July 2007 News

Tonga Becomes Newest WTO Member

On July 27, Tonga became the 151^st member of the WTO. The WTO’s director general, Pascal Lamy, welcomed the new member country, stating, “It is important for the WTO to continue facilitating fuller integration into the world economy of small developing countries such as Tonga.” Tonga is one of the world's smallest economies, with a population of approximately 116,000 and an area of 748 sq km. It applied for accession to the WTO in June 1995, but negotiations effectively started in April 2001. Tonga ratified its accession package on June 27, 2007, which was the final step in the accession process before it could officially join the WTO. Under WTO rules, a country becomes a member 30 days after national ratification.

View WTO press release

Commerce Assistant Secretary Spooner’s Senate Testimony on U.S-China Trade Relationship

View the text of Assistant Secretary of Commerce for Import Administration David Spooner’s July 25 testimony before the Senate Committee on Commerce, Science and Transportation/Subcommittee on Interstate Commerce, Trade and Tourism regarding United States-China trade. While the United States views U.S-China relations as generally positive, Spooner stated, “we recognize that U.S. companies face a number of challenges as they try to compete in China, from market barriers and intellectual property issues, to unfair trade practices in which Chinese companies might engage in the U.S. or other markets.” He also acknowledged concerns regarding the safety of Chinese imports. Spooner stated that the Commerce Department’s China work falls into three general areas: tough-minded negotiations to achieve increased access to markets; aggressive enforcement of U.S. trade laws to fight illegal dumping and subsidies; and a strong commitment to trade promotion to help U.S. companies compete and win in the Chinese marketplace.

Commerce Secretary Gutierrez Pushes Free Trade Agreements as Key to Maintaining U.S. Competitiveness

In remarks to the IBM Forum on Global Leadership, Commerce Secretary Carlos M. Gutierrez said economic growth will continue with “sound domestic economic policies, a commitment to innovation and a dedication to both immigration and open markets.” He explained that one of the best ways to open markets is through Free Trade Agreements, which “contribute to developing sustainable, balanced trading relationships.”

DUSTR Bhatia Discusses U.S. Trade Relations with Asia

View the text of Deputy U.S. Trade Representative Karan Bhatia’s July 24 remarks to the Washington International Trade Association regarding U.S.-Asia trade relations. Noting that the United States’ “relative position as a trading power in this vital region is being challenged,” Bhatia stated that the United States must be actively engaged, bilaterally and regionally, using a diverse array of trade tools. He urged the United States to work to open Asian markets to U.S. goods and services, promote lasting economic reform among U.S. trading partners and integrate them into the multilateral trading system, “create institutions that firmly tie Asia’s economies to ours, and …dedicate the resources to make sure those institutions succeed. We must think of ourselves as integrally linked to the Asian economy, and act accordingly.” Bhatia discussed the importance of passing the U.S.-Korea Free Trade Agreement, stating that it “… possesses the potential to be a template from which other high-quality free trade agreements in Asia can be concluded.” He noted that several Asian countries contacted him and USTR Schwab after the U.S.-Korea FTA was signed, urging the United States to “consider taking our bilateral relations with their respective countries ‘to the next level’, so to speak.”

USITC Launches Second Of Three Investigations On U.S. Trade With China

The U.S. International Trade Commission (USITC), an independent, nonpartisan, factfinding federal agency, was originally asked by the Committee to complete a three-report series that collectively would provide an in-depth assessment of the U.S.-China trade and investment relationship and the U.S.-Asia-Pacific trade and investment relationship. In a letter received on May 29, 2007, the Committee asked the Commission to add additional components to the investigation in order to provide an in-depth assessment of the causes of the U.S.-China trade imbalance and whether and to what extent the People's Republic of China uses various forms of government intervention to promote investment, employment, and exports. In its second report, China: Government Policies Affecting U.S. Trade in Selected Sectors, the Commission will build on the first China study by comprehensively cataloguing and, where possible, quantifying the government policies and interventions described in the first study in specific sectors, as requested by the Committee. The Commission will hold a public hearing in connection with the investigation at 9:30 a.m. on October 30, 2007. For information about appearing at this hearing or transmitting written submissions for the record, please consult the USITC press release.

Africa Trade Forum Proves Networking Success

Assistant Secretary of State Jendayi Frazer stated that the Sixth Annual African Growth and Opportunity Act (AGOA) Forum, held in Accra July 18-19, was "very positive and a success" because "it brought together the business sector, the NGO [nongovernmental organization] and the government sector all in one place and it was very much focused on practical steps to realize the total benefits of the AGOA legislation." Frazer told USINFO that the expansion of export trade in Africa is leading to more jobs and prosperity, in part, because of the networking program created by AGOA seven years ago to replace aid with trade as the engine for economic growth on the continent. Thirty-nine sub-Saharan nations now are eligible for the duty and quota-free entry of 6,400 of their products into the U.S. market under AGOA.  Frazer said that, during her talks at the conference, "One of the things that was most striking was that [Ghanian] President [John] Kufuor indicated an interest in deepening our trade relationship by looking at the possibility of a free-trade agreement and we are certainly interested in this."

View USIS Washington File report

U.S. Department of Commerce to Host National Summit on American Competitiveness

On July 23, Secretary of Commerce Carlos M. Gutierrez announced a national meeting of private and public sector officials, “The National Summit on American Competitiveness,” that will focus on promoting innovation and economic development across the United States. This summit, to be held September 18, 2007 in Washington, D.C. at the Ronald Reagan International Trade Center, will convene the nation’s premier leaders of business, government, academia and the research community to address the core components and lessons of the role of the private sector; education and workforce issues; energy independence; and partnerships in innovation. Scheduled to join Secretary Gutierrez, as moderators, are CNBC’s Maria Bartiromo, White House Office of Science and Technology Policy Director John Marburger, and White House Council on Environmental Quality Chairman James Connaughton. Confirmed speakers include Rick Wagoner, Chairman/CEO of General Motors, Frederick Smith, Chairman/CEO of FedEx, Craig Barrett, Chairman of Intel, Arden Bement, Director of the National Science Foundation, James Press, President of Toyota Motor North America, and Louis Gerstner, retired Chairman/CEO of IBM.

View Commerce Department press release

United States, Central Asian Countries Hold Third TIFA Council Meeting

Deputy United States Trade Representative John Veroneau hosted the third annual meeting of the United States-Central Asian Council on Trade and Investment (“Council”) on July 19, when he met with representatives from Tajikistan, Turkmenistan, Uzbekistan, Kazakhstan and the Kyrgyz Republic. Afghan Ambassador Said Tayeb Jawad participated as an observer. “Our talks were very productive and offered all participants new insights into the process of trade liberalization and economic integration in the region, and its significance for regional development,” said Ambassador Veroneau. Topics covered at this year’s Council meeting included a range of trade and investment issues such as barriers to doing business, trade liberalization and the WTO, and protection of intellectual property rights.  The United States has signed TIFAs with a number of countries in order to enhance trade ties and coordinate regionally and multilaterally through regular senior level discussions on trade and economic issues. In 2006, U.S. imports from the five Central Asian TIFA partner countries totaled about $1.3 billion and exports totaled about $927 million.

View USTR press release

Commerce Secretary Gutierrez Discusses Administration Trade Agenda, Announces National Export Strategy and Vietnam Trade Mission

At the 25th Annual Washington International Trade Association Gala on July 17, Commerce Secretary Carlos M. Gutierrez laid out the Bush Administration's trade agenda and highlighted the need for Congressional action on the Peru, Colombia, Panama and Korea Free Trade Agreements. The Secretary noted that the Bush Administration has kept the U.S. economy strong and vibrant through expanded economic opportunities at home and abroad, adding that this vision, as outlined in the National Export Strategy which was released on July 17, has delivered results. The Secretary also announced that he will be leading a trade mission to Vietnam later this year.

USTR Statement on WTO Texts for Doha Round

In a July 17 statement, USTR spokesperson Gretchen Hamel noted that the draft texts released by the chairs of the Agriculture and Non-Agricultural Market Access (NAMA) negotiating groups are, “as expected, wide-ranging and complex.”  Next week in Geneva, the United States will discuss its initial reactions to the texts with its trading partners and discuss how to take the negotiations forward into the fall. Hamel observed that Agriculture and NAMA are only two pillars of the Doha negotiations, and that the United States “will continue to press for an ambitious result for the third pillar, Services, which is essential in order to reach a successful conclusion to the Doha Round.” The U.S. goal for the upcoming talks on Agriculture and NAMA is to ensure that the revised texts “define a clear path for an ambitious and balanced result that generates economic growth and development through new trade flows and new market opportunities.”

USITC Study on Competitive Conditions For Foreign Direct Investment In India

India is a fast-growing destination for global flows of foreign direct investment (FDI), according to a new staff research study by the U.S. International Trade Commission (USITC) Office of Industries. Competitive Conditions for Foreign Direct Investment in India looks at FDI flows into India by country and by industry and examines India's investment climate through chapters on India's investment environment, special economic zones, investment-related regulations, and international agreements. Principal findings regarding FDI in India include: net FDI in India was valued at $4.7 billion in the 2005-06 Indian fiscal year and more than tripled to $15.7 billion in the 2006-07 fiscal year; and by country, the largest investors in India are Mauritius, the United States, and the UK.

View USITC press release

African Growth and Opportunity Act Creates Thousands of Jobs

A panel of trade experts told the House Africa Subcommittee on July 12 that trade under the African Growth and Opportunity Act (AGOA) continues to create tens of thousands of jobs that better the lives of countless Africans. Seven years after the law was passed by Congress, AGOA's trade benefits continue to spur African economies through export-led growth. Assistant USTR for Africa Florizelle Liser, who will attend the July 18-19 AGOA Forum, stated, "AGOA continues to have a significant impact on U.S.-Africa trade" and on development on the continent.” She pointed out that in 2006 exports from AGOA nations totaled $44.2 billion, or more than five times the level of 2001, the first full year the trade act went into effect.

View USIS Washington File report

United States Requests WTO Panel in Challenge to China's Prohibited Subsidies

On July 12, USTR announced that the United States has requested that the WTO establish a dispute settlement panel regarding subsidies provided by China that appear to be prohibited by WTO rules. USTR spokesman Sean Spicer noted, “China has taken a positive step by repealing one of the subsidy programs we challenged, but much more needs to be done.”  The U.S. request for a WTO dispute settlement panel challenges several subsidy programs maintained by China that the United States believes are prohibited by WTO rules.  The United States and Mexico requested WTO consultations with China over these subsidies in February and then filed supplemental consultation requests in April after China eliminated one subsidy and passed a revised income tax law with new provisions that appear to provide for prohibited subsidies.   While consultations have been productive and useful, China has not to date been able to assure the United States and Mexico that it will promptly eliminate all of the subsidy programs that remain of concern. Mexico plans to join with the United States and file its own request for the establishment of a WTO panel today.

View USTR press release

Secretary Gutierrez and Afghan Minister of Commerce and Industry Farhang Sign Joint Statement on Commercial Cooperation

On July 10, Secretary of Commerce Carlos M. Gutierrez and Afghan Minister of Commerce and Industry Dr. Mir Muhammad Amin Farhang signed a Joint Statement on Commercial Cooperation between the U.S. Department of Commerce (DOC) and the Afghanistan Ministry of Commerce and Industry. This joint statement formalizes and enhances the two sides’ cooperative efforts designed to strengthen bilateral commercial relations and help Afghanistan develop its trade capacity and private sector. The officials announced the creation of a working group comprised of designated trade officials from both nations which will create a forum for the exchange of information on commercial matters, including commercial and investment opportunities, trade and investment regulations, and intellectual property rights protection. The working group will continue to implement programs to help Afghanistan further develop sectors where it has a comparative advantage – rugs, dried fruits and nuts and mining. Prior to the signing, Secretary Gutierrez and Minister Farhang discussed ways to enhance the commercial relationship between the United States and the Afghanistan, including promoting Afghanistan’s agricultural resources, strengthening intellectual property rights protection, and developing national standards.

View Commerce press release

Africa Trade Act Helps Liberalize Continent’s Economies

Strengthening the partnership for economic reforms and development between the United States and 38 African nations is the aim of the sixth annual African Growth and Opportunity Act (AGOA) Forum, to be held in Accra, Ghana, July 18-19. U.S. and African officials said activity under AGOA in the host nation spotlights the goals and potential benefits of the law. Todd Moss, deputy assistant secretary of state for African affairs, said that Ghana, as an early partner in the program, was able to take advantage of AGOA's favorable trade benefits, in part because of macroeconomic and financial reforms undertaken by Ghanaian President John Kufuor. Moss said that the forum is an important part of AGOA because "it represents an ongoing dialogue between Africa and the United States to ensure that the benefits of AGOA are realized." U.S. Agriculture Secretary Mike Johanns is expected to deliver a keynote address on agricultural trade development under AGOA.  The forum also will include a meeting of finance, economic and trade ministers as well as separate sessions hosted by civil society and business groups.

View USIS Washington File report

Healthy, Educated, Prosperous Americas in U.S. Interests

During his July 9 remarks to participants in the “Conversation on the Americas,” President Bush highlighted a series of initiatives designed to help countries in the Western Hemisphere provide health care, expand economic opportunities and invest in education. The White House-sponsored conference brought together government officials, regional diplomats, representatives from 250 nongovernmental organizations and corporate foundations from 34 countries to exchange ideas on ways in which the United States can expand its efforts to improve the lives of people across the Americas. Citing trade as the most effective way to alleviate poverty in the Americas, Bush called on Congress to approve the free-trade agreements negotiated with Colombia, Panama and Peru. Following the President’s remarks, several members of his Cabinet led panel discussions at the daylong event, including Commerce Secretary Carlos M. Gutierrez.

View USIS Washington File report

View transcript of President Bush’s remarks

WTO Director General Says Relatively Small Concessions Needed for Reaching Doha Agreement

View the text of WTO Director-General Pascal Lamy’s recent remarks to the UN Economic and Social Council in Geneva, in which he said that what remains to be done in the Doha Round is “small compared to all the proposals on the table.” Lamy stated that “there are billions of people who are counting on this deal to deliver on the Millennium Development Goals.”

Statement by USTR Schwab on India’s Withdrawal of Additional Duty on Beer, Wine and Distilled Spirits

On July 6, U.S. Trade Representative Susan C. Schwab released a statement regarding India’s July 3 announcement that it had withdrawn the “additional duty” on beer, wine and distilled spirits (alcoholic beverages) that the United States is currently challenging in WTO dispute settlement proceedings. She stated, “We are studying India’s recent announcement that it has withdrawn the additional duty on imports of alcoholic beverages.” Schwab added, “Withdrawal of this duty would be a positive step in addressing U.S. concerns.  What we are seeking is a level playing field, consistent with India’s WTO commitments.” India took this action after a WTO dispute settlement panel was established to consider U.S. claims that the additional duty and a separate extra additional duty result in customs duties on U.S. imports of alcoholic beverages as well as other products that are in excess of India’s WTO bound rates.  Taken together, the duties resulted in tariffs on alcoholic beverages ranging from approximately 150 to 550 percent – far in excess of India’s WTO commitments that its bound tariffs on alcoholic beverages would not exceed 150 percent. 

U.S. and UAE Hold TIFA Plus Council Meeting

U.S. Trade Representative Susan Schwab and United Arab Emirates (UAE) Minister of Commerce and Planning Shaikha Lubna Al-Qasimi and Minister of State for Finance Mohammed Khalfan bin Khirbash discussed ways to deepen the U.S. –UAE economic relationship and improve bilateral trade and investment ties in a June 29 meeting at USTR.  The meeting took place under the auspices of the U.S. – UAE Trade and Investment Framework Agreement (TIFA) Plus Council, a joint body created earlier this year. Schwab commented, “Our talks were very productive and we have laid the groundwork for substantive cooperation in a number of areas including Intellectual Property, the Digital Economy and in the area of standards.” The TIFA Plus Council meeting was the first meeting between the U.S. and the UAE trade officials since both sides announced that it would not be possible to complete FTA negotiations under the existing Trade Promotion Authority.

View USTR press release

African Countries Can Benefit from More Trade

During an interview with USINFO, Assistant U.S. Trade Representative for Africa Florizelle Liser stated that African countries have much to gain from a global trade liberalization accord if they are willing to open up their economies to trade and investment and press other developing countries to do the same. Liser commented that such an accord, negotiated under auspices of the WTO, “will open up tremendous opportunities for less-developed countries to expand their exports.” She cautioned, however, that how much African nations can gain from trade liberalization will depend on how much more access to large emerging markets they can obtain and how far their own policy reforms will go to strengthen their international competitive positions.

Commerce Deputy Secretary Sampson Visits Hungary

Deputy Secretary of Commerce David A. Sampson made an official visit to Hungary June 26-30. During his stay, Dr. Sampson addressed the parliament and the American Chamber of Commerce, met with Prime Minister Gyurcsany and other GOH officials, and delivered the commencement address to Corvinus University. During his meeting with Gyurcsany to discuss building a stronger commercial and economic relationship between the U.S. and Hungary, Sampson commended Hungary’s leadership for its commitment to advocating greater transparency in Hungary. He remarked that transparency is critical to creating a competitive, dynamic and growing business environment.

View Commerce press release

View text of Sampson’s remarks to American Chamber of Commerce in Budapest

View text of Sampson’s commencement address at Corvinus University

USTR Schwab Expresses Appreciation for Extension of ATPA Preferences

On July 2, U.S. Trade Representative Susan C. Schwab expressed appreciation for action in Congress passing and President George W. Bush signing legislation to extend the Andean Trade Preference Act. Schwab stated, “I appreciate action by Congress and the President in extending Andean trade preferences for eight months.  This preference program has helped alleviate poverty and created economic opportunities for citizens of developing countries and strengthened our economic and political relationships with those countries.” In 1991, the U.S. Congress authorized duty-free benefits for four Andean nations (Colombia, Peru, Ecuador and Bolivia) under ATPA to help in their fight against illegal drug production and trafficking by expanding their economic opportunities. 

View USTR press release

USTR Schwab Meets With Australian Trade Minister Truss, Applauds Progress Under FTA

After meeting with Australian Minister for Trade Warren Truss on July 2 to review progress under the U.S.-Australia Free Trade Agreement (FTA), U.S. Trade Representative Susan C. Schwab welcomed the continued increase in two-way trade with Australia since the agreement entered into force in 2005. She commented, “The 16-percent increase in two way trade in a few short years has benefited farmers, ranchers, manufacturers, service providers, and workers in both countries and demonstrates the value of expanded trade and investment.” Schwab and Truss also exchanged ideas on promoting trade and integration in the Asia-Pacific region, including efforts within the Asia-Pacific Economic Cooperation to promote regional economic integration, and discussed recent developments in the WTO Doha Round.

View USTR press release

India-U.S. Partnerships Should Bolster Global System, Rice Says

View the text of Secretary of State Condoleeza Rice’s June 27 remarks at the U.S.-India Business Council (USIBC) conference in Washington. In her remarks, the Secretary stated that thriving economic ties between the United States and India make the relationship between the two countries a strategic partnership of global importance. In her remarks, U.S. Trade Representative Susan Schwab cited the need to simplify “often complex investment policy and approval processes” in India to allow U.S. businesses “take advantage of India’s technological surge and vast human resources.” Secretary of Commerce Carlos M. Gutierrez also addressed the conference.

United States Requests WTO Panel to Review European Union’s Banana Import Regime

On June 29, U.S. Trade Representative Susan C. Schwab announced that the United States has requested a WTO panel to review whether the EU’s banana import regime breaches the EU’s WTO obligations. The U.S. request relates to the EU’s apparent failure to implement the WTO’s ruling in a 1996 proceeding initiated by Ecuador, Guatemala, Honduras, Mexico and the United States, which said the EU’s banana regime discriminates against bananas originating in Latin American countries and against distributors of such bananas, including several U.S. companies.  The EU was under an obligation to bring its banana regime into compliance with its WTO obligations by January 1999. A similar request for panel establishment was submitted by Ecuador on February 23, and a compliance panel was composed in response to that request on June 15.  Ecuador and the United States had been authorized once before by the WTO to take action against the EU for its failure to implement the 1996 rulings.  The United States terminated that action after the EU committed to shift to a tariff-only regime for bananas no later than January 1, 2006.   Despite these commitments, the EU banana regime put in place on January 1, 2006 features a zero-duty tariff rate quota that is allocated exclusively to bananas from African, Caribbean, and Pacific (ACP) countries.  Bananas of Latin American origin do not have access to this duty-free tariff rate quota and are subject, instead, to a 176 euro/ton duty.

Commerce Secretary Gutierrez Comments on U.S.-Korea Free Trade Agreement Signing

In a June 30 statement, Secretary of Commerce Carlos M. Gutierrez called the U.S.-Korea Free Trade Agreement (FTA) “the most commercially significant trade agreement for the United States in nearly 15 years and is another step toward fulfilling President Bush’s trade agenda to promote U.S. exports, promote economic growth and raise living standards.” He said that the FTA “helps manufacturers, farmers and ranchers by eliminating nearly 95 percent of tariffs on bilateral trade in consumer and industrial goods within three years. Almost two-thirds of U.S. farm exports will be immediately duty-free when the FTA is implemented. The agreement also presents an outstanding opportunity for the United States to expand its role in creating a more peaceful and prosperous Pacific Rim.”