FREE TRADE AGREEMENTS – MAXIMIZING BENEFITS TO

YOUR BUSINESS

SKIP JONESDeputy Assistant Secretary

Trade Agreements and Compliance

October 7, 2011

Today’s Agenda

• Trade Agreements: Korea, Colombia and Panama• What’s Next?• How Will Pennsylvania Benefit?• Trade Agreements Compliance Program• Case Example• Intellectual Property Rights Resources• Resources and Contacts

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Why Trade Agreements with Korea, Colombia, and Panama?

Grow U.S. economy; support jobs.

Improve U.S. firms’ competitiveness.

Provide clear rules for doing business.

Make open trade a two-way street.

Grow important new provisions for overcoming country-specific challenges.

Strengthen U.S. national security

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Highlights : Korea Agreement

Eliminates Tariffs and Improves Market Access Nearly 95% of trade in consumer and industrial

products duty-free within 5 years Harmonizes bilateral tariffs Address tariff and non-tariff barriers Increased access for U.S. autos, including

unprecedented provisions to address non-tariff barriers in Korea

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Highlights : Korea Agreement

Codifies Rules for U.S. Exporters New protections for U.S. investors Further opens Korean market for U.S. service

providers State-of-the-art protections for intellectual property Expands access to Korean government procurement

contracts Improves transparency for all U.S. exporters, but

especially for pharmaceutical and medical device industry

L:\Outreach\Outreach Events\FY2011\DAS Skip Jones FTAs Forum (Cong. Gerlach)\DAS Jones FTAs Forum (Cong. Gerlach) 5oct2011 V.2 pptx

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The KORUS Agreement and Jobs

American manufacturers of medical equipment, information technology, environmental goods, and machinery all depend on the Korean market.

Manufactured goods accounted for over 80 percent of American goods exports to Korea in 2009.

NAM says that under the U.S.-Korea Agreement, American exports of machinery and equipment will increase by more than a third.

*NAM=National Association of Manufacturers

Highlights: Colombia Agreement

Immediate zero-tariff treatment for over 80% of U.S. exports of consumer and industrial products

Improved market access for key U.S. farm products

Major provisions for services

Colombia will join the WTO Information Technology Agreement (ITA)

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The U.S. -Colombia Free Trade Agreement and Jobs

Provides benefits to SME exporters

Streamlines customsProvides for dispute

settlementEnhances business

climate Photo: Port of Cartagena

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Highlights: PANAMA FTA

U.S. goods and services more competitive. Immediate zero-tariff treatment for 87%

of U.S. exports of consumer and industrial products

Liberalizes services trade

Streamlined access to securing business with Canal, Metro projects.

Greater transparency in Public Procurement.

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The Panama Agreement and Jobs

• Ensure that U.S. firms can participate on a competitive basis in the $5.25 billion Panama Canal expansion project.

• Expansion benefits U.S. exporters by:– increasing Canal capacity, – reducing costs of transporting goods– keeping up with demands of growing global

economy– Creating opportunities for U.S. suppliers of

machinery-construction and earth moving equipment.

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What’s Next?

• Both parties must pass the agreement into law.– We understand that the Hill vote may come as early

as October 12.– Korea is waiting for U.S. passage before presenting

to Korean Parliament vote.– Colombia and Panama have already passed the new,

enhanced agreements with their legislatures.• The agreements specify a date “on or after January 1,

2012” for the agreements to come into force.• Once in force, provisions (e.g., certain tariff rates) are

phased in, others can be immediate, as provided in the agreement.

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How will Pennsylvania Benefit?

•KORUS Opens New Markets for Key Pennsylvania Exports – Chemicals Manufactures, Computers and Electronic Products, Primary Metals Manufactures, and Creates Opportunities for Agriculture•CTPA will Eliminate Tariffs for over 87% of U.S. Exports of Consumer and Industrial Products (excluding petroleum) within 5 years.•With the TPA in place, 87% of U.S. Goods will enter Panama Duty-Free immediately, Remaining Tariffs will be Eliminated within 10 years.

Trade Agreements Compliance Program• Free Resources at the TCC Website:• Open to all U.S. exporters, particularly designed for

SMEs.• Exporters and investors can use the Online Trade

Complaint Hotline at www.export.gov/tcc to report and obtain assistance with foreign market access barriers

• Free online tools, agreement texts, IPR training modules• Standards Early Warning• A checklist of trade barriers• Overseas Compliance Officers (China, El Salvador, India,

EU)

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Trade Agreements Monitoring: What kinds of foreign government trade barriers do firms face?

• Excessive tariff and customs barriers

• Discriminatory rules of origin, certificates of origin, or import licensing requirements

• Burdensome standards, testing, labeling, or certification requirements

• Lack of Intellectual Property Rights protection

• Non-transparent government procurement procedures

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Case Example: China – Improper Application of Standards and Technical Regulations

•Klinge Corporation faced a problem re-exporting assembled refrigeration containers from China to Australia.

•Klinge contacted ITA’s Trade Agreements Compliance Program through hotline for assistance.

•Team obtained China’s commitment to release shipment and adhere to its obligations under the WTO Agreement on Technical Barriers to Trade.

•Team obtained China’s commitment to release shipment and adhere to WTO obligations on Technical Barriers to Trade, which require that such product certifications not create unnecessary obstacles to trade.

•Success leveraging China’s commitment ensured that Klinge’s $8.5 million contract was not jeopardized.

IPR Resources Available to Assist U.S. Companies

• www.stopfakes.gov• Learn more about steps to protect/obtain IPR in the U.S.

and abroad.• Request assistance from the website or call 1-866-999-

HALT to speak with a trade specialist about company problems.

• Various IPR tools and programs available from the website.

• IPR Toolkits (18)– Brazil, Brunei, China, Croatia, Egypt, European Union,

Ghana, India, Italy, Korea, Malaysia, Mexico, Pakistan, Paraguay, Peru, Russia, Taiwan, Thailand, and Vietnam

– How to obtain and enforce IP rights in each country– Country contacts 16

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Resources on the Web

Export.Gov Site on FTAs http://export.gov/fta/

International Trade Administration Site on FTAShttp://trade.gov/fta/index.asp• Sector & State Reports

FTA Benefits Fact Sheets on Korea, Colombia, and

Panama• http://trade.gov/fta/korea/pennsylvania.pdf• http://trade.gov/fta/colombia/pennsylvania.pdf• http://trade.gov/fta/panama/pennsylvania.pdf

FTA Tariff Tool• http://export.gov/FTA/FTATariffTool/

– Detailed list of resources is in your information packet.

Contact Us

MAC’s Trade Agreements Compliance Office:

• Beverly Vaughan, Director, TCC• Kevin Ellis, Compliance Team, TCC• John Liuzzi, Compliance Team, TCC• Steve Williams, Operations Team, TCC

Use our Hotline: • Report a Barrier: www.export.gov/tcc• Tel: 1-800-USA-TRADE , ask for Trade Barrier

Assistance • E-mail: tcc@trade.gov• Fax: 202-482-6097

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