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

When he addressed the Council of the Americas on February 21, Commerce Secretary Carlos Gutierrez says it is “naïve” to suggest that lifting the long-running U.S. trade embargo on Cuba would weaken the Cuban communist regime and force change on the Caribbean island. The Secretary stated, “I submit to you that foreign businesses will not flourish on the island as long as there is an active communist regime in control of Cuba.” The embargo, said Gutierrez, is neither the “problem or the solution” for the downtrodden Cuban economy. The problem, he said, is the “repressive communist system” in Cuba, and “the solution is to change the system.”

During his remarks to the U.S.-India High Technology Cooperation Group on February 22, Secretary of Commerce Carlos M. Gutierrez said that the United States and India want to capitalize on thriving strategic partnerships to boost bilateral trade in advanced technology products. Gutierrez said the United States sees many opportunities for U.S. and Indian businesses to develop commercially viable technologies. He said U.S. businesses are particularly interested in clean energy technologies and will send a trade mission to India in April to explore the potential for cooperation in this area. Gutierrez added, however, that both sides need to continue to identify and remove obstacles to trade if they want trade flows to expand further. The head of the Indian delegation, Foreign Secretary Shivshankar Menon, told the group that the United States and India should take advantage of significant steps taken by their leaders in 2006 to strengthen trade ties and elevate cooperation on high technology to a new level.

On February 16, U.S. Trade Representative Susan C. Schwab and the Liberian Minister of Commerce, Industry, & Trade Olubanke King-Akerele, signed a Trade and Investment Framework Agreement (TIFA) that will provide a forum to address trade issues and will help build trade and investment relations between the United States and Liberia. Under the TIFA, a Council on Trade and Investment will be formed to address a wide range of trade and investment issues that include, but are not limited to implementation of the African Growth and Opportunity Act, trade capacity building, intellectual property, labor, and environmental issues. The Council will also help to increase commercial and investment opportunities by identifying and working to remove impediments to trade and investment flows between the United States and Liberia.

United States Signs Agreement with Japan to Facilitate Trade in Telecommunications Equipment

On February 16, the United States and Japan signed a mutual recognition agreement (MRA) that will help U.S. telecommunications and radio equipment makers market and sell their products in Japan and expand the acceptance in Japan of determinations made by U.S. certification bodies. Commenting on the agreement, U.S. Trade Representative Susan Schwab stated that “…(it) provides an important new tool for U.S. companies to expand their exports of telecommunications equipment to Japan.” She welcomed the agreement as ’’… (a) step to further strengthen access to opportunities in the Japanese market for U.S. manufacturers of telecommunications equipment and certification bodies.” Under the agreement, Japan will accept the results of conformity assessment procedures (i.e., product testing and certification) performed by approved certification bodies in the United States demonstrating that telecommunications equipment meets Japan’s technical requirements. Japan’s agreement to accept certification by recognized U.S. bodies will lower costs and speed up the marketing in Japan of innovative U.S. products. In 2005, total U.S.-Japan trade in telecommunications equipment was approximately $2.6 billion, and Japan was the United States’ fourth largest export market for such products.

Deputy U.S. Trade Representative Karan Bhatia affirmed the Bush Administration’s determination to strengthen and improve trade ties with China during his February 15 testimony to the House Ways and Means Subcommittee on Trade. Bhatia testified exactly one year after the Administration presented a Top-to-Bottom Review of U.S. Trade Policy with China. That report noted that both countries have benefited from China’s economic transformation but concluded that the two countries had entered a phase of their relationship that will focus on bringing more balance and equity to their bilateral trade ties. In his prepared testimony, Bhatia presented specific examples of how the Administration is acting on the steps outlined in the Top-to-Bottom Review.

For example, Bhatia noted that the United States demonstrated its willingness to use WTO dispute settlement to hold China to its commitments. At the April 2006 meeting of the U.S.-China Joint Commission on Commerce and Trade (JCCT), the United States obtained Chinese commitments to address a number of concerns about access to China’s market, transparency, and enforcement of intellectual property rights, and recently launched a new and unprecedented provincial level review of China’s IPR enforcement efforts, which will be published later this Spring. In September, President Bush launched a new high-level dialogue to address critical economic issues – the Strategic Economic Dialogue (SED). The Administration has established new channels of communication with its third- country trading partners to coordinate trade policy with respect to China. During the past year, USTR has substantially strengthened its China-focused resources, creating, inter alia, the position of Chief Counsel for China Trade Enforcement.

View the text of the February 15 press release regarding Commerce Secretary Carlos M. Gutierrez’s meeting with Panamanian President Martin Torrijos. The Secretary greatly appreciates President Torrijos’ leadership in building a strong, democratic and prosperous Panama. The Secretary and President Torrijos had a good discussion on a range of commercial issues, and discussed the recently concluded U.S.-Panama Trade Promotion Agreement and Panama’s plans for the $5.25 billion expansion of the Panama Canal. Secretary Gutierrez said that the Panama TPA, which will advance what is already a strong friendship with the people of Panama, will enhance economic growth and prosperity for the people of the United States and Panama.

During his recent remarks at the recent Central Asia-Caucasus Institute in Washington, Deputy Assistant Secretary of State for South and Central Asia Evan Feigenbaum said that the primary aim of U.S. policy in Central Asia is to strengthen economic links among the region’s five nations and to extend trade and investment ties from Central Asia to the rapidly growing economies of South and East Asia. Feigenbaum characterized the U.S. goal as “the restoration of traditional continental trade” in Asia. He said the United States is pursuing this goal by supporting physical infrastructure projects and promoting legal reforms aimed at enhancing the economic environment. He said the United States is working through international institutions, such as the Asian Development Bank’s Central Asian Regional Economic Cooperation program, and through direct agreements, such as the U.S.-Central Asia Trade and Investment Agreement (TIFA) to support market reforms and reduce barriers to trade and investment.

USTR Schwab Defends Administration’s Trade Record During Congressional Testimony

During her February 14 testimony before the House Ways and Means Committee, U.S. Trade Representative Susan Schwab defended the administration’s trade record. Schwab responded to congressional criticism that the administration needs to enforce U.S. trade laws more forcefully and negotiate more equitable trade deals to address the huge U.S. trade deficit and protect the welfare of U.S. workers. Schwab said it is a common misperception to blame unemployment on trade where other factors contribute to job losses; an actual picture of the benefits the United States derives from trade is hidden behind trade deficit numbers, she added. She stated that free-trade agreements (FTAs) substantially boost U.S. exports, which she also views as the “best single vehicle” to further improvements in labor and environmental conditions around the world. At the hearings Schwab reacted coolly to the idea of a one-year extension of Trade Promotion Authority supported by the U.S. business community, stating that any extension should accommodate not only a possible Doha deal but also other types of future trade agreements.

USTR is requesting the views of interested parties on whether the designated beneficiary countries (Bolivia, Colombia, Ecuador and Peru) are meeting the eligibility criteria under the Andean Trade Preference Act (ATPA). This information will be used in the preparation of a report to the Congress on the operation of the program. Comments should be submitted no later than 5:00 p.m. on March 5, 2007. For more information on submitting comments, please refer to the Federal Register notice .

On February 14, U.S. trade and development officials held in-depth discussions with a delegation from the Common Market for Eastern and Southern Africa (COMESA). The half-day meeting was the latest high-level consultation between the two parties under the terms of the United States-COMESA Trade and Investment Framework Agreement (TIFA), which was signed in October 2001. U.S. Trade Representative Susan C. Schwab opened the meeting, which included discussions on U.S.-COMESA trade, implementation of the African Growth and Opportunity Act (AGOA), the WTO Doha negotiations, trade capacity building activities, infrastructure issues, and investment. Commenting on the talks, Schwab stated, "The United States enjoys an active and wide-ranging trade and investment partnership with COMESA… Two-way trade between the United States and the 20 members of COMESA is strong and growing, exceeding $23 billion in the first eleven months of 2006.” COMESA is the largest regional economic organization in Africa, with 20 member states.

India: Commerce Secretary Gutierrez's Remarks to American Chamber of Commerce and FICCI

View the text of Secretary of Commerce Carlos M. Gutierrez’s remarks to the American Chamber of Commerce and the Federation of Indian Chambers of Commerce and Industry (FICCI) in New Delhi on February 13. The Secretary noted that his February 13-14 visit reinforces the United States’ commercial interest in India. At the same time, he stated that he intended to discuss the challenges the United States and India face in growing their relationship and expanding upon their economic successes. While U.S. exports to India are up 25 percent, and investment is up significantly, more needs to be done to open India 's markets. Although progress has been made on intellectual property, India continues to be a major global source of counterfeit medicines, and nearly three-quarters of all U.S. software in India is pirated. The Secretary also underscored the need for India to play a leading role in negotiating an agreement in the WTO Doha Round, where the United States and India “have a shared responsibility to make the round a success.”

Commerce Under Secretary Lavin Discusses China Steel Industry Expansion, Subsidies

During his address to the American Iron and Steel Institute’s Board of Directors meeting on February 7, Under Secretary of Commerce for International Trade Franklin Lavin stated that the Bush administration is concerned about the state-supported expansion of the Chinese steel industry and problems such rapid growth creates. According to Lavin, the United States is alleging that the Chinese government is providing subsidies to its steel industry that violate WTO rules, fuel an excessive expansion of that sector and negatively affect the United States’ and other countries’ steelmakers. On February 2 the administration filed a petition with the WTO requesting formal consultations with China on WTO-inconsistent supports granted to companies in a range of industrial sectors, including the steel, paper and wood industries. In addition, Lavin said, China expands its steel and other industrial sectors without proper regard to environmental standards.

On February 12, the White House released the economic report of the President. In a fact sheet regarding the report, with respect to International Trade and Investment (Chapter 8 ), the White House noted that the United States must keep its economy open and break down barriers to trade and investment abroad so our workers and consumers can continue to enjoy the benefits of global commerce. The key points of Chapter 8 are:

• Looking ahead, international trade liberalization in services presents significant opportunities for U.S. workers, firms, and consumers.

• Foreign direct investment (FDI) flows into the United States benefit the U.S. economy by stimulating growth, creating jobs, promoting research and development that spurs innovation, and financing the current account deficit.

• U.S. direct investment abroad is an important channel of global market access for U.S. firms. U.S. multinational companies have contributed to productivity growth, job creation, and rising average living standards in the United States.

USITC to Assess Probable Economic Effect Of Proposed CAFTA-DR Rules Of Origin Modifications

The U.S. International Trade Commission (USITC) has instituted an investigation to advise the President on the probable economic effect of proposed modifications to the Central America - Dominican Republic - United States Free Trade Agreement (CAFTA-DR) relating to the rule of origin for apparel containing pocket bag fabric and other modifications to tariff treatment under the Agreement. As requested, the USITC will provide information related to the probable economic effect of modifications to the CAFTA-DR’s rules of origin and other modifications. The Commission will not hold a public hearing in connection with the investigation, but welcomes written submissions for the record. For information on transmitting submissions (which should be sent by March 2, 2007), please consult the USITC press release.

View the text of USTR Susan Schwab’s remarks to the Trade for America Coalition on February 12, urging renewal of the President’s Trade Promotion Authority (TPA) by Congress. Schwab said that renewal of TPA “…could be one of the most important actions Congress takes in the coming months to sustain our country’s prosperity at home and leadership in the international marketplace. No president should be without TPA.” She added that TPA “is crucial for our prosperity, and the economic growth and health of the global economy.”

U.S. and Mauritian officials met in Mauritius on February 5-6 to discuss implementation of the United States-Mauritius Trade and Investment Framework Agreement (TIFA), which was signed in September 2006. The meetings, which were co-led by Assistant U.S. Trade Representative for Africa Florizelle Liser and Mauritian Foreign Affairs, International Trade, and Cooperation Minister Madan Dulloo, were the first held under the TIFA’s bilateral Council on Trade and Investment (TIFA Council), which monitors trade and investment relations, identifies opportunities for expanding trade and investment, and provides a forum for addressing challenges in the two countries’ trade ties. The meeting provided the opportunity to set priorities, identify objectives, establish benchmarks, outline impediments, and chart the way forward for work under the TIFA. The TIFA Council reviewed a common workplan that the United States and Mauritius will jointly undertake in order to implement the TIFA, including a wide-range of programs and activities to support, facilitate, and ensure progress and success in strengthening the U.S.-Mauritian trade and investment relationship.

Assistant Secretary of Commerce Bohigian Addresses Foreign Trade Barriers in ABA Newsletter

In an article for the American Bar Association’s International Trade Committee newsletter, Assistant Secretary of Commerce for Market Access and Compliance David Bohigian explained how the Commerce Department’s Office of Market Access and Compliance (MAC) can assist U.S. firms which are encountering unfair trade barriers to their business abroad. If ABA members have clients who are running up against such barriers, Mr. Bohigian is encouraging them to discuss the barrier with MAC, to alert their clients to MAC’s ability to assist, and to refer any complaints or inquiries to MAC’s Trade Compliance Center for prompt action. MAC coordinates Commerce’s Trade Agreements Compliance Program, which was created to help U.S. exporters resolve their foreign trade barrier problems and to open international markets to U.S. goods and services.

On February 2, U.S. Trade Representative Susan Schwab announced that the United States has requested WTO dispute settlement consultations with the People’s Republic of China regarding its provision of subsidies that appear to be prohibited by WTO rules. Commenting on the U.S. decision, Schwab stated, “We are committed to challenging China’s WTO-inconsistent practices that harm American workers and businesses.” The Commerce Department works with USTR related to subsidies in multilateral fora such as the WTO. Secretary of Commerce Carlos Gutierrez stated, “China is using prohibited subsidies to compete unfairly… The Bush Administration will continue to use every tool at our disposal to enforce U.S. trade law and to make sure others compete fairly.” Several of the subsidy programs at issue appear to grant export subsidies, which provide incentives for foreign investors in China and their Chinese partners to export to the United States and other markets. Elimination of the subsidies will help level the playing field for U.S.-based manufacturers and, in particular, for America’s small and medium-sized businesses across a range of industries.

On February 1, the Commerce Department and USTR released a report detailing extensive Administration accomplishments in disciplining foreign manufacturing subsidies. The report highlights activities to combat subsidies in China and pledges to intensify such efforts in 2007. Commenting on the report, Under Secretary of Commerce for International Trade Franklin L. Lavin stated, “As this report shows, we’re committed to fighting foreign subsidies, and will use all the tools in the toolbox, from consultations to litigation, to level the playing field for American manufacturers.” The report recounts Commerce’s and USTR’s 2006 anti-subsidy activities. It also contains a special section describing the Administration’s efforts to address China’s subsidy practices by, among other activities, investigating possible countervailable subsidies to China’s paper industry, and making full use of the WTO’s monitoring and enforcement mechanisms. It also outlines the U.S.-China working group to address structural issues in China’s economy. Commerce has also been actively engaged in the WTO Subsidies Committee, as well as other multilateral fora, to address China’s prohibited subsidies. The report also describes Commerce’s decision to post officials in key countries, enabling the government to deploy expert, multi-lingual staff who conduct on-the-ground research and actively engage foreign officials on subsidy issues.