USTR releases annual trade report

The U.S. Trade Representative released its 504-page 2018 National Trade Estimate on Foreign Trade Barriers report, documenting foreign trade and investment barriers over the past year.    Japan’s January recognition of U.S. auto safety standards and India’s generally high tariffs were two foreign trade issues highlighted in the Office of the U.S. Trade Representative’s (USTR) 2018 National Trade Estimate on Foreign Trade Barriers (NTE).
   The NTE is an annual USTR report documenting foreign trade and investment barriers encountered by U.S. companies. 
   Japan in January recognized several U.S. automotive safety standards, including frontal and rear crash standards, “thereby reducing the cost and burden for U.S. auto exporters,” USTR said in one of four fact sheets summarizing the 504-page report.
   Further, there remains a “large gap” between India’s World Trade Organization (WTO)-bound tariff rates and its actual applied tariff rates, USTR said. The Indian government frequently changes its tariffs, improperly adjusting the level of protection provided to domestic producers, according to the agency.
   For example, India has recently increased tariffs on certain high-tech information and communication technology products from zero to between 10 percent and 20 percent.
   Additionally, India in 2017 implemented low-price controls on coronary stents and knee implants, and the country has rejected U.S. companies’ requests to withdraw technologically advanced products from its market, forcing certain products to be sold at a loss, USTR said.
   The fact sheet also said that a June decision by the Supreme Court of Canada should bode well for U.S. pharmaceutical exports.
   Lower Canadian courts had issued several rulings holding that patents that promise more than they could provide could be invalidated for a lack of utility, which resulted in invalidation of several patents held by U.S. pharmaceutical companies, USTR said. The Supreme Court of Canada struck down the doctrine as “unsound,” ruling it as inconsistent with the nation’s patent Act.
   The NTE also pointed out that Argentina authorities in 2017 undertook significant enforcement action against counterfeit sales, seizing millions of dollars’ worth of illicit goods and making key arrests to dismantle organized crime operations in one of South America’s largest black markets for counterfeit and pirated goods, La Salada.
   Like several of its predecessors, the report called out China for unfair technology transfer policies related to foreign investment, excess capacity, and cybersecurity policies that restrict U.S. exports of information and communications technology products.
   Further, USTR described wins for market access for U.S. poultry exports to South Africa and Guatemala.
   In January, the U.S. Department of Agriculture (USDA) and South African officials agreed on an amendment to the USDA export health certificate for poultry, to allow the importation of turkey meat produced from turkeys “grown from Canadian poults” under certain conditions, USTR said.
   Guatemala eliminated its tariffs on U.S. fresh, frozen, and chilled chicken leg quarters in 2017, five years earlier than stipulated by the Central American Free Trade Agreement, the agency said.
   USTR also touted its ability to negotiate with China an extension until 2019 of a requirement set to take effect in 2017, for all foods, including “low-risk processed foods,” to enter China with an export certificate. The requirement would have had a “significant adverse impact” on trade if it took effect last year, the agency said in another fact sheet.
   USTR also mentioned that Vietnam in September lifted its ban on U.S. exports of dried distillers grains and ended restrictive fumigation requirements for U.S. corn and wheat.
   “Other examples of cooperative efforts to decrease standards-related barriers in 2017 include USTR’s work with USAID to implement the Standards Alliance, a public-private partnership that provides technical assistance to developing countries and regions to help ensure those countries’ standards-related measures do not impose unnecessary obstacles to trade and comply with other important obligations under the WTO TBT Agreement.,” USTR said in another fact sheet.
   The alliance “began to expand its assistance to five countries in Africa” in 2017, including the Ivory Coast, Ghana, Mozambique, Senegal, and Zambia.
   USTR’s fourth fact sheet on the NTE gave an overview of foreign digital trade barriers.
   Restrictive overseas policies include China’s data localization requirements imposed through its 2017 Cybersecurity Law and 2015 National Security Law, and its severe restrictions on cloud computing investments, as well as South Korean restrictions on cross-border transfers of location-based data, which disadvantages international suppliers incorporating services like traffic updates and navigation.
   “Korea is the only market in the world that USTR is aware of maintaining such restrictions,” the agency said.
   Vietnam, Turkey, Russia, Nigeria, and Indonesia also maintain unfair data localization policies, USTR said.