BILL ANALYSIS �
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CONCURRENCE IN SENATE AMENDMENTS
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As Amended August 4, 2014
Majority vote
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|ASSEMBLY: |71-1 |(June 19, 2014) |SENATE: |36-0 |(August 27, |
| | | | | |2014) |
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Original Committee Reference: J., E.D. & E.
SUMMARY : Memorializes the Legislature's commitment to work
cooperatively with the Governor's Office of Business and
Economic Development (GO-Biz) on trade promotion and foreign
investment activities that enhance the state's economic
relations with El Salvador, as specified.
The Senate amendments are minor and technical.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : This resolution highlights the economic opportunities
of a stronger trade relationship between California and El
Salvador. The resolution further expresses the Legislature's
interest in supporting Administration lead activities, as well
as taking its own actions to increase trade and foreign
investment between the state and El Salvador. The resolution is
consistent with the 2014 California Trade and Foreign Investment
Strategy released by GO-Biz in February 2014.
The policy analysis includes additional information on United
States (U.S.) trade agreements, the country of El Salvador, and
California's trade economy.
U.S. Trade Agreements: Within a globally connected economy,
trade agreements create the framework by which a significant
number of businesses and workers must compete, collaborate, and
create economic value. The U.S. is currently negotiating two
major trade promotion agreements, the Trans-Pacific Partnership
and the Transatlantic Trade and Investment Partnership. In
their current iterations, these trade agreements will cover 21%
of the world's population, with the U.S. at the nexus. These
agreements are especially important to local and regional
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governments which have been proactive in using trade promotion
activities as a springboard for their own economic agenda.
The U.S. has trade agreements in force with 20 countries. El
Salvador is covered under the Dominican Republic-Central
America-United States Free Trade Agreement (CAFTA-DR) which also
includes Guatemala, Honduras, Nicaragua, the Dominican Republic,
and Costa Rica. As a result of this agreement, 100% of U.S.
exports of consumer and industrial goods to the CAFTA-DR
countries will be tariff-free by 2015. Tariffs on nearly all
U.S. agricultural products will be phased out by 2020. The
CAFTA-DR region was the 14th largest U.S. export market in the
world in 2013, and the third largest in Latin America behind
Mexico and Brazil.
Background on El Salvador: El Salvador is the smallest and most
densely populated country in Central America. Located on the
Pacific Ocean side of Central America, between Guatemala and
Honduras. The Country is led by President Salvador Sanchez
Cer�n and a Council of Ministers selected by the president.
They have a unicameral 84-seat Legislative Assembly, which is
elected to serve three-year terms.
In 2013, El Salvador's gross domestic product (GDP) was $47.4
billion, making it the 99th largest economy in the world. Since
the economic contraction due to the global recession, growth has
been averaging less than 2% from 2010 to 2013. Remittances
accounted for 16% of GDP in 2013 and were received by about a
third of all households. Top preforming industries include:
food processing, beverages, petroleum, chemicals, fertilizer,
textiles, furniture, and light metals. The U.S. dollar is used
as a medium of exchange, which encourages U.S. import and export
of goods and services. In 2013, the U.S. had a $731 million
trade surplus with El Salvador.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN: 0005460
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