Trade Compliance Center - Making America's Trade Agreements Work for You!

In a July 27 press release, U.S. Trade Representative Susan Schwab stated that Japan has announced the long-awaited reopening of its market to U.S. beef. She welcomed Japan’s step, commenting, “…we will continue our work with Japan to normalize trade in accordance with science-based international guidelines to fully open U.S. beef exports to Japan." Since January, the Administration has been working non-stop to reopen Japan’s market. Steps were taken in cooperation with Japan to investigate, audit and implement new procedures in close coordination with industry to ensure that current export program requirements are met.

U.S. Trade Representative Susan C. Schwab will travel to Brazil July 27-29 in the first of several trips to sustain support for the global trade and development goals of the WTO’s Doha Development Agenda. Schwab will confer with Brazil’s Foreign Minister Celso Amorim, who represents his country in trade negotiations, on how to move the negotiations forward to open new global trade flows following the suspension of formal Doha Round on July 24. In August, Ambassador Schwab will meet with trade ministers from the Association of Southeast Asia Nations (ASEAN). In September she, along with U.S. Secretary of Agriculture Johanns, will visit with members of the Cairns Group of agricultural exporting nations in Australia. In November, Ambassador Schwab will accompany Secretary of State Condoleezza Rice to a meeting of trade minister and other leaders of Asia Pacific Economic Cooperation group (APEC).

In a statement released by its Geneva office , USTR rebuked its EU counterparts for what they view as false and misleading statements attributing the collapse of the Doha Round of WTO trade negotiations to the United States. While they were reluctant to blame the EU, U.S. negotiators nevertheless could not let stand the EU accusation that the United States was unwilling to show flexibility. According to USTR’s statement, the United States said it was ready to show more flexibility in cutting trade-distorting domestic support spending on its farmers even further than the 60 percent cuts it proposed in October 2005. Such a step, however, was contingent on the EU and rapidly expanding developing countries opening their markets further to agricultural imports. The EU maintains average agricultural tariffs of 23 percent, nearly twice the 12 percent U.S. average, and domestic support spending of $33 billion, nearly three times higher than the U.S. level, according to USTR.

In Geneva on July 24, WTO Director-General Pascal Lamy announced indefinite suspension of the Doha Round of WTO trade negotiations, following a failed meeting among six major participants. In a teleconference with U.S. reporters later, U.S. Trade Representative Susan Schwab reaffirmed the United States’ commitment to a successful conclusion some day and rebutted EU statements blaming the United States for the failure. Despite the fact that any possible future Doha agreement could not be submitted to the U.S. Congress under existing trade negotiating authority, which expires in July 2007, Schwab said that she and Secretary of Agriculture Mike Johanns were preparing to travel extensively in the weeks ahead to meet with their foreign counterparts about how to move forward. According to Schwab, Lamy could not narrow immense divisions among the six major participants over opening agricultural markets and cutting agricultural subsidies, the same issues that have blocked movement almost since negotiations were launched.

In a statement at the WTO Heads of Delegation meeting on July 24, U.S. Trade Representative Susan Schwab seconded WTO Director General Pascal Lamy’s statement that "significant progress in all areas of negotiations" was made at the G-6 meeting. She added, however, that WTO members risk letting the opportunity “to make a significant contribution to economic growth” slip through their fingers. At the same time, she underscored the United States’ commitment to work with other Members to complete “an ambitious Doha agreement” that that opens markets for agricultural and manufactured goods, as well as services, and that effectively disciplines trade distorting subsidies. While the U.S. came prepared to further address concerns raised by its trading partners (i.e., including effective cuts in domestic support and a willingness to accept lesser tariff cuts than it proposed in October 2005), Schwab stated that “none of these are possible without evidence of the substantial improvement in market access called for in the Doha Declaration and the 2004 Framework.” She commended Lamy’s efforts to facilitate an agreement, and said that the U.S. will continue to work with him and all members “to achieve the market-opening and subsidy-reforming objectives of the Doha Development Agenda.”

In a July 20 press release, Secretary of Commerce Carlos M. Gutierrez noted that the House of Representatives passed the United States-Oman Free Trade Agreement (FTA), which he called “a key part of the administration's efforts to open markets around the world and expand American opportunities in overseas markets.” The Secretary commented that the FTA helps to expand economic opportunity in the Middle East. As the Senate approved the agreement in June, Secretary Gutierrez is looking forward to President Bush signing the implementing legislation and the FTA entering into force soon.

On July 14, Deputy U.S. Trade Representative Karan Bhatia and Cambodian Minister of Commerce Cham Prasidh signed a Trade and Investment Framework Agreement (TIFA) that will help enhance trade and investment between the two countries and provide a forum to address bilateral trade issues. Under the TIFA, the two countries will consider ways to expand and liberalize trade and investment between the United States and Cambodia. They also will discuss such issues as intellectual property rights, trade facilitation and customs, and implementation of Cambodia’s WTO commitments. In addition, the TIFA dialogue will provide a forum for closer cooperation on bilateral, regional and WTO issues.

View the text of Assistant USTR Wendy Cutler’s statement on the conclusion of the second round of negotiations of the Korea-U.S. Free Trade Agreement. Cutler noted that the two sides made “reasonable” progress during their talks. The U.S. and Korea agreed on the timeframes for tariff phase-outs for industrial goods, exchanged initial offers in services and investment, and made progress in a number of other negotiating groups. Regarding pharmaceuticals, Cutler stated that, upon arriving in Korea, U.S. negotiators learned that Korea decided to switch to a positive list system for the reimbursement of pharmaceutical products before they had the opportunity to have meaningful negotiations on these issues. She commented that such a decision was “inconsistent with both the mandate of the Pharmaceutical Working Group and the market-opening spirit of the FTA,” and “precluded meaningful negotiations at this time. “ Cutler added, “Therefore, in order to ensure continued balance in the overall negotiations, we felt that it was appropriate to suspend work in two additional groups: trade remedies and services.”

Secretary Gutierrez Touts Iraq’s Economic Vitality During Baghdad Visit

When he visited Baghdad July 17, Secretary of Commerce Carlos Gutierrez met with Iraqi Prime Minister Maliki and other senior officials and private sector representatives to discuss ways to help the Iraqi economy grow, boost jobs and become more integrated in the regional economy. While noting that Iraq faces many opportunities and challenges in building a well functioning economy, progress is being made: registered companies have soared from 8,000 to 34,000 and there are now 7 million subscribers of cellular services. The Secretary announced that the Commerce Department is implementing several new initiatives to help the Iraqi government and private sector further enhance economic development and create jobs, including creation of the U.S.-Iraq Business Dialogue, which will focus on enhancing commercial relations, training, and providing input on trade and commercial policies in both countries.

View Commerce press release

Commerce Secretary Carlos M. Gutierrez visited Kuwait July 18 to promote U.S.-Kuwait commercial ties and the business climate in Kuwait. During a meeting with reporters, the Secretary noted that the U.S. and Kuwait will meet in September to discuss their Trade and Investment Framework Agreement (TIFA), which the Secretary described as a “foundation for an FTA in the future.” Regarding the TIFA, Secretary Gutierrez praised the progress Kuwait has made to date. He noted that Kuwait has made progress in intellectual property, but noted that more needs to be done in that area. He also cited standards and taxation policy as issues which Kuwait is addressing either through legislation or other means.

On July 10, WTO Director-General Pascal Lamy welcomed the Negotiating Group on Rules' formal approval of a new WTO transparency mechanism for all regional trade agreements (RTAs), stating, “This decision will help break the current logjam in the WTO on regional trade agreements.” He added, “Hopefully this decision is a good omen for much needed progress in other areas of the talks, such as agriculture and industrial goods trade, where agreement is urgently needed.” The new transparency mechanism provides for early announcement of any RTA and notification to the WTO. The Chairman of the Negotiating Group on Rules, Ambassador Guillermo Valles Galmés (Uruguay), said the decision is “an early contribution to the Doha Round.” A WTO press release noted that RTAs, which include bilateral free trade agreements between countries that are not in the same region, have become so widespread that all but one WTO member are now parties to one or more of them.

Appearing before the House Ways and Committee on July 12, Assistant U.S. Trade Representative for the Americas Everett Eissenstat stated that the United States-Peru Trade Promotion Agreement (TPA) will help the Andean nation sustain real growth, create more jobs and attract investment. The Peruvian Congress approved the agreement on June 28. Eissenstat said that upon entry into force the pact would make permanent the trade benefits Peru has enjoyed since 1991 under Andean Trade Preference Act (ATPA). Because the ATPA is set to expire at the end of 2006, Eissenstat said the approval of the United States-Peru TPA is necessary to support Peru’s continued positive economic performance. Eissenstat said that the agreement also contains labor cooperation and capacity building mechanisms to advance cooperation on labor and establishes a labor affairs council to oversee the implementation of the agreement’s labor provisions.

During his July 12 testimony before the Senate Finance Committee, Deputy U.S. Trade Representative Karan Bhatia stated that the Bush administration wants Congress to approve permanent normal trade relations (PNTR) with Vietnam before Congress recesses in August. Bhatia said that administration officials would work with Senate and House leaders for quick passage of the legislation related to Vietnam's pending accession to the WTO; he noted, however, that they do not control Congress’s schedule. Senator Max Baucus, a Democratic leader on trade issues, urged Congress to act “before the president travels to Hanoi in November… before other countries like China beat us to the punch by benefiting first from Vietnam's market-opening commitments.”

During his July 10 remarks at the Heritage Foundation in Washington, Assistant U.S. Trade Representative Douglas Hartwick said that India is enjoying tremendous economic growth as a result of its reform policies. At the same time, he encouraged India to take further steps toward economic openness in both its bilateral ties with the United States and in its approach to the WTO Doha Round of negotiations. Hartwick acknowledged the political pressure within India to protect the agricultural sector given its size and its relative inefficiency, but he said India should not be afraid of expanding its economic reforms to that part of the economy. As a leader of the G-20 group of developing nations, India has been at the forefront of efforts to protect the developing countries’ agricultural sectors from liberalization under the WTO negotiations.

View the transcript of U.S. Trade Representative Susan Schwab’s July 7 remarks at the National Press Club in Washington regarding the latest round of Doha Round negotiations. Schwab commented that the USG has no intention of giving up on the round, but expects other WTO members to “step up to the plate.” She stated: “WTO members have a clear choice. Deliver the promises made at Doha in 2001, or in the Doha Framework, Doha Declaration in 2004, to reduce barriers, to spur growth and to spur economic development.”

Although WTO meetings in Geneva ended without a breakthrough on contentious agricultural issues, senior USG officials pledged continued efforts to work toward a solution. U.S. Trade Representative Susan Schwab stated, “We remain fully committed to an ambitious, robust round that opens new markets for the world's farmers, manufacturers and service providers." Agriculture Secretary Mike Johanns, another key U.S. participant in the talks, said the main task in Geneva had been to “agree on how to deliver on the Doha mandate to 'substantially improve' market access in agriculture through programs of fundamental reform and by reducing barriers to industrial goods. “We don't have all the answers yet, but the central question of market access is squarely on the table. We also had a long overdue discussion on the balance that we all need to achieve for the Round to succeed," he said. After several days of bilateral and small group meetings, Schwab and Johanns described the situation as serious, but not beyond hope. Schwab added, ”We are ready to roll up our sleeves and work to find the breakthrough that will enable the successful conclusion of the Doha Round. It is the right thing to do for the U.S. economy, global development, and strengthening of the world trading system.” The Doha round is scheduled to wrap up in six months.

On June 30, President Bush issued a proclamation to implement the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) for Guatemala on July 1. In a June 30 statement, U.S. Trade Representative Susan Schwab said, "Guatemala is now ready to join El Salvador, Honduras and Nicaragua in full implementation of this agreement." She praised "the sincere and diligent effort by Guatemala to adopt the necessary regulatory and legislative framework under CAFTA-DR" to ensure compliance with the terms of the pact. Parties to the agreement are Guatemala, El Salvador, Nicaragua, Honduras, and Costa Rica, in addition to the Dominican Republic and the U.S. The agreement was signed in August 2004; all the signatory parties except Costa Rica have ratified it. "We will continue our work with the remaining two CAFTA-DR partners to ensure timely and full implementation of the agreement," Schwab said.