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Washington, D.C. – The Office of the U.S. Trade Representative (USTR) today announced the release of its 2008 National Trade Estimate Report (NTE). The NTE report describes significant barriers to U.S. trade and investment, as well as the actions taken by USTR to address those barriers.
In 2007, USTR worked with four key trading partners on free trade agreements (FTAs) that will give U.S. goods and services significantly improved access to the markets of Peru, Colombia, Panama and South Korea. The vast majority of products from Peru, Colombia and Panama already have virtually duty-free access to the U.S. market under existing trade preference programs.
“In 2007, Congress enacted legislation to approve and implement our landmark FTA with Peru. We are actively working with Congress to enact legislation for the other three FTAs,” U.S. Trade Representative Susan C. Schwab said. “Approval and entry into force of these pending FTAs will make American goods and services more competitive in these markets, and more competitive relative to other trading partners.
“At the same time that we were negotiating new agreements, USTR was actively enforcing the agreements we already have,” Ambassador Schwab said. “We filed a number of very strong cases with the World Trade Organization (WTO) to combat barriers to the free and fair trade of American goods and services, including four cases against China in the past 14 months.”
The NTE report, delivered to Congress on March 28 lays out the successes and ongoing challenges to free and open trade for American goods and services. The report discusses the Administration’s efforts to eliminate trade barriers and unfair trade practices for American workers who produce and export industrial goods, agricultural products and services to the 62 major trading partners covered in the report.
Successes for the Administration, American workers, and small and medium sized businesses in 2007 as reported in the 2008 NTE include:
• Signed FTAs under Trade Promotion Authority. By the end of June 2007, the United States signed agreements with Panama and South Korea and amended our FTAs with Peru and Colombia. In the case of agriculture, for example, these FTAs have the potential to generate over $3 billion annually in additional farm exports when fully implemented.
• Approval of FTA with Peru. The Administration worked with Congress on a bipartisan basis on the approval of the United States-Peru Trade Promotion Agreement.
• Launched WTO cases against China. In 2007, USTR initiated WTO disputes challenging Chinese export and import substitution subsidies that are prohibited by WTO rules, China’s inadequate enforcement regime for intellectual property rights and China’s market access barriers to U.S. industries exporting and distributing publications, home entertainment videos, music and movies. Agreement was reached in November to resolve the case on prohibited subsidies, when China committed to eliminate the subsidies at issue effective January 1, 2008. Together with the case on financial information services that we launched in March 2008, this brings the total number of cases filed against China to six since March 2004, when we filed the first-ever case against China at the WTO.
• Worked to ensure full implementation of trade agreements. To ensure that the United States obtains the full benefits of its trade agreements, we conducted meetings with our trading partners to closely monitor implementation of these agreements. U.S. trading partners addressed a range of issues raised by U.S. officials in connection with our reviews of bilateral and regional FTAs, Trade and Investment Framework Agreements (TIFAs) and other trade dialogues, including those related to agriculture, investment, intellectual property and customs.
• Pursued successful conclusion of the Doha Round of trade talks in the WTO. A successful WTO Doha Round outcome is the top U.S. trade priority. The Round offers the potential to eliminate or significantly reduce trade barriers. The talks cover a broad range of topics including agriculture; industrial market access; services; rules; trade facilitation; and development. A multilateral agreement in the WTO offers the potential to generate economic growth here and around the world, and to help lift millions out of poverty.
• Proposed expanded market access for environmental goods and services. In 2007 the United States, together with the European Communities, submitted a ground-breaking proposal as part of the WTO Doha Round negotiations to reduce international barriers to trade in environmental goods and services, including in important “climate-friendly” technologies such as clean coal, wind energy and solar cells. The proposal lays a foundation for an innovative new WTO environmental goods and services agreement (EGSA).
• Expanded opportunities in Japan for U.S. finance and insurance products. Japan’s insurance and financial markets are among the largest in the world and an important marketplace for U.S. financial and insurance products. Japan’s citizens now have more options when it comes to insurance after all limits were lifted last year on the types of insurance products that U.S. insurers can sell through banks in Japan. Japan’s Government has also reaffirmed that recently privatized Japan Post financial businesses will operate with the same obligations and standards as those of U.S. and other private financial institutions. We will continue to monitor the privatization process of Japan Post to ensure transparency and fairness in the Japanese marketplace.
• Strengthened intellectual property rights (IPR) laws and enforcement around the globe. The three pending FTAs all contain world-class IPR provisions, and FTA partner countries such as the Dominican Republic and Oman overhauled their IPR laws as part of the FTA process. Some other examples of progress include actions against signal theft in Vietnam; raids of unlicensed optical disk plants in Russia; implementation of measures to reduce end-user software piracy and an agreement to strengthen enforcement against company name misuse in China; prosecutions for business software piracy in Taiwan; and seizures of counterfeit pharmaceuticals in Indonesia and Nigeria.
• Launched multinational Anti-Counterfeiting Trade Agreement (ACTA). Ambassador Schwab announced that the United States will work with key trading partners to set a higher international standard for combating counterfeiting and piracy by negotiating the ACTA which will bring together a group of countries who recognize, and are committed to strengthening, intellectual property enforcement.
• Made great strides in reducing telecommunications barriers. In the context of FTA negotiations, we obtained a pledge from Colombia to reduce its high licensing fee for international long distance service, which had long served as a barrier to market entry. Colombia removed the $150 million license fee in July 2007, replacing it with a fee of less than $1,000. In February 2007, we instituted a framework for speeding certification of U.S. telecommunications equipment exported to Japan through a Mutual Recognition Agreement. We also worked with India to reform licensing conditions in its newly liberalized telecommunications market, facilitating market entry for two U.S. operators.
• Lowered tariffs with FTAs. As of January 1, 2008, Mexico eliminated remaining duties on all goods as the last step in the implementation of the North American Free Trade Agreement. The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) has entered into force with five of six countries as of this year. Under this agreement, the vast majority of U.S. exports of consumer and industrial goods now enter duty-free into four Central American Parties – El Salvador, Guatemala, Honduras, and Nicaragua – and the Dominican Republic. Remaining duties will be phased out within 10 years. Over half of U.S. farm exports to these countries are now duty-free, and duties on nearly all other U.S. agricultural products will be phased out within 15 to 20 years. We continue to work with Costa Rica, the remaining CAFTA-DR nation, on implementation.
• Opened the Korean market for U.S. exporters. In addition to concluding the landmark United States-Korea Free Trade Agreement (KORUS) negotiations this past year, we worked with Korea to level the trade playing field in many areas. For example, Korea agreed to adopt an internationally recognized test procedure for energy efficiency testing by April 30, 2008, eliminating a standards barrier that had disadvantaged U.S. manufacturers and exporters of home appliances. Market access for U.S. rice also reached an important milestone, as the U.S. rice industry was awarded rice tenders for the highest level of U.S. rice exports since Korea began liberalizing its rice market. KORUS will, once entered into force, address the majority of the barriers U.S. exporters now face.
The NTE report also details areas where the Administration continues to fight to reduce trade barriers and ensure the fair application of global trading rules. Some priority areas include:
• Working with Congress to approve three pending FTAs. We signed FTAs with Colombia, Panama and South Korea under Trade Promotion Authority. We continue to work with Congress on the approval of those agreements.
• Pursuing a successful WTO Doha Round agreement. We received updated texts from WTO negotiating group chairmen and continue to move them forward in anticipation of a ministerial-level meeting.
• Vigorously enforcing U.S. rights. In addition to the previously noted cases, USTR has pursued other enforcement actions, including:
(1) European Union – We continue to challenge in the WTO the EU’s aircraft subsidies to Airbus and its undue delays in approving agricultural biotech products. We are also seeking resolution of a case regarding restrictions on U.S. beef and pressing in the new Cabinet-level Transatlantic Economic Council for resumption of U.S. poultry exports.
(2) Canada – USTR initiated two arbitrations against Canada under the bilateral Softwood Lumber Agreement – one concerning Canada’s implementation of the export measures mechanism in the agreement and the other concerning Canada’s circumvention of the agreement through grants or benefits to softwood lumber producers or exporters.
• Working with countries to open beef markets. We have made considerable progress on achieving the goal of eliminating non-science-based regulatory barriers to exports of beef and beef products from the United States. Canada, the Philippines, and Indonesia have implemented beef import regulations consistent with the World Organization for Animal Health (OIE) guidelines on Bovine Spongiform Encephalopathy (BSE), adding to the list of countries that have taken similar action – Peru, Colombia, Panama, Guatemala, Honduras, Jamaica, Barbados, Jordan, Bahrain, Kuwait, Oman, Saudi Arabia, and the United Arab Emirates. Russia has also agreed to OIE-consistent import measure on beef and beef products from the United States. The United States continues to work with all trading partners, particularly former top markets in Asia such as Korea, Japan, Taiwan and China, to fully reopen their markets consistent with OIE guidelines and the OIE’s May 2007 classification of the United States as a “controlled risk” country for BSE.
• Building the U.S.-Middle East Free Trade Area (MEFTA). We continue to work with partners in the Middle East, both current FTA partners and those in other stages such as TIFA dialogues and WTO accession candidates. We continue to promote President Bush’s MEFTA vision by encouraging countries in the region to liberalize their economies, thus creating opportunities for U.S. and Middle Eastern businesses and integrating the region more fully into the global economy.
• Continuing negotiations with African nations to open markets. Among the issues that continue to hamper U.S. exporters in several of the sub-Saharan African countries profiled in this year’s NTE Report are import bans on certain products, onerous customs procedures, corruption, and ineffective enforcement of intellectual property rights.
USTR works closely with other agencies in the U.S. government, including our embassies abroad, to prepare the NTE report, a document required by the Omnibus Trade and Competitiveness Act of 1988. Information used in preparing the report is gathered from a number of sources, including the Administration’s regular monitoring activities, our embassies, members of the public, and private and public sector trade advisory committees. These issues are also discussed in detail in meetings with Members of Congress throughout the year.
The USTR soon will announce the results of the Section 1377 Review, a report that focuses on the barriers facing U.S. telecommunications services and equipment providers and lays out the specific telecommunications-related issues on which USTR will focus this year. Thirty days after the NTE report is submitted to Congress, the USTR will issue its “Special 301” annual report on the adequacy and effectiveness of IPR protection by our trading partners around the world. The information gathered for the NTE report plays a key role in providing factual material for both of these reports.
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