COUNTRY REPORTS ON ECONOMIC POLICY INTRODUCTION The Department of State is submitting to the Congress its Country Reports on Economic Policy and Trade Practices, in compliance with Section 2202 of the Omnibus Trade and Competitiveness Act of 1988. The legislation instructs the Department to prepare a detailed report regarding the economic policy and trade practices of each country with which the United States has an economic or trade relationship: we have done so. In addition, we have included reports on a few other countries that may be of interest to readers despite a relatively small level of economic involvement with the United States. The trade policy arena continues to receive high levels of attention, both at home and abroad. For the third year, our Embassies report that many of our trading partners continue to make progress in opening markets to U.S. exports of goods and services and in providing protection for intellectual property. In 1990, many countries, most dramatically in Eastern Europe, have continued to demonstrate their appreciation of the power of the market to allocate resources rationally and equitably. The reports have been compiled from information supplied by U.S. Embassies overseas, amplified by analysis and review within the Department of State and in consultation with other U.S. Government agencies. The reports are intended primarily as general guides to economic conditions in a specific country. While we have attempted to standardize the reports, they are necessarily heterogeneous, reflecting wide differences in availability of data. In some countries, the U.S. has no formal representation. In other cases, especially for the preparation of reports on Kuwait and Iraq, access to reliable information is limited. Nevertheless, all the country reports incorporate the best information available. O O Each country report is divided into nine sections. Key Economic Indicators: The report begins with a chart showing data for key economic indicators in the national income, monetary, and trade accounts. General Policy Framework: The first narrative section is a general sketch of macroeconomic trends. Exchange Rate Policies: The second section outlines exchange rate policies, particularly with respect to their impact on price competitiveness of U.S. exports. Structural Policies: The third section on structural policies also emphasizes those changes with might affect U.S. exports to that country. Debt Management Policies: The fourth section describes debt management policies and implications for trade with the United States. Significant Barriers to U.S. Exports and Investment: exports and investment (1) Export Subsidies Policies: The sixth notes any government acts, policies, and practices that provide support for exports from that country, including exports by small businesses. Protection of U.S. Intellectual Property: The seventh section discusses the country's laws and practices with respect to protection for intellectual property. Worker Rights: The eighth and final section has three parts. The first part outlines in general the country's laws and practices with respect to internationally recognized worker rights. The second part (subsection f.) highlights Finally, a table cites the extent of such investment by sector where information is available. We believe that this third annual report builds on the strong foundation of the reports submitted in January 1989 and January 1990. The Department of State considers the report to be an important contribution toward our goal of insuring that strong and effective U.S. Government trade policies are based on the best possible understanding of the economic trends in countries around the world. Eugene J. McAllister Assistant Secretary of State for Economic and Business Affairs TEXT OF SECTION 2202 OF THE OMNIBUS TRADE "The Secretary of State shall, not later than January 31 1. The macroeconomic policies of the country and their impact on the overall growth in demand for United States exports; 2. The impact of macroeconomic and other policies on the exchange rate of the country and the resulting impact on price competitiveness of United States exports; 3. Any change in structural policies [including tax incentives, regulation governing financial institutions, production standards, and patterns of industrial ownership] that may affect the country's growth rate and its demand for United States exports; 4. The management of the country's external debt and its implications for trade with the United States; 5. Acts, policies, and practices that constitute significant trade barriers to United States exports or foreign direct investment in that country by United States persons, as identified under section 181(a)(1) of the Trade Act of 1974 (19 U.S.C. 2241(a)(1)); 6. Acts, policies, and practices that provide direct or indirect government support for exports from that country, including exports by small businesses; 7. The extent to which the country's laws and enforcement of those laws afford adequate protection to United States intellectual property, including patents, trademarks, copyrights, and mask works; and 8. The country's laws, enforcement of those laws, and practices with respect to internationally recognized worker rights (as defined in section 502(a)(4) of the Trade Act of 1974), the conditions of worker rights in any sector which produces goods in which United States capital is invested, and the extent of such investment." Notes on Preparation of the Reports Subsections a. through e. of the Worker Rights section (section eight) are abridged versions of the sections 6 in the Country Reports on Human Rights Practices for 1990, submitted to the Committees on Foreign Affairs of the House of Representatives and on Foreign Relations of the U.S. Senate on January 31, 1991. For a comprehensive discussion of worker rights in each country please refer to that report. Subsection f. of the Worker Rights section highlights conditions of worker rights in goods-producing sectors where U.S. capital is invested. A table cites the extent of such investment by sector where information is available. The Bureau of Economic Analysis of the U.S. Department of Commerce has supplied information on the U.S. direct investment position at the end of 1989 for all countries for which foreign direct investment has been reported to it. This information for 1989 the most recent figures available was published for selected countries in the August 1990 issue of Survey of Current Business. Readers should note that "U.S. Direct Position Abroad" is defined as "the net book value of U.S. parent companies' equity in, and net outstanding loans to, their foreign affiliates" (foreign business enterprises owned 10 percent or more by U.S. persons or companies). The table does not necessarily indicate total assets held in each country. In some instances, the narrative refers to investments for which figures may not appear in the table. CAP Caribbean Common Market Common Agricultural Policy (of the European Communities) CCC Commodity Credit Corporation (Department of Agriculture) COMECOM Council for Mutual Economic Assistance European Communities EC EFTA European Free Trade Association European Monetary Scheme (of the EC) EXIMBANK EMS FOREX General Agreement on Trade and Tariffs Gross Domestic Product GNP Gross National Product International Bank for Reconstruction and Development International Monetary Fund Intellectual Property Rights London Interbank Offer Rate Net National Income Organization for Economic Cooperation and Development Structural Adjustment Program (of the IMF/World Bank) Uruguay Round of current trade negotiations in the GATT World Intellectual Property Organization September 30. 1/ Angola's fiscal year is October 1 2/ U.S. assistance takes the form of PL-480 (Food for Peace) earmarked funds to the ICRC and UNHCR for refugee relief and private voluntary agency administered disaster assistance. * The Kwanza was devalued by 50 percent in late September 1990. 1. General Policy Framework The People's Republic of Angola (PRA) potentially could be one of Africa's richest countries. Relatively unpopulated, it has large hydrocarbon and mineral resources, huge hydroelectric potential, a long coastline with finfish and shellfish reserves and ample arable land. Civil and foreign war since independence in 1975 have wreaked havoc on the country, and prevented Angola from realizing this potential. A severe lack |