USTR report

[이성규]

USTR Releases 2004 Trade Barriers Report amid Clamor for Action
Trade officials rebut Democrats' demands for several WTO cases

Bush administration officials released their annual report on foreign trade barriers and rebutted demands from congressional Democrats to bring specific World Trade Organization (WTO) dispute-settlement cases against a number of countries' practices.

The 2004 National Trade Estimate (NTE) Report on Foreign Trade Barriers, a 502-page description of obstacles to U.S. exports and investment in 58 countries and regions, was released April 1. The full report can be viewed at http://www.ustr.gov/reports/nte/2004/index.htm.

In a teleconference about the report, U.S. trade officials, who asked not to be identified, said that negotiating and consulting, not filing WTO trade cases, generally are preferable for resolving trade disputes.

By April 30 the Office of the U.S. Trade Representative (USTR) is required by the Special 301 provision of U.S. trade law to announce any actions it plans to take, based on the NTE report, against failures by trading partners to protect copyrights, patents and other intellectual property. Similarly, under Section 1377, USTR must identify any actions it will take against violations of telecommunications agreements.

Years ago the Super 301 provision and subsequent Clinton administration executive orders required USTR to identify other trade barriers for taking actions, but they have long lapsed.

The NTE report mentions the controversial Chinese practice of pegging its currency exchange rate to the U.S. dollar but does not define that practice as a trade barrier. It says that the Bush administration has urged China to move toward a flexible, market-based exchange rate regime and to reduce controls on capital flows.

"Serious engagement with China on this issue will continue in 2004," the NTE says, with little elaboration.

Yet a U.S. official cautioned that the administration had not achieved a unified position concerning the trade-related effects of the Chinese exchange rate regime. He directed further questions to the Treasury Department, the agency charged with exchange-rate policy.

The Chinese exchange rate regime was not among the practices for which leading Democrats were demanding WTO cases. The demands were issued in an April 1 letter from 13 members of the House of Representatives.

One administration official said he was puzzled by the Democrats' demands because the U.S. industries concerned have not requested WTO action.

The Democrats listed the following practices as warranting challenge in the WTO:

-- limits by China on "trading rights" to allow imports and on "distribution rights" to sell those imports in China;
-- China's imposition of China-only technology product standards;
-- European Union's subsidies to Airbus;
-- imposition by India of non-tariff barriers, including unjustified and excessive testing requirements, on textiles and other products;
-- failure by India to protect trademarks and to halt copyright piracy;
-- currency manipulation by Japan; and
-- imposition by Japan and South Korea of non-tariff barriers against autos and auto parts.

The Democrats' letter and related material can be viewed at http://www.house.gov/apps/list/press/wm31_democrats/040401bush_admin_remove_unfair_trade.html.

Following is the text of the USTR press release:

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Office of the United States Trade Representative
Executive Office Of The President
Washington, D.C. 20508
April 1, 2004

USTR Releases 2004 Inventory of Foreign Trade Barriers

Market by Market, U.S. Free Trade Pacts Complement Global Efforts to Reduce U.S. Export Barriers

Washington -- The Office of the United States Trade Representative today released its 2004 annual report documenting foreign trade barriers to U.S. exports and U.S. efforts to reduce and eliminate those barriers.

"The United States benefits from being a relatively open economy, but American workers, exporters, farmers and businesses continue to face barriers for our world-class goods and services," said U.S. Trade Representative Robert B. Zoellick, regarding the National Trade Estimate (NTE) Report on Foreign Trade Barriers. "Day in and day out, all around the world, the U.S. government is working aggressively to make sure barriers to U.S. goods and services are removed. The NTE report is a useful inventory of global trade barriers to understand what has been accomplished and what more needs to be done."

"We employ a variety of tools to make sure Americans are treated fairly, from consultations to negotiations to litigation. Trade liberalization itself provides a win-win opportunity to lower barriers and promote economic growth and development," Zoellick said. "Our new and pending FTA partners represent America's third largest export market -- these FTAs are stripping away trade barriers across-the-board, market-by-market, and expanding American opportunities."

"Enforcement of existing trade agreements is a vital complement to producing new ones. Indeed, enforcement is inherently connected to the process of negotiating new agreements," added Zoellick. "Virtually everything USTR does is connected with enforcement in some way. Negotiations to open markets and enforcement are two sides of the same coin."

The NTE includes a list of barriers and unfair trade practices to American exports of goods, services, and farm products. In addition to limiting commercial opportunities for U.S. businesses, these barriers undermine the substantial potential gains from trade among developing countries. The NTE covers 58 major trading partners in each region of the world and profiles policies restricting market access. This year's report highlights the global effort to reduce or eliminate those barriers, and notes in particular the effect of the FTA [free trade agreement] negotiations the U.S. held or plans to hold, as well as top areas of concern related to intellectual property rights (IPR) protection and sanitary and phytosanitary (SPS) measures. The NTE notes many examples where countries have reduced or eliminated trade barriers described in earlier reports.

Active monitoring of compliance with trade agreements together with vigorous enforcement helps ensure that these agreements yield the bargained-for benefits for Americans, advancing the rule of law internationally and creating a fair, open, and predictable trading environment. We address trade barriers using a number of tools -- consultation, negotiation and litigation. Past examples of enforcement successes include rulings against Canada's prohibited export subsidies on dairy products, India's restrictions on U.S. exports of auto assemblies and an agreement with Argentina resolving many of the issues raised in our dispute over aspects of its intellectual property regime. Recently, the United States obtained a favorable dispute ruling against Japan on its restrictions on imports of apples and favorable preliminary findings against Mexico on its telecommunications regime. Ongoing enforcement actions involve Canada's restrictions on wheat, China's discriminatory tax on semiconductors, Egypt's excessive textile tariffs, the EU's [European Union] moratorium on biotechnology products, the EU's discriminatory regime on geographical indications, Mexico's antidumping measure on rice and Mexico's discriminatory soft drink tax.

As required by the Omnibus Trade and Competitiveness Act of 1988, USTR prepares the NTE Report in close consultation with other U.S. Government agencies, based on the Administration's monitoring program and information provided from the public and private sector trade advisory committees. This year, as in the past, the USTR solicited public comments and, in response, 52 groups filed submissions. U.S. Embassies also participated actively in the preparation of the report and provided critical input based on the experience of U.S. exporters abroad. In addition, these barriers are the subject of consultation with the Congress throughout the year.

Each year, 30 days after the NTE report is submitted to Congress USTR issues the Special 301 report, which catalogues the IPR [intellectual property rights] problems in dozens of countries around the world and places them in a hierarchy ranging from the lowest ranking of Watch List to the mid-level Priority Watch List to the ranking reserved for the worst offenders, Priority Foreign Country. All the IP-related issues noted in the NTE report will be considered during the Special 301 process. In addition, next week, USTR will announce the results of its 1377 Review, a more in-depth analysis of barriers in foreign telecommunications markets and compliance with trade commitments specific to this sector. In each of these exercises the information contained in the NTE figures prominently in the deliberation required.

The NTE report can be found using the following weblink: http://www.ustr.gov/reports/nte/2004/index.htm

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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)