Trade News Discussion

Top U.S. Trade Partners for 2009

Sat, 06 Feb 2010 06:00:00 GMT

U.S. Trade Partners 2009

Rank	Country
1	Canada
2	China
3	Mexico
4	Japan
5	Germany
6	United Kingdom
7	South Korea
8	France
9	Netherland
10	Brazil

More...

France's President attempting to make it a matter of law what Muslim women may wear

Wed, 27 Jan 2010 06:00:00 GMT

Normally, I blog about trade issues but I must say I was shocked to read in the news that France's President Sarkozy is attempting to obtain a partial ban on any veil that cover the face-including the burqa that is worn by some Muslim women in France. According to Sarkozy ..
More...

U.S. government is trying to help U.S. small-medium size businesses export more...

Sat, 23 Jan 2010 06:00:00 GMT

On October 5, 2009, Ambassador Kirk announced that the Office of the United States Trade Representative was launching an initiative aimed at increasing exports by small- and medium-sized firms in the United States. In addition to creating a USTR-wide working group focused on SME issues, Kirk announced that USTR was requesting an investigation by the USITC to better understand how many of America's small- and medium-sized enterprises export now, their role in generating employment and economic activity in the U.S., and how increased trading opportunities might benefit these businesses and their workers. This first USITC report released today covers SME exporting activity. Key findings include:

· SMEs play a crucial role in job creation. Over the last two decades, SMEs have accounted for almost 65 percent of new jobs created in the U.S. Overall they account for half of non-farm U.S. employment.

· Almost 80 percent of American SME employment is within the services sector, compared with 85 percent in larger companies. Firms providing professional, scientific, and technical services account for a larger share of services sector employment within SMEs than in larger firms.

· American SMEs are leaders in minority and foreign-born employment and opportunity. Small and medium employer firms are more likely to be minority-owned and to employ a foreign-born person than larger firms. 11.6 percent of all employer SMEs are minority owned.

· The roughly 250,000 American SMEs that export merchandise account for nearly 30 percent of U.S. merchandise exports; the SMEs constitute about 97 percent of American merchandise exporters.

· American SME exporters increase employment faster and pay higher wages than non-exporting SME firms. SMEs that export are more skill and capital intensive than those that do not. They deliver on these inputs by demonstrating higher productivity that supports better wages and helps competitiveness.

· However, American SMEs still are not exporting as actively as larger firms. As a share of their overall business, large U.S. firms are getting three times the value from foreign trade that SMEs are. This weak export involvement led to exports accounting for only 3.8 percent of SME GDP in 2004.

· Technological advances (for instance, on the Internet) and government programs are now opening the door to a larger export role for SMEs. In 2008 the NAM found that 13 percent of its SME manufacturers now derive at least 25 percent of their sales from exports, over triple the share of firms in 2001.

· American SMEs are key drivers of innovation, which will be a key to a sustainable U.S. recovery, and increased trade can help the SMEs to take advantage of their innovations. Studies show that American SMEs produce more patents of significance per employee than big firms.

· The largest markets for American SME merchandise exporters were with NAFTA partners Canada and Mexico (just like their large firm counterparts). These markets accounted for more than 30 percent of SME merchandise exports from the United States. The principal SME exports were computers and electrical products, machinery, and chemicals; they also have significant apparel and wood exports.

· American SME merchandise exporters engage more actively with higher-income small markets - including Hong Kong, Switzerland, Australia, and Israel - than they do to emerging markets like China and India.

· Though manufacturers account for almost three quarters of total U.S. merchandise exports, trade by wholesalers is growing fast. Whereas manufacturer exporters are overwhelmingly large firms, SMEs account for 57 percent of wholesaler and other non-manufacturer merchandise exports. This type of trade more than doubled between 1997 and 2007.

· Services now constitute 30 percent of U.S. trade, but the USITC found data on cross-border exports by U.S. SMEs in the services sector to be unavailable. The report instead analyzes the practices of U.S. SMEs operating abroad through foreign affiliates, and suggests that those practices may predict export patterns. Though the success of foreign affiliates is important to U.S. parent companies, foreign investment may not offer the same direct economic and employment benefits for the US economy as cross-border services trade. The forthcoming third USITC study hopes to provide better information on services exports.

· Among U.S. services SMEs operating foreign affiliates, those providing professional, scientific and technical services are the most active and the most profitable. Though it does not yet have supporting data, USITC believes that these are the most important sectors for U.S. SME services exports as well.

· U.S. services SMEs have been most active in establishing foreign affiliates in the markets of our NAFTA partners, the EU, Japan and Korea. USITC believes subsequent data will show these to be the most active markets for cross-border services exports by U.S. SMEs as well.

E.U. potentially a good market for the U.S.

Thu, 21 Jan 2010 01:24:00 GMT

In the rush to Asia, the potential of the European market for U.S. companies is overlooked. With the weakened dollar, American products and services have an advantage over European competitors. Particularly, high tech industries, cell phones, and service sector exports.More...

Warning foreign suppliers not to re-export your product to sanctioned countries may not be enough

Tue, 10 Nov 2009 05:29:00 GMT

The Commerce Department's Bureau of Industry and Security (BIS) announced today that five foreign subsidiaries of Thermon Manufacturing Company, a San Marcos, Texas-based firm, have agreed to pay a total of $176,000 in combined civil penalties to settle allegations that they participated in unlicensed exports and reexports of heat tracing equipment to Iran, Syria, Libya and listed entities in India, in violation of the Export Administration Regulations (EAR). Thermon Manufacturing voluntarily disclosed the violations to BIS.

"Thermon's foreign subsidiaries placed orders intended for and ultimately shipped to sanctioned countries and listed entities," said Kevin Delli-Colli Acting Secretary of Commerce for Export Enforcement. "A number of the violations occurred despite the fact that Thermon U.S. told the subsidiaries that such actions were prohibited."

BIS alleged that between October 2002 and June 2006, the five subsidiaries--Thermon Europe B.V., Thermon Far East Ltd., Thermon Heat Tracers Pvt. Ltd. (based in India), Thermon Korea Ltd., and Thermon (U.K.) Ltd.—committed a total of 33 violations by re-exporting or causing the export of EAR99 heat tracing equipment manufactured in the United States by Thermon Manufacturing, without the required BIS license or, for shipments to Iran, a License from the Treasury Department’s Office of Foreign Assets Control.

The Thermon subsidiaries did not inform Thermon Manufacturing of the ultimate destinations for the items and had been informed by Thermon Manufacturing in February 2005 that “products manufactured by Thermon US may not be sold to countries on the US trade sanctions list,” including specifically Iran, Syria and Libya.
The foreign subsidiaries were fined as well, but this is merely an accounting technicality since Thermon in the U.S. (the parent company) will be footing the bill.

New U.S. Country of Origin Labeling Law, Protectionism or a step toward Green?

Wed, 20 May 2009 20:44:00 GMT

U.S. country of origin labeling law referred to as "COOL" has brought a heated trade battle between effected countries Canada, Mexico and the U.S. Taking effect March 2009, U.S. enacted country of origin labeling laws on beef, pork, lamb, fish and other agriculture products imported into the United States from Mexico and Canada.
On its face, this law does not seem to merit the controversy it has received. It is well known that most trading countries require origin markings for imported goods. However, Canada and Mexico contend this is disguised protectionism which has consequently impacted their cattle industry with a projected loss of 400 million. This loss is namely due to operating and recordkeeping cost needed to meet the mix labeling requirement, that specifies producers must notate on the label the country of origin for the various stages of food processing. In the case of ground beef, an animal born in Canada, slaughtered in Mexico and finally ground in the U.S., requires labeling to state Canada, Mexico and U.S. as country of origins. Admittedly this is unique, as U.S. country of origin regulations for other products and countries allows for some form of majority calculation for separate parts to be the determining factor in electing one country of origin.
Yet supporters of the law argue that this is in the best interest of American consumer. It allows consumers to know where their food comes from. In the event of a health warning on a particular product, country of origin allows the consumer to avoid said import. It is also intended to reduce America's carbon footprint by allowing American consumers to select products with the least transportation mode. Can Canadian and Mexican food producers deny the premise of this law is globally and consumer conscience. However historically one cannot discount that protectionism does not always come in the obvious forms i.e. duty increases, quotas and antidumping. What is your take?
For more information about COOL visit USDA website.