a Free Trade Agreement (FTA) with the United Arab Emirates (UAE) on March 8, and will kick off negotiations with Oman March 12, with the goal of eliminating tariffs and barriers and expanding trade between the countries. Assistant U.S. Trade Representative for Europe and the Mediterranean Catherine Novelli will lead the U.S. negotiating team. Acting U.S. Trade Representative Peter Allgeier noted that FTAs with the UAE and Oman "…will encourage the six members of the Gulf Cooperation Council to adopt standards that promote trade and investment… We also intend to continue to move forward with our other partners in the region through our TIFAs and WTO accession discussions."

View USTR press release

U.S. Seeks to Enhance Commercial Ties with Baltic States

In his March 4 remarks to an audience of ambassadors, government officials and business executives, Assistant Secretary of State E. Anthony Wayne said that the Bush administration and the State Department are committed to enhancing commercial ties with Estonia, Latvia and Lithuania. Wayne said the State Department looks forward to working with Baltic leaders who are making efforts to “streamline the business regulatory environment, improve transparency, enhance accountability and reporting, combat corruption, and protect intellectual property rights.” The key to attracting U.S. investment and maintaining “impressive” economic growth, he said, is continued economic reform.

View USIS Washington File report

Stakes High for December WTO Meeting in Hong Kong, U.S. Consul General Says

On March 7, U.S. Consul General in Hong Kong James Keith said that WTO member states could make substantial progress on the Doha Development Agenda when they gather for the organization's Sixth Ministerial Conference in Hong Kong in December. While Keith noted that conclusion of the Doha Round by 2006 is "certainly achievable," he added "…it will require all WTO members to push very hard over the next several months to make sure that we leave Hong Kong with an 'endgame document' that will allow us to finalize the negotiations in all the areas covered by the Doha mandate." Resolution of agricultural trade issues is the key to successful conclusion of the Doha round, according to Keith, who also called for ambitious efforts to expand market access for manufactured products and services. View USIS Washington File report (includes text of Keith’s remarks)

Allgeier's Remarks at Informal Trade Ministers' Meeting

At the closing press conference of the informal trade ministers' meeting in Mombassa, Kenya, Acting U.S. Trade Representative Peter Allgeier reiterated the U.S.'s commitment to completing the Doha Development Agenda by the end of 2006, which he said is shared by meeting participants. He noted that such a goal "will not happen spontaneously through the trade negotiations equivalent of the 'Big Bang' theory," adding that it will be achieved "only if from this point on we methodically identify the negotiating issues that we need to resolve to move ahead in each of the major negotiating areas, and then negotiate solutions to those issues."

U.S., Central American Officials Voice Support for Free-Trade Accord

Congressman Kevin Brady, who was designated by the White House as its point person to secure congressional passage of the CAFTA-DR, said that the nations of Central America and the Dominican Republic collectively make up the U.S.’s second-largest trading partner in Latin America and that the agreement deserves congressional support. In March 3 remarks to the Center for Strategic and International Studies, where he joined officials from Central America, the U.S. Congress and USTR to share his thoughts on CAFTA-DR and its prospects for approval, Brady noted that the agreement is the largest trade accord that the U.S. has considered since the passage of NAFTA, and he declared CAFTA-DR a "truly win-win agreement." He said that the congressional vote on CAFTA-DR will be a close one, but predicted that, in the end, there will be sufficient votes to secure its approval in the coming months. Assistant USTR Christopher Padilla indicated that passage of the proposed trade accord would serve to reinforce progress in the region and bolster economic, democratic and social reforms. View USIS Washington File report

Request for Public Comments on Scope of Environmental Review of U.S.-Andean Free Trade Negotiations

USTR, through the Trade Policy Staff Committee (TPSC), is initiating an environmental review of the proposed U.S - Andean Free Trade Agreement. The interim environmental review is available at “http://www.ustr.gov/assets/Trade_Agreements/Bilateral/

Andean_FTA/asset_upload_file27_7305.pdf”. Copies of the review will also be sent to interested members of the public by mail upon request. DATES: Comments on the draft environmental review are requested by April 15, 2005 to inform negotiations. Comments received after April 15, 2005 will be taken into account in the preparation of the review of the final agreement. For information on submitting comments, please consult the Federal Register notice

Growing U.S.-China Economic Relations Stir Debate

While the 2005 Economic Report of the President plays down the importance of the U.S.’s trade deficit with China, which amounted to $162 billion in 2004, representatives of U.S. government and business assert that major trade issues with China, both on the export and import side, remain unresolved. One unidentified U.S. trade official identified intellectual property rights (IPR) as the major bilateral trade problem, adding that it is “…so mammoth it will, if not checked, alter the landscape for innovation, alter the way we do business as an economy…” He said China's central government leadership clearly understands the importance of IIPR protection, but noted that provincial and municipal governments are responsible for enforcement. Although Shanghai is widely regarded as a leader in IPR enforcement, he added, other provincial and local governments do little or nothing. A U.S. official in Beijing says the top problem in U.S.-China economic relations "is the abject failure of China to enforce its laws in a consistent and transparent manner." U.S. exporters also list lack of transparency and subsidies as two of many other barriers to selling in China. Unfair product standards are also on the list. The trade problem with China that probably generates the most controversy, however, concerns China's exchange-rate policy. Some scholars state that the U.S. is standing by while China negotiates free trade agreements with its East Asian and Southeast Asian neighbors with the intent, in their view, of shutting U.S. exports out. Meanwhile, public perceptions that blame the bilateral trade deficit with China for lost U.S. jobs have found resonance in Congress.

View USIS Washington File report

Bush Administration Submits Annual Trade Report To Congress

On March 1, the Bush Administration submitted to Congress the 2005 Trade Policy Agenda and the 2004 Annual Report of the President on the Trade Agreements Program. The Agenda outlines the Administration’s trade initiatives for the year and reviews its work and accomplishments in 2004. The report also contains the Congressionally mandated five-year report on the World Trade Organization WTO. In an overview of the report, former U.S. Trade Representative Robert Zoellick stated that concluding the WTO Doha agenda of multilateral trade negotiations will be a top priority for the Administration.

View USTR press release

View report (pdf)

CAFTA-DR Briefing Book

View the briefing book for the Dominican Republic-Central America FTA. Among other features, the agreement provides new opportunities for U.S. workers and manufacturers; expands markets for U.S. farmers and ranchers; delivers strong protections for worker rights; and institutes an innovative environment chapter.

U.S.-EU Agreement on Brown Rice Reached in Trade Dispute

In a February 28 press release, USTR announced that the U.S. and the EU reached agreement ending, at least for now, a WTO case concerning EU tariffs on imports of brown rice. According to USTR, the agreement lowers the EU tariff rate, opening the market to more U.S. exports, and preserves the U.S.’s right to retaliate with trade sanctions if the EU raises the tariff again. It said the WTO General Council approved the agreement February 28. The adjustment mechanism is scheduled to take effect March 1. Acting U.S. Trade Representative Peter Allgeier stated, "While we were ready to exercise our WTO rights to withdraw concessions, resolving this issue bilaterally is a much better outcome for everyone."

View USIS Washington File report