Wisconsin Department of Commerce: WISCONSIN WORLDWIDE -

Governor Jim Doyle will lead a delegation of Wisconsin business and government leaders to China and Japan from September 7 to 19, 2007. The trade mission will provide participants with opportunities to meet with distributors, potential customers, and key business and government officials. The Governor will also promote investment by Japanese and Chinese companies in Wisconsin.

"This trade mission is a great opportunity for Wisconsin companies to meet the customers and business leaders that will help them build their sales in these important markets," Governor Doyle said. "It's a good thing if a Wisconsin company finds a strong partner in Japan or China, or creates jobs in Wisconsin through exports or sales operations in these countries."

Mission events will take place in multiple cities. Schedules can be customized for individual business priorities. The delegation will be in Tokyo from September 7 to 11 to coincide with the U.S. Midwest - Japan Conference, which promotes bilateral trade and investment between the Midwest and Japan. Mission members will be in Shanghai September 12 to 15. On Friday and Saturday, September 14 and 15, participants will have the option of traveling to Ningbo, Milwaukee’s sister-city and the home of China’s second largest port, or Harbin, capital of Heilongjiang Province (Wisconsin’s sister-state) to learn about agricultural and environmental opportunities. On September 15 to 19 mission events will take place in Beijing, the Chinese capital and site of the 2008 Summer Olympic Games.

China is Wisconsin's fastest-growing export market and the third-largest export market overall, up from fourth-largest in 2005. The state's exports to China in 2006 totaled $870 million, representing a 29 percent increase over the previous year. Important export commodities include industrial machinery, up 35 percent to $338 million; electrical machinery, up 48 percent to $121 million; and paper/paperboard up 80 percent to $12 million.

Japan is Wisconsin's fourth-largest export market overall. Last year the state's exports to Japan totaled $739 million, representing a 6 percent increase over 2005. Leading categories include medical and scientific instruments, up 4 percent to $281 million; industrial machinery, up 17 percent to $181 million; and electrical machinery, $60 million.

In 2004, Governor Doyle led a trade mission to Japan. He also led the largest-ever Wisconsin trade mission delegation to China, with stops in Beijing, Shanghai, Nanjing, and Hong Kong. In 2005, Governor Doyle led a delegation of Wisconsin business and government leaders on a trade mission to Mexico. He also headed a trade mission to Germany, the Czech Republic, and Poland.

The Wisconsin Department of Commerce and the Department of Agriculture, Trade and Consumer Protection are jointly coordinating the mission in partnership with the Metropolitan Milwaukee Association of Commerce. For more information on the trip, contact Commerce's Trade Show/Mission Coordinators Ms. Jennifer Winner, jennifer.winner@wisconsin.gov, ph: (608) 266-0413 or Ms. Christine Stamm, christine.stamm@wisconsin.gov, ph: (608) 264-7824.

Weak Dollar Spurs Brazilian Imports

The weak U.S. dollar contributed to Brazil setting a new record for monthly imports, totaling U.S. $9.53 billion in March. Brazil’s trade balance contracted 8.56 percent compared to 2006 and totaled U.S. $12.85 billion in March.

The decline in the value of the U.S. dollar in relation to the Brazilian real makes imports into Brazil cheaper. During the first three months of 2007 Brazilian imports grew by 25.27 percent while exports increased by 15.42 percent. Imports of capital goods have also risen and totaled U.S. $4.26 billion in the first quarter. Mr. Armando Meziat, Secretary of the Ministry of Development, Industry and Foreign Trade denied that the growth in imports is harmful to Brazilian industry. According to the Secretary, the acquisition of imported industrial equipment is helping Brazilian firms modernize, expand production, and meet competition from Chinese producers. “This improves the competitive ability of the export sector,” he explained.

Brazilian imports of hospital and medical equipment have also grown substantially and reached U.S. $1.94 billion in 2006. A study by the Brazilian Association of Medical-Hospital Equipment, Products and Supplies (Abimed) shows that purchases abroad rose 22 percent in 2006, compared with U.S. $1.59 billion the year before. The apparent market (production, minus exports, plus imports) is estimated at U.S. $4.2 billion. The growth in this sector reflects a stabilized economy and Brazilian banks willingness to offer new lines of credit for capital goods purchases in addition to the weakening dollar explained Abimed vice-president, Mr. Abrão Melnik.

Making High-Tech Connections in Japan

The Japan External Trade Organization (JETRO) has inaugurated the Information Communications and Technologies (ICT) Partnering Japan Program in order to match Wisconsin exporters with Japanese innovation leaders. Wisconsin participants submit information on new technology and what sets them apart from the competition. Interested Japanese firms will request introductions to those firms that match their interests for future projects. JETRO will facilitate initial meetings as well as provide advice on Japanese business culture and practices to the Wisconsin participants.

Sectors of interest include:

Any non-Japanese ICT-related company that does not already have an exclusive partner in Japan is eligible to participate. The program is offered on an ongoing basis and there is no registration deadline. An application or additional information can be obtained from Mr. Kenji Higashi, kenji.higashi@wisconsin.gov, ph: (608) 266-9487.

Ethanol Spurs Brazil’s Software Market

Brazil’s ethanol industry is rapidly expanding its technological sophistication and is becoming an important customer for management software and computer hardware. Gilberto Girardi, executive director of the specialized software supplier Próxima, reported that “some years ago, the companies did not even want to buy computers.” The sector is now taking advantage of current prosperity stimulated by the search for sources of alternative energy and investing in software and infrastructure. This is opening new markets for technology firms seeking to enter the Brazilian market.

French Election Results

Nicholas Sarkozy will be the next President of France. Mr. Sarkozy won 53.1 percent compared to 46.9 percent for his Socialist Party opponent, Ms. Segolene Royal, according to official Interior Ministry figures. Eighty-four percent of France’s 44.5 million registered voters cast ballots, about four percentage points higher than the level five years ago. Nicolas Paul Stéphane Sarkozy de Nagy-Bocsa was born in Paris on Jan. 28, 1955, the son of a minor Hungarian aristocrat who fled Communism after World War II. His mother was a law student, herself the daughter of an immigrant, a doctor who had arrived a generation earlier from Greece.

During the campaign Mr. Sarkozy vowed to “break with the ideas, the habits and the behavior of the past” and to “rehabilitate work, authority, morality, respect and merit.” Mr. Sarkozy has pledged to remake France by slashing unemployment, cutting taxes, keeping trains running during strikes, making people work harder and longer, shrinking the government bureaucracy, reforming pension rules and making it easier to create new businesses.

New Talks on EU-wide Patents

The European Commission kicked off a fresh round of talks on an EU-wide patent system on March 3, trying to break a 20-year deadlock. Most EU countries participate in the European Patent Convention, first signed in 1973, which allows inventors to file a single application for patent rights in dozens of European countries. However, litigation still occurs on a country-by-country basis, with each country's rules governing the validity and enforcement of patents in that country. That has greatly inflated the costs of patent litigation. The newest proposals advocate the creation of a new system of patent courts that would have jurisdiction over both existing European patents and the new EU-wide patent. The last attempt to establish an EU-wide patent was scuttled in 2003 because of disagreements over the languages in which patent applications could be submitted.

New Location for China Trade Office

Wisconsin’s trade promotion office in China has moved to a new location. The new location is more centrally located and provides easy access to two major subway lines. The #2 and #4 lines connect the office site with easy access to major trade show/exhibition centers and both the international and domestic airports. Traffic congestion can be a major problem in Shanghai and the subways can be real timesavers. The new contact address and phone/FAX numbers are:

Firm Pays $100 Million for Export Rules Violation

ITT Corporation, the leading manufacturer of military night vision equipment for the U.S. Armed Forces, has admitted sending classified materials overseas without a license and will pay a $100 million penalty, one of the largest penalties ever paid in a criminal case. ITT Corporation is also the first major defense contractor convicted of a criminal violation of the Arms Export Control Act.

Assistant Attorney General for the National Security Division Kenneth L. Wainstein said, “ITT’s exportation of this sensitive technology to China and other nations jeopardized our national security and the safety of our military men and women on the battlefield. We commend the prosecution team and ITT Corporation for developing a plea agreement that addresses the violations of the past, ensures compliance in the future, and serves as a strong warning to others who might be tempted by the profits of such illegal exports.” U.S. Attorney John Brownlee added, “We hope the agreement reached with ITT will send a clear message that any corporation who unlawfully sends classified or export- controlled material overseas will be prosecuted and punished. In addition, the remedial action plan that is part of this agreement is designed to bring ITT Corporation back into full compliance, which will benefit both the corporation and the United States.”

Between March and August 2001, ITT Corporation exported defense-related technical data to the People’s Republic of China, Singapore, and the United Kingdom without having first obtained a license or written authorization from the U.S. Department of State. The technical data included information about a laser counter measure known as a “light interference filter” for military night vision goggle systems. These night vision goggles are designated as defense articles on the U.S. Munitions List, and companies are required to have a State Department license or written authorization before exporting them.

As part of the $100 million penalty, ITT Corporation will pay a $2 million criminal fine, a $50 million deferred prosecution penalty, and will forfeit $28 million to the United States as the proceeds of its illegal actions. ITT Corporation will also pay a $20 million monetary penalty to the Department of State.

EU/US Summit

President George W. Bush met with German Chancellor Angela Merkel and European Commission President José Manuel Barroso on Monday, April 30 as part of the annual EU/US Summit. The European Union and the United States signed a new deal on a trans-Atlantic economic partnership at the summit but remained unable to agree on steps for tackling climate change, despite an increase in positive rhetoric on the issue.

The most substantial agreement to emerge from the summit was the creation of the Trans-Atlantic Economic Council, a permanent body aimed at enhancing economic co-operation and lowering regulatory barriers in 40 areas, including intellectual property and financial services. One of the council’s first tasks will be determining common regulations for cosmetics testing, with the aim of finding alternatives to testing using animals. The council is also expected to work on mutual recognition of U.S. and E.U. accounting standards by 2009 without trying to harmonize them.

At the summit, both sides also inked an "open skies" agreement relaxing limitations on air services between the E.U. and United States - set to take effect at the end of March next year. Under the deal, EU airlines will be able to fly anywhere in the United States and vice versa, even though E.U. airlines will not be able to operate domestic U.S. routes.

Turkish Turmoil

Turkish Prime Minister Recep Tayyip Erdogan has called for early parliamentary elections on 24 June or 1 July instead of 4 November after the country's highest court annulled the first round of voting for a new president. In a 9-to-2 ruling, the court upheld an appeal by Turkey’s main secular political party, which sought to block Abdullah Gul, Turkey’s Foreign Minister and close ally of the Prime Minister, from becoming president because of his strong religious background. Mr. Gul subsequently withdrew his candidacy for president, but kept his options open for running again.

Turkey’s military has long considered itself the guardian of the country’s secular traditions. Senior commanders have issued statements that many believe indicate a willingness to stage a coup if a person with a religious background assumes the presidency. Heightening the tension was the arrest of more than 500 protestors, who were marching in an unauthorized May Day rally unrelated to the current political impasse. Television networks broadcast images of police officers in riot gear beating demonstrators and spraying them with pepper gas. Recent events have led to a fall in the Turkish stock market.

US/Korea Free Trade Agreement

The United States concluded historic free trade agreement negotiations with Korea on April 1, 2007 and the next step is for Congress to vote on the Republic of Korea – U.S. Free Trade Agreement (KORUS). The provisions of this agreement will make most consumer and industrial products duty free within three years.

The Republic of Korea is the world’s tenth largest economy, with a GDP of nearly $1 trillion. Korea is already the United States seventh largest goods trading partner, with two-way goods trade in 2006 valued at approximately $72 billion. Wisconsin exports to Korea totaled $342,519,290 last year and the country ranked #11 as a destination for Wisconsin exports. Major product categories included optical fibers and lenses, non-electrical surgical and medical devices, bovine/equine hides, parts for material handling equipment, and X-ray apparatuses.

Duty free market access for many Wisconsin agricultural products will mean millions of dollars in new sales possibilities for vegetables, soybeans, corn, and dairy products. Of particular interest from improved market access is the impact upon Wisconsin beef, processed meats and specialty cheeses. Unlike free trade agreements with lesser developed nations and regions, Korea has high per capita incomes and the ability to buy value added, identity preserved, natural, organic, and functional foods.

H-1B Visa Applications Reach Cap

The U.S. Citizenship and Immigration Service says that it reached its cap on H-1B visas for tech workers for fiscal 2008 (October 2007 to September 2008) in early April 2007. The announcement came on the first day of eligibility. With 2008 already locked out, many 2007 foreign graduates of American universities will be precluded from accepting technology positions (i.e. computer programming, science and engineering) in the United States.

Venezuelan Nationalizations

On Tuesday, May 1, Venezuelan President, Hugo Chávez, seized control of the last remaining oil projects in Venezuela controlled by large American and European energy companies. Chavez had announced his intentions to take over the projects in January. The oil-production projects, which are in the Orinoco region in the country’s interior, are worth an estimated $30 billion. Venezuela is allowing Exxon Mobil, Chevron, ConocoPhillips, and other private companies to remain as minority partners, but the companies are still far from reaching agreements on compensation for the loss of their assets. Last week President Chávez threatened to also nationalize the country's banks and largest steel producer, accusing them of unscrupulous practices.

Banking on Multilateral Development Projects

Multilateral Development Banks provide billions of dollars worth of funding for energy, water, sanitation, transportation, urban development, housing and other projects around the world every year. While a few Wisconsin companies have participated in past projects, many more could be profiting from activities supported by the World Bank, the Asian Development Bank, and the Inter-American Development Bank. Representatives of these three institutions will discuss business opportunities arising through thousands of projects in developing countries, including China, India and Brazil at a half-day seminar at Waukesha County Technical College in Pewaukee on Wednesday, May 23, 2007. Topics to be addressed include:

The event will also provide ample opportunity to network with the Bank representatives. Additional details on the event are available at http://commerce.wi.gov/IEdocs/IE-MultilateralDevelopmentBanks.pdf. While there is no charge for the seminar, please contact Ms. Susan Dragotta, susan.dragotta@wisconsin.gov, ph: (262) 691-5147 if you plan to attend so that adequate space and materials can be prepared. The seminar is being offered by the Wisconsin International Trade Team, which is a collaboration of the Wisconsin Department of Commerce and the Department of Agriculture, Trade and Consumer Protection, and the Global Education and Trade Center at Waukesha County Technical College. Driving directions can be found at http://www.wctc.edu/web/about/maps/pewaukee.htm.

Upcoming Food Promotions

Wisconsin food and ingredient companies will have several opportunities this summer to promote their products to the international market. The first is a buyers’ mission scheduled to visit Chicago and Minneapolis July 15 - 20. The Food Export Association of the Midwest USA plans to invite up to 20 qualified buyers from Mexico, Chile, Brazil, Japan, China, Korea, Taiwan, Southeast Asia, India, and Canada. Through a cooperative relationship with Food Export USA - Northeast, buyers from the Caribbean, Central America, the Middle East, and Europe will also participate. The selected buyers will travel to the Midwest for one-on-one meetings with pre-screened, interested Midwestern and Northeastern food and agricultural suppliers. These retail and foodservice buyers will be available for one-on-one meetings in Chicago on July 16-17 and in Minneapolis on July 20.

A second buyers’ mission, focusing on the ingredients market, is scheduled for July 26 - 30. Fifteen food ingredient buyers have been invited from seven countries to visit the IFT show in Chicago. The delegation will continue on to Des Moines, Iowa after the Chicago stop. Exhibitors and visitors at IFT can sign-up to meet one-on-one with these buyers at the show. This is a great opportunity to learn more about your product’s export potential and build relationships with key industry players, without the time and expense of having to travel overseas. Buyer profiles for both delegations will be made available shortly so Wisconsin firms can identify which buyers they would like to meet.

Finally, the Focused Trade Mission to Japan will be the perfect fit for gourmet food companies interested in the Japanese market. The event dates are: September 10-13, 2007. Food Export Association of the Midwest USA and Food Export USA – Northeast are offering a low-cost opportunity for U.S. gourmet food manufacturers to meet with a variety of buyers in Japan. Products of interest include:

For additional information about any of these food-related events, contact Ms. Lisa Stout, lisa.stout@wisconsin.gov, ph: (608) 224-5126.

Wisconsin Livestock and Dairy Industries at Latin American Events

Dairy Cow Image The state of Jalisco in Mexico, Wisconsin's sister-state, will be the site of the 2007 CIGAL conference, Mexico’s national dairy conference. The event is coordinated by Mexico Holstein Magazine and includes seminars, receptions, and a trade show. The Wisconsin Department of Agriculture will exhibit at the trade show and promote Wisconsin dairy genetics and related products such as feeds, equipment, software and services. The conference will be used to make new contacts with dairy cattle breeders and importers in Mexico. Wisconsin companies interested in displaying at the trade show, or networking with potential buyers and distributors should contact Ms. Jen Pino-Gallagher, jen.pino-gallagher@wisconsin.gov, ph: (608) 224-5125.

The Wisconsin Hereford Cattle breeders will travel to Argentina July 29 to August 3, 2007 for the annual Palermo Agricultural Fair. Visits and sales meetings with leading Argentine beef cattle breeders and genetics companies are planned. Several Wisconsin companies involved in the dairy semen and embryo business will be servicing existing clients and looking for new opportunities at the Fair. For more information on the Argentine event, contact Mr. Dan Vogel, dan.vogel@wisconsin.gov, ph: (608) 224-5113.

Table of Contents

International Trade Office Directors’ Visit

State of Wisconsin Trade Mission to Japan and China