Industry & Analysis’ Spotlight Series

1. Industry & Analysis’Spotlight Series June 18, 2013

2. Speakers Ryan Mulholland Renewable Energy MAS – Office of Energy and Environmental Industries Liz Couch Automotive Parts MAS – Office of Transportation and Machinery Kim Copperthite Chemicals and Green Chemistry MAS – Office of Materials Industries

3. Industry & Analysis’Spotlight on Renewable Energy June 18, 2013 Prepared by the Office of Energy and Environmental Industries Renewable Energy Team

4. Renewable Energy The renewable energy industry includes: • Wind • Solar • Geothermal • Hydropower • Biomass • Biofuels Clarification of Terms

5. Opportunities • Solar and wind are expected to grow the most • According to BNEF, Solar PV and wind will comprise the largest share of new power capacity added to 2030, accounting for 30% and 27% respectively. • Most rapid growth to occur in developing world • China, the Middle East, Africa and Latin America should all see impressive growth rates as energy demand increases to keep with economic growth. • Renewables are expected to expand globally • The IEA projects 57% of new capacity to 2030 will be in the form of renewable technologies despite the presence of lower cost natural gas power plants. • U.S. exporters are particularly competitive in high-tech products and services • U.S. research labs and universities continue to drive technology innovation, often giving U.S. companies an early lead in new technologies. Bloomberg New Energy Finance predicts that over $7 trillion will be invested globally in clean energy between 2012 and 2030. Global Private Sector Investment in Renewable Energy $269 bn $230 bn $188bn $135bn $130bn $97bn $68bn $43bn $36 bn Source: Bloomberg New Energy Finance

6. Opportunities • Solar and wind are expected to grow the most • According to BNEF, Solar PV and wind will comprise the largest share of new power capacity added to 2030, accounting for 30% and 27% respectively. • Most rapid growth to occur in developing world • China, the Middle East, Africa and Latin America should all see impressive growth rates as energy demand increases to keep with economic growth. • Renewables are expected to expand globally • The IEA projects 57% of new capacity to 2030 will be in the form of renewable technologies despite the presence of lower cost natural gas power plants. • U.S. exporters are particularly competitive in high-tech products and services • U.S. research labs and universities continue to drive technology innovation, often giving U.S. companies an early lead in new technologies. Bloomberg New Energy Finance predicts that over $7 trillion will be invested globally in clean energy between 2012 and 2030. Global Private Sector Investment in Renewable Energy

7. Risks and Issues • Key Global Trends: • Demand has declined in traditional markets, as feed-in tariffs and other incentives in Europe have been reduced • China’s interest in manufacturing renewable energy technologies has caused vast over supply in solar products • Over 100 countries now have renewable energy incentives, but many are tying incentives to domestic production requirements (LCRs) • Price declines in wind and solar are significant Manufacturers are being squeezed by price declines, causing many firms to turn to governments for support. Many countries now act inconsistently with their trade obligations. Trade enforcement has therefore become an important facet of the industry’s near-term prospects • Key Domestic Trends: • Exhaustion of Section 1603 Treasury Cash Grant Program • Manufacturing Tax Credit (48c) no longer available • No national level energy policy in foreseeable future • Production Tax Credit set to expire (could severely limit wind energy growth) • Natural gas limiting investment in renewables, particularly wind energy Finding new market opportunities for U.S. companies abroad is critical to maintaining RE industry domestically.

8. Examples of ITA and Interagency Activities The MAS Renewable Energy Team’s activities support the ongoing implementation of the Renewable Energy and Energy Efficiency Export Initiative (RE4I), a principal component of the President’s NEI. • ITA’s Commitments in the RE4I include: • Creation of a RE&EE Advisory Committee • Initial committee made 22 recommendations; since been re-chartered (four subcommittees) • The development of targeted trade policy missions and industry roundtables • Mexico (Sept 2011); Japan (December 2012); Chile (April 2013) • Host an interagency web portal • www.export.gov/reee • Produce a comprehensive market prioritization study • Expand the Green Embassies Program • Lead additional RE&EE trade missions • Saudi Arabia (May 2012); Southeast Asia (Sept 2012) • Facilitate interagency coordination at key industry trade shows A/S Nicole Lamb-Hale meets with Chile’s Minister of Energy, Jorge Bunster, during a recent RE&EE trade policy mission (April 2013) ITA and DOE employees on an observation platform above Matsushima Bay in Japan during a RE&EE trade policy mission (December 2012)

9. Renewable Energy Team’s Products MAS Market Intelligence Briefs Provides in-depth market research on key export markets, including opportunities, challenges, and market structure information. Exporters Web Portal News, information, market research from across the U.S. Government specific to exporters Country or Market Case Studies Short overviews of the renewable energy market in particular countries or sub-sectorsas part of the 2014 Renewable Energy Top Markets Report www.export.gov/reee/topmarkets Monthly Exporters’ E-Newsletters Provides links to registration for upcoming events, as well as reports and market research on export opportunities abroad

10. Adam O’Malley Director, Office of Energy and Environmental Industries Phone: 202-482-4850 Email: Adam.Omalley@trade.gov Catherine Vial Team Lead, Environmental and Renewable Energy Industries Team Phone: 202-482-2823 Email: Catherine.Vial@trade.gov Renewable Energy Team Staff Ryan Mulholland Wind and Solar, TPCC Working Group on RE&EE, RE&EE Advisory Committee Phone: 202-482-4693 Email: Ryan.Mulholland@trade.gov Cora Dickson Biofuels, Biomass, Waste-to-Energy, Fuel Cells, Hydropower, Geothermal, RE&EE Website Phone: 202-482-6083 Email: Cora.Dickson@trade.gov Nyamusi Igambi Deputy Director of CS Energy Team Phone: 713-209-3112 Email: Nyamusi.Igambi@trade.gov www.export.gov/reee

11. Industry and Analysis’Spotlight on Automotive Parts June 18, 2013 (revised 2/21/14) Prepared by the Office of Transportation and Machinery’s Automotive Team

12. Automotive Parts The automotive parts industry includes: • Original equipment parts • Aftermarket parts • Repair parts • OE or New replacement parts • Remanufactured parts • Specialty equipment • Accessories

13. NEI Priority Markets: (U.S. Auto Parts Export Figures based on Year-End 2013) • Canada ($31.6 B) • Mexico ($26.6 B) • European Union ($5.2 B) • China ($2.3 B) • GCC* ($961 M) • Russia ($493 M) • *Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and UAE • Source: U.S. Census Bureau

14. Opportunities • In 2013, U.S. auto parts exports were $77.3 billion, an 80% increase in NEI growth (from full-year 2009-2013). From 2012 - 2013, exports of U.S. auto parts to the world grew by 3.1%. • Growth economies (China, Russia, Middle East) have an increasing number of consumers able to afford vehicles and the aftermarket parts to repair and customize them. • Potential for increased U.S. auto aftermarket exports resulting from global automakers’ increased exports of U.S.-made vehicles. • Most SME auto parts companies do not currently export or export to only our NAFTA partners, which creates potential for increased exports. • An increased interest in auto electronics, connectivity, fuel-efficiency, lower emissions, creates opportunities for U.S. companies of advanced technologies.

15. Risks and Issues • Counterfeiting and protecting IP remain major concerns. • Potential for foreign governments with domestic auto industries to develop policies that give advantage to domestic firms (advanced technology support programs; incentives and financing for domestic producers; and, protectionist measures to limit imports; bans on remanufactured parts). • Potential for foreign governments to develop standards- or nationalistic-related regulations that disadvantage U.S. firms. • Currency exchange rates are a factor in OE & aftermarket parts sourcing decisions. • Ever-increasing competition from international auto suppliers and from non-automotive connectivity/infotainment companies.

16. Examples of ITA and Interagency Activities • Support SEMA’s MDCP • SEMA Business Development Missions to China , Russia and the Middle East • SEMA’s International Vehicle Measuring Program (helping SEMA members manufacture and export parts for vehicles not made or sold in the United States) • Provide education to regulators in China and GCC re: U.S. regulatory process for specialty parts & customized vehicles • Provide auto-related input for Trans-Pacific Partnership and U.S.-EU FTA negotiations. • Address and monitor China’s auto policies, including USG’s WTO complaint regarding China’s auto parts subsidies. • Promote/participate in trade promotion events, such as: Automechanika Middle East (June), Automechanika Mexico (July), and IZB International Supplier Fair (September). • Prepare and distribute “Automotive Resource Guide.” SEMA members take measurements of Toyota HiLux in order to make specialty products for export (July 2012) Industry representative comparing U.S. and EU regulatory processes and compliance (June 2013)

17. Automotive Team Products • Growth Trends of Vehicle Exports Report • Automotive Resource Guide • Quarterly automotive parts trade statistics • Compilation of Foreign Motor Vehicle Import Requirements • Website: http://trade.gov/mas/manufacturing/OAAI/index.asp

18. Thomas Sobotta; Automotive Team Leader Thomas.Sobotta@trade.gov; 202-482-4478 Automotive Team Staff Elena Mikalis; Europe, ASEAN, standards, innovation Elena.Mikalis@trade.gov; 202-482-1417 Liz Couch; Middle East, China, MDCP Award for SEMA, Liaison with CS-Auto Team Elizabeth.Couch@trade.gov; 202-482-2120 Andy Parris; Middle East, Africa, South America, Remanufacturing; Standards Andy.Parris@trade.gov; 202-482-1420 Todd Peterson; China, Japan, APEC Auto Dialogue, MDCP Award for CALSTART Todd.Peterson@trade.gov; 202-482-3865 Jeff Williams; NAFTA, Korea-US FTA, Congressional Liaison, Import Requirements report Jeffrey.Williams@trade.gov; 202-482-0670 Commercial Service’s Automotive Team: Eduard Roytberg; Global Automotive Team Leader Eduard.Roytberg@trade.gov; 909-390-8482 www.trade.gov/mas/manufacturing/OAAI/

19. Industry & Analysis’Spotlight on the Chemicals Industry June 18, 2013 Prepared by the Office of Materials Industries Chemicals Team

20. Chemicals Industry The U.S. chemicals industry is composed of a variety of robust subsectors, each of which has significant exports/imports: • Inorganic Chemicals (HTS Chapter 28) • Organic Chemicals (HTS Chapter 29) • Fertilizers (HTS Chapter 31) • Tanning/Dyeing Extracts; Dyes, Pigments, Paints and Varnishes, etc. (HTS Chapter 32) • Cosmetics, Perfumes, Toilet Preparations (HTS Chapter 33) • Soap, Washing preparations, Lubricating preparations, artificial waxes and Prepared waxes, Polishing or Scouring preparations, Candles, Modeling pastes, "Dental Waxes" and Dental preparations with a basis of plaster (HTS Chapter 34) • Albuminoidal Substances; Modified Starches; Glues; Enzymes (HTS Chapter 35) • Explosives; Pyrotechnic products; Matches; etc. (HTS Chapter 36) • Photographic or Cinematographic goods (HTS Chapter 37) • Miscellaneous Chemical Products [Pesticides, Herbicides, Fungicides, etc.] (HTS Chapter 38) • Plastic Resins and Products (HTS Chapter 39) In addition, we have a new focus on Green Chemistry - - an aspect of the industry that crosses all subsectors.

21. NEI Priority Markets In 2012, global chemical exports were $1.6 trillion, with the U.S. exporting $181.5 billion in goods. However, Chemicals is not a conventional NEI Sector as we are looking to grow exports by addressing tariffs and non-tariff measures through multilateral or bilateral efforts and by implementing new initiatives to create market readiness/acceptance of U.S. Green Chemistry (GC) products and processes. • Key Points: • For all markets, tariff reduction/elimination, product-specific rules of origin, and dialogue/advocacy on regulatory barriers are crucial to market access/expansion and reduction of cost-to-market for the U.S. chemicals industry. Multilateral and bilateral efforts are key. • TPP: tariff elimination and product-specific rules of origin. • TTIP: tariff reduction/elimination and a path forward to greater compatibility/cooperation in regulatory approaches. • ASEAN and the EU: Green Chemistry efforts focus on creating/increasing market readiness/acceptance of new chemical processes/products. • Asia: engagement on specific regulatory barriers (e.g., chemical registration) • Even imports have a role to play - - Miscellaneous Tariff Bills

22. Capitalizing on Major Market Participation in TPP • Working toward better harmonization of regulations, and addressing tariff, customs, and rule of origin issues. Opportunities • Leveraging USG Commitment to Advanced Manufacturing • Providing support for market development/trade promotion and trade barrier work on advanced/emerging chemicals technologies. • A Window for International Regulatory Cooperation • Executive Order 13609 (May, 2012) provides a vehicle for increased cooperation/participation on foreign regulations affecting U.S. industry. • Advancing U.S. Industry Opportunity through TTIP • Use US-EU negotiations to reduce/eliminate tariffs on chemicals trade, reduce NTBs, and increase regulatory cooperation/convergence.

23. Examples of ITA and Interagency Activities The I&A Chemicals Team engages industry, government, and NGOS to support the development of advanced manufacturing processes and other innovations in chemicals management. Through our Green Chemistry initiative, we have been able to partner or work with: • American Chemistry Society (ACS) Green Chemistry Institute (GCI), a NGO partner bringing technical expertise in the area • USAID, has provided funding in support of participation by ASEAN officials and chemicals management experts • United Nations Institute for Training and Research (UNITAR), a multiplier for outreach and participation by government officials, industry, and other stakeholders • U.S. Environmental Protection Agency, bringing the US government perspective and expertise • U.S. industry, bringing practical business experience as well as new products/approaches to the subject • And of course our colleagues in Global Markets who helped to bring our first ever U.S.-sponsored GC workshop to fruition in Kuala Lumpur, Malaysia in May 2013

24. Gary Stanley Acting Director, Office of Materials Industries Phone: 202-482-0376 Email: Gary.Stanley@trade.gov Chemicals Industry Team Staff Kim Copperthite Explosives, Photographic/Cinematographic Products, Plastic Resins and Products Phone: 202-482-5124 Email: Kim.Copperthite@trade.gov John Meakem Organic Chemicals, Rare Earths Phone: 202-482-4711 Email: John.Meakem@trade.gov Raimundo Prat Inorganic Chemicals, Pigments, Paints/Coatings, Cosmetics/Toiletries, Cleaning Preparations Phone: 202-482-0810 Email: Raimundo.Prat@trade.gov Blandine Trouille Fertilizers, and Ag Chemicals (Pesticides, Herbicides, etc.) Phone: 202-482-0129 Email: Blandine.Trouille@trade.gov