Today’s report is a tremendous victory for the United States – particularly its manufacturers and workers.

U.S. Trade Representative Ron Kirk Announces U.S. Victory in Challenge to China’s Raw Materials Export Restraints
Washington, D.C.
January 30, 2012

U.S. Trade Representative Ron Kirk today announced that the World Trade Organization (WTO) Appellate Body found China’s export restraints on several industrial raw materials used as key components in the steel, aluminum, and chemicals industries to be inconsistent with China’s WTO obligations.  The Appellate Body affirmed a WTO dispute settlement panel’s July 2011 finding, therefore agreeing with the United States and rejecting China’s attempts to portray its export restraints as conservation or environmental protection measures or measures taken to manage critical shortages of supply.

“Today’s report is a tremendous victory for the United States – particularly its manufacturers and workers,” Ambassador Kirk said.  “The Obama Administration will continue to ensure that China and every other country play by the rules so that U.S. workers and companies can compete and succeed on a level playing field.  During his State of the Union Address last week, the President laid out a  blueprint for an economy that’s built to last – an economy built with the renewed strength of American manufacturing.  Today’s decision ensures that core manufacturing industries in this country can get the materials they need to produce and compete on a level playing field.”

The export restraints challenged in this dispute include export quotas and export duties, as well as related minimum export price, export licensing, and export quota administration requirements.  The raw materials at issue include various forms of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus, and zinc.  Export restraints on these types of industrial products can skew the playing field against the United States and other countries in the production and export of numerous steel, aluminum and chemical, and a wide range of other products.  They can artificially increase world prices for these raw materials while artificially lowering prices for Chinese producers.  This enables China’s domestic producers to produce lower-priced products from the raw materials and thereby creates significant advantages for China’s producers when competing against U.S. and other producers, both in China’s market and other countries’ markets.  Such export restraints can also create substantial pressure on foreign producers to move their operations and, as a result, their technologies to China.

The European Union and Mexico joined the United States as co-complainants in the dispute.  Upon a U.S. request, the WTO Dispute Settlement Body (DSB) will adopt the panel and Appellate Body reports within 30 days and call for China to bring its measures into compliance with its WTO obligations.

BACKGROUND

On June 23, 2009, the United States requested WTO dispute settlement consultations with China regarding export restraints maintained by China on various forms of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus, and zinc.  On the same day, the European Union also requested consultations with China.  On August 21, 2009, a third WTO Member, Mexico, requested consultations with China.  On December 21, 2009, a single WTO panel was established to examine the three complaints.  Argentina, Brazil, Canada, Chile, Colombia, Ecuador, India, Japan, Korea, Norway, Saudi Arabia, Chinese Taipei, and Turkey joined as third parties in the dispute.

The panel found that the export duties and export quotas that China maintains on various forms of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, and zinc constitute a breach of WTO rules and that China failed to justify those measures as legitimate conservation measures, environmental protection measures, or short supply measures.  The panel also found that China’s imposition of minimum export price, export licensing, and export quota administration requirements on these materials, as well as China’s failure to publish certain measures related to these requirements, is inconsistent with WTO rules.

On August 31, 2011, China appealed certain aspects of the panel’s report.  On September 6, 2011, the United States and its co-complainants filed limited cross appeals on certain procedural and other findings made by the panel.  A hearing took place before the WTO’s Appellate Body on November 7-9, 2011.  In its report, the Appellate Body rejected China’s appeal and confirmed that:  China may not seek to justify its imposition of export duties pursuant to the exceptions provided in Article XX of the GATT 1994; China failed to demonstrate that certain of its export quotas were justified as measures for preventing or relieving a critical shortage under Article XI:2(a) of the GATT 1994; and the Panel correctly made recommendations for China to bring its measures into conformity with its WTO obligations.  The Appellate Body also found that the Panel erred:  in making findings related to licensing and administration claims identified in Section III of the U.S. panel request, declaring those findings moot; and in the Panel’s legal interpretation of one element of the exception set forth in Article XX(g) of the GATT 1994 (China did not appeal the Panel’s conclusion that China had failed to establish a defense under Article XX(g)).

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These seized counterfeit Apple iPods and iPhones were displayed at the Port of Los Angeles in February.

Washington DC,
22 December 2011

8th WTO Ministerial Meeting in Geneva

Statement from U.S. Trade Representative Ron Kirk
Regarding the 8th WTO Ministerial Conference

Geneva, Switzerland
December 17, 2011

U.S. Trade Representative Ron Kirk issued a statement today at the close of the 8th World Trade Organization Ministerial Conference.  At the ministerial event Ambassador Kirk and his fellow ministers from the WTO Members discussed the state of play in the Doha Round of world trade negotiations and adopted the terms of accession to the WTO for Russia, Samoa, and Montenegro.  Ministers oversaw the conclusion of a revision of the WTO Government Procurement Agreement, which will expand opportunities for U.S. goods and services providers in markets around the world.   Also this week, the United States announced new initiatives to boost trade and development for least developed country (LDC) Members of the WTO.  From Ambassador Kirk:

“The United States applauds the cooperative successes of this 8th Ministerial Conference of the World Trade Organization.  We welcome the coming together of Members to conclude the revision of the  Government Procurement Agreement and to invite Russia, Samoa, and Montenegro to join the WTO.  Of course, congratulations go to those acceding countries as well.

“In the United States’ view, Ministers have also had a positive, honest discussion this week on the Doha Round.   Many ministers have agreed with the assessment that we must ‘turn the page’ to solve the Doha impasse.   They are willing, as is the United States, to make progress wherever possible on the Doha mandate, based on common efforts.  But ministers have emphasized that ‘business as usual’ has not worked, and will not work going forward.  Now is the time to craft credible, innovative approaches to the WTO’s work as an institution that liberalizes trade and creates and applies meaningful trade rules.

“This has also been a week with positive focus on least developed country (LDC) Members of the WTO, including through the decisions adopted today.  For decades, the United States has been a strong partner to LDCs.  We welcome new assistance to these longtime partners of the United States.  We want to see these partners have a greater stake in global trade and overcome constraints inhibiting faster progress.  This is why the United States is one of the largest single-country providers of trade-related technical assistance, and why we announced this week new initiatives to boost trade and investment among LDCs, particularly Africa’s cotton-producing countries.  We will continue to pursue new trade initiatives in close cooperation with our LDC partners.

“The United States will continue to be in the business of opening markets around the world, through all the avenues we can.  President Obama is committed to supporting American jobs and global recovery through increased trade.  And, because this global trading system only works when all partners play by the rules, the United States will continue to use dialogue when possible and WTO dispute settlement when necessary to insist that markets remain open according to WTO commitments.

“At the close of this 8th Ministerial, WTO Members have much to be pleased about, and much work still to do.  This institution, a bulwark of the rules-based trading system, is strong.  The United States looks forward to working with partners old and new to strengthen and energize the WTO in 2012 and beyond.“

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Although WTO rules permit China to impose duties on imports of merchandise that are subsidized or dumped – provided those imports cause injury to the domestic industry – they also require WTO Members to follow specific procedures and apply defined legal standards when conducting the investigations that determine whether duties are warranted. The U.S. panel request alleges that Chinese authorities failed to abide by applicable procedures and legal standards, including by finding injury to China’s domestic industry without objectively examining the evidence, by improperly calculating dumping margins and subsidization rates, and by failing to adhere to various transparency and due process requirements.

Requesting a panel is the next step in the WTO dispute settlement process after requesting consultations. On September 20, 2011, the United States requested consultations with China regarding China’s imposition of AD and CVD duties on chicken broiler products. Consultations were held in Geneva on October 28, 2011, but were unable to resolve the dispute.

Background

On September 27, 2009, China’s Ministry of Commerce (MOFCOM) initiated AD and CVD investigations on chicken broiler products from the United States. Based on its findings, MOFCOM imposed on these products AD and CVD duties on September 26, 2010 and August 30, 2010, respectively.

In the AD investigation, MOFCOM imposed dumping duties ranging from 50.3 percent to 53.4 percent for the participating U.S. producers, and set an “all others” rate of 105.4 percent. In the CVD investigation, MOFCOM imposed countervailing duties of between 4.0 percent and 12.5 percent for the participating U.S. producers and an “all others” rate of 30.3 percent.

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Washington, D.C.
December 1, 2011    

Washington, D.C. – Today, United States Trade Representative Ron Kirk issued the following statement regarding the deadline for the European Union (EU) to comply with the World Trade Organization (WTO) ruling on Airbus and the EU’s subsequent response:

“We have received the EU’s compliance notice today and will review it carefully before announcing our next step,” said Ambassador Kirk.  “We will base our next steps on a careful evaluation of that announcement, and whether it demonstrates that the EU has in fact taken the steps necessary to bring itself into full compliance with the WTO decision.  The WTO ruling on Airbus requires that the EU withdraw its subsidies or remove their adverse effects.  The continued success of the American aerospace industry, and the jobs of hundreds of thousands of Americans who work in this highly competitive sector depend on the ability to compete on a level playing field – the level playing field assured to them by our WTO agreements.  The United States intends to ensure that our valued trading partner, the EU, keeps its commitments in this and all other trade matters.”

Background: 

The United States initiated this WTO dispute in October 2004 to end decades of launch aid and other subsidies provided to Airbus.  A panel was established to examine the matter in May 2005. The Panel issued its report on June 30, 2010, finding that European government launch aid had been used to support the creation of every model of large civil aircraft produced by Airbus. The Panel also found that launch aid and the other challenged subsidies to Airbus have significantly distorted the global market for large civil aircraft, and that those subsidies have directly resulted in Boeing losing sales and market share.

The European Union commenced the appeal on July 21, 2010 and the Appellate Body issued its report on May 18, 2011.

The Appellate Body affirmed the WTO Panel’s central findings that European government launch aid had been used to support the creation of every model of large civil aircraft produced by Airbus.  The Appellate Body also confirmed that launch aid and other challenged subsidies to Airbus have directly resulted in Boeing losing sales involving purchases of Airbus aircraft by easyJet, Air Berlin, Czech Airlines, Air Asia, Iberia, South African Airways, Thai Airways International, Singapore Airlines, Emirates Airlines, and Qantas – and lost market share, with Airbus gaining market share in the European Union and in third country markets, including China and Korea at the expense of Boeing.  The Appellate Body also found that the Panel applied the wrong standard for evaluating whether subsidies are export subsidies, and that the Panel record did not have enough information to allow application of the correct standard.

Following adoption by the WTO Dispute Settlement Body, the WTO recommended that the EU and the EU member states that financially support Airbus take appropriate steps to withdraw the subsidies or remove the adverse effects within six months.  That period ended today.

Under WTO rules, the United States has the option of challenging the EU’s claims to have withdrawn any subsidies or eliminated their adverse effects.  The United States will be examining the EU’s claims over the coming days.

# # #

Geneva, Switzerland
November 30, 2011

“As Members conclude the tenth and final Transitional Review Mechanism (TRM) for China, my delegation would like to share its observations on China’s first ten years of WTO membership.

“But, as always, we would first like to express appreciation to Ambassador Yi, the Chinese delegation and the many Chinese officials in Beijing who have worked hard over the years to provide responses to the numerous questions raised by other WTO Members. We recognize the significant amount of time and effort that the TRM has required, particularly on the part of China’s Ministry of Commerce, which oversees China’s participation in the TRM.

“As Members may recall, the TRM was created largely because China was admitted to WTO membership before it had revised all of its trade-related laws and regulations to comply with its WTO obligations, and because China was allowed a variety of transition periods before it implemented certain of its WTO obligations.

“Active monitoring of China’s implementation progress through the TRM was considered an important mechanism to help ensure that China successfully integrated into the WTO’s open, market-oriented and rules-based trading system.

“Following China’s accession to the WTO, China took impressive steps to implement a sweeping set of commitments. It reduced tariffs, eliminated many non-tariff barriers that denied national treatment and market access for goods and services imported from other WTO members, and made legal improvements in intellectual property protections and in transparency.

“Almost all of these steps took place in the first five years after China’s WTO accession. They deepened China’s integration into the international trading system and strengthened China’s rule of law and economic reform.

“Trade and investment has also expanded dramatically between China and its many trading partners, as China has become one of the major engines of economic growth in the world. From a bilateral perspective, the expanding trade and investment between the United States and China has provided numerous and substantial opportunities for U.S. businesses, workers, farmers and service suppliers and a wealth of affordable goods for U.S. consumers.

“Nevertheless, despite this progress, the overall picture presented by China’s first ten years of WTO membership remains complex, given a troubling trend in China toward intensified state intervention in the Chinese economy over the last five years. Increasingly, trade frictions with China can be traced to China’s pursuit of industrial policies that rely on trade-distorting government actions to promote or protect China’s state-owned enterprises and domestic industries.

“In fact, China seems to be embracing state capitalism more strongly each year, rather than continuing to move toward the economic reform goals that originally drove its pursuit of WTO membership. This is a troubling development, and the United States urges the Chinese government to reconsider the path it is on.

“During the TRMs conducted earlier this fall, the United States highlighted the tremendous progress that China had made in the complex task of implementing its WTO commitments. Even with much progress behind it, however, China still faces remaining work. One measure of the work remaining can be found in the WTO disputes generated by China’s actions and inactions.

“Over the past ten years, the United States and various co-complainants have invoked the WTO dispute settlement mechanism against China on 12 separate occasions after bilateral engagement failed to address concerns about China’s adherence to important commitments and obligations.

“Three cases, including one within the past year, have involved allegations indicating that China has employed prohibited subsidies throughout its first ten years of WTO membership. Three cases have included claims that China failed to implement its commitments to liberalize services trade, as evidenced by restrictions on foreign suppliers of distribution services, financial information services and electronic payment services.

“Two cases have challenged Chinese policies that undermined protection of intellectual property rights in China. Three cases have focused on claims of major trade-distortive Chinese industrial policies, including discriminatory tax treatment, local content requirements and export restraints. Two cases have alleged multiple violations of procedural and substantive obligations related to the conduct of anti-dumping and countervailing duty proceedings.

“The United States and other Members are also trying to resolve a range of concerns with China through bilateral engagement. Effective enforcement of intellectual property rights in China remains a significant challenge.

“China’s pursuit of an array of other industrial policies also raises serious concerns. For example, while China has made progress in eliminating certain discriminatory ‘indigenous innovation’ policies in the government procurement context, it continues to implement these trade-distorting policies in many other areas of its economy, retarding innovation and harming those who develop or first register their intellectual property outside China. China also makes selective use of border measures, such as value-added tax rebates and export duties to encourage or discourage exports of particular products. China continues to pursue unique national standards in a number of areas of high technology where international standards already exist. China continues to protect many domestic industries through a restrictive investment regime, particularly so-called ‘pillar industries’ and ‘strategic emerging industries.’

“In the area of agriculture, China remains among the least transparent and predictable of the world’s major markets for agricultural products, largely because of seemingly capricious customs and quarantine practices that delay or halt shipments and because sanitary and phytosanitary measures are sometimes imposed with what appear to be questionable scientific bases. We remain highly concerned that China’s lack of required transparency complicates the WTO’s ability to resolve difficult issues – or even to have a meaningful conversation – for example in the area of agricultural subsidies.

“In the area of services, discriminatory regulatory processes, informal bans on entry, overly burdensome and capricious licensing and operating requirements, and other similar problems frustrate efforts of foreign suppliers of banking, insurance, express delivery, telecommunications, legal and other services to achieve anywhere near their full market potential in China. It also appears that China has more to do in implementing some of its cross-cutting transparency obligations.

“We do understand the difficulties that China must confront in order to transition from a planned economy to a more market-oriented economy. We also recognize the important contribution China’s economic progress has been making to global economic growth and development.

“However, the developments I have described indicate that essential work remains ahead to reduce market access barriers, to increase rule of law, including transparency and predictability, and to fully institutionalize market mechanisms in China.

“Before concluding our review of China’s first ten years of WTO membership, one other aspect of China’s conduct as a WTO Member needs to be highlighted and discussed, and that is the perception among WTO Members that Chinese government authorities at times use intimidation as a trade tool.

“China’s trading partners have heard from their enterprises on too many occasions that Chinese regulatory authorities threaten to withhold necessary approvals or take other retaliatory actions against foreign enterprises if they speak out against problematic Chinese policies or are perceived as responding cooperatively to their governments’ efforts to challenge them.

“In recent years, a pattern also has seemed to emerge of the Chinese government’s reflexive resort to trade actions in response to legitimate actions taken by the United States or other trading partners under their trade remedies laws. This type of conduct is at odds with fundamental principles of the WTO’s rules-based system.

“The United States strongly urges China to eliminate any basis for these adverse perceptions. All WTO Members need to encourage – not discourage – foreign enterprises that want to shed light on policies they perceive to be problematic. And, if a WTO Member believes a trade action taken by another Member raises concerns, procedures provided by the WTO, such as the WTO’s dispute settlement mechanism, are available to try to resolve those concerns.

“In conclusion, let me reiterate that we appreciate the efforts China has made in participating in the TRM for the past ten years, and we also acknowledge the many major steps that China has taken to implement its numerous WTO commitments.

“In the years ahead, we look forward to working with China on a bilateral basis to facilitate further improvements in its trade regime. We also remain committed to working with China here at the WTO. Thank you, Chair.”

U.S. Trade Policy at the U.S. Chamber of Commerce
Washington, DC
November 30, 2011

*As Prepared for Delivery*

“Thank you, Tom.  It’s always a pleasure to be here.  I also want to recognize my distinguished predecessors: Ambassador Carla Hills, Ambassador Charlene Barshefsky, and Ambassador Susan Schwab. I am privileged to build on the work that you all have done at USTR.   I appreciate the important points Tom just made about continuing to pursue a big and bold U.S. trade agenda, and I agree we have to seize every opportunity to create American jobs and put more people back to work.

“Part of the President’s plan to build an economy that creates the well–paying jobs of the future is for Americans to make, grow, and provide things the rest of the world buys.  That’s why the President created the National Export Initiative to focus the Administration’s trade efforts on doubling exports by the end of 2014, with the goal of supporting up to two million additional U.S. jobs.  Right now we are on pace to meet that goal, which is even more encouraging when you consider that the recently approved trade agreements with Korea, Colombia, and Panama haven’t kicked in yet.  I’ll say more about them in a moment, but first I’d like to share some numbers that show just how robust our export growth has been over the past year.

“The latest economic data through September 2011 shows that over the last 12 months overall U.S. goods and services exports totaled $2.1 trillion, which represents a 30.3 percent increase over 2009.  In fact, September’s exports of goods and services set a record at $180.4 billion, marking the fourth consecutive month of expanding export growth. Moreover, these gains are reflected across all sectors: services exports are up 17.1 percent; manufacturing exports are up 30.4 percent; and agricultural exports are up 39.5 percent.

“This morning, I’d like to highlight five examples of how we plan to continue pursuing trade that supports increased U.S. exports and jobs: 1) implementing the Korea, Colombia, and Panama trade agreements;2) negotiating the Trans-Pacific Partnership; 3) enforcing U.S. trade agreements and international trade rules; 4) maximizing export opportunities in every market, and 5) and providing leadership at the WTO to combat protectionism and strengthen the rules-based global trading system.

“First, we welcomed the Korean National Assembly’s approval of the KORUS FTA last week, because we are eager to implement our trade agreement with Korea, as well as the agreements with Colombia and Panama.  All three agreements will boost U.S. exports and collectively they will support tens of thousands of jobs for Americans here at home.  That’s why we’re working closely with each country to ensure requirements are met and agreements are implemented as quickly as possible.

“We’re also doing everything we can to sustain broad-based support and bolster the U.S. trade agenda moving forward.  Because there is no doubt that bringing additional stakeholders to the table on trade helped us build a stronger coalition in support of the Korea, Colombia, and Panama agreements.  The Obama Administration continues to believe we are all better off with more stakeholders inside the tent, actively supporting trade that boosts U.S. exports and American jobs.  We’re committed to a practical, principled, and balanced approach that builds wide support for trade agreements that truly open markets and make sense for the American people as both producers and consumers.

“Speaking of trade agreements that make sense, the second item I want to discuss is the Trans-Pacific Partnership (TPP).  This bold initiative remains a top priority of the Obama Administration, because we think TPP has the potential to be a real game-changer in terms of trade and jobs.  Let’s start with the fact that TPP is going to enhance U.S. economic engagement with the dynamic Asia-Pacific region, which is home to some of the world’s largest and fastest growing markets.  Add to that all nine like-minded TPP partners are committed to aiming high, and we think TPP will be a deeply ambitious, groundbreaking trade arrangement, with binding commitments to market access across all sectors.  American entrepreneurs, small business owners, workers, and families all stand to gain from high standards in TPP, which we believe will yield significant benefits in the form of more export-supported jobs and economic growth in the United States and other TPP partners.

“TPP is also about building the best trade policy for the future.  For example, TPP partners are taking on the latest challenges that our companies and workers are facing in the 21^st century, many of which have never before been addressed in a trade agreement.  To anticipate and address these emerging concerns, TPP partners are seeking new disciplines on cross-cutting issues like regulatory coherence, small- and medium-sized businesses, and supply chains, competitiveness and business facilitation.  We are also looking at how to address new trade-related issues, such as wildlife conservation, digital technology, and state-owned enterprises.

“Earlier this month in Honolulu, we were pleased to announce that we have achieved the broad outlines of an agreement.  Moving forward, we have instructed our negotiating teams to work to conclude the agreement by the end of next year.  Also in Honolulu, we welcomed expressions of interest in joining the TPP from Japan, Canada, and Mexico.  At the same time, we conveyed that potential new entrants must be prepared to address a range of U.S. priorities and issues, and meet the high standards sought by all TPP partners.

“The Administration looks forward to working with Congress, stakeholders, and TPP partners to review the important challenges and opportunities involved with accepting new members.  And as we continue to coordinate closely with Congress on TPP, we will discuss additional negotiating authority that may be necessary at the appropriate time.

“Since I’ve just described current and future trade agreements, I want to take a few minutes now to focus on the flip side of the coin – trade enforcement.  We must enforce our trade agreements – strictly and consistently – to make sure that American businesses and workers get all the job-building benefits U.S. negotiators fight for at the bargaining table.  That’s why from day one the Obama Administration has been committed to enforcing U.S. trade rights and holding all of our trading partners accountable for their obligations to play by the rules.  Over the past three years, this Administration has launched and led unprecedented trade enforcement efforts in support of American jobs.  For example, we have brought more cases to the WTO dispute settlement body than any other member during that time.

“But let me be clear – we do not arbitrarily seek disagreements; nor is it our desire to be disagreeable.  We’re taking these enforcement actions because: 1) the international trading system works best when everyone is playing by the rules; and 2) we have a responsibility to make sure the playing field is level for American producers and workers competing in the global economy.

“Moving forward, we will continue to deploy creative and effective enforcement strategies that hold our trading partners accountable for their commitments.  Our goal is to ensure American producers are able to compete and win in world markets where intellectual property is protected, where agricultural and industrial standards are based on science, and where transparent rules and regulations are applied without discrimination.  Accordingly, our enforcement priorities will be appropriately targeted to address the most commercially-significant challenges facing U.S. workers and businesses, as well as emerging issues that have important implications for the future of the rules-based global trading system.

“For example, this week is the deadline for the EU to comply with the WTO ruling in the Airbus subsidies case.  We are determined to ensure this legal victory for the United States – the largest in the history of the WTO – translates into a mutually-agreeable solution that removes WTO-inconsistent subsidies from the global aerospace sector.  Also, as China approaches the tenth anniversary of its accession to the WTO, we are vigilantly addressing trade-distorting practices such as China’s unfair subsidies in the wind sector, which we worked hard to remove successfully.  And as we continue to seek a mutually-beneficial relationship with China based on transparency and the rule of law, we will advance the rights of U.S. manufacturers, service providers, agricultural producers, and workers through dialogue when possible, and through litigation when necessary.

“While we vigilantly enforce rules and assert U.S. trade rights daily, we are also constantly looking for ways to enhance and expand each of our trade relationships.  Because all of our trade relationships offer opportunities to increase export-supported American jobs.  And we’re not going to leave any jobs on the table.

“We continue to strengthen ties with top trading partners such as Canada, Mexico, and the European Union, and more broadly across Latin America, Africa, the Middle East, and Asia.  On Monday, President Obama, European Commission President Barroso, and European Council President Von Rompuy [von-ROM-poy] launched a High Level Working Group on Jobs and Growth that will identify and assess options for strengthening the U.S.-EU economic relationship, including ways we can generate more transatlantic trade and investment that supports better jobs for our peoples.  This new working group, which I will co-chair along with EU Trade Commissioner Karel De Gucht, is a logical step forward in our strong trade relationship.  It builds on the success we have had working together through the Transatlantic Economic Council to develop more trade-friendly measures, such as joint principles for ICT services and for good regulatory practices, just to name a few.

“In North America, our tariffs with Canada and Mexico have been eliminated, so we are working to reduce unnecessary regulatory differences among our countries.  For example, earlier this year we reached a mutual recognition agreement with Mexico to enhance cross-border trade in telecommunications products, so that companies do not have to make different products for different markets.

“Efforts like these complement President Obama’s National Export Initiative focus on helping small- and medium-sized businesses, because addressing these types of issues can reduce trade barriers that make it difficult for many small businesses to export right now.  As you know, nearly two-thirds of new American jobs are created by small businesses, but only about 1 percent of all U.S. small businesses are currently exporting.  So if we could get just one more out of every one hundred small U.S. businesses selling to customers beyond our borders, then we would likely grow many more jobs here at home.

“Large and growing markets like China, India, and Brazil also present U.S. exporters with significant opportunities.  To be sure, each market presents different barriers to trade and investment.  But emerging economies offer tremendous potential to support additional American jobs through trade that provides American producers with access to billions of international customers.  With China, we will carefully monitor implementation of commitments China made at this year’s Joint Commission on Commerce and Trade (JCCT) to enforce intellectual property rights and protections more effectively; to ensure a level playing field for our companies in emerging industries like new energy vehicles; and to remove certain “indigenous innovation” requirements.

“Similarly, with Brazil and India, we’ll be utilizing all available resources to identify, address, and remove barriers to trade and investment between the United States and these growing markets.

As we work to seize opportunities in the largest and fastest-growing world markets, we are also working to enhance our trade relationships with developing countries.  We will continue to strengthen export markets and enhance economic development in Africa, Asia, Latin America, and the Middle East.

“Now that I’ve given you a quick overview of our efforts to leverage U.S. trade relationships all around the world, I’d like to wrap up by highlighting how the United States is providing crucial international leadership on trade. Specifically, we are leading multilateral efforts at the World Trade Organization to strengthen the rules-based trading system and keep global trade flowing and growing.  In Geneva, we have been consistently emphasizing three key points: 1) rules must be followed consistently and transparently; 2) protectionism must be avoided actively; and 3) it’s time to recognize that emerging economic power carries commensurate responsibilities to build a strong multilateral trading system for the 21st century.  The implications of this third point are clear in the Doha Round, where the current model isn’t working and the United States is leading conversations about how to turn the page toward fresh, credible approaches to the negotiations.

“But at the same time, everyone should remember that there’s more to the WTO than just Doha negotiations.  The rules-based WTO system has effectively staved off protectionism and enforced global trade rules.  And we significantly benefit from the existing WTO Agreements and the day-to-day work of the standing Committees in resolving trade issues.

“To further strengthen the WTO, we are also assisting efforts to expand the community of countries participating in the rules-based global trading system.  We are pleased Russia is on track to become a WTO member, because Russia’s accession will spur trade and support significant job growth in both countries as a result of increased access to Russia’s market and requirements for Russia to comply with the same rules that apply to us and other WTO members.  Of course, to ensure that American firms and American exporters will enjoy the same benefits of Russia’s WTO membership as their international competitors, we look forward to working with Congress to secure legislation ending application of the Jackson-Vanik amendment and granting permanent normal trade relations status to Russia as soon as possible.

“Let me conclude with one final thought about the future:  I think it’s always important to remember that for millions of American families struggling to make ends meet, the future is really right now.  So while today may mark the end of two significant months in trade history, this Administration is already writing another chapter of U.S. trade policy.  Because we know the American people are counting on us to keep delivering trade opportunities that boost U.S. exports and support American jobs.  That’s what led President Obama to focus on selling more products

Made-in-America to foreign customers in the first place, and it will continue to drive our trade agenda moving forward.

“I’ll leave you with President Obama’s own words.  Speaking at APEC a few weeks ago, the President put it best when he said:

‘…whether it’s in the WTO, whether it’s in the TPP, whether it’s in forums like APEC, my message to all our trading partners, to other countries, is: ‘If you are playing by the rules, then America is ready to do business.’ And we will remain open; we will fight against protectionist measures. But we are also going to be pushing hard to make sure that you are not…gaming the system. And we want strong enforcement of these international norms and rules. We think that will be to everybody’s benefit over the long term.’

“America is ready to do business, and your support is critical to our shared success.  Thank you.”

Office of the United States Trade Representative
Oct 14, 2011

Fact Sheet

From Enactment To Entry Into Force: Next Steps On The Trade Agreements

President Barack Obama will sign legislation implementing U.S. trade agreements with Korea, Colombia, and Panama. These agreements will open markets for U.S. firms, increase trade and exports, and support additional jobs for American workers who produce Made-in-the-USA goods and services.

The length of time necessary to implement trade agreements varies, but the President is committed to bringing these agreements into force as soon as possible to reap their benefits at home. Here are next steps:

Action by our Trading Partners

Korea’s National Assembly is now considering the U.S.-Korea trade agreement. The legislatures of Colombia and Panama have ratified their respective agreements.

Beyond ratification, what each partner country must do to come into compliance with the agreement depends on its specific laws and regulations. Before the agreement can enter into force, each country must be able to demonstrate that it is in compliance with those obligations that will take effect on day one.

Action Here at Home

The trade agreement implementing bills contain all changes to U.S. law necessary to bring the United States into compliance with the agreements. In addition to these changes in U.S. law, for each agreement the United States will issue a proclamation containing specific tariff revisions and product-specific rules, and make additional administrative and regulatory changes covering issues such as customs and procurement.

Cooperative Work with our Trading Partners

Immediately after President Obama signs the implementing legislation, the United States will schedule cooperative work with Korea, Colombia, and Panama on implementing the agreements. The United States will hold discussions with the partner countries to review both countries’ laws and regulations, and ensure compliance with the obligations of the agreement that will take effect on the day the agreement enters into force. U.S. officials will also consult with Congress and with U.S. stakeholders.

Exchange of Diplomatic Notes

The provisions of the FTAs provide for entry into force through the exchange of formal diplomatic notes at a time agreeable to both countries. In the United States, the President must first determine that the trading partner has come into compliance with obligations that will take effect when the agreement enters into force. This includes, in the case of Korea, the pertinent obligations of the 2011 exchange of letters on autos. In the case of Colombia, the Administration will also ensure that Colombia has successfully implemented key elements of the Labor Action Plan before bringing that agreement into force.

Implementation, Monitoring, and Enforcement

Following the entry into force of each agreement, work continues at the Office of the U.S. Trade Representative to ensure that each partner country remains in compliance with its immediate obligations, and comes into compliance with obligations that take effect later on. As with all U.S. trade agreements, USTR will monitor compliance and actively enforce U.S. rights under these three trade agreements going forward.

United States Trade Representative

USTR Seeks Fairness for American Chicken Producers

Washington, D.C. – United States Trade Representative Ron Kirk announced today that the U.S. has filed a case against China before the World Trade Organization (WTO) to protect up
to 300,000 American agricultural jobs that are being threatened by China’s imposition of duties on imports of American chicken products.  This is the latest in a series of enforcement steps the United States has taken to hold China accountable for its WTO commitments, including actions at the WTO against China’s treatment of steel products, industrial raw materials, electronic payment services and wind power equipment as well as actions in the United States to address rapidly increasing Chinese tire imports.  In each of these matters, the key principle at stake is that China must play by the rules to which it agreed when it joined the WTO, including commitments to maintain open markets on a non-discriminatory basis, and to follow procedures in a transparent way.

“To be clear, the United States does not arbitrarily seek disagreements with China,” said Ambassador Kirk in a news conference today.  “However, we will not stand still if we believe that China has violated its commitments as a WTO member and is therefore threatening American jobs – in this case hundreds of thousands of American poultry industry jobs.  Our actions against China simply demonstrate that the United States is prepared to take every measure necessary to stand up for American workers by ensuring that China – or any of our other trading partners – does not misuse laws to prevent exports of U.S. products.”

Specifically, the United States is requesting dispute settlement consultations – the first step in a WTO dispute – to challenge China’s imposition of antidumping and countervailing duties against imports of U.S. chicken “broiler products,” which are both chicken products that are not cut into pieces, as well as various cuts and pieces.  Through this case, the United States is addressing its concerns that China’s duties appear to be inconsistent with WTO rules.  Under WTO rules, parties that do not resolve a matter through consultations within 60 days may request the establishment of a WTO dispute settlement panel.

Before the imposition of these duties, the United States was China’s largest chicken broiler products supplier with over 600,000 metric tons of broiler products exported in 2009.  Since the duties have come into force, U.S. exports to China are down 90 percent.  According to industry sources, if these duties are not lifted, the U.S. poultry industry will have lost approximately $1 billion in sales to China by the end of this year alone.

Background:

On September 27, 2009, China’s Ministry of Commerce (MOFCOM) initiated antidumping and countervailing investigations of imports of chicken broiler products from the United States, and then imposed antidumping and countervailing duties on September 26, 2010 and August 30, 2010, respectively.  The duties were based on China’s findings that American broiler products had been sold at less than fair value (i.e., “dumped”) into the Chinese market as well as subsidized.  WTO rules permit Member countries to impose duties on imports of merchandise that are found to be dumped or subsidized, if those imports cause injury to the domestic industry.  However, WTO rules also require Member countries to follow specific procedures and legal standards when conducting their investigations and making determinations.

The United States is concerned that China’s investigating authorities, in levying these duties, appear to have failed to adhere to their WTO obligations in numerous respects.  In particular, China seems to have failed to observe numerous transparency and due process requirements, failed to properly explain the basis for its findings and conclusions, incorrectly calculated dumping margins, incorrectly calculated subsidy rates and made unsupported findings of injury to China’s domestic industry.

In the antidumping investigation, China imposed dumping duties ranging from 50.3 percent to 53.4 percent for the participating U.S. producers and exporters, and set an “all others” rate of 105.4 percent.  In the countervailing duty investigation, China imposed countervailing duties of between 4.0 percent and 12.5 percent for the participating U.S. producers and exporters and an “all others” rate of 30.3 percent.

Remarks by United States Trade Representative Ron Kirk Announcing Action against China with Regard to Poultry

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