U.S - Italy Economic Cooperation
Synthesis on the Evolution of the Second Semester of 2010
1. The gradual economic recovery ongoing since June 2009 continued in the period under examination even though at a rate insufficient to notably reduce the unemployment rate (9.6% in December 2010, it gradually dropped to 8.8% in Match 2011, and then rose again to 9.1% in June). Initially sustained by massive fiscal and monetary expansion plans and by the reconstitution of spare parts, the recovery was partly fueled by a revived demand in both consumer goods and investments. The climate of greater optimism following the December 2010 bipartisan compromise in Congress to extend tax breaks as well as to introduce new measures in favor of small and mid-size companies was greatly blunted by the crises in Japan and Northern Africa. Analysts have reset expected growth in 2011 at +2.8%. By comparison with improvements in certain sectors (tourism and manufacturing), the real estate market is still in crisis and its recovery is strategic for stability in the country’s economic progress. Policies to rein in public spending to ensure that the deficit remains constant in the medium term are at the heart of the political debate, and some observers say that the uncertainty associated with the outcome will be a drag on growth at least in the short term. Inflation has been contained during the period in question with the Fed keeping interest rates at minimum levels (equal to 0-0.25%).
2. From the perspective of supporting and coordinating Sistema Italia’s promotional activities in the United States, the Embassy in Washington has increased the number of the network meetings chaired by the Chief of Mission, which gather together in Washington (and once in New York) representatives from Italian Administrations and Agencies active in the U.S. under various title. In implementation of the Directive 1 August 2008 directive of the Prime Minister on the coordination and leadership of Sistema Italia promotions, as well as in keeping with the Ministry’s structural reform, the meetings are attended by the Italian Executive Directors at the IMF, WB, IDB, representatives from the ICE, Bank of Italy, ENIT, Italian Cultural Institute, as well as from the Ministries of Defense and of the Economy and Finance. The meetings confirmed first the advisability of directing promotional activities toward high tech sectors, in line with the priorities of the Obama administration for the long-term economic development of the U.S.: transportation/infrastructure (in particular, high speed rail), energy/green economy, biotech, aerospace. In addition, focus was also given to ways of bringing companies and universities into closer contact with opportunities offered by the international financial institutions. Many of the promotional initiatives have been under the umbrella of the calendar of events in the U.S. to celebrate 150 years of Italian Unity (Italy@150), including:
• In the aerospace sector, the July 2010 event on the occasion of the visit by Italian Space Agency President Enrico Saggese to introduce our space program and Italy’s earth observation satellite “COSMO-SkyMed.” In attendance were members of Congress, the White House Office of Science and Technology (OSTP) and the Department of State. The mission confirmed the excellent relations of ASI and our most important companies in the sector with their U.S. counterparts and significant opportunities for future bilateral collaboration.
• In the medical and pharmaceutical sectors, the 22 October 2010 Global Health symposium on “Healthy Aging Globally: A Life Cycle Approach” hosted by the Embassy. The event, attended by special guest Minister of Health Ferruccio Fazio, was organized in collaboration with Italy and the U.S. scientific and pharmaceutical communities. Other attendees included Prof. Graci of ISS, the leadership of AIFA and Farmindustria, and on the U.S. side, top exponents of the Administration and the research, including 2009 Noble Carol Greider (Medicine and Physiology) and Director of the NIH National Institute on Aging Paul Hose. The proceedings of the event have since been published.
• Also in the medical sector and promoted through the consular network in the United States is the “Italian Network for Health Research” of the Ministry of Health. A platform dedicated to Italian researchers residing abroad with the objective of strengthening their ties with Sistema Italian and facilitating their potential return to Italy, the network aims to foster collaboration between Italian researchers working in the biomedical sector at home and abroad and at the same time further their contacts with Italy’s actual production capabilities.
In the traditional wine/grape sector, on 28 October 2010 the Embassy hosted Vinitaly Tour 2010, a sector specific promotional event organized by VeronaFiere that also traveled to New York and Philadelphia. The initiative made it possible to promote the production quality of major Italian wine consortia (Brunello di Montalcino, Chianti, Montepulciano, Zonin) in order to further consolidate their positive image in an important U.S. market that remains of strategic relevance in this production sector.
During September 2011 a mission from the Lombardy Region and Confindustria of companies mainly in the high tech sector (aerospace, renewable energy, precision instruments, textiles/furnishings as well) traveled to the United States for meetings in New York, Boston, and Los Angeles. The success of the initiative could pave the way for an institutional-commercial mission of the Lombardy Region in 2011.
In the context of bilateral economic relations, of special note was the 6 to 10 December 2010 visit by Confindustria President Emma Marcegaglia to Washington and New York for meetings with top representatives of the government, major U.S. business associations, Italian businesses in loco, and international financial institutions.
In March 2011, the Embassy hosted the Global Energy Symposium. Organized under the auspices of the Ministries of Foreign Affairs, Economic Development, and the Environment, in collaboration with the ICE and was included in the program of initiatives to celebrate the 150 years of Italian Unity. The event served as a model for an integrated approach between scientific collaboration and economic promotion, drawing attention to existing collaborations at the scientific and industrial levels in four major clusters (Hydrocarbons, nuclear, fusion, and renewables). It also served as a moment to showcase the scientific and business ‘excellences’ of Italy in the energy sectors and further explore potential industrial and commercial collaborations in nuclear energy between the two countries.
This year’s National Day celebration incorporated "Welcome to Italy! A Trade Exhibition in Washington" held on 1 and 2 June in collaboration with the ICE of New York and dedicated to the excellence of Italian free enterprise. Held on Embassy grounds, the expo was designed to highlight Italian companies and consortia operating in traditional and high tech sectors that have an interest in the U.S. market. Numerous visitors explored the documents, stands and video presentations organized by each of the exhibitors and the specialty gastronomy stations offering tasting of alimentary and wine/grape products. Participating exhibitors included l'Associazione Industriali delle Carni (ASSICA), Prosciutto di Parma Consorzi , VeronaFiere-Vinitaly, ENEL Green Power, Eni, Finmeccanica, Fiat, Ducati, Piaggio, ARCLINEA, Fincantieri, Beretta , Ferrero, and San Pellegrino and Panna mineral waters.
Bilateral relations and investment opportunities
1. Trade
Recovering a downturn in 2009 caused by the global economic crisis, trade between Italy and the U.S. is significant. During 2010, according to the ICE, (Government agency entrusted with promoting trade, business opportunities and industrial co-operation between Italian and foreign companies). Italian exports to US increased 7.7 %, reaching a value of 28 billion dollars. U.S. exports to Italy increased 15%, a total value of 14 billion dollars. The Italian share in the U.S. market is approximately 1.5%. Italy has a trade surplus in the United States of 14. billion dollars. In the first three months of 2011, Italian exports to US increased 15 %, in comparison to the same period of the last year. U.S. exports to Italy increased 11% in the same period.
Mechanics are classified as the main sector in the Italian exports to the US, with fashion, food-wine and design/home/furniture. The trend of exports for petrochemical products was, on the other hand, influenced by fluctuations in the price of oil. During 2010, U.S. imports of Italian products were as follows: mechanics: 18.5%, petrochemical: 13.8%, fashion: 14.4%, food and wine: 11.1%, pharmaceutics: 6.3%, home/furniture: 4.8%, other: 37%.
IMPORT-EXPORT TRADE USA-ITALIA January-March 2011 (in billions of dollars)
2010 2011 Var.
Import USA from Italy 8.130 9.352 15,03% Market share 1,90% 1,84%
Export USA toward Italy 2.083 2.314 11,07% Market share 0,70% 0,66%
Balance of Trade - 6.047 - 7.038
Source: Italian Institute for Foreign Trade
According to the European Commission in 2010 Italy has overtaken France to become the largest wine producer in the world. Italy produced 4.96 billion litres of wine compared to 4.62 billion in France. The increase in Italian production must also be compared to the fact that the territorial size of the French vineyards is far larger than Italian ones. Exports are also on the increase – up 15 per cent compared to last year, which is a very good sign."
2. Investments
In terms of investments the United States market – with a national income greater than 14,000 billion dollars, a population of over 300 million and an average per capita income of 46 thousand dollars a year – is of strategic importance in comparison to the rest of the world because of its dimensions, its central position in the global economy and its capacity as the driving force of consumption models. Over the course of the past two years, numerous Italian industries have grasped the opportunity to invest in the United States.
Among them: Finmeccanica has acquired DRS Technologies, a leading supplier of defense electronic systems, and Fincantieri which acquired the shipbuilding division of the Manitowoc Marine Group (Mmg) located on Lake Michigan, with the aim of consolidating its presence in the naval defense industry. In addition to this, the merger between Fiat and Chrysler, two of the largest automobile manufacturers in the world, is the most eloquent example of the high standard achieved by the Italian industry in the US. Indeed, there have been other alliances attesting to this very positive trend, the most recent being: ENI and Dominion Group resources; Tenaris and Hydril, Texas; Luxottica and Oakley; Campari and Cabo Wabo; and, finally, Zach System and the Ppg Industry Group in Pittsburgh. These transactions reach a total of billions of dollars. Investments were also made by: Bracco, Brembo, Colavit, Enel, Ferretti, Italcementi, Mediaset, Pirelli, Prysmian Cavi, and Sogefi.
According to the last data, there are more than 2.200 Italian firms and companies in the United States with a total billing of 42 billion dollars. There are more than 1.800 U.S. firms and companies in Italy with a revenue of 158 billion dollars.. The most important U.S. investments were made by: Coca Cola, Heinz, McDonald’s, Kraft (food); Exxon-Mobil, Pfizer, Bristol Myers Squibb, Abbot Laboratories, Johnson&Johnson, Eli Lilly (pharmaceutics); General Electric, Whirlpool (mechanics); Dow Chemical, Dupont, Procter&Gamble, Colgate-Palmolive (petrochemicals), IBM, la Microsoft, EDS (Electronic Data Systems (Information science and technology); Altria (Philip Morris), Walt Disney.
1. The gradual economic recovery ongoing since June 2009 continued in the period under examination even though at a rate insufficient to notably reduce the unemployment rate (9.6% in December 2010, it gradually dropped to 8.8% in Match 2011, and then rose again to 9.1% in June). Initially sustained by massive fiscal and monetary expansion plans and by the reconstitution of spare parts, the recovery was partly fueled by a revived demand in both consumer goods and investments. The climate of greater optimism following the December 2010 bipartisan compromise in Congress to extend tax breaks as well as to introduce new measures in favor of small and mid-size companies was greatly blunted by the crises in Japan and Northern Africa. Analysts have reset expected growth in 2011 at +2.8%. By comparison with improvements in certain sectors (tourism and manufacturing), the real estate market is still in crisis and its recovery is strategic for stability in the country’s economic progress. Policies to rein in public spending to ensure that the deficit remains constant in the medium term are at the heart of the political debate, and some observers say that the uncertainty associated with the outcome will be a drag on growth at least in the short term. Inflation has been contained during the period in question with the Fed keeping interest rates at minimum levels (equal to 0-0.25%).
2. From the perspective of supporting and coordinating Sistema Italia’s promotional activities in the United States, the Embassy in Washington has increased the number of the network meetings chaired by the Chief of Mission, which gather together in Washington (and once in New York) representatives from Italian Administrations and Agencies active in the U.S. under various title. In implementation of the Directive 1 August 2008 directive of the Prime Minister on the coordination and leadership of Sistema Italia promotions, as well as in keeping with the Ministry’s structural reform, the meetings are attended by the Italian Executive Directors at the IMF, WB, IDB, representatives from the ICE, Bank of Italy, ENIT, Italian Cultural Institute, as well as from the Ministries of Defense and of the Economy and Finance. The meetings confirmed first the advisability of directing promotional activities toward high tech sectors, in line with the priorities of the Obama administration for the long-term economic development of the U.S.: transportation/infrastructure (in particular, high speed rail), energy/green economy, biotech, aerospace. In addition, focus was also given to ways of bringing companies and universities into closer contact with opportunities offered by the international financial institutions. Many of the promotional initiatives have been under the umbrella of the calendar of events in the U.S. to celebrate 150 years of Italian Unity (Italy@150), including:
• In the aerospace sector, the July 2010 event on the occasion of the visit by Italian Space Agency President Enrico Saggese to introduce our space program and Italy’s earth observation satellite “COSMO-SkyMed.” In attendance were members of Congress, the White House Office of Science and Technology (OSTP) and the Department of State. The mission confirmed the excellent relations of ASI and our most important companies in the sector with their U.S. counterparts and significant opportunities for future bilateral collaboration.
• In the medical and pharmaceutical sectors, the 22 October 2010 Global Health symposium on “Healthy Aging Globally: A Life Cycle Approach” hosted by the Embassy. The event, attended by special guest Minister of Health Ferruccio Fazio, was organized in collaboration with Italy and the U.S. scientific and pharmaceutical communities. Other attendees included Prof. Graci of ISS, the leadership of AIFA and Farmindustria, and on the U.S. side, top exponents of the Administration and the research, including 2009 Noble Carol Greider (Medicine and Physiology) and Director of the NIH National Institute on Aging Paul Hose. The proceedings of the event have since been published.
• Also in the medical sector and promoted through the consular network in the United States is the “Italian Network for Health Research” of the Ministry of Health. A platform dedicated to Italian researchers residing abroad with the objective of strengthening their ties with Sistema Italian and facilitating their potential return to Italy, the network aims to foster collaboration between Italian researchers working in the biomedical sector at home and abroad and at the same time further their contacts with Italy’s actual production capabilities.
In the traditional wine/grape sector, on 28 October 2010 the Embassy hosted Vinitaly Tour 2010, a sector specific promotional event organized by VeronaFiere that also traveled to New York and Philadelphia. The initiative made it possible to promote the production quality of major Italian wine consortia (Brunello di Montalcino, Chianti, Montepulciano, Zonin) in order to further consolidate their positive image in an important U.S. market that remains of strategic relevance in this production sector.
During September 2011 a mission from the Lombardy Region and Confindustria of companies mainly in the high tech sector (aerospace, renewable energy, precision instruments, textiles/furnishings as well) traveled to the United States for meetings in New York, Boston, and Los Angeles. The success of the initiative could pave the way for an institutional-commercial mission of the Lombardy Region in 2011.
In the context of bilateral economic relations, of special note was the 6 to 10 December 2010 visit by Confindustria President Emma Marcegaglia to Washington and New York for meetings with top representatives of the government, major U.S. business associations, Italian businesses in loco, and international financial institutions.
In March 2011, the Embassy hosted the Global Energy Symposium. Organized under the auspices of the Ministries of Foreign Affairs, Economic Development, and the Environment, in collaboration with the ICE and was included in the program of initiatives to celebrate the 150 years of Italian Unity. The event served as a model for an integrated approach between scientific collaboration and economic promotion, drawing attention to existing collaborations at the scientific and industrial levels in four major clusters (Hydrocarbons, nuclear, fusion, and renewables). It also served as a moment to showcase the scientific and business ‘excellences’ of Italy in the energy sectors and further explore potential industrial and commercial collaborations in nuclear energy between the two countries.
This year’s National Day celebration incorporated "Welcome to Italy! A Trade Exhibition in Washington" held on 1 and 2 June in collaboration with the ICE of New York and dedicated to the excellence of Italian free enterprise. Held on Embassy grounds, the expo was designed to highlight Italian companies and consortia operating in traditional and high tech sectors that have an interest in the U.S. market. Numerous visitors explored the documents, stands and video presentations organized by each of the exhibitors and the specialty gastronomy stations offering tasting of alimentary and wine/grape products. Participating exhibitors included l'Associazione Industriali delle Carni (ASSICA), Prosciutto di Parma Consorzi , VeronaFiere-Vinitaly, ENEL Green Power, Eni, Finmeccanica, Fiat, Ducati, Piaggio, ARCLINEA, Fincantieri, Beretta , Ferrero, and San Pellegrino and Panna mineral waters.
Bilateral relations and investment opportunities
1. Trade
Recovering a downturn in 2009 caused by the global economic crisis, trade between Italy and the U.S. is significant. During 2010, according to the ICE, (Government agency entrusted with promoting trade, business opportunities and industrial co-operation between Italian and foreign companies). Italian exports to US increased 7.7 %, reaching a value of 28 billion dollars. U.S. exports to Italy increased 15%, a total value of 14 billion dollars. The Italian share in the U.S. market is approximately 1.5%. Italy has a trade surplus in the United States of 14. billion dollars. In the first three months of 2011, Italian exports to US increased 15 %, in comparison to the same period of the last year. U.S. exports to Italy increased 11% in the same period.
Mechanics are classified as the main sector in the Italian exports to the US, with fashion, food-wine and design/home/furniture. The trend of exports for petrochemical products was, on the other hand, influenced by fluctuations in the price of oil. During 2010, U.S. imports of Italian products were as follows: mechanics: 18.5%, petrochemical: 13.8%, fashion: 14.4%, food and wine: 11.1%, pharmaceutics: 6.3%, home/furniture: 4.8%, other: 37%.
IMPORT-EXPORT TRADE USA-ITALIA January-March 2011 (in billions of dollars)
2010 2011 Var.
Import USA from Italy 8.130 9.352 15,03% Market share 1,90% 1,84%
Export USA toward Italy 2.083 2.314 11,07% Market share 0,70% 0,66%
Balance of Trade - 6.047 - 7.038
Source: Italian Institute for Foreign Trade
According to the European Commission in 2010 Italy has overtaken France to become the largest wine producer in the world. Italy produced 4.96 billion litres of wine compared to 4.62 billion in France. The increase in Italian production must also be compared to the fact that the territorial size of the French vineyards is far larger than Italian ones. Exports are also on the increase – up 15 per cent compared to last year, which is a very good sign."
2. Investments
In terms of investments the United States market – with a national income greater than 14,000 billion dollars, a population of over 300 million and an average per capita income of 46 thousand dollars a year – is of strategic importance in comparison to the rest of the world because of its dimensions, its central position in the global economy and its capacity as the driving force of consumption models. Over the course of the past two years, numerous Italian industries have grasped the opportunity to invest in the United States.
Among them: Finmeccanica has acquired DRS Technologies, a leading supplier of defense electronic systems, and Fincantieri which acquired the shipbuilding division of the Manitowoc Marine Group (Mmg) located on Lake Michigan, with the aim of consolidating its presence in the naval defense industry. In addition to this, the merger between Fiat and Chrysler, two of the largest automobile manufacturers in the world, is the most eloquent example of the high standard achieved by the Italian industry in the US. Indeed, there have been other alliances attesting to this very positive trend, the most recent being: ENI and Dominion Group resources; Tenaris and Hydril, Texas; Luxottica and Oakley; Campari and Cabo Wabo; and, finally, Zach System and the Ppg Industry Group in Pittsburgh. These transactions reach a total of billions of dollars. Investments were also made by: Bracco, Brembo, Colavit, Enel, Ferretti, Italcementi, Mediaset, Pirelli, Prysmian Cavi, and Sogefi.
According to the last data, there are more than 2.200 Italian firms and companies in the United States with a total billing of 42 billion dollars. There are more than 1.800 U.S. firms and companies in Italy with a revenue of 158 billion dollars.. The most important U.S. investments were made by: Coca Cola, Heinz, McDonald’s, Kraft (food); Exxon-Mobil, Pfizer, Bristol Myers Squibb, Abbot Laboratories, Johnson&Johnson, Eli Lilly (pharmaceutics); General Electric, Whirlpool (mechanics); Dow Chemical, Dupont, Procter&Gamble, Colgate-Palmolive (petrochemicals), IBM, la Microsoft, EDS (Electronic Data Systems (Information science and technology); Altria (Philip Morris), Walt Disney.
