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OrganizationRESTRICTED DOCPROPERTY "Symbol1" WT/TPR/G/275
13 November 2012
(12-6167)Trade Policy Review BodyOriginal: English
TRADE POLICY REVIEW
Report by the
DOCPROPERTY "Country" \* UPPER UNITED STATES
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), the policy statement by the DOCPROPERTY "Country"United States is attached.
ADVANCE \y 700
Note: This report is subject to restricted circulation and press embargo until the end of the first session of the meeting of the Trade Policy Review Body on the DOCPROPERTY "Country"United States.
CONTENTS
Page
I. THE UNITED STATES IN THE MULTILATERAL SYSTEM 5
II. THE UNITED STATES ECONOMIC AND TRADE ENVIRONMENT 8
(i) Trade policy 8
(ii) Growth 8
(iii) Federal budget deficit 9
(iv) Nominal savings/investment 9
(v) Labor markets 9
(vi) Productivity 10
(vii) Exports, imports, and the trade balance 10
(viii) Challenges to the U.S. and global recovery 10
(ix) Conclusion 11
III. OPENNESS AND ACCOUNTABILITY: BUILDING SUPPORT FOR TRADE 11
(i) Policy coordination 11
(ii) Public engagement and transparency 12
(iii) Advisory committee process 13
(iv) State and local government relations 14
IV. TRADE POLICY DEVELOPMENTS SINCE 2010 15
(1) WTO Agreements and Initiatives 15
(2) Regional Initiatives 16
(i) North American Free Trade Agreement 17
(ii) Central America and the Dominican Republic 17
(iii) Asia-Pacific Economic Cooperation Forum 18
(iv) The U.S.-ASEAN Trade and Investment Framework Arrangement 19
(v) Engagement with the Middle East and North Africa 19
(vi) Managing and deepening U.S.-EU trade 20
(vii) African Growth and Opportunity Act 21
(viii) East African Community Trade and investment partnership 21
(ix) The Caribbean Basin Initiative 21
(x) HOPE II Act 22
(xi) Andean Trade Preference Act 23
(3) Bilateral Trade Agreements and Initiatives 23
V. TRADE-RELATED CAPACITY BUILDING INITIATVES 28
VI. TRADE AND THE ENVIRONMENT 31
VII. TRADE AND LABOR 32
VIII. SMALL AND MEDIUM-SIZED BUSINESS TRADE 33
IX. LOOKING FORWARD/CONCLUSIONS 34
THE UNITED STATES IN THE MULTILATERAL SYSTEM
As an original member of the World Trade Organization (WTO), the United States maintains an abiding commitment to the rules-based multilateral trading system. The WTO represents the multilateral bedrock of U.S. trade policy, playing a vital role in securing new economic opportunities for American workers, farmers, ranchers, manufacturers, and service providers and promoting global growth and development with widely shared benefits. The WTO agreements also provide a foundation for high-standard U.S. bilateral and regional agreements that make a positive contribution to a dynamic and open global trading system based on the rule of law.
As the United States Government undergoes its eleventh Trade Policy Review, the UnitedStates remains committed to preserving and enhancing the WTO's irreplaceable role as the primary forum for multilateral trade liberalization, for the development and enforcement of global trade rules, and as a key bulwark against protectionism. Recognizing that trade has and continues to make a powerful contribution in expanding the global economy, the United States will seek to create momentum for market-opening measures that present significant opportunities for producers and consumers, and strengthen the WTO's credibility as a negotiating organization.
The United States believes that the WTO continues to demonstrate its considerable value through the day-to-day work of its Standing Committees and other bodies, which remain instrumental in promoting transparency of WTO Member trade policies and providing critical fora for monitoring and resisting protectionist pressures during a time of global economic challenges. The WTO provides a forum for enforcing rights under the various WTO agreements to ensure that the United States, and all WTO Members, receive the full benefits of WTO membership. Recognizing the importance of sustaining and enhancing the WTO's critical role, the United States has devoted additional attention to making the best use of the WTO's existing committees and other structures, using them to advance specific U.S. trade policy objectives and to ensure the ongoing strength and credibility of the multilateral trading system.
Through discussions in the more than 20 Standing Committees (not including Working Groups, Working Parties, and Negotiating Bodies), the United States and other Members have had the opportunity to seek detailed information on individual Members' trade policy actions and collectively consider them in light of WTO rules and their impact on individual Members and the trading system as a whole. Such discussions have enabled Members to assess their trade-related actions and policies given concerns that other Members raise and to consider and address those concerns in domestic policymaking. With the ultimate goal of creating and sustaining jobs, the United States will continue to use the WTO Committee system to enhance transparency, combat protectionism, and engage in a dialogue with WTO Members about evolving global trade challenges and key concerns. The UnitedStates will also continue to utilize the WTO's network of committees in exploring emerging challenges surrounding issues such as regional trade agreements, export restrictions, food security, and governmental involvement in commercial activities.
The fundamental features of U.S. trade policy maintenance of open, competitive markets, compliance with WTO obligations, and leadership in the multilateral trading system remain unchanged despite new challenges presented in the global economy. Since the last U.S. Trade Policy Review in 2010, the United States has pursued a trade policy that supports additional jobs through exports and two-way trade, enforcement of trade rules, and through bolstered international trade relationships, while also partnering with developing countries to fight poverty and expand opportunities.
Two years after the President launched the National Export Initiative (NEI) in his 2010 State of the Union Address, the Administration-wide effort to double exports by the end of 2014 is continuing to making strides. Under the NEI, the Administration continues to actively pursue implementation work focused on improving trade advocacy and export promotion efforts, removing or reducing barriers to U.S. exports of goods and services, increasing access to credit, robustly enforcing trade rules, and pursuing policies at the global level to promote strong, sustainable, and balanced growth. Overall U.S. exports of goods and services reached a record US$2.1 trillion in 2011 and have continued to increase this year, despite challenging global economic conditions.
In structuring U.S. trade policy, the Administration has put a special emphasis on expanding economic and trade opportunities specifically for small businesses and women-owned and minority owned firms. Through the Asia-Pacific Economic Cooperation forum (APEC), the UnitedStates continues to work to address some of the top barriers facing small businesses trading in the region, such as by making access to basic customs documentation easier and to enhance participation by small businesses in global production chains. With European Union partners, the United States will undertake new Best Practices Exchanges to reduce transatlantic barriers to trade for small businesses. And with its trade agreement partners, the United States is working to develop ways for small businesses to take greater advantage of the economic opportunities created by these agreements. The Administration also is committed to improving women's ability to access financing and markets, to helping women-owned firms compete, and to fostering women in leadership positions. The United States is a leader on these issues in APEC and encourages developing countries to work on these issues under our trade investment framework agreements. Domestically, women owned businesses are supported by numerous programs, such as the U.S. Small Business Administration's Women's Business Centers (WBCS) a national network of nearly 100 educational centers designed to assist women to start and grow small businesses.
As part of its broader efforts to liberalize trade within the scope of WTO rules, the UnitedStates pursues a number of broad domestic, bilateral, and regional initiatives that complement multilateral approaches. In 2011, the Administration secured congressional approval for market opening trade agreements with Korea, Colombia, and Panama, renewal of trade preference programs that benefit U.S. businesses and consumers through cost savings on goods from developing countries, and the strengthening of Trade Adjustment Assistance to support American workers and farmers transitioning to new jobs. Since the last Trade Policy Review, the United States worked closely with its partners in the Trans-Pacific Partnership (TPP) to achieve a broad outline of an ambitious agreement that will tackle 21st century trade issues while further opening Asia-Pacific markets to American producers of goods and services. The United States also hosted a watershed year in the APEC forum, securing concrete and meaningful commitments from 20 other Asia-Pacific economies that will advance our trade and investment interests and support jobs for workers in the United States and around the Pacific Rim. In 2012, the United worked closely with Russia, as APEC host, to build on the momentum established in 2011 by achieving similarly meaningful outcomes. The United States and the European Union launched the U.S.-EU High-Level Working Group on Jobs and Growth (HLWG), an avenue for identifying new ways of strengthening our economic relationship with Europe. With trading partners in the Middle East and Africa, the United States began building new bilateral and regional approaches to promoting additional economic growth through the removal of barriers to regional trade and investment.
The United States also continues its efforts to maximize the benefits of international investment, which is a key driver of U.S. economic growth. Protection of U.S. investors and investment abroad is essential to ensure that firms and workers can compete on a level playing field and are treated according to the rule of law in foreign markets. In April 2012, the Administration concluded its review of the U.S. model bilateral investment treaty (BIT). Like the predecessor 2004 model BIT, the 2012 model BIT continues to provide strong investor protections while preserving the government's ability to regulate in the public interest. The Administration made several important changes to the model BIT text to enhance transparency and public participation; sharpen the disciplines that address preferential treatment to state-owned enterprises and national champions, including the distortions created by certain indigenous innovation policies; and strengthen protections relating to labor and the environment. Finalizing the updated model BIT has enabled the UnitedStates to advance its ongoing BIT negotiations with partners such as China, India, and Mauritius, and to consider launching additional BIT negotiations with other potential partners.
Robust trade enforcement across the spectrum of goods and services is also a central pillar of U.S. trade policy. For nearly two decades, the WTO dispute settlement system has proven valuable to Members as a unique venue for the discussion and adjudication of disputes with our trading partners. The United States' enforcement priorities seek to target the most commercially-significant challenges facing U.S. workers and businesses, as well as emerging issues that have important implications for the future of the rules-based global trading system. Vigorous investigation efforts by relevant agencies, including the Departments of Agriculture, Commerce, and State, help ensure that trade agreements yield the maximum benefits in terms of ensuring market access for Americans, advancing the rule of law internationally, and creating a fair, open, and predictable trading environment. Ensuring full implementation of U.S. trade agreements remains one of the Administration's strategic priorities.
The United States will continue vigilant trade enforcement efforts at the WTO, while also monitoring and enforcing commitments in our bilateral, plurilateral, and regional trade agreements, to maintain a level playing field and uphold key commitments. The United States remains committed to working with its trading partners to create a global trading system where intellectual property is protected, where agricultural and industrial regulations are based on science, and where transparent rules and regulations are applied without discrimination.
Another key element of U.S. trade policy includes efforts to partner with developing countries to alleviate poverty and promote economic opportunities. Recognizing that trade is a key component in achieving the broad-based economic growth necessary to drive development, economic growth and recovery in countries transitioning away from conflict and natural disasters, the United States promotes a global development policy to support countries in their capacity to trade. On 22September 2010, the President released his strategy for global development, which contained as one of its three pillars, a policy focused on sustainable development outcomes that places a premium on broad based economic growth, democratic governance, game-changing innovations, and sustainable systems for meeting basic human needs. The strategy also has as one of its pillars a modern architecture that elevates development and harnesses development capabilities spread across government in support of common objectives including a deliberate effort to leverage the engagement of and collaboration with other donors, foundations, the private sector, and NGOs not just at the project level, but systemically. The Administration continues to work closely with Congress to consider the future of GSP and other trade preference programs. The United States has committed to increased assistance to LDCs in a number of areas, in recognition of the fact that effective assistance to help developing countries build up their capacity to trade is an important complement to market access.
In summary, the United States remains eager to do business with trading partners around the world on the basis of mutual accountability and shared ambition for economic growth. The UnitedStates continues to adhere strongly to the precept that trade liberalization at the multilateral level holds the highest potential for securing wide-ranging market-opening outcomes. Furthermore, we view trade as an economic engine for global development. The United States will maintain its commitment to support jobs through exports and two-way trade, through enforcement of rights in a strong, rules-based system, and through bolstered international trade relationships. The United States also pledges to vigorously support and revitalize the valuable, day-to-day work carried out by the WTO's Committees, Working Groups, and its dispute settlement mechanism for the purpose of maintaining and enforcing the commitments to open markets that the WTO Agreements envision, and retaining or realizing the jobs that market access may provide. In support of our WTO commitments, the United States will continue to complement its multilateral approaches with discussions at the plurilateral, regional, and bilateral levels to build consensus for, and commitments to, market-opening agreements in many areas critical to the growth of trade-supported jobs.
THE UNITED STATES ECONOMIC AND TRADE ENVIRONMENT
Trade policy
The United States remains committed to preserving and enhancing the WTO's role as the primary forum for multilateral trade liberalization, for the development and enforcement of global trade rules, and as a key voice against protectionism. With 95% of the world's population living outside our borders, the United States is committed to opening foreign markets through negotiating trade agreements, either multilateral, regional or bilateral, as well as maintaining the integrity of existing trade agreements and enforcing U.S. rights under those agreements. Trade liberalization has benefited both the United States and the rest of the world by fueling economic growth, supporting good jobs, raising living standards and providing the world with more affordable goods and services. The gains from trade are not a win-lose proposition, but rather can be a win-win situation when we all focus on opening markets and playing by the rules of our rules-based trading system.
As of 2011, U.S. goods and services exports have supported 9.7 million jobs in the UnitedStates alone, including one in four jobs (2.93 million/25.4%) in the manufacturing sector. Imports have also helped expand our purchasing power, widen choice for American consumers and provide valuable inputs into U.S. production.
The United States maintains one of the world's most open trade regimes, with the current U.S.simple average tariff at 3.5% on a legally bound basis under the WTO. When GSP and other tariff preferences are taken into account, the U.S. trade-weighted average tariff is 1.34% on an applied basis. In 2011, nearly 70% of all U.S. imports (including under preference programs) entered the United States duty free. U.S. service markets are open to foreign providers and U.S. regulatory processes are transparent and accessible to the public.
Growth
During the period under review, the United States continued to recover from the global recession of 2007-2009, albeit more slowly than in previous recoveries. After falling by 3.1% in 2009, the growth rate in U.S. real gross domestic product (GDP) increased by 2.4% in 2010, then decelerated to 1.8% in 2011, U.S. economic activity moderated in the first half of 2012, with real GDP growth slowing from a 2.0% annual rate in the first quarter to 1.3% in the second quarter. Since the trough of the recession in the 2nd quarter of 2009 through the 2nd quarter of 2012, U.S. GDP is up 2.2% on an annualized basis. The leading contributors to this growth have been consumer spending, business fixed investment, and exports.
Personal consumption expenditures, which account for 70% of U.S. GDP, increased 4.4% between 2009 and 2011 and have contributed 1.5 percentage points to GDP growth since the end of the recession (through 2nd quarter 2012). Business fixed investment increased 9.4% between 2009 and 2011, and has contributed 0.6 percentage points to GDP growth since the end of the recession. Both U.S. real exports and imports of goods and services increased between 2009 and 2011, with exports up 18.6% and imports up 17.9%. Over the past 12 quarters of recovery (through 2nd quarter of 2012), real exports of goods and services have contributed nearly 1 percentage point to U.S. GDP growth. However, Government expenditures declined by 2.5% between 2009 and 2011 driven by a decline in state and local government expenditures of 5.1%.
Federal budget deficit
The Federal primary budget deficit has averaged roughly 8 to 9% of GDP over the past 3fiscal years (US$1.22 trillion (8.7% of GDP) in 2009, US$1.27 trillion (8.8%) in 2010, and US$1.19trillion (7.9%) in 2011). As the economy continues to recover, the primary deficit is projected to fall to 6.4% of GDP in FY2012 and continue to narrow until FY2018, when it is expected to reach a primary surplus. From FY2018 to FY2022, the primary surplus is projected to average 0.4% of GDP.
The United States is firmly committed to putting federal finances on a sustainable trajectory. The Budget Control Act, passed in August 2011, was a significant first step in this direction, committing the United States to US$2.1 trillion in deficit reduction over the next 10 years. The Administration's FY2013 Budget proposal would reduce the deficit by an additional US$2.8 trillion over the next decade, cutting the deficit in half as a share of the economy and putting the debt on a declining path by the middle of the decade. By FY2018, the budget deficit would be less than 3% of GDP, the debt-to-GDP ratio would be on a declining path, and the primary deficit would be eliminated, so that spending is no longer adding to the national debt.
Nominal savings/investment
U.S. gross savings, as a percentage of gross national income, in recent years declined from a peak of 18.6% in 1998 to a low of 11.1% in 2009, then picked up to 12% in 2010 and 2011. The increase in gross saving of US$282 billion between 2009 and 2011 was primarily due to an increase in business sector saving of US$232 billion. Deleveraging by households continued as the personal saving rate doubled from roughly 1 to 2% in 2005-2007 to 3 to 4% in 2008-2011. There was also a high level of Government dis-saving six times the level in 2007.
U.S. gross investment increased by US$279 billion between 2009 and 2011, nearly equaling the US$282 billion increase in U.S. gross savings. Although levels of gross domestic investment in the U.S.economy nearly equaled U.S. saving, net inflows of capital increased, from US$383 billion in 2009, to US$450 billion in 2010, and to US$467 billion in 2011.
Labor markets
Employment increased in the United States during most of the period under review, up 3.8million since February 2010 (up 1.0 million between December 2009 and December 2010, up 1.8million to December 2011, and up 902 thousand to June 2012). The unemployment rate subsequently decreased from a high of 9.6% in 2010 to 8.9% in 2011 and as of August 2012 stood at 8.1%. Manufacturing employment is up 512,000 since January 2010 and accounts for one in eleven U.S. non-farm jobs. Service-producing industries (including Government) employed 86% of all U.S.non-farm workers in 2011.
Productivity
Labor productivity continued to increase in both 2010 and 2011, though gains were much stronger in 2010. Labor productivity, as measured by output per hour worked, grew 4.0% in 2010 and 0.2% in 2011. Manufacturing productivity similarly exhibited stronger growth in 2010 than 2011, up 6.6% in 2010 and 2.5% in 2011.
Exports, imports, and the trade balance
Nominal U.S. exports of goods and services increased by 32% between 2009 and 2011 (from US$1.58 trillion to US$2.09 trillion). Nominal U.S. imports of goods and services increased by 34.9% between 2009 and 2011 (from US$1.97 trillion to US$2.66 trillion). As a share of nominal GDP, U.S. goods and services exports increased to a record level of nearly 14% in 2011. U.S. goods and services imports increased to a level of 17.7% of GDP in 2011, slightly below the 17.9% record level in 2008.
The United States was the recipient of 18.1% of world goods and services exports (excluding U.S. exports and intra-EU exports) in 2010 (latest data available). The United States supplied 14.5% of world goods and services imports (excluding U.S. imports and intra-EU imports).
The U.S. goods and services trade deficit with other countries (on a national income and product accounts basis) increased by 32% from US$389 billion in 2009 (2.8% of U.S. GDP) to US$512 billion in 2010 (3.5% of U.S. GDP), then increased by only 11% in 2011 to US$568billion (3.8% of U.S. GDP).
Challenges to the U.S. and global recovery
Despite the progress made over the past three years, the U.S. economy continues to face a number of challenges, both domestic and international.
Some of them, like the weak housing market and high levels of household debt, are the legacies of the bubble that preceded the recent financial crisis. Conditions are improving in the housing sector, and households have made significant strides with regard to balance sheet repair, but in neither case has the United States returned to pre-bubble norms.
The U.S. economy also remains vulnerable to global economic conditions, particularly the situation in Europe. Uncertainty about sovereign debt strains in Europe has contributed to volatility in U.S. and global financial markets. The recent slowdown in global growth has also presented challenges for U.S. exports, which have been an important source of strength for the U.S. economy over the past three years.
U.S. macroeconomic goals in the G-20 are to put in place the building blocks for strong, sustainable, and balanced global growth. The global recovery from the crisis has been slow, so the United States has urged all G-20 countries, advanced and emerging market economies alike, to boost the pace of domestic demand growth to the extent that they have policy space; to accelerate structural reforms and increase growth potential; and commit to more rapid adjustment in the rebalancing of global demand.
The United States has welcomed the progress made to reduce current account surpluses and deficits, but has urged that additional policies be put in place to safeguard progress and foster further adjustment. The United States has also pointed out that the goal of balanced global growth is about more than just reducing external imbalances; it is also about accelerating the pace of growth in domestic demand in countries highly dependent on exports as countries with external deficits work to boost national saving. Only in this way can global growth and demand be sustained at a high level.
Conclusion
The United States remains firmly committed to the WTO-based multilateral, well functioning, rules-based trading system. The United States looks to work with other members for further significant liberalization of trade through the WTO. The strengthening and further opening of global markets to trade would support global economic recovery and income increasing the expansion of world trade for all WTO Members, developing and developed alike.
OPENNESS AND ACCOUNTABILITY: BUILDING SUPPORT FOR TRADE
Support for the United States' active trade agenda including for bilateral and regional trade agreements as well as U.S. participation in the WTO has been built through extensive outreach to U.S. industry leaders, entrepreneurs, farmers, ranchers, small business owners, works, state and local government officials, and advocates for labor rights, environmental protection, and public health, among other issues. Constant coordination with Congress is also vital. The United States views the act of consulting with those interested in and affected by issues as an important part of any government's responsibility. Advice from such stakeholders is both a critical and integral part of the trade policy process.
As a result, the Administration has sought to broaden opportunities for public input and increased transparency of trade policy. This has been accomplished in part via increased the U.S.Trade Representative's (USTR) website and newsletter communications; online posting of Federal Register Notices soliciting public comment and input and publicizing Trade Policy Staff Committee (TPSC) public hearings; increasing transparency regarding specific policy initiatives; managing the agency's increased outreach and engagement with small and medium-sized businesses; meetings with a broad array of domestic stakeholders; and speeches to associations and conferences around the country regarding trade. In addition to public outreach, USTR is responsible for administering the statutory advisory committee system created by Congress under the Trade Act of 1974 as amended, as well as facilitating formal consultations with state and local governments regarding trade issues which may impact them. These efforts are bringing U.S. trade policy into greater balance with the concerns and aspirations of the American people.
Policy coordination
USTR has primary responsibility, with the advice of the interagency trade policy organization, for developing and coordinating the implementation of U.S. trade policy, including on commodity matters (for example, coffee and rubber) and, to the extent they are related to trade, direct investment matters. Under the Trade Expansion Act of 1962, Congress established an interagency trade policy mechanism to assist with the implementation of these responsibilities. This organization, as it has evolved, consists of three tiers of committees that constitute the principal mechanism for developing and coordinating U.S. Government positions on international trade and trade-related investment issues.
The Trade Policy Review Group (TPRG) and the Trade Policy Staff Committee (TPSC), administered and chaired by USTR, are the subcabinet interagency trade policy coordination groups that are central to this process. The TPSC is the first-line operating group, with representation at the senior civil servant level. Supporting the TPSC are more than 80 subcommittees responsible for specialized issues. The TPSC regularly seeks advice from the public on its policy decisions and negotiations through Federal Register Notices and public hearings. In 2011 and 2012, the TPSC held public hearings on China's Compliance with its WTO Commitments (5 October 2011, 3October2012) and public hearings on negotiating objectives concerning the participation of Mexico (21 September 2012) and Canada (24 September 2012) in the proposed TPP Agreement.
Through the interagency process, USTR requests input and analysis from members of the appropriate TPSC subcommittee or task force. The conclusions and recommendations of this group are then presented to the full TPSC and serve as the basis for reaching interagency consensus. If agreement is not reached in the TPSC, or if particularly significant policy questions are being considered, issues are referred to the TPRG (Deputy USTR/Under Secretary level) or to the Deputies Committee of the National Security Council/National Economic Council. Issues of the greatest importance move to the Principals Committee of the NSC/NEC for resolution by the Cabinet, with or without the President in attendance.
Member agencies of the TPSC and the TPRG consist of the Departments of Commerce, Agriculture, State, Treasury, Labor, Justice, Defense, Interior, Transportation, Energy, Health and Human Services, Homeland Security, the Environmental Protection Agency, the Office of Management and Budget, the Council of Economic Advisers, the Council on Environmental Quality, the International Development Cooperation Agency, the National Economic Council, and the National Security Council. The U.S. International Trade Commission is a non-voting member of the TPSC and an observer at TPRG meetings. Representatives of other agencies also may be invited to attend meetings depending on the specific issues discussed. The Small Business Administration joined the TPSC/TPRG as a full member in March 2010.
Public engagement and transparency
Through the USTR blog and website pages, http://www.ustr.gov shares updated information about the United States' efforts to support job creation by opening markets and enforcing America's rights in the rules-based global trading system. Interactive tools on the site allow the public to participate more fully in USTR's day-to-day operations. The public is also invited to sign up on USTR's homepage to receive the weekly e-mail newsletter, which highlights USTR's efforts to engage the public, open markets and enforce trade agreements around the world. This is a useful tool for small businesses and stakeholders outside Washington, D.C. to stay informed about trade policy developments and new market opportunities.
Throughout 2011 and 2012, USTR has issued Federal Register Notices online to solicit public comment and has held public hearings at USTR regarding a wide array of trade policy initiatives. Public comments received in response to Federal Register Notices are available for inspection online at: http://www.regulations.gov. Some examples of trade policy initiatives for which USTR has sought public comment include those related to the ongoing negotiations of the Partnership TPP Agreement, the Generalized System of Preferences (GSP), and a Special 301 Out of Cycle Review of Notorious Markets.
USTR has also taken steps in specific issue areas to increase transparency and augment opportunities for public input, such as through the inclusion of stakeholders at the TPP negotiations in the United States, and during the development and negotiations of an Action Plan related to Labor Rights in the context of the United States-Colombia Trade Promotion Agreement. USTR officials also meet frequently with a broad array of stakeholder groups representing business, labor, environment, consumers, state and local governments, NGOs, think tanks, universities, and high schools to discuss specific trade policy issues, subject to availability and scheduling.
To promote robust and inclusive dialogue with the American people and support an active trade agenda in 2012, the United States continues to develop and deploy innovative communications tools that enable the American people to stay informed about and take better advantage of job supporting commercial opportunities. One such effort to support U.S. commercial growth is SelectUSA. Established by Executive Order of the President in June 2011, SelectUSA is a U.S.government-wide initiative to attract, retain, and expand business investment in the United States to support economic growth and job creation. SelectUSA serves as an information clearinghouse, ombudsman, advocate, and policy expert for firms, economic development organizations, and other stakeholders seeking to grow business investment in the United States. SelectUSA works on behalf of the entire nation and exercises strict geographic neutrality. The U.S. Government also has plans to unveil a new website to assist businesses in the United States called BusinessUSA. BusinessUSA will consolidate information and services from across the government into a single, integrated network for American business owners and entrepreneurs that want to begin or increase exporting.
The United States also continues to develop the FTA Tariff Tool, a free online tool launched in 2011, which helps more small businesses take better advantage of tariff reduction and elimination under U.S. trade agreements.
Advisory committee process
The United States continues to rely on its trade advisory committee system to ensure that U.S.trade policy and trade negotiating objectives adequately reflect U.S. public and private sector interests. The trade advisory committee system consists of 28 advisory committees, with a total membership of approximately 700 advisors. It includes committees representing sectors of industry, agriculture, labor, environment, state and local interests. The system is arranged in three tiers: the President's Advisory Committee for Trade Policy and Negotiations (ACTPN); five policy advisory committees dealing with environment, labor, agriculture, Africa, and state and local issues; and 22technical advisory committees in the areas of industry and agriculture.
These bodies were strengthened in 2011 as seven agricultural advisory committees that advise USTR and the U.S. Department of Agriculture (USDA) on trade matters were reconstituted to include 74 first-time members representing a diverse range of stakeholder interests including farmers, ranchers, agribusiness, state government, and public health groups. The Labor Advisory Committee on Trade Policy and Negotiations was also expanded to include representatives from a broader range of labor organizations, strengthening the voice of American workers in shaping U.S. trade policy.
Tier I: President's Advisory Committee on Trade Policy and Negotiations (ACTPN)
The ACTPN consists of not more than 45 members who are broadly representative of the key economic sectors affected by trade. The President appoints ACTPN members to four-year terms not to exceed the duration of the charter. The ACTPN is the highest level committee in the system that examines U.S. trade policy and agreements from the broad context of the overall national interest. Members of ACTPN are appointed to represent a variety of interests including non-Federal Governments, labor, industry, agriculture, small business, service industries, retailers, and consumer interests.
Tier II: The Policy Advisory Committees
Members of the five policy advisory committees are appointed by USTR or in conjunction with other Cabinet officers. The Intergovernmental Policy Advisory Committee (IGPAC) and the Trade Advisory Committee for Africa (TACA) are appointed and managed solely by USTR. Those policy advisory committees managed jointly with the Departments of Agriculture, Labor, and the Environmental Protection Agency are, respectively, the Agricultural Policy Advisory Committee (APAC), Labor Advisory Committee (LAC), and the Trade and Environment Policy Advisory Committee (TEPAC). Each committee provides advice based upon the perspective of its specific area and its members are chosen to represent the diversity of interests in those areas.
Tier III: The Technical and Sectoral Advisory Committee
The 22 technical and sectoral advisory committees are organized into two areas: agriculture and industry. Representatives are appointed jointly by the U.S. Trade Representative and the Secretaries of Agriculture and Commerce, respectively. Each sectoral or technical committee represents a specific sector, commodity group, or functional area and provides specific technical advice concerning the effect that trade policy decisions may have on its sector or issue.
State and local government relations
USTR maintains consultative procedures between Federal trade officials and state and local governments. USTR informs the states, on an ongoing basis, of trade-related matters that directly relate to, or that may have a direct effect on, them. U.S. territories may also participate in this process. USTR also serves as a liaison point in the Executive Branch for state and local government and Federal agencies to transmit information to interested state and local governments, and relay advice and information from the states on trade-related matters. This is accomplished through a number of mechanisms, detailed below.
State Point of Contact System and IGPAC
For day-to-day communications, pursuant to the NAFTA and Uruguay Round implementing legislation and Statements of Administrative Action, USTR created a State Single Point of Contact (SPOC) system. The Governor's office in each state designates a single contact point to disseminate information received from USTR to relevant state and local offices and assist in relaying specific information and advice from the states to USTR on trade-related matters. The SPOC network ensures that state governments are promptly informed of Administration trade initiatives so their companies and workers may take full advantage of increased foreign market access and reduced trade barriers. It also enables USTR to consult with states and localities directly on trade matters which may affect them.
IGPAC makes recommendations to USTR and the Administration on trade policy matters from the perspective of state and local governments. Previously, IGPAC was briefed and consulted on trade priorities of interest to states and localities, including: Efforts to Pass Pending Trade Agreements with Colombia, Panama and South Korea; the TPP Agreement; Russia's Accession to the WTO; U.S. work in 2012 to further advance its trade and investment priorities through APEC, including by building on the outcomes of its host year in 2011; the National Export Initiative; and other matters. IGPAC members are also invited to participate in monthly teleconference call briefings, similar to teleconference calls held for State Points of Contact and chairs of the advisory committees. Specific issues of interest to IGPAC and SPOCs include trade enforcement, Sanitary and Phytosanitary measures, improving federal-state agency policy and program coordination, and foreign government challenges to state subsidies.
Meetings of State and Local Associations and Local Chambers of Commerce
USTR officials participate frequently in meetings of state and local government associations and local chambers of commerce to apprise them of relevant trade policy issues and solicit their views. For example, in June 2011, Ambassador Kirk addressed the U.S. Conference of Mayors in Baltimore, Maryland, and again in January of 2012 in Washington, DC. The Ambassador has met with individual governors, mayors, and state legislators to discuss trade issues of interest to states and localities, as well as hosted the Intergovernmental Policy Advisory Committee at USTR. The Ambassador also meets with local, and diverse, chambers of commerce to hear firsthand from local community officials and small businesses.
Consultations Regarding Specific Trade Issues
USTR initiates consultations with particular states and localities on issues arising under the WTO and other U.S. trade agreements and frequently responds to requests for information from state and local governments. Topics of interest since the last U.S. Trade Policy Review included the trade agreements with Colombia and South Korea, the pending trade agreement with Panama, negotiation of the Trans Pacific Partnership trade agreement, the application of the WTO Government Procurement Agreement, General Agreement on Trade in Services issues, enforcement of trade agreements, the NAFTA trucking issues, and consultations with individual states regarding specific anti-dumping and countervailing duty investigations.
TRADE POLICY DEVELOPMENTS SINCE 2010
WTO Agreements and Initiatives
The WTO trade ministers agreed at the 8th Ministerial Conference that the Doha Round is at an impasse. The Administration shared the concern expressed by many that there appears to be no early prospects to comprehensively conclude the Round in the near term. However, the United States believes that the commitment at the Ministerial Conference to consider fresh approaches to liberalizing trade in the WTO represents a highly significant turn of events in which the organization can regain its footing in promoting meaningful and innovative initiatives to extend and strengthen the multilateral trading system. There are a variety of opportunities for new trade liberalization to explore, such as the effort by some countries to develop a plurilateral International Services Agreement and extend coverage of the groundbreaking Information Technology Agreement. Since the 8th Ministerial Conference, work has picked up in multilateral negotiations on trade facilitation and a variety of development issues, negotiations the United States strongly supports. The conclusion of new guidelines for the accession of the least developed countries demonstrates that where there is a collective will, there is a way to reach new WTO agreements. The United States stands ready to consider additional areas for and approaches to negotiations where early progress can be made, and to ensure that the WTO maintains its central role in advancing trade liberalization in the multilateral trading system.
Implementation of Existing Agreements
Since entry into force of the Uruguay Round Agreements in 1995, a central theme of U.S.policy has been to undertake the effective and timely implementation of our WTO commitments. The United States believes it is not only important for American trade interests, but for the WTO system as a whole, to ensure that all Members meet their commitments. The various manifestations of this policy range from active and constructive participation in the deliberations of WTO committees to the use of the dispute settlement mechanism. U.S. trade policy seeks to support and advance the rule of law.
USTR coordinates the Administration's active monitoring of foreign government compliance with trade agreements to which the United States is a party and pursues enforcement actions, negotiating agreements, employing WTO and FTA institutional mechanisms, using dispute settlement procedures, and applying the full range of U.S. trade laws when necessary. Vigorous investigation efforts by relevant agencies help ensure that these agreements yield the maximum benefits in terms of ensuring market access for Americans, advancing the rule of law internationally, and creating a fair, open, and predictable trading environment. Ensuring full implementation of U.S. trade agreements is one of the Administration's strategic priorities.
To ensure the enforcement of WTO agreements, the United States has been one of the world's most frequent users of WTO dispute settlement procedures. Since the establishment of the WTO in 1994, the United States has filed 99 complaints at the WTO, thus far successfully concluding 65 of them by settling 28 cases favorably and prevailing in 37 others through litigation before WTO panels and the Appellate Body. The United States has obtained favorable settlements and favorable rulings in virtually all sectors, including manufacturing, intellectual property, agriculture, and services. These cases cover a number of WTO agreements involving rules on trade in goods, trade in services, and intellectual property protection and affect a wide range of sectors of the U.S. economy.
Regional Initiatives
As part of its broader efforts to liberalize trade, but still within the scope of WTO rules, the United States is also involved in several regional and bilateral initiatives which complement our efforts within the multilateral trading system. Like other Members of the WTO, the United States has created an extensive series of bilateral and regional trade and investment agreements. The WTO agreements have provided a foundation for high-standard U.S. bilateral and regional agreements that make a positive contribution to a dynamic and open global trading system based on the rule of law. To extend the benefits of trade more broadly, the United States is working with partners around the world to remove barriers to trade and enhance economic integration on a regional basis.
The United States has insisted on higher standards for U.S. trade agreements, and has taken a proactive approach, in close consultation with Congress and American stakeholders, to ensure trade agreements better serve American workers and business, and better reflect our values. Throughout 2012, the United States has sought to intensify its efforts through regional initiatives, such as the TPP, as well as through bilateral engagement with major trading partners and emerging markets.
During the period of this review, the United States and its negotiating partners in the TPP Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam continued their work to craft a comprehensive, high-standard regional, Asia-Pacific trade agreement, that addresses new and emerging trade issues and 21st-century challenges. The United States seeks to further strengthen its robust trade relationships with its TPP negotiating partners and foster additional job-supporting export opportunities by enhancing trade and investment among TPP countries. The United States and its negotiating partners share a vision for the TPP that is predicated on the long-term objective of expanding the agreement to additional countries across the Asia-Pacific region. To that end, the nine TPP countries formally extended an invitation to Mexico and Canada in July 2012 to join the negotiations, pending the successful completion of each country's domestic procedures. Consultations with Japan on its interest in joining the TPP are ongoing.
In 2012, the United States also began to explore with our trading partners creative approaches to fostering increased regional trade and investment integration worldwide, not only through the TPP and across the Asia-Pacific region, but also with the European Union and in response to historic transitions and changing conditions in areas including the Middle East and North Africa (MENA), sub-Saharan Africa, and Central American and the Dominican Republic.
Regional work has also included monitoring compliance with, and/or improving the functioning of, current agreements and programs, including the North American Free Trade Agreement (NAFTA), the Asia Pacific Economic Cooperation (APEC) forum, the Dominican Republic Central America United States Free Trade Agreement (CAFTA DR), the African Growth and Opportunity Act (AGOA), the Caribbean Basin Economic Recovery Act (CBERA), and the Andean Trade Promotion and Drug Eradication Act (ATPDEA or ATPA).
The following regional initiatives are each examples of the WTO-complementary liberalization efforts pursued by the United States.
North American Free Trade Agreement
On 1 January 1994, the North American Free Trade Agreement between the United States, Canada, and Mexico (NAFTA) entered into force. All remaining duties and quantitative restrictions were eliminated, as scheduled, on 1 January 2008. NAFTA created the world's largest free trade area, which now links 457million people producing roughly US$18 trillion worth of goods and services.
Trade between the United States and its NAFTA partners has soared since the agreement entered into force. U.S. two way trade with Canada and Mexico exceeds U.S. trade with the European Union and Japan combined. U.S. goods exports to NAFTA partners have more than doubled between 1993 and 2011, from US$142billion to an estimated US$480billion.
By dismantling barriers, NAFTA has led to increased trade and investment, growth in employment, and enhanced competitiveness. From 1993 to 2010, cumulative foreign direct investment (stock) in the NAFTA countries has increased by over US$3.4 trillion. Increased investment has brought better paying jobs, as well as lower costs and more choices for consumers and producers.
After signing the NAFTA, the United States, Canada, and Mexico concluded supplemental agreements on labor and environment. Under these agreements, the parties are, among other things, obligated to effectively enforce their environmental and labor laws. The agreements also provide frameworks for cooperation among the parties on a wide variety of labor and environmental issues. In connection with NAFTA, the United States and Mexico also agreed to fund a development bank to address environmental infrastructure needs along the U.S. Mexico border.
Central America and the Dominican Republic
On 5 August 2004, the United States signed the Dominican Republic Central America UnitedStates Free Trade Agreement (CAFTA DR) with five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic. The CAFTA DR is the first free trade agreement between the United States and a group of smaller developing economies. This agreement is creating new economic opportunities by eliminating tariffs, opening markets, reducing barriers to services, and promoting transparency. It is facilitating trade and investment among the seven countries and furthering regional integration.
Central America and the Dominican Republic represent the third largest U.S. export market in Latin America, behind Mexico and Brazil. U.S. goods exports to the CAFTA DR countries were valued at US$30.5billion in 2011. Combined total two way trade in 2011 between the United States and Central America and the Dominican Republic was US$58.7billion.
The agreement entered into force for the United States and El Salvador, Guatemala, Honduras, and Nicaragua during 2006, for the Dominican Republic on 1 March 2007, and for CostaRica on 1 January 2009. With the addition of Costa Rica, the CAFTA DR is in force for all seven countries that signed the agreement.
The inaugural meeting of the CAFTA-DR Free Trade Commission (FTC) took place in February 2011. Trade Ministers reviewed implementation of the CAFTA-DR and took several important actions to expand benefits and strengthen the operation of the Agreement. Among these, the FTC endorsed a CAFTA-DR Trade Facilitation Initiative to enhance regional integration and competitiveness, expand and broaden the benefits of trade under the Agreement, and support jobs, with special attention to promoting greater participation by small and medium sized business. With input from the private sector and the support of the InterAmerican Development Bank, the CAFTA DR countries will identify challenges to the efficient flow of trade in the region and policies and best practices to address them. Among several initiatives, the Ministers released "Frequently Asked Questions about Opportunities for Small Businesses to Export in the CAFTA-DR Region," providing answers to questions for firms that want to expand their business by taking advantage of the CAFTA DR Agreement and expand their export markets. A CAFTA-DR Vice-Ministerial meeting was held in October 2011 and the second CAFTA-DR FTA meeting was held in January 2012.
Asia-Pacific Economic Cooperation Forum
Since it was founded in 1989, the Asia Pacific Economic Cooperation (APEC) forum has been instrumental in promoting regional and global trade and investment and is central to our efforts to achieve a seamless economy in the Asia-Pacific region that will create more jobs, and expand opportunities for U.S. exporters, services providers, and workers, providing greater economic growth across the region.
In 2010, the 21 APEC member economies collectively accounted for 44% of world trade and 54% of global GDP. In 2011, U.S. APEC total trade in goods was an estimated US$2.3trillion. Total trade in services was US$317 billion in 2010 (latest data available). The significant value of U.S. trade in the Asia Pacific region underscores the importance of the region as a market for U.S.exports and the significant role APEC continues to play in promoting trade and investment liberalization and facilitation in the region.
As host of APEC in 2011, the United States worked closely with other APEC economies to secure APEC Leaders' commitments to address tariff and non-tariff barriers to trade and investment in environmental goods and services; to implement policies to ensure market-driven and non discriminatory innovation policies that prevent the emergence of barriers to trade in U.S.technology; and to take steps to improve the quality of the regulatory environment in the region. The United States also worked with APEC member economies to streamline import procedures for energy-efficient test vehicles; facilitate trade in remanufactured goods by ensuring that they are treated "like new" at the border; establish commercially useful de minimis values that will exempt low-value shipments from duties or taxes; and to break down barriers to small businesses trading in the region, including by promoting small business engagement in global production chains through regional trade agreements.
In 2012, during Russia's APEC host year, the United States worked with APEC economies to build on these commitments, as well as to launch work on other issues of priority to the United States, that will help promote economic growth and job creation for American workers and businesses. The United States led the way in securing APEC Leaders endorsement of a commercially and environmentally credible list of environmental goods on which they will reduce tariffs to 5% or less by 2015, based on the Leaders' 2011 commitment. The APEC List of Environmental Goods includes 54 core environmental products, including renewable and clean energy technologies, wastewater treatment equipment, air pollution control technologies, and environmental monitoring and assessment equipment. Currently US$1.2 billion in U.S. environmental goods exports to the region face tariffs above 5%, and tariffs on some of these products in the region are currently as high as 35%. Thus, the commitment will contribute meaningfully to trade liberalization efforts in the region.
APEC also showed leadership by agreeing to launch work to address local content requirements in the region, and calling for the swift and meaningful conclusion of negotiations to expand the product scope and membership of the WTO Information Technology Agreement. In addition, APEC agreed to continue its work to address next generation trade and investment issues, including by promoting market-driven and non-discriminatory innovation policy and increasing transparency and due process in policymaking, which will help to bring APEC trade policies in line with the realities of the regional environment that U.S. businesses confront, and to advance a comprehensive effort to improve supply chain performance in the region, which will make it significantly cheaper, easier, and faster for businesses to trade in the Asia-Pacific.
The U.S.-ASEAN Trade and Investment Framework Arrangement
The ten member countries of the Association of South East Asian Nations (ASEAN) collectively rank as the United States' fourth largest two-way goods trading partner and fourth largest goods export market. U.S. trade with the region continued to expand in 2011, with U.S. goods exports up 10% and imports up 11%.
The United States and ASEAN members concluded a TIFA in August 2006 and since then have been working to build upon already strong trade and investment ties to further enhance their economic relationship as well as promote ASEAN regional economic integration. In September 2012, the United States and ASEAN held a first ASEAN-U.S. business forum in Cambodia focusing on how technology can contribute to competitiveness and economic growth. The UnitedStates and the ASEAN ministers also met and reaffirmed to the goal of achieving concrete outcomes under their TIFA. They agreed on a work plan for 2013 to include cooperation on trade facilitation, the digital economy, trade and the environment, and small- and medium-sized enterprises. In addition, the agreed to organize a second road show of the ASEAN ministers to key U.S. cities to expand commercial linkages and improve United States-ASEAN economic relations.
Engagement with the Middle East and North Africa
The revolutions and other changes that swept through the Middle East and North Africa (MENA) in 2011 prompted a comprehensive reevaluation of U.S. trade and investment policies toward this critical part of the world. In response to these events, USTR coordinated with other Federal agencies, outside experts, and stakeholders in both the United States and MENA partner countries to develop a trade and investment initiative to spur job growth and enhance regional trade. To pursue this initiative, the United States re-launched its TIFA with Tunisia, setting up specific working groups to develop the means of increasing trade and investment, and pursued similar initiatives with Egypt. USTR is also working in collaboration with EU and MENA trading partners to promote common interests in the stability and prosperity of the region.
The United States continued to implement, monitor, and enforce its FTAs with Bahrain, Jordan, Israel, Morocco, and Oman. In 2011, USTR led several bilateral meetings under these frameworks, achieving notable progress toward outstanding trade issues and fostering effective trade dialogues with partner countries. The dramatic developments in certain countries in the region provided new opportunities for engagement. The United States has also increased its engagement with the Gulf Cooperation Council (GCC) and its six member states (Saudi Arabia, UnitedArabEmirates, Bahrain, Oman, Qatar, and Kuwait).
Managing and deepening U.S.-EU trade
The U.S. trade and investment relationship with the EU is the largest and most complex economic relationship in the world, with transatlantic trade and investment flows averaging almost US$3billion each day during 2011. The total stock of transatlantic direct investment was worth US$3.4trillion in 2010. These enormous trade and investment flows are a key pillar of prosperity both in the United States and Europe, and countries around the world benefit from access to the markets, capital, and innovations of the transatlantic economy.
In 2011, the United States interacted extensively with counterparts in the major EU governing institutions (the European Commission, the European Parliament, and the European Council) and EU Member State governments on key issues for U.S. workers, farmers, and businesses, such as EU restrictions on U.S. agricultural exports, the protection of intellectual property rights (IPR), and joint efforts on shared concerns in third country markets.
During their November 2011 Summit meeting, President Obama and EU leaders established a High Level Working Group on Jobs and Growth (HLWG) and charged it with identifying and assessing options for generating new transatlantic trade and investment that would support job creation and growth. With extensive input from private sector stakeholders, the HLWG, co-chaired by the U.S. Trade Representative and the EU Trade Commissioner, examined a range of negotiating and other options for expanding transatlantic trade and investment. In its 19 June 2012 Interim Report to U.S. and EU leaders, the HLWG said it had reached the "preliminary conclusion" that "a comprehensive agreement that addresses a broad range of bilateral trade and investment policies as well as issues of common concern with respect to third countries would, if achievable, provide the most significant benefit of the various options we have considered." The Working Group further concluded, however, that "further substantive work" would be "required before a more definitive recommendation can be made" on whether to launch comprehensive trade negotiations. The U.S.government and the European Commission are working internally, with domestic stakeholders, with legislators, and with each other to assess potential challenges for a negotiation, with the aim of developing final recommendations by the end of the year for generating new transatlantic trade and investment in support of increased exports and jobs.
Under the Transatlantic Economic Council (TEC) umbrella, collaboration with the EU continued throughout 2011 on several initiatives and on a broad range of issues, including agreeing on a set of regulatory best practices aimed at reducing non-tariff barriers to trade; implementing a work plan on trade and other policy issues influencing access to industrial raw materials; and conducting two major exchanges on "best practices" for SMEs and their participation in international trade. During the November 2011 TEC meeting, the United States and the EU agreed to recognize each other's "trusted trader" cargo security programs, a step that will facilitate growth in secure marine trade. The TEC also reached agreement on a joint plan for promoting regulatory and standards cooperation in the emerging electric vehicles sector. It established a new dialogue on nanotechnology, aimed at preventing the adoption of unnecessary divergent regulations and standards which could damage trade in this critical emerging sector. In early 2012, the TEC Investment Working Group successfully negotiated a text of shared principles for international investment policies, which the two sides will seek to persuade other countries to embrace.
African Growth and Opportunity Act
For the last several years, the African Growth and Opportunity Act (AGOA), enacted in 2000, has been the cornerstone of U.S. African engagement on trade and investment. By providing duty free entry into the United Sates for almost all products of beneficiary countries, AGOA has helped to expand and diversify two-way trade between the United States and sub-Saharan Africa, and helped to foster an improved business environment in many sub-Saharan African countries. In 2011, U.S. sub Saharan Africa two-way trade (exports plus imports) totaled US$95.3 billion. U.S. total imports under AGOA, including its Generalized System of Preferences provisions was US$53.8billion and U.S. imports of non-oil goods under AGOA totaled US$5 billion.
As a result of a 2011 out-of-cycle review of Guinea, Niger, and Cote d'Ivoire, and the regular 2011 annual review of country eligibility, the President designated 40 sub-Saharan African countries to be eligible for AGOA benefits in 2012. In August 2012, the U.S. Congress passed legislation, which President Obama subsequently signed into law, extending AGOA's third-country fabric (TCF) provisions to 30 September 2015. The TCF provisions were originally set to expire in 2007, but were extended to 30 September 2012 under the African Investment Incentives Act of 2006. The TCF provisions allow eligible AGOA apparel manufacturers to use textiles imported from anywhere in the world in the production of their AGOA apparel exports.
East African Community Trade and investment partnership
During the 2011 AGOA Forum in Zambia, the United States proposed a new partnership between the United States and the East African Community (EAC) that would include the exploration of a regional investment treaty, creation of trade enhancing agreements in areas such as trade facilitation, continued trade capacity building assistance, and the development of stronger commercial engagement between the United States and the EAC. The EAC Partner States include Burundi, Kenya, Rwanda, Tanzania, and Uganda. Total two-way goods trade between the United States and the EAC was an estimated US$1.5 billion in 2011, with US$955 million in U.S. goods exports and U.S. goods imports totaling US$535 million.
The Caribbean Basin Initiative
The programs known collectively as the Caribbean Basin Initiative (CBI) are a vital element in U.S. economic relations with its neighbors in Central America and the Caribbean. Initially launched in 1983 by the Caribbean Basin Economic Recovery Act (CBERA) and substantially expanded in 2000 with the U.S.-Caribbean Basin Trade Partnership Act (CBTPA), the CBI was further expanded in the Trade Act of 2002.
The CBERA provides beneficiary countries and territories with duty free access to the U.S.market for certain eligible articles. Current beneficiary countries are: Antigua and Barbuda, Aruba, the Bahamas, Barbados, Belize, British Virgin Islands, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Panama, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago.
When the CAFTA DRentered into force for each of its signatories, those countries ceased to be designated as CBERA beneficiaries. The CAFTA DR entered into force for Costa Rica on 1January 2009 and is now in force for all 7 countries. On 12 October 2011, the Congress passed legislation approving the United States-Panama Trade Promotion Agreement and President Obama signed the legislation on 21 October 2011. When this agreement enters into force, Panama will cease to be designated as a CBERA and CBTPA beneficiary country.
Since its inception, the CBERA has helped beneficiaries diversify their exports. In conjunction with economic reform and trade liberalization by beneficiary countries, the trade benefits of the program have contributed to their economic growth. In December 2011, USTR submitted its ninth biannual report to Congress on the operation of the CBERA. The report can be found on the USTR website, http://www.ustr.gov/.
Of the CBERA beneficiaries, eight are also CBTPA beneficiaries, including Barbados, Belize, Guyana, Haiti, Jamaica, Panama, St. Lucia, and Trinidad and Tobago. Under the CBTPA, duty- and quota-free treatment is provided for apparel assembled in CBI countries from U.S. fabrics formed from U.S. yarns and cut in the United States.
HOPE II Act
In addition to CBERA, the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II) represents another example of the on-going U.S. commitment to economic development in the Caribbean Basin. The HOPE II Act was enacted in 2008 as a continuation and expansion of the original HOPE Act of 2006. HOPE II provides for duty free access for up to 70million square meter equivalents (SME) of knit apparel (with some t shirt and sweatshirt exclusions) and 70million SMEs of woven apparel without regard to the country of origin of the fabric or components, as long as the apparel is wholly assembled or knit to shape in Haiti. HOPE II provides for duty free treatment of knit or woven apparel under a "three for one" earned import allowance program: for every three SMEs of qualifying fabric (sourced from the United States or certain trade partner countries) shipped to Haiti for production of apparel, qualifying apparel producers may export duty free from Haiti or the Dominican Republic to the United States one SME of apparel wholly formed or knit to shape in Haiti regardless of the source of the fabric. HOPE II also provides for duty free treatment for certain brassieres, luggage, headgear, and certain sleepwear. HOPE II allows these Haitian goods to enter the United States duty free if shipped either directly from Haiti or through the Dominican Republic.
On 16 October 2009, as required by HOPE II for continued country eligibility, the President certified to Congress that Haiti has (i) implemented a Technical Assistance Improvement and Compliance Needs Assessment and Remediation (TAICNAR) program; (ii) established a Labor Ombudsperson's Office; (iii) agreed to require producers of articles for which preferential tariff treatment may be requested to participate in the TAICNAR program; and (iv) developed a system to ensure participation by such producers, including by establishing a producer registry. To remain eligible for preferential treatment, Haiti must also have established or be making continual progress towards establishing the protection of internationally recognized worker rights. The United States continues to work with the Haitian government and Haitian producers to ensure compliance with the HOPE II labor obligations.
To further support Haiti's recovery and development, the Administration supported Congressional efforts to increase Haiti's HOPE II benefits. On 24 May 2010, the President signed into law H.R. 5160, the "Haiti Economic Lift Program Act of 2010," which expanded and extended trade benefits available to Haiti, increasing the availability of preferential access to the U.S. market for certain Haitian made apparel and other articles.
Andean Trade Preference Act
The Andean Trade Preference Act (ATPA) was enacted in 1991 to promote broad based economic development, diversify exports, and combat drug trafficking by providing sustainable economic alternatives to drug crop production in Bolivia, Colombia, Ecuador, and Peru. In 2002, the Andean Trade Promotion and Drug Eradication Act (ATPDEA) amended the ATPA to provide duty free treatment for a number of products previously excluded under the original ATPA program. The most significant expansion of benefits was in the apparel sector.
On 30 June 2012, pursuant to section 203(f) of the ATPA, as amended, USTR transmitted its Sixth Report to Congress on the Operation of the Andean Trade Preference Act as Amended. The report described the main features of the program, analyzed trade trends and outlined the countries' performance related to the program's eligibility criteria.
The ATPA, as amended, was originally set to expire on December 31, 2006, but Congress has enacted several extensions. On 12 February 2011, the privileges under ATPDEA lapsed but were reauthorized, retroactively, on 21 October 2011, for eligible countries pursuant to section 501 of the United States-Colombia Trade Promotion Agreement Implementation Act (the Implementation Act). In its previous extension of the program, Congress stipulated that Bolivia would not receive ATPA/ATPDEA benefits after 30 June 2009, unless by that date the President determined that Bolivia was satisfying the program's eligibility criteria. In a 30 June 2009 report to Congress, President Obama determined that Bolivia did not satisfy the program's eligibility requirements. As a result, no ATPA/ATPDEA benefits remained in effect for Bolivia after that date. Further, Section 201 of the Omnibus Trade Act of 2010, which re-authorized the ATPA/ATPDEA, terminated any preferential treatment available under ATPA/ATPDEA to Peru, after 31 December 2010. Peru has a free trade agreement with the United States. At the time of the 2011 re-authorization, only Colombia and Ecuador were eligible beneficiary countries. Pursuant to the Implementation Act, Colombia was no longer a beneficiary country as of 15 May 2012, leaving Ecuador as the only remaining beneficiary country.
Bilateral Trade Agreements and Initiatives
From day one, the Administration has insisted on higher standards for trade agreements, and in 2011 won congressional approval of long-awaited pacts with Korea, Colombia, and Panama after taking steps to make the agreements better reflect priorities expressed by Congress and American stakeholders. The free trade agreement with Korea entered into force on 15 March 2012, and the free trade agreement with Colombia entered into force on 15 May 2012. The United States Government is engaging in cooperative work with the Government of Panama on implementing the Agreement as soon as possible and reviewing the relevant laws and regulations to ensure compliance with the obligations of the Agreement. These free trade agreements will enhance American competitiveness in these markets. The United States also continues to actively monitor and enforce commitments in our other bilateral trade agreements in order to uphold key commitments, such as those to protect labor rights and the environment.
In April 2012, the Administration also completed its review of the model text on Bilateral Investment Treaties, which produced an updated model that preserves high-standard investor protections without compromising governments' ability to regulate in the public interest, and that enhances transparency and public participation.
United States Australia Free Trade Agreement
The United States Australia FTA entered into force on 1 January 2005. U.S. two way goods and services trade with Australia was an estimated US$56 billion in 2011, up 73% since 2004, the year before the FTA entered into force. U.S. goods exports were US$24 billion in 2011, up 71% from 2004, and U.S. goods imports were US$10 billion, up 34% from 2004.
Agricultural trade between the United States and Australia continued to grow in 2011. Under the FTA, the two countries established working groups aimed at promoting closer cooperation between them in this sector and creating fora for discussing agricultural and sanitary and phytosanitary issues. The working groups met in April 2011 to address specific bilateral animal and plant health matters with a view to facilitating agricultural trade. The next working group meeting will be held in 2012.
In 2011, the United States and Australia continued to closely monitor FTA implementation and discuss a range of FTA issues. The two sides worked to further deepen the trade and investment relationship in the TPP Agreement as well as through WTO and APEC initiatives.
The United States Bahrain Free Trade Agreement
The United States Bahrain FTA entered into force on 1 August 2006. On the first day the agreement took effect, 100% of the two way trade in industrial and consumer products began to flow without tariffs.
The central oversight body for the Agreement is the United States-Bahrain Joint Committee (JC), chaired jointly by the Office of the U.S. Trade Representative and Bahrain's Ministry of Industry and Commerce. Dates for the third meeting of the JC have not yet been set, but when scheduled, officials of the two governments expect to discuss a broad range of trade issues, including efforts to increase bilateral trade and investment levels, possible cooperation in the broader MENA region, and additional cooperative efforts related to labor rights and environmental protection.
The U.S. Bahrain FTA also promotes the Administration's policy to increase job-supporting trade and investment between the United States and Middle East. The United States Bahrain Bilateral Investment Treaty (BIT), which took effect in May 2001, covers investment issues between the two countries.
United States Chile Free Trade Agreement
The United States Chile FTA entered into force on 1 January 2004. The United States Chile FTA eliminates tariffs and opens markets, reduces barriers for trade in services, provides protection for intellectual property, ensures regulatory transparency, guarantees non discrimination in the trade of digital products, commits the Parties to maintain competition laws that prohibit anticompetitive business conduct, and requires effective labor and environmental enforcement. In 2011, U.S. goods exports to Chile increased by an estimated 44% to US$15.7 billion, while U.S. goods imports from Chile increased by 33% to US$9.3 billion.
The central oversight body for the FTA is the United States-Chile Free Trade Commission (FTC), comprised of the U.S. Trade Representative and the Chilean Director General of International Economic Affairs or their designees. The FTC held its eighth meeting on 3 July 2012, during which the two governments evaluated progress on the implementation and operation of the FTA during 2011. The Parties also initiated an exchange of letters to adjust the product-specific rules of origin in the FTA to reflect the 2012 changes to the Harmonized System nomenclature, and discussed the efforts being made to hold several committee meetings during the rest of 2012, including the committees on Technical barriers to Trade (TBT), the Committee on Sanitary and Phytosanitary (SPS) Measures.
The Parties also noted that efforts are being made to hold the sixth Meeting of the Environment Affairs Council (EAC) and the fourth Joint Commission on Environmental Cooperation in fall 2012 in Santiago.
United States Israel Free Trade Agreement
The United States-Israel Free Trade Agreement is the United States' first FTA. It entered into force in 1985 and continues to serve as the foundation for expanding trade and investment between the United States and Israel by reducing barriers and promoting regulatory transparency. From 2010 to 2011, U.S. goods exports to Israel rose by an estimated 25.6%, to US$14.2 billion.
In August 2011, the United States and Israel finalized a work plan that addresses the remaining barriers to bilateral trade, including in the areas of agriculture and services. As initial steps under the work plan, the two sides agreed to pursue negotiations towards implementation of a Mutual Recognition Agreement for assessing conformity in telecommunications equipment and to facilitate trade by reviewing existing customs procedures and regulations. The two sides also made progress on a number of market access issues related to standards, customs classification, and technical regulations.
Recognizing in the 1990s that the FTA had inadequately liberalized bilateral agriculture trade, the United States and Israel concluded an Agreement Concerning Certain Aspects of Trade in Agricultural Products (ATAP), which provided for duty-free or other preferential treatment of certain agricultural products. The 1996 agreement was extended through 2003, and a new agreement was concluded in 2004. While this Agreement originally extended through 2008, it has been extended annually since then. In December 2011, the two sides agreed to extend that agreement through 31December 2012. The two sides met in February and June with additional engagements likely later in 2012 to continue negotiations of a successor agreement to the 2004 ATAP.
United States Jordan Free Trade Agreement
In 2011, the United States and Jordan continued to benefit from their economic partnership. A key element of this relationship is the United States-Jordan Free Trade Agreement, which entered into force on 17 December 2001, and was implemented fully on 1 January 2010. In addition, the Qualifying Industrial Zones (QIZs), established by the U.S. Congress in 1996, allow products to enter the United States duty free if manufactured in Jordan, Egypt, or the West Bank and Gaza, with a specified amount of Israeli content. The program has succeeded in stimulating significant business cooperation between Jordan and Israel.
The United States-Jordan FTA has expanded the trade relationship between the two countries by reducing barriers for services, providing cutting edge protection for intellectual property, ensuring regulatory transparency, and requiring effective labor and environmental enforcement. In June 2010, the two sides crafted a plan of action, pursuant to the 2009 meeting of the JC charged with administering the FTA. Under this strategy, officials committed to explore ways to intensify cooperation in the areas of customs, agriculture, intellectual property rights, labor, the environment, and technical assistance.
The FTA has played a significant role in boosting overall United States-Jordanian economic ties. U.S. goods exports were an estimated US$1.4 billion in 2011, up 22% from 2010. QIZ products still account for more than half of Jordanian exports to the United States, but the QIZ share is declining relative to total products shipped under the FTA. This shift toward exporting products manufactured outside of the QIZs demonstrates the important role the FTA plays in helping Jordan diversify its economy.
United States Morocco Free Trade Agreement
The United States and Morocco signed an FTA on 15 June 2004. Since the entry into force of the FTA on 1 January 2006, the U.S. goods trade surplus with Morocco has risen to US$1.6 billion in 2011, up from US$35 million in 2005 (the year prior to entry into force). U.S. goods exports in 2011 were US$2.7 billion, up 37% from the previous year. Corresponding U.S. imports from Morocco were US$1.0 billion, up 49% from 2010.
The Joint Committee (JC) established by the FTA last met in November 2009. In October2010, the United States and Morocco agreed to develop an action plan for activities to pursue in advance of the next JC meeting. Pursuant to the action plan, in 2011, the two sides negotiated and concluded a Customs Mutual Assistance Agreement and Morocco undertook measures that strengthened its regime for the protection of intellectual property rights. In December 2011, the two sides discussed strengthening their trade-related environmental cooperation and agreed to focus on green economy issues in developing future environmental collaboration activities that will support Morocco's implementation of the environment chapter of the FTA. In addition, in 2011 and 2012 the two countries began discussions on new areas of cooperation, including with respect to other MENA countries, in line with the historic transitions underway in the region.
United States Oman Free Trade Agreement
The United States-Oman Free Trade Agreement, which entered into force on 1 January 2009, complements existing FTAs to promote economic reform and openness in the region. Implementation of the obligations contained in the comprehensive agreement will generate export opportunities for U.S. goods and services providers, solidify Oman's trade and investment liberalization efforts, and strengthen intellectual property rights protection and enforcement.
The central oversight body for the FTA is the United States-Oman Joint Committee (JC), chaired jointly by USTR and Oman's Ministry of Commerce and Industry. The second meeting of the JC took place in September 2012. The two governments discussed a broad range of trade issues including efforts to increase bilateral trade and investment levels, possible cooperation in the broader Middle East and North Africa region, and additional cooperative efforts related to labor rights and environmental protection.
United States Peru Trade Promotion Agreement
The United States-Peru Trade Promotion Agreement (PTPA) entered into force on 1February2009. The United States' two-way goods trade with Peru was an estimated US$14.7 billion in 2011, with U.S. goods exports to Peru totaling US$8.4 billion.
The PTPA eliminates tariffs and removes barriers to U.S. services, provides a secure, predictable legal framework for investors, and strengthens protection for intellectual property, workers, and the environment. The PTPA is the first agreement in force that incorporates groundbreaking provisions concerning the protection of the environment and labor rights that were included as part of a bipartisan Congressional-Executive agreement on trade on 10 May 2007.
The PTPA's central oversight body is the United States-Peru Free Trade Commission (FTC), comprised of the U.S. Trade Representative and the Peruvian Minister of Foreign Trade and Tourism or their designees. The FTC is responsible for overseeing implementation and elaboration of the PTPA. The second FTC was convened on 13 July 2011, in Lima, Peru. At the FTC meeting, officials discussed bilateral trade and investment and economic issues of mutual interest, as well as the administration of the PTPA. Both governments acknowledged the progress over the last year to implement the commitments under the Agreement, and discussed a plan to effectively monitor implementation of, and compliance with, environmental and labor obligations. Officials also discussed intellectual property, remanufactured goods, and agricultural biotechnology. Additionally, the Parties held the first meeting of the small and medium sized enterprises (SMEs) working group and discussed how to further enhance the ability of SMEs to capitalize on the benefits of the PTPA. The Commission agreed to hold the third meeting of the FTC in the United States in fall 2012.
Since the FTC in 2011, several committees established under the PTPA have met, including the Committee on Agricultural Trade, the Standing Committee on SPS, the Committee on Intellectual Property and the Committee on Textiles and Apparel Trade Matters. Additionally, there has been robust engagement concerning in the implementation of the environmental obligations under the PTPA Environment Chapter and the Annex on Forest Sector Governance. In May 2012, the United States and Peru held the fourth meeting of the United States-Peru Forest Sector Subcommittee and the third meeting of the Environmental Affairs Council (EAC) in Washington, DC. The Subcommittee serves as a forum for the Parties to exchange views and share information on any matter arising under the PTPA's Annex on Forest Sector Governance. The Parties agreed to continue working together to ensure that Peru completes the necessary steps to fully implement its obligations under the Annex. At the EAC meeting, officials discussed implementation of the PTPA's Environment Chapter and Annex on Forest Sector Governance, and how to ensure proper monitoring of, implementation of, and compliance with, the Chapter and Annex obligations. Both governments acknowledged the progress and collaborative work that has taken place since entry into force of the PTPA. The EAC and Subcommittee meetings also included a public session where civil society and other stakeholders had an opportunity to exchange views on issues related to implementation of the Environment Chapter and Annex. The United States and Peru also held the second meeting of the Environmental Cooperation Commission (ECC) in May. The ECC is responsible for reviewing implementation of the United States-Peru Environmental Cooperation Agreement, an agreement designed to enhance environmental cooperation and build capacity between the United States and Peru.
United States Singapore Free Trade Agreement
The United States Singapore FTA has been in force since 1 January 2004. U.S. two way goods trade with Singapore totaled US$49.1billion in 2011, up 55% from 2003 (the year before the FTA's entry into force). U.S. goods exports were US$31.7billion, up 91% from 2003, and U.S.goods imports were US$17.4billion, up 15% from 2003.
The United States and Singapore held regular consultations throughout 2011 and will hold the seventh annual FTA review in 2012. During the ongoing consultations, the two governments agreed that implementation remains on track, and focused their discussions on ways to deepen the bilateral relationship. In 2011, the two sides discussed a range of issues covered by the FTA, including trade in textiles and apparel, restrictions on imports of U.S. beef, protection of intellectual property rights, and new requirements for pay television companies to cross-carry content from competing providers.
The two sides also discussed their continued environmental cooperation efforts. In 2011, officials from the United States and Singapore participated in two separate study tours, which provided the opportunity to exchange ideas regarding the latest advances in air quality monitoring, modeling, and forecasting as well as enabled government officials to share innovative policies and programs that promote cleaner production and energy efficiency, particularly within the private sector.
The two countries took advantage of opportunities during the year to discuss issues and areas of ongoing labor cooperation. In addition to engagement with Singapore through the negotiations of the labor provisions of the TPP Agreement, labor officials from both governments continued their collaboration on areas in which Singapore's Ministry of Labor has expressed an interest, such as the United States' system for mediating collective bargaining disputes and improving labor management relations.
TRADE-RELATED CAPACITY BUILDING INITIATVES
Trade policy and development assistance are key tools that together can help alleviate poverty and improve opportunities. Through "aid for trade," the United States focuses on giving countries, particularly the least trade-active, the training and technical assistance needed to: make decisions about the benefits of trade arrangements and reforms; implement their obligations to bring certainty to their trade regimes; and enhance such countries' ability to take advantage of the opportunities of the multilateral trading system and to compete in a global economy. Accordingly, U.S. assistance addresses a broad range of issues so that communities, rural areas, and small businesses, including female entrepreneurs, benefit from ambitious reforms in trade rules that are being negotiated in the WTO and in other trade agreements. The United States promotes trade and economic growth in developing countries through a wide range of trade capacity building (TCB) activities.
Recognizing that trade is a key component in achieving the broad-based economic growth necessary to drive development, economic growth and recovery in countries transitioning away from conflict and natural disasters, the United States has prepared a global development policy to support countries in their capacity to trade. On 22 September 2010, the President released his strategy for global development, which contained as one of its three pillars, "a policy focused on sustainable development outcomes that places a premium on broad-based economic growth, democratic governance, game-changing innovations, and sustainable systems for meeting basic human needs." The strategy also has as one of its pillars, "a modern architecture that elevates development and harnesses development capabilities spread across government in support of common objectives including a deliberate effort to leverage the engagement of and collaboration with other donors, foundations, the private sector, and NGOs not just at the project level, but systemically."
An important element of U.S. TCB work involves coordinating U.S. Government technical assistance activities with those of the international institutions in order to identify and take advantage of donor complementarities in programming and to avoid duplication. Such institutions include the WTO, the World Bank, the International Monetary Fund (IMF), the regional development banks, the United Nations, and others. The United States, led by USTR at the WTO and by the Treasury Department at the international financial institutions, works in partnership with institutions and other donors to ensure that, where appropriate, trade-related assistance is an integral component of development programs tailored to the circumstances within each developing country.
The United States' efforts build on its longstanding commitment to help partner countries benefit from the opportunities provided by the global trading system, both through bilateral U.S.assistance and through multilateral institutions. U.S. bilateral assistance includes programs such as targeted assistance for developing countries participating in U.S. preference programs; coordination of assistance through Trade and Investment Framework Agreements (TIFAs); trade capacity building (TCB) working groups that are integral elements of negotiations to conclude Free Trade Agreements (FTAs); and Committees on TCB created to aid in the negotiation and or implementation of a number of FTAs, including the FTAs with the Dominican Republic and Central America, Colombia, Panama, and Peru, and for some partners in the ongoing TPP negotiations. The United States also provides bilateral assistance to developing countries to enable them to work with the private sector and non governmental organizations to transition to a more open economy, to prepare for WTO negotiations, and to implement their trade obligations. Multilaterally, the United States has supported and will continue to support trade-specific assistance mechanisms like the Enhanced Integrated Framework for Trade-Related Assistance to Least- Developed Countries and the WTOs Global Trust Fund for Trade-Related Technical Assistance.
World Trade Organization-Related U.S. Trade-Related Assistance
International trade can play a major role in the promotion of economic growth and the alleviation of poverty, and the United States recognizes that TCB can facilitate more effective integration of developing countries into the international trading system and enable them to benefit further from global trade. The United States has and will continue to directly support the WTO's trade-related technical assistance efforts. As a major bilateral provider of trade capacity building assistance, the United States has remained an active partner in the WTO's Aid for Trade discussion, including through its participation in the Third Global Review of Aid for Trade, held at the WTO in July 2011.
The United States supports the trade-related assistance activities of the WTO Secretariat through voluntary contributions to the DDA Global Trust Fund. With an additional contribution of US$1million in 2012, total U.S. contributions to the WTO have amounted to more than US$13million since the launch of DDA negotiations.
The United States has also provided substantial assistance over the years in the areas of customs and trade facilitation. More recently, U.S. support for building trade and development corridors in Africa, including through the U.S. Government's Global Hunger and Food Security Initiative, is increasing. Through this assistance, the United States has supported the WTO discussions by providing assistance to developing countries that seek help in responding to the regulatory proposals made by members in the Negotiating Group on Trade Facilitation. In November2011, the United States announced the Partnership for Trade Facilitation, a new, flexible funding mechanism that will support developing countries' efforts to implement provisions of the WTO trade facilitation agreement currently under negotiation. Additionally, in 2012 the UnitedStates contributed to the WTO Trust Fund to support updated needs assessments, for those Members that request such updates, in connection with the WTO negotiations on trade facilitation. These assessments, initially conducted in 2007-2010, analyzed whether Members were in compliance with numerous proposed trade facilitation measures and tried to identify the reasons for non compliance, the actions needed to implement the measures, and the technical assistance and capacity building needs and priorities.
Another element of U.S. multilateral TCB assistance is the technical support provided to countries that are in the process of acceding to the WTO. In 2011, WTO accession support was provided to several countries, including Afghanistan, Azerbaijan, Ethiopia, Iraq, Kyrgyzstan, Laos, Lebanon, and Serbia.
The Enhanced Integrated Framework
The Enhanced Integrated Framework is a multi-organization, multi-donor program that operates as a coordination mechanism for trade-related assistance to least-developed countries (LDCs) with the overall objective of integrating trade into national development plans. The United States supports the EIF primarily through complementary bilateral assistance to EIF participating countries. USAID bilateral assistance to LDC participants supports initiatives both to integrate trade into national economic and development strategies and to address high priority capacity building needs designed to accelerate integration into the global trading system.
Free Trade Agreement Negotiations
Although the WTO programs and the EIF are high priorities, they are only part of the U.S.TCB effort. In order to help U.S. FTA partners participate in negotiations, implement commitments, and benefit over the long-term, USTR has created TCB working groups in FTA negotiations with developing countries and Committees on TCB to prioritize and coordinate TCB activities during the transition and implementation periods once an FTA enters into force. USAID and USDA, their field missions, and a number of other U.S. Government assistance providers actively participate in these working groups and committees so that TCB needs identified can be quickly and efficiently incorporated into ongoing regional and country assistance programs. The Committees on TCB also invite non-governmental organizations, representatives from the private sector, and international institutions to join in building the trade capacity of the countries in each region. Trade capacity building is a fundamental feature of bilateral cooperation in support of the CAFTA-DR and the United States-Peru Trade Promotion Agreement. USTR also works closely with the Department of State and other agencies to track and guide the delivery of TCB assistance to Jordan, Morocco, Bahrain, and Oman. As with other agreements, the United States-Colombia Trade Promotion Agreement and the United States-Panama Trade Promotion Agreement each provide for the creation of a Committee on TCB to build upon the progress made by the proceeding TCB working groups on economic assistance and poverty alleviation.
TCB Initiatives for Africa
Through bilateral and multilateral channels, the United States has also invested more than US$3.3 billion in trade-related projects in sub-Saharan Africa since 2001 to spur economic growth and fight poverty.
In June 2011, the United States reinforced its long-standing commitment to trade capacity building in sub-Saharan Africa by announcing the new African Competitiveness and Trade Expansion (ACTE) Initiative. This initiative will provide up to US$120 million over 4 years to improve Africa's capacity to produce and export competitive, value-added products, including those that can enter the United States duty-free under AGOA, and to address supply-side constraints that impede African trade. ACTE will continue to support the work of three regional trade hubs and will help to drive economic development in African countries, and enhance trade opportunities among Africans and Americans alike.
ACTE was a successor to the US$20 million African Global Competitiveness Initiative (AGCI), which was the centerpiece of U.S. support for building trade capacity in Africa until September 2010. The primary focus of AGCI was to help expand African trade and investment with the United States, with other international trading partners, and regionally within Africa through improving the competitiveness of sub-Saharan African enterprises. Through 2010, AGCI trade and investment programs facilitated over US$178 million in AGOA exports, provided export capacity building assistance to over 234,000 firms, and trained nearly 660,000 Africans in trade capacity building. These results reflect a strategic emphasis by the U.S. Government on providing marketing assistance to African exporters at major international trade shows. Under an agreement with USAID, USDA addressed sanitary and phytosanitary issues as a part of the AGCI program, focusing specifically on the areas of food safety and plant and animal health. Additionally, the U.S.Department of Commerce's Commercial Law Development Program worked to improve protection of intellectual property rights.
Since 2005, the United States has mobilized its development agencies to help the West African countries of Benin, Burkina Faso, Chad, Mali, and Senegal to address obstacles they face in the cotton sector. The MCC, USAID, USDA, and the U.S. Trade and Development Agency continued to work with these nations as they sought to develop a coherent long-term development strategy to improve prospects in the cotton sector. The centerpiece of U.S. assistance to the cotton sector in West Africa is USAID's West Africa Cotton Improvement Program (WACIP). The program is aimed at helping to improve the production and marketing of cotton in five countries: Benin, Burkina Faso, Chad, Mali, and Senegal. The WACIP is designed to help achieve the following objectives: (1) reduce soil degradation and expand the use of good agricultural practices; (2)strengthen private agricultural organizations; (3) establish a West African regional training program for ginners; (4) improve the quality of West African cotton through better classification of seed cotton and lint; (5) improve linkages between U.S. and West African research organizations involved with cotton; (6) improve the enabling environment for agricultural biotechnology; and (7)assist with policy/institutional reform.
A key element of the WACIP program is the identification of specific policy priorities through National Advisory Committees. Composed of stakeholders in each country, these committees undertook work to identify the specific projects that would yield the assistance and results sought by participants and these projects have been the basis of WACIP's work. In 2010, WACIP was extended to April 2012. In December 2011, the U.S. Government announced that it would continue cotton related trade capacity building to these four West African countries, providing up to US$16million over four years subject to the outcome of the U.S. budget process.
The U.S. Government also provides complementary support to the cotton sector through other programs. MCC is implementing compacts with Benin (US$307 million), Burkina Faso (US$481million), Mali (US$460 million), and Senegal (US$540 million).
TRADE AND THE ENVIRONMENT
Since the last U.S. Trade Policy Review, the United States has enhanced work on environment and trade matters across multiple fronts, including through multilateral, regional, and bilateral trade initiatives. On the multilateral front, the United States has continued to be a global leader in seeking to discipline harmful fisheries subsidies and to eliminate barriers to trade in environmental goods and services, including in the clean energy sector, through the WTO as part of the Doha Development Agenda (DDA) negotiations. The United States also has sought to orient activities in APEC and the OECD Joint Working Party on Trade and Environment to focus on value added contributions to ongoing WTO work, as well as strong analytical research on the interface between trade and clean energy policies.
As host of APEC in 2011, the United States defined and achieved a robust agenda on green growth, and, in particular, secured commitments from APEC Leaders to lower applied tariffs on environmental goods to no more than 5% by 2015 and eliminate local content requirements that distort trade and investment for environmental goods and services. APEC member economies also agreed to establish an Experts Group on Illegal Logging and Associated Trade and to work to implement appropriate measures to prohibit trade in illegally harvested forest products. Finally, in 2011, we gained agreement to take steps to streamline import procedures for energy-efficient vehicles, facilitate trade in remanufactured goods, and improve the quality of regulations and standards for emerging green technologies in the region.
In 2012, during Russia's host year, the United States worked with APEC member economies to gain APEC Leaders' endorsement of a commercially and environmentally credible list of environmental goods that will be the basis for their 2011 commitment to reduce tariffs to 5% or less by 2015. This historic outcome marks the first time that trade negotiations have produced such a list of environmental goods for tariff cuts. The APEC List of Environmental Goods includes 54environmental goods, including such core products as wastewater treatment filters, solar panels and wind turbines, as well as air and water quality monitors.
In 2010, APEC regional trade in the products on the APEC List of Environmental Goods totalled US$185 billion, and APEC makes up 60% of world exports of these products. Reducing tariffs on these environmental goods will help APEC businesses and citizens access important environmental technologies at lower cost, which in turn will produce environmental benefits and improve the quality of life and living standards of people across the Asia-Pacific region due to a cleaner environment. It will also contribute significantly to APEC's core mission to promote free and open trade and investment.
Since the last review, the United States has also continued to prioritize implementation of U.S. free trade agreements. In particular, the United States has worked in close collaboration with Peru to advance implementation of the Annex on Forest Sector Governance under the UnitedStates Peru Trade Promotion Agreement. In the lead up to entry into force of the U.S. free trade agreements with Korea and Colombia, the United States also worked closely with Korea and Colombia on implementation of the environmental provisions of those agreements, and has continued to prepare for implementation of the environmental provisions of the United States-Panama Trade Promotion Agreement.
TRADE AND LABOR
The trade policy agenda of the United States includes a strong commitment to ensuring that workers and their families in America and around the world benefit from trade. The United States has continued its efforts to enhance U.S. Government engagement with trade partners to improve respect for labor rights and to increase monitoring and enforcement of trade agreement labor provisions. The U.S.-Colombia Trade Promotion Agreement is a recent example of how addressing labor issues can support trade liberalization. The agreement includes strong protections for workers' rights that reflect a 2007 Congressional-Executive commitment in the United States to incorporate high labor standards into trade agreements. In addition, the U.S. and Colombian governments announced, on 7 April 2011, an ambitious and comprehensive Labor Action Plan that included major, swift and concrete steps for the Colombian government to take to improve respect for labor rights. In the following year, Colombia made historic progress on labor rights in Colombia, including unprecedented legal reforms and new resources for labor enforcement and compliance efforts. On 15 May 2012, the trade agreement entered into force, and the Labor Action Plan played a significant role in building the domestic consensus necessary in the United States to implement this important trade initiative.
As an essential component of the Administration's trade agenda, President Obama signed into law renewal of the Trade Adjustment Assistance (TAA) programs to assist workers, firms and farmers adversely affected by global competition. On 21 October 2011, President Obama signed the Trade Adjustment Assistance Extension Act of 2011 (TAAEA). The renewal of TAA preserves the key goals of the 2009 TAA program reforms, such as covering service workers and workers whose jobs shift to China, India, and other countries. It helps ensure that American workers affected by global competition are given the best opportunity to acquire skills and credentials to get good jobs. The TAA program currently offers the following services to eligible workers: training; weekly income support; out-of-area job search and relocation allowances; case management and employment services; assistance with payments for health insurance coverage through the utilization of the Health Coverage Tax Credit (HCTC); and wage insurance for some older workers. In FY 2011, US$704,005,680 was allocated to state governments to fund and administer TAA benefits.
SMALL AND MEDIUM-SIZED BUSINESS TRADE
In October 2009, USTR announced a Small Business initiative aimed at ensuring that the specific export challenges and priorities of Small and Medium Enterprises (SMEs) and their workers are reflected in our trade policy and enforcement activities. This effort also supports the goals of the Administration's National Export Initiative (NEI) to double U.S. exports by the end of 2014 to support millions of American jobs. The NEI highlights priority attention to expanding SME exports.
U.S. small businesses are key engines for U.S. economic growth, jobs, and innovation. SMEs that export tend to grow faster, add jobs faster, and pay higher wages than SMEs that serve purely domestic markets. Recent studies by the U.S. International Trade Commission (USITC), requested by USTR, reveal that SMEs play a larger role in the export economy than is suggested by traditional trade statistics, with direct and indirect exports by U.S. SMEs supporting about four million jobs in the United States while accounting for over 40% of the total value of U.S. exports of goods and services. There are some 30 million SMEs in the United States, but currently, as few as 1% of these companies export goods or services, and most export only one product or service to one foreign country.
Several aspects of USTR's trade policy agenda have particular potential to help boost SME exports. These include enhancing trade facilitation work, strengthening and enforcing intellectual property rights, and targeting services barriers that are especially difficult for SMEs, such as requirements for staffing an office in each country to which companies wish to export. Tariff barriers, burdensome customs procedures, discriminatory or arbitrary standards, and lack of transparency relating to relevant regulations in foreign markets present particular challenges for SMEs in selling abroad.
On an interagency basis, USTR's Small Business, Market Access, and Industrial Competitiveness office participates in the Trade Promotion Coordinating Committee's (TPCC) Small Business Working Group, collaborating with agencies including the U.S. Department of Commerce, the Small Business Administration (SBA), the U.S. Export-Import Bank, the U.S. Department of Agriculture, and others across the government to promote small business exports, and connect SMEs to trade information and resources to help them begin or expand their exports and take advantage of existing trade agreements.
Throughout 2011-12 Ambassador Kirk and senior USTR staff actively participated in numerous events around the country to hear directly from local small businesses, workers, and other stakeholders about the trade opportunities and challenges they face. USTR staff regularly consult with the Industry Trade Advisory Committee for Small and Minority Business to seek its advice and input on U.S. trade policy negotiations and initiatives, and meet frequently with individual SMEs and associations representing SME members on specific issues.
LOOKING FORWARD/CONCLUSIONS
The United States looks forward to vigorous engagement with trading partners around the world on the basis of mutual accountability and shared ambition for economic growth. U.S. trade policy will remained focused on leveling the playing field for American business, workers, farmers, ranchers, manufacturers and service providers that compete and sell products around the globe. The United States will pursue policies that contribute to increased opportunities and jobs through exports and two way trade, through support for a strong rules-based international trading system, and through bolstered international trade relationships.
The pursuit of market opening and trade liberalization remains at the forefront of the U.S.trade policy, and the Administration adheres strongly to the precept that trade liberalization at the multilateral level holds the highest potential for securing wide-ranging market-opening outcomes while at the same time advancing trade as an economic engine for global development. The UnitedStates is committed to preserving and enhancing the WTO's irreplaceable role as the primary forum for multilateral trade liberalization, for the development and enforcement of global trade rules, and as a key bulwark against protectionism. Going forward, the United States will continue to contribute constructively and creatively to the effective functioning of the WTO. The United States is convinced that the WTO's negotiating arm can and must become strong again. A testament to the WTO's important negotiating role is the landmark 2011 agreement to revise the text of the WTO Government Procurement Agreement and expand the procurement that it covers, which was successfully concluded last year. As we continue to promote the rebuilding of the WTO's negotiating mission, the United States will also work to vigorously support and revitalize the valuable work carried out by the WTO's Committees, Working Groups, and its dispute settlement mechanism. The United States also remains committed to advancing the multilateral negotiations on trade facilitation and a variety of development issues as well as considering new approaches to trade liberalization in the WTO and ways to further strengthen the multilateral trading system.
To complement efforts in the WTO, the United States will work to secure swift entry into force and full implementation of its trade agreements, and will provide support for ongoing regional and bilateral initiatives. Recognizing the job-supporting benefits of trade more broadly, the UnitedStates is committed to working with partners around the world to remove barriers to trade and enhance economic integration on a regional basis. The United States will promote higher standards for trade agreements, in order to ensure that the agreement better serve workers and better reflect U.S.values. The United States will continue to advocate that trade agreements can and should be part of the solution to urgent international environmental challenges, as well as a mechanism for protecting worker's rights and promoting high labor standards.
The United States will seek increased cooperation and trade with many developing countries through our preferential trade measures, such as the Generalized System of Preferences, the African Growth and Opportunity Act, the Andean Trade Promotion and Drug Eradication Act, and the Caribbean Basin Economic Recovery Act. Additionally, the United States will work with partners especially LDC's to help increase their utilization of the tariff preferences available to them through these programs. Trade is a key component in achieving the broad-based economic growth necessary to drive development, economic growth, and recovery in countries transitioning away from conflict and natural disasters. The United States therefore remains committed to supporting countries in their capacity to trade. Further, the Administration plans to continue to develop and support innovative public-private partnerships that bring together important actors and combined resources to address development challenges.
By undertaking these various elements pursing global, regional, and bilateral trade initiatives, encouraging developing countries' multilateral integration, building support for open trade, encouraging sustainable development and core labor standards, and fostering greater transparency the United States will continue to demonstrate its support for trade liberalization and a strong trading system of benefit to all. The Administration is committed to the hard work necessary to harness U.S.trade policy as an engine of growth and prosperity for the United States and for the world.
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