U.S TRADE POLICY

Submitted To: Submitted By: KunwarMilind Singh Mohit Shukla Sameer Dhavan Varun Yadav

Trade and Investment Policy Framework

• The core of U.S. trade policy support for the multilateral trading system

• In early 2008, U.S had FTAs with 14 countries• The United States is one of the world's largest producers, exporters,

and importers of agricultural products.• The United States is the world's leading producer of manufactured

goods• Manufacturing tariffs are generally low, but high tariffs have

sheltered a few industries, such as textiles, clothing, and footwear and leather, from international competition

DescriptionMFN

No. of linesAveragea

(%)Range

(%)Coefficient of variation

(CV)

- Dairy products 166 21.4 0 - 177.2 1.1

- Tobacco 47 56.0 0 - 350 2.2 - - Leather, rubber, footwear and travel goods 397 7.3 0 - 63.9 1.6 - - Textile and clothing 1,659 9.1 0 - 42.1 0.7

- - Transport equipment

242 2.5 0 - 25 1.9

- - Transport equipment

• U.S. trade is geographically diversified. NAFTA partners continued to account for the largest share of exports in 2006, with 22.2% going to Canada and 12.9% to Mexico

• The European Union is the second largest export market for U.S. products;

• Among Asian partners, exports to China showed to strong growth both in value terms and percentages, to reach 5.3%

• Canada remained the largest U.S. supplier, accounting for 16% of U.S. imports in 2006, although its share declined by one percentage point between 2004 and 2006

• Imports from China expanded strongly over 2004-06 (from 13.8% to 15.9% of total imports), almost equaling Canada's share as the U.S. main supplier.

Trade in service• In 2006, the surplus in cross-border services trade amounted to

US$96.6 billion• The largest surpluses are in business, professional, and technical

services, and in royalties and licence fees, which represent receipts and payments for intellectual property rights, followed closely by financial service

• The fastest growing exports were in telecommunications services, financial services, insurance services, and business and professional services; transport exports

• The main trading partners for U.S. services exports in 2006 were the United Kingdom (11.8% of the total), Japan (10.2%), Canada (9.7%), Mexico (5.6%), and Germany (5.1%). The main partners for imports were the United Kingdom (12%), Japan (7.8%), Canada (7.6%), Germany (6.8%), and Bermuda (4.9%)

FDI• The largest equity capital increases by foreign investors in 2006

were in finance and insurance, chemicals, computers and electronic products, manufacturing, and machinery manufacturing

• The United Kingdom remained the largest source, with an investment position followed by Japan and Germany and the Netherlands

Trade policies and practices • The united states accords mfn tariff treatment to all wto members

except cuba.

• the average applied mfn tariff was 4.8% in 2007

• the applied mfn rate for agriculture (wto definition) fell from 9.7% in 2004 to 8.9% in 2007

• Anti-dumping (AD) remains a key trade policy instrument for the United States. At end 2007, the United States maintained some 232 AD measures in force, affecting imports from 39 trading partners.

• most AD measures are imposed on intermediate goods like steel and chemical products, they increase costs for downstream producers and consumers

• At end 2007, the United States maintained no safeguard measures but 31 countervailing (CV) orders were in place involving 13 trading partners

• Two WTO Members, Cuba and Myanmar, are subject to economic sanctions.

• The United States maintains export restrictions and controls for national security or foreign policy purposes, or to address shortages of scare materials

• The United States seeks to promote increased IPR protection and enforcement through a variety of mechanisms, including FTAs, bilateral intellectual property agreements and bilateral investment treaties.

Tariffs • The general policy of the United States, embodied in Section 126 of

the Trade Act of 1974, is to grant MFN tariff treatment to all its trading partners

• All WTO Members except Cuba receive MFN treatment• the United States does not grant MFN treatment to the Democratic

People's Republic of Korea.• The United States accords MFN tariff treatment on a temporary and

conditional basis to: Azerbaijan, Belarus, Kazakhstan, Moldova, Russia, Tajikistan, Turkmenistan, and Uzbekistan

• The United States levies customs duties on the basis of the f.o.b. value of imports at the point of export.

Anti-dumping and countervailing measures

• At end 2007 some 51% of all AD measures were being applied on iron and steel products; 14% on chemicals and pharmaceuticals; and 10% on agricultural and forestry product

• The level of AD duties applied during the period under review varied widely. The definitive duties applied during 1 July 2005-31 December 2007 range from a low of 3.91% to a high of 280.57%; provisional duties applied over the same period range from 3% to 280.57%

• Overall, there were 31 CVD orders in place at end December 2007, down from 57 in 2004, involving 13 trading partners. Some 60% of the CVD orders in place related to steel products.  

Quantitative restrictions and licensing

• Under U.S. law, safeguard measures may include tariffs, quantitative restrictions, or tariff quotas, import licensing and other measures as listed in Section 203 of the Act. NAFTA partners are excluded from the application of safeguard measures

• Most imports from Cuba, the Democratic People's Republic of Korea, Iran, Myanmar, and certain areas of Sudan are subject to bans or approval requirements

• U.S. quantitative restrictions and controls on imports are designed to safeguard consumer health, or protect public morals or the environment

• Restrictions and controls are implemented through licensing requirements for fish and wildlife, plants, animals, and plant and animal products, narcotic drugs, alcoholic beverages, tobacco, firearms, explosives, and nuclear facilities

• Imports of basic steel mill products are subject to automatic licensing, irrespective of their origin

• The importation of natural gas or liquefied natural gas (LNG) is authorized unless it is determined not to be in the public interest

• The Marine Mammal Protection Act (MMPA) prohibits the importation of marine mammals and their parts or products into the United States

• The United States maintains export restrictions and controls for national security or foreign policy purposes, or to address shortages of scarce materials

• Export control of conventional arms and dual-use exports, the Missile Technology Control Regime the Chemical Weapons. Nuclear Suppliers

Promotion and marketing assistance

• The Trade Promotion Coordinating Committee (TPCC) coordinates the export promotion activities of 19 federal agencies.

• some 100 export promotion programmes maintained• The State International Development Organizations seeks to

support the activities of trade promotion agencies in 39 State

Trade-related intellectual property rights

• The United States is an important producer and exporter of goods and services that embody knowledge and other intellectual developments

• The United States pursues high standards of IP protection through its engagement with countries seeking accession to the WTO

• It has also been noted that over 50% of U.S. exports depend on some form of IP

• The United States considers that IP and innovation are of critical importance to the enhanced productivity and growth of the U.S. economy

• The ability of innovative industries to continue to develop new products depends largely on a strong and effective IP system and the capacity to market new products effectively during the period when exclusive IPRs exist

Form Main legislation Coverage Duration

Copyright and related rights Copyright Law, Title 17 of the Code Authors' rights in the artistic, literary and scientific domains; to enjoy copyright protection a work must be an original creation

Life of author plus 70 years for works created on or after .

Anonymous works, pseudonymous works, and works made for hire protected for 95 years after publication or 120 years after creation, whichever is the shortest

Geographical indications The Lanham Act of 1946, as amended (15 U.S.C. 1051 et seq), and Federal Alcohol Administration Act of 1935

Protection against misuse of geographic signs and names of viticultural significance

Unlimited

Industrial designs Patent Law of the , as incorporated in Title 35 of the U.S. Code

The ornamental design of a product is entitled to the protection afforded to designs, provided it is new

14 years from date of grant

Patents Patent Law of the , as incorporated in Title 35 of the U.S. Code

Any inventions that are new, useful, and non-obvious. Apply to process, machine, manufacture or composition of matter

20 years from filing date

Plant variety protection Plant Variety Protection Act Amendments of 1994 (7 U.S.C. 2321 et seq.)

New plant varieties: not previously sold for purposes of exploitation of the variety, in the United States, more than 1 year prior to the date of filing; or in any area outside of the United States more than 4 years prior to the date of filing, or, in the case of a tree or vine, more than 6 years prior to the date of filing

20 years from the date of issue of the certificate in the

Topography of integrated circuits Semiconductor Chip Protection Act of 1984

Topography of microelectronic semiconductor products provided it is original (the result of its creator's own intellectual effort) and is not staple, commonplace or familiar in the industry at the time of its creation

10 years from filing date (or, if earlier, from first use)

Trade marks The Lanham Act of 1946, as amended (15 U.S.C. 1051 et seq)

Any sign used to identify and distinguish goods or services from one enterprise from those of another enterprise

10 years from registration date; renewable indefinitely as long as the trade mark is in use in commerce that is lawfully regulated by Congress

Trade secrets Economic Espionage Act of 1996 and state laws

Any information, including a formula, pattern, compilation, program device, method, technique, or process, not generally known to the relevant portion of the public, that provides an economic benefit to its holder, and is the subject of reasonable efforts to maintain its secrecy

Indefinite

e- FILING OF PATENT• Under its 21st Century Strategic Plan, a five-year plan devised in

the United States Patent and Trademark Office (USPTO) has continued to promote the electronic processing and filing of patent applications and streamline the patent application process.

• In 2006, the USPTO implemented the Internet-based Electronic Filing System-Web (EFS-Web), to allow electronic patent application and document submission

TRADE POLICIES BY SECTOR

AGRICULTURE• The United States is among the world's largest producers, exporters,

and importers of agricultural products• The U.S. International Trade Commission, some agricultural products,

including beef, dairy, ethyl alcohol, sugar and sugar-containing products, and tobacco remain subject to high import barriers

• Under the Export Enhancement Program (EEP) and the Dairy Export Incentive Program (DEIP), the United States provides cash bonus payments to exporters of eligible commodities based on the quantity exported.

• The commodities eligible under the EEP are wheat, wheat flour, rice, frozen poultry, barley, barley malt, table eggs, and vegetable oil. Under the DEIP, the eligible commodities are milk powder, butterfat, and various cheeses

Export subsidies, credit, insurance, and guarantees

• The United States operates two main export credit guarantee programmes: the Export Credit Guarantee Program (known as GSM-102) and the Facility Guarantee Program (FGP)

• Under GSM-102, the CCC is authorized to guarantee the repayment of credit made available to finance U.S. exports of agricultural goods on credit terms of up to three years. The CCC generally guarantees 98% of the principal and a portion of the interest

• Under the FGP the CCC extends credit guarantees to U.S. banks for financing export sales of U.S. manufactured goods and services that improve agriculture-related facilities in emerging markets, including storage, processing, and handling facilities

MINING AND ENERGY

• The United States is among the world's largest producers of several minerals, including coal, salt, sulphur, aluminium, copper, and gold. The United States is the world's largest energy producer and consumer

Product DescriptionRevenue loss, fiscal year 2006 (US$ million)

Oil and gas Exploration firms may deduct 100% of "intangible drilling costs" in first year (70% for integrated producers); 2 year amortization of geological and geophysical expenses (5 years for integrated producers)

1,100

Fuel minerals Independent producers and royalty owners can deduct 15% of sales of oil and gas (up to 25% for marginal wells); between 10% and 20% for other fuel minerals; only up to 1,000 barrels or equivalent per day

1,000

Synthetic fuels from coal and gas produced from either geopressurized brine, Devonian shale, tight formations, or biomass

Tax credit of US$6.40 per barrel of oil equivalent or US$1.13 per 1,000 cubic feet of gas

2,700

Biomass ethanol Tax credit of US$0.51 per gallon (blenders) plus US$0.10 per gallon (small producers)

1,890

Electricity from wind, closed-loop biomass, poultry waste, solar, geothermal

Tax credit of US$0.018 per kWh 2,000

MANUFACTURING

• The United States is the world's leading producer of manufactured goods, accounting for about 21% of world manufacturing value added

• In general, tariffs on manufactured goods are low. The average applied MFN tariff for manufactures (WTO definition) was 4% in 2007

• In addition to tariffs, government assistance to the manufacturing sector includes export financing, direct payments, and tax benefits

• The U.S. International Trade Commission has also identified textiles and apparel as subject to relatively high import barriers

• The United States maintains programmes to assist shipyards or ship-repair facilities

• The Federal Ship Financing Program provides guarantees for private-sector financing to construct, reconstruct, and recondition commercial vessels in U.S. shipyards.

Services

• The services sector is by far the largest contributor to output and employment in the U.S. economy. The private services sector accounted for 67.8% of GDP and 65.6% of total employment in 2006, or 80.2% and 83.4%, respectively

• The United States maintains several media ownership restrictions, with the objective of promoting competition, diversity, and "localism" in media production.

Financial services• U.S. bank subsidiaries of foreign banks are treated as domestic banks.

Branches and agencies of foreign banks have similar powers to banks and are subject to similar supervision; agencies, however, may not accept deposits from U.S. citizens or residents.

• payment of interest on funds maintained by a depository institution at a Federal Reserve bank and authorized the Federal Reserve Board to reduce to 0%

• Foreign banks may establish a commercial presence in the U.S. market either by establishing federal- or state-licensed branches, agencies, or representative offices, or by establishing or acquiring a national or state subsidiary bank.

• The U.S. insurance market is open to foreign direct investment through acquisition of a licensed insurance company.

• A federal tax on gross premium income is charged at 1% on all life insurance and on reinsurance, and at 4%, on non-life insurance premiums covering U.S. risks paid to companies not incorporated under U.S. law

DESCRIPTION

NO OF LINES

MFN CANADA

MEXICO

AUSTRALIA

BAHRIN

CHILE

Textiles & articles

1,591 9.0 0.1 0.0 5.2 0.1 0.1

Footwear, headgear

168 13.4 0.0 0.6 2.5 3.1 3.0

Prepared food etc.

647 12.0 3.7 0.2 7.5 8.1 7.3

Textiles & clothing

1,658 9.0 0.0 0.0 5.0 0.0 0.0

Leather, rubber, footwear & travel goods

389 7.0 0.0 0.3 1.1 1.3 1.6

DESCRIPTION

NO OF LINES

MFN CANADA

MEXICO

AUSTRALIA

BAHRIN

CHILE

Transport equipment 240 2.6 0.0 0.0 0.0 0.0 0.1

18 Precision equipment

531 3.0 0.0 0.0 0.1 0.0 0.5

Arms & ammunition

40 1.6 0.0 0.0 0.0 0.0 0.0

Miscellaneous manufacturing

278 3.2 0.0 0.0 0.1 0.0 0.2

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