Archive for the ‘Trade Agreements’ Category

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Benefits of Trade Agreements: U.S. Exports

May 12, 2016

From the Office of Trade and Economic Analysis, International Trade Administration

Free Trade Agreements (FTA) are an important tool to our nation’s economic growth and prosperity. As you know, an FTA is an agreement between two or more countries regarding certain obligations and protections in areas such as trade in goods and services, intellectual property, and investment. FTA objectives include the reduction of barriers to U.S. exports, protection of U.S. interests, and enhancement of the rule of law in partner countries. The reduction of trade barriers and the creation of a more stable and transparent trading and investment environment facilitate and reduce the costs of U.S. company exports to partner markets.

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U.S. Export Growth

The U.S. currently has FTAs in force with 20 markets worldwide. In 2015, U.S. merchandise exports to FTA partners totaled $711 billion. This comprised almost half (47%) of total U.S. goods exports in 2015.

The importance of FTAs in promoting trade growth is evident in recent trends. From 2009-2015, goods exports from the U.S. to FTA partners increased at a faster rate (53%) than goods exports to the rest of the world (34%). Further, the share of U.S. goods exports to FTA countries has increased in five out of six years since 2009. Bilateral trade results are positive as well – exports increased for 19 out of 20 FTA partners during the 2009-2015 period. And at the sectoral level, the US had a $13 billion surplus in manufactured goods trade with FTA partners in 2015. Thus, both over time and currently, FTAs have encouraged trade growth, often at levels exceeding results for the rest of the world.

In 2015, the U.S. and its FTA partners contributed 34% of global Gross Domestic product (current U.S. dollars). The remainder presents opportunities for FTA expansion and continued trade growth.

The success we have seen with our current FTA partners bodes well for the success of the Trans-Pacific Partnership. The TPP is a regional FTA that has the potential to transform U.S. trade with the Pacific region, the fastest growing region in the world. In 2015, U.S. merchandise exports to TPP countries totaled $680 billion comprising approximately 45% of U.S. goods exports.

As with current FTA partners, goods export growth (49%) for TPP partners exceeded rest of world results from 2009 to 2015. The largest sectoral increases were transportation equipment ($54 billion increase to a record $537 billion), computer and electronic products ($25 billion increase), and petroleum and coal products ($18 billion increase).

Passing TPP is a priority of the Obama Administration and can benefit our businesses by reducing up to 18,000 tariffs on Made-in-America goods and services. Leveling the playing field for American businesses will make our products and services more affordable to the millions of consumers who desire our quality goods.

The economic forces at work globally make supporting U.S. exporters, particularly smaller companies, more important than ever. FTAs are a key way to support our workers and businesses. The International Trade Administration is committed to providing high-quality export assistance and programs as well as working to level the playing field through trade policies and 21st Century agreements.

To learn more and to take advantage of any of these important trade agreements be reach out to ITA’s professional staff  in offices in more than 100 U.S. cities and 75 international markets . We stand ready to help U.S. companies succeed in the global marketplace.

 

 

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India’s Smart Cities Presents U.S. with a Unique Opportunity

February 22, 2016

 This post originally appeared on the Department of Commerce blog.  Arun M Kumar is the Assistant Secretary for Global Markets and Director General of the U.S. and Foreign Commercial Service.

 

United States-India Flags

United States-India Flags

During his January 2015 visit to New Delhi, President Obama and Prime Minister Modi announced the decision to elevate the U.S.-India Strategic Dialogue to a Strategic and Commercial Dialogue (S&CD). The expanded dialogue was created to reflect our two countries’ shared commitment to strengthen the bilateral commercial and economic partnership.

Given the importance of our relationship with India, it was imperative to better position the United States as one of India’s principal commercial partners by aligning U.S. commercial capabilities with the Government of India’s key priorities. A dedicated track within the S&CD focuses on infrastructure and smart cities. Through this work stream, the Commerce Department is taking a leadership role in partnering with India to develop smart cities and urban infrastructure, including the use of renewable energy and upgraded transportation.

In terms of purchasing power, India is the third largest economy in the world. With approximately 1.28 billion people, which is more than a sixth of the world’s population, India has the second most populous country in the world, and is estimated to add another 500 million people to its urban population over the next 40 years.

India’s government has almost overwhelmingly focused on economic development and, as a result, has proposed a nationwide program to build 100 smart cities. A smart city is a city equipped with basic infrastructure to provide a decent quality of life, and a clean and sustainable environment through the application of some smart solutions. Monitoring water quality, treatment of wastewater, smart meters, renewable sources of energy, efficient green building and intelligent traffic management systems are some of the solutions of a smart city. For India, this means a wide variety of major infrastructure projects across the country will be funded by the central and state governments, as well as private sector capital, over the next few years. India’s infrastructure needs are estimated to be in the $1.5 to $2 trillion range.

To spur smart city activity across India, the Government of India has partnered with Bloomberg Philanthropies to select 100 smart cities that will receive central government funding to be matched by the private sector. In recognition of cutting-edge U.S. technologies, products and services, the Government of India invited U.S. industry, in concert with the U.S. government, to take the lead in developing three Smart Cities in India: Ajmer in the state of Rajasthan; Allahabad in the state of Uttar Pradesh; and Vishakhapatnam (Vizag) in the state of Andhra Pradesh. The Bloomberg Smart City Challenge Competition released the 20 cities that will receive the first funding. Of the three U.S. industry-led smart cities, Vizag is included in the first group of 20.

With the support of the U.S. Trade and Development Agency (USTDA), U.S. companies will be involved in planning and providing technical assistance for each of these cities. Vizag is moving forward with a Master Planning grant issued by USTDA to be implemented by a three company consortium led by AECOM. However, U.S. participation is not limited to these three cities. Commercial Service (CS) India, in partnership with the American Chamber of Commerce and other local commercial chambers, have been staging events across India in cities with additional public and private smart city projects.

All this presents a tremendous opportunity for U.S. companies to assist India’s government to make its 100 smart city and green development goals a reality. In fact, earlier this month, Deputy Secretary of Commerce Bruce Andrews led a delegation of 18 U.S. companies on a Smart Cities Infrastructure Business Development Mission to India. Representatives from the Infrastructure industry joined the mission that was designed to connect them with opportunities in green infrastructure development, while introducing Indian policymakers, businesses and urban planners to the world-class services offered by the mission participants.

During keynote remarks at the third Smart Cities Summit in Mumbai, Deputy Secretary Andrews said that though the presence of the mission delegates underscores America’s commitment to the U.S.-India relationship, the full potential of that relationship will not be realized without solving the lingering challenge of India’s business climate.

“We want to be partners – because India’s success is critical to the future of both the global economy and the world’s fight to address climate change,” said Deputy Secretary Andrews. “Working together, we can help India not only build the foundation for a sustainable, green future – but, in the process, show the world how to create truly 21st century cities.”

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Positive Progress at the 2015 U.S. China JCCT

November 30, 2015

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

Last week I was in Guangzhou, China, participating in the 26th Session of the U.S.-China Joint Commission on Commerce and Trade (JCCT). I was joined at the event by Secretary of Commerce Penny Pritzker, U.S. Trade Representative Ambassador Michael Froman, U.S. Secretary of Agriculture Tom Vilsack, and Deputy U.S. Trade Representative Ambassador Robert Holleyman. The JCCT brings together leaders from the world’s two largest economies to seek agreement on a path forward to expand and improve a two-way commercial relationship that has grown to nearly $600 billion since its inception more than 30 years ago.

JCCT

Under Secretary Stefan Selig co-chairs a roundtable discussion with U.S. and Chinese government officials and business leaders.

It was an intense trip, with negotiating sessions stretching well past midnight, only to ramp up again early the next day. I left South China a little sleep-deprived, but with a strong sense of accomplishment for all the positive outcomes achieved during this critical annual event. Through meetings with our Chinese counterparts, we reached agreement in several areas of importance to U.S. farmers, innovators, manufacturers and workers. We agreed on key outcomes in the areas of intellectual property rights and enforcement, pharmaceuticals and medical devices, competition policy, and technology policy.

In the area of IPR protection and enforcement, new commitments from China will facilitate much needed improvements in a wide range of industries that rely on the ability to protect and enforce their IPR in China. Building on several prior commitments, China also clarified efforts to revise China’s trade secrets system and provide more effective remedies to deter  theft of trade secrets.

We made progress on several areas related to pharmaceuticals and medical devices. We announced concrete outcomes on implementing mutually agreed goals of eliminating drug and medical device application backlogs and improving the time it takes to make these products available to Chinese patients. China also agreed that imported medical devices will be treated the same as domestically produced medical devices. These outcomes on pharmaceuticals and medical devices pave the way for significant increases in U.S. exports in healthcare, a key sector for future growth in China as its population ages and its economy matures.

We also announced advancements in the competition policy arena. The United States and China made meaningful progress in China’s enforcement of its Anti-Monopoly Law (AML). China agreed that it would protect commercial secrets obtained in the process of AML enforcement from unauthorized disclosure and ensure that other agencies do not try to improperly influence that enforcement, for example, in favor of domestic competitors.

Significant strides were made on technology policy as well. China committed to nondiscriminatory and transparent policies for ICT information security, including assurances that Chinese banks are free to purchase ICT products regardless of the country of origin.

I was pleased to participate in several programs this weekend that continued our efforts to “re-imagine” the JCCT that Secretary Pritzker and Ambassador Froman launched in Chicago last year. The reinvigorated forum included a full day of collaborative programing designed to facilitate private sector engagement with officials from the United States and China, as well as to promote the exchange of information on trade opportunities at the state, provincial, and local level.

I had the privilege to co-chair a roundtable discussion on corporate governance and business-government engagement featuring U.S. and Chinese government officials and business leaders from U.S. and Chinese companies at the historic Chen Family Academy. With these 25 business leaders from both countries, we were able to explore conditions and best practices for successful business operations in both our countries. The other collaborative events included a networking event and luncheon recognizing the importance of bilateral cooperation at the local level; a program highlighting mutually beneficial health and healthcare public-private partnerships; and a U.S. and Chinese stakeholder discussion regarding recent progress made toward safer and more reliable food chains.

As Secretary Pritzker noted at the conclusion of this year’s JCCT, “a close and productive U.S.-China commercial relationship, based on responsible partnership, is essential to the growth and stability of the global economy.”

I’m happy to report that we had a successful JCCT, and particularly pleased to note that the International Trade Administration was able to achieve this success through close partnership with other Commerce Department bureaus such as the Bureau of Industry and Security, the U.S. Patent and Trademark Office, and the National Oceanic and Atmospheric Administration.  I look forward to working with my U.S. and Chinese counterparts as we strive to continue our efforts to enhance and expand the U.S.-China commercial relationship.

Building, deepening, and managing commercial relationships does not only define ITA’s work with our Chinese counterparts. This defines the singular importance of our agency as a whole. Between our consistent engagement with the private sector, our collection of trade specialists and industry experts, and the second-to-none global reach of our Commercial Service, ITA leads the efforts to work with and on behalf of U.S. business to promote trade and investment that makes U.S. companies more competitive abroad and encourages investment into the United States. You can expect that we will continue this important work well into the future.

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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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U.S. and Canada Sign Historic Preclearance Agreement

April 16, 2015

Andres Leon is an intern in the International Trade Administration’s Office of North America.

Update: April 20, 2015: This post was updated to provide additional information about “preclearance.”

The United States and Canada have a $1.3 trillion trade and investment relationship. The broad scope of U.S.-Canadian bilateral relations includes extensive economic, cultural, and educational ties with nearly $2 billion in two-way trade in goods and services, and more than 300,000 border crossings each day.

As a result, the United States and Canada signed a historic cross-border agreement on March 16, 2015 that will further benefit travelers and enhance trade in North America. The Agreement on Land, Rail, Marine, and Air Transport Preclearance Between the Government of the United States and the Government of Canada, also known as “Preclearance,” creates the opportunity for requests for new preclearance locations and enables exploration of co-location at small and remote ports of entry. It also enables Canada to request the conversion of immigration pre-inspection sites at cruise, rail, and ferry terminals in British Columbia to full preclearance.

Preclearance customs inspection points have reduced waiting times and congestion at designated points of entry, while also strengthening security along the U.S.-Canada border. The Preclearance agreement also provides a framework to expand Preclearance sites, which will further facilitate trade and tourism in one of the most active economic regions in the world.

The Preclearance signing is yet another milestone for the Beyond the Border initiative that was announced by President Obama and Prime Minister Harper in 2011 in an effort to provide a shared approach to perimeter security and economic competitiveness. To learn more about Preclearance benefits and locations, visit U.S. Customs and Border Protection.