The Office of the U.S. Trade Representative (USTR) yesterday released the 2018 National Trade Estimate (NTE), an annual report documenting foreign trade and investment barriers facing American exports around the world.

“The President is fully committed to addressing unfair foreign trade barriers through tough enforcement and the negotiation of new agreements that increase U.S. exports and support high-paying jobs for all Americans,” said Ambassador Robert Lighthizer.  “We will use every available tool to ensure Americans are treated fairly.”

The findings of the 2018 NTE build upon the major pillars of President Donald R. Trump’s 2018 Trade Policy Agenda to secure market access for American farmers, ranchers and exporters, and hold our trading partners accountable by enforcing U.S. trade laws.

To view the 2018 National Trade Estimate, click here.

Background

The NTE is the U.S. government’s major annual report on the barriers to trade, investment, and services that American exporters and other businesses and their workers encounter around the world. The report is required to be published each year by March 31 and is submitted to the President and Congress. The USTR works closely with other government agencies and U.S. embassies to prepare the NTE.

Largest Export Markets

This report discusses the largest export markets for the United States, including 60 countries, the European Union, Taiwan, Hong Kong, and one regional body. The discussion of Chinese trade barriers is structured and focused to align more closely with other congressional reports prepared by the USTR on U.S.-China trade issues. The China section includes cross-references to other USTR reports where appropriate. As always, the omission of particular countries and barriers does not imply that they are not of concern to the United States.

Trade barriers elude fixed definitions, but may be broadly defined as government laws, regulations, policies, or practices that either protect domestic goods and services from foreign competition, artificially stimulate exports of particular domestic goods and services, or fail to provide adequate and effective protection of intellectual property rights.

The NTE covers significant barriers, whether they are consistent or inconsistent with international trading rules. Many barriers to U.S. exports are consistent with existing international trade agreements. Tariffs, for example, are an accepted method of protection under the General Agreement on Tariffs and Trade 1994 (GATT 1994). Even a very high tariff does not violate international rules unless a country has made a commitment not to exceed a specified rate, i.e., a tariff binding. On the other hand, where measures are not consistent with international trade agreements, they are actionable under U.S. trade law, including through the World Trade Organization (WTO).

This report classifies foreign trade barriers into 10 categories. These categories cover government-imposed measures and policies that restrict, prevent, or impede the international exchange of goods and services. The categories covered include:

• Import policies (for example, tariffs and other import charges, quantitative restrictions, import licensing, customs barriers, and other market access barriers);
• Sanitary and phytosanitary measures and technical barriers to trade;
• Government procurement (for example, “buy national” policies and closed bidding);
• Export subsidies (for example, export financing on preferential terms and agricultural export subsidies that displace U.S. exports in third country markets);
• Lack of intellectual property protection (e.g., inadequate patent, copyright, and trademark regimes and enforcement of intellectual property rights);
• Services barriers (for example, limits on the range of financial services offered by foreign financial institutions, restrictions on the use of foreign data processing, and barriers to the provision of services by foreign professionals);
• Investment barriers (for example, limitations on foreign equity participation and on access to foreign government-funded research and development programs, local content requirements, technology transfer requirements and export performance requirements, and restrictions on repatriation of earnings, capital, fees and royalties);
• Government-tolerated anticompetitive conduct of state-owned or private firms that restricts the sale or purchase of U.S. goods or services in the foreign country’s markets;
• Digital trade barriers (for example, restrictions and other discriminatory practices affecting crossborder data flows, digital products, Internet-enabled services, and other restrictive technology requirements); and,
• Other barriers (barriers that encompass more than one category, for example, bribery and corruption, or that affect a single sector).

Trade Impact Estimates and Foreign Barriers

The NTE Report identifies localization barriers to trade to assist efforts to reduce their use and to inform the public on the scope and diversity of these practices. The United States has observed a growing trend among trading partners to impose localization barriers to trade—measures designed to protect, favor, or stimulate domestic industries, service providers, or intellectual property at the expense of imported goods, services or foreign-owned or -developed intellectual property. These measures may operate as disguised barriers to trade and unreasonably differentiate between domestic and foreign products, services, intellectual property, or suppliers. They can distort trade, discourage foreign direct investment and lead other trading partners to impose similarly detrimental measures.

For these reasons, it has been longstanding U.S. trade policy to advocate strongly against localization barriers and encourage trading partners to pursue policy approaches that help their economic growth and competitiveness without discriminating against imported goods and services.

The USTR continues to scrutinize foreign labor practices and to address substandard practices that impinge on labor obligations in U.S. free trade agreements (FTAs) and deny foreign workers their internationally recognized labor rights. In addition, the USTR has enhanced its monitoring and enforcement of U.S. FTA partners’ implementation and compliance efforts with respect to their obligations under the environment chapters of those agreements.

To further these initiatives, the USTR has implemented interagency processes for systematic information gathering and review of labor rights practices and environmental measures in FTA countries, and USTR staff regularly works with FTA countries to monitor practices and directly engages governments and other stakeholders in its monitoring efforts. The administration has reported on these activities in the 2018 Trade Policy Agenda and 2017 Annual Report of the President on the Trade Agreements Program.

NTE sections report the most recent data on U.S. bilateral trade in goods and services and compare the data to the preceding period. This information is reported to provide context for the reader. The merchandise trade data contained in the NTE are based on total U.S. exports, free alongside value, and general U.S. imports, customs value, as reported by the Bureau of the Census, U.S. Department of Commerce. The services data and direct investment are compiled by the Bureau of Economic Analysis in the U.S. Department of Commerce (BEA).

Source: CalChamber