Archive for the ‘Trade Agreements’ Category

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Nearly 50 Countries Reach Historic Agreement to Eliminate Tariffs on Information and Communication Technologies

July 24, 2015

Stefan M. Selig is the Under Secretary of Commerce for International Trade.

Today, representatives from 47 countries reached the first tariff-cutting agreement at the World Trade Organization (WTO) in 18 years. After negotiating one of the largest agreements in recent history, the countries—including the United States, the EU, and Japan, among others—agreed to expand the scope of products that receive duty-free treatment under the WTO Information Technology Agreement (ITA). As a result, numerous countries will eliminate tariffs on roughly 200 information and communication technology (ICT) products which have a value of more $1 trillion in global trade.

I am proud to say that the International Trade Administration has played a critical role since the negotiations began. Our industry and policy experts helped shape U.S. negotiating proposals, reviewed hundreds of product proposals from other countries, delved into the commercial relevance for each item, and ensured that products exported by small- and medium-sized companies were factored into the mix.

The ITA expansion will open overseas markets for Made-in-America ICT exports without the imposition of costly and burdensome tariffs, and will support thousands of well-paying U.S. manufacturing and technology jobs. Last year, exports of goods and services directly and indirectly supported an estimated 11.7 million U.S. jobs, of which 6.2 million jobs were supported by manufactured products exports. We want to see these numbers continue to grow—and this agreement can help do just that.

The agreement today is a step in the right direction. Addressing barriers and opening markets, as the ITA expansion agreement will, are the central forces that drive President Obama’s trade agenda, which will spur economic growth, create jobs, and level the playing field for American businesses and their workers. This is why the United States has been a staunch supporter and leader in the effort to expand the product coverage of the ITA.

The Information Technology Agreement will provide new opportunities for U.S. companies, and the International Trade Administration is committed to helping U.S. firms reap the benefits of the agreement. Now, U.S. ICT companies will be able to export their products duty-free to some of the largest markets in the world including Canada, Malaysia, and China. Medical equipment, GPS devices, video game consoles, computer software, and next generation semiconductors are among the high-tech products that will see tariff elimination. These and other highly competitive U.S. ICT products worth over $100 billion will no longer face high tariffs in key markets.

For example, U.S. exports of loudspeakers face tariffs of up to 30 percent. Next generation semiconductors face tariffs of up to 25 percent, medical devices such as MRIs and CT scanners face tariffs up to 8 percent, and printed matter/cards to download software and games face tariffs up to 10 percent. And, in some countries, certain U.S. ICT exports are effectively shut out of the market because of those high tariffs. Thanks to the new agreement, all these tariffs will be reduced to zero.

I look forward to making sure these negotiating wins translate into meaningful commercial realities for U.S. firms. With more than 100 U.S. export assistance centers across our nation and staff in the ITA expansion agreement countries, the International Trade Administration stands ready to help U.S. ICT companies take advantage of the new opportunities from the expansion of the WTO Information Technology Agreement.

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E Star Award Winner Volk Optical Saving Sight and Supporting Exports

July 7, 2015

This is a guest blog post by Pete Mastores, President, Volk Optical

ophthalmic lenses In May, the Department of Commerce hosted the 52nd  Annual President’s “E” Awards honoring U.S. companies for their contributions to increasing our nation’s exports. The awards are broken into two designations: “E” Award for Exports for first time winners and “E” Star Award for Exports for previous recipients who continue to demonstrate significant contributions to the expansion of U.S. exports.

Having received a first time “E” Award for Exports in 2011, Volk Optical was recognized this year with an “E” Star Award for Exports for the continued success of our exports program. One of only 4 product manufacturing exporters awarded this distinction, Volk has seen steady growth in export sales since its first “E” Award.

Our company manufactures ophthalmic lenses, portable diagnostic imaging products, and surgical ophthalmic viewing systems and lenses that are used to diagnose and treat conditions of the eye. Eye doctors globally use Volk’s products provide the best possible eye care, thus improving vision.

ophthalmic lensesIt’s gratifying to have our export strategy recognized with a second President’s “E” Award and Star distinction. Our focus, strategy, and personnel additions have allowed our export business to grow consistently for 8 years.  Volk takes the proven approach of focusing on a single region for a one year period, establishing distributors, attending regional tradeshows, and securing the necessary regulatory product registrations and approvals. We concentrate our efforts on entrenching our core product line of ophthalmic diagnostic, laser treatment, and surgical lenses, after which that region is expected to grow organically. After the initial year, Volk turns its eye to growing demand for our more technical and capital-intensive products such as eye imaging cameras and surgical systems. These products require more education and effort to sell, so training of our worldwide distributors was critical. They take time and effort to sell, so the commercial approach requires established, trained, savvy boots on the ground.

We applied this approach first in Europe, then South America, India, China and the Middle East. Volk’s commercial expansion was supported by our parent company, Halma plc, which set up office hubs in developing markets. Having a regional base of operations helped us establish our international sales force.

Additionally, Volk has been assisted along the way by the efforts of the International Trade Administration (ITA) and U.S. free trade agreements. Some of the benefits from a U.S. Free Trade agreement is in lowering our costs of procurement of raw materials, components, etc., as well as in expanded global sales opportunities, allowing us to provide affordable optical medical devices.

Free trade agreements have helped Volk a lot and will continue to do so. We still manage everything out of Mentor, Ohio– the design, the manufacturing, the sales and marketing. The free trade agreements have allowed us to save significant time and money in going to market in foreign countries. We’ve kept and created jobs here in the U.S., as well as internationally, by putting people in the field to support our export efforts.

Volk has also benefited from the services of the U.S. Commerce Department which has been instrumental in assisting us with Gold Key programs to identify distribution channels around the world.

Volk expects export growth to continue as more and more developing countries’ eye doctors are able to afford Volk’s high quality, high performance lenses  and electronic diagnostic imaging devices to provide the best eye care to their patients.

Winning the U.S. President’s E Award in 2011 certainly excited and challenged us to continue to grow our international export business for the past 4 years in order to win this prestigious E Star Award. We’re eager to see what the next several years hold for Volk Optical.

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Beyond the Border: U.S.-Canada and U.S.-Mexico Trade in Perspective

June 16, 2015

This post contains external links. Please review our external linking policy.

This is a guest blog post by Philip Poland, Director of International Trade Compliance at DHL (USA). DHL was a Platinum Marketing Partner for the Discover Global Markets: The Americas Forum in Miami, FL, in May 2015, and is a Marketing Partner for the 2015 Discover Forum Series.

The North American trade relationship is the strongest in the world, and exceptionally important to U.S. businesses.  The United States exported over $600 billion in goods and services to both Canada and Mexico in 2014. Canada is our largest trading partner, with $658 billion in goods exported and imported last year. With this in mind, a recent panel discussion I participated in, held during the Discover Global Markets: The Americas conference, explored the opportunities and challenges for U.S. companies looking to do business with our closest neighbors.

How should businesses approach trade with Mexico and Canada, and what are the implications for organizations that want to expand and succeed?  The following is an overview of key considerations relating to the U.S.-Mexico and U.S.-Canada equations:

NAFTA is key. Since taking effect in 1994, the free trade pact has significantly reduced the cost of trading between the United States, Mexico, and Canada, by removing or reducing tariffs in multiple industries, including agriculture, textiles and automobiles.  U.S. manufacturing exports to NAFTA countries have increased 258 percent in the last 20 years.  Companies that have not yet launched an export strategy, and are analyzing opportunities for their products, must surely consider the cost implications involved under the free trade marketplace.  Simply put, if your business is just getting into the global trade game, Canada and Mexico may be a good place to start.  Both countries have a very skilled labor force as well as high-quality education in the areas of engineering that is needed for production and manufacturing.

Logistics costs are low.  Given the close proximity of our neighbors, and the productive relationships that exist between our governments, border movements are simplified relative to other nations. Lower transportation costs and streamlined customs procedures mean reduced logistics costs for those U.S. businesses exporting goods to Canada and Mexico – and for those importing manufactured goods and materials for use in production as compared with the cost of shipping from Asia.

Rules and details matter. Companies considering trade with our neighbors – and those that are already trading – must clearly understand the particular customs requirements that apply in each country.  For instance, in Mexico, customs officials can be very particular about accuracy on customs documents, right down to the smallest details.  Companies must state the date as “day, month, year” versus the way that it is ordinarily stated in the United States, or they risk delays.  Even the smallest errors on documentation can cause long delays in the clearance process.

Regulations and enforcement are subject to change. As in many countries, regulations in Canada and Mexico evolve and change. Companies need to stay up-to-date and work with a logistics partner who understands the shifting environment.  As an example, Mexican customs recently began enforcing regulations on shoes and apparel that require the importer in Mexico to be registered in an effort to prevent the undervaluation of shipments.  More information on this requirement is available here.

Licensing and permit requirements must be understood.  It is essential for companies to understand the way that products are regulated in Canada and Mexico before they decide on their trade strategy.  For instance, in the area of vitamins and supplements, in some cases items sold over the counter in the United States will be sold only with a prescription in Canada and Mexico.  This regulatory difference means that some items exported to these countries will require a specific license or permit.  On the import side, U.S. companies that work with particular manufacturers across the border also need to understand when a license is required.

Looming policy and process changes could make trade with Canada and Mexico even more attractive. The United States, Canada, and Mexico continue to pursue agreements to streamline the trade process and harmonize data flows and perimeter security procedures.  The Beyond the Border program is a good example.  Mutual recognition and acceptance of trusted trader programs, which will allow for expedited customs procedures, are also in the works.  More information is available here.  Finally, the United States is pursuing the implementation of the International Trade Data System (ITDS), which will allow international traders to submit documents required by U.S. Customs and Border Protection and its Partner Government Agencies through a “single window.”  The ITDS will expedite customs procedures and reduce paperwork, and fulfill U.S. commitments under the Beyond the Border program.  Mexico has also recently implemented a single window program.

I am glad that DHL was able to be a part of the Discover Forum in Miami, and we all look forward to participating in future events with the U.S. Commercial Service. Is your company engaged in trade with Canada and/or Mexico? Let us know what you see as the biggest opportunities and greatest challenges at @DHLUS, and be sure to check out the export resources available at export.gov.

Note: This article is not intended to be specific legal or compliance advice, but general information related to international trade.

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San Diego/Tijuana Mega-Region Drives and Expands Bilateral Trade

April 20, 2015

This post contains external links. Please review our external linking policy.

John Andersen is the International Trade Administration’s Deputy Assistant Secretary for the Western Hemisphere.

Last week, I traveled to San Diego and Tijuana to meet with companies on both sides of the border and learn about the dynamic coproduction in the U.S.-Mexico border region. More than $1.5 billion in trade crosses the U.S.-Mexico border every day and much of that value is generated in the largest metropolis between San Diego and Tijuana.

While in Tijuana I toured the Welch Allyn plant, a medical device manufacturing facility that sources more than 85 percent of its inputs from the United States. The company, which is headquartered in upstate New York, selected its Baja California location to be close to its largest consumer market, North America.

While in Mexico, I also met with the dynamic binational Smart Border Coalition, a group that works diligently to improve efficiencies along the various border crossings between California and Baja California. In our discussion, we talked about how we could work together better to hasten the development of important cross-border land ports of entry, including the Xpress Airport facility that will provide U.S. citizens with direct access to the Tijuana International Airport; the proposed Otay Mesa East crossing, which will double commercial vehicle crossing capacity in San Diego County; and reactivation of the desert railroad line that will allow regional manufacturers to export their heavy manufactured goods at a lower cost. The U.S. Department of Commerce will help facilitate these projects within the U.S. government border management process, and binationally with Mexico, to increase border capacity at new and existing ports of entry.

After returning to San Diego via the San Ysidro port of entry, the busiest land border of entry in the world, I met with several U.S. companies based in San Diego County to understand and address their export concerns. One of the companies I spoke with at length, Taylor Guitars,   successfully exports their products to several markets overseas.

Taylor Guitars shared that they have recently been battling counterfeit products imported from China. I explained that one of the Obama administration’s top priorities is to expand free trade agreements, which will establish common standards and protections for U.S. companies. Free trade agreements, not only reduce trade barriers, allowing U.S. products to enter foreign markets at lower prices, but they also ensure that U.S. companies have recourse to combat corrupt practices of competitors and provide protections for intellectual property rights for U.S. companies.

The administration is currently negotiating the Trans-Pacific Partnership (TPP) agreement, which will link the United States with growing markets in Latin America and Asia. It is estimated that in the next two decades, nearly 50 percent of the world’s economic growth will come from the Asia-Pacific region, yielding almost one billion new middle-class consumers.

The businesses I spoke with in San Diego were supportive of the administration’s goal to expand U.S. free trade agreements and understood the importance of Trade Promotion Authority which will allow the executive branch to secure the best trade deals possible for U.S. companies. The companies expressed their hope that TPP would enable them to expand their exports into the rapidly growing Asia-Pacific region and help them to better protect their intellectual property.

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Increased Exports and the Jobs Supported by Exports Are Keys to Heightened Economic Confidence

March 12, 2015

This post originally appeared on the Department of Commerce blog.

Guest blog post by Stefan M. Selig, Under Secretary of Commerce for International Trade

Under Secretary of Commerce for International Trade Stefan M. Selig

Under Secretary of Commerce for International Trade Stefan M. Selig

When we look back at 2014, it will be seen as the year our country regained its economic confidence, symbolized by the nearly 3 million jobs our economy created in 2014.

While this feat extended the longest streak of job growth in American history, we should not overlook the role our exports and our exporters played in regaining that economic confidence.

U.S. exports of goods and services tallied a record $2.35 trillion in 2014. That was the fifth consecutive year we achieved record exports. This is a clear validation of the Administration’s commitment to a robust trade and investment agenda.

In fact, there are three ways that our exports played an important role in the breakthrough year our economy produced.

First, at the same time that we were experiencing the longest streak of job growth, we also experienced a record year when it came to export-supported jobs: more than 11.7 million. This number includes the 2.8 million jobs supported by the exports to our North American Free Trade Agreement partners Canada and Mexico. And we know those export supported jobs pay 13 to 18% higher wages than non-export supported jobs.

Second, U.S. exporters reaped the benefits of a record year of exports with our 20 free trade partners – with a total of $765 billion in goods sent to these markets. That record included increases in exports to Colombia (up 10.5%), South Korea (up 6.8%) and the Central America Free Trade Agreement-Dominican Republic partners (up 5.7%). Overall, these 20 countries purchase nearly half of all U.S. exports today – 47% to be exact.

Third, a major driver of our export growth came from our Latin American free trade partners, such as Chile, Colombia, Mexico, Panama, and Peru. Exports to these 11 countries alone represented more than a third of our entire year-over-year increase in exports. The region is a major destination for U.S. petroleum and coal, computers and electronics, chemicals, and transportation equipment.

So 2014 was clearly a breakthrough year for our exports and for our economy in general. Now, we need the tools that will allow us to carry that momentum into 2015 and beyond.

That is why passing trade promotion legislation is even more crucial, particularly as we work to finalize the historic Trans-Pacific Partnership agreement (TPP).

TPP will give U.S. exporters better access to the Asia-Pacific, which will carry the majority of global middle class by 2030. TPP means taking the very success we have seen in Latin America – U.S. goods exports to Look South markets increased 5.4 percent in 2014 from the previous year, more than double the increase of goods exports to the rest of the world — and replicating it in the Asia-Pacific.

To help our negotiators reach the best deal possible, the President needs Congress to pass trade promotion legislation. This would signal to our negotiating partners that a successfully negotiated TPP will not be held up by amendments when it goes to Congress for a final vote. This would give those trading partners the confidence to put their final offers on the table.

And because trade promotion legislation empowers Congress to determine the priorities and objectives our negotiators must pursue, it will ensure TPP embodies the values of 21st century global commerce: environmental protection, workplace regulations, and fair wages.

If we want a future that will include connecting U.S. exporters to 60% of global GDP, accessing the majority of global middle class consumers, supporting more American jobs through expanded exports, and locking 21st century values into the global trading system, then trade promotion legislation will be an essential element.

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Secretary Pritzker Joins Bipartisan Roundtable on the Benefits of Trade During National Governors Association Winter Meeting

February 24, 2015
Secretary Pritzker Joins Bipartisan Roundtable on the Benefits of Trade During National Governors Association Winter Meeting

Secretary Pritzker Joins Bipartisan Roundtable on the Benefits of Trade During National Governors Association Winter Meeting

 

This post originally appeared on the Department of Commerce blog.

Yesterday, Commerce Secretary Penny Pritzker joined a bipartisan roundtable at the White House on the importance of trade and new trade agreements. The meeting was part of the National Governors Association (NGA) Winter Meeting in Washington. NGA is the bipartisan organization of the nation’s governors, and its members include the 55 states, territories and commonwealths of the United States.

Governors John Hickenlooper of Colorado, Gary Herbert of Utah, and Terry McAuliffe of Virginia attended the roundtable, along with Secretary Pritzker, U.S. Trade Representative Michael Froman, Agriculture Secretary Tom Vilsack, and White House officials.

During the discussion, Secretary Pritzker highlighted how trade has helped drive the nation’s economic recovery and proven beneficial to state’s economies. For example, more than 5,000 Colorado businesses, both large and small, are counted among the ranks of America’s exporters. Exports from Virginia to our free trade agreement partners have grown by 74 percent over the past 10 years, and in Ogden, Utah, exports drove more than 100 percent of growth out of the recession.

Overall, exports support 11.3 million American jobs – which pay up to 18 percent higher than jobs not related to exports. In addition, the Commerce Department announced earlier this month that American exports had hit an all-time high for the fifth year running – sending $2.35 trillion worth of goods and services overseas.

That is why the Obama Administration has set an ambitious trade agenda focused on building on this progress. It will ensure U.S. businesses in every state can access more global markets with fewer barriers.

This agenda includes the completion and implementation of new trade agreements including the Trans Pacific Partnership, which the U.S. is negotiating with 11 other nations. Once completed, TPP will give American businesses free trade arrangements with 40 percent of global GDP.

Secretary Pritzker stressed to the attending governors that in today’s global economy, American prosperity is directly tied to our ability to reach new markets and new customers beyond our borders. Today’s roundtable gave Secretary Pritzker an opportunity to urge the nation’s governors to support trade policies like TPP, and explain why they are essential to the growth of the economy, to the creation of good jobs, to the economic security of American families, and to the competitiveness of our businesses.

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One Year Later, Look South Looking Brighter

January 9, 2015

This post contains external links. Please review our external linking policy.

Joe Matthews recently completed an internship in the International Trade Administration’s Office for Export Policy, Promotion, and Strategy.

As yet another polar vortex bears down on much of the United States, we in the trade community can still find some sunshine in the fresh trade data through November 2014. Our export numbers are up globally, and some bright spots are appearing for trade with our friends to the south one year after launching the Look South initiative — they include:

  • U.S. goods exports to Look South markets (our 11 Free Trade Agreement (FTA) partner countries in Latin America) increased by $16.0 billion through November 2014, which accounts for more than one-third of the increase in U.S. global exports over the same period in 2013.
  • Despite most being small- and medium-sized economies, these 11 trade partners represent 20.3 percent of total U.S. good exports through November 2014, up from 16.7 percent in 2009.
  • In 2012 (the latest data available), more than 89,000 American companies exported to Look South markets. This is an increase of more than 2,600 from 2011.
  • In particular, Mexico stands out as an excellent place for U.S. companies to look for new opportunities as 1,700 of those 2,600 new firms entered the Mexican market.

Mexico is one hot destination, as goods exported to Mexico rose more than $13 billion through November 2014, an increase of 6.5 percent.  The International Monetary Fund (IMF) projects Mexico’s economic growth at 3.5 percent in 2015, which is a sizeable increase from the IMF’s 2014 prediction of 2.4 percent and bodes well for U.S. exports.

Colombia is an emerging export market thanks to the U.S.-Colombia Trade Promotion Agreement that entered into force in 2012. U.S. exports to Colombia have increased by $1.8 billion through November 2014, a 10.8 percent increase over the same period 2013. Colombia was also a recent winner in the World Bank’s 2015 Doing Business reports, jumping from 53 to 34 to take the top spot for all of Latin America.

The popularity of Latin American FTA markets as export destinations is heightened by improvements in economic growth. According to IMF estimates, in 2014, the top four economic growth performers in the region are Panama, the Dominican Republic, Bolivia, and Colombia, three of which have FTAs with the United States. Strong growth in both the United States and these countries will positively affect one another, helping encourage trade.

Through November 2014, our progress with the Look South Initiative shines. So grab your warm weather gear and Look South for bright new opportunities—don’t forget your shades!

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