Office of United States Trade Representative : U.S. Trade Representative Announces New Obama Administration Accomplishments in Reducing Barriers to American Exports
03/31/2016 | 03:47pm EDT
2016 National Trade Estimate Illustrates the Office of the U.S. Trade Representative's Efforts to Remove Obstacles to Made-in-America Exports and Increase Economic Opportunity Abroad for American Workers, Farmers, and Businesses
Washington, D.C. - American exports are a critical source of economic growth, prosperity, and jobs in every state. Central to President Obama's commitment to doing trade right is applying all of the resources available to the U.S. Trade Representative (USTR) toward opening important markets to American exports, and leveling the playing field of the global economy so that Americans can compete and win on fair terms.
Unwarranted barriers to selling Made-in-America exports abroad harm the livelihood of American workers, farmers, ranchers, and businesses of all sizes. USTR's efforts to identify and address these barriers to Made-in-America exports around the world are undertaken in order to help our businesses grow their exports and support more high-paying American jobs.
The 2016 National Trade Estimate Report (NTE), released by U.S. Trade Representative Michael Froman - the final National Trade Estimate of the Obama Administration - spotlights major foreign barriers imposed on American exports by other countries and gives an update on USTR's multifaceted work to reduce those barriers.
'President Obama has pursued a trade agenda that promotes economic growth, supports high-paying American jobs, and strengthens the middle class - because we know that when the playing field is level, our workers and businesses can compete - and win - in the global economy,' said U.S. Trade Representative Michael Froman.
'The United States already has one of the world's most open economies. But not all countries are playing by the same rules, and all too often, our workers and businesses face significant obstacles when they export their goods and services abroad. Opening foreign markets through smart, high-standard trade agreements - and enforcing our existing agreements to ensure that other countries live up to their commitments - is how we can level that playing field and make trade deliver for the American middle class. To that end, the 2016 National Trade Estimate underscores how the Obama Administration has worked tirelessly on a global scale to erase these barriers and guarantee American workers, farmers, and businesses the economic opportunities they deserve across the world.'
The 2016 NTE outlines accomplishments reached by the Obama Administration in terms of reducing and eliminating tariff and non-tariff barriers affecting American exports.
This report includes features breaking down the United States' use of trade enforcement actions and resources to strike down trade barriers, as well as - for the first time in an NTE - USTR's work to target barriers that have impacted American's participation in digital trade.
The 2016 NTE also provides features on Sanitary and Phytosanitary (SPS) barriers that are placed on American agricultural exports, as well as Technical Barriers to Trade (TBT) that are restricting American manufacturing exports from reaching customers who want to buy them.
SPS standards, or rules for food safety and animal and plant health, are essential in trade and ensure that food is safe for people to eat. However, as explained in the NTE, some countries create excessive, unnecessary SPS regulations that act as disguised barriers to American agricultural exports. USTR has had numerous successes over the past year in eliminating many of these barriers.
Similarly, as USTR has worked to reduce tariff barriers to industrial and agricultural trade, certain onerous technical regulations have also emerged as disguised barriers to American trade. The Obama Administration has delivered key reductions and eliminations of these barriers, as well.
Key Success Stories from the 2016 National Trade Estimate:
The 2016 NTE highlights the Obama Administration's ongoing work to target and eliminate significant trade barriers that block American exporters in our export markets all over the world in order to safeguard the vital contributions that exporting makes to the United States economy. For example, in the past year, the administration accomplished the following:
Conclusion of Trans-Pacific Partnership Negotiations: In October 2015, the United States concluded negotiation of the Trans-Pacific Partnership (TPP) Agreement, a free trade agreement with 11 other countries -- Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam -- representing nearly 40 percent of the global economy and 32 percent of global trade. TPP is high standard, ambitious, and comprehensive, and focused on issues that will foster U.S. competitiveness now and in the future. The TPP will cut over 18,000 import taxes imposed on Made-in-America manufactured and agricultural products, address non-tariff barriers that unfairly block U.S. exports; open Asia-Pacific markets for U.S. service suppliers, which are the most competitive in the world; and promote digital trade and strong and balanced intellectual property rules that will further stimulate U.S. innovation. TPP will level the playing field for U.S. exporters by fostering fair competition and good governance; establishing strong, enforceable labor and environmental standards; helping ensure fair and transparent regulatory policies that promote trade by U.S. innovators and exporters while helping to ensure consumer safety and privacy; and promoting inclusive growth, including by supporting U.S. small businesses. The 12 TPP countries, including the United States, are now working on completing their respective domestic approval processes so their workers, businesses, farmers, ranchers and consumers can begin benefitting from the agreement as soon as possible.
Intellectual Property Rights Concerns in India: India remained on the Priority Watch List in the 2015 Special 301 Report because of concerns regarding weak protection and enforcement of intellectual property rights (IPR). India is in the process of undertaking an examination of its current IPR environment and is in the final stages of developing a National IPR Policy that offers the opportunity to provide more clarity and resolve long-standing IPR challenges for stakeholders. However, despite meaningful progress on discreet IPR issues of the past year, India has yet to undertake the reforms necessary to achieve India's innovation, creative and investment goals. To advance IPR related work, in 2015 the United States and India committed to an IPR work plan for 2016 that includes continued work on copyright, trade secrets, trademarks, and patents.
Increased Intellectual Property Protection and Enforcement in Honduras: The Government of Honduras has taken concrete actions to address concerns in the protection and enforcement of intellectual property, including by bolstering its criminal enforcement capacity and by issuing official clarifications that certain generic terms are not protectable as geographical indications. Going forward, Honduras has made a series of related commitments not only on criminal enforcement and geographical indications, but also to promote more effective border enforcement and to combat the unauthorized rebroadcast of cable and satellite signals.
Signing of a Trade and Investment Framework Agreement with Laos: In February 2016, the United States and Laos signed a bilateral Trade and Investment Framework Agreement to facilitate engagement on bilateral trade and investment issues, such as intellectual property, labor, environment, and capacity building, and to coordinate on multilateral and regional issues, including related to ASEAN.
The 2016 NTE also covers the ways in which the United States has specifically leveraged trade enforcement actions in order to remove barriers identified in past NTE editions that have disadvantaged American exporters.
Import Licensing in Argentina: Following the 2014 NTE report's observations of restrictive import licensing policies in Argentina, the Obama administration challenged these restrictions at the WTO. In January 2015, the WTO found in favor of the United States in a dispute challenging Argentina's widespread restrictions on the importation of U.S. goods. The measures potentially affect billions of dollars in U.S. exports each year in job-creating industries, including energy products, electronics and machinery, aerospace and parts, pharmaceuticals, precision instruments and medical devices, miscellaneous chemicals, motor vehicles and vehicle parts, and agricultural products.
AD/CVD Duties on High Tech Steel from the United States to China: The 2011 NTE report and several subsequent NTEs noted concerns with China's imposition of countervailing duties. The United States then challenged China's imposition of AD/CVD U.S. exports of grain oriented flat-rolled electrical steel (GOES). In July 2012, the WTO found China's measures to be inconsistent with its WTO commitments. In 2014, USTR challenged China's failure to comply with WTO rules in the WTO's first ever compliance proceeding brought against China. The WTO concluded that China's actions following the WTO findings in 2012 were inconsistent with WTO rules. China revoked the AD and CVD duties on GOES from the United States.
India Solar Local Content and Solar Local Content II: After the 2015 NTE Report expressed objections to India's solar local content, in February of 2016 a WTO dispute settlement panel found in favor of the United States in the U.S. challenge to India's 'localization' rules discriminating against imported solar cells and modules under India's National Solar Mission. The panel agreed with the United States that India's domestic content requirements discriminate against U.S. solar cells and modules by requiring solar power developers to use Indian-manufactured cells and modules rather than U.S. or other imported solar technology in breach of international trade rules. In an important outcome -- not just as it applies to this case, but also as other countries consider localization policies -- the panel rejected India's defensive arguments and determined that India's local content requirements are inconsistent with the national treatment obligations under the Agreement on Trade-related Investment Measures and the General Agreement on Tariffs and Trade 1994.
In a first-ever feature in a National Trade Estimate, the 2016 NTE showcases some of the most serious barriers Americans face with regard to digital trade, which is a strong point of the United States economy and especially important to small businesses that use online platforms to export Made-in-America goods.
Data Localization Requirements in Russia: Russian law requires that certain data collected electronically by companies on Russian citizens be processed and stored in Russia. For many U.S. companies, ensuring local storage and processing is either technically or economically infeasible, forcing them to operate with significant legal uncertainty.
Foreign Investment Restrictions in China: China continues to impose foreign equity restrictions on value-added (50 percent) and basic (49 percent) telecommunications services. In addition, with respect to value-added telecommunication services, China severely limits access of foreign providers through a non-transparent and overly rigid licensing process. With regard to basic telecommunication services, China only permits foreign suppliers to enter into joint ventures with state-owned enterprises and imposes exceedingly high capital requirements ($145.9 million).
Local Content Requirements in Indonesia: Indonesia requires that equipment used in certain wireless broadband services contain prescribed percentages of local content, and that telecommunication operators expend half of their total capital expenditures for network development on locally sourced components or services. In 2015, Indonesia issued a regulation that appears to require all 4G enabled devices to contain 30 percent local content, and all 4G base stations to contain 40 percent local content.
The section on Sanitary and Phytosanitary (SPS) Barriers to Trade explains the Obama Administration's efforts to identify and remove onerous barriers that affect American agricultural exports. For example, in the past year, the administration accomplished the following:
Poultry, Pork, and Beef Exports to South Africa: In the context of an African Growth and Opportunity Act (AGOA) out of cycle eligibility review, in early 2016, South Africa lifted restrictions on the import of U.S. poultry, pork, and beef products, ending South Africa's longstanding barriers on imports of these U.S. agricultural products. With the removal of South Africa's barriers to exports of U.S. poultry, pork, and beef, U.S. exports of these products to South Africa could reach up to nearly $160 million annually. Annual exports of U.S. poultry to South Africa could reach $100 million, exports of U.S. pork $40 million, and exports of U.S. beef $17 million.
Agriculture Policy in China: During President Xi Jinping's visit to the United States in September 2015, China agreed to issue biotech approvals in a timely manner, and to revise regulations to ensure a more transparent, predictable, and science-based approval process. China reaffirmed those commitments at the December 2015 JCCT and approved several key biotech products in early 2016.
Beef to Peru: In March 2016, Peru removed burdensome certification requirements for U.S. beef and beef product exports, further opening one of the fastest growing markets in Latin America. Peru ranked as the 18th largest export market for U.S. beef and beef products in 2015, with shipments totaling $25.4 million.
The section on Technical Barriers to Trade (TBT) addresses unwarranted or overly burdensome technical barriers that make it difficult for American manufacturers and workers to sell their products abroad. For example, in the past year, the administration accomplished the following:
Technology Policy in China: In early 2015, the United States, in concert with other governments and stakeholders around the world, raised serious concerns about Chinese banking regulations calling for 'secure and controllable' information communication technology (ICT) products in their banking system, effectively shutting out foreign ICT providers; China subsequently suspended those regulations. During President Xi's visit to the United States in September 2015, China also committed that all commercial technology product regulations would be nondiscriminatory and without nationality-based requirements and agreed to enhance transparency in this area, and at the 2015 United States-China Joint Commission on Commerce and Trade (JCCT), further committed not to unnecessarily limit commercial sales opportunities for foreign suppliers of ICT products.
Supplying a Key Industrial Raw Material to the European Union (EU): The United States is the world's largest producer of beryllium, a metal that is used in defense and commercial applications because of its particular properties such as strength, low weight, and resistance to chemical deterioration. The EU market for beryllium is forty percent of U.S. sales of the metal. Since 2013, Germany has been advancing efforts to place beryllium on the EU's Registration, Evaluation, and Authorization of Chemicals (REACH) candidate list of substances of very high concern for authorization. In practical terms, the regulatory requirements for materials on the REACH candidate list often preclude their use in a variety of applications, which is problematic because there are very limited substitutes for beryllium. The United States agrees that there can be important health risks from exposure to beryllium, but believes the appropriate way to manage that risk is by controlling human exposure rather than effectively banning the substance. The United States worked diligently in 2015 to provide a science-based risk assessment for public consultations in Germany and the EU that explains methods to address the risks from beryllium without losing the benefits of this crucial raw material.
Simplifying Labeling Requirements in India: We secured two important changes to India's labeling requirements that will benefit U.S. exporters.
First, as announced at the U.S. - India Trade Policy Forum (TPF) meetings in October 2015, India has changed its policy concerning mandatory labeling of retail prices on goods. Specifically, rather than require the maximum retail price of goods to be preprinted on the goods' packaging, India is adopting a more flexible approach that allows importers to instead affix a sticker with the retail price information to the package at the port. This change will benefit U.S. exporters by allowing them to avoid producing unique packaging for the Indian market.
Second, consistent with the commitment India made at the 2014 TPF, the Division of Legal Metrology at the Ministry of Consumer Affairs in May 2015 eliminated conflicting labeling requirements regarding wholesale and retail goods, whereby labeling requirements were determined by weight rather than end use. India explicitly clarified in the 2015 TPF joint statement that the 'determination of wholesale and retail labeling requirements are not dependent on the weight of imported food consignments' thus eliminating uncertainty for U.S. exporters.
For the full 2016 National Trade Estimate report, please click here.
For a fact sheet on the 2016 National Trade Estimate Report, please click here.
For a fact sheet on the trade enforcement section of the 2016 National Trade Estimate Report, please click here.
For a fact sheet on the key barriers to digital trade highlighted in the 2016 National Trade Estimate Report, please click here.
For a fact sheet on the Sanitary and Phytosanitary barriers section of the 2016 National Trade Estimate Report, please click here.
For a fact sheet on the Technical Barriers to Trade section of the 2016 National Trade Estimate Report, please click here.
The 2016 National Trade Estimate (NTE) Report on Foreign Trade Barriers is the fourteenth annual report that surveys significant barriers to American exports. In accordance with section 181 of the Trade Act of 1974, as added by section 303 of the Trade and Tariff Act of 1984 and amended by section 1304 of the Omnibus Trade and Competitiveness Act of 1988, section 311 of the Uruguay Round Trade Agreements Act, and section 1202 of the Internet Tax Freedom Act, the Office of the U.S. Trade Representative is required to submit to the President, the Senate Finance Committee, and appropriate committees in the House of Representatives, an annual report on significant foreign trade barriers. A list of the major developments of the National Trade Estimate Report can be seen here.