United StatesWT/TPR/S/XX
Page 1
WorldTrade
Organization / RESTRICTED
WT/TPR/S/235
25 August 2010
(10-4280)
Trade Policy Review Body
TRADE POLICY REVIEW
Report by the Secretariat
UNITED STATES
This report, prepared for the tenth Trade Policy Review of the United States, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from United States on its trade policies and practices.
Any technical questions arising from this report may be addressed to Mr.JohnFinn (tel: 022 739 5081), Mr. Karsten Steinfatt (tel: 022 739 6759) and Mr.Raymundo Valdés (tel: 022 739 5346).
Document WT/TPR/G/235 contains the policy statement submitted by the UnitedStates.

Note:This report is subject to restricted circulation and press embargo until the end of the first session of the meeting of the Trade Policy Review Body on the United States.

United StatesWT/TPR/S/235
Page 1

CONTENTS

Page

OVERVIEWvii

I.Economic environment1

(1)National Income and Economic Balances1

(2)Monetary and Fiscal Policies5

(3)Developments in Trade and Investment7

(i)Merchandise trade7

(ii)Trade in services10

(iii)Foreign direct investment10

II.trade and investment policy framework12

(1)Trade Policy Formulation12

(2)Participation in the World Trade Organization13

(3)Preferential Trade Agreements and Arrangements15

(i)Bilateral and regional preferences15

(ii)Unilateral preferences16

(4)Investment Agreements and Arrangements18

(5)Aid-For-Trade18

III.trade policies and practices by measure20

(1)Measures Directly Affecting Imports20

(i)Customs procedures20

(ii)Customs valuation23

(iii)Rules of origin23

(iv)Tariffs24

(v)Other charges affecting imports28

(vi)Contingency measures29

(vii)Quantitative restrictions, controls, and licensing34

(viii)Technical regulations and standards35

(ix)Sanitary and phytosanitary measures40

(2)Measures Directly Affecting Exports46

(i)Customs procedures and documentation46

(ii)Export taxes and fees46

(iii)Prohibitions, restrictions and licensing46

(iv)Export restrictions and controls47

(v)Official support and related fiscal measures51

(vi)Finance, insurance, and guarantees51

(vii)Promotion and marketing assistance53

(3)Other Measures Affecting Investment and Trade53

(i)Business framework and foreign investment regime53

(ii)State trading, state-owned enterprises, and privatization57

(iii)Government procurement58

(iv)Subsidies and other government assistance63

(v)Trade related intellectual property rights67

(vi)Competition policy76

Page

IV.Developments in selected sectors80

(1)Agriculture80

(i)Agriculture in the United States80

(ii)Agriculture policies81

(iii)Agriculture tariffs and tariff quotas90

(iv)Support levels90

(2)Financial Services94

(i)General legal framework94

(ii)Recent developments94

(iii)Policy actions in response to the crisis95

(iv)Financial regulatory reform97

(3)Transport97

(i)Air transport services97

(ii)Maritime transport101

(4)Telecommunications105

(i)Market structure105

(ii)GATS commitments106

(iii)Regulatory and policy authority106

(iv)International settlements policy108

(v)Satellite services109

(vi)Media ownership rules109

(5)Professional and Business Services110

(i)Introduction110

(ii)Accounting services112

(iii)Legal services114

REFERENCES117

APPENDIX TABLES125

CHARTS

Page

I.ECONOMIC ENVIRONMENT

I.1Contribution to real GDP growth, 2007-101

I.2Wealth, debt, and consumption, 1995-20093

I.3Composition and level of the current account, 1995-20094

I.4Merchandise trade by product, 2006 and 20098

I.5Merchandise trade by main origin and destination, 2006 and 20099

III.TRADE POLICIES AND PRACTICES BY MEASURE

III.1Tariff distribution according to the type of duty26

III.2Tariff averages and dispersion by product groups, 201027

III.3Balance of Payments for royalties and licence fees, 2000-0970

IV.DEVELOPMENT IN SELECTED SECTORS

IV.1Product-specific AMS support and market prices for selected commodities, 1995-200792

IV.2Waterborne trade in the United States, 2008102

IV.3Exports and imports of business, professional, and technical services, 1997-2008111

IV.4Trade in accounting, auditing, and bookkeeping, 2006-2008113

IV.5Trade in legal services, 2006-2008114

TABLES

I.ECONOMIC ENVIRONMENT

I.1Selected macroeconomic indicators, 2004-102

III.TRADE POLICIES AND PRACTICES BY MEASURE

III.1Structure of the tariff schedule, 1998, 2000, 2002, 2004, 2007 and 200925

III.2Anti-dumping investigations initiated, 2004-0930

III.3Anti-dumping measures by country and product, 2004-0931

III.4Countervailing duty investigations and measures imposed, 2004-0932

III.5Notifications by the United States, 1995-201041

III.6Ex-Im Bank credit and budget authorizations, 2004-0952

III.7Overview of CFIUS reviews, 2006-0956

III.8Domestic preferences applied under the Buy American Act and the stimulus

package, March, 201062

III.9Federal programmes notified to the WTO, fiscal years 2005-0864

III.10Assistance for the automobile industry65

III.11Renewable and alternative fuel incentives, 201067

III.12Dispute Settlement cases involving the United State as at June 201068

III.13Summary of intellectual property protection in the United States corresponding to

TRIPS obligations, 201071

III.14Patent pendency months73

Page

IV.DEVELOPMENT IN SELECTED SECTORS

IV.1Value of production, 2007-0980

IV.2Production and exports of selected commodities, selected years81

IV.3Exports of sugar and sugar-containing products, 2005-0983

IV.4Farm Service Agency Direct Loans; loan volumes at end of Fiscal Year87

IV.5Farm loan programmes; interest rates (effective as of 1 February 2010)88

IV.6Total producer support estimate and single commodity transfer values for

selected commodities93

IV.7Exports and imports of financial and insurance services, 2008-1095

APPENDIX TABLES

I.ECONOMIC ENVIRONMENT

AI.1Balance of payments,2004-10127

AI.2Merchandise exports and re-exports by group of products, 2003-09128

AI.3Merchandise imports by group of products, 2003-09130

AI.4Merchandise exports and re-exports by trading partner, 2003-09132

AI.5Merchandise imports by trading partner, 2003-09133

AI.6Cross-border imports of services, 2004-08134

AI.7Cross-border exports of services, 2004-08135

II.TRADE AND INVESTMENT POLICY FRAMEWORK

AII.1Status of dispute-related WTO matters involving the United States,

December 2007-March 2010136

AII.2Overview of U.S. Free-Trade Agreements, March 2010139

III.TRADE POLICIES AND PRACTICES BY MEASURE

AIII.1Trade concerns over U.S. TBTs, July 2007-March 2010143

AIII.2Summary analysis of the MFN tariff, 2009144

AIII.3Tariffs according to preferential agreements, 2009145

IV.TRADE POLICIES BY SECTOR

AIV.1Payment rates under the Farm Act of 2008 (Conversion factors)146

AIV.2Direct payment rates in the 2002 and 2008 Farm Acts146

AIV.3Commodity loan rates, selected years147

AIV.4Counter-cyclical payments target prices, selected years147

United StatesWT/TPR/S/235
Page 1

OVERVIEW

  1. The U.S. trade and investment regimes are among the most open in the world, and have remained so throughout the period under review. Like most other WTO Members, the United States very largely resisted pressures to respond to the global economic recession by tightening restrictions on imports. The restraint shown by the United States helped forestall a worldwide slide into protectionism.
  2. Border measures such as tariffs and quantitative restrictions have remained broadly unchanged since the previous Review of the United States, illustrating the overall stability of its trade regime. At 4.8%, the simple average applied MFN tariff is the same as in late 2007, when the recession started. The United States abolished quotas on imports of several categories of textiles and apparel from China in December 2008. Remaining quantitative restrictions and controls on imports are maintained to protect health, safety, or the environment, or for foreign policy purposes. These restrictions include a new ban on imports of plants taken in violation of foreign laws. Export regulations, used for foreign policy and security reasons, have not changed, although a major review is currently under way.
  3. The limited changes made during the period under review to trade border measures related mostly to contingency measures. In September 2009, the President made a determination under safeguard legislation to apply additional duties on tyre imports from China for three years. This followed the U.S. International Trade Commission's determination that imports of passenger vehicle and light truck tyres from China were being imported "in such increased quantities or under such conditions as to cause market disruption to the domestic producers".
  4. Regarding other contingency measures, the United States had 246 anti-dumping duty (AD) orders in effect in December 2009, 22 more than in December 2007. These affect imports from 40 countries or territories. While AD investigation initiations in 2008-09 remained well below the peak of 2007, the share of investigations that result in final AD orders has increased since then. A 2007 decision by the United States changed its long-standing policy of not applying countervailing duties (CVD) on China. CVD investigation initiations almost tripled, on average, between 2004-06 and 2007-09. CVD final orders increased from 31 in 2007 to 41 in December 2009.
  5. The overall stability and openness of the U.S. trade and investment regime during the period under review did not prevent a steep fall in U.S. trade. Between the third quarter of 2008 and the second quarter of 2009, imports of goods decreased almost 35%. Imports of consumer durables and capital goods were particularly affected, as consumers delayed purchases of durables amid a sharp reduction in wealth resulting from the downturn in the housing and equity markets, and growing uncertainty in financial markets. U.S. firms shelved investment plans in response to lower consumer demand and higher capital costs, reducing demand for capital good imports. Exports of goods also declined, albeit at a slower pace, reflecting the slowdown in global demand. With imports falling more rapidly than exports, the U.S. current account deficit narrowed sharply, from a peak of 6% of GDP in 2006 to slightly less than 3% of GDP in 2009.
  6. The Administration considers that a sustainable recovery from the recession will require some rebalancing of the economy towards increased investment and exports and away from household consumption as the main basis for economic growth. Over the past two years, trade policy has focused on enhancing export promotion, along with monitoring and enforcement of trading partners' commitments under international agreements. In his State of the Union Address in January 2010, the U.S. President set a goal of doubling exports over the next five years.
  7. As part of their efforts to rebalance the economy away from household consumption, the authorities are committed to increasing the national savings rate in part through a reduction in the fiscal deficit and improved financial regulation. In addition, the authorities consider that a shift toward increased consumption in countries with current account surpluses could bring the U.S. current account deficit toward its mid 1990s level of roughly 1-2% of GDP.
  8. The Administration is using trade and investment policy in support of economic recovery and rebalancing. Specifically, U.S. trade policy is seeking to encourage export growth by allocating additional resources to export promotion activities, and to monitoring and enforcing partners' trade commitments. These activities are part of a new National Export Initiative implemented to help achieve the goal of doubling exports in the next five years.
  9. There has been a marked slowdown in the pace of negotiating free-trade agreements (FTAs) by the United States during the review period. FTAs with three countries became effective: Costa Rica (part of the Dominican Republic-Central America FTA); Oman; and Peru. The negotiations on these FTAs had been completed before the period under review. The United Stateshas FTAs in force with 17 countries. The Administration has not yet submitted for Congressional consideration three FTAs signed before 2008 but still awaiting ratification.
  10. Some anti-recession measures included provisions that favoured domestic suppliers of goods and services. These measures included sizeable assistance to selected sectors, particularly the financial and automotive sectors, with provisions to avoid "leakage" of assistance outside of the United States. For example, in their loan agreements with the U.S. Treasury Department, two large domestic car manufacturers agreed to maintain specified levels of production in the United States. These loans were part of an US$85billion programme that sought to "prevent a significant disruption of the American automotive industry, which would pose a systemic risk to financial market stability and have a negative effect on the economy of the United States".
  11. Furthermore, domestic preferences were incorporated into the US$787 billion fiscal stimulus package of early 2009 to ensure that the manufacture of iron, steel, and manufactured goods used as construction materials in public projects funded with stimulus dollars is performed in the UnitedStates. These domestic preferences, which must be applied in accordance with U.S. international commitments, are more restrictive than long-standing domestic preferences used in federal procurement under the Buy American Act of 1933.
  12. Aside from anti-recession policies, new measures affecting trade during the period under review involved certain measures to address security and safety concerns. The United States also adopted new farm legislation.
  13. Among the measures to increase the safety of imports are new advance information requirements for cargo arriving in the UnitedStates by vessel under the so-called "10+2" rule. Regarding the requirement to scan 100% of containers prior to loading them on U.S.-bound vessels, the Secretary of Homeland Security has indicated that this security initiative was currently unworkable at many ports, and that she would seek the extensions authorized by law to delay its implementation beyond 2012.
  14. In an effort to increase the safety of thousands of consumer products, including all those for children aged 12 or less, the Consumer Product Safety Improvement Act of 2008 introduced a wide range of regulatory and enforcement measures for domestic and imported goods. Among the measures are new product regulations, labelling and third-party testing requirements,and border controls.
  15. The 2008 Farm Act maintained, with some changes, most of the policies in the 2002 Act with some new programmes introduced and some adjustment to payment rates. Like previous Farm Acts, most of the support under the 2008 Farm Act is not for farming but for nutrition programmes for low-income families and a large portion of the funding that is for farmers is decoupled from production. However, of the support that remains, most is linked to prices and/or production and producers of cereals, oilseeds, and cotton are effectively insulated from market prices while sugar and dairy have market price support programmes. Overall, support for agriculture in the United States, as a percentage of the value of production, remains low compared with other OECD countries and some non-OECD countries. However, the large size of the agriculture sector means that the absolute amount of support is considerable, varies from one year to another depending on prices, and can affect world markets.
  16. To ensure that trade policy supports economic recovery and rebalancing more
    effectively, the United States should maintain the emphasis on the contribution that open and transparent trade and investment regimes can make to productivity, a key ingredient of export success. Export promotion should be complemented by continued reduction in remaining restrictions on market access and other distorting measures, in line with Members' observations during the previous Review of the United States, including with respect to U.S. tariff peaks, support for agriculture, and remaining barriers to services trade and investment.
  17. Pursuing liberalization on an MFN basis could provide the United States with the added advantage of helping reduce the future risks of protectionist measures at home and abroad, and reaffirm the U.S. leadership role that has been a crucial element in advancing the objectives of the multilateral trading system since its inception.

United StatesWT/TPR/S/235
Page 1