Assistant Secretary of Commerce Michael C. CamuÑez
Market Access and Compliance
"The Partnership to Defeat Trade Barriers: The Critical Role of the Trade Agreements Compliance Program"
Wednesday, October 17, 2012
As prepared for delivery
Thank you, Dan. It’s good to finally be here, delivering on our mutual pledge to take this work to a higher level and develop a strong partnership. Let me begin by expressing my thanks to the National DEC for organizing this important conference. I also want to thank the Chamber for hosting us here today. I know that today’s workshop is the result of a great deal of planning and hard work, and I’d like to congratulate all those who have pushed to make this event a reality.
It’s a real pleasure to be with you this morning. One of the things I enjoy most about serving as Assistant Secretary of Commerce is getting out and talking to the business community—to the U.S. exporters who play such a big role in the country’s economic growth. It’s one thing to sit in my office at headquarters and be briefed on “what industry thinks.” But it’s quite another, much better, thing to have an opportunity to talk with you first-hand. So thank you for being here and for this important opportunity.
As you heard from Dan, a little over a year ago, we began a dialogue between my office and the National DEC about the challenges facing U.S. exporters in foreign markets. We agreed that one of the most significant challenges that industry faces concerns non-tariff barriers (“NTBs”), which can impede U.S. competitiveness and our ability to access foreign markets. We also discussed the fact that most businesses don’t seem to be aware of the tremendous resources we have in the federal government to tackle these NTBs and to support companies, especially small businesses, when they encounter market access problems overseas. We agreed we should do something about it, and like that, this workshop was born.
Our main goal today is to introduce you to what I consider to be one of the government’s best kept secrets: our Trade Agreements Compliance Program and the critical role it plays in tackling and defeating systemic non-tariff barriers all around the world. Now I know you are all aware of the great job that the U.S. and Foreign Commercial Service does to promote U.S. exports, helping companies identify and take advantage of business opportunities overseas. Likewise, I know that most of your are familiar with the great work that our United States Trade Representative and his team do to lead our trade negotiations, to open new markets, and, when necessary, to aggressively enforce our trade agreements through formal dispute settlement procedures. But between trade promotion on one end of the spectrum and formal litigation to enforce our trade laws at the other, there is a broad continuum of activity that is central to ensuring the success of U.S. companies doing business in foreign markets. And it’s in this critical spectrum of activity where our Trade Agreements Compliance Program does its most important work, playing an equally important role in advancing our trade policy priorities world-wide. So let me take just a couple of minutes to elaborate a bit on TAC’s work and put it in a proper context for you.
THE TRADE ENFORCEMENT ICEBERG
There’s a lot of talk about trade enforcement these days. Most of it focuses on formal dispute settlement actions that the U.S. government takes to help ensure our trading partners honor their obligations, whether under a free trade agreement we’ve negotiated with them or under the disciplines they’ve agreed to as members of the World Trade Organization. For example, you’ve probably seen how we’ve used the WTO to go after China for improperly subsidizing its export-oriented companies, or perhaps you’ve heard about the President’s new Interagency Trade Enforcement Center – the ITEC – a new tool to help us pursue our rights and maintain the integrity of our trade agreements. Although formal litigation is often what makes the headlines, it’s by no means all there is to enforcement.
Broadly speaking, the government has two types of trade enforcement tools: those formal tools I just mentioned, whose use is prescribed and framed by federal law and governed by international agreements, but also the less formal, diplomatic tools we use to achieve practical everyday solutions to open markets. I’m referring here to commercial diplomacy to resolve trade irritants like NTBs in a manner that advances U.S. commercial interests while engaging our trading partners constructively on market opening initiatives.
As I noted, USTR is responsible for bringing formal WTO or bilateral enforcement actions, working with other agencies and, of course, the resources of the new Interagency Trade Enforcement Center. Such legal actions are sometimes necessary and can provide a significant catalyst for changing policies and setting good precedents for future behavior. While the United States Government does not hesitate to use these formal dispute settlement actions when necessary, they do require tremendous resources, and they can take years to litigate. I know we can all agree that, where possible, it’s better to try to work out our differences without resorting to formal dispute settlement and fix problems as quickly as possible. And that’s precisely the goal of our Trade Agreements Compliance Program.
To be clear, both approaches are really part of the same effort: enforcement of our trade agreements. That is, our objective under both approaches is to change foreign government behavior to gain fair treatment and market access for U.S. industry.
I view the government’s trade agreement enforcement efforts, conceptually, like an iceberg. The part of the iceberg that’s visible, above the waterline, is certainly formidable. But the part below surface, which is not readily seen, is many times larger and is often what sinks the ship. Using this metaphor in the context of our enforcement agenda, you can think of our formal enforcement efforts as the tip of the trade enforcement iceberg. Since 2009, the United States has formally initiated 14 matters under the WTO or our bilateral agreements where egregious patterns of activity have threatened our commercial interests. These enforcement matters certainly generate headlines, and they represent an important way to signal to the world our intention to enforce our rights under our trade agreements. But beneath the surface of our formal enforcement agenda is the work of our Trade Agreements Compliance Program, which has initiated a whopping 874 compliance and market access cases during the same period, where we have directly engaged with our trading partners to resolve, through commercial diplomacy, a systemic non-tariff barrier that has impeded market access for American industry in economies around the world. These efforts go on, year in and year out, beneath the surface and out of the limelight. Our goal is not publicity; rather, it’s to get American industry the fair treatment it deserves, and the market access to which it is entitled, in the quickest fashion possible.
There are of course other aspects of U.S. trade enforcement, such as anti-dumping/ countervailing duty trade remedies, or Section 301 actions, for instance. Among our experts here today are officers who can provide assistance to exporters who want to talk about these activities.
MAC’s ROLE IN LEADING THE TRADE AGREEMENTS COMPLIANCE PROGRAM
The Department of Commerce’s Market Access and Compliance unit (“MAC”), which is an integral part of the International Trade Administration, is at the forefront of our commercial diplomacy effort to informally resolve systemic market access barriers through its leadership of the Trade Agreements Compliance Program. Charged with this mandate by Congress, since 1979, under Reorganization Plan No. 3, our vision has been a barrier-free global trading system and an open economic environment where American firms and the workers they employ can compete on a level playing-field.
As Assistant Secretary, I’ve made tackling non-tariff barriers a central focus of MAC’s work, engaging our entire team on this critical objective. Simply put, our goal is to make trade agreements work for American industry, and to support companies, especially SMEs, as they enter foreign markets and lead the way to growth and jobs through exports.
To drive our mission and achieve our goal, we have organized MAC’s 200 plus member staff in four geographic, regional units—Asia; Africa, Middle East and South Asia; Europe and Eurasia; and the Western Hemisphere—each led by a Deputy Assistant Secretary of Commerce, represented here today. I am also supported by a Deputy Assistant Secretary who oversees a cross-cutting trade policy unit, whose primary focus is to provide the expertise needed to use our agreements as leverage across all countries. We also have international trade specialists who function as “MAC Attachés” stationed at key embassies around the world—in Beijing, San Salvador/CAFTA, and in Brussels—who work closely with our Foreign Commercial Service colleagues to advance MAC’s policy and enforcement agenda. I’m pleased to say that some of our MAC attaches are here today to support this conference. And of course we all work closely with our colleagues across ITA and throughout the entire Department of Commerce to leverage needed expertise to drive and advance our core mission.
I’m very proud of the work my team at MAC does each and every day through the Trade Agreements Compliance Program to knock down barriers to trade and open markets for U.S. industry. And our efforts are really making a difference. As I noted, since January 2009 through the end of September 2012, the Program has initiated 874 trade barrier investigations in 108 countries, with 341 (or almost 40%) of these cases on behalf of SMEs. And out of 676 investigations closed in that same time frame, we’ve successfully resolved 371 cases, or about 55%, overcoming barriers in 90 countries that were affecting a broad range of U.S. industries. I can tell you these numbers reflect a lot of work by a lot of dedicated professionals whom I’m proud to lead. But the numbers only tell you part of the story. It’s the success stories behind the numbers that really matter. Let me give you a recent example:
In February 2011, a U.S. engineering company, EUR Consulting, reported that Chile’s Ministry of Health excluded it from bidding on a government tender to build a hospital because it did not have prior experience in Chile designing seismic shock resilient structures. This exclusion, which shut the company out of an opportunity worth several hundred thousand dollars, was clearly inconsistent with Chile’s FTA obligations, which ensures that U.S. companies are treated the same as Chilean companies when competing for covered government procurement contracts.
Assembling a team of ITA experts through the Trade Agreements Compliance Program, our MAC team engaged the Chilean government on this issue, pressing the importance of upholding the government procurement provisions of the U.S.-Chile FTA. In May of 2012, the Chilean Government found that EUR’s global experience should have been considered when assessing its eligibility to participate in the procurement. The company was happy with this outcome, and especially that its future access to the Chilean market was protected. Most importantly, by enforcing our rights under the US-Chile FTA, we set a positive precedent for all U.S. companies seeking to do business in Chile in the future.
A PARTNERSHIP TO DEFEAT TRADE BARRIERS
Our work on behalf of EUR reflects but one of many important ways that our Trade Agreements Compliance Program supports U.S. industry each and every day. Whether it’s a procurement problem, or an issue with foreign customs, the improper use of standards and conformity assessment procedures, or the failure to adequately protect intellectual property rights, our team has the expertise and the experience to help American industry overcome whatever trade barrier may be thrown in their way.
But here’s the catch: we can’t do it alone. We have great talent; we have tremendous expertise. But our team can only be effective if we know about the challenges industry is facing in foreign markets. And that’s precisely why we need a partnership to defeat trade barriers with the National DEC and each of you. We need your market intelligence; we need your industry contacts; we need you to help us get the word out to your networks about the resources our government has to deploy against the wide range of trade barriers American companies face each day.
I can tell you from personal observation, from my many travels around the globe, protectionism is alive and well. Especially in these challenging economic times, we’re seeing a large number of countries—from developed markets to the most emerging economies—deploy a host of non-tariff barriers designed to favor domestic industries and to keep foreign companies at bay. We can’t litigate every case; we can’t bring formal dispute settlement procedures in every instance. But with your help, and with the resources of our Trade Agreements Compliance Program, we can work together to tackle these problems, diplomatically, before they get worse, and before they unfairly limit the ability of our companies to compete fairly and openly on a level playing field.
I genuinely appreciate your willingness to partner with us, and I look forward to working with all of you as we work to grow our economy and put our citizens back to work through exports and international trade.
It’s now my great pleasure to introduce to you Skip Jones, the Deputy Assistant Secretary of Commerce for Trade Agreements and Compliance. I am very fortunate to have Skip as one of my key deputies, and we are very lucky to have his expertise and his leadership of the Trade Agreements Compliance Program. Skip will share with you a bit more about how the TAC Program works, and how you can support our efforts to build this new partnership.
Thank you very much.
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