The NAM joined other major trade associations earlier this week to urge swift and ambitious expansion of the Information Technology Agreement (ITA), the most commercially successful trade agreements in the World Trade Organization (WTO).

“The ITA has helped to drive innovation, accelerate productivity, increase employment, lower consumer prices, and bridge communities across the globe in ways unimagined 15 years ago,” the unified statement, released Monday, said. “This initiative would improve market access for information and communications technology (ICT) products around the world and make the newest technologies more affordable and available to everyone.”

The statement is backed by a coalition of 56 associations from around the world that represent every aspect of the highly innovative technology sector. The latest round of ITA expansion talks opened this week in Geneva, Switzerland. The full statement, with a list of signatories, is available online.

The ITA now has more than 70 signatories, and a report earlier this year by the Information Technology & Innovation Foundation (ITIF) found that the ITA has had a significant impact on expanding trade and economic opportunity. From 1996 to 2008, total global trade in information and communications technology products increased more than 10 percent annually, from $1.2 trillion to $4.0 trillion. An expanded ITA could bring an additional $400 billion in high-tech trade under ITA coverage and increase world GDP by $190 billion, ITIF reported.

The leaders of the Asia-Pacific Economic Cooperation (APEC) expressed support for ITA expansion during the 2012 APEC Ministerial Meeting earlier this month. In May, the WTO held an ITA symposium in Geneva to mark the agreement’s 15^th anniversary and to chart a course toward expansion. That work continued this week in Geneva with technical discussions on an initial list of products to be considered for inclusion in the ITA.

This morning the House Ways and Means Committee is holding a hearing on Russia Permanent Normal Trade Relations (PNTR). Testifying at today’s hearing was USTR Ron Kirk and also Caterpillar Inc. Chairman and CEO and NAM Vice-Chair Doug Oberhelman, who testified on behalf of the NAM and the Business Roundtable.  

With Russia’s ascension to the WTO later this summer it is critically important for Congress to act to pass Russia PNTR so manufacturers will not lose out on the tremendous export opportunities in Russia. Passing Russia PNTR will benefit manufacturers of all sizes, both large and small. About 83 percent of U.S. exporters to Russia are small and medium-sized companies.

In his testimony Mr. Oberhelman discusses the importance of the Russian market to U.S. manufactured goods exports:

Russia is the world’s sixth largest economy in terms of purchasing power. It has a population of 142 million with a rapidly growing middle class. Russia imported nearly $300 billion in goods in 2011, yet the United States accounted for only 5 five percent of those imports. An economy of this size should not be just our 31st largest goods export market. Clearly there is tremendous opportunity to increase U.S. exports to Russia. 

Also today Secretary of State Hillary Clinton penned an op-ed in the Wall Street Journal urging Congress to pass Russia PNTR in order to remove Jackson-Vanick Amendment and she also lays out how a vote for PNTR isn’t a vote for Russia:

Extending permanent normal trading relations isn’t a gift to Russia. It is a smart, strategic investment in one of the fastest growing markets for U.S. goods and services. It’s also an investment in the more open and prosperous Russia that we want to see develop.

The bottom line is the clock is ticking for Congress to act. Russia is expected to join the WTO in early August leaving little time. If Congress fails to act we will be left on the sidelines while our competitors enjoy this enormous export market.

Manufacturers are appalled by European Union (EU) action purporting to be in compliance with a World Trade Organization (WTO) finding that the European subsidies for the launch of Airbus aircraft are illegal and must cease. 

Despite the fact that the WTO found that every single grant of aid to launch Airbus aircraft was a WTO-illegal subsidy, which includes every aircraft model Airbus produces or has produced, the EU proposes to keep granting those subsidies.

An EU spokesman went so far in a press quote as to say that the new Airbus A350 under development is “… outside the (WTO) Airbus case…” 

WTO dispute settlement rulings are not a historical exercise only looking at the past, but are the guidelines for WTO-consistent behavior in the future.  It is unacceptable that the EU would continue to engage in the same WTO-illegal action of the past, even while it grudgingly faces the necessity of compensating the United States for its commercially-harmful past action.

The NAM agrees fully with the USTR that the United States cannot and will not accept anything less than an end to this subsidized financing.  We urge the full and effective pursuit of all avenues in the WTO to bring about this result. (continue reading…)

Trying to regain the momentum for the Doha Round of global trade talks, the National Association of Manufacturers and other business groups outlined a set of priorities and strategies in a letter Wednesday to Karel De Gucht, the European Union’s trade commissioner, and U.S. Trade Rep Ron Kirk.

Reuters covered the story today, “Business groups press emerging economies over Doha“:

BRUSSELS, July 22 (Reuters) – Brazil, China and India must use their growing economic might to help revive deadlocked global trade talks, a coalition of business lobby groups said in a letter to U.S. and European Union trade negotiators.

The letter …is the latest sign that interest is growing in completing the Doha round of talks, which was launched in 2001 to help poor countries prosper through trade but has been stalled since 2008.

The business groups, from Europe or the United States, said the Doha round would progress only if Europe and the United States convince the big emerging economies to reduce tariffs on important industrial sectors and services.

Right. As the letter (available here) stated:

The success of the Doha Round depends on the willingness of the large emerging countries —especially Brazil, China and India—to assume the responsibility commensurate with the economic benefits they have been realizing as a result of global trade and investment liberalization. The large emerging countries now have the fastest growing economies in the G-20, and will clearly be major beneficiaries of the Doha Round. With their new economic power, they are now clearly distinguished from the least developed members of the WTO and, as a result, have a new and greater responsibility to share in leading the Doha Round forward in the NAMA, agriculture and services negotiations. Indeed, most of the significant additional market access available for the least developed countries lies in the reduction of market access barriers to the rapidly emerging economies—which could substantially boost south-south trade.

The NAM was joined by Business Europe, the Business Roundtable, Coalition of Service Industries, European Services Forum and the U.S. Chamber of Commerce. Chris Wenk of the Chamber writes about the letter at the Chamber Post, “Deliverable from Chamber Doha Mission.”

Reuters, “WTO Doha round deal unlikely in 2010“:

US business groups said on Wednesday they expect slow progress in world trade talks in 2010 despite a goal set by President Barack Obama and other leaders to finish the long-running negotiations this year.

“I think it’s going to be difficult to conclude in 2010,” said Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers. “I think it will probably be next year.”

(Frank Vargo, the National Association of Manufacturers’s vice president for international economic affairs, has blogged from Geneva this week at the ministerial meeting of the WTO.  This is his final report.)

Ah well, the strangeness and wonder of the WTO negotiating process continues. Consider, for example, the Chairman’s report at the conclusion of the 7th WTO Ministerial meeting that ended yesterday. (Report available here as .doc.)

The report states, “There was wide support for building on progress made to date. There was also support for not attempting to reopen stabilized texts.” (My emphasis.) This statement refers, among other texts, to the Non-Agricultural Market Access (NAMA) text that the U.S. has not accepted. The clear implication from yesterday, though, is that many consider the text to be done, agreed, and not to be revisited.

Stabilized texts? Excuse me, but when the NAMA chairman Luzius Wasescha wrote that text at the end of last year, he stated right in his own text that, “Even though the included text is accepted as a basis for further work, we are far from a consensus among Members.” He also added “Anyhow, everything is conditional in the deepest sense.”

Whoa! By what magic elixir do we move from that December statement to the Ministerial Chairman’s statement yesterday that there is strong support for considering the text wrapped up and immutable? Is this sleight of hand? Or does the WTO have all the collective memory of a computer with a fried hard drive?

Example two: Press reports indicate at the end of the conference European officials lamented, “Doha does not seem to be fully on the agenda of the United States … there is no sign today that the Americans are ready to go forward.” (AFP report.) One said, “They want more concessions for a more acceptable package for the US Congress. Now, the problem is to find a way without damaging what has been achieved so far.”

What hypocrisy! In private, European government officials and business representatives are quite free in admitting their analysis conforms perfectly with the U.S. view – they are getting virtually no new market access out of the proposal so far. But they are willing to accept that, because they believe if they were to press for more industrial market access, the developing countries would turn right around and demand more European concessions in agriculture.

That has the Europeans terrified, for they feel they have given all they possibly can in agriculture. One more grain of wheat will break the European back and result in a revolt that will cause them to pull out of the whole deal. So they would rather build Fortress Europe around their agriculture and forgo market access gains in the rest of the world.

Example three: Indian officials still indicate a reluctance to have India participate in sectorals (but not the same degree of “shut-the-door” resistance I saw last year). But at the same time, India has free trade agreements cooking or under discussion with China, Japan, the European Union and Canada – and when India’s Prime Minister visited Washington recently, he indicated a free trade agreement could be possible with the United States as well. So my question is, who’s left? Why can’t you make cuts in the Doha Round?

The problem isn’t that the United States isn’t showing leadership, for it is. I spoke with Ambassador Ron Kirk a couple of times in Geneva this week. He knows the point to the Doha Round is getting meaningful market opening, and he knows the road to Doha goes through Beijing, New Delhi, and Brasilia. The problem isn’t U.S. leadership. The problem is getting others to get off their defensive agendas and join the United States is a commitment to open markets and grow world trade. (continue reading…)

(Frank Vargo, the National Association of Manufacturers’s vice president for international economic affairs, is blogging from Geneva this week at the ministerial meeting of the WTO. )

The WTO 7th Ministerial Meeting opened yesterday afternoon, with Director General Lamy calling for unity (remarks), and minister after minister urging that the Doha Round conclude in 2010. U.S. Trade Representative Ron Kirk told the gathering not to confuse process for substance and urged countries to call for a round that would generate greater market access for all. (Kirk’s remarks.) There were some signs of support for this, with some ministers referring to ambition and balance, and some suggesting that we should consider different approaches, since we really hadn’t gotten very far. But despite these welcome signs, there has not been what one could call a rising tide demanding a stronger outcome.

Instead of unity, the gulf between those who want a strong outcome and those who want to hold back became even more obvious. Rather than offering any indications the time had come to begin serious negotiations, Brazil’s Minister Amorim instead chose to come out attacking the United States and re-writing history. Amorim accused the United States of “delaying the conclusion of the round because they want to have some few dollars more in some specific sections.” Wrapping Brazil in the flag of the least developed countries, he said that reducing trade barriers would hurt tariff revenues in the poorest countries and impair their ability to cope with climate change obligations. (Reuters coverage.)

What’s wrong with this picture? Well, first, once again Amorim implied that the least developed countries will have to cut their tariffs, which is untrue. Aside from the advanced developing countries like Brazil that have become global export figures, the developing countries don’t have to do anything in the Round.

Second, Amorim again is seeking to promote his revisionist view of Doha history by stating the United States is asking for new concessions, ignoring the multitude of negotiating sessions over the past eight years in which the United States has consistently said the industrial package had to be viewed as a whole – the tariff cutting formula, sectoral agreements, and exceptions from tariff cuts.

There is nothing new here. The United States has pressed consistently for both industrial and advanced developing countries to cut their barriers, while Brazil has wanted to keep its tariff protection. Amorim expressed horror that the United States thinks the Doha Round is about opening markets.

Third, Amorim stated that under what’s on the table now, Brazil is already committed to cut its applied tariff rates more than the United States, so “it is unreasonable to expect that concluding the round would involve additional unilateral concessions from developing countries.” That’s not so.

WTO data show that the formulas would have the United States cut its applied tariffs in half, while Brazil would cut its applied tariffs only by about 1/8 – from an average of 11 percent to about 9.7 percent. Moreover, Brazil’s tariffs would stay at an average of 11 percent for nine years, and only ten years out would fall to 9.7 percent. And, get this – even then only about 40% of Brazil’s tariffs would take any cut at all. What kind of market access is that?

This is what caused former Deputy U.S. Trade Representative Peter Allgeier to once quip that he finally understood what NAMA (Non-Agricultural Market Access) stood for – it meant “No Additional Market Access.”

It is time for Brazil to stop the rhetoric, show the leadership worthy of a major global player, and sit down and negotiate a deal that will have Brazil grant significant new market access and get significant new market access in return – and do this in services as well. You think? (continue reading…)

In the November 4, 2009, Toronto Globe and Mail, World Trade Organization (WTO) Director General Pascal Lamy was quoted as saying that a Doha round deal can be concluded soon: “We are nearly there,” he said, “but there remain a few nuts to crack, mostly the U.S.”

The National Association of Manufacturers (NAM) finds this comment unfortunate and distressing. The United States, which was instrumental in creating the post-World War II trading system that has served the world so well, which has led other nations – sometimes kicking and screaming – to liberalize world trade and open their markets in every negotiation since the Geneva Round of 1947, and which is pressing so hard for global market opening in the Doha Round, is not a “nut to be cracked.”

Rather than singling out the United States and seeking to pressure the Obama Administration to accept a deal the Bush Administration had already rejected, Mr. Lamy should focus his efforts on those WTO members who are still reluctant to offer substantial new market access. U.S. negotiators have been working tirelessly for a deal that creates significant and genuine new market openings that would benefit not just American firms, but firms in all countries – including in the poorest countries, who are key intended beneficiaries of the Doha Round.

Based on the recent estimates of the prestigious Institute for International Economics, without the sectoral tariff cutting agreements the U.S. is working so hard to achieve, the current (un-agreed) Doha Round text would barely increase world manufactured goods exports one percent. Furthermore, most of that gain would not occur for up to 10 years. And the situation in the services negotiations is even worse.

For over eight years the U.S. has been consistent in saying that only a balanced and ambitious outcome – not just for U.S. producers, but for all producers globally — is acceptable. The Doha Round is not there yet, and will not get there if Mr. Lamy continues to view the U.S. as a nut to be cracked rather than reinforcing the U.S. effort to obtain more trade liberalization globally.

Frank Vargo is Vice President, International Economic Affairs, National Association of Manufacturers

From an author who embraces the attack on property rights by the government of Rafael Correa, a news release, “Ecuador president Correa to override drug patents in order to provide affordable medication“:

(NaturalNews) The President of Ecuador, Rafael Correa, announced Sunday that he planned to override a number of pharmaceutical patents in order to provide more affordable medicines to the People of Ecuador. In a statement, Correa explained that access to medicine is a “human right” and that he intends to seek “compulsory licenses” to acquire medications considered indispensible.

Under current World Trade Organization rules, countries have the right to seek such “compulsory licenses” that override traditional patent rights. Current WTO rules require that such countries negotiate with the patent owners to determine fair compensation.

This action by Correa joins Ecuador’s recent declaration that it would not honor the illegitimate debt that had been placed on the country by foreign banks (under previous administrations). This bold move allowed Ecuador to renegotiate its debt for roughly 30 cents on the dollar. Much of that debt was considered “predatory debt” by academics who understand the way the World Bank and other first-world banking interests attempt to place debt burdens on many smaller nations as a tactic for exerting long-term influence over their economies.

Right. And the Barbary Pirates had legitimate grievances against the United States, too.

See also the AP story, “Ecuador pres: National labs to ignore drug patents.”

Also, on September 25, major U.S. business groups sent a letter to the leaders of the Senate Finance Committee and House Ways & Means Committee urging Congress not to reward Ecuador and Bolivia for undermining rule of law by renewing Andean trade preferences for those countries. The letter from Business Roundtable, Emergency Committee for American Trade, National Association of Manufacturer, National Foreign Trade Council, United States Council for International Business, and U.S. Chamber of Commerce is available here.

The World Trade Organization (WTO) sided with the United States Wednesday and slapped China for its restrictions on selling copyrighted U.S. films, music, books and other media. (WTO report.) China has been forcing companies to route imports through Chinese state-owned or controlled enterprises, while restricting reading material and music. The U.S. argues that this opens the door to the vast amount of Chinese counterfeiting in these media. And we’re talking about real money for U.S. producers –$3.6 billion lost sales in China of legitimate media in just 2008 alone.

A very important case filed by the U.S. and the European Union in June of this year against China for restricting exports of raw materials is still in the early stages. The U.S. is concerned that the Chinese export restraints hurt U.S. “downstream producers” of goods by limiting access and raising world market prices for the raw materials, while lowering the prices that domestic Chinese producers have to pay. The case covers nine materials: bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc. (USTR news release.)

The National Association of Manufacturers has long supported the use of WTO cases as a legitimate trade enforcement tool after negotiations fail. The seven cases brought against China since it joined the WTO in 2001 have produced results in areas like semiconductors, foreign financial information suppliers, packaging paper and auto parts. Although it is always preferable to avoid a litigation process, the use of WTO cases doesn’t mean the U.S.-China trade relationship is crumbling – it’s the way trade disputes between mature trading partners are settled – without a costly trade war.

More …

• USTR news release, “World Trade Organization Report Upholds U.S. Trade Claims Against China“
• Motion Picture Association of America news release, “MPAA’s Dan Glickman Hails WTO Decision“
• National Journal, “WTO Rules Against China On Copyrights“
• WSJ Law Blog, “WTO Ruling a Possible Boon to U.S. Copyright Holders“
• Agence France Presse, “China may appeal WTO order on films, music“

(Pat Mears is the NAM’s Director for International Commercial Affairs)