June 2007 News

Free-Trade Pacts Might Gain Congressional Support, Official Says

During his June 28 remarks to the American Enterprise Institute, Deputy U.S. Trade Representative John Veroneau stated he was optimistic that the Congress will approve free-trade agreements with Colombia, Panama, Peru and South Korea. He said the administration now can start a “full-throttle” campaign to help lawmakers realize that the four FTAs are beneficial to the United States and its trading partners and will advance U.S. values. But some doubts remain as to whether the administration can win congressional approval for the FTAs with Colombia and South Korea. Veroneau said the administration officially will submit these deals for congressional approval after “sorting through some additional non-FTA issues.” The four FTAs will be the last ones to be considered by Congress under the Trade Promotion Authority (TPA), also known as fast track, which expires July 1; the President has asked Congress to renew TPA. With WTO negotiations stalled again, U.S. trade officials have said they would need a new TPA to be part of increased worldwide efforts to negotiate bilateral and regional trade deals.

View USIS Washington File report

Secretary Gutierrez’s Statement on Signing of United States-Panama Trade Promotion Agreement

In a June 28 press release, Secretary of Commerce Carlos M. Gutierrez called the United States-Panama Trade Promotion Agreement, which was signed earlier that day, “a comprehensive agreement that will provide new economic opportunity for American businesses and workers and is a key part of this Administration’s effort to open markets for American exporters.” He said that the agreement “will help provide new economic opportunities for U.S. manufacturers and service providers, including significant opportunities to participate in the $5.25 billion expansion of the Panama Canal.”

Bush Administration Completes 2006 Annual Review of Generalized System of Preferences Program

On June 28, U.S. Trade Representative Susan C. Schwab announced the outcome of the Bush Administration’s 2006 Annual Review of the Generalized System of Preferences (GSP), a program created in 1974 that provides duty-free treatment to nearly 5,000 products exported to the United States from 131 beneficiary developing countries.  As a result of this year’s review, the Administration will continue GSP eligibility for 115 exports from specific countries whose trade exceeded statutory limits in 2006 and terminate GSP eligibility for 21 products from specific beneficiary countries in order to advance a more targeted and effective program to promote economic development.  In 2006, such imports were valued at approximately $4.8 billion.  This group includes 13 products that exceeded the statutory “competitive need limitations” (CNLs) and eight products that had been granted waivers to the CNLs at least five years ago and are now subject to statutory “super-competitiveness” thresholds.  USTR will publish further details on the results of the annual review in the Federal Register.

View USTR press release

Commerce Secretary Gutierrez Calls for Renewal of Trade Promotion Authority

On June 29, Secretary of Commerce Carlos M. Gutierrez issued a statement calling for the renewal of Trade Promotion Authority (TPA), stating, “With exports at a historically high level, the U.S. cannot afford to be sidelined…” He added, “Our trading partners, including those in Asia and the European Union, among others, are signing free trade agreements (FTAs) with each other, and the U.S. needs the ability to adapt and react within this dynamic environment.” Renewing TPA will help the United States continue to play a leadership role in multilateral and bilateral trade negotiations.

View Commerce press release

USITC To Modify, Augment Series of Reports on China

The U.S. International Trade Commission (USITC) announced that it will modify and augment its series of reports on U.S.-China trade, as requested by the U.S. House of Representatives' Committee on Ways and Means. The Commission will be adding components to the three-part report series about the U.S.-China trade and investment relationship and the U.S.-Asia-Pacific trade and investment relationship that was initially requested by the House Ways and Means Committee 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. The Committee noted it may supplement its request further, including with questions related to the functioning of China's labor market. For more information about the scope of the reports, and to learn how to

make a submission for the record, please consult the USITC press release.

The Commission will hold a public hearing in connection with the investigation at 9:30 a.m. on September 6, 2007; please consult the press release for information about making a request to appear at the hearing.

Secretary of Commerce Carlos M. Gutierrez’s Remarks to U.S.-India Business Council

View the text of Commerce Secretary Carlos M. Gutierrez’s remarks to the U.S.-India Business Council on June 27. While he noted the rapid growth of U.S.-India trade, the Secretary stated that the challenge of sustaining that growth can best be accomplished by providing the people of the United States and India with access to the best products and widest variety of choices in the world. The Secretary pointed out that India can also do more by assuming a leadership role in the Doha WTO negotiations. Bilaterally, the United States is asking India to provide the same openness to its markets that the United States is providing to Indians who export to and invest in the U.S. Although Mr. Gutierrez stated that India has reduced tariffs on several imports over the past few years, “there are categories of products where more can be done,” e.g., distilled spirits and wines and large motorcycles. He added that “recently announced tariffs on general aviation aircraft were a step backwards.”

Schwab Statement on Amendments to U.S.-Peru Trade Promotion Agreement

View the text of U.S. Trade Representative Susan Schwab’s June 25 statement that the United States and Peru had reached an agreement on amendments to their bilateral Trade Promotion Agreement. According to Schwab, these amendments to the agreement's provisions on labor, the environment, and other matters reflect the bipartisan agreement on trade between the Administration and Congressional leadership reached on May 10.  She noted that the United States is also in consultations with the Governments of Colombia, Panama and Korea regarding similar provisions. 

United States and Georgia Sign Trade and Investment Framework Agreement

On June 20, Deputy U.S. Trade Representative John Veroneau and Georgian Minister of Economic Development George Arveladze signed a Trade and Investment Framework Agreement (TIFA) that will provide a forum to address a wide range of trade and investment issues and will help build trade and investment relations between the United States and Georgia. The TIFA mandates the formation of a joint U.S.-Georgia Council on Trade and Investment which will address a wide range of trade and investment issues including 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 U.S.-Georgian trade and investment.  The first meeting of the Council took place on June 21 in Washington. Georgia’s progress has been widely recognized.  The World Bank cited Georgia as the world's fastest-reforming economy in its 2007 “Doing Business” report, ranking Georgia as the world's 37th easiest place to do business. 

View USTR press release

United States and Vietnam Sign Trade and Investment Framework Agreement, Review Bilateral Trade Agreement

The United States and Vietnam signed a Trade and Investment Framework Agreement (TIFA) on June 21 that will create a platform on which to further expand and deepen their bilateral trade and investment ties.  Under the TIFA, the United States and Vietnam will discuss implementation of the 2001 U.S.-Vietnam Bilateral Trade Agreement (BTA) and Vietnam’s WTO commitments.  The two sides also will explore new initiatives to increase trade in industrial and agricultural products and services, and to encourage further investment between the two countries. Before signing the TIFA, U.S. and Vietnamese officials held their annual review of Vietnam’s progress in implementing the BTA.  They discussed a broad range of issues, including importation rights for U.S. firms, licensing procedures for U.S. investors and service providers, intellectual property rights, customs, and agriculture issues.  Ambassador Karan Bhatia, who signed the TIFA for the United States, said, “We applaud the substantial progress Vietnam has made to implement its bilateral and WTO commitments and to reform and open its economy.” The TIFA was negotiated under the Enterprise for ASEAN Initiative (EAI).  President Bush launched the EAI to further strengthen ties with countries in the commercially and strategically significant Southeast Asian region, and the United States now has TIFAs with Brunei, Cambodia, Indonesia, Malaysia, Philippines, and Thailand, and an FTA with Singapore.

View USTR press release

Assistant Secretary Bohigian Highlights Security & Prosperity Partnership

On June 20, Assistant Secretary of Commerce for Market Access and Compliance David Bohigian participated in a panel discussion of the Security and Prosperity Partnership of North America (SPP) at the National Press Club in Washington. During the discussion, which was hosted by Judicial Watch, Bohigian said that the SPP dialogue with Canada and Mexico is critical to helping the United States combat infectious diseases, protect people and the environment, and bolster its competitiveness globally.

Secretary Gutierrez Issues Statement on Doha Negotiations

In a June 21 statement, Commerce Secretary Carlos M. Gutierrez commented on the talks held by the U.S., EU, Brazil and India to revive the stalled WTO process. The negotiations broke down, however, when the Brazilian and Indian delegations walked away. The Secretary commented, “Without meaningful progress, particularly by key advanced developing countries, Doha will unfortunately remain in limbo. The United States will not accept a deal which isn’t fair or balanced.” He added, “In light of this setback, renewing Trade Promotion Authority becomes more critical than ever before. The United States cannot remain competitive if we sit on the sidelines as the rest of the world negotiates bilateral trade agreements… We are committed to working with Congress to pass these (pending free trade) trade agreements and extend the President’s Trade Promotion Authority so we are not left behind the rest of the world.”

View USIS Washington File report

View text of Secretary Gutierrez’s statement

Strengthened U.S.-Caribbean Ties Focus of June 19-21 Conference

President Bush, Secretary of State Condoleezza Rice and other U.S. officials will meet with the leaders of CARICOM (the Caribbean Community and Common Market) states June 19-21 during "Conference on the Caribbean -- A 20/20 Vision.” This is said to be the first formal conference for government policymakers and others to focus solely on policies crucial to the Caribbean region, and will examine how to build economic growth and development for the betterment of Caribbean democracy, human rights, and justice. The event is being held prior to the 2008 implementation of the CARICOM Single Market and Economy, which calls for one large market of CARICOM’s member states to provide more and better opportunities to produce and sell Caribbean goods and services to foreign markets while attracting investment to the region. In his opening keynote speech, Commerce Secretary Carlos Gutierrez noted, “In terms of trade with the U.S., the CARICOM Single Market and Economy (CSME) serves as an opportunity to strengthen ties and better prepare the region for the global economy.” Conference participants will discuss promoting more Caribbean trade and tourism, encouraging competitiveness and investment, and providing better social and economic equity. 

View USIS Washington File report

Commerce Secretary Gutierrez Says Small Businesses Are Key to Western Hemisphere Growth

Speaking at the Department of Commerce-sponsored Americas Competitiveness Forum in Atlanta, Secretary of Commerce Carlos Gutierrez said that countries in the Western Hemisphere can raise living standards, create jobs and reduce poverty by increasing the competitiveness of their small businesses and reducing regulatory burdens. According to the new Commerce report released at the Forum, Competitiveness in the Americas: Promoting Prosperity and Economic Opportunity, regional leaders can promote competitiveness by supporting innovation and creating legal and regulatory environments that encourage small businesses to develop and grow. To promote the spread of models of small business success, the United States is pledging $50 million over five years to a multilateral investment fund of the Inter-American Development Bank (IDB). Additionally, the U.S. Overseas Private Investment Corporation (OPIC,) in cooperation with the IDB, will assume up to $150 million in risks associated with lending to small, profitable businesses with growth potential, Treasury Secretary Henry Paulson said at the Forum.

View USIS Washington File report

USTR Official Discusses U.S. Government Strategies to Help Small Businesses Access New Markets

View the text of Assistant U.S. Trade Representative for Intergovernmental Affairs and Public Liaison Tiffany M. Moore’s statement before the House Committee on Small Business on June 13. Noting that the U.S. Government is working to increase access to foreign markets for U.S. businesses of all sizes, Moore noted that the U.S. Government’s “key task for small business is to break down trade barriers abroad through government-to-government negotiations so that we open the door to new markets.” Moore stated that USTR’s partner agencies—the Commerce and Agriculture Departments and the Small Business Administration—“ help small and medium-sized business and farmers walk through the door to take advantage of these new markets and new customers.”

United States Launches Investment Treaty Negotiations with Rwanda

On June 14, USTR and the State Department announced that the United States and Rwanda have begun formal negotiations toward a Bilateral Investment Treaty (BIT) that would strengthen investor protections and encourage the continuation of market-oriented economic reforms in Rwanda.  Deputy U.S. Trade Representative Karan Bhatia commented, “We believe that a U.S.-Rwanda Bilateral Investment Treaty can help to enhance the confidence of current and prospective U.S. investors in Rwanda and, ultimately, help promote the new investment that is essential to Rwanda’s future.” Assistant Secretary of State for Economic, Energy, and Business Affairs Daniel S. Sullivan said, "An investment treaty would complement the progress Rwanda has already made on economic reform.” The negotiations with Rwanda are the first bilateral investment treaty talks with a sub-Saharan African country in nearly a decade.  The prospective treaty would help to improve the environment for U.S. investment in Rwanda, thereby supporting the Central African country’s efforts to attract the capital it needs to accelerate economic development and tackle poverty. 

View USTR press release

Administration Declines Section 301 Petition on China’s Currency Policies

In a June 13 press release, U.S. Trade Representative Susan C. Schwab announced that the Administration has declined a Section 301 petition requesting that the United States initiate WTO dispute settlement procedures against China over its currency exchange rate policies. Schwab stated, “We do not believe that this Section 301 petition is likely to be the most productive way to secure Chinese movement towards currency flexibility. Rather, the Administration continues to believe that firm engagement with China, in concert with international institutions and other countries, offers the best chance of success.”

U.S. Free-Trade Agreement with South Korea Would Enhance Partnership

If approved by Congress, the United States- South Korea Free-Trade Agreement (FTA) would help broaden and modernize the partnership between the two countries and anchor the U.S. presence in the most economically vibrant region in the world, U.S. officials say. Christopher Hill, assistant secretary of state for East Asian and Pacific affairs, said that the agreement would supplement the long-standing bilateral security alliance between the two countries and serve as its pillar in the 21st century. Testifying before the House Foreign Affairs Subcommittee on Terrorism, Nonproliferation, and Trade June 13, Hill said the agreement would strengthen the U.S. strategic economic position in East Asia at a time when the region is moving toward greater economic integration. Deputy U.S. Trade Representative Karan Bhatia said at the same hearing that U.S. global competitors already have established or are trying to establish trading relationships in the region that exclude the United States. Bhatia said the FTA with South Korea could serve as a model that the administration believes can be replicated with other Asian economies, helping it expand trade liberalization throughout the region. Earlier in June, U.S. Trade Representative Susan Schwab defended the deal as a “very strong” one for U.S. automakers as it immediately would remove the 8 percent tariff on American cars and establish an unprecedented dispute settlement process, but added that South Korea must reopen its market to all U.S. beef.

View USIS Washington File report

View text of Hill’s prepared testimony

View text of Bhatia’s prepared testimony

Gutierrez Says Economic Opportunity is “True Social Justice” for Western Hemisphere

Secretary of Commerce Carlos M. Gutierrez opened the inaugural Americas Competitiveness Forum with keynote remarks to the more than 800 attendees gathered from across the Western Hemisphere. He highlighted the importance of building strategic economic partnerships to remain globally competitive and “extend the benefits of democracy throughout the hemisphere.”

View text of Secretary’s remarks

USTR Schwab Welcomes Progress on Japan Reforms; Investment Initiative Report Released

On June 6, U.S. Trade Representative Susan Schwab welcomed new steps Japan is taking on economic reform that will help further open markets, foster new business opportunities, and stimulate competition, while urging continued focus on regulatory reform in the year ahead.  These new measures are highlighted in the Sixth Annual Report to the Leaders under the U.S.-Japan Regulatory Reform and Competition Policy Initiative. Schwab commented, “We welcome Prime Minster Abe’s clear commitment to promoting economic reform in Japan.  Regulatory reforms taken in recent years have contributed significantly to Japan’s overall economic growth.” This year’s Report reflects the broad scope of measures that Japan has either taken in recent months or will take in the near term, including new steps to streamline import procedures for certain agricultural and other products and further open Japan to foreign investment.

The Report outlines new measures in response to U.S. recommendations on the importance of creating a level playing field between Japan Post and private companies in the banking, insurance, and express delivery sectors.  It also demonstrates a continuing commitment by both governments to strengthen their cooperation in helping to combat the problem of counterfeiting and piracy of intellectual property and to promote regulatory and other transparency best practices in the Asia-Pacific region. On an area of continuing concern to the United States, Schwab added, “Separately, I also expect Japan to move forward rapidly to fully reopen its market to U.S. beef imports consistent with international standards and science.” 

On the same day, the U.S. and Japan released the United States-Japan 2007 Investment Initiative Report prepared for President Bush and Prime Minister Abe. The State Department welcomes the ongoing commitment of the Japanese Government to take concrete steps to expand opportunities for foreign direct investment in Japan, as outlined in the report. The report welcomes Prime Minister Abe's success in nearly doubling foreign direct investment (FDI) in Japan since 2001 and his commitment to redouble FDI by 2010. It documents the Initiative's success in promoting changes to Japan's Corporate Code, which entered into force in May 2007, that open new avenues for mergers and acquisitions by foreign companies investing in Japan.

View State Department press release

View fact sheet on Sixth Report to Leaders

Commerce Secretary Gutierrez Kicks Off Inaugural Americas Competitiveness Forum in Atlanta

In a June 8 press release, U.S. Secretary of Commerce Carlos M. Gutierrez stated that the inaugural meeting of the Americas Competitiveness Forum (ACF), to be held June 11-12 in Atlanta, Georgia, “creates a unique opportunity for us to generate new forward momentum in the Western Hemisphere.” According to a Commerce press release, the ACF (which will bring over 700 government and private-sector decision makers together) “…will facilitate the sharing of ideas and examples of success from other countries in the region in education, innovation, supply chain strategies, workforce development and small business development growth.” Joining Secretary Gutierrez will be U.S. Secretary of Treasury Henry M. Paulson and Secretary of Education Margaret Spellings, as well as Overseas Private Investment Corporation President Robert Mosbacher, Jr. High-level government officials from 30 of the 33 democratically-elected countries of the Western Hemisphere will also participate, including two Vice Presidents from Central America: Ana Vilma de Escobar of El Salvador and Jaime Morales Carazo of Nicaragua.

U.S. Trade Representative Schwab Urges Approval of Colombia Trade Pact

In her remarks to the Women in International Trade on June 4, U.S. Trade Representative Susan Schwab said that concerns about violence in Colombia should not be used as an excuse by Congress to hold up approval of a free-trade agreement (FTA) with that country. Schwab stated that the Bush administration is encouraging Colombian President Alvaro Uribe to take additional steps to curb violence. But, she added, it is important that the United States does not "rebuke a leader making a difference." Under an agreement reached between the administration and Democratic congressional leaders, those FTAs and one signed with South Korea need to be amended to reflect stronger emphasis on labor and environmental standards. Schwab said she hoped Congress would take up the free-trade agreement with Peru before it recesses in August. The administration will work closely with that country to make changes in that FTA, which already has been approved by Peru's legislature, she said, adding that another FTA with Panama is expected to be signed in June. Schwab indicated that Congress would not approve a free-trade agreement with South Korea unless that country completely opens its market to all U.S. beef exports.

View USIS Washington File report

View transcript of Schwab’s remarks

WTO: Lamy Asks G8 for “Added Political Effort” to Spur Doha Agreement

In his speech to the G8 Summit on June 8, WTO Director-General Pascal Lamy said an interim Doha agreement is now “within reach,” and urged the G8 leaders “not to let this opportunity slip through your fingers.” Such an agreement would pave the way towards a final agreement in 6-9 months’ time. He said “what better way to fulfil the numerous commitments that the G8 has made in favour of the developing countries over the past few years?”

View WTO news release

Free Trade, Aid Help States Transform Themselves, Rice Says

In a June 7 speech to the Economic Club of New York, Secretary of State Condoleeza Rice said that the United States will continue to use free trade, foreign aid and all elements of its power to promote an open international order based on political liberty, free markets, self-determination and national sovereignty. Rice said U.S. foreign policy is guided by both interests and ideals, which are “inextricably linked” because “liberty and justice within states leads to peace and stability between states.” Rice called for a new bipartisan consensus on free trade, as a vital tool of U.S. foreign policy. She stated, “Trade is the engine not only of economic growth, but also of political transformation. Integrating into the global economy helps to open closed societies. It helps new democracies to deliver on the high hopes of the people. And it gives governments a stake in the international system.”

View USIS Washington File report

View transcript of Secretary Rice’s remarks

Schwab Announces Retired Supreme Court Justice Sandra Day O’Connor to Serve on Prestigious NAFTA Roster of Judges

U.S. Trade Representative Susan C. Schwab announced on June 4 that retired U.S. Supreme Court Justice Sandra Day O’Connor has agreed to serve on an elite roster of current and former U.S. judges that helps resolve trade remedy disputes between Canada, Mexico, and the United States. Ambassador Schwab commented, “I am delighted that one of America’s most distinguished jurists will lend her formidable legal mind to the NAFTA dispute settlement process.” The North American Free Trade Agreement Extraordinary Challenge Committee (ECC) roster consists of distinguished current and former federal judges from the three NAFTA countries, and helps resolve significant trade disputes between the United States and its NAFTA partners. Since the NAFTA entered into force in 1994, three ECCs have been composed.

View USTR press release

Commerce Secretary Gutierrez’s Statement on U.S. Proposal to Strengthen WTO Subsidy Rules

In a June 4 press release, Commerce Secretary Carlos M. Gutierrez commented on the paper the United States submitted to the WTO Negotiating Group on Rules proposing that certain particularly trade-distorting subsidies be prohibited. These negotiations are occurring within the framework of the Doha Development Agenda. The Secretary stated, “Developed and developing countries alike would benefit from stronger subsidies disciplines. Subsidies distort the free flow of goods and deny opportunity to the world’s most efficient producers. This is a positive step forward in strengthening fair trade with our global partners.” The U.S. proposal would prohibit five types of subsidies if they are “specific” (i.e., are only given to a particular company or industry) and benefit a product that is exported or competes with imports, including coverage of operating losses and forgiveness of government-held debt. These types of government supports are among the root causes of unfair foreign subsidization. Strengthening global trade on rules, such as unfair practices, will help to ensure a level playing field internationally on which U.S. workers, manufacturers and exporters can compete more effectively.

United States Proposes to Address “Zeroing” in WTO Negotiations

The United States submitted a proposal to the WTO Negotiating Group on Rules on June 4 to correct the Appellate Body’s rulings regarding offsets for non-dumped comparisons in antidumping proceedings, often referred to as “zeroing.” The paper was submitted as part of the ongoing Rules negotiations in the Doha Development Agenda. The United States has previously stated its strong objections to recent dispute settlement rulings by the WTO Appellate Body regarding zeroing.  Accordingly, the United States is now urging WTO Members to resolve this issue in the WTO negotiations by adopting clear, precise rules permitting the use of zeroing in both investigations and administrative reviews.  The United States looks forward to discussing its proposal with other WTO Members in the Rules Group meetings in mid-June.  Commenting on the U.S. proposal, David M. Spooner, Assistant Secretary of Commerce for Import Administration, stated, "Because the practice of zeroing has resulted in extensive litigation and conflicting judgments, Members' obligations under the WTO remain unclear. The U.S. firmly believes the members of the WTO need to engage in a frank and thorough discussion to resolve the issue of zeroing."

View USTR press release

President Outlines U.S. Development Agenda Before G8 Summit

In a May 31 speech to the U.S. Global Leadership Campaign, a coalition of businesses, nongovernmental organizations and community leaders, President Bush announced new initiatives to strengthen financial markets and boost educational opportunities in Africa. In his remarks, the President summarized the U.S. development agenda: “to bring progress and prosperity to struggling nations all across the world.” The President added, “We’re working to increase access to trade and relieve the burden of debt. We are increasing our assistance to the world’s poorest countries and using this aid to encourage reform and strengthen education and fight the scourge of disease.” Mr. Bush announced a new project called the Africa Financial Sector Initiative, which will provide technical assistance to African nations seeking to strengthen their financial markets. In addition, the U.S. Overseas Private Investment Corporation (OPIC) will work with the financial community to create several new private equity funds that would mobilize up to $1 billion for new private investments in Africa, he said. The President also said that open trade will improve lives faster than government help, and pledged to urge other nations at the G8 summit to help conclude a successful WTO Doha Round of global trade negotiations.

View USIS Washington File report

View transcript of President’s remarks