March 2007 News

USITC to Assess Probable Economic Effect of Duty-Free, Quota-Free Access to U.S. Markets for Imports from LDCs

The U.S. International Trade Commission (USITC) has instituted an investigation to advise the President on the probable economic effect of allowing products from the world's least-developed countries to enter the United States free of all duties and quotas. In her letter requesting the investigation, U.S. Trade Representative Susan Schwab noted that members of the WTO reached an agreement at their December 2005 Ministerial Conference in Hong Kong to provide duty-free, quota-free market access to products from LDCs, as defined by the United Nations. The United States will implement the initiative together with the results of the overall Doha round multilateral trade negotiations. The Commission will not hold a public hearing in connection with this investigation, but it welcomes written submissions for the record from all interested parties. For information on preparing and transmitting submissions (which should be filed no later than 5:15 p.m. on April 3, 2007), please consult the USITC press release.

Vietnam and United States Announce Launch of TIFA Negotiations

After their March 16 meeting, U.S. Trade Representative Susan C. Schwab and Vietnam’s Deputy Prime Minister and Foreign Minister Pham Gia Khiem announced the launch of negotiations to conclude a Trade and Investment Framework Agreement (TIFA), which will serve as a platform on which the two countries will work to further strengthen their trade and investment ties.  The TIFA will establish a formal dialogue under which the two countries intend to discuss new initiatives to deepen their trade and investment ties.  It also will provide a forum for monitoring Vietnam’s implementation of its WTO and Bilateral Trade Agreement (BTA) commitments.  According to a USTR press release, the TIFA would be negotiated under the Enterprise for ASEAN Initiative (EAI), an initiative which the Bush Administration launched to strengthen ties with countries in the commercially and strategically significant Southeast Asian region.

View USTR press release

New Trade Centers Fuel Gulf Economy, U.S. Officials Say

USG officials recently stated that new, fast-growing Gulf trade and financial centers attract foreign investment, stimulate regional development and can serve as models of diversified, open economies. On March 8, Deputy Secretary of Commerce David Sampson told the Arab Chamber of Commerce in Houston that Bahrain has developed into “the freest economy of any Arab country,” bustling with economic activity. He said that Bahrain, facing declining oil revenues, “positioned itself as a massive financial services center” and a leading exporter of aluminum. Speaking March 12 before the American Business Group of Abu Dhabi, Under Secretary of Commerce for International Trade Frank Lavin said the United Arab Emirates (UAE) has become a vibrant business hub, “one of the best business platforms in the world and one of the most inviting environments” in which to work. Lavin also spoke about challenges in U.S.– Emirati trade relations: export controls, counterfeit goods manufactured in some UAE territories, limits on foreign asset ownership in United Arab Emirates companies -- and called for further reduction of trade barriers.

View USIS Washington File report

View text of Sampson’s remarks

View text of Lavin’s remarks

Commerce Secretary Gutierrez Discusses U.S. Competitiveness at PhRMA Discoverers Awards Dinner 

View the text of Secretary of Commerce Carlos M. Gutierrez’s remarks at the PhRMA Discovers Awards Dinner on March 15. The Secretary discussed how the Administration can create the environment for U.S. businesses to succeed in the global market place: opening global markets and protecting U.S. intellectual property; implementing tort reform; and implementing the President’s American Competitiveness Initiative, which commits $136 billion over 10 years to increase investment in R&D, strengthen education and encourage innovation.  

Commerce Assistant Secretary Spooner Comments on Applying CVD Law to Nonmarket Economies

View the text of Assistant Secretary of Commerce for Import Administration David M. Spooner’s March 15 remarks before the House Ways and Means Committee’s Subcommittee on Trade, where he shared the Commerce Department’s views on the "Nonmarket Economy Trade Remedy Act of 2007.” During his appearance before the Subcommittee, Spooner focused on application of the countervailing duty (CVD) law to China and other non-market economy (NME) countries. Spooner noted, “There is no legal bar to Commerce’s application of the CVD law to non-market economies, including China, and we will do so, as long as appropriate circumstances warrant such application.” He added that it is a top administration priority to identify and address trade-distortive and injurious subsidies from all countries, including those in China.

China Ends Export Credit Subsidy

China has terminated its central bank program that allowed a select group of large exporters to take advantage of discounted loans unavailable to many other companies. The United States and several other countries had challenged the program as a prohibited export subsidy and requested WTO dispute settlement consultations. The loan program was among nine Chinese activities the United States has identified as possible violations of WTO rules. “This is a welcome move by China,” said U.S. Trade Representative Susan C. Schwab. “We hope that the termination of these discounted loans signals China’s willingness to withdraw other subsidy programs identified in our recent WTO action that harm U.S. companies and workers."

View USIS Washington File report

Weak Financial Markets Hold China Back, Treasury Secretary Says

During a speech in Shanghai on March 8, Treasury Secretary Henry Paulson said that China is on the right track in implementing economic reforms, but must speed the pace of development and modernization in its financial markets. Paulson urged China to capitalize on its current economic strength to move quickly and confidently toward greater transparency and liquidity in its financial markets, cautioning that delay would increase political risks at home. Calling strong capital markets (financial markets that trade in stocks and bonds) the "backbone of stable and balanced growth," Paulson said efficiency and competition in the financial sector are important in allocating a society's economic resources to the most productive uses. Paulson said that China's leaders recognize the need for economic diversification and movement away from overdependence on the production of low-cost manufactured goods for export. 

View USIS Washington File report

Commerce Secretary Gutierrez Discusses

Benefits Of Trade With Minnesota Business Leaders

During his March 9 visit to Minneapolis-St. Paul, U.S. Commerce Secretary Carlos M. Gutierrez discussed how trade is supporting economic growth and job creation in Minnesota and throughout the U.S.  Gutierrez attended a roundtable of Minnesota’s businesses hosted by Cargill to illustrate how trade is benefiting Minnesota’s exporters and the local job market.  The Secretary noted that, in 2006, Minnesota companies exported 23 percent more than they did in 2005 to the eleven countries where the Bush Administration has put free trade agreements in place.  He stated, “Trade exports are growing the Minnesota economy and they are supporting Minnesota’s workers and farmers whose jobs depend on exports.” During a question-and-answer period with Cargill employees, the Secretary emphasized that the President’s pro-growth policies are helping to strengthen the economy through lower taxes, new efforts to reduce the U.S.’s dependence on foreign sources of energy, and a commitment to prepare students to compete in the global economy.

View Commerce press release

United States Files WTO Case Against India Challenging Excessive Duties on U.S. Wine and Spirits

On March 6, the United States requested WTO dispute settlement consultations with India over customs duties India imposes on imports of wine and distilled spirits. On top of its basic customs duties, India imposes an “additional duty” and an “extra additional duty” on imports of wine and distilled spirits, resulting in aggregated duties on these imports that range from approximately 150 to 550 percent.  In the WTO, India committed that its tariffs on wine and spirits would not exceed 150 percent. “With its fast-growing middle class, India could be an important export market for American wines and distilled sprits if not for these layers of duties,” said U.S. Trade Representative Susan C. Schwab.  “We have raised this issue with the Government of India on several occasions over a number of years.  We hope the matter can be successfully resolved in WTO consultations.” The EC has also requested WTO dispute settlement consultations on India’s duties on wine and distilled spirits; the United States requested to join these consultations, but India denied the U.S. request.

View USTR press release

U.S. Initiative Aims To Smooth Way for Foreign Investment

On March 7, Under Secretary of Commerce for International Trade Frank Lavin announced the "Invest in America” Initiative, which is designed to attract more foreign direct investment (FDI) by addressing regulatory impediments and promoting the strengths of the U.S. marketplace. Speaking at the Peter J. Peterson Institute for International Economics, Lavin stated that Commerce’s International Trade Administration will spearhead the initiative by helping foreign investors cut through bureaucracy, managing regulatory reviews and addressing other investment issues. The initiative is aimed at transactions that do not have national security concerns, he said. Lavin indirectly acknowledged the U.S. image as an investment-friendly destination for foreign investment was hurt by the 2006 Dubai Ports World controversy, and added that the United States cannot risk having perception of its investment climate shaped only by an “occasional difficulty.” In 2006, the United States was the largest recipient of FDI -- a position it has not always held -- followed by the United Kingdom, France and China. Lavin said that the United States is the only major economy that does not have a federal government program to attract and retain foreign investment, adding, “This historically passive role toward FDI is increasingly anachronistic.”

View ITA press release

View text of Lavin’s remarks

Business Integrity Essential for Healthy Markets, U.S. Official Says

At a March 1 meeting of the American Bar Association, Attorney General Alberto Gonzales told attendees that protecting the freedom and integrity of businesses in the United States and around the world by fighting corruption and ensuring fair competition are among the top priorities of U.S. federal law enforcement. Gonzales said the interest of business and law enforcement are essentially the same. “The markets want and reward reliability, integrity and transparency,” he pointed out. “Investing, after all, is itself a measure of trust.” Gonzales outlined the U.S. Justice Department’s efforts to combat international corruption, corporate fraud, intellectual property (IP) crimes and other anti-competitive activities. Regarding Justice’s efforts to protect intellectual property globally, the attorney general noted that it recently obtained the extradition from Australia to the United States of Raymond Griffiths, the leader of the Internet software piracy group DrinkOrDie, which has produced some $50 million worth of pirated software, movies, games and music.

View USIS Washington File report

Treasury Secretary Paulson Warns Against Economic Isolationism

In his remarks to the Economic Club of Washington on March 1, Treasury Secretary Henry Paulson said that free trade remains the cornerstone of U.S. economic success and the main tool for expanding global prosperity. Paulson acknowledged that dislocation and anxiety caused by a rapidly growing and changing economy create doubts about the gains free trade brings. He added, however, that the United States must redouble its efforts to demonstrate the benefits of trade worldwide and make it clear that retreating to economic isolationism would mean “lower standards of living in the United States and for hundreds of millions of people around the world.” The Secretary called on Congress to approve free-trade agreements with Peru and Colombia, once the administration submits them for approval, and renew the Andean Trade Preference Act (ATPA, which expires in June), which established duty-free benefits for Colombia, Peru, Ecuador and Bolivia.

View USIS Washington File report

Bush Administration Delivers Annual Trade Report To Congress

The Bush Administration’s 2007 Trade Policy Agenda and the 2006 Annual Report of the President of the United States on the Trade Agreements Program was delivered to Congress on March 1. Among the highlights of 2006 on the multilateral front was U.S. leadership in the ongoing effort by WTO Members to conclude a comprehensive, ambitious and balanced Doha Development Agreement.  The United States also completed bilateral WTO accession agreements with Vietnam, Russia and Ukraine. In the bilateral and regional arenas, the United States launched negotiations on Free Trade Agreements (FTA) with Korea and Malaysia and signed agreements with Peru and Colombia.  In addition, the United States and its trading partners nearly completed the implementation process for the Dominican Republic-Central America Free Trade Agreement, an FTA with Bahrain went into force, and Congress approved an FTA with Oman. 

With regard to monitoring and enforcement, in 2006, the United States continued to insist that its trading partners honor their WTO and bilateral commitments, using a range of formal and informal options to monitor and enforce compliance with trade agreements.  USTR completed a Top-to-Bottom Review of U.S. trade ties with China and initiated steps to create and sustain a stronger and more balanced bilateral relationship now that China has completed its five-year transition to WTO membership. In 2007, the Administration will continue these multilateral, bilateral and regional activities to deepen and strengthen trade ties around the world and to ensure the rules of trade are fairly and evenly applied. 

View USTR press release

View text of report

Secretary Gutierrez Welcomes Dominican Republic's Implementation of CAFTA-DR

View the text of Commerce Secretary Carlos M. Gutierrez’s statement praising the Dominican Republic for implementing the Central American/Dominican Republic Free Trade Agreement. The Secretary noted that the Dominican Republic is the United States’ largest export market among the CAFTA-DR countries with exports totaling $5.3 billion in 2006.

Request for Public Comments on GSP Competitive Need Limitations

USTR is informing the public of the availability of full CY 2006 import statistics relating to Competitive Need Limitations (CNLs) under the Generalized System of Preferences (GSP) program. Public comments are invited by 5:00 p.m. on March 16, 2007 regarding possible de minimis CNL waivers with respect to particular articles and possible redesignations under the GSP program of articles currently not eligible for GSP benefits because they previously exceeded the CNLs. Additionally, public comments are invited by 5:00 p.m. on March 23, 2007 regarding the potential revocation of CNL waivers that meet the new statutory thresholds set forth by Sections 503(d)(4)(B)(ii) of the Trade Act of 1974, as amended by Public Law 109-432. For further information, please consult the Federal Register notice.

Schwab Welcomes Mexico’s Support in China Subsidies Action

U.S. Trade Representative Susan C. Schwab welcomed Mexico’s announcement on February 26 that it has requested WTO dispute settlement consultations with China on prohibited subsidies and thereby is joining the United States in challenging China’s provision of certain subsidies that appear to be inconsistent with its WTO commitments. She also welcomed recent requests by Japan, Australia and the European Union to participate in the U.S. consultations as third parties. Schwab commented, “It is important that the international community work cooperatively to encourage China to comply with its international obligations.  We will continue to work with these and other trading partners to that end.”

View USTR press release

U.S.-Central America Trade Pact in Force for the Dominican Republic

On March 1, 2007, President Bush issued a proclamation to implement the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) for the Dominican Republic. In a statement, U.S. Representative Susan C. Schwab noted she was pleased that the President had issued the proclamation, adding that the United States has worked “closely and intensively with all six CAFTA-DR countries to ensure they meet their obligations and responsibilities under the agreement.” Schwab observed that trade with the CAFTA countries “has increased significantly over the past year.” She praised efforts by President Fernandez and his government to adopt the necessary laws and regulations to implement the Dominican Republic’s commitments under the agreement. Schwab said that the United States will continue to work with the remaining signatory, Costa Rica, to put the agreement into effect as early as possible.

View USTR press release