The Office of the U.S. Trade Representative (USTR) has released its annual report on significant foreign trade barriers, providing an inventory of the most important foreign barriers affecting U.S. exports of goods and services, foreign direct investment by U.S. persons and protection of intellectual property rights. The term “trade barriers” does not have a fixed definition but is broadly defined by the USTR 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 report classifies foreign trade barriers into 10 different categories, including import policies, government procurement, export subsidies, lack of intellectual property protections and service/investment barriers.
While the voluminous report covers 64 countries, customs territories and regional associations, as well as all 20 U.S. free trade agreements, this update focuses on those countries of major interest for TrumpandTrade.com readers. The report provides little detail regarding ongoing NAFTA renegotiations, stating only that the parties have entered into discussions “seeking to update and rebalance the NAFTA.” Regarding the U.S.-Korea Free Trade Agreement (KORUS), the report notes that an agreement in principle was reached on March 28, 2018 to decrease the large U.S. trade deficit in industrial goods. Particularly, the report notes efforts and improvements in increasing U.S. automobile exports to South Korea through a commitment to double the number of U.S. automobile exports, to 50,000 cars per manufacturer per year that can meet U.S. safety standards (in lieu of Korean standards) and enter the Korean market without further modification. The parties will also harmonize testing requirements, and Korea will recognize U.S. standards for auto parts.
Concerning Russia, the report notes that sanctions implemented between the two countries, in response to Russia’s actions in Ukraine, have “created uncertainty for American firms and reduced prospects for market penetration. The U.S. Government continues to engage with industry to analyze and assess the impact of sanctions on trade in the broader context of U.S. national interests. Furthermore, because the U.S. Government has curtailed its bilateral engagement with Russia … our ability to raise and resolve market access barriers in Russia has been severely limited.”
With regard to China, the report states that “China continued to pursue a wide array of industrial policies in 2017 that seek to limit market access for imported goods, foreign manufacturers and foreign services suppliers, while offering substantial government guidance, resources and regulatory support to Chinese industries. The beneficiaries of these constantly evolving policies are not only state-owned enterprises but also other domestic companies attempting to move up the economic value chain.” Specifically, the report notes the Section 301 investigation regarding China’s “unreasonable or discriminatory” technology transfer and intellectual property practices.
Despite the ongoing embargoes, sanctions or otherwise severe trade restrictions in place by the United States, the report makes no references to trade with Cuba, Iran or Syria.