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Strategic Goals 3, 4, 5, and 6


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National Interest: Economic Prosperity

Strategic Goal 3: Open Markets
Open world markets to increase trade and free the flow of goods, services, and capital.

STRATEGIC GOAL OVERVIEW/PUBLIC BENEFIT

As the world's biggest importer and exporter, the United States benefits from open markets. A strong U.S. economy promotes economic and social development worldwide while helping foreign nations and societies to resist terrorism.

Exports: Over the past decade alone, growth in exports has accounted for one-quarter of U.S. economic growth. Twenty percent of U.S. manufacturing jobs depend on exports; exports generate 25 percent of gross cash sales for U.S. farmers and ranchers.

Imports: As the largest market for developing countries' exports, the U.S. market is crucial to global stability and for these countries' economic growth and development. Imports also boost the standard of living for Americans by making available lower cost inputs for U.S. industries and consumer goods.

Investment Flows: Over the past decade, U.S. investment overseas grew three times faster than U.S. exports, generating $230 billion in related exports in 1999, and accounting for one-third of total merchandise exports. U.S. investment abroad creates demand for U.S. products and jobs for U.S. workers
.

STRATEGIC GOAL SUMMARY OF RESULTS ACHIEVED
One Annual Goal and Eleven Targets Represented
Four Annual Goals Represented
Number of Targets
Significantly Below Target
Slightly Below Target
On Target
Above Target
Significantly Above Target
No 2002 Data Available
TOTAL
11
1
2
5
3
0
0
Percent of Total
100%
9%
18%
45%
27%
0%
0%

Annual Performance Goal 1
A robust international framework for free trade in goods, services, and investment ensures the openness of international markets for new technologies


SUMMARY OF KEY RESULTS AND IMPACT

Work in support of this goal results in the creation of a predictable, rules-based international environment for trade and investment, making it easier to do business across borders. For example, adequate protection of intellectual property is an important item on the Department's agenda. Ensuring markets for products of modern biotechnology, particularly agriculture crops, is also a high-priority area of activity.

During FY 2002, China and Taiwan joined the World Trade Organization (WTO) and a new round of WTO talks was launched in Doha, Qatar. Progress is being made towards the accession of Macedonia, Armenia, and Russia to the WTO. The United States is also working with Saudi Arabia in its bid to join the WTO. In accordance with the Doha mandate, negotiations in Geneva are focusing on twelve substantive trade sectors. As shown in the adjacent chart, through September 30, 2002, 144 countries have joined the WTO.

China has started conforming to the WTO by taking steps to remove trade barriers and open its markets. China enacted or changed over 2,000 laws and regulations to comply with WTO rules, cut tariffs on over 5,000 product lines, and increased foreign access to its financial and tourism sectors. In its initial year in the WTO, China made significant progress in conforming to international trade rules and liberalizing its trade regime, but problems arose in some key areas including agriculture. The scope and complexity of China's implementation efforts will require close monitoring in 2003.

The conclusion of free trade agreements (FTAs) has been a major priority for several years. FTAs open markets for U.S. producers, promote economic growth and stability in important economic and political partners, and improve cooperation in other fora. The passage of Trade Promotion Authority allows the United States to pursue an ambitious reciprocal trade liberalization strategy at global, regional, and bilateral levels through the WTO Doha Development Agenda, the Free Trade
Area of the Americas (FTAA) negotiations, and a number of bilateral free trade initiatives. In FY 2002, Jordan's FTA with the United States entered into force, increasing interest in better trade ties with the United States throughout the Middle East. FTAA negotiations continued during FY 2002. Four new FTA candidates (Central America, Morocco, the Southern African Customs Union, and Australia) were formally identified and the intent to negotiate FTAs has been communicated to Congress. The United States agreed on core elements of an FTA with Singapore in November 2002, and concluded an FTA with Chile in December 2002 (FY 2003).

[Text version of a photo: Secretary Powell speaking at a microphone. Caption/credit reads: "Secretary of State Colin Powell addresses international business leaders during the CEO Summit of the Asia Pacific Economic Cooperation on October 24, 2002 in Los Cabos, Mexico. AFP Photo/Omar Torres."]

Working with the Asia Pacific Economic Cooperation (APEC) economies, the Department is reducing traditional barriers to trade and investment, and opening "new economy" opportunities in e-commerce and information technology. The Department has expended much effort to build broad support for a scientific and non-trade distorting regulation of agricultural biotechnology. Unilateral trade benefit programs, such as the Andean Trade Promotion and Drug Eradication Act (ATPDEA), the Caribbean Basin Trade Partnership Act (CBTPA), and the African Growth and Opportunity Act (AGOA) help expand trade, regional economic integration, good governance, prosperity, and stability.

Discussions continued with several other nations to increase the number of Bilateral Investment Treaty (BIT) signatories. While productive discussions were held with Peru, and the Department was working to re-engage with Russia on a BIT, political factors limited engagement with Colombia, South Korea, and Venezuela. The Department is currently updating the Model BIT text from which it negotiates agreements. This text will expedite the Department's ongoing BIT discussions and information exchanges with over a dozen countries.

In 2002, the Department negotiated five new "Open Skies" aviation agreements, creating major transport services expansion in new markets. These arrangements have created jobs, increased trade, and attracted investment. The United States now has "Open Skies" agreements with fifty-eight countries, and other liberalized agreements with three countries.

The complete privatization of INTELSAT has leveled the playing field in the international telecommunications satellite service market, providing a basis for other governments to adopt open, competitive regulatory regimes. Additional work will be required to complete the congressionally-mandated public offering of INTELSAT shares, as well as to address other remaining regulatory and diplomatic issues.

Finally, thirty-six countries have agreed to liberalize their telecommunications regimes by adopting Mutual Recognition Agreements (MRAs) for equipment certifications. This will avoid duplication of effort and cost by U.S. companies seeking certification of equipment overseas. The Department will continue multilateral and bilateral efforts to encourage additional nations to adopt MRAs.

WTO Membership:
FY 2000 -- 136 (Result)
FY 2001 -- 140 (Result)
FY 2002 -- 145 (Target)
FY 2002 -- 144 (Result)

Number of countries ageeing to "Open Skies" aviation agreements:
FY 2000 -- 46 (Result)
FY 2001 -- 53 (Result)
FY 2002 -- 56 (Target)
FY 2002 -- 58 (Result)

STATUS OF MARKET OPENING NEGOTIATIONS IN THE WTO
Initial Target
Revised Target 1
Result
Rating
Negotiations continue. Consensus reached to launch new
trade negotiations.
WTO launched new round in Doha; China and Taiwan joined WTO.
On Target
New Round launched, negotiations
underway.
WTO MEMBERSHIP
Target
Result
Rating
Add five new members. China and Taiwan entered WTO; Macedonian and Armenian accessions approved.
WTO membership was 144 at end of FY 2002.
Slightly Below Target
Russian, Saudi Arabian and other accession processes
were more difficult than expected; less progress than
planned.
CHINA'S WTO ACCESSION
Target
Result
Rating
China begins to conform to WTO
obligations.
China took concrete steps to remove trade barriers and open its markets; some shortfalls remain in
areas of interest.
Slightly Below Target
China made significant progress in its initial year, but
problems emerged in some key sectors.
STATUS OF BILATERAL TRADE AND INVESTMENT POLICY DIALOGUES
Initial Target
Revised Target 1
Result
Rating
Measurable progress on improvement of trade and investment climates.
Implement Jordan FTA. Negotiations with Chile and Singapore ngoing.
Identify candidates for FTA negotiations
Agreement on core elements with Singapore in November 2002, FTA with Chile concluded in December 2002; Jordan FTA entered into force;. FTAA negotiations continued; and Morocco, Central America, the South African Customs Union (SACU), and Australia identified as partners for FTAs.
On Target
STATUS OF INTEGRATED FRAMEWORK (IF) FOR TRADE -
RELATED CAPACITY BUILDING ROUND TABLES
Target
Result
Rating
Majority of needs met, as identified
in IF roundtables.
Donors and recipients using country trade integration studies to determine needs and how to use liberalization to reduce poverty.
On Target
STATUS OF BILATERAL INVESTMENT TREATY (BIT) NEGOTIATIONS
Target
Result
Rating
Increase total number of signed BITs by four (10%).
BIT discussions continued with Venezuela, Peru, Colombia, and Korea; discussions with Russian officials reinvigorated BIT discussions.
Significantly Below Target
The Department expects to conclude a BIT with Peru
in the near future. Despite repeated U.S. attempts to
engage, Colombia, South Korea and Venezuela have
not moved forward due to political events and
uncertainty.
1 Target was modified; activities related to achieving both initial and revised targets were undertaken. "Result" reported for both sets of targets.
STATUS OF MULTILATERAL POLICY DIALOGUES
Initial Target
Revised Target 1
Results
Rating
Substantial new progress on new
OECD initiatives.
Continue investment policy dialogues
and related OECD outreach events
with China and Russia.

Announcement of U.S.-China Foreign Direct Investment (FDI) Conference; USG backing for OECD outreach to Russia and China culminated in financial contribution and Global Forum on International Investment
in China (December 2002).
On Target
NUMBER OF COUNTRIES AGREEING TO "OPEN SKIES" AVIATION AGREEMENTS
Target
Result
Rating
56
58 Open Skies agreements plus 3 other liberalized agreements (Russia, Ecuador, and Samoa).
Above Target
In addition to the target, 2 more Open Skies
agreements and 3 liberalizations were achieved.
STATUS OF INTELSAT PRIVATIZATION
Target
Result
Rating
INTELSAT privatization established. INTELSAT privatization established. On Target
NUMBER OF COUNTRIES AGREEING TO LIBERALIZE TELECOM EQUIPMENT
CERTIFICATION AND STANDARDS REGIMES
Target
Result
Rating
34
36
Above Target
Nations in APEC, EU and Inter-American
Telecommunications Commission (CITEL)
adopted Mutual Recognition Agreements
(MRAs) for equipment certification
NUMBER OF COUNTRIES AGREEING TO ESTABLISH
INDEPENDENT TELECOM REGULATORY AGENCIES
12
15
Above Target
1 Target was modified; activities related to achieving both initial and revised targets were undertaken. "Result" reported for both sets of targets.

National Interest: Economic Prosperity

Strategic Goal 4: U.S. Exports
Expand U.S. exports to $1.2 trillion early in the 21st century

STRATEGIC GOAL OVERVIEW/PUBLIC BENEFIT

During the past decade, America's prosperity has become increasingly dependent on the prosperity of the rest of the world. As the President has made clear, increased trade will help our workers, farmers, and consumers by creating more jobs, providing more choice in goods and services, and lowering costs. In statistical terms, the importance of exports is clear:

  • Exports accounted for over one-quarter of U.S. economic growth in the 1990s.
  • Exports now account for about 11 percent of GNP.
  • Exports support twelve million American jobs.
  • One in five manufacturing workers depend on exports for their jobs.
  • U.S. agricultural exports were $53 billion in FY 2002.
  • One-third of U.S. farmland is planted for export.
  • Exports generate 25 percent of gross cash sales for U.S. farmers and ranchers.
  • U.S. investment abroad generated about $200 billion in U.S. exports (growing twice as fast as overall U.S. exports).

The Department defends the rights of U.S. businesses operating overseas, leads efforts to strengthen the rule of law, fights corruption, promotes open and transparent trade and investment regimes, and encourages corporate responsibility. By coordinating private-sector dialogues in key markets, such as Turkey and Mexico, the Department is encouraging institutional development and reform in developing countries in order to increase their economic growth and expand U.S. exports.

 

STRATEGIC GOAL SUMMARY OF RESULTS ACHIEVED
One Annual Goal and Seven Targets Represented
Four Annual Goals Represented
Number of Targets
Significantly Below Target
Slightly Below Target
On Target
Above Target
Significantly Above Target
No 2002 Data Available
TOTAL
7
0
1
0
4
0
2
Percent of Total
100%
0%
14%
0%
71%
0%
29%

Annual Performance Goal 1
U.S. companies compete successfully for worldwide sales

SUMMARY OF KEY RESULTS AND IMPACT

Approximately 360 outreach meetings and business briefings were held with the following beneficial impact:

  • Helped alleviate consumer boycotts of American products in Arab countries.
  • Increased awareness of business-visa processing problems after the events of 9/11 through distribution of information to the business community .
  • Increased USG and private-sector efforts to encourage countries to reduce corruption.
  • Increased corporate social responsibility and public-private partnerships improved the climate for U.S. exports and business overseas.
  • Increased awareness by U.S. companies of opportunities available in Africa and in Jordan as a result of organizing roundtables on both AGOA and the Qualifying Industrial Zones respectively.

Advocacy services were provided to approximately 120 companies. The following are some examples of the results:

  • Sale of eight aircraft to Pakistan worth $1.5 billion.
  • Nortel Networks USA won a $64-million judgment against TELECOM, a Colombian quasi-governmental corporation.
  • GE collected $6 million in arrears from the Kenyan Government for locomotive engines.
  • Resolved American investors' problems (e.g., Coca-Cola, for $800,000) with the Uzbekistan Government regarding privatization and currency convertibility.

Groundbreaking for the Caspian Main Export Pipeline (Baku-Tbilisi-Ceyhan) is underway. This event represents a major victory in the U.S effort to diversify world oil production. It also enhances the stability and sovereignty of Caspian states and provides major benefits for U.S and world energy security. U.S. firms will play an important role in this $2.9 billion-pipeline project, which has extensive equipment export potential.

U.S. firms began construction on a major export pipeline in Ecuador, resulting in a 64 percent increase in U.S. oil and gas field equipment exports to Ecuador. U.S. gas field equipment exports to Brazil increased by 22 percent. U.S. investments in Venezuelan heavy oil came on line. Trinidad and Tobago's expansion of its vast liquid natural gas (LNG) capacity resulted in a 48 percent increase of U.S. exports to that nation. Saudi Arabia awarded $20 billion in natural gas development contracts to U.S. and international oil companies; U.S. equipment sales to Saudi Arabia increased by 9 percent.

The Business Facilitation Incentive Fund (BFIF) program supports commercial advocacy training and business promotion at 105 of the Department's 243 posts not served by the Foreign Commercial Service of the Department of Commerce. These posts represent billions of dollars in export market and investment potential. Posts are actively reaching out to larger audiences and want to develop higher impact projects.

PERFORMANCE RESULTS BY INDICATOR AND TARGET

NUMBER OF OUTREACH MEETINGS AND BUSINESS BRIEFINGS HELD
Target
Result
Rating
300
360
Above Target
NUMBER OF BUSINESS CONFERENCES ATTENDED
Target
Result
Rating
75
100
Above Target
NUMBER OF COMPANIES FOR WHOM ADVOCACY SERVICES WERE PROVIDED
Target
Result
Rating
100
120
Above Target
TELECOMAND IT EQUIPMENT SALES
Target
Result
Rating
$138 billion
Data not yet available.
N/A
MINUTES/MESSAGES OF OVERSEAS SERVICE PROVIDED BY U.S.
TELECOM OPERATORS INCLUDING SATELLITE COMPANIES
Target
Result
Rating
33.2 billion minutes
6.2 billion messages
Data not yet available.
N/A
OIL AND GAS SECTOR EXPORTS
Target
Result
Rating
New energy investment in Middle East, Latin America, and the Caspian Region resulting in increased flows of energy equipment and service exports by U.S. firms.
New energy investments resulted in increased energy-related U.S. exports.
Above Target
AGRICULTURAL EXPORTS
Initial Target
Revised Target 1
Results
Rating
$32.4 billion
$54.5 billion
$53 billion
Slightly Below Target
1 Target was modified; activities related to achieving both initial and revised targets were undertaken. "Result" will be reported for both sets of targets.

National Interest: Economic Prosperity

Strategic Goal 5: Global Economic Growth
Increase global economic growth and stability.

STRATEGIC GOAL OVERVIEW/PUBLIC BENEFIT

Global macroeconomic conditions have a significant impact on the ability of the United States to sustain stable economic growth. U.S. export, income, and employment levels benefit from faster growth and greater economic stability worldwide. To achieve this, Department officials in Washington and abroad work closely with the IMF, the World Bank, other regional and multilateral organizations, and foreign governments to support sound macroeconomic and structual policies that lay the
groundwork for growth. The Department strongly supports more selective and effective conditioning of International Monetary Fund (IMF) and World Bank activity to implement economic reform programs.

In the decades ahead, making effective and appropriate use of science and technology will be key to ensuring strong, sustained economic growth. There is widespread recognition in the United States of the value generated by investments in information technology and biotechnology. The Department plays a major role in promoting the effective use of these technologies abroad to enhance growth and stability.

 

STRATEGIC GOAL SUMMARY OF RESULTS ACHIEVED
One Annual Goal and Threee Targets Represented
Four Annual Goals Represented
Number of Targets
Significantly Below Target
Slightly Below Target
On Target
Above Target
Significantly Above Target
No 2002 Data Available
TOTAL
3
0
3
0
0
0
0
Percent of Total
100%
0%
100%
0%
0%
0%
0%

Annual Performance Goal 1
Countries around the globe adopt and maintain growth-oriented economic policies;
economic crises are less likely and less severe

SUMMARY OF KEY RESULTS AND IMPACT

By adopting and maintaining growth-oriented economic policies, countries directly contributed to global economic growth, avoided economic crises, reduced social turmoil, and promoted stability.

Indonesia, Brazil, Uruguay, Russia, Thailand, Ukraine, Pakistan, Turkey, and Yugoslavia implemented IMF reform programs during 2002, ameliorating economic crises and social misery, while protecting the global financial system and U.S. investments. Argentina abandoned its IMF program in December 2001, but continued U.S. support for other regional economies and renewed IMF-Argentine engagement helped contain the crisis and keep the door open for a new reform program.

In FY 2002, International Telecommunications Union (ITU) states adopted 25 new telecom "recommendations", making a total of 385 adopted "recommendations". The downturn in the telecom market led to a decline in participation; nevertheless, the ITU continued to expand its standardization work. U.S. industry continued its deep involvement in that work.

The Department has increased U.S. energy security by working within the International Energy Agency (IEA) to achieve an increase in IEA collective oil stocks from 111 days of net imports in 2000 to 114 days of net imports in 2002, despite increased imports. In addition, the Department's efforts have contributed to a decision by China, a significant non-IEA net importer, to set up strategic oil reserves.

PERFORMANCE RESULTS BY INDICATOR AND TARGET

GLOBAL GDP GROWT H (IMF MEASURE )
Initial Target
Revised Target 1
Result
Rating
3.6% during
CY 2002
4.0%
2.8%
Slightly Below TargetGlobal economic growth slowed, in
part due to consequences of the events of 9/11.
KEY COUNTRIES IMPLEMENTING IMF REFORM PROGRAMS
Initial Target
Revised Target 2
Result
Rating
Indonesia, Argentina, Brazil, Uruguay, S. Korea, Nigeria, Russia,
Thailand, Ukraine, Pakistan, Turkey.
Indonesia, Argentina, Brazil, Uruguay, S. Korea, Nigeria, Russia,
Thailand, Ukraine, Pakistan, Turkey,
and Yugoslavia implement IMF
reform programs.
Indonesia, Brazil, Uruguay, Russia, Thailand, Ukraine, Pakistan, Turkey,
and Yugoslavia implemented IMF
reform programs.
Slightly Below Target Political/social problems prevented Argentina and Nigeria from following IMF programs.
NUMBER OF INTERNATIONALLY APPROVED TELECOM
RECOMMENDATIONS ADOPTED BY ITU MEMBER STATES
Target
Result
Rating
400
385
Slightly Below Target
The downturn in the telecom market led to a downturn in participation. The ITU nevertheless continued to expand its standardization work.
1 Target was modified; activities related to achieving both initial and revised targets were undertaken. "Result" reported for both sets of targets.

National Interest: Economic Prosperity

Strategic Goal 6: Economic Development
Promote broad-based, sustainable growth in developing countries and transitional economies.

STRATEGIC GOAL OVERVIEW/PUBLIC BENEFIT

Poverty leads to despair, instability, and violence, and contributes substantially to problems that spill across America's borders, including terrorism, narcotics, illegal immigration, and trafficking in persons. It is in the U.S. interest to help developing and transitional countries make the shift to democratic, market-based, competitive societies that can achieve sustainable development.

World Bank and other studies show that the best way for a country to reduce poverty and spur social development is by generating rapid economic growth. To the extent that such growth can be generated by private investment, developing and transitioning countries will become more competitive and better integrated into the world economy. Economic development will also facilitate the transition to and consolidation of democracy.

In many cases, difficulties in achieving development have stemmed from a reluctance or inability to adopt and implement basic good governance by implementing the rule of law, investing in people, and promoting economic freedom. To this end, the President has proposed the new Millennium Challenge Account, which earmarks up to $5 billion per year to support efforts by developing countries to implement reforms.

 

STRATEGIC GOAL SUMMARY OF RESULTS ACHIEVED
One Annual Goal and Four Targets Represented
Four Annual Goals Represented
Number of Targets
Significantly Below Target
Slightly Below Target
On Target
Above Target
Significantly Above Target
No 2002 Data Available
TOTAL
4
1
1
0
1
0
1
Percent of Total
100%
25%
25%
0%
25%
0%
25%

Annual Performance Goal 1
Developing and transition economies experience broad-based, sustainable economic growth

SUMMARY OF KEY RESULTS AND IMPACT

By adopting and maintaining growth-oriented economic policies, countries directly contribute to global economic growth. Avoiding economic crises reduces social turmoil and promotes stability.

Estimated GDP growth in developing countries was 5.1 percent during 2002, slightly below the Department's revised target of 5.3 percent. The shortfall was largely due to global economic factors. Continued economic growth in developing countries remains a Department priority, as evidenced by continued U.S. participation in and leadership of the international development dialogue, especially the Doha Development Round, the G-8 Summit, the Monterrey Conference on Financing for
Development (which produced the Monterrey Consensus), and the World Summit on Sustainable Development. These efforts strengthened international support for needed policy reforms at the national level. The Monterrey Consensus was a turning point in international development discussions because it emphasized the critical importance of domestic policies and measures for resource mobilization.

Estimated average GDP growth for "transitional" countries was 3.3 percent during 2002, slightly above the revised rate of 3.2 percent. Continuing U.S. efforts to motivate and support policy reforms in countries with transitional economies, including support for European Union (EU) enlargement and an open international trading system, helped spur economic growth.

More than two-thirds of the world's poor live in rural areas; farming is the main livelihood for three-fourths of these people. Food production must double in the next fifty years in sustainable ways, and raising agricultural productivity is the key to raising living standards and reducing hunger. The United States, therefore, showcased a new agricultural-productivity initiative at the spring World Food Summit, and again at the World Summit on Sustainable Development in late summer.

As an essential element in the war on terrorism in response to the events of 9/11, the United States provided over $600 million in FY 2002 to stabilize and rebuild Afghanistan, in addition to more than $5 billion in military expenditures. The United States has built an international coalition for the reconstruction of Afghanistan that has so far pledged more than $5.2 billion. The assistance and reconstruction effort has supported the formation of an Afghan Government committed to democracy and policy reform, and has provided resources to support its development efforts. As part of the broader USG response, the Department has provided significant support and assistance to "front-line" states in the region, including Pakistan and the Central Asian Republics, to bolster growth and stability.

Number of Countries Receiving Heavily Indebted Poor Countries (HIPC) Debt Relief:
FY 2000 -- 10 (Result)
FY 2001 -- 23 (Result)
FY 2002 -- 37 (Target)
FY 2002 -- 26 (Result)

SUMMARY OF RESULTS BY INDICATOR AND TARGET

AVERAGE DEVELOPING COUNTRY GDP GROWTH RATE
Initial Target
Revised Target 1
Result
Rating
5.3% for
CY 2002
5.3%
5.1%
Slightly Below Target
The slight shortfall was due to
global economic factors.
AVERAGE TRANSITION COUNTRY GDP GROWTH RATE
Initial Target
Revised Target 1
Result
Rating
4.1% for
CY 2002
3.2%
3.3%
Above Target
REDUCTION OF WORLD POPULATION LIVING IN ABJECT POVERTY
Initial Target
Revised Target
Result
Rating
2-3% for
CY 2002
2-3%
Data not yet available.
N/A
NUMBER OF COUNTRIES RECEIVING HEAVILY INDEBTED POOR
COUNTRIES (HIPC) DEBT RELIEF
Initial Target
Result
Rating
All 37 countries
26 Significantly
Below Target
Other countries unable or unwilling
to undertake reforms.
1 Target was modified; activities related to achieving both initial and revised targets were undertaken. "Result" reported for both sets of targets.

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