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U.S. Department of State

Diplomacy in Action

08. Open Markets


America prospers when other countries prosper.  In promoting markets, global economic growth, and growth in developing and transitional economies, we are promoting American prosperity.  Since the end of the cold war, economic issues have become increasingly important in international affairs.  Political growth is linked to long-term economic growth and prosperity.  America's economy is ever more linked to the rest of the world; the United States, for example, is the biggest exporter of farm products, manufactured goods, and services.  Globalization offers vast new opportunities for U.S. businesses, farmers, and consumers.  However, it benefits others as well.  To developing countries, for example, globalization offers the possibility of increasing their participation in the world economy and being able to have more access to information and to take advantage of innovations, of the more open trading system, and of the flow of investment capital.  Advances in biotechnology can feed the hungry and save millions of lives.  The information revolution not only can promote faster economic growth, the increased access to information can help encourage individual freedom around the world.

Strengthen the international framework for open markets for goods, services, and investment and ensure openness of international markets for new technologies, including e-commerce and biotechnology
Throughout the fiscal year the Department worked closely with other U.S. agencies, for example the office of the U.S. Trade Representative (USTR), to convince foreign governments to take steps to open their markets to international flows of goods and capital.  The commitment of 34 Western Hemisphere governments made at the Quebec Summit of the Americas in April to negotiate to establish a free trade agreement in the Americas by 2005 is one example of the progress made.  Work undertaken through the year in preparations for the Asia-Pacific Economic Cooperation (APEC) organization's leaders October meeting in Shanghai also led to a reaffirmation of the value of open markets, albeit after the end of the fiscal year.  The completion of seven additional Open Skies agreements improved access to international civil aviation markets and boosted competition.  Working in numerous forums, the Department continued to argue against unfair rules banning trade in agricultural biotech products.  For example, the United States checked efforts to require unfair labeling of such biotech products.

At the same time, through a series of bilateral and multilateral policy dialogs, the United States worked to strengthen and open further the international system to financial flows.  The United States launched an investment dialog with Japan and reinvigorated talks with Russia on investment policy.  Multilaterally, we worked in the OECD as it expanded its investment outreach with China, Russia, and other nonmembers.

Integrate transition and developing economies more fully into the world economic system
The Department worked closely with the USTR and the Departments of Agriculture and Commerce to win international support to launch a new set of talks in the World Trade Organization (WTO).  The work entailed substantial public diplomacy efforts to explain U.S. positions to international audiences as well as more traditional bilateral and multilateral contacts with the full range of foreign governments.  The WTO's reliance on consensus for reaching decisions meant it was essential that developing as well as developed countries agree.  Due to the timing of the WTO Ministerial in Doha, November 9 - 14, the final successful launch of market-opening talks took place after the end of the fiscal year.

Use public diplomacy to garner foreign support for opening markets and understanding the role open markets can play in sustainable economic growth
The Department undertook an energetic and multipronged public diplomacy approach in support of U.S. market-opening policies during the year, using a number of international meetings and other events as opportunities to get out the message that countries need to lower barriers to trade and other international activities, adopt market-oriented economic policies, and participate fully in the global economic system if they are to prosper and develop.

National Interest

Economic Prosperity

Performance Goal #


Strategic Goal

Open world markets to increase trade and free the flow of goods, services, and capital.

Outcome Desired

America needs open markets around the world so that its goods and services can compete on a level playing field.  Likewise, as both the largest exporter and the biggest recipient of capital investment, the United States depends on sound international rules on foreign investment.  Acceptance of free market principles abroad is essential to other countries' sustainable economic growth and development and their prosperity contributes to international peace and stability.

FY '01 RESULTS AS OF 9/30/01

This goal is key because we are a major beneficiary of an open and strong multilateral economic system. Over the past 25 years, our imports and exports have grown over 50% as a share of Gross Domestic Product (GDP). Such a system also brings increased prosperity to other nations, strengthening international peace and stability.

Our multilateral and bilateral strategy based on consensus-building produced results from the WTO to successful Open Skies and bilateral investment treaties.

We will continue to build on this productive strategy in FY '02.

Eight indicators are outcome oriented; the remainder are activity or output measures where multilateral or bilateral processes—OECD outreach, for example—are vital to achieving outcomes such as adherence to international agreements.  Our indicators focus on key areas such as the WTO and investment where success is required to advance to our goals. 

Continued close cooperation with U.S. Trade Representative, the Department of Commerce, U.S. Department of Agriculture, and other U.S. agencies will be required to achieve further results in strengthening the international open market system next year.  Public diplomacy will be needed to ensure broad understanding of the issues.

Performance Indicator

FY '00 Actual

FY '01 Target

FY '01 Actual

Status of market opening negotiations in the WTO

Initial negotiations underway on agriculture and services.

Consensus to launch new round of multilateral trade negotiations achieved.

The more than 140 members of the World Trade Organization worked through the year to prepare for the launch of new market-opening talks.   The members agreed November 14, after the end of the fiscal year, at their Ministerial meeting in Doha to start these negotiations in January 2002.

Status of Integrated Framework (IF) for Trade-related Capacity Building Roundtables

None of needs yet met, as identified in IF needs-assessment funded roundtables.

Majority of needs met, as identified in IF roundtables.

Pilot trade capacity needs diagnostic projects in three least developed countries (Cambodia, Madagascar, Mauritania) were successfully completed as the IF was reenergized by member agencies.   Eleven additional countries have been identified for diagnostic studies.

Performance Indicator

FY '00 Actual

FY '01 Target

FY '01 Actual

WTO membership

WTO has 136 countries

Add five new members.

Oman, Croatia, Lithuania, and Moldova joined during the fiscal year.  Progress made in negotiations during the year enabled China and Taiwan to be admitted at the WTO's November 9-14, 2001, Ministerial in Doha

Number of countries agreeing to "Open Skies" aviation agreements



We reached new open skies civil aviation agreements with 7 additional countries, bringing the total to 53.

Status of multilateral policy dialogs

Launch OECD analytical study of investment policy changes in 21st century; expand adherents to OECD Declaration on Investment and Multilateral Enterprises.

Recommendation to OECD Ministerial on new policy initiatives; enhanced OECD work with Russia and China.

OECD expanded its investment outreach work with China, Russia, and other nonmember countries.  Latvia, Israel, Singapore, and Venezuela are in the pipeline to adhere to the Declaration on Investment and Multilateral Enterprises.

Status of bilateral investment policy dialogs

Define countries to engage in bilateral dialog.

Launch dialog with key countries that are important markets for U.S. investors.

The investment dialog with Japan was launched.  The United States reinvigorated its bilateral discussions with Russia on investment policy.

China's WTO accession

China is in WTO application process.

China completes WTO accession process and enters WTO.

Negotiations continued during the fiscal year.  China was admitted to the WTO in November, after the fiscal year's close.

Status of INTELSAT privatization

Assembly of parties considering final privatization documents.

Privatization completed.

INTELSAT was privatized July 18, 2001.

Number of countries agreeing to liberalize telecommunications equipment certification and standards regimes




Number of countries agreeing to establish independent telecommunications regulatory agencies







Source:  IMF, U.S. Government

Storage:  Department of State/EB

Complementary U.S. Government Activities (Non-Department of State)

Treasury:  Reform of international financial institutions, efforts to strengthen financial architecture and promote sound economic policies;

U.S. Trade Representative:  Bilateral and multilateral efforts to promote trade liberalization; and

U.S. Agency for International Development: Efforts to build capacity, combat corruption, improve health, and education.

Lead Agency

Department of State/EB


Regional bureaus, IO, INR, Treasury, U.S. Agency for International Development, U.S. Trade Representative, international financial institutions, and foreign governments

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