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 U.S. – EUROPE COMMERCE NEWS

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

US & EU ECONOMIC STATS

U.S. UNEMPLOYMENT INSURANCE CLAIMS CONTINUE TO RISE

According to the U.S. Department of Labor, first-time unemployment insurance claims rose to 417,000 last week from 412,000 the previous week. The number of claims has been increasing over the last few months, bringing the four-week moving average to a five-month high of 423,000. Readings above the 400,000 level are generally considered to be recessionary. The total number of ongoing claims grew to a 3-month high of 3.68 million. The Department of Labor also reports that the unemployment rate has remained within a range of 5.6 to 5.9 percent over the last four months.

GROWTH IN U.S. SERVICE SECTOR INCREASES, EUROZONE CONTRACTS IN SEPTEMBER

According to the Institute for Supply Management’s monthly index, service-sector activity rose from 50.9 in August to 53.9 in September, representing a three-month high. Any figure above 50 is associated with growth. The index is based on a survey of executives in retail, healthcare, real estate, finance, entertainment, and other service industries. The U.S. service sector accounts for the bulk of the U.S. economy and provides roughly 80 percent of all U.S. jobs. In contrast, the Reuters/NTC Research survey released on Friday said that the purchasing managers’ index for the Eurozone’s dominant services industry fell below the 50 mark that divides growth from contraction from 50.8 in August to 49.1 in September. The index had not fallen below the 50 mark for nine months. The European Central bank will meet next Thursday to discuss a cut in interest rates, currently at 3.25 percent.

Please find attached to this week’s U.S. – Europe Commerce News the latest economic forecast from the U.S. Chamber’s Chief Economist, Martin Regalia.

U.S. CHAMBER URGES RESOLUTION TO WEST COAST DOCK DISPUTE

The U.S. Chamber has urged business owners and union leaders to resume contract negotiations and bring an end to the work stoppage at 29 ports on the U.S. west coast since September 27 that has cost roughly $1 billion a day. Representatives from the Longshore and Warehouse Union and the Pacific Maritime Association returned to the bargaining table on Thursday to continue negotiations over a plan to introduce labor-saving technology strongly opposed by the union. Meanwhile, a port security bill sponsored by Senate Commerce Committee Chairman Ernest Hollings (D-SC) remains deadlocked in conference over how to pay for port security upgrades. West Coast ports now handle about one-fifth of US export-import traffic.

U.S. REVERSES LONG-STANDING POSITION ON INVESTOR PROTECTION

In a new proposal presented last week in bilateral trade negotiations with Chile and Singapore, the U.S. government changed its long-standing position on protecting companies from foreign expropriations. For the first time, the U.S. has demanded that limitations be placed on the legal recourse available to foreign investors who believe their property has been wrongly expropriated by a foreign government. Specifically, the U.S. seeks to narrow the standards for what is considered an expropriation, because several foreign companies have used the expropriation provisions to mount significant legal challenges against U.S. regulatory initiatives on the environment. For example, a Canadian methanol producer is seeking over $1 billion in damages over a California decision to ban the use of certain chemical additives. The U.S. wants health and safety laws that are intended to protect the public welfare to be exempt from such challenges in its agreements with Chile and Singapore.

POLAND LIFTS RESTRICTIONS ON CAPITAL MOVEMENTS WITH 22 COUNTRIES

Poland opened up capital movements with 22 countries with a new law that allows citizens in the country to open foreign bank accounts and vice versa. The new law frees up capital movements with the 15 countries of the EU, Iceland, Norway, Lichtenstein, the U.S., Switzerland, Japan, and Canada. Before, Polish citizens were required to obtain authorization from the central bank in order to get a bank account abroad, to transfer capital, and to buy short-term foreign bonds. The new law also reduces the paperwork required for foreigners seeking to open bank accounts in Poland.

U.S. SECRETARY OF STATE CALLS FOR ADVANCED VISA PROCESSING SYSTEM

In a speech delivered to the President’s Council of Advisors on Science and Technology, Secretary of State Colin Powell called for the scientific community to develop a system to ensure that the nation’s visa system is more secure against those seeking to enter the U.S. to do harm. Powell asked for the development of a system that would allow a consular officer anywhere in the world to enter a visa applicant’s basic data and have it “bounced against every possible intelligence or law enforcement database that we have . . . and you get access to what you need to know to make an informed decision.” Powell also stressed the importance of getting information quickly, as well as allowing the U.S. to remain an open, welcoming society.

U.S. TRADE PANEL APPROVES NEW DUTIES ON STEEL RODS

A federal trade panel of the U.S. International Trade Commission voted 5-to-0 last week to impose new duties on imports of carbon and certain alloy steel wire rods from Canada, Brazil, Mexico, Indonesia, Ukraine, Moldova, and Trinidad and Tobago. The panel ruled that low-priced imports from these countries were hurting American producers and should be restricted. The panel further found that imports of these products from Germany were negligible, or that they amounted to less than 3 percent of all such merchandise imported into the U.S. over the last 12 months. The decision means that the Department of Commerce can now impose the duties it recommended in August, which could equal as much as 116 percent in Ukraine and 369 percent in Moldova. The U.S. uses about 8 million tons of wire rods per year, and imports amount to more than one-third of that.

U.S. CHAMBER SEEKS NOMINATIONS FOR CORPORATE CITIZENSHIP AWARDS

The Center for Corporate Citizenship (CCC) of the U.S. Chamber of Commerce will present the Third Annual Corporate Citizenship Awards at a special dinner on December 5, 2002. The CCC is currently seeking nominations of Chambers and/or U.S. businesses meeting the selection criteria. Information regarding the nomination procedure and the nomination form are attached to this week’s newsletter. Please note that all nominations must be received at the CCC by October 11, 2002.