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Strategic Objective

Expand Access to Future Markets, Investment, and Trade

Strategic Objective

Expand Access to Future Markets, Investment, and Trade

Lead Office: Under Secretary for Economic Growth, Energy and the Environment (State) and Bureau for Economic Growth, Education, and Environment (USAID)

Themes:

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Overview
Progress Update

Overview

In an interconnected world, America’s prosperity is closely linked with the global economy. In 2011, the United States exported $2.1 trillion of goods and services, which supported 9.7 million American jobs. In the Western Hemisphere alone, U.S. trade with Latin America and the Caribbean reached $1.3 trillion in 2012, with Canada and Mexico trade alone exceeding $1.5 billion per day, making Canada our top trade partner and Mexico our third largest partner. Foreign markets – especially in developing and emerging economies – are growing more rapidly than the U.S.

As one of the world’s most competitive and innovative economies, the United States benefits as markets open and trade barriers are lowered. A proven way to open markets and lock in transparent trade and investment rules is through trade negotiations. The United States has free trade agreements with 20 countries, and is actively negotiating the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Doubling down on our already-robust partnership with Europe and linking the eastern and western halves of the Pacific is in our economic and security interest.

Free trade agreements are only part of the story. All around the world, State and USAID work hard to establish clear, transparent, and open markets outside of formal negotiations. U.S. firms succeed abroad when government and private sector procurement decisions are based on commercial and technical merits, when rules and regulations are transparent and enforceable, when intellectual property rights are respected, and when foreign competitors, including state-owned enterprises, do not benefit from unfair advantages or unsustainable labor and environmental practices.

We also work through international organizations such as the Organization for Economic Cooperation and Development (OECD), World Trade Organization (WTO), International Labor Organization (ILO), and the World Intellectual Property Organization (WIPO), and with private sector organizations. Reaching global consensus on economic rules through these organizations minimizes the potential for barriers to trade and investment, directly benefitting U.S. companies.

Information and communications technology drives growth and prosperity in every sector of the economy. The government and private sector partnership in this sector is essential to success. We conduct negotiations and engage with international organizations to set agreed rules and standards, paving the way for private sector innovation and prosperity.

Our educational, technical, and scientific exchanges and collaboration also bring clear economic benefits. They serve as a bridge between the United States and foreign countries and leaders; advance research and policy collaboration in addressing common challenges; and build respect for the United States as a meritocracy driven by knowledge and innovation. With America’s higher education sector perched at the pinnacle of the global education market, the United States is the preferred destination for international students, making education and training our nation’s fifth largest export.

International travel supports an estimated 1.2 million U.S. jobs. Facilitating quick, efficient, and secure travel remains an important goal of the State Department. We facilitate over 67 million visitors traveling to the United States each year. Travel and tourism-related goods and services accounted for $166 billion in 2012. Efficient issuance of U.S. passports also facilitates international travel by American citizens, promoting international tourism and commerce.

Factors affecting U.S. government efforts to expand access to future markets, investment, and trade include the strength of the U.S. economy and fiscal situation, which in turn determines our leadership on global economic issues. Another financial crisis or deep recession could trigger resurgence in protectionist sentiment worldwide, rolling back efforts to open markets. Political instability can shock financial markets and lead to a deteriorating investment climate. On the education front, slower growth in students’ homelands, a stronger dollar relative to local currency, and greater competition from other countries could lead to fewer students attending U.S. universities. Successful science and technology cooperation depends on foreign partners with the right resources and expertise. Encouraging innovation depends upon foreign governments’ commitment to policy and regulatory reform – including strong support for intellectual property rights – and making the right investments to build a knowledge economy.

Strategies for Achieving the Objective

Today’s increasingly competitive global environment compels the U.S. government to strengthen its advocacy for free, transparent, and open markets; promote equal legal and regulatory treatment for American and local companies in foreign markets; expand support for U.S. companies looking overseas for customers and partners; broaden access to the United States for foreign students and leading researchers; and intensify international collaboration on innovation and technology. Our diplomatic missions are on the front-line in achieving these goals advocating for U.S. exporters, pushing to eliminate impediments for our companies, and promoting job-creating foreign direct investment in the United States.

The Department of State, together with the Departments of Commerce, Agriculture, and USAID, support the Office of the U.S. Trade Representative as it negotiates bilateral and multilateral trade, investment, and transportation agreements that reduce barriers to trade and foster a more open, transparent, inclusive, and rules-based international economic environment. Moreover, USAID and State deliver targeted trade capacity building and technical assistance to foster adoption of agreed trade and investment rules. USAID further facilitates improvements in country trading systems and helps build capacity for trade, working with developing countries and countries in transition to identify and reduce trade and other barriers that inhibit business formation and growth. Assistance also encompasses reforming laws and regulations, reducing compliance costs for businesses and individuals, and ensuring implementation and enforcement capacity. The Department and USAID also promote regional economic integration as a way to reduce tensions among states, promote growth, and create larger common markets for U.S. exporters.

The Department partners with the Department of Commerce to advocate for U.S. companies bidding on foreign government tenders, to help U.S. companies find new markets for exports, to continue policies that open markets to trade and investment, and to encourage investment in the United States. The ability of U.S. companies to bid successfully on foreign government tenders is a measure of U.S. government success working with other governments to negotiate market-opening agreements and resolve regulatory issues, and in ensuring fairness for our companies in the face of aggressive foreign competition.

U.S. industries and operators are at the forefront of information and communication technology development and innovation. The State Department, in collaboration with the Federal Communications Commission, the Department of Commerce, other executive branch agencies, and industry, actively promotes the regulatory and policy environment necessary for market confidence and economies of scale for a global information and communications technology sector. U.S. engagement with organizations such as the International Telecommunication Union (ITU), the Organization for Economic Cooperation and Development (OECD), and the Asia-Pacific Economic Cooperation (APEC) enables agreement on the technical standards and policies that drive this sector, facilitating scientific advancement, expansion of affordable broadband Internet access, and the evolution of wireless devices.

The Department of State promotes educational and professional exchanges and links between the United States and foreign educational, non-profit, and private sectors; promotes U.S. educational exports such as study in the United States through student advising centers; and prioritizes the visa applications of students, scholars, and exchange visitors, regularly expediting appointments and maintaining short appointment queues for these priority travelers. These efforts, and the people-to-people connections they foster, advance research and collaboration while building respect for the United States.

USAID assistance to strengthen foreign markets makes other countries better trade and investment partners for the United States. USAID tailors programs for individual countries. Some need assistance in broad-based economic policy reforms; others need help developing market-supporting institutions such as improved commercial law, industrial relations systems, trade regimes, banking structures, stock exchanges, or tax collection systems.

USAID has prioritized support for the World Trade Organization Agreement on Trade Facilitation (TFA), which is aimed at streamlining borders, including enhancing technical assistance and capacity building for developing countries. Implementation of this seminal agreement is expected to provide cost and time savings for companies trading goods regionally and internationally. Programming will focus on reforms that boost trade by reducing costs and delays for traders, and increase the predictability, simplicity and uniformity in customs and other border procedures. USAID is working with the private sector as an important partner in this work, involving U.S. and local business communities on public-private partnerships that expand and deepen bilateral trade and investment opportunities.

The intersection between economic growth and competitiveness, rapidly advancing technology, and the complexity of critical issues such as climate change require the Department of State and USAID to integrate traditional economic policy approaches with our support for entrepreneurship, environmental stewardship, innovation, and scientific collaboration. Expanding international collaboration on science, technology, and knowledge-based industries, facilitating fair access to emerging markets for U.S. companies, and fostering the free flow of goods, services, and ideas, while protecting intellectual property rights, have a powerful impact on growth and innovation.

Throughout all these efforts, the Department and USAID seek to increase the positive impact of economic growth. This means promoting gender and ethnic equality; increasing access to and defending a free, open Internet; advancing human rights and labor rights; encouraging responsible business practices; and protecting the environment. Gender activities are guided by the Presidential Memorandum on Coordination of Policies and Programs to Promote Gender Equality and Empower Women and Girls Globally.

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Progress Update

The Departments of State and Commerce collaborated to improve the President’s National Export Initiative, launching the new version, NEI/Next. NEI/Next is a new customer service-driven strategy with improved information resources that will ensure American businesses are fully able to capitalize on expanded opportunities to sell their goods and services abroad. NEI/NEXT will help more American companies reach more overseas markets by improving data, providing information on specific export opportunities, working more closely with financing organizations and service providers, and collaborating with states and communities to empower local export efforts.

Progress has been demonstrated on SelectUSA, a program created at the federal level to showcase the United States as the world’s premier business location and to provide easy access to federal-level programs and services related to business investment. SelectUSA is designed to complement the activities of our states—the primary drivers of economic development in the United States. This effort is driving the creation of major policy conferences like the Investment Summit and the Summer Forum, taken economic development organizations (EDOs) on Road Shows throughout the world to connect them with investors, and facilitated seminars at industry trade shows in the United States and overseas.

The Department of State also demonstrates progress in Strategic Objective 1.1 with the Business Information Database System (BIDS). BIDS is a portal built to help U.S. businesses learn about significant international commercial opportunities. The BIDS website features an interactive map that displays descriptions and locations of projects that represent potential contract or tender opportunities for U.S. businesses. The site also connects U.S. business to detailed information about each project as well as information to contact U.S. embassies overseas. BIDS is an open data platform; developers can use BIDS data to support other applications including the development of websites and apps. Over the long-term, BIDS is also designed to create an archive of projects that can be used to analyze development and procurement patterns.

In addition to responsibility for maintaining the Trade Capacity Building (TCB) Database, which serves as a primary source for TCB information for many U.S. government agencies, USAID is also the lead U.S. government agency for implementation of the TFA. During 2015-2017, USAID will continue support for Trade Facilitation reforms with a focus on partnerships with the private sector and international like-minded donors. Partnering with the private sector will capitalize on real world experience and insights to ensure real savings in time and cost of trade.

On another front, the Department of State is monitoring a positive trend in the number of foreign students studying in the U.S. and note progress is on track to meet goal of a 50 percent increase in high-level science and technology and innovation engagements.

In addition to these efforts, the U.S. Global Development Lab (Lab) launched in April 2014 is making strong progress to bring game-changing solutions to global scale and drive innovation. The Lab serves as a hub and intellectual center for those focused on evidence around development impact, cost effectiveness, and scalability.

USAID, through the Lab, identified four promising innovations ready to reach millions of people: drought and disease tolerant maize in Africa; chlorhexidine, a simple antiseptic that reduces the incidence of infant illness and death from umbilical cord infection; electronic payment systems; and real-time data systems. These solutions, along with others being tested and scaled by universities, researchers, nongovernmental organizations, and private sector partners, via private sector routes, are on a path to reach more than five million people. Over the next five years, the Lab is taking 10 percent of solutions in its pipeline of innovations to at least one million people each, and 10 percent of those to global scale, improving 200 million lives around the world.

The main challenge is the ambition of the Lab’s planned impact and its reliance upon collaborative partnerships to achieve targets. In collaboration with a wide range of external actors to leverage one dollar in external funding for every one dollar in Lab investment, success depends upon an ability to create and sustain partnerships to take solutions to developing countries and communities.

The Lab’s Action Plan is to build business plans for each of the four principal solutions we will support reaching scale, and to engage USAID bureaus, missions, other U.S. government agencies, international organizations, host country counterparts, foundations, corporations, nongovernmental organizations, and other donors to join in taking these proven solutions to scale. Additionally, the Lab will draw attention to other solutions in the innovation pipeline so that hundreds of other solutions may find paths to scale independently, for example, through private sector and nongovernmental channels.

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Strategic Goals

Strategic Goal:

Strengthen America’s Economic Reach and Positive Economic Impact

Statement:

Strengthen America’s Economic Reach and Positive Economic Impact

Strategic Objectives

Expand Access to Future Markets, Investment, and Trade

Statement:

Expand Access to Future Markets, Investment, and Trade

Description:

Strategies for Achieving the Objective

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Promote Inclusive Economic Growth, Reduce Extreme Poverty, and Improve Food Security

Statement:

Promote Inclusive Economic Growth, Reduce Extreme Poverty, and Improve Food Security

Description:

Reducing extreme poverty and its causes has long been a central goal of the U.S. government’s development efforts. The Administration has prioritized inclusive economic growth and democratic governance as the only sustainable ways to accelerate development and eradicate extreme poverty. President Obama has called for the United States to “join with our allies to eradicate . . . extreme poverty in the next two decades.” Recent progress toward this goal is encouraging: since 2000, faster growth has led to falling aggregate poverty rates throughout the developing world, including sub-Saharan Africa and Latin America. Developing countries have cut their poverty rates in half in 10 years, with strong support from the United States and the international community.

Inclusive economic growth, in which all members of society benefit, can reduce political turmoil and conflict by stabilizing countries and regions. When the causes of poverty and hunger are addressed by helping youth gain access to economic opportunities, connecting people to the global economy, building resilience to economic and social stresses in conflict-prone societies, empowering women and minorities, and saving children from disease and preventable death, the United States and the world are stronger and more secure. As countries develop, they open their markets, become potential consumers of U.S. goods and services, and contribute to regional stability. To meet the goal of a world without extreme poverty, we continue to pay particular attention to the need for inclusive economic growth in fragile or conflict-affected states, where extreme poverty is likely to be concentrated in the coming decade and where growth can be uneven and volatile.

Through diplomacy and development programs, the Department of State and USAID encourage both governments and increasingly influential non-state actors to: demand and implement sound macroeconomic policy, good public financial management and accountability, and transparent and effective financial institutions and regulation; invest in public goods (like safe water and infrastructure); and establish an environment that permits the private sector, innovators, entrepreneurs, and civil society to flourish. We also encourage governments to work with civil society organizations, including labor organizations and business chambers. These groups have an important role as partners in development, influencing decisions regarding government resource allocation and the development agenda at the country level.

The Department of State and USAID can also play a critical role facilitating private sector engagement and private-public partnerships throughout the world. The private sector paves the way for reform efforts, creating bonds among people that foster a virtuous cycle of investment, growth, profits, and jobs in which everyone benefits.

We also support gender and minority integration and encourage governments to consider the impact of new policies on both men and women and majority and minority groups. This is a proven way to ensure that growth is inclusive and that it leads to better outcomes. We also support accessible quality education to reduce extreme poverty. An educated populace is healthier, more productive economically, and more active and empowered politically at all levels of society.

To help make countries more resilient in the face of shocks, USAID has developed Policy and Program Guidance to Building Resilience to Recurrent Crisis. This policy promotes resilience as an analytical, programmatic, and organizing concept to address the causes of chronic vulnerability and recurrent crisis. Greater resilience can help vulnerable communities emerge from cycles of crisis onto a pathway toward development.

Globally, 842 million people are chronically hungry. Climate change will make meeting the food and nutrition needs of a growing global population even more challenging. The resulting malnutrition can translate to a loss of as much as eight percent of a country’s gross domestic product. To tackle these food and nutrition security challenges, the U.S. government engages on policy, trade, investment, and development tracks – both bilaterally and through multilateral organizations such as the World Food Program. Through the Feed the Future Initiative, we work to increase agricultural productivity by partnering with governments, donor organizations, the private sector, and civil society. By focusing on small farmers, particularly women, we promote inclusive growth that increases incomes and reduces hunger, poverty, and under-nutrition. We also support food security goals through the New Alliance for Food Security and Nutrition and Partnerships for Growth.

External factors influence whether we attain our development goals. U.S. government development programs are typically only a small fraction of the economy in countries where we operate, so the political and economic environment inside a country is critical. Success is more likely when partner governments set a good policy and regulatory foundation for growth and improved public service delivery and encourage a vibrant private sector that invests and creates jobs. Events such as another global economic slowdown, political instability, conflict, drought, floods, and other natural disasters could all cause setbacks. In times of government austerity, donor resources can drop, making it more difficult to achieve development goals.

Strategies for Achieving the Objective

The world is coalescing around a goal to end extreme poverty by 2030, with growing optimism that this remarkable goal is within reach. The U.S. role is critical to ensuring continued global progress. American ingenuity is essential to solving the most complex development challenges that stand in the way of a world without extreme poverty.

The Department and USAID are making critical contributions toward achieving this goal. Ending extreme poverty requires enabling inclusive growth and promoting free, peaceful, and self-reliant societies that build human capital and create social safety nets for the poorest members of society, including women and other marginalized groups, such as people with disabilities, Lesbian, Gay, Bisexual and Transgender (LGBT) people, and members of indigenous or ethnic minority groups. Engagement can open doors for development by resolving conflict, fostering political stability, and advocating development-friendly policies. U.S. government initiatives that increase food security, reduce deaths from preventable illness, and improve energy access address fundamental causes of poverty. USAID's work on education and resilience in the face of recurrent crisis is reaching millions in extreme poverty, and cross-cutting efforts on gender, governance, and climate are key to sustainability. USAID is also strongly positioned in the countries - many of them fragile - where extreme poverty affects the most people.

The Department and USAID promote inclusive growth through initiatives such as the African Women's Entrepreneurship Program (AWEP), which provides professional networking, business development, and trade capacity building opportunities for prominent women entrepreneurs across sub-Saharan Africa. AWEP includes an export readiness program, technical assistance, and access to capital. It empowers small-and-medium-sized African enterprises to capitalize on the Africa Growth and Opportunity Act, increasing trade regionally and with the United States. USAID’s Women’s Leadership Incentive Fund is also used annually to leverage Mission funding in support of women’s economic empowerment and female entrepreneurs are key participants in USAID’s worldwide economic growth projects. For example, using Leadership Funds, women in Bangladesh will be empowered to lead on employment and labor reform in the apparel sector, a crucial arena for promoting inclusive economic growth.

USAID's Policy Framework features eight interrelated development objectives: (1) increase food security; (2) promote global health and health systems; (3) reduce the impact of climate change and promote low emissions growth; (4) promote sustainable, broad-based economic growth; (5) expand and sustain the ranks of stable, prosperous, and democratic states; (6) provide humanitarian assistance and support disaster mitigation; (7) prevent and respond to crises, conflict, and instability; and (8) improve lives through learning and education. Poverty is multi-dimensional, and elements of each of these eight objectives are essential to address the causes and consequences of extreme poverty and promote inclusive growth.

USAID is establishing a new development model that focuses on creating public-private partnerships and harnessing science, technology, and innovation to deliver measurable results. The new model is grounded in the reality that political leadership and policy reform are essential preconditions to driving investment to the regions and sectors where it has the biggest impact on reducing extreme poverty and ending the most devastating consequences of child hunger and child death. This approach requires integrated diplomatic and development efforts as we seek policy reform and promote investment and responsible business conduct in complex and transitional environments.

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FY 14-15 Priority Goal: Food Security

Statement:

Increase food security in Feed the Future initiative countries. By September 30, 2015, increase the number of farmers and others who have applied new technologies or management practices to eight million, from a corrected base of five million in 2012.

Description:

Approximately 840 million people in the world remain hungry today, and 98 percent of them live in developing countries. In addition, the world’s population is projected to increase to nine billion by 2050. This population increase and changes in diets will require at least a 60 percent increase in global food production, all in a world that will have less arable land and less access to water under changing climate patterns.

Improving food security has risen to prominence as a global development goal in recent years due to factors such as food price spikes, increasing poverty rates, and social unrest related to poverty and hunger. At the G-8 Summit in L’Aquila, Italy, in July 2009, global leaders—including President Obama—agreed to take significant action to improve food security through agricultural development and reforms to the way the international community approaches food security. The U.S. committed at least $3.5 billion and other countries committed over $18 billion through 2012. In May 2012, at the Camp David G-8 Summit with African heads of state and corporate and G-8 leaders, President Obama again led global food security efforts by launching the New Alliance for Food Security and Nutrition for Africa, a shared goal to achieving sustained and inclusive agricultural growth and raising 50 million people out of poverty by 2022.

The Feed the Future initiative is the U.S. Government’s contribution to the global effort launched by President Obama at L’Aquila. Feed the Future works with the global community, strengthening coordination with other donors and stakeholders, to:

Advance comprehensive, country-led strategies that focus on accountability and improving the productivity and market access of small-scale producers, particularly women, who make up the majority of small farmers in developing countries;
Catalyze private sector economic growth, finance, and trade with necessary investments in public goods as well as policy, legal, and regulatory reforms;
Use science and technology to sustainably increase agricultural productivity;
Protect the natural resource base upon which agriculture depends;
Build resilience and help to prevent recurrent food crises in vulnerable regions; and
Invest in improving nutrition for women and young children as a foundation for future growth.

Feed the Future is well-positioned to support the U.S. Government’s aim to promote inclusive economic growth, reduce extreme poverty, and improve food security, as outlined in the State Department-USAID Joint Strategic Plan.

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Agency Priority Goals

FY 14-15: Food Security

Statement:

Description:

Advance comprehensive, country-led strategies that focus on accountability and improving the productivity and market access of small-scale producers, particularly women, who make up the majority of small farmers in developing countries;
Catalyze private sector economic growth, finance, and trade with necessary investments in public goods as well as policy, legal, and regulatory reforms;
Use science and technology to sustainably increase agricultural productivity;
Protect the natural resource base upon which agriculture depends;
Build resilience and help to prevent recurrent food crises in vulnerable regions; and
Invest in improving nutrition for women and young children as a foundation for future growth.

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