This Administration's trade enforcement strategy is simple: we are focused not on process, but on producing real results that create opportunities for American workers, farmers and companies.
-Robert B. Zoellick, U.S. Trade Representative
Real Results With China
• Semiconductors: In July 2004, the U.S. and China reached an agreement to
resolve a WTO dispute regarding China’s tax refund policy for integrated
circuits (semiconductors), a market worth $2 billion to American manufacturers
and workers. The resolution will ensure non-discriminatory tax treatment for
U.S. integrated circuits in China, the world’s fastest growing semiconductor
market. The U.S. had filed the first-ever WTO case against China in this
• Problem-Solving at the JCCT:
At a recent meeting of the U.S.-China
Joint Commission on Commerce and Trade (JCCT), the U.S. used leverage, serious
discussions, and practical problem-solving to resolve seven potential WTO cases.
This involved months of detailed work with Chinese officials in a host of
ministries, culminating in an April 2004 meeting with Chinese Vice Premier Wu
Yi. Issues resolved included:
o Wireless Internet Standards:
China announced a more open approach to
developing next-generation wireless computing standards. It agreed to suspend
indefinitely its proposed implementation of a unique Chinese standard (WAPI) as
a mandatory wireless encryption standard.
o Third-Generation (3G) Mobile Phone
Standards: China agreed to support
technology neutrality with respect to 3G wireless phone standards, and telecom
service providers will be allowed to make their own choices.
o Intellectual Property:
China presented a detailed action plan
to address the piracy and counterfeiting of American ideas and innovations,
particularly through increased criminal penalties for violators.
o Trading Rights: China agreed to implement its WTO trading rights
obligations six months ahead of schedule, allowing U.S. firms to ship U.S.
products to China without using local middlemen.
o Distribution Rights:
China agreed to provide distribution
rights to U.S. companies by the end of 2004 and shared a draft of its
implementing regulations, resolving concerns about full implementation of this
important WTO commitment. This will allow U.S. firms to engage in wholesaling
and retailing of U.S. products directly within China.
o Express Delivery: Preserved a growing market for U.S. express delivery
service providers by securing China’s abolition of regulations that would have
protected Chinese providers by disadvantaging U.S. and other foreign providers.
o Agricultural Biotechnology: China agreed to implement new procedures and
issue new product approvals for U.S. biotech soybeans, canola, and corn. Twelve
U.S. biotech product approval requests have now been approved.
• Soybeans and Cotton: As a result of U.S. problem-solving efforts, China
has corrected problems in its tariff-rate quota system for bulk agricultural
commodities and has relaxed market constraints in soybeans and cotton trade.
U.S. exports of soybeans reached an all-time high in 2003 of $2.9 billion and
cotton exports were $733 million, up 431 percent over 2002.
• Financial Services: As a result of U.S. problem-solving efforts, China has
reduced capital requirements for financial services and opened the auto
financing sector to foreign competition.
• Insurance: China is in the process of changing its insurance regulations
to make it easier for foreign insurance companies to do business there, as a
result of U.S. pressure.
• Textiles: The U.S. exercised its rights to impose safeguards when import
surges threaten U.S. production. In December 2003, Chinese imports of robes,
bras, and knit fabric were limited under safeguards.
Real Results at the World Trade Organization (WTO)
• Telecommunications (Mexico): As a result of a U.S. case, a WTO dispute
panel overruled Telmex’s government-granted monopoly on negotiating rates to
connect calls into Mexico. U.S. industry estimates more than $1 billion in
excess payments since 2000 because of this practice, and should save hundreds of
millions of dollars a year as a result of the victory.
• Hogs (Mexico): After Mexico unfairly imposed dumping duties on hogs, the
U.S. took the issue to the WTO and Mexico fixed the problem.
• Dairy (Canada): The United States gained an important win against Canada
in January 2003 when the WTO found that Canada was improperly subsidizing dairy
exports. As a result, in May 2003, Canada committed to stop exporting subsidized
dairy products to the United States and to significantly limit these exports to
• Apples (Japan): In December 2003, the United States won a major WTO case
on Japan’s import restrictions on U.S. apples. Japan had argued that the
restrictions were needed to protect Japanese plants from disease, but U.S.
scientific evidence showed the apples could not transmit the disease. The U.S.
is following up with Japan and the WTO to ensure full compliance with the WTO
• Intellectual Property & Patents (Argentina): As a result of WTO cases,
the United States concluded an important settlement with Argentina in April 2002
that will ensure that its intellectual property system operates in a manner
consistent with WTO obligations. Argentina also amended portions of its patent
law that were inconsistent with international trade rules.
• Autos (India): The U.S. prevailed in its WTO challenge to India’s
restrictions on imports of U.S. auto parts.
• Apparel (Egypt): Following a U.S. challenge at the WTO on Egypt’s high
tariffs on apparel products, Egypt reduced the tariffs.
Real Results Pending at the WTO
• High-Fructose Corn Syrup (Mexico): Mexico imposes a 20 percent tax on
beverages and syrups made with sweeteners other than cane sugar. The U.S.
believes this tax discriminates against U.S. products such as high-fructose corn
syrup. Bilateral negotiations did not resolve the matter, so the U.S. took its
case to the WTO.
• Agricultural Biotechnology (EU): The EU has maintained a moratorium on new
ag biotech products and some EU countries even ban imports of biotech products
previously approved by the EU. After the Administration brought a WTO case to
end the moratorium and lift the bans on approved products, the EU approved a
biotech corn product. The Administration will, however, continue to pursue the
case until the EU moratorium is lifted on all biotech products, and the national
import bans are removed.
• Geographical Indications (EU): The EU discriminates against U.S.
geographical indicators and trademarks, so the U.S. took the case to the WTO.
• Wheat (Canada): Canada discriminates against U.S. wheat exporters through
a Canadian government-sanctioned monopoly, so the U.S. took a case to the WTO.
The U.S. won a partial victory at the panel that is lending momentum to efforts
to address this issue in the Doha WTO negotiations. The U.S. is also appealing
other aspects of the panel’s decision.
• Beef and Rice (Mexico): Mexico has used its antidumping laws as unfair
barriers to U.S. farm products. The U.S. believes various procedures and
methodologies Mexican authorities used in beef and rice antidumping
investigations, as well as requirements of the Mexican legislation, violate the
Real Results Through Bilateral Problem-Solving
• Telecom Standards (Korea): Through bilateral discussions, USTR resolved a
long-standing trade dispute that threatened to shut U.S. firms out of the Korean
wireless telecom market. A Korean technical standard (WIPI) for downloading
content from the Internet onto cellphones would have become the exclusive
technology, shutting out competing U.S. systems. Korea has agreed to ensure that
U.S. systems can continue to grow and operate in this important market.
• Beef (Mexico): After repeated interventions by USTR and USDA, Mexico
announced it will lift restrictions on categories of U.S. beef exports that
totaled $935 million in 2003. In another Mexican beef issue, a NAFTA dispute
panel handed down a ruling that should pave the way for the removal of some
anti-dumping duties on U.S. beef exports to Mexico.
• Dyed Textiles (India): In response to pressure from the U.S., India
recently relaxed its requirement that imported textiles obtain a dye safety
certification from an Indian laboratory.
• Intellectual Property (Dominican Republic): The U.S. settled ongoing IPR
disputes with the Dominican Republic through leveraged efforts in connection
with a bilateral free trade agreement. IPR problems regarding patents and
copyrights were resolved, and the U.S. won commitments for improved enforcement
against piracy and counterfeiting.
• Almonds (India): With a dubious scientific basis, India restricted U.S.
almond exports in January 2004. Before the regulations could stifle $70 million
of U.S. exports, the Administration convinced India to delay the regulation
until June 2005, allowing time to work out a long-term solution that will not
undermine U.S. farmers’ second-most important export to India.
• Investment Disputes & Child Labor (Colombia, Peru, Ecuador): Using the
leverage of pending FTA negotiations and the Andean Trade Preference Act, the
U.S. was able to resolve five major investment disputes in these Andean nations
valued at more than $100 million. In addition, the U.S. spurred action by the
government of Ecuador to hire additional child labor inspectors and institute
new police procedures for the protection of striking workers.
The Administration’s record in WTO cases involving the United
States is 13 wins and 10 losses in three and a half years, a 56% success rate.
From 1995-2000, the U.S. record was 18 wins and 15 losses, a 54% success rate.