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A Commercial Perspective on MDA David Long Director Office of Service Industries U.S. Department of Commerce. Navy-Industry International Dialogue Army-Navy Country Club April 19, 2005. Topics. Commercial background to MDA Growing interconnection at every level
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A Commercial Perspective on MDADavid Long Director Office of Service Industries U.S. Department of Commerce Navy-Industry International Dialogue Army-Navy Country Club April 19, 2005
Topics • Commercial background to MDA • Growing interconnection at every level • Trade and investment flows • Supply chain issues • Maritime security programs in the system • Importance of MDA to commercial world
U.S. Exports to Selected Countries YR 2004 (goods) Jordan$404 M Morocco$524 M China $34.7 B EU $172.6 B Central America + DR $17.4 B Bahrain $301 M Panama$1.8 B Thailand $6.4 B Ecuador$1.7 B India $6.1 B Colombia $4.5 B Singapore$19.6 B Peru $2.1B Bolivia $194 M Southern African Customs Union $3.3 B Australia $14.3 B Chile $3.6 B
U.S. Imports from Selected Countries YR 2004 (goods) Jordan$674 M Morocco$515 M China $196.7 B EU $282.6 B Central America + DR $25.9 B Bahrain $405 M Panama$316 M Thailand $17.6 B Ecuador$4.3 B India $15.6 B Colombia $7.3 B Singapore$15.3 B Peru $3.7B Bolivia $261 M Southern African Customs Union $6.9 B Australia $7.5 B Chile $4.7 B
Trade Growth Impact 282.6 B Up 11.7% 196.7 B Up 29% 172.6 B Up 11.2% 34.7 B Up 22.4% 19.6 B Up 18.4% 15.3 B Up 1.1% 3.6 B Up 33.5% 4.7 B Up 27.8%
Other Forces in Globalization • Fuller levels of business integration based on technology and new business practices • Berlin Wall and 9/11 • Workflow software • Open-sourcing • Outsourcing • Supply chain • Insourcing • Emergence of China, India, and Russia • Source: The World Is Flat, by Thomas Friedman (2005)
Typical Supply Chain “24-hour Rule” “96-hour Notice” Container Security Initiative Customs-Trade Partnership Against Terrorism
Port Container Growth at Long Beach(in millions of twenty-foot container units) 175% increase since 1990
More than 360 ports, 1000 harbor channels, 25,000 miles of domestic waterways Nearly $750 billion of America’s GDP and handles 95% of all overseas trade Railways carry 16% of freight today. Avg. export travels 1,000 miles to port vs 100s in other markets Highway system carriers 78% of domestic tonnage. Just-in-Time delivery Shortages of truck drivers Fewer train locomotives River transportation slow Port capacity US Infrastructure Considerations Structure Factors Delivery Factors
Impact of Port Shutdown • Difficult to assess • Depends on timing, location, severity • West Coast Port Shutdown in October 2002 • 23-day work backlog; more than $6 billion of disrupted trade; affecting 64,000 jobs • Large impact on foreign end
Generates majority of domain activities and operations Generates virtually all economic activity in MDA Faces maximum risks for security incident Possesses substantial resources for awareness and information networking Bears majority of the costs Requires new, advanced operational systems and technologies (incl. sensors, airborne equip, comm. systems) Requires enhanced communications with the non-Federal domestic and international stakeholders Private Sector Participation vital to MDA Risk Factors Requirements
Selected Security Partnerships • Advance Presentation of Cargo Information • Container Security Initiative (CBP) • Advance Notice of Arrival (Coast Guard) • C-TPAT (Customs-Trade Partnership Against Terrorism) (DHS CBP) • Security and Prosperity Partnership Initiative (Canada, Mexico, US) • International Cargo Security Programs
Multilateral (big bloc party) WTO/GATS OECD Universal Postal Union Regional (smaller bloc party) APEC FTAA AGOA, CBI Bilateral (one+one, multiple) FTAs (NAFTA,US- Australia, Singapore, Chile, Israel, Jordan, Morocco,CAFTA Air Courier and Postal Services Air Transport Distribution Services Express Delivery Services Land Transportation Services Maritime Transportation Services (Security issues are not negotiated in trade agreements) Engage and Enhance Intl. Partnerships (Notable Discussions on Trade Matters)
Conclusions • Huge economic stakes • Everything inter-related, national and international • Private sector participation vital • Control costs, encourage growth • Need to see whole private sector picture • Large, medium, and small business impact • Need your participation in workshops and conferences
Any Questions David Long Director, Office of Service Industries U.S. Department of Commerce ITA-H 1124 Washington, DC 20230 Tel 202-482-3575 Fax 202-482-2669 david_long@ita.doc.gov General: 1-800 USA TRADE