USTR - USTR Releases 2001 Inventory of Trade Barriers
                 
The Office of the United States Trade Representative

USTR Releases 2001 Inventory of Trade Barriers
Contact: Amy Stilwell (202) 395-3230 03/30/2001


The Office of the United States Trade Representative today released The 2001 National Trade Estimate Report on Foreign Trade Barriers. The report, required by the Omnibus Trade and Competitiveness Act of 1988, catalogues foreign trade barriers to U.S. exports. The report also highlights examples of our trading partners reducing, or eliminating, trade barriers.

"Free trade is vitally important to the American people," said U.S. Trade Representative Robert B. Zoellick. "It improves the economic well-being of Americans, it advances freedom around the world, and it promotes our nation’s security. But in order to realize these benefits, we need to build public support for open trade. That means publicizing the existence of trade barriers in foreign markets and working with our trading partners to eliminate them."

The persistence of trade barriers reaffirms the need for the United States to remain actively engaged with the World Trade Organization, which provides a framework for dispute resolution with our trading partners. The trade barriers also underscore the importance of launching a new round of multilateral trade negotiations this November when WTO members meet in Doha, Qatar. These negotiations are an opportunity for governments to reduce, and eventually eliminate, barriers to free trade.

"The trade barriers described in this year’s report illustrate the opportunities presented by global, regional, and bilateral trade negotiations," said Zoellick. "The report demonstrates what is at stake if the United States fails to take the lead in shaping the international trade agenda."

The full text of the trade barriers report is available on the USTR web site, www.ustr.gov. Bound copies of the report are available from USTR’s Office of Public Affairs.

Regional Highlights of the 2001 Report:

Africa: The eight sub-Saharan African countries under review are undertaking economic and political reforms to promote economic growth and to facilitate their integration into global markets. Most of the countries have taken steps to improve their investment climate and are actively seeking foreign investment. Tariffs have been reduced, but remain high in certain sectors and countries. Other issues hampering U.S. exporters in sub-Saharan Africa include ineffectual enforcement of intellectual property rights, onerous customs delays, and corruption.

Canada: The United States trades more with Canada than with any other country, but a number of issues threaten this partnership.

The 1996 U.S.-Canada Softwood Lumber Agreement, which covers $7 billion in trade, was created to mitigate the effects of Canadian provinces’ timber sales practices and to provide time for reform. But the United States has seen little change in these practices and continues to be concerned with the lack of market principles in Canadian forest management systems. The Agreement expires March 31.

The Canadian Wheat Board has been reorganized but continues to enjoy government-sanctioned monopoly status, as well as other privileges that restrict competition. In October 2000, USTR initiated a 12-month investigation of the wheat board’s practices in response to an industry petition.

Canada committed to bring its dairy export subsidy regime into compliance with its WTO obligations by January 31, 2001. Instead, it instituted programs that essentially replicate the old regime. The United States has requested WTO authorization to suspend trade concessions if a WTO appeals panel determines that Canada has not complied.

China: The United States and China continued multilateral negotiations on China’s accession to the WTO throughout 2000. In preparation for accession, the Chinese government launched a campaign to align domestic laws and regulations with WTO rules. But a number of problems continue to plague the bilateral trade relationship.

Import standards and phytosanitary requirements are being used to create import barriers for products that will benefit from tariff cuts following accession to the WTO.

Imports of products ranging from cosmetics to medical equipment are required to undergo duplicative and expensive quality and safety inspection procedures.

Imports of agricultural products such as grain, poultry, and citrus have been arbitrarily blocked.

Transparency continues to be an issue for both foreign and domestic firms. Inconsistent notification and application of existing laws and regulations create problems for businesses.

China has made improvements in its intellectual property rights protection regime, but a high level of product counterfeiting and copyright piracy continues.

European Union: Several European Union policies continue to create significant barriers to U.S. economic interests. These include the bananas regime, bans on U.S. beef from livestock treated with hormones and on U.S. bio-engineered products, member state government financial support to the aircraft industry, and widely differing EU standards, testing, and certification procedures. Many U.S. trade concerns stem from the lack of transparency in the development of EU regulations. The United States views transparency and public participation as essential to promote more effective trans-Atlantic regulatory cooperation, to achieve better quality regulation, and to help minimize possible trade disputes.

India: Access to the Indian market has improved with the removal in the last year of longstanding quantitative restrictions on a wide variety of products. However, India continues to impose substantial barriers to U.S. exports, including high tariffs and related taxes, and a variety of non-tariff measures affecting most trade, including an onerous import licensing regime.

Inadequate intellectual property protection and enforcement remains a longstanding concern.

India’s policy linking auto imports to investment, local content and trade balancing is the subject of a WTO dispute.

India has recently introduced new labeling and other standards-related requirements that could impede U.S. exports to India.

Japan: Japan is the United States’ third largest trading partner, accounting for well over $250 billion in two-way trade in goods and services. But a sputtering Japanese economy, persistent market access barriers, structural rigidity and excessive regulation limit opportunities for U.S. companies trading with, and operating in, Japan.

The United States is encouraged that Prime Minister Mori agreed with President Bush in their Joint Statement on March 19, 2001, about the importance of promoting deregulation, restructuring and foreign direct investment.

Much of this year’s report focuses on progress achieved under the U.S.-Japan Enhanced Initiative on Deregulation and Competition Policy. The report highlights the U.S. submission to Japan under the Enhanced Initiative in October 2000. The initiative calls on Japan to adopt additional regulatory reforms in key sectors and structural areas of the Japanese economy.

This year’s report includes new sections on information technology and proposed revisions to Japan’s Commercial Code. (The Commercial Code provides the regulatory framework for doing business in Japan.)

The report underscores USTR’s deep concern with barriers in Japan’s $130 billion telecommunications sector. Competition in this sector has been stifled due to the absence of an independent regulator; weak dominant carrier regulation; high interconnection rates for both wired and wireless services; and inadequate access to rights-of-way, facilities, and other services to competitors.

We are concerned about the increase in barriers to Japan’s agricultural market, including the level of access for U.S. rice. Japan also needs to comply with a WTO ruling in favor of the United States on varietal testing.

Korea: Korea is one of the United States' major trading partners, and President Kim Dae Jung has made some progress toward a more open, market-oriented economic policy. However, Korea continues to impose significant barriers to U.S. imports.

Korea’s high tariffs and related taxes, and anti-import biases, combine to restrict seriously access for U.S. exports. Korea’s auto market remains virtually closed to U.S. companies. Korea also imposes high duties and maintains other barriers on many agricultural and fishery products.

The United States has expressed its concern to the Korean Government about the negative implications of recent government-directed lending on the country’s restructuring efforts, and the potential inconsistency of this action with its WTO commitments.

Inadequate protection of intellectual property rights continues to be a serious problem in Korea.

USTR has long-standing concerns about the Korean Government's involvement in, and support for, the Korean steel industry.

Mexico: Mexico is the United States' second largest bilateral trading partner, and has been the fastest growing major U.S. export market over the last seven years. USTR welcomes Mexico’s progress in promoting competition in its $12 billion telecommunications market. However, Mexico has not addressed certain outstanding issues subject to its WTO commitments. It has failed to ensure competition in its market for international services. It has also failed to enforce its rules to prevent its major telecommunications supplier, Telmex, from engaging in anti-competitive conduct.