Global Update: VP Biden in India

Vice President Biden urged India to lower barriers to foreign trade and investment on Wednesday, July 24th 2013, in order to strengthen its economy.

Foreign businesses, including Wal-Mart, have reduced their investment plans in the country. India’s weak public policy has led its foreign direct investments to crumble by 21% this past fiscal year.

Sreeram Chaulia, a professor at the Jindal School of International Affairs in Haryana, claims “India’s value as a market for U.S. goods and investment is losing sheen. What the Americans don’t want to see in India is protectionist and populist policies.”

In order to increase investment in the country, Michael Froman, the U.S. Trade Representation, pointed out that “investors look for a consistent commitment to, not sporadic outbursts of, reforms. Most importantly, they look for the enduring confidence that comes from long-term, sustained, high levels of growth.”

If India chooses to follow Froman’s advice, US companies will pounce on the opportunity to get a foothold in this lucrative market and growth will soon be at her doorstep.

U.S. and Southeast Asian Nations to Deepen Trade and Investment

U.S. Trade Representative Ron Kirk visited Vietnam on September 2, after visiting Cambodia 1at the first U.S.-ASEAN Business Summit on August 3. His visits were to deepen and strengthen trade and investment between the United States and Southeast Asian nations.

Ambassador Kirk and Cambodian Minister of Commerce Cham Prasidh announced that the U.S. and Cambodia have started to explore a potential bilateral investment treaty (BIT). During Kirk’s visit in Vietnam, he also seeks to strengthen bilateral ties, advance Trans-Pacific Partnership  (TPP) and regional economic integration. The visits set the stage for the fourteenth round of Trans-Pacific Partnership negotiations, which will take place in Leesburg, Virginia, September 6 – 15.

For more information: http://www.ustr.gov/.

 

Effects of Russia’s WTO Entry

http://travel.nationalgeographic.com

On August 23rd, 2012 Russia became the 156th member of the World Trade Organization (WTO) As a result, Russia is expected to lower import taxes and open its market to international competition.

An article in the Moscow Times suggests that Russia should use the WTO membership as a signal to its business community and international investors. (www.themoscowtimes.com, July 18, 2012)

Typically, Russia has received much less foreign investment than many other big emerging markets due to its tariff walls and onerous customs clearance procedures. (www.economist.com, July 14, 2012). Russia’s economy needs the diversification brought about by external investors, and greater adherence to stable rules will help in attracting them.

According to Office of the United States Trade Representative, Russia’s membership in the WTO will bring significant commercial opportunities for U.S. exporters in several sectors, such as agriculture, high-tech products, services, and retailing. (www.ustr.gov)

Weekly News – Russia Joins WTO

Source: WTO Website

Russia will become the 156th WTO member from August 23, a month after President Putin signed into law a protocol ratifying the country’s accession to the WTO.  Then, Russia is expected to lower import taxes and open its market.

The news of Russia’s acceptance to the WTO was praised by U.S. government. According to Office of the United States Trade Representative, Russia’s membership in the WTO brings significant commercial opportunities for U.S. exporters in several sectors, such as agriculture, high-tech products, services, and retails. (www.ustr.gov)  A House committee also approved legislation to ease trade relations with Russia. (www.businessweek.com, July 26, 2012)

How Russia will handle its WTO membership remains unveiled. But it is certain that Russia is paving its path toward a more rule-based system and a more open economy. United States Trade Representative Ron Kirk stated that Russia’s acceptance to the WTO marks a historical event in the evolution of the WTO and the global trading system. With the last country of BRIC entering the world trade arena, we are expecting to see a more integrated world economy that provides important opportunities for international business and trade.

Solution to Years-Old Zeroing Disputes – Commitment to Export Growth and Job Creation

The following is from a Press Release from the Office of the United States Trade Representative, “United States Trade Representative Ron Kirk Announces Solution to Years-Old Zeroing Disputes, Demonstrating Commitment to Export Growth and Job Creation”

Washington, D.C. – United States Trade Representative Ron Kirk announced that today in Geneva the United States signed agreements with the European Union (EU) and Japan that will bring to an end longstanding disputes with these important trade partners over “zeroing.” Zeroing is a label sometimes used to describe a methodology employed in antidumping calculations for aggregating unfairly-traded (“dumped”) transactions with other transactions. The disputes started nearly nine years ago, when the EU first requested WTO consultations over the use of zeroing. In April 2006 (in the EU dispute) and January 2007 (in the Japan dispute), the World Trade Organization (WTO) found that the U.S. use of zeroing in certain antidumping proceedings is inconsistent with WTO rules. After the WTO found that the United States had not brought its antidumping methodologies into compliance, the EU and Japan requested authorization to impose hundreds of millions of dollars of trade retaliation. Had these agreements not been reached today, substantial volumes of U.S. exports could have been closed out of markets in the EU and Japan, resulting in job loss for U.S. workers and financial loss for U.S. farms and businesses.

“I am proud to announce today that we have finally put these burdensome and potentially damaging trade disputes behind us,” said Ambassador Kirk. “What this means for the American people and the country as a whole is that American farmers and businesses can invest in job-creating export markets without the uncertainty of possible trade retaliation. And the resolution of these longstanding disputes promotes our ability to focus on the Administration’s priority of enforcing U.S. rights under our trade agreements to ensure a level playing field for American farmers, workers and businesses.”

Under the agreements signed today, the United States will complete the process – which began in December 2010 – of ending the zeroing practices found in these disputes to be inconsistent with WTO rules. In return, the EU and Japan will drop their claims for trade retaliation.

The United States has repeatedly explained that the WTO Appellate Body – in making its findings on zeroing – did not apply the text of the Antidumping Agreement and, therefore, exceeded its mandate. The United States will continue to press in ongoing WTO negotiations for affirmation that zeroing is consistent with WTO rules. Nonetheless, in these circumstances and at this time, the compliance actions announced today are important in confirming U.S. support for the rules-based system that the WTO provides. Moreover, as Ambassador Kirk explained, “the Administration is committed to vigorous enforcement of U.S. antidumping and other trade remedy laws. I am confident that we will continue to enforce these laws effectively, as was shown, for example, in our successful defense of the President’s imposition of duties on tires from China.”