#ff00006

Wisconsin Worldwide

#0000ff

Volume 3, Issue 3: May 2002
E-Newsletter of the Division of International and Export Development
Wisconsin Department of Commerce
http://www.commerce.state.wi.us

#ff00005In This Issue:

Arial

• Director's Visits
• Lead Article -

ArialTrade Promotion Authority

• Export Markets

Arial

• Export News

Arial

• Cultural Affairs

Arial

• International Business Information on the Web
• Upcoming Trade Shows
• Seminars & Meetings
• Contact Us
• Subscribe/Unsubscribe

Arial4

ArialOn April 26^th, the European Union signed a free trade pact with Chile. Under the agreement, Chile has agreed to phase out charges on European industrial goods in seven years and farm produce within ten years. The net impact will be to make European goods more cost competitive vis a vis our products in the Chilean market. Canada long ago negotiated and signed a free trade pact with Chile on its own when it was clear that the U.S. Congress was unwilling to move forward on a joint free trade agreement with Chile. The European Union has just proposed that the provisions of its free trade agreement with Mexico be amended to eliminate all industrial tariffs immediately. This would, of course, make European industrial goods more cost competitive vis a vis our products in Mexico. Japan recently signed a free trade agreement with Singapore and is drawing up a proposal for an Asian Free Trade Zone, which would include all of our trading partners on the western Pacific Rim. Such an agreement would make Japanese goods more cost competitive vis a vis our products in the Asian market.

ArialOxfam International, one of the world's most respected international assistance organizations recently released a report entitled "Rigged Rules and Double Standards". While the report is anything but an endorsement of U.S. and European trade policies, it does state that: "The extreme element of the anti-globalization movement is wrong. Trade can deliver much more for poor countries than aid or debt relief" and "History makes a mockery of the claim that trade cannot work for the poor." In East Asia "since the mid-1970s rapid growth in exports has contributed to a wider process of economic growth which has lifted more that 400 million people out of poverty."

ArialSince U.S. trade promotion authority lapsed in 1994, America has stood on the sidelines while countries worldwide have brokered over 130 trade agreements that benefit their workers, businesses and economies. If free trade is such a bad deal, why are countries all over the world hopping on to the free trade bandwagon? America's workforce is the most productive in the world. Under the NAFTA Agreement, we doubled our exports to Canada and Mexico in less than a decade. And the majority of those goods remain industrial machinery, electrical machinery, transportation equipment and instruments produced by highly paid U.S. labor. What are we afraid of? In December, the House passed a bipartisan Trade Promotion Authority Bill by only one vote. The Senate Finance Committee quickly followed their lead with a strong bipartisan vote of 18-3 in favor. TPA is now before the full Senate. Please take the time to let your Senators know your position on this vital issue.

 

#ff00005Export Markets

#ff0000

Arial2000, World exports dipped 1.5% in volume in 2001 and contracted 4% in value to US$6 trillion, according to

ArialThe U.S. Commerce Department reported on April 26 that U.S. economic growth increased by 5.8% in the first quarter of 2002. This was the strongest growth figure since the fourth quarter of 1999. The announcement indicates that the recession of 2000-2001 and the impact of September eleventh are now behind us. Most economists, however, believe a quick return to the boom years of the 1990's is unlikely and that manufacturing growth - a key to Wisconsin's economy- is likely to be restrained. That being said, the news will have positive impacts in all corners of the global economy. In particular, economic forecasters are becoming increasingly positive on Asia, with the major exception of Japan. We expect that Wisconsin's export numbers for the first quarter of 2002 will be down, since they represent shipments based on purchasing decisions made in the immediate months following September 11. We expect those numbers will start to turn around in the second quarter.

ArialThe South Korean economic outlook remains upbeat. Fourth quarter growth was up 3.7% over the same period in 2000 and overall growth was 3% for 2001. The Korean Central Bank has estimated 2002 economic growth of 3.9% and is hinting that it may raise these estimates to 4.2% or 4.3% in the near future. Now might be a good time to contact

ArialThe South Korean Government has also announced an ambitious master plan to transform 130 square kilometers of land on the coast west of Seoul into a special economic zone for foreign investors. Modeled on Singapore, the 20-year project would attempt to transform natural resource poor Korea into a hub for international trade and business. Foreign companies doing business in the zone would be offered incentives and both English and Korean would be official languages of the zone. If implemented, this would be the first time Korea has offered a special economic zone to international investors and would mark a sea change in Korean attitudes towards foreign investment.

Arial 

ArialThe situation in Argentina continues to deteriorate. In March, CAME, the Argentine small business chamber estimated that business sales in March were off 40% to 60% over the same periods in 2001. In late March, CTI Holdings, the Argentine wireless business of U.S. Verizon Wireless indicated that it would default on $1 billion in debt. On April 2, Telecom Argentina, the country's second largest telephone company suspended payment on debts of $3.2 billion.

ArialIn mid-April, Argentina's efforts to obtain new external financial assistance were rebuffed by the IMF, largely because of Argentina's failure to implement past promises of economic reform. A week later, Economy Minister Jorge Remes Lenicov resigned after the Argentine Senate refused to consider proposed legislation that would convert $12.5 billion in bank deposits into low interest, long term bonds. In the face of a run on the banks, the Government declared a bank holiday on April 19. On April 26, Roberto Lavanna, Argentina 's Ambassador to the European Union was named as the new Economic Minister - the sixth in the past six months. On April 29 banks reopened and long lines formed as Argentines rushed to withdraw funds. The Argentine peso is now trading about 3.14 to the U.S. dollar as opposed to the 1:1 peg which had existed until last December. Given the very difficult political, economic and financial situation in Argentina, extreme prudence should be exercised in transactions with Argentine firms.

ArialThe political situation remains very unstable in Venezuela. In late March, street battles erupted between supporters and opponents of President Chavez. On April 9 millions of workers began a general strike supported by both the main union and main business federations. On April 12 President Chavez was taken prisoner and forced from office by top military officers after government actions to put down the general strike resulted in 13 dead and over a hundred injured. On April 14, Chavez was returned to power as lower ranks of the army returned him to office. Given the continued instability, continue to exercise prudence in your transactions with Venezuela.

Arial 

#ff0000ArialU.S.

ArialIn the wake of September 11, the United States has begun to take steps to create more stringent visa requirements. These will likely include reducing the amount of time that businessmen and tourists can stay in the U.S. (currently six months). If you are planning to host foreign agents, distributors, potential reps, or end users of nationalities that require visas, you may wish to encourage your potential guests to apply earlier rather than later. This is particularly true in countries where individuals try to immigrate to the United States by seeking sponsorship letters from a U.S. company or for passport holders from countries where terrorism is a problem. Remember, however, that the majority of your business visitors probably don't require a visa.

ArialStudent visas could be a major problem. There are over 600,000 foreign students enrolled in U.S. colleges and universities and delays in visa issuance could cause financial problems for colleges and specific university departments that have large numbers of international students. Foreign students and tourism are both strong export earners for the U.S.

ArialFor those of you who deal with exports that require export licenses, you should know that the Commerce Department's Bureau of Export Administration (BXA) has changed its name to the Bureau of Industry and Security. The Commerce Department states that the new name will "more accurately reflect the broad scope of the agency's responsibilities". That being said, it appears that despite the new name, the substantive responsibilities for export licensing and enforcement remain unchanged.

ArialOn April 25, the U.S. House of Representatives voted 405 to 9 to abolish the U.S. Immigration and Naturalization Service. The Senate had earlier voted to abolish the Agency. A new federal border security agency that would pull together the INS, Customs and the Coast Guard is being called for in some quarters. Those of us who have worked with INS know that for decades it has been one of the most understaffed and under-funded of all federal agencies and a stepchild within the Department of Justice. Did you know there were more immigrants to the U.S. during the 1990-2000 decade than in any other decade in U.S. history? Just stop by an INS office if you have any doubts on their resources or business volume.

ArialIt's not too soon to be thinking about the 2008 summer Olympics in Beijing. The city is planning to invest about $23 billion over the next seven years in preparation for the games. Much of this will be spent on facilities, transportation, telecommunications and environmental improvements. Besides the Olympic facilities, Beijing will spend $7 billion on environmental projects including waste water treatment, solid waste treatment, power supply & distribution, fiber optic networks, housing, five subway lines, natural gas transport lines, new LNG vehicle fleets stations and vehicle test facilities. For additional information go to:

#ff0000I

4Last year, almost $47 billion in foreign funds were invested in China. In the first quarter of 2002, $10.1 billion was invested, a 28% increase on the same quarter in 2001. Contracted foreign direct investment (projects approved but awaiting the delivery of funds) increased by 11.4% in the first quarter to $17.9 billion. In short, China continues to be the largest developing country market for foreign investment which in turn means a high demand for Wisconsin products such as machinery, electrical machinery and instruments.

4On April 10, the European Parliament approved legislation which will require electrical goods manufacturers to pay for the recycling of their products. Only about 10% of such products are now recycled. The draft law, called the Waste Electrical and Electronic Equipment Directive, now goes to EU governments for approval. The changes would be incorporated across the European Union by 2005. The law requires that individual manufacturers must take responsibility for the disposal of the products when they finish their life cycles. If you are a producer of electrical goods and export to the EU, you should be in touch with your distributors and representatives ASAP to discuss how you will be able to meet this requirement.

ArialGiven the impact of September 11, it might be useful to review a few basic facts about Islam. First, Arabs constitute only about 11% of the world's Muslims. Indonesia, Pakistan, Bangladesh and India all have over 100 million Muslims and both Iran and Turkey have more than 60 million each. Egypt is the country with the largest Arabic Muslim population with 51.6 million adherents. Rounding out the top ten are Nigeria, China, Algeria and Morocco. In short, the Islamic world is in reality more a melting pot than an "Arabic monolith".

ArialRemember that Arabic, like Hebrew is a Semitic language. Referring to an Arab as anti-Semitic, therefore, is something of an oxymoron.

#ff00004Languages

ArialAccording to

www.ethnologue.com

Arial, there are some 6,809 living languages in the world. In case you feel sorry for yourself in having to occasionally speak Spanish or French, note that there are 74 native languages in the United States alone which you probably don't know. Once you master them, you can move on to the 387 different languages in India, the 505 different languages in Nigeria, the 726 different languages in Indonesia and the 823 different languages in Papua New Guinea.

#ff00005 

#ff00005International Business Information on the Web

ArialWe do our best to provide you with free international trade information available in our International Business Internet Guide

#ff0000Arial

Arialat

http://www.commerce.state.wi.us/IE/IE-Int'lGuideForBusiness.html

ArialThe

U.S. National Center for Standards and Certification Information

Arial has a new online service through which you can obtain up-to-date information about changes in regulatory standards around the world. By registering for the Export Alert! U.S. companies receive, via e-mail, notifications of drafts or changes to foreign regulations for a specific industry sector and/or country.

ArialPitney Bowes (the postage people) have started a new on-line international payment service for small and medium sized companies. We have no experience with this service, but you might wish to check the website at

ArialThe Office of the U.S. Trade Representative has released the 2002 National Trade Estimate Report on Foreign Trade Barriers. The report includes a comprehensive list of unfair trade practices and barriers to U.S. goods as well as deficiencies in intellectual property rights protection. A country by country text can be found at

ArialExplore new business opportunities in the largest market in Latin America. The second annual RepCom is an exhibition for new-to-market firms looking for potential agents, distributors, representatives, licensees, franchisees, joint venture partners and business associates.

Arial 

ArialOctober 2-6, 2002- Cheongju City, Chungcheongbuk-do Province, South Korea

ArialA gathering place for biotech specialists and corporations providing an international platform, as well as a forum for information exchange and investment opportunities. Options include exhibition space, customized appointment schedules, and more. Grant dollars available for this event.

ArialFor further information, contact Christine Stamm, Trade Show & Trade Mission Coordinator by phone at (608) 264-7824 or at:

ArialComments about this newsletter

ArialContact our outreach consultants:

ArialContact our area specialists:

ArialContact our offices around the world:

#ff00005Subscribe/Unsubscribe

Arial

• If you know of anyone who might like to receive this newsletter, please have him or her send an e-mail to

Arial5

ljanowski@commerce.state.wi.us

Arial.

• If you would like to stop receiving this newsletter, please send an e-mail to your personal unsubscribe address listed below.