Strategic Goal 8: Economic Prosperity and Security - Performance Results for Performance Goal 2

FY 2003 Performance and Accountability Report
Bureau of Resource Management
December 2003
Report

PERFORMANCE GOAL 2

Increased trade and investment achieved through market-opening international agreements and
further integration of developing countries into the trading system

 

I/P #2: CREATE OPEN AND DYNAMIC WORLD MARKETS

Pursue increased market access through multilateral, regional, and bilateral negotiations to conclude agreements to create open investment policies and free trade in goods and services.

OUTCOME INDICATOR

Indicator #1: Status of Negotiations on Open Markets for Services, Trade, and Investment

FY Results History 2000 Baseline: WTO negotiations on agriculture and services began. Ten Bilateral Investment Treaties (BITs) sent to Senate for ratification. Negotiations on Free Trade Agreements (FTAs) ongoing.
2001 Preparations for launch of new WTO round underway. Chile and Singapore FTA negotiations began. Congress approved Jordan FTA. Five BITs entered into force. APEC leaders agreed in Shanghai to liberalize trade and investment.
2002 WTO launched new round in Doha. China and Taiwan joined WTO. Jordan FTA entered into force. Chile and Singapore FTA negotiations continued.

Morocco, Central American Free Trade Area (CAFTA), Southern African Customs Union (SACU) and Australia identified as partners for FTAs. BIT discussions continued with Venezuela, Peru, Colombia, and South Korea. China took concrete steps to remove trade barriers and open its markets; some shortfalls remained in areas of interest.
FY 2003
Data
2003 Results
  1. Two FTAs (Chile, Singapore) concluded.
  2. WTO and Free Trade of the Americas (FTAA) negotiations continue.
  3. FTA negotiations began with CAFTA, Morocco, SACU, and Australia.
  4. Due to the lack of inter-agency agreement on draft BIT language, no new BITs were concluded in FY 2003.
    • Also, notified Congress of intent to initiate FTA talks with Dominican Republic and Bahrain.
Target
  1. Conclude Chile and Singapore FTAs.
  2. Continue WTO Doha Round negotiations and Free Trade Area of the Americas (FTAA) negotiations.
  3. Begin new FTA negotiations with CAFTA, Morocco, SACU and Australia.
  4. Conclude two new BITs.
Rating On Target
Impact

FTAs open markets for U.S. businesses, serve as model agreements for future FTAs, and provide leverage in other negotiations. Statistics on NAFTA, for example, show that, in the ten years of its existence U.S. exports to Canada and Mexico grew from $147.7 billion to $260.2 billion, and foreign direct investment in all three countries went from $136.9 billion in 1993 to $299.2 billion in 2000.

Spurred by both NAFTA and the WTO Uruguay Round Agreements, expanded trade through exports accounted for about 25 percent of U.S. economic growth over the last decade and supported an estimated 12 million American jobs. According to the World Bank, full trade liberalization in goods and services through the WTO could lift 300 million people out of poverty by 2015.

Impasse at September 2003 Cancun WTO Ministerial will slow efforts toward multilateral trade liberalization; lack of agreed model BIT delays negotiation of BITs.

OUTPUT INDICATOR

Indicator #2: Number of Market Opening Transportation Agreements in Place

FY Results History 2000 Baseline: Open Skies agreements in place with forty-seven countries.
2001
  1. Five additional bilateral Open Skies agreements concluded.
  2. Multilateral Open Skies agreements with four countries concluded.
2002 Five additional bilateral Open Skies agreements plus three other liberalized agreements concluded.
FY 2003
Data
2003 Results
  1. Concluded three bilateral Open Skies agreements: Jamaica, Albania, and Thailand (all cargo Open Skies); and one Multilateral Accession: Samoa.
  2. Liberalized two (non-Open Skies) Agreements: Hong Kong and Thailand.
Target
  1. Conclude three full Open Skies agreements: Jamaica, Albania, and Samoa.
  2. Conclude two non-Open Skies agreements: Hong Kong and Thailand.
Rating
  1. On Target
  2. On Target
Impact Hong Kong deal will generate estimated $1.5 billion in revenue for U.S. carriers in the next three years; others expand global links for U.S. (and foreign) carriers, lowering costs for travelers and shippers, and help open markets for U.S. firms.

OUTPUT INDICATOR

Indicator #3: Number of Countries Allowing Commercial use of Agricultural Biotechnology and Global Acreage of Biotech Crops Under Cultivation

FY Results History 2000 Baseline: Seven countries allowed commercial use of ag-biotech products.
2001
  1. Seven additional countries allowed commercial use of ag-biotech products.
  2. Acreage under cultivation increased.
2002
  1. India commercialized transgenic cotton.
  2. Philippines and Brazil took initial steps toward commercializing ag-biotech.
FY 2003
Data
2003 Results
  1. The Philippines and Brazil commercialized ag-biotech.
  2. Biotech acreage continued to expand.
Target
  1. The Philippines and Brazil commercialize ag-biotech.
  2. Biotech acreage continues to expand.
Rating
  1. On Target
  2. On Target
Impact
  • In 2003, the Philippines became the first country in Asia to commercialize a biotech food crop, maize.
  • While there was some movement made on the part of the Kenyan Parliament this year, they did not enact legislation that would allow the commercial planting of biotech crops.
  • Brazil authorized the commercial planting of biotech soybeans this year. As the second largest exporter of soybeans in the world, this decision will have a significant impact on the global acreage of biotech crops under cultivation.

OUTPUT INDICATOR

Indicator #4: Number of New Accessions to the WTO

FY Results History 2000 Baseline: 135 total members.
2001 7 new accessions.
142 total members.
2002 2 new accessions.
144 total members.
FY 2003
Data
2003 Results Four new accessions (Armenia, Cambodia, Former Yugoslav Republic of Macedonia, and Nepal) bring total to 148 members.
Target 2 new accessions for a total of 146 members.
Rating Significantly Above Target
Impact Increasing the number of WTO members broadens acceptance of market-oriented principles.
Other Issues Reason for Significantly Exceeding Performance Target: The rate of accession for aspirant countries to the WTO depends on a number of factors, including WTO member concerns and domestic policitical considerations. It is difficult to predict exactly when a country will have satisfied accession requirements, although a general timeline is possible. In this instance, two countries progressed more rapidly than originally anticipated and were able to join the WTO earlier than expected.

OUTPUT INDICATOR

Indicator #5: International Telecommunication Union (ITU) Recommendations Adopted

FY Results History 2000 Baseline: 526
2001 321
2002 385
FY 2003
Data
2003 Results 472 U.S. telecom, information technology, radio communication proposals/positions, standards, and recommendations adopted.
Target Adoption of 455 U.S. telecom, information technology (IT), radio communication proposals/positions, standards and recommendations favorable to U.S. businesses in International Telecommunications agreements and declarations.
Rating Significantly Above Target
Impact

Adoption of ITU recommendations and U.S. telecom, information technology, and radio communication proposals/positions and standards/recommendations gauges the willingness of countries to adhere to principles favorable to market-oriented policies.

As such, the ability of the U.S. to persuade other countries to adopt these measures increases business opportunities for U.S. firms. Examples of those that have benefited from recently adopted recommendations/proposals include the wireless local area network systems, the commercial roll-out of broadband services for airline passengers, and the manufacturers of small broadcast satellite service antennas that are widely used in the United States.

Other Issues Reason for Significantly Exceeding Performance Target: The number of recommendations adopted at the ITU depends on a number of factors, including countries' perceived negotiating space and whether there are any counter-proposals. U.S. Representatives were able to persuade ITU members to adopt a higher number of recommendations than originally predicted due to a successful negotiating strategy.