United States WT/TPR/S/275 
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 I. ECONOMIC ENVIRONMENT 
(1) RECENT ECONOMIC DEVELOPMENTS  
1. The United States has emerged quite steadily from the 2007-09 financial crisis, but growth 
was slower in 2011 than in 2010.  Since the recove ry began, U.S. growth has averaged 2.2% and the 
U.S. economy has added private sector jobs for 28 consecutive months, totalling 4.4 million.1  The 
U.S. economy is moving in a positive direction but it will take more time to emerge from the 
downturn and to return to growth and confidence leve ls seen prior to the crisis.  Despite a slightly 
worsening trade deficit for 2011, imports and exports have now surpassed 2008 peak levels. 
2. Growth in real GDP was positive in both 201 0 and 2011, with increases of 3% and 1.7%, 
respectively, compared with -3.5% for 2009.  Real  GDP has grown since third quarter 2009, with 
consumer spending, gross private domestic investme nt, and exports as the main contributors in the 
recovery period (Chart I.1 and Table I.1).2 
-10-8-6-4-20246
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2008 2009 2010 2011 2012Chart I.1
Contributions to real GDP growth, 2008-12
(Percentage points)
Source: Bureau of Economic Analysis online inform ation. Viewed at:  http://www.bea.gov/.Consumption
Government  expenditurePrivate investment
Net exports
 
                                                      
1 Data as of 1 July 2012, i.e. covers first and second quarter data for 2012 (IMF, 2012a).   
2 BEA Press Release, "Gross Domestic Product:  Fo urth Quarter and Annual 2011 (Third Estimate) 
Corporate Profits:  Fourth Quarter and Annual 2011",  29 March 2012.  Viewed at:  http://www.bea.gov/ 
newsreleases/national/gdp/2012/pdf/gdp4q11_3rd.pdf. WT/TPR/S/275 Trade Policy Review 
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 Table I.1 
Selected macroeconomic  indicators, 2008-11 
(US$ billion and %)  
 2008 2009 2010 2011a 
GDP (current US$ billion) 14,291.5 13,939 14,526.5 15,094 
 (% change) 
Real GDP (based on chained 2005 US$ billion) -0.3 -3.5 3.0 1.7 
Personal consumption expenditures -0.6 -1.9 2.0 2.2 
Gross private domestic investment -10.2 -25 17.9 4.8 
Fixed investment -7.1 -18.8 2.6 6.8 
Non-residential -0.8 -17.8 4.4 8.8 
Residential -23.9 -22.2 -4.3 -1.3 
Exports (goods and services) 6.1 -9.4 11.3 6.7 
Imports (goods and services) -2.7 -13.6 12.5 4.9 
Government consumption expenditures a nd gross investment 2.6 1.7 0.7 -2.1 
Federal 7.2 6 4.5 -1.9 
State and local 0 -0.9 -1.8 -2.2 
Saving and investment (% of GDP) 
Gross saving 13.4 11.5 12.5 13.0 
Gross private saving 16.0 18.4 19.2 19.0 
Gross government saving -2.6 -7.0 -6.6 -5.9 
Net saving 0.4 -1.9 -0.4 0.1 
Personal saving rate (% of dis posable income) 5.4 5.1 5.3 4.7 
Gross domestic investment 18.1 14.7 15.8 15.9 
Gross private domestic investment 14.6 11.1 12.4 12.7 
Gross government investment 3.5 3.6 3.5 3.2 
Net domestic investment 5.1 1.3 2.9 3.0 
Money and prices     
M2 (December-December, % change) 9.8 3.7 3.5 9.7 
Consumer price index (annual average, % change) 3.8 -0.4 1.6 3.2 
Interest rates (%) 
Federal funds rate, effectiveb 1.92 0.16 0.18 0.1 
Treasury note (ten-year) 3.66 3.26 3.22 2.78 
Federal public debt     
Value (US$ billion, fiscal year  end) 5,803.1 7, 544.7 9,018.9 10,128.2 
% of GDPc 40.5 54.1 62.8 67.7 
Employment     
Unemployment rate 5.8 9.3 9.6 9.0 
a Preliminary. 
b The federal funds rate is the cost of borrowing immediately av ailable funds, primarily for one day. The effective rate is a 
 weighted average of rates on brokered trades. 
c Fiscal year GDP, seasonally  adjusted at annual rates.  
Source:   WTO Secretariat, based on Bureau  of Economic Analysis onl ine information.  Viewed at:  http://www.bea.gov; 
Board of Governors of the Federal Reserve System online information.  Viewed at:  
http://www.federalreserve.gov /econresdata/default.htm; Budget of the Un ited States Government.  Viewed at:  
http://www.gpo.gov/fdsys/browse/co llectionGPO.action?collectionCode =BUDGET; and Bureau of Labor 
Statistics online information.  Viewed at: http://www.bls.gov.  
3. The U.S. current account balance continued to worsen slightly between 2010 and 2011, from 
US$470.9 billion to US$473.4 billion.  However, it remained around 3% of GDP, which is lower than 
the 6% peak in 2005-06.3  In 2011, the biggest influence on the current account deficit was the deficit 
in trade in goods, which widened to US$738.3 billion.   The surplus on trade in services continued to 
increase, as did the surplus on income, but not to the same extent as the deficit on goods trade; and net 
unilateral transfers remained nearly static (Chart I.2).  Recovery from this recession has been less 
                                                      
3 It was 3.2% and 3.1% of GDP, respectively, in 2010 and 2011 (BEA Press Release, "U.S. Current 
Account Deficit Increases in 2011", 14 March 2012.   Viewed at:  http://www.bea.gov/newsreleases/ 
international/transactions/trans_high lights.pdf;  and Labonte, 2010).   United States WT/TPR/S/275 
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 unbalanced compared with the previous recession, in 2001.  In the current recovery, the current 
account has remained stable, despite  worsening conditions in major U.S. export markets, due to the 
strength in services exports and the income balance (Table AI.1).   
-250-200-150-100-50050100
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 a
2008 2009 2010 2011 2012
Balance on current account Balance on goods Balance on services
Balance on income Unilateral current transfers, netChart I.2
U.S. current account and net financial flows, 2008-12
US$ billion
Source: Bureau of Economic Analysis.  Viewed at: http://www.bea.gov.a  Preliminary data.
 
4. The U.S. current account deficit of 3% of GDP has so far not been a problem for the 
U.S. economy.  U.S. foreign direct investment infl ows remain the largest in the world and U.S. assets 
continue to benefit from the perceived safe-haven status of the U.S. dollar and the U.S. economy. 
5. From a peak in 2002, the U.S. dollar4 depreciated gradually by about 25% until 2008, 
stabilized temporarily in 2008-09, and then resumed its downward trend in 2009 to mid-2011, depreciating by around 16%.  More recently, it appr eciated by about 5% in the second half of 2011, 
and then resumed its downward trend in early 2012, falling about 2% before climbing again 
(Chart I.3).  The dollar depreciation has not been uniform against all currencies:  since the economic 
downturn, it has depreciated 13% against the euro , 11% against the yen, 8% against the Mexican 
peso, and less than 3% against the yuan.
5  As the euro zone crisis has intensified, the dollar has 
strengthened against the euro.  The euro-dollar exchange rate movements have an impact on 
U.S. trade that extends beyond the direct import a nd export linkages of the United States and the euro 
zone, as they also affect third-country markets where both compete. 
6. The recovery effort was aided by a number of  policies or measures that encouraged change, 
such as reform of the banking and financial sector , budget re-balancing, reduc tion of household debt, 
                                                      
4 Inflation-adjusted trade-weighted dollar index. 
5 Elwell (2012). WT/TPR/S/275 Trade Policy Review 
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 reduction of financial sector debt, and an increase in business investment.  While U.S. corporate 
profits and personal income rose during 2010-11, ove rall U.S. unemployment levels remain high and 
the housing market remains weak. 
9095100105110115
1
20083579 1 11
20093579 1 11
20103579 1 11
20113579 1 11
201235Chart I.3
Index of trade-weighted exchange rate of dollar, 2008-12
Index, 1997=100
Source: Board of Governors of the Federal Reserve System.  Viewed at: http://www.federalreserve.gov/econresdata/statistics
data.htm. 
7. According to projections by the IMF, the outl ook for the U.S. economy is optimistic for 2012, 
as it was predicted to grow by approximately 2%.  However, this figure was revised downwards by 
0.1% at mid-year due to less robust growth th an forecast.  Weaknesses in the global recovery, 
including spillover from the euro zone crisis, and po ssible future fiscal tightening have been cited as 
important factors in the U.S. outlook.6 
(2) MONETARY , FISCAL , AND OTHER POLICIES  
8. During the past two years in particular, and since the Obama administration took office, the 
theme of "rebalancing", both domestically and interna tionally, has been at the core of U.S. economic 
policy.  It was recognized that the United States, with long-term current account deficits, has relied 
heavily on domestic consumption a nd construction of real estate for growth which is unsustainable;  
and a more balanced pattern of growth is n eeded, which relies less on consumption and more on 
exports and investment for growth.  Domestically , reforms are also needed in order to increase 
investment, raise revenues, and cut unnecessary spending.7 
9. As a result of the financial crisis, a number of fiscal stimulus measures were enacted to aid 
the economy.  The American Recovery and Reinvest ment Act (ARRA), enacted in 2009, continued to 
support the recovery in 2011, although at declining levels.8  The Troubled Asset Relief Program 
                                                      
6 IMF (2012b). 
7 White House (2012b). 
8 For a detailed description of A RRA and analysis, see WTO (2010). United States WT/TPR/S/275 
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 (TARP) of 2008 targeted financial stability, especi ally as concerns banking, credit, and support of 
certain industries.  Although funding expired at th e end of 2010, approximately one quarter of the 
funds are outstanding and still supporting certa in programmes, including U.S. government 
investments in the auto industry, American In ternational Group (AIG), and 460 U.S. banks (end 
2011).9  However, these investments and support are gradually being reduced and eliminated.  
10. Other laws aimed at easing the financial situ ation and improving the U.S. economy include 
the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act (TRUIRJCA), enacted at the end of 2010.  This law extended the emergency unemployment benefit programs, and 
reduced the workers' payroll taxes by 2%.
10  In late 2011 and again in early 2012, two extensions of 
the TRUIRJCA provisions for unemployment benefits  and payroll tax cuts were approved, thus 
maintaining them until the end of 2012.11  Furthermore, in late 2011, a new tax credit entered into 
force for businesses that hire unemployed veterans.12   
11. In 2011, the U.S. reported the third highest  federal deficit on record since 1945, at 
US$1.3 trillion.  This was nearly the same as in 2010 (US$1.29 trillion) and reflects a slight downward trend from the 2009 peak of US$1.42 trilli on.  As a percentage of GDP, the 2011 deficit 
improved slightly to 8.7% compared with 9% in  2010.  Government receipts improved for the second 
consecutive year (fiscal year 2011) to reach US$2.3 trillion, still below the 2007 peak level, while 
government expenditures grew to US$3.6 trillion.
13  The largest increase in expenditures was a 17% 
increase in net interest on the public debt.14  In 2011, revenues comprised individual income taxes 
(47%), social insurance and retirement receipts (36% ), corporate income taxes (8%), and other (9%).15  
While trade remains an important part of the U. S. economy, the impact of tariff revenue for the 
United States is very small.  According to th e World Customs Organization, revenues from customs 
duties in the United States averaged 1.5% to 2% of overall tax revenue in recent years, compared with 
an overall average of 12.4% for the countries' surveyed.16 
12. The Budget Control Act of 2011, containing a US$1 trillion deficit-reduction package, was 
enacted in 2011 in order to reign-in the growing government deficit that poses a number of economic 
risks.17  Current low yields (negative in real terms) on U.S. government debt and the surge of investor 
demand for U.S. government debt indicate that market s continue to have a high degree of confidence 
that the U.S. fiscal situation will improve.  Furthe r reductions of US$1.2 trillion to US$1.5 trillion are 
also scheduled to follow.  In addition, the 2010 Pay-as-you-go Act contains a rule of budget 
neutrality, meaning that new laws should not be  introduced that would increase budget deficits.18  A 
number of expiring tax cuts, and lower defence operation spending will also aid the budgetary 
situation in the near term.  Revising U.S. tax po licy has also been high on the agenda with a number 
of proposals from the Administration and from Congr ess, especially regarding corporate taxes.  
However, to date, no major refo rm measures have been enacted. 
                                                      
9 Department of the Treasury, Office of Financial Stability (2011). 
10 Public Law 111-312. 
11 Middle Class Tax Relief and Job Creation Act of 2012, Public Law 112-96. 
12 The VOW to Hire Heroes Act, Public Law 112–56. 
13 Monthy Treasury Statement.  Viewed at:  http://www.fms.treas.gov/mts/mts0612.pdf 
14 Congressional Budget Office online information.  Viewed at:  http://www.cbo.gov.   
15 Office of Management and Budget online inform ation, "Historical Tables".  Viewed at:  
http://www.whitehou se.gov/omb/budget/Historicals. 
16 World Customs Organization (2011a).   
17 Public Law 112-25.  
18 Public Law 111-139. WT/TPR/S/275 Trade Policy Review 
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 13. U.S. monetary policy is carried out by the Federal Reserve (hereinafter "the Fed") as a result 
of powers delegated by the U.S. Congress.  Howeve r, the Congress maintains oversight on the Fed to 
ensure that it adheres to its mandated goals of achieving maximum employment, stable prices, and moderate long-term interest rates.  The Fed has been  very active in recent times, using a wide range of 
policies, some unconventional, to aid economic rec overy, while it has also been affected by new 
legislation.
19  From late 2010 to mid 2011, the Fed c onducted a second round of quantitative easing 
due to the financial crisis and its aftermath.  Ac tions by the Fed during 2011 have been described as 
"accommodative", with the Federal Open Market Committee (FOMC)20 maintaining the federal funds 
rate at exceptionally low target levels, i.e. 0% to 0.25%.  Due to the continued weak recovery, the 
FOMC announced in late 2011 and ear ly 2012 that it would keep the federal funds rate at these low 
levels until at least end 2014.  It also made other mo ves in 2011 to lower long-term interest rates.  It 
has maintained central bank liquidity swaps, a rare ly used mechanism, in part to aid with the 
European debt crisis.  The Fed's swap policy allows  foreign central banks to provide liquidity to the 
foreign banks in U.S. dollars.  In January 2012,  the Fed announced its policy for a long-run goal of 
maintaining inflation at 2%.21 
14. The U.S. administration was taken two major initiatives in recent years aimed at increasing 
exports.  In 2010, President Obama set a goal of dou bling exports in five years through his National 
Export Initiative.  The National Export Initiative aims at improving trade advocacy, increasing access to credit, removing trade barriers, enforcing trade rules, and pursuing policies to promote growth.  
This programme is currently on track to reach its objective of US$3.16 trillion in exports by 2014.
22  
The Export Control Reform Initiative was launched to  reconcile definitions, regulations, and policies 
for export controls, while working toward creating a single control list under one agency with unified 
information and enforcement.23  These initiatives, either alone or  in conjunction with other policies 
and factors, appear to be bearing fruit as exports, as a share of GDP, have grown by 13% since 2009.  
Exports reached a historic high of 13.8% of GDP in 2011.24 
(3) DEVELOPMENTS IN TRADE AND FOREIGN DIRECT INVESTMENT  
(i) Merchandise trade 
15. U.S. merchandise imports and exports grew in  2010 and 2011, surpassi ng 2008 record levels, 
although the merchandise trade deficit expanded.  Afte r contracting significantly at the end of the 
2007-09 financial crisis, the negativ e trade balance continued to grow steadily in 2010 and 2011, 
although not to 2007-08 peak levels.  While both imports and exports grew, import growth outpaced 
export growth, which accounted for the worsening of the trade deficit.    
                                                      
19 The Dodd-Frank Act made some changes with respect to audit and oversight.  Other proposed 
legislation in the 112th Congress that could alter the Feds's mandate, have not become law. 
20 The FOMC is the branch  of the Federal Reserve Bank that determines the direction of monetary 
policy. 
21 Federal Reserve Press Release, 25 January 2012.  Viewed at: http://www.federalreserve.gov/ 
newsevents/press/monetary/20120125c.htm. 
22 Executive Order 13534, 11 March 2010.  View ed at: http://www.wh itehouse.gov/the-press-
office/executive-order-national-export-initiative. 
23 White House online information, "Fact Sheet on the President's Export Control Reform Initiative".  
Viewed at:  http://www.white house.gov/the-press-office/fact-sheet-presi dents-export-control-reform-initiative. 
24 Department of Commerce online information, "U.S. Export Fact Sheet".  Viewed at:  
http://www.trade.gov/press/press-releases/2 012/export-factsheet-fe bruary2012-021012.pdf. United States WT/TPR/S/275 
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 16. Strong growth in merchandise exports conti nued for the second year in a row, with 16% 
growth in 2011 and increased in all major e xport categories.  Exports to Latin American25 and 
Middle East markets grew faster, at 21% each.  Ho wever, Middle East destinations still account for a 
very small share of U.S. exports (4%), whereas Latin America is the second largest regional market, 
accounting for 25% of U.S. merchandise exports.  Th e largest single export market continues to be 
Canada, which accounted for 19% of 2011 U.S. me rchandise exports.  The Americas remains the 
most important export region, accounting for 43. 5% of merchandise exports, followed by Asia 
(27.9%) and Europe (21.4%) (Table AI.2 and Chart I.4).   
17. U.S. merchandise exports are heavily con centrated in manufactures (65.3% in 2011), 
followed by mining (12.5%) and agriculture (11.4%).   Within manufactures, machinery and transport 
equipment is the most significant subsector, acc ounting for about one third of 2011 merchandise 
exports (Table AI.3 and Chart I.5). 
18. The situation of imports is similar to that of  exports in that merchandise imports exhibited 
strong growth for the second year after the recession at  16% in 2011.  Imports in all major categories 
were higher in 2011 than in 2010.  Imports from th e Middle East grew the most rapidly in 2011, 
climbing by 40% but again from very low base of 5% of total U.S. merchandise imports.  Similar to 
the growth in exports, U.S. imports from Latin Ameri can grew slightly more than the average, at 21% 
in 2011.  China is the dominant supplier of me rchandise to the U.S. market, accounting for 18% of 
total U.S. merchandise imports in 2011, followed by the EU (16.6%) and Canada (14.1%) (Table AI.4 
and Chart I.4). 
19. U.S. merchandise imports are highly concentrated in manufactures (67.3%) with a much 
smaller concentration in the mining sector (23.1%).  Agricultural imports are very small, accounting 
for 6.1% of 2011 merchandise imports.  As with ex ports, machinery and transport equipment is the 
largest subsector (35.8%), followed by fuels (20.5%) (Table AI.5 and Chart I.5). 
20. U.S. merchandise trade and the merchandise trade deficit are heavily influenced by trade in 
petroleum products26, which accounted for a growing share of the total value of merchandise imports 
during 2009-11, from 16% to 20%.  Even more signi ficant is the impact of petroleum trade on the 
growing trade deficit, accounting for 41% and 44% of the merchandise trade deficit in 2009 and 2011, 
respectively. 
21. This impact on the trade balance was in large pa rt due to the rising price of oil rather than 
import volumes.  Import volumes declined contin ually in 2010 and 2011, while domestic production 
increased slightly, somewhat reducing U.S. reliance on imported petroleum.  U.S. imports averaged 
11.4 million barrels per day in 2011, down 2.7%  from 2010, and down 17% from 2005 peak levels.  
Technological developments and innovation in the U.S. energy sector are credited with improving the trade balance (in volume term s), with falling import volumes.
27  The prospects for further increases in 
domestic production of oil and natural gas are quite  high.  As domestic production expands, domestic 
"tight oil" (obtained from shale rock and other previously inaccessible geological formations through 
hydraulic fracturing and related techniques) could displace some crude oil imports, and there may be scope for substitution between importe d oil and domestic natural gas in part of the national transport 
fleet.   
 
                                                      
25 Including other western hemisphere countries as well. 
26 Includes crude petroleum and refined petroleum products. 
27 Jackson (2012);  and Neelesh (2012). WT/TPR/S/275 Trade Policy Review 
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 Chart I.4
Merchandise trade, by main origin and destination, 2010 and 2011
2010 2011
(a)    Ex ports and re-ex ports (f.o.b. )
Total: US$1,277 billion
(b)    Im ports (c.i.f.)
Total: US$1,967 billion Total: US$2,263 billion
Source: UNSD, Comtrade database (SITC Rev.3).China
7.2%
Total: US$1,480 billionMexico
12.8%Others
6.8%
Canada
19.4%
Mexico
13.3%
Other 
America
8.0%
Bolivarian Rep. 
of Venezuela
1.7%Other Asia
16.6%
America
43.5%Canada
19.0%
Brazil
2.8%
Other America
8.3%
EU(27)
18.4%Other Europe
3.0%Other Asia
16.4%Others
7.2%
America
43.0%
Canada
14.2%
Other America
5.2%
EU(27)
16.6% Other 
Europe
1.6%Japan
6.3%
China
19.5%Other Asia
13.1%Others
10.0% Canada
14.1%
Bolivarian 
Rep. of 
Venezuela
1.9%
Other America
5.9%
EU(27)
16.6%
Other 
Europe
1.8%Japan
5.9%
China
18.4%Other Asia
12.9%Others
10.8%
America
32.9%America
33.7%EU(27)
19.0%Bazil
2.9%China
7.0%
Mexico
11.8%Mexico
11.7%Europe
21.4%Europe
21.7%
Europe
18.2%Asia
38.9%Asia
37.2%
Europe
18.4%Other Europe
2.8%Japan
4.7%Asia
28.5%Asia
27.9%Japan
4.5%
 United States WT/TPR/S/275 
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 Chart I.5
Merchandise trade, by product, 2010 and 2011
2010 2011
(a)    Ex ports and re-ex ports (f.o.b.)
Total: US$1,277 billion
(b)    Im ports (c.i.f.)
Manufactures
69.6%
Total: US$1,967 billion Total: US$2,263 billion
Source: UNSD, Comtrade database (SITC Rev.3).Total: US$1,480 billionIron & steel
1.3%Iron & steel
1.4%Other 
agriculture
2.4%
Other manuf.
16.8%
Machinery & transport equip.
35.2%Agri.
11.4%
Chemicals
14.8%Food
8.9%Other 
agriculture
2.5%
Fuels
8.7%
Other mining
3.8%
Chemicals
14.0%Other manuf.
16.1%
Mining
12.5%Agri.
11.2%
Mining
10.0%
Other 
agriculture
1.0%
Chemicals
9.0%
Other semi-
manuf.
5.8%Machinery & 
transport equip.
37.0%Other 
manuf.
16.2%
Other mining
2.3%Fuels
18.4%Food
5.0%
Chemicals
8.9%Other 
agriculture
1.0%Food
5.0%
Agri.
6.1%
Manufactures
67.3%Mining
23.1%Agri.
5.9%
Mining
20.7%Fuels
20.5%
Other mining
2.6%
Other 
semi-manuf.
5.6%Machinery & 
transport equip.
35.8%Other 
manuf.
15.1%Other
3.5%Food
8.8%
Manufactures
68.1%Manufactures
65.3%Other mining
3.7%
Other
3.7%Fuels
6.3%
Iron & steel
1.6%
Iron & steel
1.8%Other
10.7%
Machinery & transport equip.
33.9%Other
10.8%
 WT/TPR/S/275 Trade Policy Review 
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 22. Trade in petroleum products varies significantly depending on the type of product.  
U.S. imports are dominated by crude petroleum, while exports (at 25% of import volumes), consist 
nearly exclusively of refined petroleum products (e.g . gasoline, fuel oil, di stillates, etc.).  This 
imbalance is in large part attributable to demand, which far exceeds domestic production (the 
United States is the world's largest  oil importer), but also policy issu es such as export restrictions on 
crude petroleum.28  The long-standing trade deficit for refi ned petroleum products turned to a trade 
surplus, for the first time, in 2011.  Some attribut e this to higher world prices and/or higher demand in 
developing countries relative to developed markets, which have excess refining capacity following 
lower economic output.29 
23. As a result of its importance, U.S. trade in petroleum significantly affects the U.S. economy, 
including the trade balance/current account balance, th e rate of inflation, and consumer spending.  Oil 
provides 94% of the energy needed for the U.S. transport sector and 40% of the energy used in the 
industrial sector.30  The United States is cognizant of the wider and often negative impact of increased 
costs and imports of oil, and implemented polic ies and initiatives in 2011 such as President Obama's 
initiative to cut oil imports by one-third, and c onducting sales from the Strategic Petroleum Reserve in 
an effort to stabilize prices.31 
(ii) Trade in services 
24. The services sector continues to be a growing part of the U.S. economy, both in terms of GDP 
and employment.  U.S. GDP is heavily reliant on the services industries, which reportedly account for almost 70% of U.S. output.
32  Since 2007, the growing trade surp lus in services and the growth in the 
income balance have had an important impact on the current account balance.  Both imports and 
exports of services rebounded for the second consecu tive year in 2011 after retracting in 2009.  
Imports rose and exports grew more rapidly, thus th e positive trade balance in services grew strongly.  
U.S. commercial services exports rose 9.2% in 2011,  while imports grew 6.9%, widening the trade in 
services surplus to US$186 billion.  The United States  is the world's leading exporter of services, and 
set new records in 2011 in terms of services exports and surplus. 
25. In 2011, exports increased in all major services categories, led by travel and royalties and 
licence fees (Table I.2):  travel services accounted for approximately 26% of total services exports, and royalties and licence fees for 18%.  These services categories are also the most important contributing sectors to the services trade surplus.  U.S. exports of commercial services reached a 
record US$581 billion in 2011. 
26. U.S. imports of commercial services reached  a new level of US$395 billion, surpassing the 
previous record level of US$374 in 2008.  The grow th in commercial services other than travel and 
transportation services accounted for over half the gr owth (Table I.3).  U.S. services trade (imports 
and exports) is generally concen trated in relatively few, mainly advanced, developed countries 
(Tables I.4 and I.5).  The EU is by far the most  important in terms of both imports and exports. 
                                                      
28 Certain U.S. laws and statutes restrict exports of crude petroleu m.  Unless exports qualify for a few 
pre-defined exceptions, the U.S. Department of Commer ce does not grant export lic ences for crude petroleum 
exports (Neelesh, 2012). 
29 Neelesh (2012). 
30 Neelesh (2012). 
31 White House Press Release, "Remarks by th e President on America' s Energy Security", 
30 March 2011.  Viewed at:  http://www.whitehous e.gov/the-press-office/2011/03/30/remarks-president-
americas-energy-security;  an d Andrews and Pirog (2012). 
32 White House (2012b). United States WT/TPR/S/275 
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 Table I.2 
U.S. commercial services exports, by type, 2008-11  
(US$ million) 
2008 2009 2010 2011 
Total  523,348 491,852 532,142 580,864 
Services pursuant to modes 1, 2, and 4      
Commercial services  522,231  490,776  532,142  580,864  
Transportation 74,671  61,410  70,637  78,929  
Travel 139,123  123,855  134,846  149,640  
Other commercial services  308,437  305,511  326,659  352,295  
Communications services 10,301  10,278  11,324  12,988  
Construction 3,885  4,032  2,611   ..  
Insurance services 13,403  14,427  14,605  15,351  
Financial services 63,027  62,444  66,387  72,989  
Computer and information services 13,120  13,483  13,766  15,313  
Royalties and licence fees 88, 895  83,447  92,054  103,797  
Other business services 101,829  102,615  111,397  ..  
Personal, cultural and recreational services 13,977  14,785  14,515  15,906  
Government services, n.i.e. 15,644  17,680  18,604   ..  
Services pursuant to mode 3  1,117 1,076 .. .. 
.. Not available. 
Source:  WTO (2012 forthcoming), International Trade Statistics .   
Table I.3 
U.S. commercial services imports, by type, 2008-11 
(US$ million) 
 2008 2009 2010 2011 
Total  374,592 349,596 369,907 395,268 
Services pursuant to modes 1, 2, and 4      
Commercial services  373,890  348,927  369,907  395,268  
Transportation 87,944  67,274  78,122  85,237  
Travel 86,904  80,828  82,696  86,734  
Other commercial services  199,042  200,825  209,089  223,297  
Communications services 8,353  7,947  8,367  8,174  
Construction 3,451  3,579  2,351  ..  
Insurance services 58,913  63,614  61,767  57,562  
Financial services 17,218  13,597  13,803  15,070  
Computer and information services 16,895  17,047  19,385  23,977  
Royalties and licence fees 27,841  27,924  31,784  34,813  
Other business services 64,295  64,699  69,418  .. 
Personal, cultural and recreational services 2,076  2,418  2,214  ..  
Government services, n.i.e. 32,216  34,889  35,012  34,045  
Services pursuant to mode 3 702 669 .. .. 
.. Not available.  
Source:  WTO (2012 forthcoming), International Trade Statistics .   
Table I.4 
U.S. commercial services exports (modes 1, 2, and 4), by destination, 2008-10 
(US$ million) 
 2008 2009 2010 
Total 522,231 490,776 532,142 
EU(27)  193,016 170,096 169,098 
Canada  45,114 42,644 50,521 
Japan  41,524 40,049 44,750 
Mexico  25,938 23,080 24,110 
China  15,065 15,971 21,135 
Switzerland  19,896 18,871 20,313 
Brazil  12,120 13,082 16,515 
Table I.4 (cont'd) WT/TPR/S/275 Trade Policy Review 
Page 12 
  
  2008 2009 2010 
Korea, Republic of  12,885 12,758 15,105 
Australia  12,022  12,024 13,168 
Bermuda  9,604  10,903 11,061 
India  10,189  9,831  10,319 
Singapore  7,277 7,055 9,709 
Chinese Taipei 6,041 6,459 9,292 
All others  111,540 107,953 117,046 
Source:  WTO (2012 forthcoming), International Trade Statistics .   
Table I.5 
U.S. commercial services imports (modes 1, 2, and 4), by origin, 2008-10 
(US$ million) 
 2008 2009 2010 
Total 373,890  348,927  369,907  
EU(27)  140,688  123,124  125,399  
Bermuda  24,740  33,624  31,740  
Canada  25,000  22,295  25,579  
Japan  24,460  20,990  23,541  
Switzerland  18,982  18,583  19,665  
Mexico  15,502  13,538  13,730  
India  12,465  12,359  13,661  
China  9,316  8,161  9,967  
Korea, Republic of  7,240  6,384  7,756  
Hong Kong, China  7,255  5,820  6,492  
Chinese Taipei 6,576  5,125  6,330  
Australia 5,713 5,352 5,600 
Brazil  4,913 4,987 5,232 
All others  71,040 68,585 75,215 
Source:  WTO (2012 forthcoming), International Trade Statistics .   
27. The United States is aware of the growth potential of its services exports and has enacted laws 
or initiated actions to increase services exports, especially  in the travel and tourism sector.  The Travel 
Promotion Act of 2009, passed in 2010, established the Corporation for Travel Promotion, which does 
business as Brand USA, a public-private partnership with the mandate to promote travel to the 
United States.33  In January 2012, President Obama issued an Executive Order to improve visa 
processing and promote travel and tourism.  The Executive Order required the Departments of State and Homeland Security to develop an implementation plan within 60 days to improve visa processing 
times for non-immigrant visas for foreign visitors, in particular with respect to increasing capacity by 
40% in Brazil and China, in order to promote tourism.  The Executive Order requires periodic reporting on progress in implementing the goals with respect to non-immigrant visa processing times.  In addition, it established a Task Force on Travel  and Competitiveness to develop a National Travel 
and Tourism Strategy, aiming to make the U. S. a top travel and tourism destination.
34 
(iii) Foreign direct investment 
28. The United States is the world's largest recipient of foreign direct investment (FDI), which 
totalled US$228 billion in 2011, down from US$236 b illion in 2010.  FDI continues to play an 
important role in the U.S. economy, with accumu lated stock reached US$2.9 trillion in 2010, and 
making important contributions to U. S. employment, R&D, and exports.35  U.S. foreign direct 
investment flows tend to track economic growth, be ing higher when the economy expands, and falling 
                                                      
33 Travel Promotion Act of 2009, Public Law 111-145. 
34 Executive Order No. 13,597, 19 January 2012. 
35 Stated at current cost va lue (White House, 2012b). United States WT/TPR/S/275 
 Page 13 
 
 
 when the economy shrinks.  In recent years, U.S. FD I reached a peak in 2008 before falling during the 
financial crisis.  Along with the recovery, U. S. FDI climbed in 2010 and 2011, after falling 
significantly in 2009, but has not yet recovered to 2008 peak levels.  As the world economy recovers 
from the economic downturn, global FDI is also pr edicted to recover, possibly surpassing 2007-08 
peak levels in 2013 according to UNCTAD estimates.36   
29. FDI in the United States has traditionally been  heavily concentrated, both in terms of 
geographic source and type of investment.  Th e manufacturing sector has generally received the 
majority of FDI, although levels have varied widely year-to-year (Chart I.6).  The vast majority of 
FDI originates in eight countries, six of which are European.37  In 2010, these top eight accounted for 
84% of all U.S. FDI.38  As Europe is a major contributor to U.S. FDI, there is some concern about a 
prolonged debt crisis in Europe and its conse quential negative impact on U.S. FDI.  Given the 
beneficial impact of FDI on the U.S. economy and jobs, the U.S. Administration has recently created SelectUSA, described as a one-stop shop to seek and attract investment in the United States.  
Established in the Department of Commerce, Se lectUSA covers a wide range of investment 
promotion functions such as coordinating among st ate, local, and regional economic development 
organizations and educating investors about  relevant U.S. policies and procedures.
39 
050100150200250300350
2007 2008 2009 2010 2011Chart I.6
Foreign direct investment into the United States, 2007-11
(US$ billion)
Source: Bureau of Economic Analysis online information.  Viewed at: http://www.bea.gov/.Manufacturing Wholesale trade Banking & finance All others Manufacturing Wholesale trade Banking & finance All others
 
                                                      
36 UNCTAD (2011).   
37 Switzerland, United Kingdom, Japan, France, Germ any, Luxembourg, the Netherlands, and Canada. 
38 Department of Commerce, Economics and Statistics Administration (2011).   
39 Established by Executive Order 13577, 15 June 2 011 (White House Press Release.  Viewed at:  
http://www.whitehouse.gov/the- press-office/2011/06/15/executive-orde r-selectusa-initiative;  and SelectUSA 
online information.  Viewed at:  http://selectusa.commerce.gov/).