TERMppr US Trade Policy

8/8/2019 TERMppr US Trade Policy

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The openness and transparency of the U.S. trade regime have been key contributing factors to theefficiency that characterizes the U.S. economy as a whole. the United States has taken further steps toliberalize its trade regime, although mostly on a preferential basis. In the face of the economicuncertainty prevalent in early 2008, U.S. welfare would be best promoted by exploiting the adjustmentcapacity of the U.S. economy and continuing to reduce barriers to market access and other distortingmeasures, including those that result from high levels of assistance in agriculture and energy. Moreover,

ongoing efforts to incorporate additional security considerations into U.S. trade and investment policiesshould be pursued within the framework of the risk-based approach that seems to have served the UnitedStates well. Further reforms undertaken on a MFN basis would also lessen distortions in global marketsand strengthen the multilateral trading system, as the United States is both the world's largest singleeconomy and trader.

(1) TRADE AND INVESTMENT POLICY FRAMEWORKy The United States considers that the expansion of international trade is vital to its national

security and economic growth. Support for the multilateral trading system is at the core of U.S.trade policy, and the Administration remains committed to a comprehensive Doha agreement. Inthis context, the United States has made numerous proposals in a wide range of negotiating areas.

It has fulfilled its notification obligations, except for preferential rules of origin, agricultural tariffquotas, and government procurement statistics. The United States has made progress inimplementing several WTO rulings calling for changes to U.S. legislation, but rulings relating tointellectual property rights and anti-dumping have not yet been fully implemented.

y While the United States considers that a comprehensive multilateral agreement offers the bestchance to create expanded trade and development opportunities around the world, it believes thatbilateral and regional trade liberalization can also provide significant benefits. Consistent withthis, the United States has continued to enter into free-trade agreements (FTAs). In early 2008, ithad FTAs with 14 countries, up from seven during its last Review, and three at the start of thecurrent Administration in early 2001; FTAs with another six countries had been completed butwere not yet in force. The United States grants unilateral preferences to developing countries

under several schemes, which may be conditional on adherence to criteria that the U.S. authoritiesconsider promote sound policies and allow beneficiaries to expand trade and investment

y Trade promotion authority, which the Administration views as an important tool for achievingU.S. trade objectives, expired on 1 July 2007. In May 2007, the Administration andcongressional leaders agreed to a trade policy "template", which has been described as providinga "clear and reasonable path forward" for congressional consideration of pending FTAs, and as"open[ing] the way for bipartisan work on Trade Promotion Authority". The template containsprovisions on labour, environment, intellectual property, investment, government procurement,and port security.

(2) SECTORAL POLICIESy The United States is one of the world's largest producers, exporters, and importers of agricultural

products. As measured by the OECD, overall support to agriculture, including through bordermeasures and government payments, accounted for 11% of gross farm receipts in 2006, downfive percentage points from 2004. This decline largely reflects higher commodity prices. Certaincommodities, including sugar and milk, continue to receive high levels of assistance. Moreover, payments under some commodity programmes (e.g., marketing assistance loans) provideincentives for resource use that may be inconsistent with market signals and may affect tradewhen supported output finds its way into world markets. Certain aspects of domestic support


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programmes were challenged under multilateral rules during the period under review. Theexpiration of the 2002 Farm Act, and the current environment of high commodity prices, offers afavourable juncture to introduce policy changes aimed at further improving the market orientationof the agriculture sector to the benefit of both consumers and taxpayers.

y The United States is a major producer and consumer of minerals and energy U.S. energy policyplaces emphasis on domestic energy production and the provision of tax and other incentives forthe supply of alternative and renewable fuels. Assistance for domestic ethanol productionincludes tax incentives and import duties; these measures could have a significant impact onglobal production patterns. The Energy Policy Act of 2005 contains provisions to addressshortcomings in the regulatory framework governing electricity markets. In computing fueleconomy standards, NAFTA-produced automobiles are treated differently from other vehicles.

y The United States is the world's leading producer of manufactured goods. Multifactorproductivity and output in the sector have expanded in absolute terms but the sector's share intotal U.S. value added and employment has declined. Manufacturing tariffs are generally low, but high tariffs have sheltered a few industries, such as textiles, clothing, and footwear andleather, from international competition.

y The U.S. telecommunications market, the world's largest by revenue, is open to foreign participation and is highly competitive. During the period under review, certain unbundlingrequirements were eliminated to level the regulatory playing field between broadband internetaccess providers. A comprehensive intercarrier compensation reform plan is under consideration.The United States maintains several media ownership restrictions, with the objective ofpromoting competition, diversity, and "localism" in media production. The relaxation of one ofthese restrictions was approved in late 2007, and rules have been adopted to facilitate entry intothe video services market.

y During the period under review, there have been no major changes in U.S. legislation with respectto financial services. However, the sector has been considerably affected by the sub-prime

mortgage turmoil, suggesting the need for improvements in financial supervision. In this respect,changes to existing regulations are under consideration to restrict certain mortgage practices, andto consolidate and strengthen supervision.

y Initial entry into the U.S. market through the establishment or acquisition of a nationallychartered bank subsidiary by a foreign person is permitted in all states. U.S. bank subsidiaries offoreign banks are granted national treatment. However, foreign-owned banks, unlike domestic banks, are required to establish an insured banking subsidiary to accept or maintain domesticretail deposits of less than US$100,000. Branches and agencies of foreign banks have similarpowers to banks but agencies may not accept deposits from U.S. citizens or residents. At the statelevel, there are limitations to the acquisition or establishment of a state-chartered bank, and forthe establishment of branches or agencies.

y Regulation of insurance services is primarily at the state level. Insurance companies, agents, and brokers must be licensed under the law of the State in which the risk they intend to insure islocated, but U.S. states have taken steps to facilitate multi-state operations. Foreigners mayacquire an insurance company licensed in all states, incorporate subsidiaries in 47 states, oroperate as branches in 36 states and the District of Columbia. A federal tax on insurance policiescovering U.S. risks is imposed at a rate of 1% of gross premiums on all reinsurance but at 4% ofgross premiums with respect to non-life insurance when the insurer is not subject to U.S. netincome tax on the premiums.


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y The profitability of U.S. airlines has improved, and by end 2007 all major U.S. airlines hademerged form bankruptcy protection. Foreign ownership in U.S. carriers is limited by statute to25% of the voting shares. The provision of domestic air services is permitted only by U.S.carriers. The Fly America Act generally requires government-financed transportation to be onU.S.-flag air carriers, but foreign participation is possible under international agreements. TheUnited States has bilateral aviation agreements with 97 countries, of which 79 are open skies

agreements. The U.S.-EU Air Transport Agreement, provisionally applied since 30 March 2008,introduced a number of significant liberalization measures. All public-use U.S. airports withcommercial services are currently owned by state or local governments. A law was passed in1996 establishing an Airport Privatization Pilot Program; one airport participated butsubsequently returned to public ownership.

(3) DEVELOPMENTS ON TRADE AND INVESTMENT(i) Merchandise trade1. The depreciation of the U.S. dollar, coupled with strong growth in the rest of the world, has had apositive impact on U.S. exports during the period under review. Total exports increased by almost 15%

in 2006 while imports grew by about 11%.1

Merchandise exports (including re-exports) totaled US$1.04trillion in 2006 and imports reached US$1.92 trillion (Tables AI.1 and AI.2). Manufactures representedthe main export category, with some 80% of the total in 2006; machinery and transport equipment, andcomputers and electronic products were the main exported manufactures, but their share declined over2004-06. At the same time, the share of primary products grew to 15.8% in 2006, due mainly to thegrowing importance of mining.

2. Manufactures also represented the main import category, with just over 70% of the total in 2006.Among manufactures, strongest import growth was in iron and steel, but the main product groups weremachinery and transport equipment, which accounted for 37.7% of imports. Overall, imports of primaryproducts expanded significantly faster than imports of manufactures.

3. U.S. trade is geographically diversified. NAFTA partners continued to account for the largestshare of exports in 2006, with 22.2% going to Canada and 12.9% to Mexico (Table AI.3). Brazil andVenezuela were the main non-NAFTA partners in the Americas. The European Union is the secondlargest export market for U.S. products; its share stayed at the same level over 2005-06. Among Asianpartners, exports to China showed to strong growth both in value terms and percentages, to reach 5.3% ofthe total in 2006. Japan remained the main Asian market, although its share declined continuouslybetween 2000 and 2006.

4. Canada remained the largest U.S. supplier, accounting for 16% of U.S. imports in 2006, althoughits share declined by one percentage point between 2004 and 2006 (Table AI.4). However, imports fromChina expanded strongly over 2004-06 (from 13.8% to 15.9% of total imports), almost equaling Canada'sshare as the U.S. main supplier.

(ii) Trade in services5. In 2006, the surplus in cross-border services trade amounted to US$96.6 billion; the surplusincreased in both 2005 and 2006, as exports grew faster than imports. The largest surpluses are inbusiness, professional, and technical services, and in royalties and licence fees, which represent receiptsand payments for intellectual property rights, followed closely by financial services, other private


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services, and education; the largest deficit is in insurance (Table AI.5). The fastest growing exports werein telecommunications services, financial services, insurance services, and business and professionalservices; transport exports, consisting of travel and passenger fares, also expanded The main tradingpartners for U.S. services exports in 2006 were the United Kingdom (11.8% of the total), Japan (10.2%),Canada (9.7%), Mexico (5.6%), and Germany (5.1%). The main partners for imports were the UnitedKingdom (12%), Japan (7.8%), Canada (7.6%), Germany (6.8%), and Bermuda (4.9%).2

6. Services sold abroad by U.S. companies through their majority-owned foreign affiliates toforeigners reached US$528.5 billion in 2005, the most recent year for which data were available.3Affiliates in Europe accounted for some 52% of the total, followed by the Asia Pacific region (24%), andLatin America (11%). The value of services sold by foreign multinationals through their U.S. majority-owned affiliates to U.S. persons was US$389 billion. In 2005, sales of services by U.S. multinationalsthrough their majority-owned affiliates increased by 9.4% over the previous year, while foreignmultinationals' sales of services through their majority-owned U.S. affiliates to U.S. persons rose by1.9%.

(iii) Foreign direct investment7. The United States' foreign direct investment position increased to US$1.79 trillion in 2006, in linewith the 11% average annual growth in 1994-2004.4 Foreign direct investment inflows for 2006 totaledUS$180.6 billion5. Net equity capital inflows were the largest contributor to this flow, with a surge of73% in nominal terms, after declining for five consecutive years. Reinvested earnings, which remainedabove historical norms for a third consecutive year, contributed to the increase in the inward position;valuation adjustments and inter-company debt investment made smaller contributions.The United Kingdom remained the largest source, with an investment position of US$303.2 billion, or17% of the total, followed by Japan with US$211 billion (12%), and Germany and the Netherlandsaccounting for 11% each. The largest equity capital increases by foreign investors in 2006 were infinance and insurance, chemicals, computers and electronic products, manufacturing, and machinerymanufacturing.

8. U.S. direct investment abroad increased by 12% in 2006 to US$2.38 trillion; this was above the(less than 1%) increase in 2005, and in line with the average annual growth rate of 13% in 1994-2004.Foreign direct investment outflows for 2006 totaled US$235.4 billion. Reinvested earnings were thelargest contributor to the increase in 2006; net equity capital investment also contributed to the increasebut was the smallest recorded since 1996.6 Three host countries: the United Kingdom (U$364.1 billion,or 15% of the total), Canada (US$246.5 billion or 10%), and the Netherlands (US$215.7 billion, or 9%),accounted for over a third of the total investment position. Equity capital increases for the acquisition orestablishment of new affiliates in 2006 were largest in the United Kingdom, the Netherlands, andLuxembourg. Over two-thirds of capital contributions to existing foreign affiliates were to affiliates inEurope. Among industries, the largest contributions were to affiliates in finance and insurance. Thelargest stocks of FDI in the United States are owned by United Kingdom, Japan, Dutch, and Germaninterests. The highest stocks of U.S. FDI abroad continue to be in the United Kingdom and Canada

(Table AI.6).


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TRADE POLICIES AND PRACTICES BY MEASURE

y The united states accords mfn tariff treatment to all wto members except cuba. all except twotariff lines are bound, generally at low rates, which lends predictability to the u.s. trade regime.the average applied mfn tariff was 4.8% in 2007, virtually the same as in 2004 (4.9%). theapplied mfn rate for agriculture (wto definition) fell from 9.7% in 2004 to 8.9% in 2007,

reflecting the rise in commodity prices and the resulting decline in the ad valorem equivalentrates. at 4%, the 2007 average applied mfn rate for non-agricultural products remainedunchanged. around 2% of all lines are subject to tariff quotas; high out-of-quota tariffs are oneof the main forms of import protection for certain agricultural products. tariff preferences may begranted by the united states either unilaterally or in the context of free-trade agreements.

y Security considerations have continued to drive significant changes relating to customsprocedures. The SAFE Port Act of 2006 codified and expanded existing cargo and supply-chainsecurity programmes, and established additional filing requirements for importers. Under theAct, from mid 2012, all containers must be scanned prior to being loaded on a U.S.-bound vessel.However, the Act recognizes that this requirement could have a significant impact on trade, andoffers the possibility of delaying the implementation for specific ports.

y Anti-dumping (AD) remains a key trade policy instrument for the United States. At end 2007, theUnited States maintained some 232 AD measures in force, affecting imports from 39 trading partners. During 2005-07, the United States initiated some 33 investigations and applied19 provisional measures, but imposed only 11 final duties. Applied AD duties can be substantial,up to 280%, and thus affect significantly U.S. domestic prices. As most AD measures areimposed on intermediate goods like steel and chemical products, they increase costs fordownstream producers and consumers. Although temporary, some 40% of the AD measures inforce have in practice granted protection for over 10 years. The percentage of U.S. importsdirectly affected by AD measures is less than 0.1% and the number of AD orders issued since2005 has been lower than in earlier years. Nevertheless, it would be important to ensure that ADmeasures do not retard adjustment to changing conditions in international markets.

y At end 2007, the United States maintained no safeguard measures but 31 countervailing (CV)orders were in place involving 13 trading partners. Although the Continued Dumping and

Subsidy Offset Act of 2000 (the Byrd Amendment) was repealed in 2005, AD and CV dutiesassessed before October 2007 continue to be distributed to U.S. producers who supported thepetition for investigation. Total disbursements were estimated at approximately US$1.9 billionfrom the entry in force of the Byrd Amendment to end 2007.

y Two WTO Members, Cuba and Myanmar, are subject to economic sanctions. The United Statesmaintains export restrictions and controls for national security or foreign policy purposes, or toaddress shortages of scare materials. U.S. entities are required to apply for an export licence incertain cases when they intend to transfer controlled technologies to foreign nationals in theUnited States.

y The United States is an important producer and exporter of goods and services that embodyknowledge and other intellectual developments. The United States seeks to promote increasedIPR protection and enforcement through a variety of mechanisms, including FTAs, bilateral

intellectual property agreements and bilateral investment treaties. The United States also pursueshigh standards of IP protection through its engagement in WTO activities and negotiations.


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Tariffs

MFN and other trading partners

y The general policy of the United States, embodied in Section 126 of the Trade Act of 1974, is togrant MFN tariff treatment to all its trading partners.7 The United States may adopt laws that

deny MFN tariff treatment to particular countries. All WTO Members except Cuba receive MFNtreatment. In addition, the United States does not grant MFN treatment to the DemocraticPeople's Republic of Korea. Imports from these two countries are subject to the "statutory rate",which is the rate imposed by the Smoot-Hawley Tariff Act of 1930, as amended. The statutoryrate is shown in column 2 of the Harmonized Tariff Schedule. Permanent MFN tariff treatmentwas extended to Ukraine in March 2006 and to Viet Nam in December 2006.8

y The United States accords MFN tariff treatment on a temporary and conditional basis to:Azerbaijan, Belarus, Kazakhstan, Moldova, Russia, Tajikistan, Turkmenistan, and Uzbekistan, allof which have entered into bilateral commercial agreements with the United States.9 Thesecountries are denied permanent, unconditional MFN tariff treatment on the basis of Title IV of theTrade Act of 1974, which requires that the U.S. President deny MFN tariff treatment to any non-market economy that was ineligible for such treatment on 3 January 1975 (when the legislation

was enacted), and that denies or seriously restricts the rights of its citizens to emigrate. Thisprovision is known as the Jackson-Vanik amendment.

Applied MFN tariffs

y The United States levies customs duties on the basis of the f.o.b. value of imports at the point ofexport.

y The Harmonized Tariff Schedule of the United States was enacted by the Omnibus Trade andCompetitiveness Act of 1988 and became effective in January 1989. It is based on theHarmonized Commodity Description and Coding System (HS).10 The 2008 Harmonized TariffSchedule reflects the fourth amendment to the HS (HS 2007). The following analysis is based on

the 2007 Harmonized Tariff Schedule of the United States. Although the 2008 HarmonizedTariff Schedule was available at the time of preparing this report, ad valorem equivalents of non-

ad valorem tariff rates were available only for 2007.

Anti-dumping and countervailing measures

y The United States considers that effective rules on anti-dumping and subsidies are necessary toaddress injurious dumped and subsidized imports, and can also contribute toward sustaining supportfor further trade liberalization. In this respect, it has noted that, "maintaining confidence in theenforcement of agreed rules and support for further trade liberalization, addressing the harmful effectsof trade distorting practices, and eliminating or reducing those practices to the extent possible areessential to the long term viability of the WTO and the economic prosperity of its Members"

y At end 2007 some 51% of all AD measures were being applied on iron and steel products; 14% onchemicals and pharmaceuticals; and 10% on agricultural and forestry products (Table III.4).


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Table III.4

Anti-dumping measures by country and product, 2002-07

Year 2002 2003 2004 2005 2006 2007

Trading partner /region 266 278 273 268 256 232

Argentina 6 6 6 6 5 3

Brazil 14 15 14 14 13 10

Canada 8 9 9 6 3 2

China 43 52 55 57 58 62

EC countries (27) 64 64 57 53 50 36

India 10 10 12 13 14 14

Indonesia 6 6 5 5 6 6

Japan 30 32 29 27 23 21

Korea Rep. of 18 19 19 17 16 14

Mexico 8 8 9 10 9 8

Russia 2 3 3 4 4 8

South Africa 3 4 4 4 3 3

Chinese Taipei 17 17 17 16 16 15

Thailand 5 5 7 8 8 7

Turkey 4 4 3 3 3 3

Ukraine 6 6 6 6 6 7

Other America 5 4 4 5 5 3

Other Asia (including Australia) 12 9 10 10 10 7

Other Europe 5 5 4 4 4 3

y The level of AD duties applied during the period under review varied widely. The definitive dutiesapplied during 1 July 2005-31 December 2007 range from a low of 3.91% to a high of 280.57%;provisional duties applied over the same period range from 3% to 280.57%.

(b) Countervailing dutiesy Between two and three CVD investigations were initiated per year during the period under review

(Table III.5). In contrast to 12 orders reported in the previous Review of the United States, two finalCVD orders were issued during the period. Three investigations were terminated with an ITA orUSITC negative determination.11

y Overall, there were 31 CVD orders in place at end December 2007, down from 57 in 2004, involving13 trading partners.12 Some 60% of the CVD orders in place related to steel products.13


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Table III.5

Countervailing duty investigations and measures imposed, 1980-07

1980-90 1991-01 2002 2003 2004 2005 2006 2007

Investigation initiations 240 89 4 5 3 2 3 5

Preliminary injury determinations, affirmative 210 71 3 2 3 2 3 3

Preliminary countervailing duty

determination, affirmative, of which

.. .. 3 2 3 2 3 3

provisional measure applied .. .. 3 2 3 2 3 3

Final countervailing duty determinations 176 71 3 2 1 2 0 0

Final injury determinations, of which .. .. 2 2 0 2 0 0

duty order imposed 107 44 2 2 0 2 0 0

Revocations 83 93 0 0 2 4 11 7

Safeguards

y U.S. legislation on global safeguards is contained in Sections 201-204 of the U.S. Trade Act of 1974,as amended by the URAA. Under Section 201 of the Act, the USITC determines whether an article isbeing imported in such increased quantities that it is a substantial cause of serious injury, or threatthereof, to the U.S. industry producing a like or directly competitive article. If the USITC makes anaffirmative determination, it recommends to the President relief that would address the serious injuryor threat thereof, and facilitate the adjustment of the domestic industry to import competition. ThePresident makes the final decision whether to provide relief and the form and amount of relief, within

60 days of receipt of an USITC report.

y Under U.S. law, safeguard measures may include tariffs, quantitative restrictions, or tariff quotas,import licensing and other measures as listed in Section 203 of the Act. NAFTA partners areexcluded from the application of safeguard measures, unless they individually account for asubstantial share of total imports, and it is shown that they make an important contribution to seriousinjury.

Quantitative restrictions and licensing

y The United States bans imports from certain countries for foreign policy purposes. Most importsfrom Cuba, the Democratic People's Republic of Korea, Iran, Myanmar, and certain areas of Sudan

are subject to bans or approval requirements.

14

The Office of Foreign Assets Control of theDepartment of the Treasury is responsible for administering these measures.

y Most other U.S. quantitative restrictions and controls on imports are designed to safeguard consumerhealth, or protect public morals or the environment. These restrictions and controls are implemented


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through licensing requirements for fish and wildlife, plants, animals, and plant and animal products,narcotic drugs, alcoholic beverages, tobacco, firearms, explosives, and nuclear facilities, and aredescribed in the latest U.S. reply to the questionnaire on import licensing procedures.15

y Imports of basic steel mill products are subject to automatic licensing, irrespective of their origin.

y The importation of natural gas or liquefied natural gas (LNG) is authorized unless it is determined notto be in the public interest

y The Marine Mammal Protection Act (MMPA) prohibits the importation of marine mammals and theirparts or products into the United States

y The United States also prohibits imports of shrimp and shrimp products harvested with technologythat may adversely affect sea turtle species

y Imports of certain textile and clothing products from China are subject to "agreed levels"

y Licences are required to import agricultural products at the in-quota tariff rate

MEASURES DIRECTLY AFFECTING EXPORTS

y A Shipper's Export Declaration (SED) is used to keep a record of exports and act as a sourcedocument for official U.S. export statistics SEDs must be prepared, regardless of value, for allshipments requiring an export licence or destined for countries restricted by the ExportAdministration Regulations. SED, are prepared by exporters or their agent and delivered to theexporting carrier, who is required to present it to the CBP at the port of export.

y The number of documents required for exporting varies according to the product and destinationTransactions involving products subject to export restrictions and controls require approval in theform of licences from the U.S. Government

Export restrictions and controls

y The United States maintains export restrictions and controls for national security or foreign policypurposes, or to address shortages of scarce materials. Export controls can be based on U.S. domestic


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legislation, policy decisions, United Nations resolutions or on U.S. participation in four non-bindingexport control regimes: the Wassenaar Arrangement, which deals with controls of conventional armsand dual-use exports, the Missile Technology Control Regime (MTCR), the Nuclear Suppliers Group(NSG), and the Australia Group (AG, chemical and biological non-proliferation). The United Statesparticipates in the Chemical Weapons Convention (CWC). Export controls are implemented througha licensing system; they also cover re-exports.

y Export controls for nuclear materials, facilities, and equipment used for civil purposes are regulated by the Atomic Energy Act of 1954, as amended (AEA), and administered by the U.S. NuclearRegulatory Commission (NRC).

y The Bureau of Industry and Security (BIS) in the USDOC is responsible for formulating andimplementing export control policy on dual-use items (items with both commercial and possiblemilitary use), software, and technology Items that have dual uses are listed on the Commerce ControlList (CCL) and are subject to general export prohibitions, unless allowed by an export licence or otherauthorization, which is dependent upon the item classification, the destination, the end-user, and theend-use.16

y A licence is required for exports or re-exports to Cuba of all commodities, technology, and softwaresubject to the EAR, with a few exceptions. The BIS generally denies applications, althoughapplications for certain products are reviewed on a case-by-case basis. In May 2006, the BISamended the EAR clarifying the application of License Exception Baggage (BAG) for Cuba, revisedin June 2004

y The Nuclear Regulatory Commission (NRC) is responsible for licensing exports of nuclear materials,facilities, and equipment used for civil purposes, pursuant to the Atomic Energy Act of 1954, asamended.

Duty drawback, tax exemptions, and other assistance

y The United States maintains a duty drawback programme. Customs duties and certain internal taxesand fees resulting from importation are refunded following the export of the imported product or ofthe article manufactured from the imported product.17 The statutory definition of duties, taxes, andfees subject to drawback includes customs duties, marking duties, and internal revenue taxes "whichattach upon importation.

Promotion and marketing assistance

y The Trade Promotion Coordinating Committee (TPCC) coordinates the export promotion activities of19 federal agencies.18 TPCC members allocated around US$1.5 billion to promotion activities infiscal year 2006.19 The Department of Agriculture, the Department of Commerce, and the StateDepartment accounted for almost 85% of the total.

y The TPCC must submit a national export strategy to Congress each year. It also publishes theExport Programs Guide, which describes some 100 export promotion programmes maintained by its

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members.20 The International Trade Administration of the Department of Commerce managesExport.gov, an online access point to TPCC members' information on export promotion.

y U.S. States also maintain general programmes to promote exports. The State InternationalDevelopment Organizations seeks to support the activities of trade promotion agencies in 39 States

Section 301 and related actions

y Sections 301-309 of the Trade Act of 1974 (commonly known as Section 301) provide the UnitedStates with the authority to enforce trade agreements, resolve trade disputes and open foreign marketsto U.S. goods and services. Section 301 is implemented by the USTR to investigate foreign tradepractices that are considered to affect U.S. exports of goods and services or impair U.S. rights underinternational trade agreements. Under Section 301, the United States may impose trade sanctions onforeign countries that either violate such agreements or maintain such practices.

Trade-related intellectual property rights

y The United States is a member of the World Intellectual Property Organization (WIPO), andparticipates in a large number of international conventions and treaties related to IPRs

y The United States seeks to promote increased IPR protection and enforcement through a variety ofmechanisms. The United States has addressed IPR subject matter in the context of bilateralintellectual property agreements and memoranda of understanding, bilateral investment treaties, andtrade and investment framework agreements. IPR issues have also been included in U.S. free-tradeagreements in force or pending approval or implementation.21 The United States pursues highstandards of IP protection through its engagement with countries seeking accession to the WTO.

y The United States is an important producer and exporter of goods and services that embodyknowledge and other intellectual developments. In this respect, IP has been recognized in Congressas the backbone of U.S. economic competitiveness and the only sector where the United States has a

trade surplus with every nation in the world.22

It has also been noted that over 50% of U.S. exportsdepend on some form of IP, and that IP assets today represent more than one third of the value ofU.S.-based corporations and over 17% of GDP. The United States traditionally posts a balance-of-payments surplus in IP-related trade, as measured by royalties and licence fees. In 2006, net receiptswere US$36 billion and gross receipts US$62.4 billion.

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y Table III.8Summary of intellectual property protection in the United States corresponding to TRIPS obligations, 2008

Form Main legislation Coverage Duration

Copyright and

related rights

Copyright Law, Title 17 of the U.S.

Code

Authors' rights in the artistic, literary and

scientific domains; to enjoy copyright

protection a work must be an originalcreation

Life of author plus 70 years for

works created on or after

1 January 1978.

Anonymous works,

pseudonymous works, and

works made for hire protected

for 95 years after publication

or 120 years after creation,

whichever is the shortest

Geographical

indications

The Lanham Act of 1946, as amended

(15 U.S.C. 1051 et seq), and Federal

Alcohol Administration Act of 1935

Protection against misuse of geographic

signs and names of viticultural

significance

Unlimited

Industrial

designs

Patent Law of the United States, as

incorporated in Title 35 of the U.S.

Code

The ornamental design of a product is

entitled to the protection afforded to

designs, provided it is new

14 years from date of grant

Patents Patent Law of the United States, as

incorporated in Title 35 of the U.S.

Code

Any inventions that are new, useful, and

non-obvious. Apply to process, machine,

manufacture or composition of matter

20 years from filing date

Plant variety

protection

Plant Variety Protection Act

Amendments of 1994 (7 U.S.C. 2321

et seq.)

New plant varieties: not previously sold

for purposes of exploitation of the variety,

in the United States, more than 1 year

prior to the date of filing; or in any area

outside of the United States more than 4

years prior to the date of filing, or, in the

case of a tree or vine, more than 6 years

prior to the date of filing

20 years from the date of issue

of the certificate in the United

States

Topography

of integrated

circuits

Semiconductor Chip Protection Act of

1984

Topography of microelectronic

semiconductor products provided it is

original (the result of its creator's own

intellectual effort) and is not staple,

commonplace or familiar in the industry

at the time of its creation

10 years from filing date (or, if

earlier, from first use)

Trade marks The Lanham Act of 1946, as amended

(15 U.S.C. 1051 et seq)

Any sign used to identify and distinguish

goods or services from one enterprise

from those of another enterprise

10 years from registration

date; renewable indefinitely

as long as the trade mark is in

use in commerce that is

lawfully regulated by Congress

Trade secrets Economic Espionage Act of 1996 and

state laws

Any information, including a formula,

pattern, compilation, program device,

method, technique, or process, not

generally known to the relevant portion

of the public, that provides an economic

benefit to its holder, and is the subject of

reasonable efforts to maintain its secrecy

Indefinite


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y The United States considers that IP and innovation are of critical importance to the enhancedproductivity and growth of the U.S. economy23, and that IPRs can facilitate the commercialization ofinventions and encourage public disclosure.24 In its view, the ability of innovative industries tocontinue to develop new products depends largely on a strong and effective IP system and thecapacity to market new products effectively during the period when exclusive IPRs exist.25 Onerationale advanced for advocating IPR protection is that IP encourages innovation. In the U.S.

Patents

y Patents are granted by the United States Patent and Trademark Office (USPTO) using the first-to-invent rule; the United States is the only WTO Member to use this rule.

y Under its 21st Century Strategic Plan, a five-year plan devised in 2002, the USPTO has continued to promote the electronic processing and filing of patent applications and streamline the patentapplication process. In 2006, the USPTO implemented the Internet-based Electronic Filing System-Web (EFS-Web), to allow electronic patent application and document submission.26 The USPTOalso issued new procedures for accelerated examination effective 25 August 2006. 27 To improve patent quality, the USPTO issued rule changes in October 2007 which, when implemented, will

require applicants to identify with more specificity the claimed invention to be examined. TheUSPTO also published Examination Guidelines to help determinations regarding the obviousness ofclaimed inventions.

y The Stop Counterfeiting in Manufactured Goods Act of 2006 (P.L. 109-181) amended the federalcriminal code to revise provisions prohibiting the trafficking in counterfeit goods and services toinclude trafficking in labels or similar packaging of any type or nature bearing a counterfeit mark andthat are intended to be used on or in connection with the goods or services for which the genuinemark is registered The Act subjects to forfeiture any article that bears or consists of a counterfeitmark and any property used to violate the prohibition against counterfeit marks.


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TRADE POLICIES BY SECTOR

AGRICULTURE

y The United States is among the world's largest producers, exporters, and importers of agriculturalproducts. The value of agricultural production was approximately US$292 billion in 2007.28 The

value of crop production, which accounts for around 51% of the total value of agricultural production,is forecast to reach a record level in 2008 (US$176 billion), primarily as a result of higher commodityprices. Agricultural exports were US$90 billion in 2007, around 9% of total U.S. exports.29 Mainexports were grains and feeds, soybeans, and red meats and their products. Agricultural imports wereUS$72 billion, around 4% of total imports. Main imports were vegetables, fruits, and grains andfeeds.

y The Agricultural Adjustment Act of 1938 and the Agricultural Act of 1949 constitute what is knownas the "permanent" legal framework governing commodity price and income support in the UnitedStates. The U.S. Congress regularly enacts legislation that amends and suspends provisions of thepermanent laws. The last such legislation was the Farm Security and Rural Investment Act of 2002(the 2002 Farm Act), signed into law in May 2002. Additionally, Congress provides ad hoc

emergency and supplementary assistance under separate legislation.

y The Commodity Credit Corporation (CCC), a federal corporation operated by the U.S. Department ofAgriculture, manages most financial transactions for federal agricultural programmes. Annualaverage net CCC outlays under the 2002 Farm Act (fiscal years 2002-07) were US$16.8 billion,around one billion more than the annual average for the previous six fiscal years.

y The United States has taken steps to comply with the Dispute Settlement Body's recommendationsand rulings regarding a number of U.S

Border measures

y This is slightly more than twice the protection afforded to the non-agricultural sector.The averageMFN applied tariff for agriculture (WTO definition) in 2007 was 8.9%y Parts of tariff quotas are generally allocated to specific countries. This is the case for most products

subject to tariff quotas, including beef, certain dairy products, peanuts and peanut butter, chocolate

crumb, and tobacco. Apart from the tariff quotas specified in its WTO schedule of commitments, the

United States has allocated additional tariff quotas to its preferential trading partners under free-

trade agreements.

y Access to tariff quotas is on a first come, first served basis, except for dairy products and sugar.Access for dairy is granted to "historical" importers, importers designated by the government of an

exporting country, and on the basis of a lottery.According to the U.S. International TradeCommission, some agricultural products, including beef, dairy, ethyl alcohol, sugar and sugar-containing products, and tobacco remain subject to high import barriers.30 For example, theCommission estimates that the removal of barriers on imports of raw and refined sugar would expandimports of these two products by 281% and 553%, and increase U.S. welfare by US$811 million.


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The Commission estimates that the elimination of barriers on imports of dairy products would addUS$573 million to U.S. welfare; the associated increase in imports of these products would rangebetween 88% and 380%.

Export subsidies, credit,insurance, and guarantees

y The United States scheduled export subsidy reduction commitments under the WTO Agreement onAgriculture for 13 product groups.

y Under the Export Enhancement Program (EEP) and the Dairy Export Incentive Program (DEIP), theUnited States provides cash bonus payments to exporters of eligible commodities based on thequantity exported. The commodities eligible under the EEP are wheat, wheat flour, rice, frozenpoultry, barley, barley malt, table eggs, and vegetable oil. Under the DEIP, the eligible commoditiesare milk powder, butterfat, and various cheeses. Both programmes are authorized through15 March 2008. There have been no expenditures under the EEP since fiscal year 2002, and nobonuses under the DEIP since 2004.

y The United States operates two main export credit guarantee programmes: the Export CreditGuarantee Program (known as GSM-102) and the Facility Guarantee Program (FGP)The Intermediate Export Credit Guarantee Program (GSM-103), and the Supplier Credit GuaranteeProgram were discontinued in 2005.

y Under GSM-102, the CCC is authorized to guarantee the repayment of credit made available tofinance U.S. exports of agricultural goods on credit terms of up to three years. The CCC generallyguarantees 98% of the principal and a portion of the interest. It determines the eligibility ofagricultural products based on market potential.

y Under the FGP the CCC extends credit guarantees to U.S. banks for financing export sales of U.S.manufactured goods and services that improve agriculture-related facilities in emerging markets,including storage, processing, and handling facilities. The export credit guarantee for sales of

manufactured goods and services is only extended to projects that are expected to benefit the exportof U.S. agricultural products.

MINING AND ENERGY

y The United States is among the world's largest producers of several minerals, including coal, salt,sulphur, aluminium, copper, and gold. The United States is the world's largest energy producer and

consumer. Energy is imported mostly in the form of petroleum. The United States has the twelfth

largest proved oil reserves in the world (21.8 billion barrels in December 2005).

y The federal Government has adopted measures to foster competition in wholesale electricity marketsduring the past three decades.31 In addition, some states began to allow retail customers to choose

their power supplier during the 1990. The Energy Policy Act of 2005 contains provisions to enhancewholesale competition in electricity. It allows the Federal Energy Regulatory Commission (FERC) to

impose civil penalties for market manipulation, expands the FERC's authority to review mergers and

generation facility transfers to prevent increases in the exercise of market power, and contains

provisions to enhance market transparency. The Act also includes provisions to strengthen the


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interstate power grid. As at April 2006, 16 states and the District of Columbia allowed at least some

competition at the retail level.

y The General Mining Law of 1872 governs access to hardrock minerals in federal public lands. 32 Itauthorizes a prospector to stake a claim to land believed to contain a mineral deposit, subject to the payment of certain fees. A claim gives the holder the right to develop the minerals, and may be

"patented" to transfer the ownership of the public land to the private sector. The law does not requirepayment of royalties. Many states have enacted laws governing mineral rights on state-owned lands.Although these laws vary considerably, many authorize royalty payments.33

y Federal oil and gas are subject to leasing under the Mineral Leasing Act. Companies seeking to leasefederal lands for oil and gas exploration must pay a "bonus bid" determined through a competitive

auction. Companies must pay royalties based on a percentage of the cash value of the oil and gas

produced and sold.

y The energy tax structure seeks to provide incentives for the supply of alternative and renewable fuels(Table IV.3). The Energy Policy Act of 2005, signed into law in August 2005, establishes tax

incentives for domestic energy production and energy efficiency valued at approximately US$15billion during 11 years.34 The Act requires a doubling of biofuel use and authorizes several federalenergy research and development programmes.

Table IV.3

Selected energy tax incentives, early 2007

Product DescriptionRevenue loss, fiscal year

2006 (US$ million)

Oil and gas Exploration firms may deduct 100% of "intangible drilling costs" in

first year (70% for integrated producers); 2 year amortization of

geological and geophysical expenses (5 years for integrated

producers)

1,100

Fuel minerals Independent producers and royalty owners can deduct 15% of

sales of oil and gas (up to 25% for marginal wells); between 10%

and 20% for other fuel minerals; only up to 1,000 barrels or

equivalent per day

1,000

Synthetic fuels from coal and gas

produced from either

geopressurized brine, Devonian

shale, tight formations, or biomass

Tax credit of US$6.40 per barrel of oil equivalent or US$1.13 per

1,000 cubic feet of gas

2,700

Biomass ethanol Tax credit of US$0.51 per gallon (blenders) plus US$0.10 per gallon

(small producers)

1,890

Electricity from wind, closed-loop

biomass, poultry waste, solar,

geothermal

Tax credit of US$0.018 per kWh 2,000


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y Domestically produced and imported passenger automobiles must meet the standards separately (two-fleet rule). A vehicle is considered to be part of the domestic fleet if at least 75% of the cost of thecontent is of U.S., Canadian, or Mexican origin.

y In December 2007, Congress amended the Energy Policy and Conservation Act, mandating standardsfor passenger automobiles and light trucks of model years 2011-2020 to ensure that the average fueleconomy of the combined industry-wide fleet of passenger automobiles and light trucks in model year2020 is at least 35 miles per gallon.35 The Department of Transportation must set these standards onthe basis of a vehicle attribute such as size.

y The Energy Policy and Conservation Act authorized in 1975 the creation of a Strategic PetroleumReserve (SPR) for the storage of up to one billion barrels of petroleum products.36 The SPR, which ismanaged by the Department of Energy, contained enough oil to offset 59 days of U.S. oil imports asat 2006.37

MANUFACTURING

y The United States is the world's leading producer of manufactured goods, accounting for about 21%of world manufacturing value added.38 Foreign direct investment (FDI) is important in

manufacturing. Assets of majority-owned non-bank U.S. affiliates in the manufacturing sector were

almost US$1.1 trillion in 2005, almost one fifth of total U.S. affiliate assets.

y In general, tariffs on manufactured goods are low. The average applied MFN tariff for manufactures(WTO definition) was 4% in 2007. However, the U.S. International Trade Commission has identified12 sectors that are subject to relatively high tariffs.39 The Commission estimates that U.S. welfaregains from eliminating the tariffs on these products would range from US$2 million for edible fatsand oils to US$249 million for footwear and leather products.40 The increase in imports resultingfrom this liberalization would range from 2% to 19%.

y In addition to tariffs, government assistance to the manufacturing sector includes export financing,direct payments, and tax benefits

y The U.S. International Trade Commission has also identified textiles and apparel as subject torelatively high import barriers

y Manufacturers spent US$158 billion for research and development (R&D) performed in theUnited States in 2005.41 Federal government R&D expenditures in the manufacturing sector wereapproximately US$15.6 billion. These expenditures cut across a broad spectrum of industries,

including computers and electronic products, aerospace products and parts, chemicals, and


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machinery. Together these industries accounted for approximately 72% of federal funds for R&D inmanufacturing.

y The United States maintains programmes to assist shipyards or ship-repair facilities. The FederalShip Financing Program provides guarantees for private-sector financing to construct, reconstruct,and recondition commercial vessels in U.S. shipyards.42 Guarantees may not cover financing for theacquisition of foreign components unless the Department of Transportation grants a waiver

Services

y The services sector is by far the largest contributor to output and employment in the U.S. economy.The private services sector accounted for 67.8% of GDP and 65.6% of total employment in 2006, or

80.2% and 83.4%, respectively, if government services are included. Private services industries have

been expanding faster than GDP during the period under review and contributed 2.75 percentage

points to GDP growth in 2006. The United States made wide-ranging sector-specific commitments

under the General Agreement on Trade in Services (GATS).43 These include 11 of the 12 broadly

defined service areas,

y The United States maintains several media ownership restrictions, with the objective of promotingcompetition, diversity, and "localism" in media production. Under the rules in effect in January

2008, the dual network rule prohibits mergers between two or more of the "top four" networks,

that is, ABC, CBS, Fox, and NBC.

Financialservices

yThe U.S. financial services sector accounted for 7.8% of GDP in 2006, about half of which wasgenerated by banking activities, some 30% by insurance, 18% by securities trading activities, and 2%by funds, trusts, and other financial vehicles.44 The sector employed 6.1 million people in 2005, orsome 4.3% of total employment.

y The Gramm-Leach-Bliley Act (Financial Services Modernization) of 1999 (GLBA) is the main lawregulating the consolidated financial sector. The GLBA allows domestic and foreign banks toaffiliate with entities engaged in other activities that are financial in nature, or incidental orcomplementary to a financial activity, provided certain capital and managerial standards are met.

y U.S. bank subsidiaries of foreign banks are treated as domestic banks. Branches and agencies offoreign banks have similar powers to banks and are subject to similar supervision; agencies,

however, may not accept deposits from U.S. citizens or residents.

y The Financial Services Regulatory Relief Act of 2006 introduced changes to U.S. financial servicelegislation, which affect banking, securities, and insurance business. The Act authorized payment ofinterest on funds maintained by a depository institution at a Federal Reserve bank and authorized the


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Federal Reserve Board to reduce to 0% the reserves required to be maintained by a depositoryinstitution as of 1 October 2011. The current statutory requirement ranges from 3% to 14%. The Actalso amended the Home Owners' Loan Act (HOLA) to prescribe conditions under which a federalsavings association may convert to a national or state bank, including prior FDIC approval for eachbank if more than one national or state bank results from the conversion.

y Foreign banks may establish a commercial presence in the U.S. market either by establishing federal-or state-licensed branches, agencies, or representative offices, or by establishing or acquiring anational or state subsidiary bank.

y The operations of foreign banks in the United States are mainly governed by the InternationalBanking Act of 1978 (IBA), which provides for the granting of national treatment to foreign banksand offers them the option of establishing federally licensed branches and agencies in addition tostate-licensed offices.

y Initial entry into the U.S. market through the establishment or acquisition of a nationally charteredbank subsidiary by a foreign person is permitted in all states. Initial entry or expansion by a foreign person (but not a domestic person) through acquisition or establishment of a state-chartered

commercial bank subsidiary is prohibited or limited in 29 states.

y The U.S. insurance market is open to foreign direct investment through acquisition of a licensedinsurance company. Market access for foreign companies may also take place through incorporationin a state as a subsidiary of a foreign insurance company, with the exception of Minnesota,Mississippi, and Tennessee. Foreign companies may also be licensed to operate as branches in 36states and the District of Columbia.

y A federal tax on gross premium income is charged at 1% on all life insurance and on reinsurance, andat 4%, on non-life insurance premiums covering U.S. risks paid to companies not incorporated underU.S. law, or under the laws of countries with which the United States has double taxation treaties.

Air transport services

y Over a quarter of U.S. trade by value is moved via air cargo, which is the main mode of transportationfor high value and perishable goods. U.S. air traffic accounts for about one third of the world aviationmarket, and 17 of the world's 30 busiest airports are located in the United States. There were some19,854 airports in 2006, of which 5,270 for public use.

y The U.S.-EU Air Transport Agreement, signed 30 April 2007, is scheduled to be appliedprovisionally from 30 March 2008. The agreement, which replaces bilateral agreements between theUnited States and EU Member States, introduced a number of liberalization measures with respect toair traffic freedoms, ownership and control, provision of aircraft with crew, and U.S. governmentprocured transportation

y The United States has bilateral aviation agreements with some 100 countries, of which 79 are openskies agreements (OSAs), as defined by the DOT.45 The DOT views OSAs as providing anenvironment that produces the most competitive and price-sensitive service for consumers.


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9. Table AI.6Major indicators of U.S. inbound and outbound direct investment by selected country and sector, 2006

U.S. direct investment abroad

(outbound investment)

Foreign direct investment in the

United States (inbound investment)

Stocks US$ billion

Stocks US$ billion

All countries 2,384.0 1,789.1

United Kingdom 364.1 303.2

Canada 246.5 159.0

Netherlands 215.7 189.3

Switzerland 90.1 140.3

Bermuda 108.5 2.8

Japan 91.8 211.0

Germany 99.3 202.6

Singapore 60.4 2.4

Mexico 84.7 6.1

France 65.9 158.8

Ireland 83.6 28.6

Australia 122.6 25.7

Hong Kong, China 38.1 3.5

Luxembourg 82.6 130.9

Brazil 32.6 2.1

By industry

Mining 136.1

Utilities

Manufacturing 503.5 593.4

Wholesale trade 164.3 242.2

Retail trade .. 32.9

Information 74.4 126.0

Depositary credit intermediation (banking) 67.6 149.0

Finance (except depositary inst.) and

insurance484.8 257.7

Real estate and rental and leasing


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U.S. direct investment abroad

(outbound investment)

Foreign direct investment in the

United States (inbound investment)

Stocks US$ billion

Stocks US$ billion

Professional, scientific, and technical services 57.4 62.3

Holding companies (non-bank) 710.3 ..

Other industriesa 185.5 272.2

Table AII.3

Overview of preferential trade agreements, early 2008

AgreementEntry into

force

WTO

notificationTariffelimination

Main products

excluded from

tariffelimination

Additional coverage

NAFTACanada January 1994 L/7176 (GATT)

and S/C/N/4

U.S. duties on most

goods eliminated in 1998

Dairy products,

cocoa products,peanuts, sugar, andsyrups

Services, investment,

competition policy,government procurement,intellectual property rights

Mexico January 1994 L/7176 (GATT)and S/C/N/4

U.S. duties on mostgoods eliminated

immediately; remainderphased out over 5, 10, or15 years (the last phase

out period ended on1 January 2008)

None Services, investment,competition policy,

government procurement,intellectual property rights

Israel September 1985

(Agreement onTrade in

AgriculturalProducts ineffect since

2004)

L/5862 (GATT) U.S. duties on most

goods eliminated in 1995

Dairy products,

beef, peanuts, sugarand sugar-

containing products,cotton, seasonings

Government procurement

Jordan December 2001 WT/REG134/1

and S/C/N/193

Most U.S. duties phased

out over periods ofbetween 2 and 10 years

Tobacco and

tobacco products

Services, intellectual

property rights,environment, labour

Chile January 2004 WT/REG160/N/1,S/C/N/262

U.S. duties on mostgoods eliminatedimmediately; remainder

phased out over periodsof between 2 and 12

years

None Services, investment,competition policy,government procurement,

intellectual property rights,environment, labour

Singapore January 2004 WT/REG161/N/1,S/C/N/263

U.S. duties on mostgoods eliminated

immediately; remainderphased out over 4, 8, or10 years

None Services, investment,competition, government

procurement, intellectualproperty rights,environment, labour

Australia January 2005 WT/REG184/N/1,S/C/N/310


phased out over periods

Dairy products, andsugar and sugarcontaining products

Services, investment,competition, government

procurement, intellectual

property rights,


22/34

AgreementEntry into

force

WTO

notificationTariffelimination

Main products

excluded from

tariffelimination

Additional coverage

of between 4 and 18

years

environment, labour

Morocco January 2006 WT/REG208/N/1,

S/C/N/362

U.S. duties on most

goods eliminatedimmediately; remainderphased out over periods

of between 5 and 18years

None Services, investment,

government procurement,intellectual property rights,environment, labour

Bahrain August 2006 WT/REG219/N/1,S/C/N/375


phased out over periodsof 5 or 10 years

None Services, governmentprocurement, intellectualproperty rights,

environment, labour

Centralamerica-

dominicanrepublic

March 2006 (elsalvador), april

2006 (hondurasand nicaragua),

july 2006(guatemala),

and march 2007(dominicanrepublic)

Wt/reg211/n/1-4and s/c/n/365,

366, 372, 391

U.s. Duties on mostgoods eliminated

immediately; remainderphased out over periodsof 5 to 20 years

Sugar Services, investment, governmentprocurement, intellectual property

rights, environment, labour

Agreementssigned but not yet in force

Colombia n.a. n.a. U.S. duties on mostgoods eliminatedimmediately; remainder

phased out over periodsof between 5 and 15years

Sugar Services, investment, competitionpolicy, government procurement,intellectual property rights,environment, labour

Costa Rica n.a. n.a. U.S. duties on mostgoods eliminated

immediately; remainderphased out over periodsof 5 to 20 years

Sugar Services, investment, governmentprocurement, intellectual property

rights, environment, labour

Panama n.a. n.a. U.S. duties on most

goods eliminatedimmediately; remainder

phased out over periods

of between 5 and 17 year

Sugar Services, investment, government

procurement, intellectual propertyrights, environment, labour

Peru n.a. n.a. U.S. duties on mostgoods eliminated

immediately; remainderphased out over periodsof between 5 and 17

years

Sugar Services, investment, competitionpolicy, government procurement,


Korea n.a. n.a. U.S. duties on mostgoods eliminated

immediately; remainderphased out over periodsof between 2 and 15

years

None Services, investment, competitionpolicy, government procurement,


Oman n.a. n.a. U.S. duties on mostgoods eliminatedimmediately; remainder

phased out over periodsof 5 or 10 years

None Services, investment, governmentprocurement, intellectual propertyrights, environment, labour


23/34

General overview of preferential rules of origin

Substantial transformation criteriaMain tolerance

provisionsa

Cumulationb

CTHc Minimum local value added

Technical

testd

Free-trade agreements

U.S.-Israel No 35% of appraised value No None Only up to a maximum of

15% of value

NAFTA Yes 60% under transaction value

methodor 50% under net cost

method; different thresholds

apply to certain products

under HS 34-37, 64, and 87

Yes 7% of value; textiles

and apparel: total

weight of fibres or

yarns must not exceed

7% of total weight

Full

U.S.-Jordan No 35% of appraised value No None Only up to a maximum of

15% of value

U.S.-Chile Yes 45% under build-down method

or 35% under build-up method;

different thresholds apply to

products under HS 64, 84, and

87


and apparel: total

weight of fibres or


7% of the total weight

Full

U.S.-

Singapore

Yes 45% under build-down method



products under HS 64, 84, 86,

and 87


and apparel: total

weight of fibres or


7% of the total weight

Full

U.S.-

Australia





and 90


and apparel: total

weight of fibres or


7% of total weight

Full

U.S.-

Morocco

Limited to

certain

products in

HS6-9, 12,

13, 20-22,

39, 72, 85,

and 87, and

to textiles

35% of appraised value Yes None; textiles and

apparel: total weight

of fibre or yarns must

not exceed 7% of total

weight

Full


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Substantial transformation criteriaMain tolerance

provisionsa

Cumulationb

CTHc Minimum local value added

Technical

testd

and apparel

U.S.-

Dominican

Republic-

Central

America





84, 85, 87, and 92


and apparel: total

weight of fibres or


10% of the total

weight

Full; under certain

conditions, accumulation

with Canada and Mexico for

woven apparel, subject to a

cap

U.S.-

Bahrain

Limited to

certain

products in

HS 17, 18,

20, and 21,

and to

textiles and

apparel

35% of appraised value No None; textiles and

apparel: total weight

of fibre or yarns must

not exceed 7% of total

weight

Full

Summary analysis of the MFN tariff, 2007


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Description

MFN

No. of linesAverage

a

(%)

Range

(%)

Coefficient of

variation

(CV)

Total 10,253 4.8 0 - 350 2.5

HS 01-24 1,648 8.7 0 - 350 3.0

HS 25-97 8,605 4.1 0 - 67.3 1.4

By WTO category

WTO Agriculture 1,595 8.9 0 - 350 3.0

- Animals and products thereof 139 4.2 0 - 100 2.4

- Dairy products 166 21.4 0 - 177.2 1.1

- Coffee and tea, cocoa, sugar etc. 315 9.7 0 - 90.7 1.4

- Cut flowers, Plants 57 1.7 0 - 6.8 1.2

- Fruit and vegetables 439 6.3 0 - 131.8 1.9

- Grains 21 1.6 0 - 11.2 1.6

- Oil seeds, fats and oils and their products 95 6.3 0 - 163.8 3.4

- Beverages and spirits 100 4.8 0 - 51.8 1.8

- Tobacco 47 56.0 0 - 350 2.2

- Other agricultural products n.e.s. 216 2.0 0 - 67.3 2.8

WTO Non-agriculture (incl. petroleum) 8,658 4.0 0 - 63.9 1.4

- WTO Non-agriculture (excl. petroleum) 8,630 4.1 0 - 63.9 1.4

- - Fish and fishery products 201 2.0 0 - 35 2.2

- - Mineral products, precious stones and precious

metals 540 3.5 0 - 38 1.5

- - Metals 1,015 1.9 0 - 23.8 1.4

- - Chemicals and photographic supplies 1,843 3.7 0 - 6.5 0.7

- - Leather, rubber, footwear and travel goods 397 7.3 0 - 63.9 1.6

- - Wood, pulp, paper and furniture 526 0.7 0 - 14 2.8

- - Textile and clothing 1,659 9.1 0 - 42.1 0.7

- - Transport equipment 242 2.5 0 - 25 1.9

- - Non-electric machinery 790 1.4 0 - 9.9 1.4


26/34

Description

MFN

No. of linesAverage

a

(%)

Range

(%)

Coefficient of

variation

(CV)

- - Electric machinery 529 2.2 0 - 15 1.0

- - Non-agriculture articles n.e.s. 888 3.0 0 - 35.8 1.2

- Petroleum 28 2.2 0 - 7 1.2

By ISIC sectorb

Agriculture and fisheries 488 5.5 0 - 350 5.9

Mining 116 0.3 0 - 10.5 3.7

Manufacturing 9,648 4.8 0 - 350 2.0

By HS section

01 Live animals & products 437 9.4 0 - 177.2 1.8

02 Vegetable products 499 4.1 0 - 163.8 2.6

03 Fats & oils 66 3.7 0 - 19.1 1.3

04 Prepared food etc. 646 12.2 0 - 350 3.1

05 Minerals 201 0.6 0 - 13.1 2.9

06 Chemical & products 1,710 3.5 0 - 6.5 0.8

07 Plastics & rubber 375 3.7 0 - 14 0.7

08 Hides & skins 220 4.3 0 - 20 1.1

09 Wood & articles 237 2.5 0 - 18 1.4

10 Pulp, paper etc. 279 0.0 0 - 0 n.a.

11 Textile & articles 1,594 9.0 0 - 67.3 0.8

12 Footwear, headgear 174 13.9 0 - 63.9 1.1

13 Articles of stone 298 5.2 0 - 38 1.2

14 Precious stones, etc. 105 3.0 0 - 13.5 1.1

15 Base metals & products 995 1.9 0 - 23.8 1.4

16 Machinery 1,340 1.7 0 - 15 1.2

17 Transport equipment 253 2.4 0 - 25 1.9

18 Precision equipment 514 3.0 0 - 19.6 1.1

19 Arms and ammunition 39 1.6 0 - 10 1.5


27/34

Description

MFN

No. of linesAverage

a

(%)

Range

(%)

Coefficient of

variation

(CV)

20 Miscellaneous manufacturing 264 3.3 0 - 35.8 1.3

21 Works of art, etc. 7 0.0 0 - 0 n.a.

ariffs according to U.S.preferential agreements, 2006

Average tariffs (per cent)

DescriptionNo. of

linesa

MFN Canadaa

Mexicoa

Australiaa

Bahrain Chilea

Total 10,311 4.7 0.6 0.0 1.5 1.0 1.0

HS 01-24 1,647 8.7 3.4 0.1 3.9 5.5 5.3

HS 25-97 8,664 4.0 0.0 0.0 1.1 0.1 0.2

By WTO category

WTO Agriculture 1,611 8.9 3.5 0.1 4.1 5.7 5.5

- Animals & products thereof 140 4.3 0.0 0.0 1.6 1.9 0.8

- Dairy products 166 22.5 17.5 0.5 2.2 16.0 18.1

- Coffee, tea, cocoa, sugar etc. 314 9.4 6.1 0.1 4.3 6.1 5.6

- Cut flowers, plants 60 1.4 0.0 0.0 0.1 0.0 0.0

- Fruit & vegetables 437 6.4 0.9 0.1 3.9 3.0 3.0

- Grains 21 1.7 0.0 0.0 0.3 0.0 0.0

- Oil seeds, fats & oils & their

products 100 6.0 3.1 0.3 3.6 3.5 2.9

- Beverages & spirits 100 4.8 0.3 0.2 0.2 2.8 2.8

- Tobacco 47 55.9 0.0 0.0 48.6 48.9 40.8

- Other agricultural products n.e.s. 226 2.0 0.7 0.0 0.2 0.5 0.6

WTO Non-agriculture (incl.

petroleum) 8,700 3.9 0.0 0.0 1.1 0.1 0.2

- WTO Non-agriculture (excl.

petroleum) 8,672 4.0 0.0 0.0 1.1 0.1 0.2

- - Fish & fishery products 192 2.0 0.0 0.0 0.0 0.1 0.3


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DescriptionNo. of

linesa

MFN Canadaa

Mexicoa

Australiaa

Bahrain Chilea

- - Mineral products, precious

stones & precious metals 530 3.3 0.0 0.2 0.9 0.2 0.7

- - Metals 1,011 1.9 0.0 0.0 0.1 0.0 0.1

- - Chemicals & photographic

supplies 1,828 3.7 0.0 0.0 0.0 0.0 0.0

- - Leather, rubber, footwear &

travel goods 389 7.0 0.0 0.3 1.1 1.3 1.6

- - Wood, pulp, paper & furniture 508 0.7 0.0 0.0 0.0 0.0 0.0

- - Textiles & clothing 1,658 9.0 0.0 0.0 5.0 0.0 0.0

- - Transport equipment 229 2.6 0.0 0.0 0.0 0.0 0.1

- - Non-electric machinery 853 1.3 0.0 0.0 0.1 0.0 0.0

- - Electric machinery 564 2.1 0.0 0.0 0.1 0.1 0.0

- - Non-agriculture articles n.e.s. 910 2.9 0.0 0.0 0.1 0.0 0.3

- Petroleum 28 2.1 0.0 0.0 0.0 0.0 0.2

By ISIC sectora

Agriculture & fisheries 493 5.6 0.4 0.1 4.0 3.9 3.3

Mining 118 0.3 0.0 0.0 0.1 0.0 0.0

Manufacturing 9,699 4.7 0.6 0.0 1.4 0.8 0.9

By HS section

01 Live animals & products 428 10.1 6.8 0.2 1.3 6.7 7.3

02 Vegetable products 505 4.0 0.6 0.1 2.1 1.9 1.6

03 Fats & oils 67 3.7 0.2 0.0 1.2 0.9 1.1

04 Prepared food etc. 647 12.0 3.7 0.2 7.5 8.1 7.3

05 Minerals 203 0.6 0.0 0.0 0.0 0.0 0.0

06 Chemicals & products 1,707 3.5 0.0 0.0 0.0 0.0 0.0

07 Plastics & rubber 373 3.7 0.0 0.0 0.0 0.0 0.0

08 Hides & skins 222 4.3 0.0 0.0 0.0 0.0 0.6

09 Wood & articles 193 2.2 0.0 0.0 0.1 0.0 0.1

10 Pulp, paper etc. 288 0.0 0.0 0.0 0.0 0.0 0.0


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DescriptionNo. of

linesa

MFN Canadaa

Mexicoa

Australiaa

Bahrain Chilea

11 Textiles & articles 1,591 9.0 0.1 0.0 5.2 0.1 0.1

12 Footwear, headgear 168 13.4 0.0 0.6 2.5 3.1 3.0

13 Articles of stone 283 5.0 0.0 0.3 1.7 0.5 1.4

14 Precious stones, etc. 105 3.0 0.0 0.0 0.1 0.0 0.0

15 Base metals & products 991 1.9 0.0 0.0 0.1 0.0 0.1

16 Machinery 1,444 1.6 0.0 0.0 0.1 0.0 0.0

Table AIII.3 (cont'd)

17 Transport equipment 240 2.6 0.0 0.0 0.0 0.0 0.1

18 Precision equipment 531 3.0 0.0 0.0 0.1 0.0 0.5

19 Arms & ammunition 40 1.6 0.0 0.0 0.0 0.0 0.0

20 Miscellaneous manufacturing 278 3.2 0.0 0.0 0.1 0.0 0.2

21 Works of art, etc. 7 0.0 0.0 0.0 0.0 0.0 0.0

By stage of processing

First stage of processing 962 3.7 0.4 0.0 2.2 2.3 1.9

Semi-processed products 3,395 4.2 0.1 0.0 1.2 0.1 0.1

Fully-processed products 5,954 5.2 0.8 0.1 1.6 1.2 1.4


DescriptionNo. of

linesa

MFN DR CAFTAa

Israela

Jordanb

Moroccoa

Singaporea

Total 10,311 4.7 0.8 0.3 0.7 1.8 1.3

HS 01-24 1,647 8.7 4.8 1.9 3.1 5.9 4.7

HS 25-97 8,664 4.0 0.0 0.0 0.3 1.0 0.7

By WTO category

WTO Agriculture 1,611 8.9 5.0 2.0 3.2 6.1 4.7

- Animals & products thereof 140 4.3 1.1 1.1 0.5 1.8 1.2

- Dairy products 166 22.5 17.3 5.8 6.9 17.4 12.8


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DescriptionNo. of

linesa

MFN DR CAFTAa

Israela

Jordanb

Moroccoa

Singaporea

- Coffee, tea, cocoa, sugar etc. 314 9.4 6.0 5.8 2.4 6.5 4.9

- Cut flowers, plants 60 1.4 0.0 0.0 0.0 0.0 0.1

- Fruit & vegetables 437 6.4 0.9 0.3 0.6 3.1 3.0

- Grains 21 1.7 0.0 0.0 0.0 0.0 0.3

- Oil seeds, fats & oils & their

products 100 6.0 3.1 0.1 1.2 3.8 2.8

- Beverages & spirits 100 4.8 0.3 0.3 1.2 3.4 2.5

- Tobacco 47 55.9 48.6 0.0 55.3 51.0 38.2

- Other agricultural products n.e.s. 226 2.0 0.8 0.7 0.3 0.8 0.6

WTO Non-agriculture (incl.

petroleum) 8,700 3.9 0.0 0.0 0.3 1.0 0.7

- WTO Non-agriculture (excl.

petroleum) 8,672 4.0 0.0 0.0 0.3 1.0 0.7

- - Fish & fishery products 192 2.0 0.0 0.0 0.1 0.1 0.8

- - Mineral products, precious

stones & precious metals 530 3.3 0.0 0.0 0.2 0.4 1.3

- - Metals 1,011 1.9 0.0 0.0 0.0 0.1 0.3

- - Chemicals & photographicsupplies 1,828 3.7 0.0 0.0 0.0 0.0 1.2

- - Leather, rubber, footwear &

travel goods 389 7.0 0.3 0.0 1.4 1.3 3.4

- - Wood, pulp, paper & furniture 508 0.7 0.0 0.0 0.0 0.0 0.1

- - Textiles & clothing 1,658 9.0 0.0 0.0 1.0 4.6 0.1

- - Transport equipment 229 2.6 0.0 0.0 0.3 0.0 1.0

- - Non-electric machinery 853 1.3 0.0 0.0 0.0 0.1 0.1

- - Electric machinery 564 2.1 0.0 0.0 0.0 0.2 0.2

- - Non-agriculture articles n.e.s. 910 2.9 0.0 0.0 0.1 0.0 0.7

- Petroleum 28 2.1 0.0 0.0 0.0 0.0 0.2

By ISIC sectora

Agriculture & fisheries 493 5.6 3.1 0.1 3.3 3.9 3.2


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DescriptionNo. of

linesa

MFN DR CAFTAa

Israela

Jordanb

Moroccoa

Singaporea

Mining 118 0.3 0.0 0.0 0.0 0.0 0.1

Manufacturing 9,699 4.7 0.7 0.3 0.6 1.7 1.2

By HS section

01 Live animals & products 428 10.1 7.0 2.6 2.8 7.4 5.5

02 Vegetable products 505 4.0 0.6 0.0 0.4 1.8 1.7

03 Fats & oils 67 3.7 0.2 0.2 0.1 1.5 1.1

04 Prepared food etc. 647 12.0 7.2 3.2 5.7 8.6 6.8

05 Minerals 203 0.6 0.0 0.0 0.0 0.0 0.1

Table AIII.3 (cont'd)

10. Table AIV.1Products covered by tariff quotas

Products

Average tariff ratea

2007 (%)Bound

import

quota

Fill rateb

2002

(%)

Fill rateb

2003

(%)

Partners with reserved access

(% of WTO quota)c

In-quotaOut-of-

quota

Beef, fresh, chilled or frozen (t) 4.5 26.4 696,621 83 90 Canada and Mexico (no limit),

Australia (57.6), New Zealand (32.5),

Japan (0.03), others (9.9)

Cream ('000 litres) 3.5 6.5 6,695 65 62 New Zealand (87.3)

Evaporated/condensed milk (t) 2.9 22.4 6,857 87 73 EU (21.8), Canada (17.0), Australia

(1.5)

Non-fat dried milk (t) 3.7 26.9 5,261 98 22 Global, no country allocation

Dried whole milk (t) 3.7 31.7 3,321 96 97 Global, no country allocation

Dried cream (kg) 9 109.9 99,500 7 90 Global, no country allocation

Dried whey/buttermilk (t) 6.7 42.9 296 22 23 Global, no country allocation

Butter (t) 4.4 19.1 6,977 98 99 Global, no country allocation

Butter oil/substitutes (t) 8 67 6,080 100 100 Global, no country allocation

Dairy mixtures (t) 12.8 29.5 4,105 100 100 Australia (27.7), EU (4.2)

Blue cheese (t) 14.4 34.4 2,911 97 99 EU (96.1), Chile (2.3), Czech Republic

(1.5), Argentina (0.07)

Cheddar cheese (t) 12 20.4 13,256 98 99 New Zealand (56.8), Australia (25.4),

EU (8.5), Canada (6.4), others (2.8)

American type cheese (t) 14.3 49.7 3,523 99 93 New Zealand (57.0) Australia (28.5),

EU (9.6), others (4.8)

Edam and Gouda cheese (t) 12.1 33.9 6,816 98 95 EU (81.2), Costa Rica (10.2),

Argentina (2.9), Uruguay (2.8), others


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Products


2007 (%)Bound

import

quota

Fill rateb

2002

(%)

Fill rateb

2003

(%)


(% of WTO quota)c

In-quotaOut-of-

quota

(3.0)

Italian type cheese (t) 13.9 48 13,481 99 98 Argentina (51.2), EU (33.5), Uruguay

(7.1), Romania (3.5), Hungary (2.8),

Poland (1.8), Others (0.1)

Swiss/Emmenthal cheese (t) 6.4 33.6 34,475 83 80 EU (62.6), Norway (20.3), Switzerland

(10.6), Australia (1.5), Czech

Rep.(1.0), Hungary (1.0), others (3.0)

Gruyere process cheese (t) 9.3 30.4 7,855 86 82 EU (74.1), Switzerland (16.0), others

(1.0)

Other cheese NSPF (t) 10 41.5 48,628 99 95 EU (56.7), New Zealand (25.2),

Switzerland (3.6), Australia (3.3),

Poland (2.7), Canada (2.5), Israel

(1.5), others (4.3)

Low fat cheese (t) 10 22.7 5,475 65 56 EU (74.2), New Zealand (17.5),

Australia (4.4), Poland (3.1), Israel(0.9)

Peanuts (t) 9.1 139.8 52,906 100 100 Argentina (84.0), others (16.0)

Chocolate crumb (t) 4.5 13.6 26,168 79 76 EU (32.1), Australia (8.3)

Low-fat chocolate crumb (t) 5.9 14 2,123 0 0 Ireland (80.1), United Kingdom (19.9)

Infant formula containing oligo

saccharides (t)

17.5 33.2 100 100 55 Global, no country allocation

Table AIV.1 (cont'd)


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Products


2007 (%)Bound

import

quota

Fill rateb

2002

(%)

Fill rateb

2003

(%)


(% of WTO quota)c

In-quotaOut-of-

quota

Green ripe olives (t) 7 1.6 730 0 0 Global, no country allocation

Place packed stuffed olives (t) 1.1 1.2 2,700 31 38 Global, no country allocationGreen olives, other (t) 2 2.4 550 69 68 Global, no country allocation

Green whole olives (t) 2.4 1.7 4,400 19 11 Global, no country allocation

Mandarin oranges (Satsuma) (t) 0 0.3 40,000 100 100 Global, no country allocation

Peanut butter and paste (t) 0 131.8 20,000 78 83 Canada (73.1), Argentina (15.4),

others (9.3)

Ice cream ('000 litres) 20 36.5 5,668 57 71 EU (20.0), New Zealand (11.4),

Jamaica (0.7)

Animal feed containing milk (t) 7.5 26.9 7,400 1 1EU (75.1), New Zealand (24.1),

Australia (0.8)

Raw cane sugar ('000 t) 3.1 59.9 1,117 81 94 Mexico (2.1), others (95.3)

Other cane or beet sugars or syrups

('000 t)

3.3 45.4 22 151 96 Canada (29.4), Mexico (8.6),

others (62.1)

Other mixtures over 10% sugar (t) 9.2 20.6 64,709 99 99 Canada (91.6), others (8.4)

Sweetened cocoa powder (t) 6.7 13.5 2,313 15 28 Global, no country allocation

Mixes and doughs (t) 10 29.5 5,398 100 100 Global, no country allocation

Mixed condiments and seasonings (t) 7.5 14.1 689 45 45 Global, no country allocation

Tobacco (t) 17.7 350 150,700 75 71 Brazil (53.3), Malawi (8.0), Zimbabwe

(8.0), Argentina (7.1), EU (6.6),

Guatemala (6.6), others (10.5)

Short staple cotton (t) 0 13.7 20,207 2 0 Global, no country allocation

Harsh or rough cotton (t) 2.7 1.6 1,400 0 0 Global, no country allocation

Medium staple cotton (t) 1.4 6.8 11,500 7 2 Global, no country allocation

Long staple cotton (t) 0.7 14.9 40,100 13 34 Global, no country allocation

Cotton waste (t) 0 0.7 3,335 0 0 EU (26.3), Japan (5.7), Canada (4.0),

India and Pakistan (1.2), China (0.3)

Cotton processed but not spun (kg) 5 67.3 2,500 100 100 Global, no country allocation


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