### TRADE WORLD

September 2004 Newsletter

### 

### Fed Ex and the U.S. Commercial Service: Working together for you! 

Fed Ex and the U.S. Commercial Service have teamed up to help small and
medium-sized businesses export successfully. This partnership includes
joint export promotion seminars for U.S. companies to help them take
advantage of this export assistance. By joining forces with the U.S.
Commercial Service, FedEx, a world leader in transportation, e-commerce
and business services, will support U.S. small and medium-sized
exporters through its web site and extensive network of global
operations. Benefit from this partnership today. (link to article
below).

### U.S. Commercial Service and FedEx Launch New Initiative to Promote U.S. Small-Business Exports 

WASHINGTON, D.C. (July 14, 2004) -The Commerce Department\'s U.S.
Commercial Service today announced the participation of FedEx Corp
(NYSE:FDX) in a new initiative to provide ongoing support to Commercial
Service efforts aimed at boosting exports from U.S. small and
medium-size businesses. The agreement promotes exporting through
cooperative public-private sector export tools and resources.

\"This is a big win for U.S. businesses, especially smaller firms
looking to export,\" said Rhonda Keenum, Assistant Secretary for Trade
Promotion and Director-General of the U.S. Commercial Service.
\"Ninety-five percent of the world\'s consumers are outside the United
States, and by combining our export resources, FedEx and the Commercial
Service will make it easier for U.S. exporters to establish and grow
their international sales.\"

FedEx can inform its clients about the benefits of the U.S. Commercial
Service\'s worldwide export assistance network of 108 domestic offices
and 149 posts in 78 countries that provide small and medium sized
business end-to-end export solutions. Each year, the U.S. Commercial
Service conducts thousands of trade events, and this new cooperative
agreement with FedEx should generate more public awareness of the
Commercial Service\'s export promotion activities designed to boost U.S.
export sales from small and medium-size businesses.

The agreement includes linking of the BuyUSA.com and FedEx Web sites. In
addition, the U.S. Commercial Service and FedEx program may include
other activities like joint export promotion seminars for U.S. small and
medium business, sales force training, and direct marketing campaigns.

By joining forces with the U.S. Commercial Service, FedEx, a world
leader in transportation, e-commerce and business services, will support
U.S. small and medium-sized exporters through its online Web site and
extensive network of global operations.

\"As the U.S. becomes better integrated into the global trading system,
FedEx and the U.S. Commercial Service are well-positioned to help
exporters remain competitive in the global marketplace through our
portfolio of services and solutions,\" said Michael Ducker, Executive
Vice President of International for FedEx Express. \"FedEx has a clear
international growth strategy, and increasing U.S. export volume is a
top priority.\"

FedEx and the U.S. Commercial Service expect to see more successes like
Wild Flavors, Inc. of Erlanger, Kentucky, a manufacturer of flavor,
color, and ingredients for the food and beverage industry. Last year,
the company was referred to the U.S. Commercial Service by FedEx.
Through export counseling, market research and other assistance provided
by the Department of Commerce, in combination with international
shipping solutions provided by FedEx, Wild Flavors anticipates a 50
percent increase in export sales this year, said Jonathan Martin,
International Sales Manager.

Over the last decade, U.S. exports have accounted for a significant
portion of the nation\'s economic growth, with exports currently
supporting about 20 percent of U.S. manufacturing jobs. There is also
vast untapped export potential: Small and medium-sized companies
comprise 97 percent of U.S. exporters, but as a group account for only a
small share of the value of U.S. exports. Small businesses also create
70 percent of the new jobs in America, and helping these firms export is
vital to continued U.S. economic growth.

### 

### Mexican Border Clearance -- The United States and Mexico recently began a Free and Secure Trade (FAST) lane at the World Trade Bridge between Laredo, Texas and Nuevo Laredo, Mexico. The program provides importers expedited release for qualifying low-risk commercial shipments. FAST cuts truck-wait times from an average of two hours down to approximately 20 minutes. Companies may apply for participation in the program by proving that their facilities are secure and that their shipments are low-risk. For details, log on to the U.S. Customs & Border Protection website at <http://www.cbp.gov/xp/cgov/import/commercial_enforcement/ctpat/fast/us_mexico/>.

**New Business Insurance from OPIC** - The Overseas Private Investment
Corporation (OPIC) recently announced two new insurance products
designed to protect American businesses as they grow and invest
overseas. ***Small Business Insurance Wrap*** is for companies with
annual revenues under \$35 million, and offers clients a reduced rate
for political risk insurance with a one-time fee for the life of the
loan. ***Stand-Alone Terrorism Insurance*** is available to companies of
any size and is designed to cover loss resulting from violent acts that
are intended to achieve a political objective including threats posed by
weapons of mass destruction. For more information, please see
<http://www.opic.gov/>.

**SBA Expands It's Trade Finance Programs** - The following information
highlights the U.S. Small Business Administration (SBA) Office of
International Trade finance programs available to U.S. small business
exporters. For complete details, visit the SBA website at
<http://www.sba.gov/oit> or contact your local U.S. Export Assistance
Center.

-   Export Working Capital Program (EWCP) encourages lenders to offer
    export working capital loans for a term of up to one year by
    guaranteeing repayment of up to \$1 million, or 90 percent of a loan
    amount, whichever is less. Financing may be done for a single export
    order or multiple sales under a revolving line of credit. The loan
    may be used to: (1) acquire inventory; (2) pay manufacturing costs
    of goods for export; (3) purchase goods for export; (4) pay for
    costs associated with service contracts with foreign buyers; (5)
    support standby letters of credit used for bid and performance
    bonds; and (6) finance foreign accounts receivable.

-   International Trade Loan Program (ITL) working capital loan has
    terms of up to 25 years. Loans are made by lending institutions with
    SBA guaranteeing a portion of the loan up to \$1.25 million. The
    applicant must establish either that the loan proceeds will
    significantly expand existing export markets or develop new export
    markets, or that the small business is adversely affected by import
    competition. Proceeds may be used for working capital and/or
    facilities or equipment.

-   SBA Export Express allows lenders to use streamlined and expedited
    loan review and approval procedures to process SBA guaranteed loans
    of up to \$150,000. Loan proceeds may be used for most business
    purposes, including: market development activity such as
    participation in a foreign trade mission; transaction-specific
    financing; general lines of credit for export purposes; and term
    loans for permanent working capital and fixed-asset financing.

**New Financial Assistance for Mexican SME's** - To encourage Mexican
buyers to purchase more U.S. goods and services, the Export-Import Bank
of the United States and Mexico's development bank, Nacional Financiera,
SNC (NAFIN), launched a new financial strategy that will allow NAFIN to
offer medium and long-term loans guaranteed by Ex-Im Bank to Mexican
small and medium-sized companies. This agreement will benefit U.S.
manufacturers by providing additional financing mechanisms to the SME's,
which had been ignored previously by the Mexican financial institutions.
This offers U.S. companies substantial opportunities to market their
goods and services to a sizeable niche of Mexican companies. Nacional
Financiera, SNC is a development bank with the objective to promote
integral development and modernization of the Mexican industrial sector;
stimulate the development of financial markets and act as financial
agent of the Federal Government in the negotiation, contracting and
management of financial credits from abroad.

According to NAFIN, small and medium enterprises in Mexico play a key
role in the country's economic activity since they contribute 42% of the
GDP and 64% of all employment. Unfortunately, most of these companies
are unable to access new technologies and high quality equipment to
improve their processes due to the lack and high cost of the financing
offered by the private Mexican banking institutions. Given the
importance of the machinery and equipment upgrades to increase Mexican
small and medium-sized enterprises' competitiveness and quality
standards, NAFIN and Ex-Im Bank have launched this innovative financing
plan that offers attractive and competitive terms to purchase U.S.
capital goods or services. The Ex-Im Bank guaranteed financing strategy
features the following benefits:

-   Financing is available to purchase U.S. machinery and equipment.

-   The minimum amount per loan is USD 100,000.

-   Medium or long-term financing is available for small and medium
    companies.

-   The loan finances 85% of the total value of the machinery and
    equipment purchase.

-   Companies can access financing either in U.S. Dollars or Mexican
    Pesos at their own convenience and at competitive interest rates.

-   The financing time frame is no less than 2 years.

-   The loan also finances technical services offered by U.S. based
    companies.

-   Mexican SME's can decide whether to buy new or used equipment.

The requirements that Mexican SME's face in order to get access to the
Ex-Im Bank guaranteed loans offered by NAFIN are the following;

-   Companies must be Mexican and be part of the industrial, commercial,
    or services sectors.

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-   SME's must contribute 15% of the purchase.

-   Companies are required to deliver legal information and financial
    statement to demonstrate their credit solvency.

-   Companies must have been operating for more than 3 years in their
    business area.

-   Companies must obtain insurance for the goods and machinery
    purchased.

The Ex-Im Bank and NAFIN financing strategy represents a good
opportunity for U.S. machinery and equipment suppliers to promote their
products among small and medium size Mexican companies. U.S. companies
should take advantage of this unique opportunity to sell goods and
services to Mexican SME's. For further information, contact your local
U.S. Export Assistance Center.

*Article prepared by Juan Carlos Ruiz, U.S. Commercial Service, Mexico
City*

### International Marketing Resource Guide 2004 is Now Available

The U.S. Department of Commerce recognizes the important role that
America's small business plays in creating jobs, stimulating economic
growth, and generating innovative ideas and new technology. This edition
of the International Marketing Resource Guide contains valuable
information and can be used as a practical reference to many valuable
federal, state and private sector resources available to U.S. companies.
For a copy of this please contact (local) EAC.

### Introducing the European Union's new Internet address top level domain

The new ".eu" Top Level Domain will allow eligible companies to
reinforce their pan-European marketing presence by registering a .eu
domain Internet address. This report answers ten questions on \".eu\".

\".eu\" -- The European Union's new Internet address Top Level Domain.

Summary:

The new \".eu\" Top Level Domain will allow eligible companies to
reinforce their pan-European marketing presence. There follows ten
question, and ten answers, on \".eu\". The links references in brackets
are grouped at the end of the report.

1\. What is \".eu\"?

It is a new Internet address Top Level Domain (TLD) that will
complement, not replace, existing national TLDs like \".be\" and
\".fr\". It should not be confused with the \".eu.com\", which is a
sub-domain of \".com.\"

2\. Why has \".eu\"? been established?

It is part of a broader initiative by the European Union to encourage
online activity. The idea is that companies can underscore their pan
European marketing presence by registering \".eu\" Internet addresses.

3\. Who can register a \".eu\" address?

Any EU resident or undertaking with its \"registered office, central
administration or principal place of business within the Community\".
The \"Community\" is eurospeak for the European Union and refers to all
twenty-five EU Member States.

4\. Who will manage the system?

The European Commission has selected EURid (the European Registry for
Internet Domains) to administer the \".eu\" registry. EURid will
accredit registrars who will be responsible for handling applications
and forwarding them to the Registry.

5\. When will the registration process begin?

Probably not before Spring 2005. At the time of writing (24 August 2004)
the European Commission still has to sign a contract with EURid. Once
that happens the Registry will need to complete its preparations, which
include accrediting Registrars. Registrars will only be able to forward
to EURid those applications they receive after their accreditation date:
no pre-registrations are possible.

6\. Where will companies go to register names in the \".eu\" TLD?

Companies will need to channel their application via one of the
accredited Registrars, which EURid will list on its website. The
Registry will not accept applications directly.

7\. How will the addresses be assigned?

On a first come, first served basis -- a registrar who receives more
than one request for the same address shall forward the requests to the
Registry in the chronological order in which they were received.

8\. How will existing rights holders be protected?

The \".eu\" implementing Regulation (Link 1) specifies that prior rights
holders should be able to register in advance. The recently adopted
Public Policy Rules (Link 2) have fleshed out this arrangement by fixing
a \"phased registration\" period that will precede the general
registration. During the \"phased registration\" holders of prior
rights, such as trade marks, will be able to register \".eu\" domain
names before the registration process is opened to all.

9\. How long will the phased registration period last?

Four months. During the first two months registration will be open
exclusively to: holders of registered national and Community trademarks;
geographic indications; and to public bodies wishing to register
themselves and/or the territories they are responsible for. In the
second two-month period holders of these prior rights can continue to
register but the process will also be open to other rights holders, such
as company's with trading names protected by national law.

10\. How much will it cost to register a name in the \".eu\" domain?

EURid will be responsible for setting fees and states on its website
(Link 3): \"in its response to the Call for expressions of interest for
the selection of the \".eu\" TLD Registry, EURid proposed a registration
fee of € 10 (ex. VAT) during the first year of operations. This is the
price that will be charged by EURid to the \".eu\" registrars and does
not take into account the additional services by the registrar for his
customer. Therefore it is estimated that the ultimate retail price
charged by the registrars will be higher\". Indeed.

Key Links

1\) \".eu\" implementing legislation

http://europa.eu.int/eur-lex/pri/en/oj/dat/2002/l_113/l_11320020430en00010005.pdf

2\) \".eu\" Public Policy Rules

http://europa.eu.int/information_society/topics/ecomm/all_about/todays_framework/public_resources/names_addresses/doc/euTLD_PublicPolicy874_2004en.pdf

3\) EURid

http://www.eurid.be/index.html

For further information or feedback please do not hesitate to contact
the U.S. Commercial Service at the United States Mission to the European
Union. We are located at Boulevard du Regent 27, Brussels B-1000,
Belgium, and can be contacted via e-mail at:
brussels.ec.office.box@mail.doc.gov; For further information on the
services provided by the Commercial Service at the European Union please
visit our website: www.buyusa.gov/europeanunion.

### 

**EU Structural and Cohesion Funds: Opportunities in the new Member
States**

Grants from the EU Structural and Cohesion Funds contribute to the
economic development of the new EU Member States. This report outlines
the decision-making process between the European Commission and EU
Member States, the setting up of programs, the eligibility of U.S.
companies, the co-financing possibilities with the European Investment
Bank (EIB), and contacts in the local administrations. Emphasis is
placed on the 10 new EU Member States, but the basic principles of
EU-funded programs outlined here are valid for the entire European
Union.

Around one-third of the European Union's (EU) budget is spent developing
the environmental, transport, tourism, medical, and information and
communication technology infrastructure in the less developed areas of
its 25 Member States.  Grants (from the Structural and Cohesion funds)
and loans (from the European Investment Bank) are the main instruments
used to further the EU's economic development policy.  This
International Market Insight (IMI) is designed to help U.S. companies
better understand the process by which projects are funded and financed
in Europe, and consequently to maximize the chances of participating in
these projects.  Although this IMI addresses opportunities in the 10 new
EU member states of Central and Eastern Europe, in fact the information
in the report applies throughout the entire EU. 

[Introduction]{.underline}

On May 1, 2004, the EU welcomed ten new Member States:  the Czech
Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia,
Slovenia, and the islands of Cyprus and Malta.  With the GDP per capita
in these new member states roughly half the level of the prior EU 15, EU
regional development funds play an important role in promoting economic
convergence.  The total budget of regional funds for the ten new Member
States for 2004-2006 is €24.4 billion, which includes Structural Funds,
the Cohesion Fund and miscellaneous Community initiatives.

U.S. companies interested in pursuing opportunities with EU funding
support should familiarize themselves with the different funds and their
associated rules.  Companies should also be proactive in obtaining
financing for projects, as funds are limited.

### Reclaiming EU Value-Added Tax

Every member state of the European Union has a value-added tax (VAT).
The rates vary from 15 to 25 percent among the member states and among
certain types of products. VAT recovery claims may be filed at least
every three months or once a year, subject to country-specific
restrictions. Companies may reclaim most of their VAT expenses such as
those paid on:

· Business travel costs (car rentals, hotel lodging, meals, gas
expenses, telephone expenses, etc.)

· Business operating expenses (jet fuel, maintenance costs)

· Marketing/advertising and professional advice such as that obtained
through business consultancy services

· Trade fair expenses

· Goods, machines and equipment

· Exports into Europe and inter-European transfers of goods

Two websites with good information on VAT are the European Union VAT
(www.eurunion.org/legislat/VATweb.htm) and the Federation of
International Trade Associations (www.fita.org/marketplace/vat.html).
The sites have links to information about VAT rates, legislation,
proposals, refund procedures, and much more.