News

News

News USA

 A weekly service provided to the American Chambers of Commerce in Europe

WHITE HOUSE ADVISER ON ECONOMIC RECOVERY

This week, Council of Economic Advisers Chairman Glenn Hubbard said the outlook for the U.S. economy remains strongly positive. However, a slower recovery in capital spending, rising energy prices or security concerns may make it less so. Growth in the United States will be initially slow in 2002, but over four quarters, inflation-adjusted gross domestic product (real GDP) is expected to grow 2.7 percent. Consumer spending is projected to continue at solid rates while business investment and exports are likely to start growing significantly later in the year. Currently, the Bush administration is proposing increased funding to develop measures for collecting better and timely economic data, which both government and private decision-makers need to track the economy as accurately as possible.

U.S. CHAMBER ECONOMIC FORECAST – FEBRUARY 2002

Please find attached to this week’s News USA a copy of this week’s economic forecast from the Chamber’s Chief Economist, Martin Regalia.

ZOELLICK: CONGRESS MUST ACT TO STAVE OFF EU FSC RETALIATION

U.S. Trade Representative Robert Zoellick urged members of Congress to move on a legislative change to U.S. corporate tax law in order to ward off trade retaliation from the European Union in the World Trade Organization dispute over the U.S. Foreign Sales Corporation law this week. Zoellick's push drew a cool response from Senate Finance Committee Chairman Max Baucus (D-MT) at a February 6 hearing. At a separate hearing the next day, Ways and Means Committee Chairman Bill Thomas (R-CA) urged Zoellick to put the administration plan to fix the tax code in writing. Zoellick believes that Senate Finance Committee action responding to the WTO ruling, whether in the form of hearings or some other action, is needed to “show [the Europeans] there is a serious consideration of the topic. Because otherwise . . . we're going to face retaliation.”

USDA PROPOSES LISTING ESTONIA AS FREE OF FOOT-AND-MOUTH DISEASE

The U.S. Department of Agriculture (USDA) is proposing to add Estonia to the list of regions considered to be free of rinderpest and foot-and-mouth disease at this time. USDA is also proposing to add Estonia to the list of regions that are subject to certain import restrictions on meat and meat products because of their proximity to or trading relationships with rinderpest- or foot-and-mouth disease-affected countries. These actions would update the disease status of Estonia with regard to rinderpest and foot-and-mouth disease while continuing to protect the United States from an introduction of these diseases.

USDA is also seeking comments on an interim rule that adds Slovakia and Slovenia to the list of regions where bovine spongiform encephalopathy exists. USDA enacted this rule because BSE has been found in native-born animals in those countries. This interim rule is effective upon publication in the Feb. 1 Federal Register. This announcement invites public comment on either proposal, which must be postmarked, delivered or e-mailed by April 2, 2002. For more information, please visit http://www.aphis.usda.gov.

ALDONAS CONVENES FIRST MEETING OF TEXTILE WORKING GROUP

On February 1, U.S. Department of Commerce Under Secretary for International Trade Grant Aldonas chaired the first meeting of the Textile Working Group; an interagency group formed to ensure the Administration fulfills the commitments made in advance of the Trade Promotion Authority vote. Officials from the Office of the U.S. Trade Representative, the National Security Council, and the U.S. Departments of Commerce, Labor, Treasury, Justice, and State attended. To address specific industry concerns, Aldonas proposed the creation of several subgroups during the largely organizational meeting of principals. The subgroups will cover trade negotiating objectives in existing and future free trade negotiations; compliance with and enforcement of existing laws and agreements; the implementation of the Agreement on Textiles and Clothing integration schedule; encouraging optimal utilization of the Commerce Department's Export Expansion Program; supporting reauthorization of trade adjustment assistance programs; combating illegal textile transshipment; and ensuring full access to trade remedy laws consistent with international rights and obligations.

USTR ZOELLICK OUTLINES TRADE OBJECTIVES FOR 2002

According to U.S. Trade Representative Robert Zoellick, the United States’ trade-related goals for the coming year include completing bilateral free trade agreements with Chile and Singapore, advancing Russia’s accession to the World Trade Organization (WTO), and ensuring the involvement of least developed countries in the global talks launched at the November 2001 WTO meeting in Doha, Qatar. He also pressed Congress to approve trade promotion authority (TPA) for the president, and to re-authorize the Andean Trade Preference Act (ATPA) and the Generalized System of Preferences (GSP). Both the ATPA and GSP programs set preferential tariffs for many imports from developing countries, and both expired in 2001.

BUSH FARM BUDGET SLASHES FOOD AID, BOOSTS EXPORT CREDITS

The Bush Administration's proposed farm budget slashes food aid programs used to dispose of surplus crops that have drawn criticism from trading partners who charged they allowed the U.S. to circumvent export subsidy limits in the World Trade Organization. But the fiscal year 2003 budget proposal maintains or increases funding for export credit programs that trading partners also charge subsidize U.S. crop exports. The Administration is proposing to boost funding for food aid programs administered by the U.S. Agency for International Development. As a result the budget would fund only 3.7 metric tons of food aid in the next fiscal year compared to the 5.6 million metric tons supported by current funding, according to private-sector sources. The Bush budget calls for $74.4 billion overall for farm programs, a net decrease of $2.2 billion over 2002 funded levels. This includes $6.45 billion for international programs, which represents a $50 million net increase over 2002 funded levels. On export credits, the Bush budget maintains the current year's level of just over $3.4 billion for two key export credit guarantee programs administered by the Commodity Credit Corporation (CCC).

CHAMBER PRESIDENT VISITS WARSAW AND GENEVA

This week, U.S. Chamber of Commerce President and CEO Thomas Donohue made an executive office visit to Warsaw, Poland and Geneva, Switzerland. In Warsaw, Donohue met with AmCham Poland, the Polish Business Roundtable, and the Polish Ministers of Labor, Economy, Infrastructure and Agriculture. He also met with the Polish Federation of Private Employers and His Excellency Leszek Miller, Prime Minister of Poland. In Geneva, he met with AmCham Switzerland, WTO Deputy Director Generals Paul Henri Ravier and Andrew Stoler, U.S. Ambassador to the WTO, U.S. Ambassador to the United Nations and the Secretary General of ILO.