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ITA Releases Smart Cities Guide

July 14, 2016

Vinay Vijay Singh, Senior Advisor, Global Markets, Urbanization & Infrastructure

A successful economy lays the foundation for a successful city, but the city must be able to keep up with an evolving economy to maintain overall success. Global trends show the world is spending far less on infrastructure than is required to contend with the rapid pace of economic development. A Smart Cities movement has risen to address the forces of urbanization around the world.  The International Trade Administration’s (ITA) newly released Smart Cities, Regions & Communities Export Opportunities Guide highlights potential business opportunities for U.S. companies along with insights from other Commerce bureaus.

City

The Smart Cities initiative was created to target federal resources to meet the needs of local communities.

Cities have been the center for commerce since bartering and trade first began. Smart Cities is a development mission aiming to monitor and promote urban sustainability, environmental cleanliness, citizen engagement, governance and critical needs in education and healthcare. The growth of a city places demand on its municipal government to address urban challenges in sectors such as water, energy, transportation and connectivity. Each of these industries represents opportunities to foster business partnerships and bolster prosperity.

The recent $160 million investment in federal research by the White House is aimed to help local communities establish solutions to key problems faced, including traffic congestion, fueling economic growth, managing effects from climate change, fighting crime and improvement of city delivery systems. This initiative is part of the President’s commitment to target federal resources to meet local needs and by providing leadership at a national level, this initiative is just one example of a Smart Cities vision and a huge business opportunity. The ITA continues the Obama Administration’s level of engagement by offering The Smart Cities Guide as another tool for U.S. companies to help make these connections and further expand their global export solutions.

The Smart Cities Guide incorporates Department of Commerce intra-agency smart city initiatives by combining in-depth information for export opportunities into four main categories: Access to Capital, Trade Promotion, Industry Sectors and Internet of Things (IoT). Many bureaus in Commerce are lending their thought leadership to help U.S. cities and businesses find unique solutions to global urbanization issues. ITA’s primary focus in the Guide is to serve as a trade promotion resource for U.S. companies looking to interface with local partners and government officials in markets with export opportunities.

This is the first edition of The Smart Cities Guide and as the U.S. government synthesizes its efforts to continue to elevate U.S. industry leading capabilities in this space, the ITA will look to publish its second edition later this year.  Come join our global teams at Discover Global Markets: Building Smart Cities in Chicago, November 1-3, 2016, to further explore opportunities in the smart city space.  For more information on the U.S. government smart city initiatives or services offered by the ITA, please email the team at smartcities@trade.gov and follow me @SmartCitySingh.

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Jobs Supported by Exports 2014: Product and Industry

July 13, 2016

Chris Rasmussen, a Senior International Economist in the Office of Trade and Economic Analysis, is the Team Lead for Quantitative Analysis and the author of several publications on jobs supported by exports.

The International Trade Administration has released a report detailing the jobs supported by exports by specific product and also within individual industries. This report joins earlier work estimating total U.S. jobs supported by exports, jobs supported by state goods exports, and jobs supported by exports by destination.

When thinking about the relationship between exports and jobs the natural tendency is to focus on the workers employed in the industry that produces the final product that is exported.  For example, a statistic for U.S. exports of chemical products may conjure up images of workers employed in chemical plants wearing hardhats and other protective gear.

However, products are not produced in isolation from beginning to end in a single industry, with the production of any product generally requiring the use of inputs from other industries.   As a result of these interrelationships between industries in the production process, the export of a product will impact employment in multiple industries in addition to the industry that produced the export.

In the chemical products example, the production and export of those products will not only affect employment in the chemical industry but also employment in industries such as petroleum and coal products, transportation and other services whose products are used by the chemical industry.

By the same token, production and employment in the chemical industry will be impacted not only by the export of chemical products but also by the export of agricultural products and products made of plastic and rubber that use products from the chemical industry as inputs in their production.

This report uses data capturing these interrelationships to look at the impact of exports on employment throughout the supply chain.  This report finds that as a group, manufacturing industries have the highest share, 26 percent, of their employment supported by exports. The report further finds that although 59 percent of all export-supported jobs are supported by the export of goods, 68 percent of all export-supported jobs are jobs located within service industries.  In fact, the report indicates that for every job within manufacturing industries supported by the export of manufactured products there is there is also a job supported in service industries by the export of those manufactured products.

To read the entire report and other jobs-supported by exports materials, visit the OTEA website: http://www.trade.gov/mas/ian/employment.

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Business Investment that Counts: Congratulations to Sofidel and Circleville, Ohio on New Groundbreaking

July 12, 2016

By Vinai Thummalapally, Executive Director, SelectUSA

Yesterday, I was honored to participate in the groundbreaking ceremony for Italy-based Sofidel Group’s first greenfield investment in the United States – a 1.4 million square-foot integrated paper manufacturing facility in Circleville, Ohio expected to create more than 300 jobs. With a speaker lineup featuring Ohio Lieutenant Governor Mary Taylor, Sofidel CEO Luigi Lazzareschi, Columbus2020 CEO Kenny McDonald, P3 Executive Director Ryan Scribner, and JobsOhio Senior Advisor David Mustine – the event clearly demonstrated the depth of community support and engagement for this project.

Groundbreaking

L to R: Tony Curtis, CEO Sofidel America, Simone Capuano, Sofidel Ohio project manager, Luigi Lazzareschi, CEO, Sofidel Group, Vinai Thummalapally, Executive Director, SelectUSA

My role was twofold – first, to welcome Sofidel on behalf of the U.S. government, and second, to congratulate the local community and recognize the vital, collaborative efforts of the state, regional, and local economic developers that helped transform this manufacturing opportunity from a vision to a reality. My observations following the event are below.

Sofidel’s $259 million commitment to Circleville – the largest private sector investment in the community in decades – was recently highlighted by President Barack Obama at the 2016 SelectUSA Investment Summit. It was a particularly meaningful occasion to recognize Sofidel – a world leading manufacturer of paper for hygienic and domestic use – because the Summit is where it all began.

Each SelectUSA Investment Summit is a unique opportunity for investors and those seeking investment to connect and explore the diversity of opportunities across the United States under one roof. Following meetings at the 2015 Summit, Sofidel welcomed Columbus2020, JobsOhio, and the Pickaway Progress Partnership to their facility in Italy. Shortly thereafter, the company’s planned Circleville facility was officially announced in November 2015, which culminated in yesterday’s groundbreaking ceremony. This investment milestone would not have been possible without the support and close collaboration of these dedicated regional and local economic development teams and the state government – and it is truly remarkable how it all came together.

In his remarks, the president emphasized that this project represents exactly the type of investment that the United States welcomes to our shores. The United States is consistently ranked among the best internationally for its overall competitiveness and ease of doing business – and today, Italian companies directly employ nearly 125,000 people across the country.

For companies like Sofidel, which has been making tremendous headway since entering the market in 2012, the United States offers a competitive platform for manufacturing and exports; a transparent, fair, and stable business environment; and one of the world’s most productive workforces.

At the same time, foreign direct investment in the United States creates high-paying jobs, spurs innovation, and drives exports – connecting American communities with global networks. This has a significant real-world impact on Circleville, and communities like it all across the country.

Win-win outcomes like these are why SelectUSA was created in 2011 to help companies considering establishing or expanding operations in the United States. We are proud to have played a role in bringing Sofidel together with these high caliber partners, and look forwarding to continuing to work with all parties towards the next key milestone of this project.

Congratulations and best wishes on the dawn of an exciting new chapter for Circleville and for Sofidel.

To learn how SelectUSA can help your community to attract international investment or assist your company to establish or expand in the United States, visit http://www.SelectUSA.gov.

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New Opportunities with TPP – Increasing U.S. Exports to Singapore

July 12, 2016

Margaret Hanson-Muse is the Regional Senior Commercial Officer for ASEAN at the U.S. Embassy in Singapore. Amy Vickery is an International Trade Specialist covering Singapore for the U.S. Department of Commerce in Washington, D.C.

Singapore is a reliable trading partner, strategic ally, and friend to the United States.

Consistently ranked the easiest place in the world to do business and among the best on indices of competitiveness and perceptions of corruption, Singapore offers a hospitable business climate for American companies exporting, investing and operating abroad. As a shipping and logistics hub and first-world financial center, Singapore is an ideal entry point to the ten ASEAN countries, and even to India and China. As such, over 3,600 U.S. companies have already established a presence in Singapore, with many designating Singapore as their regional and sometimes even second global headquarters. Mirroring U.S. industry’s enthusiasm for operating in Singapore, the U.S. Department of Commerce established its regional commercial office for ASEAN at the U.S. Embassy in Singapore in 2012.
Underpinning our strong bilateral commercial relationship is the U.S.-Singapore Free Trade Agreement (FTA), in force since 2004. The U.S.-Singapore FTA was the United States’ first FTA in Asia and has contributed to a 48 percent increase in U.S. exports to Singapore since implementation. In 2015, Singapore was our 13th largest goods export market and 17th overall largest trading partner. Singapore’s foreign direct investment into the United States reached nearly $20 million last year. Goods exports to Singapore totaled $28.7 billion in 2015, yielding a trade surplus of $10.4 billion—the sixth largest trade surplus for the United States. This goods surplus demonstrates that FTAs work and that U.S. economic well-being is inextricably linked to the Asia market.
Successful implementation of the Trans-Pacific Partnership (TPP) Agreement will be the next chapter in our strong bilateral commercial relationship with Singapore. The TPP, which involves 12 countries, including the United States and Singapore, will help U.S. exporters once it is approved and implemented. As Singapore already has an open economy and existing FTAs with the United States and all other TPP parties except Canada and Mexico, the bulk of economic gains for U.S. firms vis-à-vis Singapore will not come through direct tariff reductions. In fact, Singapore currently maintains the lowest tariff levels of the TPP parties, with an average Most Favored Nation (MFN) applied tariff rate of 0.2 percent. Instead, benefits to U.S. companies will come from the TPP’s improvements on the core obligations in existing FTAs and World Trade Organization agreements, reductions in non-tariff barriers that impede trade, and strategic gains as Singapore’s regional hub status is further solidified through simultaneous regional integration efforts.
Let’s explore a few examples of new benefits under the TPP:
The TPP’s expanded “rules of origin” will help both the United States and Singapore, and are an improvement over the U.S.-Singapore FTA. Under the TPP, these rules, which determine whether or not a good qualifies for preferential tariffs, will now allow for “regional cumulation.” This should allow U.S. and Singaporean exporters to get duty-free treatment on a greater range of goods than they can currently under the U.S.-Singapore FTA.
Professional services are an example of an industry sector that will gain from the TPP. In 2014, Singapore’s imports of services accounted for 13.4 percent of its total trade, a larger proportion than any other TPP country. The TPP represents liberalization over the U.S.-Singapore FTA for several professional services, including architectural, engineering, and auditing services. For Singapore, the TPP contains fewer scheduled exceptions for these services than the bilateral FTA does. This should enable greater exports of U.S. architectural, engineering, and auditing services to Singapore.
For more information on new U.S. export opportunities in Singapore under the TPP please see our Singapore TPP factsheet. Additionally, to find out more about best prospect sectors in Singapore, please see our Country Commercial Guide and Top Market Reports. We invite U.S. exporters interested in exploring the Singapore market to contact us.

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Global Trends Put U.S. Building Product Exports on Solid Footing

July 11, 2016

Joanne Littlefair is a Senior International Trade Specialist at the International Trade Administration

Increasing urbanization worldwide is a megatrend driving global export opportunity for U.S. building product manufacturers, according to a new report, 2016 Top Markets Building Products and Sustainable Construction, from the International Trade Administration (ITA).  With more than half the world population now living in urban areas and more would-be residents flooding into cities daily, cities are challenged to create built environments in which increasingly dense populations can thrive.

This megatrend fuels ITA’s projection that in 2018 some $39.4 billion in global export opportunities will await U.S. exporters of seven categories of building products.  U.S. manufacturers of heating, ventilation, air conditioning and refrigeration (HVACR) products, lighting, plumbing products, wood products, insulation, windows and doors and glass for construction are globally competitive and well positioned to respond to six key trends driven by the urbanization megatrend.

The ITA Top Markets study ranks 75 international markets in terms of 2018 sector export prospects, supported by 10 country case studies.  The study elaborates six focal areas capturing policy and commercial attention as global markets seek increased building performance.

  1. Resilience

In the face of natural and man-made risks, the ability to circumvent, withstand, and recover from impacts is essential to economic and social vitality.  Resilience is a concept receiving considerable attention from governments, investors, international organizations and private sector construction stakeholders.  Buildings have a clear role to play in this sphere.

  1. Energy efficiency

Fully one third of world energy use is estimated to occur inside buildings, so improving building energy efficiency can have huge impacts on energy demand and greenhouse gas emissions.  Improving energy efficiency can be expected to be a continuing core focus throughout buildings.

  1. Water efficiency

Water shortages and drought conditions experienced around the globe underscore the importance of buildings in achieving more sustainable environments.  Estimated to account for 20 percent of global water use, buildings have much to contribute to increasing water efficiency.  The nexus of water efficiency and energy efficiency also is increasingly recognized.

  1. Net-zero energy buildings (NZEB)

The NZEB concept has captured considerable attention globally.  Government policies and private initiatives can be seen being geared to designing, building and operating structures in which the total amount of energy used by the building on an annual basis is roughly equal to the amount of renewable energy generated on site.

  1. Healthy buildings

Notably among institutional and commercial buildings, and increasingly across all building types, there is a focus on increasing building value through a healthy building approach.  This emphasizes indoor air quality, use of low-toxicity materials, occupant thermal comfort and access to natural light, among other factors.

  1. Smart buildings

A smart building is generally understood as one reflecting a holistic approach to a building’s design, construction and operation to maximize efficiencies, occupant comfort and other functional priorities. The building is a system of systems that communicate within the building and externally to optimize performance.  Smart buildings create immediate opportunity for design services and information and communication technologies. They also create demand for high-quality building products with inherent efficiency and interoperable functionality compatible with smart building design.

For additional information on these export opportunity drivers, and how they manifest across the 10 case study markets, download the full report, 2016 Top Markets Building Products and Sustainable Construction.

ITA trade specialists around the globe stand ready to assist U.S. entities with their international market development objectives.  U.S. building products are globally competitive and opportunity exists for companies of all sizes.

 

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The United States-Colombia Trade Promotion Agreement – Four Years Later

July 6, 2016

Fernando Gracia is an Intern in the Office of the Western Hemisphere at the International Trade Administration

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

Four years ago, the United States Colombia free trade agreement went into effect, representing a commitment to trade and prosperity between our two countries.  Today, we look back at the four years since the United States-Colombia Trade Promotion Agreement (CTPA) entered into force and analyze what it has meant for trade between our two countries.

The overall trend for U.S. exports to Colombia has been positive since the CTPA was implemented in 2012.

  • In 2011, the year before the CTPA came into force, goods exports to Colombia had a value of $14.3 billion. In 2014, goods exports reached a high of $20.1 billion.
  • In 2015, U.S. goods exports to Colombia fell to $16.3 billion, primarily due to the drop in the price of oil and related fuel products. Nevertheless, even with this drop, U.S. goods exports to Colombia have seen a growth rate of 14% ($2.0 billion) over the past four years, compared to 1.4% growth for U.S. exports worldwide.
  • Today, Colombia is the U.S.’s 20th largest goods export partner and the 3rd largest in Latin America behind Mexico and Brazil. Explore U.S.-Colombia trade data here.

The CTPA’s key components that allowed for this growth include the protection and enforcement of intellectual property rights, equal access for services exports, equal access to covered government procurement opportunities, and the elimination of tariffs.  When the CTPA took effect in 2012, over 80 percent of U.S. exports of consumer and industrial products to Colombia immediately became duty-free; the remaining tariffs are being phased out over a period of ten years.  Recently, on January 1, 2016, more than 500 additional tariff lines became duty free for the first time.  This included products like pork products, perfumes, printing ink, soap, paper products, caps and lids, and exercise equipment, among others.  (For the latest tariff information on specific goods, check out the FTA Tariff Tool)

At the industry level, various sectors have benefitted from the CTPA. Manufacturing and agricultural exports have experienced major gains:

  • Manufacturing exports grew from $13.2 billion to $14.5 billion, an increase of 9.8%.
  • Agriculture and livestock exports doubled from $648 million to $1.3 billion.

Before the CTPA was implemented, U.S. exporters had seen their share of the Colombian market decline year after year.

  • In 2009, U.S. exports to Colombia made up 29% of Colombian imports, and by 2012 the U.S. share had dropped to a low of 24%.
  • Since the implementation of the CTPA in May 2012, U.S. market share in Colombia has rebounded, reaching 29% in 2015 (Figure 1).

Figure 1: U.S. Exports Market Share in Colombia

Graph showing U.S. Exports Market Share in Colombia from 2009 through 2015. In 2009, it was 29%, in 2010 it was 26%, in 2011 it was 25% and in 2012 before the Free Trade Agreement went into effect it was 24%. In 2013 it was 28%, in 2014 it was 28% and in 2015 it was 29%.

U.S. market share increased from 24% to 29% since the CTPA was implemented. Data Source: Global Trade Atlas.

At the same time, while the overall value of U.S. goods imports from Colombia  decreased by 39% from 2011 to 2015, trade has become increasingly diverse. The falling price of oil is the primary factor behind the diminishing value of U.S. imports from Colombia. The value of mineral fuel imports from Colombia dropped from $16.8 billion in 2011 to $8.1 billion in 2015 (52%), though the quantity of exports remained more steady (oil imports dropped from 160 million barrels to 149 million barrels, or just 7%, during that time).  Other sectors performed better:

  • Imports of live plants, especially cut flowers, from Colombia increased from $578 million in 2011 to $624 million in 2015, an increase of 8%.
  • Non-knit apparel imports increased from $117 million in 2011 to $137 million in 2015, an increase of 17%.
  • Aluminum product imports also increased significantly from $41 million in 2011 to $123 million in 2015, an increase of 199%.

In addition, the CTPA increased both the number of companies exporting to the United States and the diversity of the products being shipped.

  • According to ProColombia 2,059 Colombian companies and 104 new products entered the U.S. for the first time since the CTPA took effect in 2012, strengthening and diversifying the trade relationship.
  • 97% of these companies are from industry sectors other than mining and energy, two of Colombia’s major export industries. ProColombia put together a list of 10 Colombian companies from diverse industries that have benefitted from the CTPA.

The CTPA’s primary objective and accomplishment has been to provide a platform for both Colombian and U.S. companies to succeed. As the Colombian government approaches a peace agreement with the Revolutionary Armed Forces of Colombia (FARC), we can expect the U.S.-Colombia relationship, including our trade relationship, to only grow stronger.

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Mexico and the United States Expand Relationship Through TPP

July 5, 2016

Leslie Wilson is the Mexico Desk Officer at the International Trade Administration

The United States and Mexico share a deep, longstanding relationship that goes far beyond diplomatic relations to include extensive commercial, cultural, and educational ties, with over $1.6 billion in two-way trade of goods and services and roughly one million legal border crossings each day.  Mexico is our second largest export market and third largest source of imports, with annual two-way trade of $580 billion, reflecting the highly integrated nature of our bilateral value chains.

Shipping containers

US companies will be able to do business in Mexico hassle-free, thanks to TPP.

These deep commercial ties not only make Mexico a favorable market for businesses to expand their operations, but they also make it an ideal first market for new exporters.  Mexico is a high-performing, diversified economy with strong macroeconomic fundamentals.  It provides significant opportunities for U.S. exporters in key sectors such as chemicals, automotive products, metals and ores, machinery, and information and communication technologies. In fact, more than 18,000 U.S. companies have operations in Mexico and more than 57,000 U.S. companies exported goods to Mexico in 2013. These goods exports supported over 952,000 U.S. jobs, and services exports supported an additional 192,777 U.S. jobs. In addition to these market opportunities, initiatives between our governments such as the U.S.-Mexico High Level Economic Dialogue promote mutual economic growth, job creation, and competitiveness.

Our commercial ties have been strengthened by new and existing trade agreements that allow companies to expand and compete in Mexico. The entry into force of the North American Free Trade Agreement (NAFTA) in 1994 created open markets, low tariffs, strong protections for intellectual property, low energy costs, a skilled work force, and integrated supply chains that resulted in U.S. exports of over $240 billion to Mexico in 2014. In fact, a full 40 percent of the content of Mexican exports is comprised of U.S. inputs. That means that of all the products that Americans buy that are manufactured in Mexico, an average of 40 percent of those products’ value-added components are made here in the United States.

The Trans-Pacific Partnership (TPP) represents a further step forward in strengthening our corridor and advancing our regional competitiveness, as the TPP will allow U.S. companies greater market access to 300 million consumers and the fastest growing region in the world in the Asia-Pacific. TPP will enable the strengthening of our global supply chains by providing U.S. exporters with preferential access to our 11 TPP partners and incentivizing stakeholders in North America to engage in greater and deeper integration. The TPP will go beyond NAFTA by adopting higher standards and stronger provisions in areas like e-commerce, anti-corruption, state-owned enterprises, intellectual property rights, small and medium-sized enterprises, environment, and labor.  It will also further expand business opportunities in key sectors such as energy, telecommunications, electronic commerce, financial services, and agribusiness.

Mexico’s sweeping reforms in energy, telecommunications, finance, and labor practices make it an increasingly attractive market for U.S. businesses to become more competitive, and the TPP will further complement these reforms. For further information on the export opportunities to Mexico under the TPP please see our Mexico TPP report. The U.S. Commercial Service team in Mexico stands ready to support your company with offices in Mexico City, Guadalajara, and Monterrey.  We look forward to hearing from you!

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