This year is an important year for a number of trade policies and agreements between the United States and countries around the world. These trade policies are important in determining U.S. competitiveness around the globe.
1. African Growth and Opportunities Act (AGOA)
AGOA was signed in 2000 by President Bill Clinton to promote trade between the United States and eligible Sub-Saharan African countries. (For details about what AGOA means for US and Sub-Saharan African businesses, check out my earlier posts.) AGOA is set for reauthorization this year. Otherwise, this piece of legislation will expire on September 30, 2015. In other words, the duty-free access that African exporters enjoy in the U.S. market will come to an end if AGOA is not reauthorized. President Obama supports reauthorization, but the question remains as to what the U.S. Congress will do.
2. Dominican Republic-Central American Free Trade Agreements (DR-CAFTA)
DR-CAFTA took effect in the United States, El Salvador, Guatemala, Honduras, and Nicaragua in 2006; the Dominican Republic, 2007; and Costa Rica, 2009. This year, all duties placed on manufactured goods traded between the seven countries will be completely eliminated provided that they satisfy certain rules. (See earlier posts on DR-CAFTA rules that producers must follow to enjoy duty-free treatment.)
Additionally, Nicaragua no longer enjoys a special benefit known as Tariff Preference Levels (TPLs), in which apparel made of certain cotton and man-made fiber and assembled in Nicaragua could enter the U.S. market duty-free regardless of where the fabrics were produced. These TPLS were designed to help Nicaragua, since its textile industry is extremely small. All other DR-CAFTA countries can only use fabric that originates in one or more of the DR-CAFTA countries. Efforts are being made by various organizations within the textile and apparel industry, such as the United States Fashion Industry Association and the American Apparel and Footwear Association, to extend the TPLS for Nicaragua. (For other posts about DR-CAFTA, see U.S. labor complaint against Guatemala)
3. National Export Initiative (NEI)
President Obama announced the NEI in January 2010. The goal of the NEI was to double U.S. exports by January 1, 2015. According to numbers provided by the U.S. Bureau of Economic Analysis, U.S. exports of goods and services to the world reached $1.6 trillion by the end of 2009. That figure reached $2.3 trillion in 2013. The data available covering January-November 2014 shows an export value of $2.1 trillion. The next report should have the final numbers for all of 2014. It appears that U.S. exports have increased but have fallen short of actually doubling in growth.
4. Trans-Pacific Partnership Agreement (TPP)
The TPP will be a large trade deal that the United States has signed with multiple countries throughout the Asia-Pacific region. (See earlier posts describing the TPP in detail.) However, negotiations still continue after missing a number of deadlines. This year, media reports continue to show the opposition to the TPP. The question remains as to whether this will be another year in which the talks fail to make any significant progress or the year that the deal collapses altogether.
5. Trans-Atlantic Trade and Investment Partnership Agreement (T-TIP)
The T-TIP is another agreement that is still being negotiated. Similar to the TPP, this potential trade deal between the United States and the European Union continues to face an uphill battle on both sides. (For a detailed description of T-TIP, click here.) For example, just this week, the European Commission published the results of a public consultation conducted in March 2014. Many respondents voiced their opposition to the T-TIP altogether and others expressed serious concern about investor protection. In a Pew Research Center report, many Americans support T-TIP but express concern about certain points within the agreement such as removing all investment restrictions on trade between the United States and the EU.
We will see what will become of these five trade programs and free trade negotiations, especially with the shift in the U.S. Congress following the midterm elections. (See my analysis of the midterm elections and what it means for the U.S. trade agenda.)
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