MDA DoC

A Commercial Perspective on MDA David Long Director  Office of Service Industries U.S. Department of Commerce: 

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: 

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

Slide3: 

Colombia $4.5 B Morocco$524 M Jordan$404 M Bahrain $301 M Australia $14.3 B Singapore$19.6 B Thailand $6.4 B Southern African Customs Union $3.3 B Central America + DR $17.4 B Panama$1.8 B Chile $3.6 B Bolivia $194 M Ecuador$1.7 B Peru $2.1B U.S. Exports to Selected Countries YR 2004 (goods) China $34.7 B EU $172.6 B India $6.1 B

Slide4: 

Colombia $7.3 B Morocco$515 M Jordan$674 M Bahrain $405 M Australia $7.5 B Singapore$15.3 B Thailand $17.6 B Southern African Customs Union $6.9 B Central America + DR $25.9 B Panama$316 M Chile $4.7 B Bolivia $261 M Ecuador$4.3 B Peru $3.7B U.S. Imports from Selected Countries YR 2004 (goods) China $196.7 B EU $282.6 B India $15.6 B

Trade Growth Impact: 

Trade Growth Impact 196.7 B Up 29% 3.6 B Up 33.5% 4.7 B Up 27.8% 34.7 B Up 22.4% 15.3 B Up 1.1% 172.6 B Up 11.2% 282.6 B Up 11.7% 19.6 B Up 18.4%

America’s Major Commercial Arteries: 

America’s Major Commercial Arteries

Other Forces in Globalization: 

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: 

Typical Supply Chain “24-hour Rule” Customs-Trade Partnership Against Terrorism Container Security Initiative “96-hour Notice”

Port Container Growth at Long Beach(in millions of twenty-foot container units): 

Port Container Growth at Long Beach (in millions of twenty-foot container units) 175% increase since 1990

US Infrastructure Considerations: 

US Infrastructure Considerations 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 Structure Factors Delivery Factors

Impact of Port Shutdown: 

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

Private Sector Participation vital to MDA: 

Private Sector Participation vital to MDA 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 Risk Factors Requirements

Selected Security Partnerships: 

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

Engage and Enhance Intl. Partnerships (Notable Discussions on Trade Matters): 

Engage and Enhance Intl. Partnerships (Notable Discussions on Trade Matters) 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)

Conclusions : 

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

Slide16: 

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