WT/TPR/M/275/Add.1 15 May 2013

379 Pages·2013·1.74 MB·English

WT/TPR/M/275/Add.1

15 May 2013
(13-2514) Page: 1/379
Trade Policy Review Body Original: English/ anglais/ inglés
18 and 20 December 2012

TRADE POLICY REVIEW
UNITED STATES OF AMERICA
RECORD OF THE MEETING
Addendum
Chairperson: H.E. Mr. H.E. Eduardo Muñoz Gómez (Colombia)

This document contains the advance written questions, and replies provided by the
United States of America.1

Organe d'examen des politiques commerciales
18 et 20 décembre 2012
EXAMEN DES POLITIQUES COMMERCIALES
ÉTATS-UNIS D'AMÉRIQUE
COMPTE RENDU DE LA RÉUNION
Addendum
Président: S.E. M. H.E. Eduardo Muñoz Gómez (Colombie)

Le présent document contient les questions écrites communiquées à l'avance et les
réponses fournies par les États-Unis d'Amérique.1

Órgano de Examen de las Políticas Comerciales
18 y 20 de diciembre de 2012
EXAMEN DE LAS POLÍTICAS COMERCIALES
ESTADOS UNIDOS
ACTA DE LA REUNIÓN
Addendum
Presidente: Excmo. Sr. H.E. Eduardo Muñoz Gómez (Colombia)

En el presente documento figuran las preguntas presentadas anticipadamente por escrito,
junto con las respuestas facilitadas por los Estados Unidos.1

1 In English only./En anglais seulement./En inglés solamente.
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ARGENTINA
1. In light of the sustained growth of bilateral trade since 2002 – with the exception of 2009
when the impact of the global crisis unleashed in 2008 was felt – with Argentine imports from
the U.S. increasing 12.3% on average over the last decade (18.5% in 2010 and 27.1% in
2011), while its exports to the U.S. market increased 5.6% on average (2.0% in 2010 and
19.9% in 2011), it is deemed fitting to ask about developing channels to access information on
market opportunities for products with greater added value that contribute to the increasing
number of such products in U.S. imports.
RESPONSE: The US Government has no centralized data source on opportunities available to
foreign exporters interested in selling to the U.S. market. That is a service normally provided by
the foreign government to its own exporters, typically through its embassies.
Numerous academic studies have shown that innovation, plant productivity and product quality –
all of which are important for moving up the value chain – are significantly enhanced when firms
have freer access to imported intermediate inputs. We would note that Argentina has put in place
measures that would make it more difficult to import. This could be impacting Argentina's ability to
participate at higher levels within the global value chain.
Report by the Secretariat WT/TPR/S/275 of 11/13/12
I. Questions regarding Section I on the Economic Environment.
1. In Section 2 (Monetary Policy...) of the Report by the Secretariat, paragraph 9 outlines the
fiscal stimulus measures adopted by the U.S. administration to buoy the economy. With regard
to the Trouble Asset Relief Program, the Report mentions that funding for this program expired
in 2010, but states that one quarter of the available funds are outstanding and are allocated to
support public investment "in the auto industry," among other sectors. Could the U.S. describe
in detail the funds, recipients, programs and implications of said disbursements?
RESPONSE: The Office of Financial Stability, which administers the TARP, maintains a website
that provides comprehensive information about TARP,
http://www.treasury.gov/initiatives/financial-stability/Pages/default.aspx, that includes pages with
descriptions of each program, monthly reports that detail major transactions, and a chart updated
daily that shows exactly how much has been expended or recovered in each program under TARP.
2. In Section 2 (Monetary Policy...) of the Report by the Secretariat, paragraph 13 mentions that
the US Federal Reserve (FED) carried out quantitative easing (QE) to head off the effects of
the financial crisis. Bearing in mind that to date there have been three rounds of quantitative
easing (2009, 2010, and 2012), could the U.S. identify the external and internal factors and
indicators that could lead to a new round of quantitative easing (QE4) on the part of the FED?
RESPONSE: The Federal Reserve is an independent agency and responsible for U.S. monetary
policy. The Federal Reserve released a Federal Open Market Committee statement in late October
that reports the current monetary policy action.
http://www.federalreserve.gov/newsevents/press/monetary/20121024a.htm.
3. In Section 2 (Monetary Policy) of the Report by the Secretariat, paragraph 14 discusses the
adoption by the U.S. administration of initiatives to increase exports. As regards the Export
Control Reform Initiative, could the U.S. comment on the status of its implementation, request
greater detail [sic] and the period provided for its application?
RESPONSE: The United States has deployed a three-phase implementation plan. The United
States has developed and applied a methodology for rebuilding the control lists, has already
published a series of proposed rules for public comment in 2012, will publish the first final rules in
early 2013, and will continue to publish the remaining proposed and final rules on a rolling
schedule throughout 2013. Some aspects of implementation could require legislation to implement
a government reorganization that would consolidate the current system into a single control list,
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single licensing agency, single primary enforcement coordination agency, and single information
technology system. To follow developments on the reform initiative, visit www.export.gov/ecr
where details on all actions on the initiative are posted.
II. Questions related to Section III on Trade Policy and Practices by Measure.
1. Measures Directly Affecting Imports, Customs Procedures, paragraph 2: Taking into account
the progress made in installing specialized equipment for pre-screening containers bound for
the United States at the port of Buenos Aires, could the U.S. indicate when this pre-screening
will begin and what estimates they have about its impact on Argentine exporters with regard
to the costs and delays that could be caused by its application, based on the experience of the
58 ports where it currently is being done.
RESPONSE: Buenos Aires is identified as one of ports that is a participant in the CBP program, the
Container Security Initiative (CSI). CSI is a security regime to ensure all containers that pose a
potential risk for terrorism are identified and inspected at foreign ports before they are placed on
vessels destined for the United States. More information on the CSI program can be found through
this link, http://www.cbp.gov/xp/cgov/trade/cargo_security/csi/csi_in_brief.xml.
2. As regards state aid and related fiscal measures, the Report by the Secretariat points out that
the mission of the US Import-Export Bank is, inter alia, to offer financing that is "comparable"
to that which other governments provide to their exporters. Could the U.S. comment on the
criteria and parameters used to determine what levels of financing are "comparable"?
RESPONSE: Ex-Im Bank does not compare levels of financing offered; instead, the Bank
compares the specific terms and conditions that our foreign ECA counterparts offer in a
competitive situation. For financing aspects covered by the set of export credit guidelines known
as the OECD Agreement on Export Credits or the "Arrangement" (e.g., minimum interest rates or
fees, maximum repayment terms), Ex-Im Bank applies these terms.
For financing aspects not covered by the Arrangement (e.g., risk appetite), Ex-Im Bank compares
proxies (e.g., cover policies). Ex-Im Bank publishes an Annual Competitiveness Report and it can
be found at www.exim.gov in the Publications section and it will provide you with many details on
its comparative analysis.
3. Regarding specific trade measures (paragraph 47), the Report by the Secretariat indicates that
of the anti-dumping orders in force since 1998, 738 were reviewed under the sunset review
procedure by the end of 2011. 58% of said orders were maintained (i.e., not revoked). Could
the U.S. comment on the factors that led it to maintain these orders?
RESPONSE: In determining whether revocation of an order, or termination of a suspended
investigation, would be likely to lead to continuation or recurrence of material injury within a
reasonably foreseeable time, the USITC considers the factors set out in U.S. law at 19 U.S.C.
1675a. In determining whether revocation of a countervailing duty order or antidumping duty
order, or termination of a suspended investigation, would be likely to lead to continuation or
recurrence of a countervailable subsidy or sales of the subject merchandise at less than fair value,
the Department of Commerce considers the factors set out in U.S. law at 19 U.S.C. 1675a.
III. Questions regarding Section IV on Trade Policy by Sectors, Agriculture, Section IV.1.
U.S. agricultural policy is particularly important to Argentina because of its global impact, relative
size and integration in international markets, as is highlighted in paragraph 4. For this reason it is
of vital importance that developed countries continue to reform agricultural policies in keeping with
the mandate of the Doha Round. Furthermore, this explains the central role that reform of these
policies plays in the context of the Doha Round.
The questions below (in addition to some clarifications and requests for information from the
Secretariat) should be understood to refer to the period under review, unless otherwise indicated.
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1. Location of available information – Paragraphs 5 and 6 of Sections IV.1.i and IV.1.ii
of the report.
a) Could the U.S. indicate the internet site or other sources that identify the agricultural
producers of commodities and/or processors of said commodities that receive agricultural
subsidies of any kind (i.e., price support payments or benefits or direct payments)?
RESPONSE: The United States does not maintain a website of this nature.
b) Taking into account the current WTO rules, could the U.S. indicate the website or other
sources that identify agricultural producers and/or commodities processors that receive any
kind of export subsidy, including those that may stem from officially supported export
financing or food aid?
RESPONSE: The United States directs Argentina to the Dairy Export Incentive Program site:
http://www.fas.usda.gov/excredits/deip/deip.asp.
2. Location of the available information – Food Aid, Section IV.1.ii.b.
The questions below refer to non-emergency food aid.
a) Could the U.S. indicate the website or other sources that identify non-governmental
organizations or persons that were involved in providing in-kind food aid?
RESPONSE: One of the best sources about U.S. food aid programs is the International Food Aid
Report, which is prepared annually. The latest report includes information about the
non-government organizations that distribute the food aid. The report is found at the following
website: http://www.fas.usda.gov/info/Testimony/FY_2010_IFAR_10-3-11.pdf.
b) Could the U.S. indicate the website or other sources that identify the service provider firms
that were involved in providing in-kind food aid?
RESPONSE: The approved list of commodity suppliers is provided at the following website:
http://www.fsa.usda.gov/Internet/FSA_File/ipdqbl.pdf.
3. Financing, guarantees and export insurance - paragraph 16 of Section IV.1.ii.a of the
report.
a) Clarification: The last sentence in paragraph 16 incorrectly states that no financing would be
available in the absence of GSM-102 payments exceeding fees and recoveries on default
claims. To the extent that this official support program (with conditions that are different from
those that could otherwise be obtained) remains active, it will influence decision-making by
export firms. This sentence should be deleted from the Secretariat's report.
RESPONSE: There is no declaration in paragraph 16 that no financing would be available in the
absence of the GSM-102 program. The United States assumes this comment is in reference to the
following statement: "Currently, no funding is provided to GSM-102 as fees and recoveries on
default claim payments exceed losses." This means that program fees cover defaults net of
recoveries. The statement is strictly related to US Government budget estimates and has nothing
to do with the decisions of export firms or whether financing would be available in the absence of
the program.
b) It is suggested that the Secretariat's report be completed by including information available on
official U.S. sites or that the U.S. add information on the amounts of official support by product
and country of destination. Notwithstanding the foregoing, given that this information has not
been included in the Secretariat's report, could the U.S. provide it?
RESPONSE: Program utilization by commodity and region is available at the USDA Foreign
Agricultural Service website: http://www.fas.usda.gov/excredits/Monthly/ecg.html.
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c) In light of the fact that the GSM-102 program has been recognized as circumventing the
provisions on export subsidies, could the U.S. report on modifications to this program based on
this conclusion, the status of discussions on further reforms, as well as the potential outlook
for the program?
RESPONSE: The WTO dispute settlement rulings and recommendations regarding the GSM-102
program related to the program in effect during fiscal year 2006 of the United States government.
Since that time, the US Government has made substantial changes to the GSM-102 program,
including changes to program premia and repayment terms. Current U.S. budget estimates
indicate that the program is covering its long-term operating costs and losses.
4. Food aid - paragraph 16 of Section IV.1.ii.b. of the report.
Could the U.S. comment on monetized food aid, i.e., in-kind food aid sold in recipient developing
countries to obtain proceeds for the purpose of providing resources to cooperation projects?
RESPONSE: Monetized food aid adds to the supply of food within food-deficit countries, and the
sale proceeds fund development projects in agriculture, health, education, and nutrition. Proceeds
may also be used to cover the costs of transportation and distribution costs within the recipient
country. The amount of monetized assistance provided by the United States is extremely small
compared to the total imports and consumption of grains and cereals by countries in Central
America, Africa, and South Asia, which are the main recipients of food aid. The United States
continues its analyses of markets and potential impacts of monetization in those markets. These
efforts include the use of sophisticated market analyses, such as Bellmon Estimation Studies for
Title II (BEST) and Market Information and Food Insecurity Response Analysis. The
US Government has also improved the oversight of monetization.
5. Domestic support – paragraph 16 of the Section IV.1.ii.c of the report.
The questions below should not be understood as acceptance of the considerations made in the
report or in the notifications of the United States regarding these programs, in particular on their
proper classification under the different kinds of domestic support provided for in the Agreement
on Agriculture.
a) ACRE Program:
i) The Secretariat's report should be completed with information on the amounts of the subsidies
available to agricultural producers, as they appear in other domestic support programs. Could
the U.S. provide this information as of the last notification corresponding to 2009, indicating
the products that have benefited therefrom?
RESPONSE: The United States directs Argentina to review U.S. notification G/AG/N/USA/89
Supporting Table 6, which covers marketing year 2010 for the requested information.
ii) Bearing in mind that the ACRE program not only involves price supports, but also revenues to
agricultural producers that allow this subsidy to be received even when prices are not low,
wouldn't this support program be a new distorting agricultural subsidy that runs counter to the
agricultural reform process?
RESPONSE: The ACRE program is not a price support program, but rather a whole-farm revenue
guarantee program. The ACRE program was implemented as part of the 2008 Farm Bill. The
program was designed as an alternative to the countercyclical payments program, which is
classified as an amber box program. A producer who elects the ACRE program is not eligible for
countercyclical payments and must also take a reduction in direct payments and a reduction in the
loan rate under the marketing assistance loan program. Payments under the program have been
small, and the United States remains well within its commitments on amber box support.
b) Domestic support programs for dairy products.
Could the U.S. comment on the status of domestic debate on these programs and their outlook for
upcoming years?
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RESPONSE: Discussions on the 2012 Farm Bill are on-going, and the United States is unable to
speculate as to content of successor legislation to the 2008 Farm Bill.
c) Relative significance of different kinds of support:
i) Could the U.S. comment on the proportion of each one of the supports and their total with
respect to the value of agricultural production for each product, including, in particular, the
crop and revenue insurance programs, the SURE program, countercyclical payments, and the
biomass crop assistance program?
RESPONSE: The programs in question are reported by the United States as non-product specific
support. Crop and revenue insurance programs are offered for more than 100 different
commodities under essentially the same program rules, and additional commodities are regularly
being added to the program; the SURE program is based on whole farm revenue, not individual
commodities; countercyclical payments are provided on the basis of historical commodity
production and are not linked to current planting; and biomass crop assistance provides support
for harvest and delivery of categories of agricultural and forest waste products and production of
certain categories of non-food grasses and legumes.
ii) If any of these supports benefit more than one product, without benefiting all agricultural
products, could the U.S. comment on the proportion of each one of the supports and their total
with respect to the group of products they benefit?
RESPONSE: See answer to previous question.
6. Tariff quotas – paragraph 13 of Section IV.1.ii.a of the report.
a) Could the U.S. comment on imports (in value and physical quantities) of those agricultural
products with most favored nation access subject to tariff quotas, according to whether they
enter within the tariff quota or outside of it?
RESPONSE: Please see U.S. notification G/AG/N/USA/85 concerning imports under TRQs during
2010 and 2011.
b) Could the U.S. report on imports (in value and physical quantities) of agricultural products with
preferential access that are attributed to the WTO tariff quota?
RESPONSE: Please see U.S. notification G/AG/N/USA/85 concerning imports under TRQs during
2010 and 2011.
7. Reciprocal trade agreements – agricultural products.
In Section II.3 of the Secretariat's report regarding preferential trade agreements and
arrangements, there is an interesting chart (n° II.2) that reports on U.S. imports for consumption
by type of import regime.
a) Could the U.S. report on the proportions and value of imports for consumption of agricultural
products by the import regime to which they are subject?
b) Could the U.S. provide this information for the following products: apples, pears, lemons,
tangerines, oranges, grapefruits, grapes, blueberries, peaches, apricots, garlic, onions, olives,
olive oil, wine, ethanol, processed food products, dairy products, beef and lamb?
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RESPONSE:
U.S. imports for consumption from Argentina, by type of import regime, 2011
($)
Group MFN duty Reciprocal Unilateral MFN dutiable Total
free trade preferences
agreements
Apples 4,011,669 0 2,179,250 426,978 6,617,897
Apricots 0 0 340,011 0 340,011
Beef 24,264,098 0 33,426,969 10,590,177 68,281,244
Blueberries 70,251,725 0 0 0 70,251,725
Dairy 26,289,277 0 32,261,457 8,845,857 67,396,591
Ethanol 0 0 2,121,059 801,828 2,922,887
Garlic 0 0 0 7,555,127 7,555,127
Grapefruits 0 0 0 0 0
Grapes 5,544 0 0 4,510,678 4,516,222
Lamb 0 0 0 0 0
Lemons 0 0 0 0 0
Olive oil 0 0 29,022,267 3,355,962 32,378,229
Olives 0 0 0 0 0
Onions 0 0 0 0 0
Oranges 0 0 0 0 0
Peaches 68,990 0 0 40,488 109,478
Pears 0 0 0 0 0
Processed 5,065,919 0 4,282,855 617,280 9,966,054
foods
Tangerines 0 0 0 0 0
Wine 0 0 38,426,411 302,280,315 340,706,726
Total 129,957,222 0 142,060,279 339,024,690 611,042,191
8. The Food, Conservation and Energy Act of 2008 (point 10 of the Secretariat's report).
Given that the above-mentioned law will soon expire, could the U.S. report on any bills under
consideration to replace it, the bills' features, scope, and impact on production, and international
trade of said items and their effects on the environment?
RESPONSE: Discussions on the 2012 Farm Bill are on-going, and the United States is unable to
speculate as to content of successor legislation to the 2008 Farm Bill.
9. Agricultural-related services.
a) Could the U.S. comment on the relative significance that subsidies for crop and revenue
insurance programs have on the earnings of businesses that provide insurance?
RESPONSE: The payments made to the insurance companies as compensation for their
administrative and operating expenses reflects the participation in the crop insurance program,
and impacts the revenues generated by the companies from delivery of the U.S. crop insurance
program.
b) Could the U.S. comment on the involvement of foreign insurance businesses in the agricultural
risks that are subsidized by the crop and revenue insurance program?
RESPONSE: Foreign-based reinsurers have long been one of the primary commercial reinsurers of
the U.S. based crop insurance companies. There also have been several recent acquisitions of U.S.
crop insurance companies.
Questions regarding the Report by the US Government.
1. With regard to the support that US SMEs receive through the coordinated action of
government agencies and business entities (VIII. Point 155, Trade Policy Review, Report by
the U.S.), it would be interesting to find out about the initiatives that the federal government
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is undertaking to incentivize trade in that business sector, in keeping with the objectives listed
under point 5 regarding implementation of policies that promote not only the development of
U.S. exports, but also bilateral trade in order to "fight poverty and expand opportunities."
RESPONSE: U.S. small businesses are key engines for economic growth, jobs and innovation. The
Export Promotion Cabinet has developed recommendations to address the eight priorities for the
National Export Initiative (NEI) set out in Executive Order 13534 on March 11, 2010. The
recommendations cover the five components of the NEI – access to credit, especially for small and
midsize firms; trade advocacy and export promotion efforts; market access and removing barriers
to the sale of U.S. goods and services abroad; enforcement of trade rules; and pursuing policies
that will increase global economic growth. Details on the implementation of the NEI and
recommendations related to small business may be found in the 2011 National Export Strategy at
http://www.trade.gov/publications/pdfs/nes2011FINAL.pdf.
The National Export Strategy also provides further details regarding the Administration's initiatives
to reduce barriers to trade, including trade agreements and deeper engagement with emerging
markets, which can lead to increased economic growth, reduced poverty, and expanded
opportunities for the U.S. and its trading partners.
Eight Priorities Identified in the NEI Executive Order:
Priority 1: Exports by Small and Medium-Sized Enterprises (SMEs)
Priority 2: Federal Export Assistance
Priority 3: Trade Missions
Priority 4: Commercial Advocacy
Priority 5: Increasing Export Credit
Priority 6: Macroeconomic Rebalancing
Priority 7: Reducing Barriers to Trade
Priority 8: Export Promotion of Services
ADDITIONAL QUESTIONS FROM ARGENTINA
Report by the Secretariat (doc. WT/TPR/S/275)
SUMMARY
Paragraph 3 states that, "as concerns investment policy, after several years of review, the
United States completed a new model bilateral investment treaty framework containing detailed
provisions to foster or facilitate the flow of investment; and in June 2011, new steps were taken to
facilitate and attract inward FDI into the United States by creating the first government-initiated
centralized investment promotion body through the SelectUSA initiative."
1. Could the US Government provide more details about the SelectUSA initiative and the
measures taken under this initiative to attract investment?
RESPONSE: Established by Executive Order of the President in 2011, SelectUSA is the first federal
initiative to facilitate business investment in the United States. SelectUSA works with firms – both
foreign and domestic –as well as U.S. economic development organizations to provide information,
guidance, and counseling on the U.S. economic climate and federal rules and regulations impacting
business investment in the United States. Housed in the Department of Commerce, SelectUSA is a
part of the U.S. and Foreign Commercial Service (USFCS), which is located at U.S. embassies and
consulates in over 70 worldwide markets and has a robust field operation through Export
Assistance Centers across the United States. By coordinating resources across the federal
government, SelectUSA provides both information assistance and ombudsman services to the
global investment community.
The functions of the SelectUSA Initiative are defined within Executive Order 13577 (June 2011),
and include: (1) coordinating outreach and engagement by the federal government to promote the
United States as the premier location to operate a business; (2) serving as an ombudsman that
facilitates the resolution of issues involving federal programs or activities related to pending
investments; (3) providing information to domestic and foreign firms on the investment climate in
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the United States, federal programs and incentives available to investors, and state and local
economic development organizations; and (4) reporting to the President, to describe outreach
activities, requests for information received, and efforts to resolve issues.
Since its establishment in June 2011, SelectUSA has reached key milestones, including: training of
key personnel across the US&FCS to assist firms and U.S. economic development organization on
business investment promotion; providing investors customized, timely, and accurate information
about the U.S. investment climate; on a case-by-case basis, working across the U.S. federal
government to address investor issues and needs; and assisting states, regions, counties, and
local economic development organizations across the United States in their efforts to promote
business investment.
More information can be found at the following website: www.SelectUSA.gov.
Paragraph 4 states that the main regulatory reform in the financial services sector since the last
review was the Dodd-Frank Wall Street Reform and Consumer Protection Act, which entered into
force in July 2010. "The Act's main objectives include promoting financial stability, ending 'too big
to fail,' ending bailouts, protecting taxpayers, and protecting consumers from abusive financial
services practices."
2. Could the US Government explain how this Act ends bailouts, given that paragraph 143 states
that the amount spent under the Troubled Asset Relief Program (TARP) amounted to
US$63 billion as of May 2012?
RESPONSE: TARP was authorized by Congress as part of the Emergency Economic Stabilization
Act of 2008 (EESA). EESA's purpose was to promote the stability and liquidity of the financial
system in the short term during the financial crisis, through TARP and other measures. These
measures were not designed to address the underlying problems that led to the financial crisis.
Subsequently, President Obama and Treasury Secretary Geithner worked tirelessly with Congress
to enact the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) in
2010, which addresses the regulatory shortcomings that contributed to the 2008 financial crisis
and made TARP necessary. This legislation, which is now being implemented, gives the
government better tools to protect consumers and new authority that builds a stronger and more
resilient financial system less vulnerable to crisis.
The Dodd-Frank Act empowers the government to break apart large firms whose imminent failure
could threaten our financial system, thereby giving the United States the tools to help prevent the
problem of "too-big-to-fail." The law allows the government to keep a watchful eye over the
system and curb excessive risk-taking, while supporting investment and growth. It brings the
derivatives market out of the shadows. It also protects consumers from the most abusive and
deceptive practices that helped to create the crisis in the first place. That law safeguards
consumers and investors, helps the government to better monitor and limit risk, and provides new
tools to break up and wind down firms whose imminent failure could threaten the health of the
economy. For more information about the Dodd-Frank Act and Wall Street Reform, visit:
http://www.treasury.gov/initiatives/wsr/Pages/wall-street-reform.aspx.
I. ECONOMIC ENVIRONMENT
(2) Monetary, Fiscal and Other Policies
Paragraph 9 states that, "The Troubled Asset Relief Program (TARP) of 2008 targeted financial
stability, especially as concerns banking, credit, and support of certain industries. Although funding
expired at the end of 2010, approximately one quarter of the funds are outstanding and still
supporting certain programs, including U.S. government investments in the auto industry,
American International Group (AIG), and 460 U.S. banks (end 2011).2 However, these
investments and support are gradually being reduced and eliminated."
3. Could the US Government tell us which programs are still being supported? What type of
government investments are being made in the auto industry?

2 Department of the Treasury, Office of Financial Stability (2011).
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RESPONSE: Treasury's authority to invest money through TARP ended on October 3, 2010, in
accordance with the Emergency Economic Stabilization Act of 2008 (EESA), the legislation that
created TARP. As of November 30, 2012, Treasury has recovered almost 90 per cent of the funds
invested through the various TARP programs. Several programs have already been completely
closed, and more are in their wind-down phases. EESA did not set a date by which the programs
will be fully shut down, however, the government is focused on winding down TARP programs as
quickly as possible, while ensuring financial stability and maximizing returns to the taxpayer.
Treasury continues to have TARP investments in AIG and through the Automotive Industry
Financing Program in General Motors and Ally Financial.
AIG: During the financial crisis, the government's overall support for AIG peaked at approximately
$182 billion, including $70 billion that Treasury committed through TARP, and $112 billion
committed by the FRBNY. On December 11, 2012, Treasury announced that it has agreed to sell
all of its remaining 234,169,156 shares of AIG common stock in an underwritten public offering,
for expected aggregate proceeds of approximately $7.6 billion. Giving effect to this offering, the
overall positive return on the Federal Reserve and Treasury's combined $182 billion commitment
to stabilize AIG during the financial crisis is now $22.7 billion. Treasury will continue to hold
warrants to purchase approximately 2.7 million shares of AIG common stock – the sale of which
will provide an additional positive return to taxpayers.
GM: As of September 30, 2012, Treasury held 500.1 million shares and Treasury had recovered
$23.97 billion of its total $51.03 billion investment in GM. Since GM is a publically-traded company
and its stock is highly liquid, Treasury can exit its investment over time through sales of its
remaining common shares on the open market, through underwritten offerings, block trades or
dribble out programs, or a combination of the above. Treasury will continue to evaluate its options
to exit its remaining GM investment based on market conditions.
Ally Financial: As of September 30, 2012, Treasury's outstanding investment in Ally Financial
stood at $13.75 billion, having recovered approximately one-third its original investment. Treasury
continues to closely monitor the performance of Ally Financial and look for the best opportunities
to exit its remaining investment in the company.
More information about these programs can be found at:
http://www.treasury.gov/initiatives/financial-stability/TARP-Programs/Pages/default.aspx.
II. TRADE POLICY AND INVESTMENT REGIMES
(4) INVESTMENT AGREEMENTS AND POLICIES
(i) Bilateral investment treaties and framework agreements
Paragraph 31 states that the new, "2012 model bilateral investment treaty is reported to build
upon the previous model by enhancing transparency and public participation; sharpening
disciplines that address preferential treatment to state-owned enterprises, including the distortions
created by certain indigenous innovation policies; and strengthening protection relating to labor
and the environment."3
4. Could the US Government explain what it means by "distortions created by certain indigenous
innovation policies"? What are some examples of this?
RESPONSE: The revised 2012 U.S. model BIT includes changes to address new and emerging
barriers in foreign markets that frustrate U.S. investment and U.S. exports. For example, we
include a new discipline on "indigenous innovation" measures that require investors to purchase,
use, or accord a preference to a country's domestic technology.

3 Department of State (2012).