The importance of free trade was a focus of the 2008 International CES® , the world’s largest trade show for consumer technology, which took place on January 7–10, 2008 in Las Vegas, Nevada. This year, for the first time, the show focused on a key element of the success of the consumer electronics industry — international free trade.

In his keynote address, Gary Shapiro, President and CEO for the Consumer Electronics Association (CEA)®, said that Americans understand the importance of free trade in our economy, “International trade allows us to access products and ideas that we would otherwise not have. Each country contributes what it does best and, as a result, all trading countries benefit.”

He continued, “Free trade allows greater access to products and resources by eliminating harmful tariffs. It streamlines commerce by making transactions transparent, enabling companies of any size to compete on a global scale and support good American jobs.”

Because free trade is imperative to the technology industry, Mitch Bainwol, Chairman and CEO of the Recording Industry Association of America (RIAA), and Dan Glickman, Chairman and CEO of the Motion Picture Association (MPAA), along with Shapiro, are calling on the United States Government to support free trade.

The trio sent a formal request on January 8 to congressional leadership to approve pending free trade agreements (FTA) and to restore the President’s authority to negotiate FTA’s during the second half of the 110th Congressional Session.

“We seek a separate agreement to eliminate all barriers on electronics products and all products around the world. We urge Congress to ratify the pending Colombia, Panama and Korea bilateral free trade agreements and to give back to the President authority to negotiate trade agreements,” Shapiro said.

Glickman and Bainwol joined Shapiro as signatories to the letter thanking Congress for passage of the Peru Trade Promotion Agreement and seeking additional actions to reduce foreign trade barriers. Specifically, the organizations asked Congress to pass pending free trade agreements with Colombia, Panama and the Republic of Korea, and to create a pathway for renewal of a Trade Promotion Authority (TPA) that would allow the President to more easily negotiate additional trade agreements.

In their letter to Speaker of the House Nancy Pelosi, U.S. House of Representatives Minority Leader John Boehner, Unites States Senate Majority Leader Harry Reid and United States Senate Republican Leader Mitch McConnell, the association heads argued, “The U.S. consumer electronics, motion picture, and recording industries are among the strongest drivers of American innovation and economic growth. Our industries promote the currency of democracy: ingenuity, innovation and the pursuit of personal and artistic expression. The growth of our industries, and our ability to promote American values, depends on access to foreign markets.”

“We ask for your continued leadership in reducing foreign trade barriers and allowing us to sell the fruits of our industries’ genius around the globe so that our industries can continue to create high-paying U.S. jobs and contribute to the U.S. economy,” they said.

At a policy briefing on the official opening of the CES Shapiro, joined by U.S. Trade Representative Susan C. Schwab, said that from 2000 to 2006, U.S. consumer electronics exports increased 12% to Peru, 35% to Colombia and 44% to Panama.

“When you’re talking about Peru, Colombia, Panama, Korea, you’re talking about over 124 million people. Those are serious consumers. In the case of Peru and Colombia, both are signing on to the information technology agreement for the first time as a result of these agreements,” said Ambassador Schwab. “While some of you may downplay this, as noted in my opening, U.S. exports in this sector are over $300 billion a year, $328 billion in 2006, and we have manufacturers that manufacture in this country that export.

“So this is real money and real in the United States.”

She continued, “We have noted our intention of moving the Colombia, Panama, and Korea Free Trade Agreements through the United States Congress this year. We continue to have those conversations, and when Congress returns in the next several weeks, you can assume that those conversations will pick up. It is our intent and clearly our desire to move ahead as quickly as possible with the Colombia FTA in conjunction with the Congressional leadership.”

In 2006, Shapiro stated, U.S. high tech companies exported more than $220 billion of their products, accounting for one fifth of total U.S. exports, and making high-tech America’s largest export sector. Shapiro said that sales for technology products for 2008 are expected to reach $US171 billion, up 6.1% from 2007. According to new CEA sales projections, manufacturers will post 11% revenue growth, to over US$25 billion, from sales of digital televisions in 2007. CEA also forecasts 13% revenue and 17% unit sales growth for digital television in 2008.

“The United States is a major player both as an exporter and as an importer. Together, we are talking about $800 billion in U.S. exports and imports combined in a sector with global trade of over three trillion dollars,”Ambassador Schwab said. “It is evident from the participants [at CES] how incredibly important trade is, whether they are manufacturing here, manufacturing abroad, designing here, creating software, all of it moves in and around international commerce, creating jobs, creating opportunities.”

Last fall the CEA launched a new trade initiative to focus Congress on the importance of trade to U.S. job creation in the electronics industry. CEA called on Congress to pursue a pro-growth trade policy that includes:

• Aggressively pursuing bilateral trade agreements. In the absence of an agreement in the Doha Round of the World Trade Organization, bilateral trade agreements offer the next best way to open foreign markets to U.S. small businesses. They create sales opportunities, reduce costs and diminish uncertainties. Through trade agreements we can implement intellectual property rights standards, establish substantive investment protections, and provide increase transparency to U.S. exporters;
• Reauthorize trade promotion authority. Without trade promotion authority our trading partners will be reluctant to negotiate trade pacts with the U.S. America’s hands will be tied and the U.S. will fall behind other nations negotiating trade agreements at an unprecedented pace;
• Eliminate non-tariff barriers. These non-tariff barriers hinder trade and burden small companies with unnecessary compliance costs. Examples of these barriers include cumbersome customs regulations, corrupt government procurement processes, and most recently, a proliferation of divergent or non-harmonized approaches to environmental standards, among others; and
• Uphold and enforce trade agreements. In addition to pursuing new agreements, the United States must commit to maintaining and enforcing those agreements already in place. The United States must take an aggressive stance to protect products already covered by the WTO’s Information Technology Agreement (ITA). The ITA covers over 97% of the world trade in information technology products, and provides for the elimination of duties on those covered products. But as technology has evolved, many countries claim that the ITA does not apply to the next generation of covered products. It is crucial for the United States to uphold provisions of the ITA that allow for future developments of IT products and enable companies to enjoy the full scope of the agreements intended duty-free benefits.

The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the $161 billion U.S. consumer electronics industry. More than 2,200 companies are members of CEA. CEA also sponsors and manages the International CES®. Find CEA online at www.ce.org.

This entry was posted on Thursday, January 17, 2008 at 9:59 am and is filed under Technology, Free Trade Agreements. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.