F REE T RADE A GREEMENTS – M AXIMIZING B ENEFITS TO YOUR BUSINESS S KIP J ONES Deputy Assistant Secretary Trade Agreements and Compliance October 7, 2011

Today’s Agenda Trade Agreements: Korea, Colombia and Panama What’s Next? How Will Pennsylvania Benefit? Trade Agreements Compliance Program Case Example Intellectual Property Rights Resources Resources and Contacts 2

Why Trade Agreements with Korea, Colombia, and Panama?  Grow U.S. economy; support jobs.  Improve U.S. firms’ competitiveness.  Provide clear rules for doing business.  Make open trade a two-way street.  Grow important new provisions for overcoming country- specific challenges.  Strengthen U.S. national security 3

4 Highlights : Korea Agreement  Eliminates Tariffs and Improves Market Access  Nearly 95% of trade in consumer and industrial products duty-free within 5 years  Harmonizes bilateral tariffs  Address tariff and non-tariff barriers  Increased access for U.S. autos, including unprecedented provisions to address non-tariff barriers in Korea

5 Highlights : Korea Agreement  Codifies Rules for U.S. Exporters  New protections for U.S. investors  Further opens Korean market for U.S. service providers  State-of-the-art protections for intellectual property  Expands access to Korean government procurement contracts  Improves transparency for all U.S. exporters, but especially for pharmaceutical and medical device industry L:\Outreach\Outreach Events\FY2011\DAS Skip Jones FTAs Forum (Cong. Gerlach)\DAS Jones FTAs Forum (Cong. Gerlach) 5oct2011 V.2 pptx

6 The KORUS Agreement and Jobs  American manufacturers of medical equipment, information technology, environmental goods, and machinery all depend on the Korean market.  Manufactured goods accounted for over 80 percent of American goods exports to Korea in  NAM says that under the U.S.-Korea Agreement, American exports of machinery and equipment will increase by more than a third. * NAM=National Association of Manufacturers

Highlights: Colombia Agreement  Immediate zero-tariff treatment for over 80% of U.S. exports of consumer and industrial products  Improved market access for key U.S. farm products  Major provisions for services  Colombia will join the WTO Information Technology Agreement (ITA) 7

The U.S. -Colombia Free Trade Agreement and Jobs  Provides benefits to SME exporters  Streamlines customs  Provides for dispute settlement  Enhances business climate Photo: Port of Cartagena 8

Highlights: PANAMA FTA  U.S. goods and services more competitive.  Immediate zero-tariff treatment for 87% of U.S. exports of consumer and industrial products  Liberalizes services trade  Streamlined access to securing business with Canal, Metro projects.  Greater transparency in Public Procurement. 9

The Panama Agreement and Jobs Ensure that U.S. firms can participate on a competitive basis in the $5.25 billion Panama Canal expansion project. Expansion benefits U.S. exporters by: –increasing Canal capacity, –reducing costs of transporting goods –keeping up with demands of growing global economy –Creating opportunities for U.S. suppliers of machinery-construction and earth moving equipment. 10

What’s Next? Both parties must pass the agreement into law. –We understand that the Hill vote may come as early as October 12. –Korea is waiting for U.S. passage before presenting to Korean Parliament vote. –Colombia and Panama have already passed the new, enhanced agreements with their legislatures. The agreements specify a date “on or after January 1, 2012” for the agreements to come into force. Once in force, provisions (e.g., certain tariff rates) are phased in, others can be immediate, as provided in the agreement. 11

How will Pennsylvania Benefit? KORUS Opens New Markets for Key Pennsylvania Exports – Chemicals Manufactures, Computers and Electronic Products, Primary Metals Manufactures, and Creates Opportunities for Agriculture CTPA will Eliminate Tariffs for over 87% of U.S. Exports of Consumer and Industrial Products (excluding petroleum) within 5 years. With the TPA in place, 87% of U.S. Goods will enter Panama Duty- Free immediately, Remaining Tariffs will be Eliminated within 10 years.

Trade Agreements Compliance Program Free Resources at the TCC Website: Open to all U.S. exporters, particularly designed for SMEs. Exporters and investors can use the Online Trade Complaint Hotline at to report and obtain assistance with foreign market access barrierswww.export.gov/tcc Free online tools, agreement texts, IPR training modules Standards Early Warning A checklist of trade barriers Overseas Compliance Officers (China, El Salvador, India, EU) 13

Trade Agreements Monitoring: What kinds of foreign government trade barriers do firms face? Excessive tariff and customs barriers Discriminatory rules of origin, certificates of origin, or import licensing requirements Burdensome standards, testing, labeling, or certification requirements Lack of Intellectual Property Rights protection Non-transparent government procurement procedures 14

Case Example: China – Improper Application of Standards and Technical Regulations Klinge Corporation faced a problem re-exporting assembled refrigeration containers from China to Australia. Klinge contacted ITA’s Trade Agreements Compliance Program through hotline for assistance. Team obtained China’s commitment to release shipment and adhere to its obligations under the WTO Agreement on Technical Barriers to Trade. Team obtained China’s commitment to release shipment and adhere to WTO obligations on Technical Barriers to Trade, which require that such product certifications not create unnecessary obstacles to trade. Success leveraging China’s commitment ensured that Klinge’s $8.5 million contract was not jeopardized.

IPR Resources Available to Assist U.S. Companies Learn more about steps to protect/obtain IPR in the U.S. and abroad. Request assistance from the website or call HALT to speak with a trade specialist about company problems. Various IPR tools and programs available from the website. IPR Toolkits (18) –Brazil, Brunei, China, Croatia, Egypt, European Union, Ghana, India, Italy, Korea, Malaysia, Mexico, Pakistan, Paraguay, Peru, Russia, Taiwan, Thailand, and Vietnam –How to obtain and enforce IP rights in each country –Country contacts 16

17 Resources on the Web Export.Gov Site on FTAs International Trade Administration Site on FTAS Sector & State Reports FTA Benefits Fact Sheets on Korea, Colombia, and Panama FTA Tariff Tool – Detailed list of resources is in your information packet.

Contact Us MAC’s Trade Agreements Compliance Office: Beverly Vaughan, Director, TCC Kevin Ellis, Compliance Team, TCC John Liuzzi, Compliance Team, TCC Steve Williams, Operations Team, TCC Use our Hotline: Report a Barrier: Tel: USA-TRADE, ask for Trade Barrier Assistance Fax: