U.S. Commercial Service

Briefing by

Fred LatuperissaDirector

U.S. Department of CommerceInternational Trade Administration

U.S. Commercial ServiceInland Empire Export Assistance Center

U.S. Commercial Service

Our mission:

To promote the export of goods & services from the United States, particularly by small- and medium-sized businesses

To represent U.S. business interests internationally

To help U.S. businesses find qualified international partners

The U.S. Commercial Service is a program of the U.S. Department of Commerce’s International Trade Administration.

• International Trade specialists in 108 U.S. cities and more than 150 posts in 80 countries worldwide...

Our Network & What it can do for you

We can...

• Locate international buyers, distributors & agents• Provide expert help at every stage of the export process • Help you to enter new markets faster and more profitably

U.S. Trade - 2006

U.S. exports $1.4 trillionCalifornia exports $128 billion

Inland Empire exports $5billion

Total Merchandise Exported

U.S.2000: $7822005: $904

Brazil2000: $552005: $118

EU2000: $2,4372005: $4,001

China2000: $2492005: $762

Russia2000: $1062005: $244

World2000: $6,4522005: $10,431

India

2000: $42

2005: $95

Total Merchandise/Product

Product Dollars (B)

Computer/Electronics

$44.5

Non-Electrical Machinery

14.8

Transportation 13.5

Chemicals 8.7

Other 46.1

Canada$14 Billion

China$10 Billion

Europe$22 Billion

Mexico$19 Billion

California = World’s Sixth Largest Economy

National Export Statistics

• National– February 2007 exports were $124.0 billion, further narrowing the trade deficit thanks to

strong exports and easing imports– 2006 exports reached a record $1,037.3 billion. By categories, these exports included:

– Food, feeds and beverages - $65.9 billion– Industrial supplies and materials - $275.8 billion– Capital goods - $414.0 billion– Automotive vehicles, parts and engines - $107.2 billion– Consumer goods - $129.2 billion

• California – accounted for 12.3% of total US exports– 2006 exports grew 9% from previous year to $127.8 billion

– Top export growth destinations included: Mexico (22%), Canada (41%), Japan (26%), China (123%), and South Korea (50%)

– Top export product from California: Digital Monolithic Integrated Circuits, accounting for 4.9% of total

Inland Empire Export Statistics

• Inland Empire Region of Southern California– Top industries

• Agriculture• Metal Fabrication• Logistics• Aircraft• Defense

– On strong forecasted international trade, the logistics segment of the IE economy is predicted to add 2,100 jobs in 2007 (1.8% growth)

– 2004 regional exports totaled $3 billion

The Status of Free Trade

• FTAs in force with 14 countries, and several more pending– In 2005, US exports to countries where there was an FTA in effect exceeded

$437 billion and accounted for 42 percent of US exports – Trade Promotion Authority (TPA), enacted in 2002, expires June 30 of this year

• Strong Support for US-Korea FTA– US exports to Korea total:

– 2006 Goods - $32.5 billion– 2005 Services - $10.2 billion

• US-India Agreement Brings Indian Mangoes to into US– US-India bilateral trade represents one of the world’s fastest growing

relationships, expanding at nearly 20% annually• Intellectual Property Rights Watch – China and Russia

Products & Services

• Market Research• Gold Key Matching Service• Trade Counseling & Advocacy• International Partner Search• China Business Information Center• Middle East and North Africa

Business Information Center

• Commercial News USA• Catalog Exhibitions

Market Research

The U.S. Commercial Service Market Research Library contains more than 100,000 country and industry specific market reports, web sites, events, and tradedirectory listings.

• Included in the Library:

Country Commercial Guides - Prepared annually by U.S. Embassy staff, these guides contain information on the business and economic situation of foreign countries and the political climate as it affects U.S. business and foreign investments.

Trade Counseling

Our trade specialists in the U.S. work directly with our team of experts overseas in getting you all the information and advice that you need.

We can help you:Determine the best markets for your products & services

Evaluate international competitors

Identify and comply with legal and regulatory issues

Settle disputes

Learn about cultural issues and business protocol

The Advocacy Center

The U.S. Commercial Service’s Advocacy Center ensures that sales of The U.S. Commercial Service’s Advocacy Center ensures that sales of U.S. products and services have the best possible prospects abroad. U.S. products and services have the best possible prospects abroad.

Assistance may include:Assistance may include:

• Visits to key foreign officials by high-ranking U.S. officialsVisits to key foreign officials by high-ranking U.S. officials

• Direct support from U.S. officials stationed overseasDirect support from U.S. officials stationed overseas

• Letters to foreign decision-makersLetters to foreign decision-makers

• U.S. export credit agency financing support to qualified U.S. companiesU.S. export credit agency financing support to qualified U.S. companies

Advocacy Center efforts are coordinated with U.S. officials stationed at Advocacy Center efforts are coordinated with U.S. officials stationed at our embassies around the world and other U.S. government agencies to our embassies around the world and other U.S. government agencies to provide companies with maximum assistance.provide companies with maximum assistance.

Gold Key Matching Service

Pre-screened appointment schedule arranged for you before you travel overseas

Customized market and industry briefings with our local trade specialists

Timely and relevant market research

Post-meeting debriefing with our trade specialists and assistance in developing appropriate follow-up strategies

Help with travel, accommodations, interpreter service, and clerical support

Invest in America

• Recent Examples of Investing in America:• On February 27, Japanese automaker Toyota Motor Corp. announced that it would build a new manufacturing facility near Tupelo, MS. This $1.3 billion facility is expected to employ 2,000 initially. In 2005, Toyota employed 38,340 in North America.• On January 22, AstraZeneca announced it would invest $100 million into its U.S. research and development team based in Waltham, MA. This will bring total research employment at this site to 500, with a focus on anti-infection and cancer treatments.

• Promoting America as the Investment Destination of Choice:• The Invest in America initiative promotes the desirability of investment in the U.S. as a whole by highlighting the advantages of investing in the U.S., and countering the misconceptions some investors may have.• The initiative will focus on outreach to the international investment community; coordination with state and local governments engaged in foreign investment promotion; and work as ombudsman in Washington, DC policy community to address business climate concerns.• The initiative will also include the creation of a task force within the International Trade Administration charged with the responsibility of educating and coordinating the efforts of the 2,300 ITA employees in offices around the world on inward investment.

Invest in America

• Who Invests in the United States:• Foreign companies based in OECD countries account for 94 percent of cumulative foreign direct investment in the United States.• The top 5 countries, ranked by cumulative direct investment in the United States were: The United Kingdom - $282.5 billion; Japan - $190.3 billion; Germany - $184.2 billion; The Netherlands - $170.8 billion; Canada - $144.0billion.

• Total Inward Investment:• The cumulative value of inward direct investment at the end of 2005 was $1.874 trillion.• In the first 3 quarters of 2006, direct investment capital inflows totaled $135.2 billion• 2005 direct investment capital inflows totaled $109.8 billion; 2004 capital inflows totaled $133.2 billion; 2003 capital inflows totaled $64.0 billion.

Invest in America

• Promotes Employment with High Wages:• U.S. subsidiaries of foreign firms employ 5.1 million American workers, support an annual payroll of $324.5 billion, and pay on average 32 percent higher wages than the national average.

• These U.S. subsidiaries invest heavily in American manufacturing, with 31 percent of these jobs in this sector.

• Strong Economic Benefits to the U.S. Economy:• U.S. subsidiaries of foreign firms account for 19 percent of total U.S. exports of goods ($153.9 billion), and in 2005 reinvested $59 billion of their profits back into the U.S. economy.

• U.S. subsidiaries also spent $29.9 billion on research and development activities in the United States.

Transformational Commercial Diplomacy Initiative

• ·        Similar to the State Department’s transformational diplomacy initiative

·        The first step of a long-term strategic plan

• ·        Created to respond to a changing global marketplace in which emerging markets are of increasing importance to future opportunities for U.S. business.

• ·        Proposes a strategic shift of some resources from well-developed markets

• ·        It enabling the US&FCS to enhance its diplomatic and program support for U.S. business in emerging markets.

• ·        Africa, Near East, and South Africa

• ·        East Asia Pacific

• ·        Europe

Saudi Arabia

Strategic Relationship Opportunities and Business Prospects

Economic Indicators & IncentivesEconomic Indicators & Incentives

• Economic Indicators– Largest free market economy in the Near East

and North Africa– Expanding domestic market, 23 million and

growing at 3.5% annually– Largest oil reserves in the world at 261.8 billion

barrels– One-fourth of the total Arab GDP at $310 billion

• Incentives– No restrictions on foreign exchange– No restrictions on repatriation of capital and

profits– No income tax– Privatization fast-moving forward

CS Saudi ArabiaBest Prospects 2007

1. Oil & Gas2. Petrochemical3. Security4. Power 5. Telecomm / IT6. Medical Equip 7. Architecture/Const/Eng8. Railroad Equip/Svs9. Franchising10. Automotive (Automobiles & Parts & Services)11. Aviation (Civil & Defense)12 Pollution Control & Env Services13 Mining14 Services15 Water Resources /Equip

Opportunities(2005-2009)

Investments by Sector– Oil and Gas ($69 billion)– Defense and Security ($48.8 billion)– Petrochemicals ($45.3 billion)– Infrastructure ($40.7 billion)– Real Estate ($40 billion)– Mining & Minerals ($11.9 billion)– Electricity & Water ($9.8 billion) – Health & Education ($8 billion) – Transportation ($6.6 billion)– Housing ($2.6 billion)

Trade Events

• Americas Competitiveness Forum (ACF)– 2007– Hosted by US Secretary of Commerce Carlos Gutierrez in Atlanta

from June 11-12– Networking opportunities with US cabinet members, foreign

dignitaries and SCOs• 2008 National DEC Conference

– Hosted in the Inland Empire, featuring “Travel ’n Trade”• 2007 National DEC Conference

– Hosted in Tampa, Nov. 7-9, featuring “The Great Debate: The Future of US Trade”

How to contact us

U.S. Department of CommerceInternational Trade Administration

U.S. Commercial Service

2940 Inland Empire Blvd., Suite 121Ontario, CA 91764Tel: 909-466-4134Fax: 909-466-4140

www.buyusa.gov/inlandempire

1-800-USA-TRADE1-800-USA-TRADE www.export.govwww.export.gov