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Country Commercial Guides
FY 2000: Italy
CHAPTER I. EXECUTIVE SUMMARY
This Country Commercial Guide (CCG) presents a comprehensive look at Italy's commercial environment, using economic, political and market analysis. The CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. Country Commercial Guides are prepared annually at U.S. embassies through the combined efforts of several U.S. government agencies.
Italy, with world's sixth largest industrial economy, remains in the midst of a process of political and economic transformation. The Italian government continues on a path of budget austerity and privatization, reducing its significant role in the economy. As this rationalization of the economy moves forward, Italy should offer even more opportunities for U.S. firms, both as a destination for exports and a point for investment.
Italy is one of the 11 founding members of European Economic and Monetary Union (EMU). Beginning in January, 1999, EMU member countries adopted the new "euro" as their currency and the new European Central Bank as their monetary authority. National currencies will be phased out and only euros will be used beginning in 2002.
Italy's economy grew at a 1.3 percent rate in 1998, one of the lowest levels in the industrialized world. Many economists expect Italian GDP growth to decelerate in 1999 to 1.1%, with GDP reaching $1.18 trillion. Inflation is at its lowest level in years. Consumer inflation rose only by 2.0 percent in 1998. Economists predict it to decelerate to 1.5 percent in 1999. The United States has consistently maintained a trade deficit with Italy. In 1998, United States exports to Italy totaled $10.9 billion, while imports from Italy totaled $20.8 billion. The total stock of U.S. direct investment in Italy was $14.3 billion in 1998, while Italy had total direct investment of more than $16.1 billion in the United States.
The Italian market is mature and highly competitive, demanding high quality products and services. The market is very open to U.S. items, particularly innovative and niche market products, services and technologies. European Union (EU) changes to the Common Agricultural Policy (CAP) and Italy's implementation of EU harmonized phytosanitary and sanitary regulations should offer fresh opportunities for U.S. agricultural exports. For example, the continued move toward a fully integrated single European market should aid U.S. high value, convenience, and health food products. The realignment of the distribution sector toward larger chains and more competitive pricing should also aid U.S. exports.
Italy's participation in the "euro" will simplify trade for those companies exporting to several EU countries. It also creates opportunities for U.S. companies with technologies and services that can assist Italian firms compete in the more integrated European market. However, these changes also will benefit European competitors who are increasing their presence in the Italian market through mergers and joint ventures with Italian firms. U.S. companies, already well known for delivering innovative quality products, will have to focus on price and service to maintain or develop their market share. The U.S. exporter also should be aware that to be successful in Italy they need to establish linkages with Italian representatives or partners and be flexible in their approach to this market.
Country Commercial Guides are available for U.S. exporters from the National Trade Data Bank's CD-ROM or via the Internet. Please contact STAT-USA at 1-800-STAT-USA for more information. Country Commercial Guides can be accessed via the World Wide Web at http://www.stat-usa.gov, http://1997-2001.state.gov/, and http://mac.doc.gov. They can also be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553-NTIS. U.S. exporters seeking general export information/assistance and country-specific commercial information should contact the U.S. Department of Commerce, Trade Information Center by phone at 1-800-USA-TRAD(E) or by fax at (202) 482-4473.
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Note* International Copyright, United States Government, 1998 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title17, United States Code.
