Archive for the ‘Industry and Analysis’ Category

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A Year Like No Other: Overview of U.S. Trade in 2020

March 22, 2021

Gulbin Yildirim and Ian Saccomanno are International Economists in the Office of Trade and Economic Analysis

Overshadowed by a global pandemic, 2020 was a challenging year for U.S. trade as unprecedented social restrictions, changing work patterns, and supply-chain disruptions caused a worldwide recession and hampered trade flows. U.S. exports of goods and services fell 15.9 percent to $2.1 trillion and imports declined 9.5 percent to $2.8 trillion in 2020. The drop in exports was the largest on record while imports saw their largest decline since 2009. Because exports decreased more than imports, the U.S. trade deficit increased 18.2 percent to $681.7 billion, the highest level in the last 12 years (Figure 1). A record-breaking goods deficit and shrinking services surplus were equally responsible for the increase in the overall deficit.

Graph showing changes in exports, imports ,and trade deficit from 2008 to 2020. Graph shows drops in exports and imports to 2.8 trillion U.S. dollars and 2.1 trillion U.S. dollars in 2020, respectively. Trade deficit grew to 681.7 billion U.S. dollars in 2020
Figure 1: Sources: U.S. Census Bureau and Bureau of Economic Analysis.

While declines in both exports and imports were largely expected because of the recession, the deterioration in trade balance was unusual. In the past recessions, U.S. trade deficits shrank as the fall in domestic consumption led imports to drop more than exports. For instance, during the Great Recession, the U.S. trade deficit contracted by almost 45 percent (Figure 1).

The unique nature of the COVID-19 recession, the first global recession solely triggered by a pandemic, was behind this key difference. The efforts to fight the virus increased the demand for imported medical products which helped imports bounce back quickly. Lingering social and economic effects of the pandemic, on the other hand, hindered recovery in key U.S. export categories.

Declining Exports Led the Increase in the U.S. Goods Trade Deficit

The U.S. experienced a record-high goods trade deficit ($905.2 billion) with exports decreasing at more than double the rate of the decline in imports (-12.9 percent vs. -6.4 percent).

A significant share of PPE such as face masks are classified under Textiles.
Figure 2: Sources: U.S. Census Bureau and Bureau of Economic Analysis. Data non-seasonally adjusted on a Census basis. Categories shown are the top 5 increases and decreases.

The sharp drop in exports was led by the largest U.S. export sectors, including aircraft & spacecraft, vehicles, petroleum products, and machinery (Figure 2). These four sectors accounted for 41 percent of total goods exports in 2019 but were responsible for more than 70 percent of the overall export decline in 2020. The pandemic hit these sectors particularly hard as reduced domestic and international travel, uncertainty over consumers’ incomes, and plant closures caused both supply and demand to plunge at the same time.

On the other side of the scale, higher imports of gold and medical products, including pharmaceuticals and personal protective equipment (PPE), partially offset the decreases in other categories such as petroleum products. According to ITA’s analysis, PPE imports increased by more than 240 percent, the bulk of which came from China (72 percent). Similarly, imports of gold soared nearly 260 percent in value as the uncertainty from the pandemic curbed risk-appetite in markets and turned investors to safe haven assets. Switzerland was the largest supplier of gold to the U.S., boosting U.S. goods imports from Switzerland to their highest level on record.

Decreased Travel Exports Led the Drop in the U.S. Services Surplus

Although 2020 saw a record-high deficit in goods, a shrinking surplus in services equally contributed to the increase in the overall trade deficit. U.S. exports and imports of services fell 21.0 percent and 22.1 percent, respectively, in 2020 and the overall surplus in services decreased 18.6 percent to $233.9 billion, the lowest level since 2012. By comparison, the decline in the services surplus at the peak of the Great Recession was only 4.3 percent.

Graphs showing the change in U.S. exports from 2019-2020 across various services.
Figure 3: Sources: U.S. Census Bureau and Bureau of Economic Analysis. Data seasonally adjusted on a Census basis.

Travel and transport services led the decline for both exports and imports of services as each fell more than 50 percent from 2019. Other services categories, however, proved more resilient to the pandemic (Figure 3).

Automotive, Oil and Aircraft Sectors Dominated Declines in Goods Trade with Top Partners

Goods trade with top partners was also shaped by COVID-19’s severe impact on the largest export and import sectors of the United States (Figure 4). Trade with Canada and Mexico fell significantly in both directions, led by declines in automobiles and auto parts and petroleum products. The decline in trade with our two neighbors accounted for nearly 40 percent of the decline in total goods exports and over 50 percent of the drop in total goods imports.

The decrease in exports to the European Union (EU) was largely driven by fewer aircraft sales. Aircraft parts and passenger cars were the categories where imports from the EU fell the most.

Graphs showing changes in goods imports and exports by trade partner. Partners are ranked by 2020 exports/imports from greatest to least.
Figure 4: Sources: U.S. Census Bureau and Bureau of Economic Analysis.

One positive development for American exporters was the increase in soybeans and crude oil shipments to China which led goods exports to that country to grow 17.1 percent.

Imports from China fell 3.6 percent with declines in telecommunication equipment, apparel, and footwear.

In contrast, imports from several South Asian countries such as Vietnam, Malaysia, Singapore, and Taiwan reached their highest levels on record.  Higher demand for electronics, machinery, furniture, and apparel played an important role in increased imports from these countries.

More data on national and subnational trade, including interactive visualizations, can be found at https://www.trade.gov/trade-stats-express.

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Traveling on Your Mind? The U.S. Travel and Tourism Industry is Eager to Welcome You to the United States

March 11, 2021

Isabel Hill serves as the Acting Deputy Assistant Secretary of Travel and Tourism for ITA’s National Travel and Tourism Office 

A hiker takes in the breathtaking view at Horseshoe Bend in Glen Canyon National Recreation Area, Arizona (Source: BrandUSA)

We miss traveling too. Whether you are seeking beaches, mountains, big city towers, or national parks, America offers many exciting destinations for tourists. And let’s face it: Bucket lists have only grown during quarantine. In 2020 we estimate international visitation to the United States declined 76% while the share of global travelers planning a vacation fell to a record low. 

Fortunately, brighter days seem to be ahead for the U.S. travel and tourism industry as COVID-19 vaccination rates are on the rise. Many U.S. destinations have worked for months to implement health and safety measures and are starting to launch marketing and promotion campaigns to attract new and returning visitors after such a hard year.

To help U.S. businesses and communities who rely on tourism plan ahead, the International Trade Administration last week launched the COVID-19 Travel Industry Monitor–a user-friendly web platform that brings key health, economic and travel data all together in one place. The Monitor tracks a number of indicators important for the performance of the travel and tourism sector in the United States in the wake of the pandemic, including: COVID-19 Cases, International Visitation, Travel Indicators, Travel in Trade, Business and Consumer Sentiment, and Key Economic Indicators.   

The data displayed in the Monitor is derived from existing data sources from federal, state and local agencies, as well as private sector entities. The Monitor is updated weekly, though many data sets are dependent on monthly data that takes a few weeks to process. Data on the dashboard today dates from January 2021. 

I would like to thank the U.S. Travel and Tourism Advisory Board and the other industry stakeholders and data partners who provided tremendous input for this Monitor. To access the Monitor, click: https://www.trade.gov/data-visualization/covid-19-travel-industry-monitor 

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STOPfakes Roadshows Deliver Critical Intellectual Property Information to U.S. Businesses

May 5, 2020

By Benjamin Hardman, Senior International Trade Specialist, Office of Standards and Intellectual Property

StopFakes.gov logo roundThe need for U.S. businesses to be vigilant about protecting their intellectual property has never been greater. Many well-known U.S. brands are being knocked off by cheap counterfeits and pirated goods, mainly made in China, and marketed through e-commerce platforms.

The trade secrets of our most innovative companies are increasingly targeted for theft with tradecraft more commonly seen in state-sponsored espionage. The creative genius of American artists, authors, inventors, engineers, and other creators is stolen and sold for pennies on the dollar. America’s comparative advantage, our ingenuity, is under attack, and we must do everything we can to uphold and strengthen American businesses, so they may protect themselves and advance our global competitiveness.

Since 2005, the International Trade Administration’s STOPfakes program has served as an important mechanism in harnessing the IP resources of various U.S. Federal agencies through a singular channel, providing guidance to U.S. businesses and consumers.

The STOPfakes Roadshows are an essential component to our program’s success, delivering critical intellectual property information to the audiences that need it most: start-ups, entrepreneurs, small and medium-sized businesses, independent creators, and inventors.

STOPfakes conducts 8 to 10 roadshows each year in partnership with local U.S. Export Assistance Centers, bringing the program to cities across the country. The information at STOPfakes roadshows is provided by IP experts from multiple government agencies. Their presentations of timely and invaluable information during the one-day seminars allow for the best means of advancing U.S. IP interests.

  • The International Trade Administration identifies mechanisms for obtaining intellectual property protection in export markets;
  • The U.S. Patent and Trademark Office provides information about how to protect patents and trademarks;
  • The U.S. Copyright Office discusses the importance of copyright protection to businesses;
  • The U.S. Customs and Border Protection explains how a registered trademark or copyright can be recorded with Customs to facilitate the seizure of infringing goods at the U.S. border;
  • The Federal Bureau of Investigation or a local Assistant U.S. Attorney discusses how to protect trade secrets and identify internal and external threats;
  • The U.S. Department of State highlights the role diplomacy and our diplomatic missions play in advocating for U.S. businesses overseas; and
  • The Small Business Administration advises on the potential use of grants and loans to help with the costs of obtaining IP protection before exporting.

Stopfakes medley of Intellectual Property images

In addition to the regular roadshow partners listed above, the Minority Business Development Agency, Export-Import Bank, and Patent and Trademark Resource Centers are also frequent participants. Our whole-of-government approach provides many resources to assist U.S. businesses with acquiring and protecting their intellectual property.

In 2018, the STOPfakes team expanded the opportunities available to businesses at the roadshows to include three signature offerings:

  • First, participants can sign up to talk one-on-one with the speakers for 10-minute sessions.
  • Second, participants can apply for copyright registration. U.S. Copyright Office staff will be on site to facilitate the application process required to register a work online. The fee is $55 for most works and takes approximately 20 minutes.
  • Third, participants can apply for copyright and trademark recordation. On-site assistance is made available by U.S. Customs and Border Protection staff. The fee for Trademark recordation is $190 per international class of goods, and the fee for copyrights are $190 per application. The registration process takes approximately 40 minutes.

For more information regarding the STOPfakes programs or to learn more about our resources and upcoming roadshows, please visit: www.STOPfakes.gov.

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ITA Connects Smart City Technology Exporters to Southeast Asia

April 22, 2020

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

By: ITA’s Industry & Analysis Office of Health and Information Technologies

Deputy Chief of Mission at U.S. Embassy Singapore Daniel Bischof (middle), U.S. Department of Commerce staff, presenters, and participants at an ASEAN Smart Cities Third Country Training Program event in Singapore, December 2019.

Deputy Chief of Mission at U.S. Embassy Singapore Daniel Bischof (middle), U.S. Department of Commerce staff, presenters, and participants at an ASEAN Smart Cities Third Country Training Program event in Singapore, December 2019.

Today, nearly 300 million people living in the 10 countries comprising the Association of Southeast Asian Nations (ASEAN) reside in urban areas, and this number is set to increase to more than 500 million by 2050. Like cities in the United States and elsewhere, ASEAN cities are increasingly looking to use digital technologies as part of their smart city efforts to address a wide range of urbanization challenges.

The International Trade Administration (ITA) is spearheading programming that connects U.S. smart city technology providers and experts with ASEAN cities to promote U.S. exports, increase U.S.-ASEAN best practices exchanges, and assist ASEAN cities in their development needs.

ITA’s work is part of the U.S.-ASEAN Smart Cities Partnership announced by Vice President Mike Pence in 2018. This multi-year program is a whole-of-government effort to promote collaboration between the two regions. To date, ITA has organized a variety of events to advocate for trade-enabling policies to connect U.S. technology providers to ASEAN cities.

Best Practices in Smart Cities

In December 2019, the United States and Singapore co-hosted a five-day workshop on Smart Cities in Singapore featuring a range of sessions on smart city planning. Debra Lam, Managing Director for Smart Cities and Inclusive Innovation at the Georgia Institute of Technology, reinforced the idea among the 24 participants that “all cities can be smart because it is a continuous improvement process.” As the former Chief Innovation & Performance Officer for the city of Pittsburgh, she was able to draw on her real-world experience. She encouraged cities to harness the power of emerging technologies rather than prematurely banning them, as blocking new technology can limit opportunities for future growth.

With each participant focused on one priority project that they hoped to develop in their city, ITA and experts from the region led interactive sessions for participants on:

  • planning and tailoring their smart city build-outs;
  • developing strategies to finance and sustainably fund their priority smart city projects;
  • adopting standards and project procurement best practices; and
  • mitigating cybersecurity risk.

Throughout the week, ITA connected ASEAN participants with U.S. industry partners such as Cisco Autodesk, and New York based Xylem to learn about innovative technology solutions to real world problems.

Industry Engagement

This past January, ITA led a delegation of Indonesian municipal officials to DistribuTECH, a leading energy and utilities trade show in San Antonio, Texas. U.S. companies participating and exhibiting at DistribuTECH had an opportunity to meet with key decision makers in Indonesia’s power sector, opening market prospects for technology and solutions critically needed in that nation. During the show, officials from Sumatra and Java discussed best practices with U.S. public and private sector representatives to facilitate development of Indonesia’s smart cities and smart grid infrastructure.

In recent months, ITA has continued extensive industry outreach to raise awareness of Southeast Asian smart city business opportunities and to plan for future programming.

Looking Towards the Future

During the next few years, ITA will continue to organize sector specific smart cities programs at trade shows focused on water, safety and security, transportation, cybersecurity, and waste management, among others. In addition, ITA will lead expert advisor delegations to ASEAN cities to engage with municipal governments on specific challenges they are facing and advocate for U.S. smart cities solutions that address those challenges.

If you are interested in connecting with us on future U.S.-ASEAN Smart Cities programs, please email USASCP@trade.gov.

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Application Process Opens for U.S. Industry Groups Seeking Awards for Projects that Address Barriers to U.S. Exporters

February 11, 2020

By Brad Hess, Director, Market Development Cooperator Program, Office of Industry Engagement

The International Trade Administration (ITA) invites U.S. trade associations, professional societies, standards developing organizations, and other non-profit industry groups to apply for financial and technical assistance for projects that remove trade barriers to U.S. exporters. Applications for the Market Development Cooperator Program (MDCP) awards are due April 27, 2020.

ITA is conducting a series of conference calls to provide further information on how to compete successfully for a 2020 MDCP award. Potential applicants can check the requirements to determine their eligibility to apply for the program.

Pitch Ideas Now to ITA Officials
Prior to the February 27 MDCP notice being published on grants.gov, applicants will have the chance to brainstorm project ideas with ITA officials.

Interested industry groups should contact Jessica.Dulkadir@trade.gov to discuss their ideas. ITA will also include trade professionals in this initial phase that can give potential applicants useful feedback.

2020 Funding Focus is Removing Trade Barriers
Historically, 30-40 percent of MDCP projects have included a strong focus on removing trade barriers. For the 2020 competition, ITA wants all projects it funds to have such a focus.

An MDCP applicant must propose a project that creates or sustains U.S. jobs by increasing or maintaining exports (priority 1 listed below). In addition, a successful applicant must show how its proposed project will address any two of priorities 2-6 below.

  1. Create or sustain U.S. jobs by increasing or maintaining exports.
  2. Address non-tariff barriers to U.S. exports such as discriminatory regulations, local content requirements, onerous standards or conformity assessment procedures, and other measures that may be unreasonably trade restrictive.
  3. Secure strong intellectual property rights protection and combat counterfeiting and piracy.
  4. Counter discriminatory trade policies such as “indigenous innovation” or “localization.”
  5. Participate in the formulation and encourage the adoption of standards that are industry-developed, market-driven, science-based, and internationally recognized.
  6. When appropriate, encourage the development of aligned regulatory requirements that avoid unnecessary costs on businesses.

Examples of Successful Trade Barrier Removal Projects
It takes time to address and remove trade barriers. This is why MDCP projects must last a minimum of three years. Realistically, most projects need even more time to remove trade barriers like discriminatory standards or regulations. The International Association of Plumbing and Mechanical Officials (IAPMO) was able to help Indonesia establish a new plumbing code and implement a conformity assessment regime in just three years.

IAPMO advised Indonesia officials on establishing a national plumbing code then openedPhoto and Caption for MDCP Blog 020920 a lab to certify compliance of products with the new code. Indonesia’s newly adopted national plumbing standard, SNI 8153:2015, requires a lab certification of plumbing products. This allows architects, planners, builders, and building owners the certainty they need to choose the right products for the right applications.

Prior to the MDCP project and the adoption of the plumbing code, low quality plumbing products not up to standard were prevalent throughout the country. The shoddy products made urban living miserable for most residents. Their widespread use also made it hard for high quality U.S.-made products to compete. Now all plumbing products must conform to the same high standards.

A more detailed description of the IAPMO project is available at trade.gov/mdcp on the Addressing Trade Barriers page. Highlights of several other current and past MDCP trade barrier projects are available on this page as well.

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FDI in High-Tech: Innovation and Growth in The United States

February 5, 2020

Kara Mazachek is an Economic Research Analyst at SelectUSA

Following SelectUSA’s participation in the Consumer Electronics Show (CES), it is the optimal time to look at how foreign direct investment (FDI) in high technology, or high-tech, supports innovation and growth in the United States.

What is high-tech?
SelectUSA defines the high-tech sector as an industry that relies on a skilled and educated workforce, acts as an innovative producer in our economy, and creates and utilizes advanced technologies. Perhaps unsurprisingly, the high-tech sector’s share of workers in science, technology, engineering, and mathematics (STEM) occupations is more than twice that of the national average.

This industry is quite large and growing consistently, according to data from the Bureau of Economic Analysis (BEA). In 2018, high-tech companies contributed $8.3 trillion of economic value in the United States, accounting for nearly 23 percent of U.S. gross domestic product (GDP). Additionally, high-tech companies employ approximately 20 million U.S. workers. The U.S. high-tech industry also continues to grow, especially in fields such as the data processing, hosting, and related services sub-industry, which had a compound annual growth rate (CAGR) of 57.9 percent from 2013 to 2018.

How has FDI impacted the U.S. high-tech sector?
FDI supports the high-tech industry in the United States and helps it thrive. Specifically, the inward position of FDI in the U.S. high-tech sector was $2.0 trillion in 2018. That’s 46 percent of total FDI in the United States! It also steadily continues to grow: the five-year CAGR for FDI in the high-tech sector was 10.1 percent between 2013 and 2018. This growth is faster than the comparable all-industry FDI CAGR average of 9.8 percent.

High-Tech FDI in US for the Feb 5 Blog Post

The United States sees tangible results from high-tech FDI. According to BEA, foreign-owned companies in high-tech industries have steadily increased their annual U.S. research and development (R&D) spending over recent years to $48.7 billion in 2017. High-tech FDI also accounted for $169.5 billion of total U.S. goods exports in 2017. Additionally, foreign-owned U.S. affiliates in the high-tech sector directly supported more than 2.1 million U.S. jobs in 2017.

So, what does this mean for the high-tech sector?
All these data points further confirm that high-tech investment are important drivers of growth for the U.S. economy. As FDI into this sector continues to grow, the United States will see advanced innovation, continue to employ millions of highly skilled and educated workers, and further the competitiveness of our high-tech sector. To maintain success in high-tech and all other sectors, SelectUSA will continue to help global business investors and U.S. economic developers to succeed in the U.S. economy.

To learn more about how SelectUSA supports FDI in all industries, sign up for our email updates and visit SelectUSA.gov for resources such as FDI fact sheets, interactive data tools, and informative reports. You can also read our previous report on FDI in high-tech.

About SelectUSA
Housed within the U.S. Department of Commerce’s International Trade Administration, SelectUSA promotes and facilitates business investment in the United States. To learn more about SelectUSA’s services, the U.S. business and investment climate, and how FDI benefits the U.S. economy, visit selectusa.gov and follow @SelectUSA on Twitter.

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Innovative Customs Procedures in Laredo, Texas Accelerate U.S. Exports to Mexico

November 18, 2019

Last month, from October 16-17, industry leaders and officials from the U.S. Department of Commerce’s International Trade Administration (ITA) traveled to Laredo, Texas, one of the premier cities for U.S.-Mexico trade.

With over $100 billion in U.S. exports processed in 2018 alone, customs officials on both sides of the border face increasing demands to perform efficient and effective inspections. The Laredo International Airport has seized upon this growing commercial opportunity by innovating their customs process and establishing a unique bi-national inspection facility in 2013. ITA’s Advisory Committee on Supply Chain Competitiveness (ACSCC) had the privilege of touring and learning more about this facility and its achievements over the past several years.

ACSCC-ITA oustide Laredo Airport Inspection Station 110819

Members of the ACSCC and ITA toured the Laredo airport’s Federal Inspection Station and met with U.S. and Mexican customs officials

 The Federal Inspection Station at the Laredo airport, the first of its kind, houses both U.S. Customs and Border Patrol (CBP) and Mexican customs officials (Servicio de Administración Tributaria, or SAT), who jointly perform inspection checks on U.S. exports within a single facility. With goods examined by both agencies in one location, U.S. exports can have expedited entry into airports in eight Mexican cities, allowing for uninterrupted delivery within Mexico. Cargo cleared at this facility can be immediately released to the importer in Mexico with no pauses at customs in these Mexican airports.

Elizabeth Merritt, Managing Director for Cargo Services at Airlines for America and ACSCC member, highlighted the importance of streamlined customs procedures to U.S. industries and value chains saying, “by leveraging a bilateral customs partnership, the Laredo airport boosts the competitiveness of the North American supply chain while maximizing the limited resources of all stakeholders to ensure trade compliance.”

The joint inspection process helps American companies avoid production delays by reducing the amount of time it takes to receive necessary parts and is especially critical for just-in-time deliveries. “Our largest trading partner in the United States is Mexico, so the ability to quickly clear expedited exports heading to that country is essential,” said Brandon Fried, Executive Director of The Airforwarders Association and member of the ACSCC.

Establishing this customs facility was no easy feat. Its creation required both a passage of a law in Mexico’s Congress of the Union and an amendment to the Mexican Constitution, but it was well worth the effort. Today, the Laredo International Airport features the only bi-national federal inspection station in the United States and is the only airport that has approval by the Mexican government to pre-inspect air cargo bound for delivery in Mexico.

Currently this accelerated customs treatment is available for products in the automotive,aerospace, and electronics industries. Importers, shippers, and other logistics companies can also benefit from round-the-clock service from the customs officials, as Laredo has the only airport on the southern border with U.S. customs open 24 hours a day, seven days a week.

During their visit to the facility, members of the ACSCC, all experts in the policies and logistics surrounding U.S. supply chains, received a presentation on the Federal Inspection Station’s activities and spoke with both U.S. and Mexican customs officials to better understand their joint procedures.

“Witnessing the high level of cooperation and information sharing between the U.S. and Mexican customs authorities at the Laredo Airport Federal Inspection Station was an eye-opening experience, showing how such international joint efforts can streamline the border clearance process,” said Michal Mullen, Executive Director of the Express Association of America and ACSCC member. “The trade community has long desired to have this kind of international ‘single window’ operating on the border, and we hope the process will be expanded to more air and land crossing points in the near future.”

ACSCC member at Mexican and US border official 110819

ACSCC member Brandon Fried with a Mexican customs official and a U.S. CBP agent.

Mr. Fried also expressed hopes for the future activities of this bi-national facility saying, “my organization is pleased to see Mexican customs officials working alongside their CBP counterparts at Laredo International Airport. Their joint presence under the same roof enables easy preclearance on air export shipments destined for several manufacturing centers throughout Mexico. We look forward to the program’s continued success and hope to see similar arrangements at other U.S. airports in the future.”

Looking forward, the officials based at the Federal Inspection Station see room for growth, especially as approval of the U.S.-Mexico-Canada Agreement (USMCA) could lead to a surge in trade between the neighboring countries. CBP and SAT officials expressed their desire to grow awareness of their collaborative program and to expand the list of qualified products for inspection. Experts from the Laredo airport have already been invited to pilot similar programs at other airports in the United States, and customs agents believe the joint facility is prepared to handle greater volumes of U.S. exports in the future. This innovative, bi-national process can serve as a model to other ports and cities seeking to expedite inspections for the benefit of U.S. industry.

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Privacy Shield and GDPR

October 1, 2019

by Alex Greenstein, Privacy Shield Director

In April 2016, the European Union (EU) replaced its 1995 Data Protection Directive with the General Data Protection Regulation (GDPR). As companies in the EU and beyond review their data protection policies to ensure compliance with this law, many are asking how GDPR impacts the three-year-old EU-U.S. Privacy Shield Framework.

Background on GDPR
Effective May 2018, GDPR governs the commercial use of the personal data, requiring companies to follow certain data protection practices.American And European Union Flag Pair On A Desk Over Defocused Background

The regulation applies to all EU-based companies, as well as companies outside the EU that receive EU personal data in offering goods and services or in monitoring EU individuals’ behavior. GDPR also governs the transfer of EU personal data to companies outside the EU.

GDPR has garnered a great deal of attention globally and has incentivized many companies to review and update their privacy and cross border data flow policies. The International Trade Administration at the U.S. Department of Commerce engages regularly with the U.S. business community to promote wider awareness of the GDPR’s new requirements. ITA’s Office of Digital Services Industries (ODSI) has also partnered with the U.S. Commercial Service team at the U.S. Mission to the European Union in outreach efforts.

For additional information about GDPR, click here.

 Relationship with Privacy Shield
Privacy Shield is not a GDPR compliance mechanism, but rather a means that enables participating companies to meet the EU requirements for transferring personal data to third countries, as discussed in Chapter V of the GDPR.

GDPR’s Article 45 explicitly provides for the continuity of prior European Commission (EC) adequacy determinations, like the adequacy decision regarding Privacy Shield adopted by the Commission in July 2016, under the 1995 Data Protection Directive. Accordingly, the EC’s adequacy determination for Privacy Shield remains valid under the GDPR.

Negotiators from both the U. S. Government and the European Commission accounted for the GDPR’s new substantive and procedural requirements as they developed the Privacy Shield Framework in 2016. Privacy Shield’s joint annual review, for example, was designed to satisfy the GDPR requirement for review of European Commission adequacy determinations once every four years. Privacy Shield’s annual review exceeds this requirement.

In addition, the Privacy Shield Framework created the Ombudsperson mechanism, which provides an unprecedented new channel for EU and Swiss individuals to seek an independent review regarding national security access to personal data transferred to the United States. This mechanism applies not only to data transferred pursuant to the Privacy Shield Framework, but also to other EU-approved data transfer mechanisms, such as Standard Contractual Clauses and Binding Corporate Rules, further enabling transatlantic commerce while protecting privacy.

To learn more about the Privacy Shield Frameworks, visit www.privacyshield.gov and check out our two-pager here.

The Privacy Shield Team is part of the Office of Digital Services Industries (ODSI) in the International Trade Administration (ITA) at the U.S. Department of Commerce. ODSI promotes privacy policy frameworks that facilitate the free flow of data across borders, leads policy discussions on privacy with international partners, and addresses trade and commercial issues on evolving information and communications technology (ICT) services. It operates within ITA’s Industry & Analysis business unit, which helps to create the conditions for U.S. industry to innovate and compete globally.

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

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The EU-U.S. and Swiss-U.S. Privacy Shield Frameworks: Why They Matter

September 13, 2019

by James Sullivan, DAS for Services, Industry and Analysis

The EU-U.S. Privacy Shield Framework marked its third anniversary on August 1st. Just this week, on September 12-13, the U.S. Department of Commerce and the European Commission conducted the Third Annual Joint Review of the Privacy Shield program (Review) in Washington, D.C.

In connection with the Review, the International Trade Administration (ITA) is spotlighting the origins of the Privacy Shield and its importance for transatlantic commerce.

What is Privacy Shield?
The EU-U.S. and Swiss-U.S. Privacy Shield Frameworks were designed by the U.S. Government and the European Commission and Swiss Administration, respectively, to provide companies with a mechanism to transfer data from the European Union (EU) or Switzerland to the United States while complying with EU and/or Swiss data protection requirements.

At its core, the Privacy Shield Frameworks establish robust and enforceable protections for the personal data of EU and Swiss individuals as companies transfer the data to the United States. The Frameworks require transparency from participating companies on how they use personal data, as well as strong oversight from the U.S. government, all in collaboration with EU and Swiss data protection authorities.

Companies participating in the Privacy Shield program commit to provide privacy protections determined to be adequate under EU and Swiss laws. While signing up for the Frameworks is voluntary, once a company self-certifies to the U.S. Department of Commerce and publicly declares its adherence to the Privacy Shield Principles, the commitments are enforceable under U.S. law.

With the global economy increasingly dependent on cross-border data flows, the Frameworks are vital for U.S. organizations currently doing business or looking to pursue  business opportunities in Europe.

A Short History, a Major Achievement
In July 2016, the European Commission determined that the EU-U.S. Privacy Shield Framework provides adequate privacy protections for the personal data of EU individuals. Shortly thereafter on August 1, 2016, ITA began accepting and processing self-certification applications. A similar arrangement with Switzerland followed in January 2017. Since that time, ITA has taken a number of steps to further strengthen the implementation of both Frameworks.

Just this month, , the EU-U.S. Privacy Shield and the Swiss-U.S. Privacy Shield reached milestones of having more than 5,000  and more than 3,300 participating companies, respectively. A full list of Privacy Shield participants is available at www.privacyshield.gov/list.

These participating organizations represent a wide variety of industry sectors and sizes, and more than 70 percent of participants are small and medium-sized businesses. All participants transfer data to the United States and have a presence there, with many U.S. subsidiaries of European companies having also joined the Frameworks.

PS Overview Blog Pie Chart 091319

Privacy Shield participants range from small companies (revenue less than $5 million) to large companies (revenue more than $5 billion).
Source: Office of Digital Services Industries (ODSI), Industry & Analysis, ITA.

A Transatlantic Win
U.S., EU, and Swiss companies are key Privacy Shield beneficiaries, as the Frameworks provide a clear mechanism to comply with data protection requirements when transferring personal data from the EU or Switzerland to the United States. By bridging the different regulatory systems in Europe and the United States, transatlantic commerce is preserved and promoted. In addition, compliance requirements are clear and cost-effective, which especially helps small and medium enterprises seeking to do business with Europe.

To join Privacy Shield, a company is required to self-certify with ITA and publicly commit to comply with the Frameworks’ requirements. The decision to participate in Privacy Shield is completely voluntary, but the public commitment is enforceable under U.S. law by the Federal Trade Commission or the U.S. Department of Transportation. The self-certification process is designed to be as clear and efficient as possible, and ITA officials are available to help companies along the way.

Any U.S. company certified under Privacy Shield must provide relevant individuals with information on personal data collected, including why it was collected and how it will be used. Privacy Shield also gives individuals options for limiting the use and disclosure of their personal data.

Finally, under Privacy Shield, EU and Swiss individuals for the first time have a defined channel to raise questions regarding U.S. government intelligence practices pertaining to their data. Privacy Shield also offers multiple avenues for filing complaints and seeking redress, and free independent dispute resolution to address other data protection concerns.

Why Does Privacy Shield Matter?
The economic implications of cross-border data flows are immense. Digital data flows underpin the $7.1 trillion in trade and investment between the United States and Europe.

Furthermore, they allow businesses in all sectors to cooperate across the Atlantic, engage in research and development with their counterparts, connect with global supply chains, and share data with subsidiaries located in different countries.

An increasingly digital economy also enables even the smallest companies to participate in the global marketplace—so long as they can transfer data across national borders to facilitate trade, investment, and innovation.

Moreover, by creating clear, enforceable personal data protection obligations on companies, Privacy Shield enables participating companies to better protect the privacy of their customers, promoting trust. Such trust ensures greater consumer confidence in the use of digital services and helps grow the market, creating jobs and opportunity, while providing valuable services to consumers.

To learn more about Privacy Shield and its importance to a successful transatlantic relationship, go to: https://www.privacyshield.gov.

Businesses interested in joining Privacy Shield can start the self-certification process here: https://www.privacyshield.gov/PrivacyShield/ApplyNow.

The Office of Digital Services Industries (ODSI) in the International Trade Administration (ITA) at the U.S. Department of Commerce promotes privacy policy frameworks that facilitate the free flow of data across borders, leads policy discussions on privacy with international partners, and addresses trade and commercial issues on evolving information and communications technology (ICT) services. It is part of ITA’s Industry & Analysis business unit, which helps to create the conditions for U.S. industry to innovate and compete globally.

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The U.S. is Enhancing Development and Growth Through Energy Opportunities in the Indo-Pacific

July 23, 2019

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

By James Sullivan, Deputy Assistant Secretary and performing the non-exclusive duties of the Assistant Secretary for Industry and Analysis

James Sullivan, Deputy Assistant Secretary and performing the non-exclusive duties of the Assistant Secretary for Industry and Analysis participates on Energy Investment and Infrastructure in Asia panel hosted by the Center for Strategic and International Studies in Washington on July 18.

Last week, I had the privilege of participating in an Energy Investment and Infrastructure in Asia event hosted by the Center for Strategic and International Studies (CSIS) on the one-year anniversary of Asia EDGE. At this event, I joined U.S. government officials, the U.S. private sector, and foreign governments to discuss Asia EDGE and highlight the International Trade Administration’s (ITA) contribution to the U.S. government’s Indo-Pacific energy initiative.

What is Asia EDGE?

Launched in July 2018 as an initiative to support President Trump’s vision for the Indo-Pacific region, Asia EDGE (Enhancing Development and Growth through Energy) is a U.S. whole-of-government effort to grow sustainable and secure energy markets throughout the Indo-Pacific. Asia EDGE seeks to strengthen energy security, increase energy diversification and trade, and expand energy access.

How does ITA support Asia EDGE?

  • Mobilize private sector investment: ITA coordinates interagency advocacy efforts on behalf of U.S. exporters competing against foreign firms for international public sector projects. With 57 active energy sector cases in the Indo-Pacific valued at $191.5 billion that total more than an estimated $171.6 billion in U.S. export content, these efforts seek to support hundreds of thousands of U.S. jobs.
  • Promote U.S. exports: ITA launched a data-driven series of events called “Access Asia” to connect commercial diplomats and policy experts throughout the region with U.S. companies in targeted sectors and cities. To date, the program has conducted events in more than 25 cities across the United States reaching over 1,000 new companies.
  • Remove trade barriers: Througha Federal Register Notice, a private sector roundtable, and ITA-administered federal advisory committees, ITA is actively engaging the U.S. private sector to improve U.S. government understanding of private sector interests and programmatic and policy needs. ITA has incorporated feedback into its commercial diplomacy engagements to promote free, fair, and reciprocal trading relationships.
  • Strengthen standards and best-value procurement practices: Because the development and use of standards is critical for U.S. companies doing business in the region, ITA established a Regional Standards Attaché in Jakarta, Indonesia, to pursue equal market access for U.S. companies in the region.

How can you get involved in ITA Asia EDGE programs?

  • Join an Asia EDGE Energy Industry Working Group (EIWG): ITA’s Asia EDGE EIWG Network is the private sector participation mechanism for U.S. firms to connect to all Asia EDGE activities, inform U.S. government policy, and advance U.S. trade and investment goals.
  • Send us your comments: As outlined in the Federal Register, ITA continues to seek individual comments from industry on government programs. These comments will use used to inform the catalyzation of U.S. private sector participation in commercial energy opportunities in the Indo-Pacific region.
  • Leverage our services: ITA offers companies a full range of services to plan, assess, promote, and expand business in the Indo-Pacific. Companies can find assistance domestically in more than 100 U.S. offices nationwide and in 23 markets across the Indo-Pacific!
  • Find us at an upcoming event: ITA goes where you go! Connect with ITA staff and foreign buyers to expand international sales by meeting with our team at global trade events in the United States and abroad:

Jul 30-31, 2019:          Coal Conference                                 New Delhi, India

Sep 15-18, 2019:         IAEA U.S. Trade Mission                 Vienna, Austria

Sep 17-19, 2019:         Gas Tech                                       Houston, Texas

Sep 23-26, 2019:        Solar Power International                      Salt Lake City, Utah

Oct 9-11, 2019:          LAGCOE 2019                             New Orleans, Louisiana

Oct 28-31, 2019:         Singapore Int’l Energy Week                     Singapore

Nov 4, 2019:               Indo-Pacific Business Forum                   Bangkok, Thailand

Nov 5-7, 2019:            Energy Storage NA                            San Diego, California

Nov 19-21, 2019:        PowerGen 2019                            New Orleans, Louisiana

Jan 28-30, 2020:         DistribuTECH International                      San Antonio, Texas

Mar 16-24, 2020:        Asia EDGE U.S. Trade Mission           Vietnam, Indonesia, Thailand

For more information on ITA’s Asia EDGE programs contact AsiaEDGE@trade.gov.

Learn more today about ITA at www.trade.gov and www.export.gov!