Posts Tagged ‘WTO’

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U.S. Exporters Set to Reap Benefits of Russia’s Accession to the World Trade Organization

February 7, 2013

Matthew Edwards is Director, and Christine Lucyk is Senior Policy Advisor, in the International Trade Administration’s Office of Russia, Ukraine and Eurasia.

As 2012 drew to a close, Acting Commerce Secretary Rebecca Blank joined President Obama, U.S. Trade Representative Ron Kirk, members of Congress, and representatives of the business community at the White House to mark a historic event in U.S.-Russia economic relations – the signing of legislation authorizing the President to establish Permanent Normal Trade Relations (PNTR) with Russia. Calling the legislation a “win-win for American businesses and workers,” Blank hailed the legislation as a crucial step to ensure that U.S. businesses can compete on a level playing field and enjoy in full measure the increased access to Russia’s growing market which Russia extended through its agreement to join the World Trade Organization (WTO).

These are benefits that the U.S. Government, in consultation with Congress and American manufacturers, farmers and service-providers as well as fellow with WTO members, worked hard to achieve, through intensive negotiations, and with bipartisan support by successive U.S. administrations, culminating in Russia’s accession to the WTO in August 2012.

What does this mean for the future? For context, as one of the world’s larger emerging markets, Russia has been playing a growing role in U.S. trade and investment, in particular as a market for U.S. goods. In 2012, American exports to Russia rose approximately 25 percent over 2011’s level, growing more than five times as fast as U.S. exports to the world as a whole. More exports means support for more American jobs.

U.S. exporters stand to benefit further from greater and more predictable market access, as tariffs fall in line with Russia’s commitments to reduce and bind tariffs on many industrial products. In the past, Russia was able to increase tariffs without limit. As a result of its WTO commitments, Russia’s tariffs will be bound at an average rate of about seven percent. U.S. exports in key sectors like information technology, civil aircraft, chemicals, agricultural products and many types of capital goods and equipment will see significant tariff benefits.

In the past, U.S. service providers were excluded from many sectors or faced barriers in those sectors where they were allowed to operate. Russia’s market access and national treatment commitments provide new opportunities in telecommunications, computer services, express delivery, distribution, financial services and audio-visual services.

Russia’s commitments on non-tariff measures, including obligations to abide by WTO rules on technical barriers to trade, subsidies, and sanitary and phytosanitary (SPS) measures, will limit Russia’s ability to take certain kinds of arbitrary actions, such as SPS and other measures that have restricted U.S. exports of meat and poultry, spirits, and dairy products.

Russia’s trade environment also should continue to benefit over time from commitments in the area of transparency. U.S. exporters have in the past come up against laws and regulations adopted without adequate opportunity for input from interested parties or without reliable information about regulations on trade in a given product or industry. Under the WTO, Russia is obligated to apply WTO rules on transparency, including formal establishment of notice and comment procedures for proposed measures affecting trade in goods, services and intellectual property and requirements to provide decisions in writing and new rights of appeal.

As the volume and breadth of U.S.-Russia trade grows, establishing PNTR has provided the U.S. with more tools and the leverage to hold Russia accountable for the obligations it has undertaken, and to defend U.S. economic interests in Russia’s market. In the coming months, the International Trade Administration plans to step up our outreach to advise U.S. industry of new opportunities in Russia’s market – as well as its remaining challenges. These challenges still can be considerable, as indicated in the World Bank’s most recent “Doing Business” rankings, where despite jumping eight places in the rankings, Russia placed 112th out of 185 economies surveyed.

The Commerce Department will be working under the U.S.-Russia Business Development and Economic Relations Working Group (part of the U.S.-Russia Bilateral Presidential Commission) to continue to bring U.S. business interests to the fore in discussions with our Russian counterparts on ways to further expand this growing trade relationship in ways that benefit U.S. industry and U.S. workers.

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Remanufacture = Reduce, Reuse, Recycle

July 31, 2012

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Tyler Voorhees is working in the Office of Public Affairs at the International Trade Administration for the summer. He is a junior at Washington and Lee University in Lexington, Virginia.

In day to day life, most of us usually imagine new goods when we think about buying anything. But that ignores an entire group of goods that we call “remanufactured goods,” which is just a generic term that describes a product that goes through a recovery process where it is transformed through cleaning, testing and other operations so that it meets the same specifications as a new good.  Pieces subject to wear are replaced or processed to restore original performance while housings and other components are cleaned and reused to preserve their value.  Remanufactured goods are therefore not old consumer goods sold as is, like an old radio from a thrift store. They are products that are just as good as a newly manufactured good, but less expensive!  In addition to the cost savings, the process has important environmental benefits.

Opening markets for remanufactured products has been an important ITA goal.  While remanufactured goods dominate important market segments in the United States and account for roughly 90 percent of automotive parts sales in most wear part categories, many countries try to limit imports of remanufactured goods through barriers such as outright bans. Others force remanufactured goods to meet restrictive licensing requirements.  This is because many countries associate remanufactured goods with used goods and waste, so ITA is working with industry and colleagues in the U.S. government to educate countries on the benefits of remanufacturing.

The United States has brought the issue of remanufactured goods to the World Trade Organization (WTO) to try and make trade in remanufactured goods more open and is now working with countries in the Asia-Pacific Economic Cooperation (APEC) on a “pathfinder” process designed to familiarize countries on the benefits and quality of remanufactured goods.  We are also working bi-laterally with major trading partners like China to open their markets to remanufactured products.  Likewise, we have included special language in our free trade agreements to allow U.S.-made remanufactured goods to qualify for tariff free access.

As noted above, there are a lot of economic and environmental benefits from opening up trade in remanufactured goods. Remanufacturing represents a huge possibility for job growth. In the United States alone, there are estimates that more than 73,000 firms specialize in remanufacturing, and most of them are small and medium-sized businesses, with a few larger multinational corporations mixed in. Some sources claim these firms are growing at 20-30 percent per year. Remanufacturing is also relatively labor intensive. Remanufactured goods require the original good to be disassembled, cleaned and remade by skilled labor. Overall, remanufacturing employs more skilled labor per good produced than traditional manufactured goods.

There are also huge environmental benefits. A remanufacturer can use 85 to 95 percent less energy and materials per unit produced than a new equipment manufacturer because the reused “cores” retain the energy and materials from their original production.  Global estimates of energy saved through remanufacturing equals about 120 trillion BTUs (British Thermal Units) a year.  In simple terms, that’s about equal to:

  • 10.8 million barrels of crude oil or 233 oil tankers
  • The lifetime fuel consumption of 75,000 car owners
  • The electricity generated by five nuclear power plants every year!

By reusing much of the material in the core of an old product, businesses can avoid additional waste from finding its way into landfills, and save the harm of removing new raw materials from the earth and also reduce demands on increasingly valuable water resources.  This is truly “Reduce, Reuse, Recycle” in action.  By preserving the energy, materials and water from original production of reused core inputs, remanufacturing provides access to the same high quality goods at lower prices.  Because the input costs for remanufactured goods are lower than a new good, it means remanufactured goods can be priced much cheaper than new goods.

Global demand for products is rising quickly thanks to a growing middle class in developing countries. Because of this, the cost of raw materials is sky-rocketing. Remanufacturing can provide a way to produce the same high-quality goods we’re used to for a fraction of the cost, and save the environment at the same time. There’s already been huge growth in the remanufacturing sector, along with a lot of good-paying jobs. Bringing down trade barriers will only help create jobs, and help us create a more sustainable economy.

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Chicago Today, Russia Tomorrow

June 27, 2012

Francisco Sánchez is the Under Secretary for International Trade

Today I was fortunate enough to speak at the SMC3 conference in Chicago about the progress we’ve made toward achieving the President’s goal of doubling U.S. exports. SMC3 is a supply chain industry association that provides technology to shipping and logistics companies across the country, the very same companies who ensure the efficient transportation of American exports. Each year, the conference brings together representatives from America’s most active manufacturing, trucking, rail, shipping, and logistics firms.

The success of U.S. exporters depends in part on U.S. businesses being able to quickly and efficiently get their products to market. So it was fitting that I gave these remarks in Chicago, home to some of America’s most important freight and transportation corridors. According to the latest data, the Chicago metropolitan area is the 7th largest export market in the U.S. with merchandise shipments totaling nearly $34 billion.

Under Secretary Francisco Sanchez and Chicago U.S. Export Assistance Center Director Julie Carducci present Export Achievement Certificate to BayRu CEO Aaron Block. (Photo Commerce)

Chicago is also home to some of America’s top exporters. I was pleased to honor an innovative company, BayRu, with an Export Achievement Certificate while in Chicago. Their online store, http://www.bay.ru, BayRu is one of the fastest growing e-commerce sites in Russia. On bay.ru, Russian shoppers can buy a wide range of American consumer goods found in catalogues like E-bay and Amazon and then have those products shipped to more than 160 cities across Russia and other CIS states.

But what makes this company unique is that it’s headquartered right here…in Skokie, Illinois. BayRu has a unique business model of buying American consumer goods here, which are often tough to find in Russia, repackaging them, and then exporting those goods for delivery in Russia.

In January 2011, BayRu partnered with the International Trade Administration’s Commercial Service in Chicago and Moscow to gain market knowledge and insight. Since partnering with ITA, BayRu’s export sales increased by more than $10 million and it plans to create 20 local jobs here in the Chicago area.

BayRu is just another example of an American company being creative, growing their business through exports, and creating good-paying jobs for Americans in the process. But it is also the prime example of a company that would benefit from Russia’s WTO accession and the repeal of the Jackson-Vanik Amendment.

Currently, Russia is set to join the WTO, which will reduce tariffs and increase transparency, making it easier for American companies to access this large and growing export market. However, Russia is still covered by the Jackson-Vanik Amendment, which makes trade conditional with certain economies. If this amendment is not repealed, American businesses would not be able to enjoy the benefits of more open trade with Russia.

That’s why the Obama administration has called on Congress to repeal the amendment and grant Permanent Normal Trade Relations (PNTR) with Russia as soon as possible. It makes no sense to let American businesses stand on the sideline while our global competitors take advantage of Russia’s WTO accession and gain access to a growing market with new opportunities for innovative American companies, like BayRu.

If Congress establishes PNTR with Russia, it will open the door for American businesses to expand into Russia and create jobs here at home. BayRu will enjoy many real benefits, direct and indirect. Increasing trust and awareness of U.S. brands will help drive their growth even further and help them create more good-paying jobs in Chicago.

This is an important issue for many businesses across the country. To find out more about what Russia WTO accession and the repeal of Jackson-Vanik could mean for business, visit our website where you’ll find detailed reports on potential opportunities for U.S. businesses.

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Twelve U.S. Companies Participate in the First-Ever Energy Themed Trade Mission to Russia

June 5, 2012

Francisco Sánchez is the Under Secretary of Commerce for International Trade.

Russia’s impending accession to the World Trade Organization (WTO) has sparked a boom of foreign business interest in the Russian economy. Couple this with the Russian governments’ concentrated investments in energy technology and you have a situation ripe for trade deals between American and Russian companies. As such, I am leading a trade delegation of American energy companies to Moscow, the first such energy-themed mission in the history of U.S.-Russian relations.

Under Secretary Sánchez welcomes members of a 12-company U.S. trade delegation to Moscow for the first stop on an energy efficiency trade mission to Russia. The delegation will meet with public and private sector officials in Moscow and St. Petersburg to discuss export opportunities in a growing sector

Under Secretary Sánchez welcomes members of a 12-company U.S. trade delegation to Moscow for the first stop on an energy efficiency trade mission to Russia. The delegation will meet with public and private sector officials in Moscow and St. Petersburg to discuss export opportunities in a growing sector

Representatives from 12 American energy firms are accompanying me on a business tour of Moscow in search of export opportunities for American energy firms. The Russian market represents incredible potential and invaluable relationships – opportunities that America cannot afford to neglect. Successful investments in the Russian energy market could spur a windfall of job creation and economic growth at home while American companies rake in profits from these beneficial partnerships.

We’ve watched U.S. merchandise exports to Russia double from 2005 to 2010, and then grow nearly another 40 percent in 2011 alone. American business exports to Russia now top $8 billion dollars a year. This is a market we must capitalize on. Recognizing this growth and potential, the Department of Commerce led an automotive technologies mission to Russia in April and was eager to do so again.

The Russian government is implementing an Energy Strategy that calls for energy efficiency, sustainable development, energy development and technological development, as well as improved effectiveness and competitiveness. The demand for affordable and efficient energy will only grow as the global economy evolves, a phenomenon that will continuously stimulate demand for high-quality, energy-efficient products and services. Appropriately, the companies on this trade mission can supply exactly that. As I highlighted in an opinion piece in The Moscow Times, many U.S. businesses on the mission have a particular interest in Russia’s focus on smart grids, green-building and road infrastructure.

This mission is a historic event for both the American and Russian energy industries. U.S. companies, manufacturers, and workers already are global leaders in clean technology production and services. And that is why I am privileged to lead this mission to expand exports to the region, exports that will create jobs at home. As a nation, we should be proud of the expertise our companies offer, as well as the innovation and advancement we are known for. These investments today will pay dividends to our citizens tomorrow.

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Vietnam’s Emerging Telecom Market Creates New Trade Opportunities

May 8, 2009

Senior International Trade Specialist Cora Dickson joined the U.S. Department of Commerce’s International Trade Administration in 2001. She helped to establish the U.S.-Vietnam Information and Communications Technologies (ICT) Dialogue, an interagency initiative led by ITA.

Last month on my second visit to Vietnam, it was evident that U.S. companies are taking a keen interest in Vietnam’s telecom market. As an analyst I can tell you several objective reasons why Vietnam holds such potential, but seeing it firsthand makes me a believer.

A cellular phone store in Hanoi, Vietnam

A cellular phone store in Hanoi, Vietnam (U.S. Department of Commerce photo)

In the downtown streets of Hanoi and Ho Chi Minh City, cell phones are becoming as ubiquitous as the scooters, bicycles, and rickshaws. You might even see farmers in straw hats carrying their goods the old-fashioned way, balanced on a pole over their shoulders, but they have cell phones too.

Some Vietnamese citizens even have more than one cell phone, confounding those who try to keep accurate statistics on mobile subscribers in Vietnam. Furthermore, a major upgrade is about to happen in Vietnam now that the government has issued several spectrum licenses for “third generation” (3G) digital wireless services. The manufacturers of handsets and other equipment have been salivating for years at the potential 3G opportunities as they watched Vietnam’s market take off.

Of course it’s not all about mobile. Internet Service Providers (ISPs) are another growing business in Vietnam, and many of the ISPs are private enterprises formed within the past ten years. Most of the broadband services are concentrated in the two major urban areas but the government is actively promoting policies for build out to the rural provinces. Meanwhile, reliable telecom infrastructure is absolutely essential to attract more foreign investment and multinational corporations (MNCs) to Vietnam. Some U.S. telecom companies already serve the MNCs globally and they would like to add Vietnam branches to their networks.

While Vietnam’s telecom market is rapidly modernizing, the telecom regulatory framework still reflects the pre-WTO accession mindset. However, new rules are taking shape through draft legislation that will bring Vietnam’s laws in line with its WTO commitments. I’ve been hearing from U.S. companies who have been eagerly awaiting this legislation, which could really make it easier to do business in Vietnam. Thus, I worked with the Commercial Service post in Hanoi and Vietnam’s Ministry of Information and Communications (MIC) to organize a half-day seminar on April 18th focusing on Vietnam’s draft telecom law.

The U.S. companies left the seminar with the impression that MIC had been willing to listen to their input and will continue to engage with the private sector as they refine the text of the bill, which is expected to be adopted by Vietnam’s National Assembly by the end of the year.

I left Hanoi feeling satisfied as a catalyst for a robust exchange of views between the U.S. companies and the Vietnamese government.

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