December 2006 News

Comments on 2007 Review of Compliance with Telecom Trade Agreements

View comments from U.S. trade and labor associations regarding the 2007 review of compliance with telecommunications trade agreements.

USTR Schwab Applauds Vietnam Trade Bill Signing, Extension of GSP

On December 20, U.S. Trade Representative Susan C. Schwab issued a statement after President Bush signed legislation authorizing him to grant Permanent Normal Trade Relations (PNTR) to Vietnam and extending major trade preference programs. Regarding Vietnam PNTR she stated, “With his signature today, the President ushered in a new era of economic opportunity and cooperation between the United States and Vietnam.”  He also signed legislation to extend the Generalized System of Preferences (GSP), African Growth and Opportunity Act (AGOA), Andean Trade Preference Act (ATPA), and Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006 (HOPE Act) programs for two years until December 31, 2008. Schwab commented that the trade preference programs have “…helped alleviate poverty and created economic opportunities for people in dozens of developing countries, strengthened our economic relationships with those countries, and given consumers here at home more choices.”

View USTR press release

U.S. and Panama Complete Trade Promotion Agreement Negotiations

On December 19, the United States and Panama announced completion of negotiations on a free trade agreement, with the understanding that it is subject to further discussions regarding labor. This comprehensive agreement will eliminate tariffs and other barriers to trade of goods and services, expand trade between the United States and Panama, and promote economic growth and opportunity. U.S. Trade Representative Susan C. Schwab commented that the agreement “… significantly cuts trade barriers and expands opportunities for American workers, consumers, farmers and ranchers, manufacturers, and service providers.” She added, “The agreement will provide new economic opportunities for U.S. exporters, including significant opportunities to participate in the $5.25 billion expansion plan for the Panama Canal," which is due to begin and finish in 2014. The Panama Canal is the focal point of Panama’s services-based economy, with much of the country’s economic activity tied to the canal’s infrastructure and to the logistics and financing of international shipping.

View USTR press release

View brief summary of agreement

View detailed summary of agreement

WTO: Provisional Agreement on Text of Revised Government Procurement Agreement

WTO members to the 1994 plurilateral WTO Government Procurement Agreement (GPA) provisionally agreed on a substantial revision of the text of the GPA. This was the first major revision of the text of the GPA since its adoption in 1979. The revised text significantly improves the current GPA by: making it more user friendly by clarifying obligations, removing ambiguities, and re-grouping related provisions into a single article; re-ordering the provisions to correspond more closely to the order in which procurements are conducted; expanding and clarifying transitional measures for developing countries to facilitate their GPA accession; and agreeing to develop arbitration procedures to resolve differences over the modification of the entities covered by the GPA. The revised GPA will be particularly useful for China as it prepares its initial GPA offer, which it agreed in the U.S.-China Joint Commission on Commerce and Trade (JCCT) to table by the end of 2007. On January 1, 2007, when Bulgaria and Romania join the EU, they will be added to the GPA, which will bring the total members to 40.

View USTR fact sheet

View list of GPA members

U.S. Trade, Investment Deals in Middle East Advance Bolder Goals

U.S. officials say that Trade and Investment Framework Agreements (TIFAs) the United States signs with countries in the Middle East and North Africa help realize the vision of a regional free trade area (i.e., Middle East Free Trade Area Initiative, or MEFTA) integrated with the global economy. The U.S. administration works to move interested, reform-oriented countries toward MEFTA by a step-by-step process that usually starts with a TIFA, which provide a forum for senior-level discussions of issues the two countries consider “of importance to their trade and investments relationships,” said the U.S. official. According to USTR, TIFAs focus on implementing legal protection for investors, and transparent and efficient trade procedures. Private-sector experts say successful TIFAs should lead to full-fledged bilateral trade treaties, such as free trade agreements (FTAs), which are considered the main building blocks of a future Middle East Free Trade Area. The United States has concluded FTAs with Bahrain, Israel, Jordan, Morocco and Oman, and is negotiating an agreement with the United Arab Emirates.

View USIS Washington File report

U.S., China Agree on Reform Principles, Treasury Secretary Says

Following two days of negotiation between senior U.S. and Chinese officials, Treasury Secretary Henry Paulson (who led the U.S. delegation) said that the United States and China have agreed on basic principles covering a wide range of issues -- including further economic reforms Beijing should implement to achieve balanced, sustainable growth -- but differ on the timing of changes. Commerce Secretary Carlos M. Gutierrez was a member of the delegation. Paulson released a statement at the conclusion of the talks, the initial session of the U.S.-China Strategic Economic Dialogue, an initiative first proposed in September by President Bush and Chinese President Hu Jintao.  Paulson said China’s leaders agreed to move toward a growth strategy that will rely more on domestic consumption than exports, maintain high productivity, strengthen protection for intellectual property rights, and open up the service sector. That approach will help China successfully integrate into the global economy without contributing to global current account imbalances, he said. According to Paulson, both countries pledged to address global current account imbalances by maintaining an open investment environment and by implementing other measures -- the United States through policies increasing national savings, and China through efforts to increase domestic consumption and exchange rate flexibility.

View USIS Washington File report

China/Korea: Commercial Highlights of Secretary Gutierrez’s Visits

During his visits to China (as a member of a senior-level U.S. Government delegation) and Korea, Commerce Secretary Carlos M. Gutierrez participated in events highlighting the accomplishments of U.S. companies. In Beijing, the Secretary presided over the signing of contracts that represent expanded access to China's market. Companies signing contracts with their Chinese counterparts are The Home Depot, Oshkosh Truck Corporation, VeriSign, and GE Aviation with a deal valued at more than a half-billion dollars. This commercial cooperation highlights the strengthening economic relationship between the U.S. and China. The new deals support jobs in the U.S. and further increase U.S. exports to China, which are up 34 percent this year. Secretary Gutierrez also released a statement applauding China’s selection of Westinghouse Electric (which participated in the November 2006 trade mission the Secretary led to China) to provide third generation nuclear power units. The multi-billion dollar agreement will create more than 5,000 new U.S. jobs. In Korea, Secretary Gutierrez and Energy Secretary Samuel highlighted the tremendous progress made by Seoul city buses. The buses are manufactured by Natural Gas Vehicle International, a Korean company, using U.S. technology developed by Woodward Governor Company of Illinois, to eliminate pollution and promote high efficiency natural gas vehicles. "This innovative technology and unique public private partnership is a win-win for American workers, the people of Korea and the environment," the Secretary stated.

U.S. Commitment to Asia-Pacific Cooperation Remains Strong

During his December 7 speech to members of the Asia Society in Washington, the Council of the Americas and the U.S.-APEC Business Coalition, Michael Michalak, the senior U.S. official for APEC, said that

the United States remains strongly committed to the Asia-Pacific Economic Cooperation (APEC) forum. Michalak stated that the ultimate goal of U.S. activities in APEC is "to advance the prosperity and security of the region and improve business's bottom line." In Hanoi, Michalak said, APEC members successfully endorsed six sets of free-trade agreement model measures to act as important references and to ensure transparency, cooperation, ways to deal with technical barriers to trade, government procurement, market access and dispute settlement.  He also said that APEC continues to place a high premium on protecting intellectual property rights (IPR) in the region; APEC ministers and leaders welcomed the completion of two new IPR model guidelines under the 2005 APEC Anti-Counterfeiting and Piracy Initiative.  Ministers and leaders also agreed that government agencies "should be setting a good example by prohibiting the use of illegal software and on government computer systems and via the Internet," he said.

View USIS Washington File report

High-Level U.S.-China Talks Focus on Medium-, Long-Term Gains

Commerce Secretary Carlos M. Gutierrez will be a member of the senior level U.S. delegation (led by Treasury Secretary Henry Paulson) traveling to China December 14-15 for an inaugural meeting of the U.S.-China Strategic Economic Dialogue. Regarding the China visit, Paulson noted that the U.S. delegation (also comprised of Labor Secretary Chao, Health and Human Services Secretary Leavitt, Energy Secretary Bodman, USTR Schwab, EPA Administrator Johnson and Federal Reserve Chairman Bernanke) “…can look at all the items on the agenda and have conversations that really try to move the ball forward in many different areas.” The U.S. delegation is expected to discuss such issues as trade reform, global current account imbalances, capital market reform, China’s growth strategy and exchange-rate policy as well as cooperation on energy and the environment. Before visiting China, Secretary Gutierrez will be in Korea December 12-13 for bilateral talks.

View USIS Washington File report

China: Mixed Record in Implementing WTO Obligations

On December 11, USTR Schwab presented to Congress a statutorily mandated annual report on China’s compliance with its WTO obligations.  The report describes broad progress made to date by China in implementing reforms, but also highlights the need for additional action in important areas such as intellectual property rights enforcement and the elimination of government policies that hinder market access for U.S. companies. Commenting on the report, Schwab observed that although it has taken many important steps to implement its WTO obligations, “… China’s overall record is decidedly mixed.” She continued, “With five years of WTO membership experience under its belt, we believe it is fair to expect China to be implementing the letter and spirit of its WTO obligations in full.  This would benefit both of our countries and strengthen the global trading system.” Since China entered the WTO on December 11, 2001, exports of U.S. goods to China have grown by 190 percent and China has gone from being the United States’ fifteenth to fourth largest export market. At the same time, the report highlights a number of areas of concern about the level of China’s implementation of its WTO commitments in areas such as intellectual property rights, industrial policies, trading rights, services, transparency, and agriculture.

View USTR press release

USTR Schwab Welcomes Bipartisan Senate Vote Approving Key Trade Legislation

On December 9, U.S. Trade Representative Susan C. Schwab praised the Senate for approving legislation extending several trade preference programs and authorizing Permanent Normal Trade Relations (PNTR) for Vietnam. According to Schwab, “This bill shows that, contrary to conventional wisdom, Democrats and Republicans, the Administration and Congress, can work together to further our vital trade agenda.” She stated that the vote on PNTR for Vietnam “demonstrates to our trading partners in East Asia, the United States ' commitment to strengthen and deepen our relationships in that region.” Schwab also welcomed the Senate’s vote to extend key trade preference programs: "I believe this can also lay the groundwork for bipartisan action on trade issues in the next Congress, including passage of the Peru and Colombia Trade Promotion Agreements."

View USTR press release

USTR Schwab Calls on Japan to Accelerate Economic Reform

On December 5, the United States presented comprehensive reform recommendations to the Japanese Government that urge further improvements in Japan’s business environment and new market opportunities for U.S. exporters and companies seeking to do business in Japan. The U.S. - Japan Regulatory Reform Initiative includes detailed recommendations for Japan to strengthen regulatory transparency and predictability, facilitate cross-border triangular mergers, improve access to life-saving medical devices and drugs, and strengthen intellectual property protection through bilateral cooperation and domestic reforms.  The recommendations also call on Japan to undertake reforms to Japan Post that will level the playing field in Japan. Schwab commented, “Our trade relationship will benefit from Japan adopting international best practices and reforms to create more vibrant markets and enlarge long-term economic opportunities. We look forward to Japan’s continuing commitment to economic reform at all levels.”

View USTR press release

View 2006-2007 reform recommendations

United States and Costa Rica Sign Agreement on Pocketing Fabric

On December 5, U.S. Trade Representative Susan Schwab announced that the United States and Costa Rica had reached an agreement on pocketing fabric. Schwab commented, "This has been a high priority for our industry and the industries in the region." With this exchange of letters, the United States has concluded agreements on pocketing fabric with all five Central American signatories to the CAFTA-DR and the Dominican Republic.  The United States and the other CAFTA-DR signatories agreed to negotiate amendments on pocketing fabric when concerns were raised during Congressional consideration of the CAFTA-DR implementing bill.

View USTR press release

U.S. Seeks To Boost Competitiveness of Latin America, Caribbean

Commerce Deputy Assistant Secretary for the Western Hemisphere Walter Bastian told State’s Bureau of International Information Programs that the nations of Latin America and the Caribbean are falling dangerously behind in global economic competition, which has negative implications for both that region and the United States. Bastian gave the interview as he participated in a daylong “Competitiveness” forum at the 30th annual Miami Conference on the Caribbean Basin, held in Miami December 4-6.  Bastian said the issue will receive further attention in Atlanta June 11-13, where U.S. Commerce Secretary Carlos Gutierrez will host the “Western Hemisphere Competitiveness Forum.” He emphasized that Latin America and the Caribbean need to improve the time it takes to move a product from the supplier to the consumer.  Recent reports from the World Bank and the World Economic Forum indicated that even the adoption of preferential trade benefits for Latin America and the Caribbean “have not served as the catalyst for long-awaited gains” in the region.

View USIS Washington File report

USITC Seeks Input Regarding Changes to Singapore FTA

The U.S. International Trade Commission (USITC) has launched investigations concerning the probable economic effect of accelerating the reduction or elimination of certain U.S. duties under the U.S.-Singapore Free Trade Agreement , as well as a rules of origin change for certain articles. The articles include preparations for infant use, put up for retail sale (HS 1901.10); peanuts in snack products (HS 2008.11); and polycarbonates (HS 3907.40.00). In addition, the ITC will provide advice on the probable effect of modifying the USSFTA rules of origin for photocopiers (HS 9009.12.00) on U.S. trade under the USSFTA, on total U.S. trade, and on domestic industries. The Commission expects to submit its confidential advice to the USTR by February 5, 2007. The ITC will not hold a hearing in connection with this investigation, but it welcomes written submissions for the record from all interested parties and requests that the information focus on the articles for which the ITC is requested to provide information and advice. Written submissions should be sent no later than 5:15 p.m. on December 21, 2006. For more information, please refer to the USITC news release.

United States Intensifies Fight Against Counterfeit Drugs

U.S. Department of Justice officials stated that the United States Government is expanding its efforts to combat the rising threat posed by dangerous counterfeit drugs entering global markets. More than 10 percent of the drugs sold around the world today are counterfeit, according to the World Health Organization, and the problem is growing. Eugene Thirolf, who directs the U.S. Department of Justice (DOJ) office that assists the Food and Drug Administration (FDA) in prosecuting counterfeiters, told an audience in Taiwan via digital videoconference November 28 that the removal of counterfeit drugs from the marketplace is “critical.” He added, “Maintaining the confidence of the American public or the public in Taiwan that the products that they are taking are, in fact, going to help them, and are safe and effective --it is something that must be maintained.”

View USIS Washington File report

United States and Lebanon Sign Trade and Investment Framework Agreement

On November 30, Assistant U.S. Trade Representative for Europe and the Middle East Shaun Donnelly and Lebanese Minister of Economy and Trade Sami Haddad signed a Trade and Investment Framework Agreement (TIFA), which will provide a forum for expanding and strengthening bilateral trade and investment relations between the United States and Lebanon. "Today's signing of the TIFA is a part of a comprehensive U.S. effort to support the Lebanese Government" Donnelly said.  "The United States’ mission is to help Lebanon meet the needs of its people and build a peaceful, prosperous and democratic future.  Expanded trade and investment between our two countries can play a vital role in achieving these objectives."

View USTR press release