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President Obama’s Trade Agenda: Unlocking Economic Opportunity for Americans
President Obama has made increasing American exports a centerpiece of his Middle Class Economics strategy because exports unlock economic opportunity for American workers and businesses. USTR’s efforts to spotlight and address barriers to Made-in-America exports all over the world reinforce that goal and are aimed at helping businesses of all sizes grow their exports and support more well- paying American jobs. Made-in-America exports are a major source of economic growth and support 11.7 million jobs across our country.
The National Trade Estimate Report, a companion to the President’s Trade Policy Agenda published by USTR in March, enhances awareness of these trade restrictions and facilitates discussions and negotiations aimed at reducing or eliminating these barriers. The report covers significant barriers, whether they are consistent or inconsistent with international trading rules, in our largest export markets, including 58 countries, the European Union, Taiwan, and Hong Kong.
USTR is continually working to unlock important export opportunities for American businesses, workers, farmers and ranchers, as we progress toward realizing President Obama’s trade agenda in order to promote economic growth, support more jobs, and strengthen the American Middle Class.
Among the most noteworthy changes in the last year, both positive and negative, in the barriers in U.S. export markets are:
TRANS-PACIFIC PARTNERSHIP (TPP)
- 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.
- Poultry, Pork, and Beef Exports to South Africa: In the context of an 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.
EUROPE AND THE MIDDLE EAST
- Localization Requirements: The Turkish government is reportedly moving to implement recent legislation that would bar electronic payment companies from the Turkish market if they do not locate personal data banks in Turkey. Such localization requirements would inhibit the further development and expansion of creative electronic services by U.S. companies in Turkey.
- Tariff and Non-Tariff Restrictions on Trade: In March 2015, Ecuador implemented a tariff surcharge ranging from 5 to 45 percent on 2,800 tariff lines, which represents approximately 32 percent of the value of Ecuador’s imports. Ecuador claimed that the tariff surcharge is a balance of payments safeguard measure, though Ecuador did not promptly notify this measure to the WTO Balance of Payments Committee, as it was required to do.
- Increased IP protection and enforcement: 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.
- Reforms in Energy and Telecommunications: In 2015, Mexico continued implementation of its major reforms of the energy and telecommunications sectors, creating significant new opportunities for U.S. investors, manufacturers and service suppliers. Full implementation of the 2014 energy reform legislation, which opened Mexico’s oil and gas sector to private participation for the first time since 1938, has created opportunities for greater private investment, including in power generation. In addition, due to the improved business climate in the telecommunications sector, AT&T acquired Iusacell and Nextel Mexico in 2015 to become Mexico’s third largest carrier and announced ambitious investment plans that were matched by competitors. Since the reforms, consumer prices in the wireless sector have declined by 20 percent (according to the Mexican government’s estimates), and market penetration, quality of service and carrier accountability have improved.
- United States – Korea Free Trade Agreement (KORUS) Implementation and Bilateral Issues: The United States and Korea cooperated closely to address implementation and bilateral concerns. For example, the consultations between the two countries achieved a more streamlined and effective regime on cross-border data transfers in the financial services area, as well as progress on automotive regulatory issues. In addition, we also began discussions on Korea’s regulatory environment.
- Technology Policy: 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.
- IP/Trade Secrets: China announced several efforts to revise China’s trade secrets system, including through changes to its civil judicial system. In early 2016, China also published draft revisions to its Anti-Unfair Competition Law for public comment that contain revisions with respect to trade secrets.
- Competition Policy: Taking into account the pro-competitive effect of intellectual property licensing, China agreed at the 2015 JCCT to attach great importance to maintaining coherent rules relating to intellectual property rights in the Anti-Monopoly Law (AML) context. China also committed to properly protect parties’ commercial secrets during anti-monopoly enforcement proceedings, and to ensure anti-monopoly enforcement agencies are free from intervention by other agencies in AML enforcement actions. At the 2015 United States-China Strategic and Economic Dialogue (S&ED), China clarified the jurisdiction of courts reviewing administrative AML decisions.
- Agriculture: 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.
- Theatrical film distribution: At the July 2015 S&ED meeting, China agreed to ensure that U.S. filmmakers could contract directly with private Chinese distributors, without interference from the film regulator or state-owned distributors, for the distribution of their films on a flat-fee basis.
- WTO dispute on China’s duties on U.S. high-tech steel: In the first ever compliance proceeding brought against China, the WTO confirmed that China did not comply with prior WTO rulings finding that China’s duties were inconsistent with WTO rules.
- Localized Safety Testing Requirements: For certain information and communications technology (ICT) products, the Indian government mandates that manufacturers register their products with laboratories affiliated or certified by the Bureau of Indian Standards (BIS), even if the products are already certified by internationally recognized laboratories. The ICT industry is facing significant delays in product registration due to lack of Indian government testing capacity, a cumbersome registration process, and tens of millions of dollars in additional compliance costs, which includes factory level as well as component level testing. The government of India has never articulated how such a domestic certification requirement advances India’s public safety objectives. The United States continues to actively raise concerns with this requirement bilaterally, including during meetings on the margins of the TPF, and multilaterally in the WTO TBT Committee.
- Intellectual Property Rights Concerns: 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.
- 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.
- In 2015, USTR closed a longstanding Generalized System of Preferences review of worker rights in the Philippines based on progress by the Philippines government in addressing worker rights issues in that country, including through reforms of labor laws and regulations.
- In 2015, the United States and Indonesia launched a new Insurance Dialogue to address market access issues and held the inaugural meeting of the Dialogue in November 2015. USTR will continue to engage Indonesia on key market access issues, including reinsurance, through the new dialogue in 2016.
- Indonesia administers trade restrictive import licensing requirements that impede imports of horticultural products, animals, and animal products. In 2015, a WTO panel was established at the request of the United States and co-complainant New Zealand and the first hearing was held in February 2016.