Posts Tagged ‘TPP’

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TPP: Fostering a Level Playing Field for the American Services Sector

March 10, 2016

Stefan Selig is the Under Secretary for the International Trade Administration

This week, I had the opportunity to speak before the Washington International Trade Association (WITA) at their event “What Will TPP Mean for Services Trade?” So I used this opportunity to go even further.

First, I explained what our services exports have meant for the American economy as a whole. The U.S. is currently the leading exporter of services in the world. But more importantly, over the past 20 to 25 years, as the global marketplace for services developed, we have experienced the job and export growth that came with maintaining and deepening that leadership. Between 1999 and 2014, U.S. jobs supported by services exports increased by 36%, and services accounted for 70% of the total increase in jobs supported by exports during this period. Today, more than 4.5 million jobs are supported by services exports, and last year we exported more than $710 billion in services. Overall, our services sector produces surpluses year after year after year.

Selig

Selig speaks with WITA about TPP and U.S. service exports.

I also explained what TPP means for American leadership. As I have said over the course of my time as Under Secretary, trade is not a threat to American leadership, it is an expression of it. TPP will allow us to expand our commercial leadership by opening market access for our goods and services in the part of the world where the majority of global middle class will be located within the next 15 years. It will allow us to expand our strategic leadership by advancing rules of global commerce that reflect our core values, embodied in the strongest labor, environmental, and intellectual property protections of any trade agreement in history. And, TPP will allow us to grow our strategic and diplomatic leadership, because it will enable our nation to deepen our relationships with countries in the Asia-Pacific, the area that is becoming both the political and economic center of gravity in the world.

Of course, I also answered the topic question of the event. For our services exporters, TPP is nothing short of a generational opportunity. TPP is a generational opportunity compared to earlier agreements, particularly the General Agreement on Trade in Services (GATS). Because TPP utilizes a negative list approach, as opposed to GATS with its positive list approach, U.S. services exporters will enjoy a superior breadth of coverage and superior quality of commitments for market access. And TPP contains several advancements relative to GATS and our other free trade agreements, which will better combat “behind-the-border” regulations that impede our services exporters. TPP is also a generational opportunity in that it is the first major trade agreement of the digital economy era. TPP positions our digital services exporters to gain market access in such sectors as network management, internet search, data analytics, and cloud computing among others. And TPP is a generational opportunity for our services exporters to access a $600 billion services market among our partner countries. That market will only grow as nearly half of global economic growth will be in the Asia-Pacific in the next 20 years.

Our services sector has been a backbone of our economy, supporting good-high paying jobs. In order to ensure this will continue, we need to do everything we can to make sure TPP becomes a reality during this administration.  That includes the organization I lead, the International Trade Administration (ITA), which supported the negotiations to close TPP, and which is working with members of Congress to secure its passage.

ITA is committed to creating opportunities for U.S. workers and businesses by promoting international trade and business investment, and by fostering a level playing field for American businesses. With offices in more than 100 U.S. cities and 75 international markets— including 170 Commercial Service officers in all 11 TPP markets—we are available to help U.S. companies succeed in the global marketplace.

 

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U.S. Information and Communication Technology Exports: TPP Helps Connect the World to American-Made Digital Products

March 8, 2016

Sergio Delgado is the International Trade Specialist in the Office of Health & Information Technologies

One of the larger trade categories, Information and Communication Technology (ICT) Goods includes optical fibers, audio-video equipment, television reception apparatus, coaxial cable, and batteries, in addition to those items covered by the World Trade Organization’s Information Technology Agreement, whose coverage was recently expanded to include over 200 new product categories. These items range from machines that bring the Internet into our homes; entertainment to our televisions, radios, and mobile devices; processing power to cash registers and point of sale systems; all the way to the crucial technologies needed to help teach children across the world.

Technology

Technology plays a critical role in both economic growth and job creation in the United States.

The use of digital products has increased at a rapid rate within the last decade. Essentially, these are the every-day items that connect us to each other, across America and around the world. The TPP creates a huge opportunity to increase the export of American-made ICT goods, and the digital services they enable, to our partners overseas.

In 2014, $9.7 billion in U.S. ICT goods were exported to new TPP countries, where they faced tariffs up to 35 percent, putting made in America goods at a disadvantage in comparison to other countries. U.S. exporters also face border delays and customs inefficiencies that increase costs and impede the flow of U.S. exports throughout the region.

A few months ago, leaders from across the Asia Pacific completed negotiations for the Trans-Pacific Partnership (TPP) to combat these trade barriers.  This historic agreement not only benefits American businesses, but also facilitates access to reliable, well-made American products for consumers throughout the region – improving the lives of our neighbors abroad.

This agreement is crucial to American businesses and workers. In 2014, twenty states across the country exported more than $700 million in ICT goods to TPP markets alone. That same year, the sector employed more than 700,000 American workers.

President Obama recognizes that technology plays a critical role in both economic growth and job creation in the United States. In 2011, speaking at the National Innovation and Growth Conference the President stated “We have to do everything we can to encourage the entrepreneurial spirit, wherever we find it. We should be helping American companies compete and sell their products all over the world. We should be making it easier and faster to turn new ideas into new jobs and new businesses. And we should knock down any barriers that stand in the way. Because if we’re going to create jobs now and in the future, we’re going to have to out-build and out-educate and out-innovate every other country on Earth.”

Once enacted, TPP will reduce the cost of exporting, increase the competitiveness of U.S. goods, and promote fairness and transparency in trade among the participating countries. The TPP provisions that promote trade in digital products (e.g., software, music, video, e-books) as well as e-commerce generally also benefit the ICT goods industry, which makes the equipment that enables global trade via the Internet.

To learn more about how this historic agreement benefits U.S. workers and businesses visit us on the web or contact one of our local offices.

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Latin America –Opportunities for U.S. Automotive Aftermarket Exports

February 25, 2016

Kellie Holloway is a Senior International Trade Specialist and Deputy Team Leader of the U.S. Commercial Service’s Global Automotive Team

 Todd Peterson is an International Trade Specialist in the Office of Transportation and Machinery and Team Lead for the Auto Care Association’s Market Development Cooperator Program (MDCP)

The U.S. auto parts sector continues to be one of the largest contributors to total U.S. exports.  In 2015, the U.S. exported nearly $81 billion in auto parts worldwide. One of the promising, but overlooked regions for U.S. automotive aftermarket parts exports is Latin America, particularly Peru, Guatemala and El Salvador. Demand for aftermarket auto parts and repair services in these three markets is increased due to aging vehicles (averaging 15.5 years for private and 22.5 years for commercial vehicles).  In addition, there is a high level of used-car sales and deteriorating road conditions.  US market share for auto parts in Guatemala is 31 percent, in El Salvador it is 26 percent, and US companies have a 19 percent share of the Peruvian market.  Also worth noting: U.S. auto parts exports over the last five years grew 87 percent in Peru; 19 percent in Guatemala, and 50 percent in El Salvador.

Auto parts

Auto parts

In addition, these three countries are Free Trade Agreement (FTA) partners with the United States, which increases U.S. market access by breaking down potential market entry barriers. FTA partnership, product quality, available warranties and geographic proximity, all contribute to the United States having a competitive advantage when entering Latin American markets.

Some of the specific products/services in demand include:

  • Motor parts: compressors, radiators, batteries, accumulators, green filters, motor oil, and lubricants;
  • Body and crash parts;
  • Accessories: sound systems, spoilers, bumpers, cleaning products;
  • Safety Products: alarms, GPS systems;
  • Brake systems, suspension and components;
  • Driving simulators; and
  • Tools and diagnostic equipment.

Recognizing the opportunities for automotive aftermarket suppliers in Latin America, the International Trade Administration (ITA) awarded the Auto Care Association a three-year matching award of just under $300,000 to support activities designed to help boost exports to that region. Upcoming events utilizing this Market Development Cooperator Program (MDCP) project are two automotive trade missions to Latin America.  The first mission is destined for Peru (May 17-19, 2016), followed by a mission to Guatemala with an optional stop in El Salvador (June 21-24, 2016). Future missions are planned to Chile, Colombia, Costa Rica, and Honduras.

“The MDCP award creates important partnerships that assists U.S. firms in selling more of their goods and services to the 95 percent of consumers living outside our borders,” said Assistant Secretary of Commerce for Industry & Analysis Marcus Jadotte. “We are excited to help the U.S. auto care industry increase exports in Latin American and expand economic opportunity in such an important sector of the U.S. economy.”

The Automotive Trade Missions to Peru, Guatemala and El Salvador are designed to inform participants of the local market and provide access to key industry contacts. The number of mission participants is intentionally limited to ensure customized and well-targeted matchmaking scheduling. In addition, U.S. Embassy staff will provide country commercial briefings on the legalities and nuances of doing business in those markets, with the schedule rounded out to include industry-specific networking receptions and site visits. The Auto Care Association’s upcoming missions are an extremely cost-effective way to expand your business prospects in Latin America. The package includes personalized business-to-business matchmaking meetings with foreign industry executives, hotel accommodations and local transportation, networking receptions, interpreters, and country briefings.

A past trade mission participant relayed the value that joining a supported mission provided. “We’ve boosted sales by 70 percent in Latin America and could not have done it as fast without the U.S. Commercial Service,” said Ross Tamimi, Vice President, Warco Products. The contacts that Ross made while on the mission helped the firm understand local commercial dynamics and regulatory policies, and successfully identify local distributors.

Harness your share of these growing Latin American economies and expand your export strategies through both Automotive Trade Mission opportunities!

For more information on auto parts exports, please see ITA’s Top Markets Report for Automotive Parts.

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Personal Care and Cosmetics: TPP Opens Expanding Markets to Industry

February 25, 2016

Tracy Gerstle is an International Trade Specialist in ITA’s Office of Materials Industries.

Second only to the European Union in terms of total global exports, the United States personal care and cosmetics industry holds nearly 20 percent of the world market (2014). In 2014, the sector contributed $10.22 billion in exports to U.S. GDP, with a 5 percent rate of average annual growth since 2009. The personal care and cosmetics sector comprises a broad mix of companies from household names including Procter and Gamble, Avon and Estee Lauder, to a large number of nimble and small enterprises, often characterized by women and minority owners. In addition, the industry makes important contributions to the U.S. economy on other fronts, employing 48,513 people in 2013 with an average wage of $45/hour. The industry is characterized by high levels of investment in innovation and marketing, with U.S. companies maintaining competitiveness through the constant introduction of new products and marketing campaigns.

Woman shopping

American-made personal care and cosmetics

Once implemented, the Trans-Pacific Partnership (TPP) will pave new in-roads for U.S. personal care and cosmetics companies in some of the largest and highest potential markets for the industry. Comprising 48 percent of U.S. global personal care and cosmetics exports, the TPP countries offer the industry 800 million consumers. This base includes consumers in well-established markets for U.S. products such as Mexico and Japan, which together accounted for more than $1 billion in U.S. exports in 2014. Also important, the TPP countries will provide unprecedented access to some of the highest potential future markets—including the growing middle class in countries spanning from Vietnam to Malaysia. These consumers aspire to the quality and sophistication for which U.S. products are known, and they are increasingly willing to move beyond basic products such as shampoo and soaps to skin care and premium products. Under the TPP agreement, U.S. products will become more competitive in new TPP markets where the United States does not have an existing free trade agreement and will result in an estimated duty savings of $11.1 million on U.S. exports to Japan, Malaysia, Vietnam, Brunei, and New Zealand. For example, in Vietnam tariffs on U.S. products from makeup to skin care to shaving cream range as high as 30 percent, all of which will be duty free within four years.

TPP is a milestone for the U.S. personal care and cosmetics industry, as the first regional trade agreement in which the United States participates that includes an annex specific to this sector. The Cosmetics Annex to the TPP’s chapter on Technical Barriers to Trade promotes international best practices in cosmetics regulation, with all of the TPP signatories committing to processes that are timely, objective, and transparent. Under the agreement, TPP countries agree to consider transitioning any product registration requirements for cosmetics to notification systems and post-market surveillance. Further, TPP countries agree to recognize all relevant international standards, guidance and recommendations, including when preparing or adopting guidelines on Good Manufacturing Practice, which is one of the greatest trade impediments for the sector in terms of countries’ customs requirements. In addition, the industry will receive considerable benefits regarding time and cost-savings with the elimination of costly documentation requirements such as certificates of free sale across the TPP countries. In some TPP countries, such as Chile, these requirements currently cost companies hundreds of dollars per product to prepare and submit for processing, in addition to several weeks for preparation, submission and approval. Also, relabeling will be allowed across the TPP countries, reducing requirements on companies for new packaging. Another important element of TPP to note is its recognition across the countries that cosmetics should be regulated differently from medical devices or pharmaceutical products, in terms of product risk. TPP provides that there will be no animal testing requirements in product safety assessments, unless there are no other means available.

In terms of global market share, Japan is the world’s fourth largest market for personal care and cosmetics products and accounts formore than 30 percent of the aggregate Asia-Pacific market. As the second largest exporter of cosmetics to Japan, the Unites States is well poised to benefit from the TPP. Additionally, U.S. businesses often find that expanding to Japan creates heightened visibility for their products and brands, which in turn leads to regional market demand. In this way, the Japanese market offers U.S. exporters a stepping stone to the greater Asia-Pacific region. Best prospects for U.S. companies include dual-use products that offer beauty and skin care benefits, natural or certified-organic products, men’s skincare and personal care products, as well as personalized skin cleansers and niche fragrances.

The International Trade Administration offers the cosmetics and personal care industry a number of services and tools to reach the TPP markets, including market research to support their identification of high value markets; targeted support via trade shows, e-commerce, and business partner vetting; and links to other USG agencies that offer assistance in financing, insurance and other services. For more information on this historic agreement and export opportunities for U.S. personal care and cosmetics exporters, contact one of our local offices or visit us on the web.

 

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Miami: Expanding Trade Through TPP and Global Expansion in the Western Hemisphere

February 24, 2016

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

Earlier this month, I had the pleasure of joining several business leaders and state officials for a series of trade events in the Miami, Florida area. Miami has a record for being one of the country’s top exporters, coming in seventh on the list of metro area exporters in the country. In 2014, Miami-Ft. Lauderdale-West Palm metro reported $38 billion in merchandise exports, representing nearly 65 percent of the state’s total.

Meeting

Under Secretary Selig meets with Miami business leaders to discuss the President’s trade agenda

With so much export potential, I thought it was important to meet with local business leaders for a roundtable discussion on the President’s trade agenda and the benefits to the greater Miami region from the Trans-Pacific Partnership (TPP). During the conversation, hosted by the Miami USEAC, we discussed the commercial value of TPP and strategic importance of strengthening our ties with the Western Hemisphere and TPP countries.   Local and state business executives and company representatives seeking to expand their businesses overseas asked questions such as how U.S. companies are affected by international trade policies, including TPP, and what these can mean for businesses in South Florida.

Over the past few months, the answer has become clear: opportunity. Trade in the United States is an engine for economic growth and job creation, which is why agreements such as TPP are critical to our success as a nation.

Following the roundtable, I addressed the Association of American Chambers of Commerce in Latin America and the Caribbean’s (AACCLA) ‘Outlook on the Americas’ luncheon. During the event, I spoke about U.S. relations with Latin American and the Caribbean, focusing on how regional cooperation and collaboration can make each country more globally competitive. This collaborative commitment for open trade and investment flows is what helped our region weather the financial crisis, and is what will drive economic growth in the coming years.

At the Department of the Commerce, we remain committed to our engagement in Latin America to support sound economic policies and unifying the region along a shared agenda for growth.  This week, Secretary Pritzker travels to Mexico as part of our ongoing High Level Economic Dialogue. Deputy Secretary Andrews traveled to Brazil last summer and this spring we will host a U.S.-Brazil CEO Forum in Washington. The United States policy shift on Cuba is one of the most significant policy actions in the region in the past 50 years and President Obama will make an historic trip to the country this spring. Existing free trade agreements like CAFTA and the U.S.-Columbia FTA support economic partnerships in the region, and TPP will expand those partnerships even further.

Over the last 25 years, our trade partnerships with our Latin American and Caribbean neighbors have done far more than just ensure market success. They have maintained the trajectory of our growth agenda by deepening the ties that bind our commercial communities. The International Trade Administration’s Foreign Service Officers and Trade Specialists on the ground throughout Latin America, working with both local and U.S. businesses, will continue to play a central role in deepening economic partnerships in the region.

In order for us to continue the success of the last 25 years, a shared growth agenda through new trade agreements like the TPP will further strengthen our supply chains and ensure an equal and tariff-free treatment with all of our TPP partners. I am deeply excited for this historic opportunity to advance our mutual and strategic interests through furthered collaboration on a global stage.

 

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TPP Promotes Building Products Exports

February 23, 2016

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

The global trend toward more sustainable construction has created an enormous opportunity for U.S. building product exporters. Across international markets, the recognized impact of the built environment on resource usage, environmental conditions, energy and water consumption, and air emissions links higher performance in buildings to important national priorities. High-quality solutions are in demand, making building products a competitive global industry.

Construction

Building products

Construction is expected to be one of the more dynamic sectors of the world economy over the coming decade, with activity in the Asia-Pacific region driving much of the sector’s growth.  Global construction output is expected to grow in the range of 85 percent by 2030, creating a $15.5 trillion marketplace worldwide.  As American exporters gear up to meet international opportunities, they can expect some traditional barriers to be reduced based on the recently negotiated, Trans-Pacific-Partnership (TPP).

This new trade deal will open doors for U.S. exporters by allowing tariff-free access and easier export pathways to new and emerging economies abroad.  Building products manufacturers across America, including numerous small and medium-sized companies, have helped to build and sustain our homes, schools, medical facilities, and places of work. In 2014, the industry employed more than 753,000 workers. Once enacted, this new agreement will help expand opportunities by leveling the playing field and supporting their interest in reaching new markets.

These exporters currently face up to 60 percent in tariffs when doing business in TPP markets. An estimated $78 million in duties are levied on these exports every year. This sets back a lot of our businesses that manufacture products such as lumber, HVAC equipment, insulation, electrical circuitry equipment and parts, and other building products.

The TPP implementation offers new opportunities for U.S. exporters. For example, the Japanese construction market is large, highly stable, and reflects trends that will continue to drive demand for the advanced building products U.S. exporters offer. Japan’s population has high disposable income, a commitment to energy and other resource conservation, and a strong interest in new technologies to achieve greater environmental friendliness in construction. Since 2012, the Japanese Government has embarked on a focused roadmap for a series of building energy efficiency policies. The Japanese market holds solid prospects for U.S. wood products and innovative U.S. lighting products, in both retrofits and new construction, as examples. U.S.-sourced insulation products make up over one fifth of Japan’s import market.

Another great example is New Zealand. In 2011, earthquakes destroyed approximately 1,000 commercial buildings and 10,000 residences in the southern city of Christchurch. The city’s massive rebuild is anticipated to continue over the next 15 years creating strong demand for building supplies. In particular, non-wood building supplies are anticipated to be in high demand.

American-made building products have captured the attention of architect designers around the globe, particularly in our TPP partner countries. Sixty-two percent of the total U.S. building product exports to the world went to these countries.

Increased global interest in green building and sustainable construction also creates enormous opportunity for U.S. suppliers of architecture, design, and other services.

In an effort to support industry exporters, our Industry and Analysis team recently produced a series of Top Markets Reports that highlights future export opportunities based on a sector-specific methodology.  The 2015 Top Markets Building Products and Sustainable Construction report is available here.

For more information on how TPP impacts American workers and businesses, visit us on the web.

 

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U.S. Consumer Goods and TPP: Supporting jobs and Economic Opportunities for Americans

February 17, 2016

Jim Rice is Director of the Office of Consumer Goods at the International Trade Administration

With Valentine’s Day a recent memory and the Groundhog predicting an early end to winter, the focus of the American public turns to consumer goods; items such as jewelry for your loved one, recreational vehicles, or sports gear for the summer.

Workers

In a five year period, U.S. consumer goods exports to the world employed more than 780,000 workers.

It’s no surprise that the world enjoys many of these items that are made in the United States, leather goods, contact lenses, footwear, sporting equipment and musical instruments are sought after across the world. In 2014, more than 10 states saw consumer goods exports to Asian countries exceed $50 million. These states were spread across the country. Both coasts, as well as the heartland were represented across the Asia-Pacific.

And there’s no sign of stopping. In a five year period, U.S. consumer goods exports to the world employed more than 780,000 workers (2014), and grew by 21 percent, totaling $43 billion in consumer goods exports to the world, with 47 percent of those exports going to the TPP region!

But we can do more.

The newly negotiated, Trans-Pacific Partnership (TPP) is an opportunity to expand this industry beyond our borders. In addition to the United States, 11 countries across the Pacific Rim will use the new agreement to break down barriers, allowing tariff-free access, and easier export pathways to new and emerging economies. Once enacted, TPP will also protect American workers, business owners and small-and medium-sized businesses by leveling the playing field and creating more opportunities to do business abroad.

For example, when doing business in Japan, most leather goods from the United States currently face high tariffs (up to 189 percent), or quotas, restricting the amount of sales and goods that can come into the country—restrictions that can hamper businesses of all sizes across the country. Under TPP, Japan will immediately eliminate their quotas for leather goods, and will start to phase out remaining tariffs.

Another great example is the opportunity that TPP provides to U.S. exporters of home appliances. They face tariffs as high as 35 percent in Vietnam and 30 percent in Malaysia. Under TPP, Vietnam will eliminate all its tariffs on U.S. consumer appliances within four years; Malaysia will eliminate most of its tariffs on consumer appliances immediately with the remaining tariffs eventually phased out. The elimination of the tariffs will provide U.S. producers the ability to compete more effectively with China for access to the growing middle class in Vietnam and Malaysia.

In December 2015, Deputy Secretary of Commerce Bruce Andrews talked about the improvements TPP will bring to retailers and businesses, “[TPP] also includes requirements to facilitate e-commerce, the final agreement improves efficiency by promoting paperless trading between businesses and the government.”

The Federal Reserve reported in a working paper that trade agreements, such as TPP, do increase the number of U.S. firms that are exporting and, by extension, establish new export markets which  generate increased profits and support high-paying export-dependent jobs.

With a high percentage of U.S. consumer goods being exported, the International Trade Administration’s Industry and Analysis team has prepared a TPP sector report that captures what exporters can expect as a result of the recently negotiated trade agreement.

Consumer goods are not the only sector that will benefit from TPP. The agreement will also benefit other leading U.S. industries. Stay tuned for Tradeology’s ongoing coverage of the benefits of this trade agreement.

To learn more about how TPP benefits U.S. workers and businesses visit our TPP site. For more information on this historic agreement and opportunities for U.S. consumer goods exporters, contact one of our local offices.