Nairobi, Kenya – The United States Government, represented by the United States Trade Representative, and the East African Community (EAC) today issued the following statement outlining further progress under the U.S.-EAC Trade and Investment Partnership:
Today, 19th October 2012, the East African Community and the United States have taken important steps to advance the U.S.-EAC Trade and Investment Partnership – a new initiative that supports the economic integration of the EAC and enhances the U.S.-EAC trade and investment relationship. This new Partnership is built on the recognition of the important role that trade and investment play in economic and social development including job creation, both in East Africa and the United States.
The EAC and the United States agreed on a framework to move forward on the establishment of a Commercial Dialogue, which will be formally launched in late November 2012.
The EAC and the United States also agreed that their respective technical teams will meet at the soonest possible date for further consultations toward negotiation of a proposed investment treaty and a trade facilitation agreement. The technical teams will further discuss and agree on the trade capacity building assistance, including identification and agreement of priority areas to support the Trade and Investment Partnership. The EAC acknowledged that the United States already provides substantial assistance to the EAC Partner States and the Secretariat, including an additional amount of up to $10 million (ten million United States Dollars) that the United States will provide over the next five years to the EAC Secretariat to support regional economic integration.
As the next step, the EAC Ministers responsible for Trade and Investment, and the U.S. Trade Representative agreed to advance the U.S.-EAC Trade and Investment Partnership within their respective administrations. They also agreed to hold their next Ministerial meeting on the margins of the 2013 AGOA Forum.
The statement follows a Ministerial meeting on October 19, 2012 in Nairobi, Kenya attended by Ministers from the EAC Partner States, the Deputy United States Trade Representative, the representative of the EAC Secretary General, Senior Officials from the EAC Partner States, and senior U.S. Government officials from a number of U.S. Government agencies, including the Departments of State, Commerce, and Transportation, and the U.S. Agency for International Development.
The EAC and the United States announced this new Trade and Investment Partnership at the AGOA Forum in Washington D.C. earlier this year. The initial items the EAC and the United States have agreed to explore under this new Partnership include an investment treaty, a trade facilitation agreement, continued trade capacity building assistance, and a commercial dialogue. Building upon the foundations of our existing trade and investment relationship, the Partnership will help to promote EAC regional integration, social and economic growth, and expand and diversify U.S.-EAC trade and investment. It could also serve as building blocks towards a more comprehensive trade agreement over the long term.
The U.S.-EAC Trade and Investment Partnership is an important component of the U.S. Strategy Toward Sub-Saharan Africa, which President Obama announced in June 2012.
ITEC coordinates closely not only with USTR, but with government agencies to which companies and individuals most frequently report barriers and trade-related concerns. These agencies’ reporting processes remain in effect, and American stakeholders are encouraged to continue to use them. Issues that cannot be resolved through these processes may be referred to ITEC for further action.
Q: When was the Interagency Trade Enforcement Center (ITEC) established?
A: On February 28, 2012, the President signed Executive Order 13601 establishing ITEC to enhance enforcement of U.S. trade rights and domestic trade laws.
Q: What is ITEC’s mission?
A: ITEC is charged with fighting for American workers, farmers, ranchers, and businesses by bringing a more aggressive “whole-of-government” approach to addressing unfair trade practices around the world. ITEC will be supported by the Departments of Agriculture, Homeland Security, Justice, State, and the Treasury, as well as the intelligence community. The personnel from these agencies will enhance U.S. trade enforcement capabilities and facilitate increased engagement with foreign trade partners at the World Trade Organization (WTO) and elsewhere through the creation of an expanded team of language-proficient researchers, subject matter experts, and economic analysts. ITEC is designed to help leverage and mobilize resources and expertise across the federal government to develop trade enforcement actions that will address unfair foreign trade practices and barriers that could otherwise imperil our nation’s export promotion and job recovery efforts.
Q: How is ITEC different from existing trade enforcement programs?
A: ITEC is unique in that it constitutes a more dedicated “whole-of-government” approach to addressing unfair trade practices and trade barriers. This new approach will provide a primary forum within the federal government to bring together experts from executive departments and agencies to coordinate trade enforcement. ITEC will permit a sustained focus on particular issues not possible previously.
Q: Doesn’t the U.S. government already have the capacity to address unfair trade practices and trade barriers?
A: A priority of the Administration is to better leverage the government’s trade enforcement activities by focusing its existing resources to address unfair trade practices and foreign trade barriers more effectively. ITEC will link, leverage and align both existing and new resources more efficiently across the executive branch and with stakeholders. The key here is efficiency. ITEC’s goal is to build upon existing capacity to give U.S. companies, workers and producers every chance to compete on a level playing field in today’s global marketplace.
Q: How many people will be working at ITEC at any given time?
A: By October 2012, ITEC had more than a dozen full-time and part-time staff and that number should increase substantially by the end of FY13. These figures are subject to change as issues, priorities and available funding change.
Q: How do you determine the issues for priority attention and action?
A: The Director and Deputy Director, along with the various offices within USTR, and in cooperation with other agencies will examine various trade issues and will establish priority projects for investigation. As is currently the case, a variety of factors will be taken into account in setting those priorities, including economic impact of the issue, systemic impact of resolution on international trading practices, ability to document and demonstrate the problem, available resources, and broad trade goals.
Q: Is ITEC’s purpose to bring more trade remedies and WTO cases against Chinese products?
A: ITEC’s purpose is to help ensure that all of our trading partners play by WTO rules and abide by their obligations, including commitments to maintain open markets on a non-discriminatory basis, and to follow rules-based procedures in a transparent way.
Q: What countries will ITEC be working on?
A: ITEC will be addressing trade enforcement issues originating in a variety of regions across the globe. It is USTR policy not to discuss publicly cases that it is developing to avoid giving advance notice to governments overseas.
Q: What will the role of ITEC be in administering domestic trade laws?
A: The Department of Commerce has statutory responsibility for administration of the antidumping and countervailing duty (AD/CVD) laws and will continue to administer them. The International Trade Commission (ITC) will continue to make injury determinations with regard to all AD/CVD investigations and sunset reviews. ITEC was not intended to duplicate the efforts that are assigned by statute to particular agencies. ITEC will be looking for areas where it can add value to the work already being done.
Q: What will the role of ITEC be in dealing with circumvention of antidumping and countervailing duty orders?
A: Import Administration’s Customs Unit and U.S. Customs and Border Protection will continue to take the lead on issues related to circumvention of antidumping and countervailing duty orders. Deliberate evasion of AD/CVD duties by providing false information in a customs declaration constitutes customs fraud, and is a breach of U.S. law, punishable by fine or imprisonment. In addition, the National Intellectual Property Rights Coordination Center (NIPRCC) plans to step up enforcement of commercial fraud laws related to evasion of antidumping and countervailing duties.
Q: Will ITEC be involved in “self-initiation” of antidumping or countervailing duty cases?
A: Antidumping and countervailing duty investigations may be initiated as the result of a petition filed by a domestic interested party or at the Secretary of Commerce's own initiative. Self-initiation of such investigations has been a very rare occurrence. However, should the Secretary of Commerce request ITEC assistance in such a self-initiation, ITEC will provide support as appropriate.
Q: How will ITEC engage with the NIPRCC and the Intellectual Property Enforcement Coordinator (IPEC)?
A: The NIPRCC’s focus is on the law enforcement response to IPR theft, primarily coordinating investigation and prosecution of IPR infringers under the criminal laws of the United States. The NIPRCC also is a key participant in international cooperation on criminal enforcement activities involving various other partner governments and international police organizations such as Interpol and Europol. ITEC’s focus is enforcement of U.S. rights under trade agreements across a wide set of issues – including intellectual property. ITEC has and will continue to coordinate with the NIPRCC and the IPEC.
Q: Will ITEC serve a rapid response function, including with respect to identifying subsidies in overseas markets?
A: ITEC will be focusing on enforcement of U.S. rights under trade agreements which require some time to investigate, develop, and coordinate. However, to the extent ITEC becomes aware of issues requiring a rapid response through its monitoring or outreach functions, it will bring such issues to the attention of that part of USTR or another agency best positioned to take more immediate action.
Q: How will ITEC help small and medium-sized enterprises? What is the difference between what ITEC does and what the Trade Compliance Center at the Department of Commerce does?
A: Small and medium-sized enterprises (SMEs) are encouraged to continue to report their specific market access problems to the Trade Compliance Center (TCC) at the Department of Commerce. If the TCC is unable to resolve an issue, especially when it has noted a trend, the TCC will report the problem to ITEC. By leveraging the expertise of the TCC, ITEC will have a head start on dealing with trade issues that are affecting SMEs. Small and medium-sized enterprises may also work through their associations to bring industry-wide problems to the attention of ITEC.
Q: How will ITEC interact with other parts of USTR that may already be engaged in working on an issue of concern to certain companies or industries?
A: ITEC is in close contact with the various offices within USTR. USTR sector experts and negotiators are aware of ITEC activities and vice versa to ensure full coordination. Parties which have been working closely with USTR offices on issues of concern should continue to do so.
Q: What role will ITEC play in section 301 cases?
A: Interested persons may file petitions with USTR under section 301 of the Trade Act. Depending on the nature of the petition, ITEC may be involved in doing additional research during the 301 investigation phase. It is important to note that, although USTR can initiate a section 301 investigation itself, USTR does not need to do so in order to initiate WTO dispute settlement action. With regard to the majority of WTO dispute settlement actions, we anticipate that ITEC will be doing some of the same types of research that outside parties would typically do themselves in order to file a 301 petition.
Q: What role will ITEC play in section 201 cases?
A: Section 201 investigations will continue to be carried out by the International Trade Commission, which has statutory responsibility for implementing this section of U.S. trade law. Although it is a historically rare occurrence, the President or USTR can request the ITC to conduct a section 201 investigation. ITEC may have a role in providing information that can be used to inform the decision as to whether the President or USTR should make such a request.
Q: Will ITEC monitor the new free trade agreements to ensure that trading partners are not erecting new non-tariff barriers that would limit the benefits U.S. companies are supposed to gain from the agreements?
A: While ITEC will monitor certain issues, it does not have the staff to monitor every aspect of every FTA. ITEC continues to work with other offices within USTR to ensure compliance with FTAs and will continue to request that industry and companies bring problems to ITEC’s attention.
The financial services chapter in the U.S.-South Korea trade agreement provides extensive market access into South Korea for American financial services firms – supplementing and modifying the agreement’s rules on investment and services without undermining the right of U.S. financial regulators to take action to ensure the integrity and stability of financial markets or address a financial crisis. Importantly, South Korea commits to treat U.S. financial institutions comparably to their competitors in the South Korean market.
Under this agreement, U.S. and South Korean financial institutions will be able to establish or acquire financial institutions in each other’s markets and may choose whether to establish that institution as a subsidiary or a branch, based on what best fits their business models. The United States and South Korea agreed to some limited exceptions to this commitment, for example, in order to preserve U.S. laws regarding financial services. In every case, all financial institutions must comply with capital requirements, licensing requirements and other regulations set out by financial authorities.
The Insurance Information Institute estimated the South Korean insurance market to be $97 billion in 2008, making every one-percent increase in U.S. market share worth $970 million. The agreement sets out a number of significant steps that South Korea has agreed to take toward creating a level playing field for U.S. insurance companies competing with government-owned South Korea Post and cooperative insurance suppliers, such as giving South Korea’s insurance regulatory agency – which also regulates American companies selling insurance in South Korea – a greater role in the supervision of South Korea Post.
U.S. and South Korean firms will be able to supply a clearly defined set of financial services into each other’s markets. In banking and securities, this is limited to advisory services, financial information and data processing, and portfolio management services for investment funds. In insurance, these services include marine, aviation and transport insurance; insurance for goods in international transit; reinsurance and retrocession; services necessary to provide insurance, such as actuarial services or claims settlement; and, the ability for an insurance service supplier to serve as an agent or broker for a large commercial risk – such as, insuring a shipping fleet and the goods it carries. Neither the United States nor South Korea makes any commitment to allow the cross-border sale of core banking, securities or insurance services.
The agreement requires South Korea to improve transparency in its financial regulation. In line with U.S. practice, South Korea agreed to generally publish proposed financial services regulations in advance and give interested persons a reasonable opportunity to comment on them. In addition, the agreement requires South Korea to be more transparent about how its regulatory regime and application processes work, and what financial activities or services are allowed. The agreement also locks in a recently enacted South Korean policy to provide financial services companies with guidance in writing.
The agreement requires South Korea to allow financial institutions to transfer data into and out of its territory, allowing for more efficient data processing.
The agreement establishes a framework for the United States and South Korea to discuss issues of concern regarding financial services, and in particular to review future developments in the market for insurance and in competitive conditions affecting the sector.