Washington D.C. – Today’s release of the final National Trade Estimate (NTE) on Foreign Trade Barriers under President Obama highlights the Administration’s robust efforts to hold trading partners accountable using the full set of enforcement tools. Using the NTE as a guide to trade barriers being thrown up across the globe, the President has worked to build a more capable enforcement system that has utilized resources from agencies across the government.
“The NTE has been a key component of the Administration’s unprecedented trade enforcement efforts,” said U.S. Trade Representative Michael Froman. “In response to barriers highlighted in previous NTE reports, this Administration has brought more enforcement cases at the WTO than any other member, used pre-dispute engagement to push trading partners to live up to their obligations, and strengthened U.S. government enforcement capacity through creation of the Interagency Trade Enforcement Center (ITEC). In the weeks and months ahead, we plan to build on this record by continuing to press enforcement actions and engagement with our trading partners in order to level the playing field for American workers, businesses, farmers, and ranchers.”
The Obama Administration’s Trade Enforcement Record was recently highlighted in a February report from the White House, which may be viewed here.
KEY RECENT EXAMPLES OF TRADE ENFORCEMENT ACTIONS IN PREVIOUS NTE REPORTS:
The 2016 National Trade Estimate Report catalogues barriers to U.S. export and other policy challenges. Read in the context of the challenges earlier editions of the NTE have described, and the progress in addressing these challenges through the full set of trade enforcement tools, this report also highlights the success of the Obama administration’s vigorous enforcement policy. Four highlights from the past year include:
Argentina Import Licensing: The 2014 NTE Report observed that “Argentina imposes a growing number of customs and licensing procedures and requirements, which make importing U.S. products more difficult. The measures include additional inspections, restrictions on entry ports, expanded use of reference prices, import license requirements, and other requirements such as importer invoices being notarized by the nearest Argentine diplomatic mission when imported goods are below reference prices. Many U.S. companies with operations in Argentina have expressed concerns that the measures have delayed exports of U.S. goods to Argentina and, in some cases, stopped exports of certain U.S. goods to Argentina altogether.”
Result: The Obama administration challenged Argentina’s 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.
Chinese AD/CVD Duties on High Tech Steel from the United States: The 2011 NTE report and several subsequent NTEs noted that “China initiated its first three countervailing duty investigations in 2009. Each of these investigations involved imports of products from the United States – grain-oriented electrical steel (GOES), poultry and automobiles. China’s conduct in these countervailing duty investigations raises the same types of concerns regarding transparency and procedural fairness as those raised by China’s antidumping practice. The methodologies used by China in these countervailing duty investigations also raise significant concerns, in light of WTO Subsidies Agreement rules.”
Result: The United States 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 Poultry SPS: The 2015 NTE report pointed out that “the United States has raised concerns about India’s SPS‐related trade restrictions in bilateral and multilateral fora including the Agriculture Focus Group of the TPF, the WTO SPS Committee, and Codex Alimentarius (Codex). The United States will continue to make use of all available fora with a view to securing the entry of U.S. dairy, poultry, pork, and other agricultural products into the Indian market.
Result: In June 2015, the WTO found in favor of the United States in a dispute challenging India’s ban on various U.S. agricultural products – such as poultry meat, eggs, and live pigs – allegedly to protect against avian influenza. The reports of the WTO panel and Appellate Body agreed with the United States that India’s ban breached numerous international trade rules, including because it was imposed without a scientific risk assessment.
India Solar Local Content and Solar Local Content II: The 2015 NTE Report detailed India’s solar local content policy as follows: “In 2010, India issued guidelines for the Jawaharlal Nehru National Solar Mission (JNNSM) which aims to bring 20,000 megawatts (MW) of solar based electricity online by 2022, as well as promote solar module manufacturing in India. In November 2014, Prime Minister Modi raised this target to 100,000 MW. The JNNSM is broken down into three multi-year phases and further divided into batches. Phase-I required all solar photovoltaic (PV) projects to use domestically manufactured solar modules and later expanded this to include solar cells. Furthermore, all solar thermal projects were required to meet a 30 percent local content threshold under both parts of Phase I. Phase-II (2013-2017), Batch I, which was initiated in October 2013, called for 750 MW of Grid Connected Solar, of which half (375 MW) must use domestically produced solar cells and modules. Moreover, under Phase II, Batch 1, this local content requirement (LCR) expanded to cover solar thin film technologies as well, which comprise the majority of the components made in the United States. The other 375 MW is open to any source regardless of origin. State-level projects are not obligated to abide by LCRs. The government of India is offering a number of incentives such as long-term contractually guaranteed rates to project developers who agree to use locally-sourced equipment.”
Result: In February 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.
