OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

Executive Office of the President

Washington, D.C.

20508

USTR RELEASES 2002 INVENTORY OF TRADE BARRIERS

The Office of the United States Trade Representative today released the 2002
National Trade Estimate (NTE) Report on Foreign Trade Barriers. The annual
report, required by the Omnibus Trade and Competitiveness Act of 1988,
documents foreign trade barriers to U.S. exports. A notable change in this
year's report is the increased use of countries using sanitary and
phyto-sanitary standards as a strategy for blocking U.S. exports. The report
also highlights examples of our trading partners reducing, or eliminating,
trade barriers.

"The Bush Administration continues to move forward to advance trade and free
markets," said U.S. Trade Representative Robert B. Zoellick. "By identifying
barriers to trade, we can work with our trading partners, globally,
regionally, and bilaterally, to eliminate them, while further liberalizing
our market at home. This trade policy improves the economic well-being of
Americans, advances freedom around the world, and promotes our nation's
security."

The persistence of trade barriers reaffirms the need for the United States
to remain actively engaged on multiple fronts. The trade barriers also
underscore the importance of the new round of multilateral trade
negotiations launched in Doha, Qatar. These negotiations are an opportunity
for governments to reduce, and eventually eliminate, barriers to trade. To
realize these benefits, we need to build public support for open trade. The
report demonstrates what is at stake if the United States fails to take the
lead in shaping the international trade agenda.

The NTE is a comprehensive list of unfair trade practices and barriers to
American exports of goods, services and farm products. It covers 55 major
trading partners in each region of the world, and profiles policies
restricting exports of goods and services, as well as deficiencies in
intellectual property rights protection and investment barriers. The NTE
also notes many examples where countries have reduced or eliminated trade
barriers described in earlier reports. USTR prepares the NTE Report in close
consultation with other U.S. Government agencies, based on the
Administration's monitoring program and information provided from the public
and private sector trade advisory committees. This year, as in the past,
USTR solicited public comments and received 49 submissions. U.S. Embassies
also participated actively in the preparation of the report, and provided
critical input based on the experience of U.S. exporters abroad. These
barriers are the subject of consultation with the Congress throughout the
year.

The full text of the trade barriers report is available on the USTR web
site, www.ustr.gov . Bound copies of the report are
available from USTR's Office of Public Affairs beginning Monday, April 8,
2002.

Regional Highlights of the 2002 Report:

Africa:

Most of the sub-Saharan African countries under review are introducing
economic and political reforms that will promote economic growth and
facilitate their integration into global markets. With the exception of
Zimbabwe, these countries are eligible for benefits under the African Growth
and Opportunity Act (AGOA) and are taking steps to make their investment
climate attractive for foreign investors. Tariffs have been reduced but
remain high in certain sectors and countries. Other issues that hamper U.S.
exporters in certain countries are onerous customs delays, ineffective
enforcement of intellectual property rights, and corruption.

South Africa is the United States' largest export market in sub-Saharan
Africa and a major beneficiary of the African Growth and Opportunity Act.
The United States is currently working cooperatively with the South African
Government to address U.S. poultry industry concerns related to South
Africa's December 2000 imposition of antidumping duties against certain
chicken parts from the United States.

The United States has expressed serious concerns about the refusal of South
Africa's monopoly telecommunications provider, Telkom, to lease lines to
competitive providers of value-added network services. South Africa's newly
enacted Telecommunications Amendment Bill would also prevent resale until
2005, which raises questions about South Africa's commitment to a
competitive telecommunications market and its long-term ability to attract
foreign participation in its high-technology sector.

Argentina:

Due to continuing financial and political crises starting in late 2000, the
government has implemented and overturned trade policies frequently,
fostering uncertainty and confusion in the exporting and importing
community. In January 2002, the Government of Argentina established a system
that prioritizes Central Bank distribution of foreign exchange to pay for
imported products. This has had an adverse impact on U.S. firms and is
generally a disincentive to trade.

Brazil:

During the past ten years Brazil has liberalized its trading regime in a
substantial manner, but still maintains high applied tariffs (such as a 35
percent tariff on motor vehicles) and tariff bindings, as well as various
non-tariff barriers. In addition, Brazil has very high information
technology tariffs of 30 percent, which combined with other taxes adds 100
percent to the cost of personal computers. The main non-tariff trade
irritants include restrictive and non-transparent import licensing, an
unofficial yet de facto imposition of questionable minimum import prices on
certain sensitive products, and restrictions on payments for imports.
Overall, Brazil's customs regime continues to be problematic among U.S.
exporters for being non-transparent, burdensome, and costly.

Canada:

The United States trades more with Canada than with any other country, but a
number of issues continue to threaten this partnership.

The 1996 U.S.-Canada Softwood Lumber Agreement was created to mitigate the
effects of market distorting Canadian provincial timber sales practices and
provides time to implement systemic reform. The Agreement expired in April
2001 having fostered little substantive reform. U.S. industry filed
antidumping and countervailing duty petitions immediately thereafter. On
March 22, 2002, the U.S. Department of Commerce announced its final
determinations that Canadian softwood lumber is being dumped into the U.S.
market and benefits from Canadian Government subsidies. The U.S.
International Trade Commission continues to investigate the extent of injury
to the U.S. industry caused by Canadian dumped and subsidized imports and
its final decision will be made around May 6. In the absence of an agreement
on basic reforms to the Canadian system which would form the basis of a
durable solution as an alternative to trade litigation, the United States
will effectively enforce U.S. trade laws.

The Canadian Wheat Board has been reorganized but continues to enjoy
government-sanctioned monopoly status, as well as other privileges that
restrict competition. The United States is committed to using all effective
tools available to end the market distorting impact of the Canadian Wheat
Board's monopoly on the sale and distribution of its wheat around the world.
In response to a petition from the North Dakota Wheat Commission (NDWC), on
February 15, 2002, USTR announced multiple steps to fight for a level
playing field for American wheat farmers. These include: examination of a
possible dispute settlement case in the World Trade Organization (WTO)
against the Canadian Wheat Board; working with the wheat industry to examine
the possibilities of filing U.S. countervailing duty and antidumping
petitions; and identifying specific impediments to U.S. wheat entering
Canada to ensure the possibility of fair, two-way trade. These actions are
complemented by the Administration's ongoing commitment to vigorously pursue
comprehensive and meaningful reform of monopoly state trading enterprises in
the WTO agriculture negotiations.

In July 2001, a WTO compliance review panel agreed with the United States
that Canada had not taken the necessary steps to bring its dairy export
subsidy program into compliance with the WTO. The United States intends to
present further evidence to the WTO demonstrating that Canada is unfairly
subsidizing its dairy exports in response to the review panel's judgment
that the factual record in the case was incomplete.

China:

A number of problems continue to affect the bilateral trade relationship.
For example, import standards and phytosanitary requirements are being used
to create import barriers, and imports of many products are required to
undergo duplicative and expensive quality and safety inspection procedures.
Imports of agricultural products such as grain, poultry, and citrus are at
times arbitrarily blocked. In addition, transparency continues to be an
issue for both foreign and domestic firms, as inconsistent notification and
application of existing laws and regulations continues to create problems
for businesses.

China did make further improvements in its intellectual property rights
protection regime, but a high level of product counterfeiting and copyright
piracy continues, and enforcement must be improved.

Following nearly 15 years of negotiations, China acceded to the WTO on
December 11, 2001. Although China had begun the difficult process of
reforming its trade regime in order to become WTO-compliant, this process is
ongoing. It is expected that WTO accession will further open China's market
to U.S. goods and services. In the long run, it is also expected that
adherence to WTO rules and international norms should encourage structural
reform and promote the rule of law throughout China.

European Union:

Several European Union policies continue to create significant barriers to
U.S. economic interests. Among these barriers are unjustified bans on U.S.
beef from livestock treated with hormones, U.S. poultry, and bioengineered
products. The EU ban on U.S. beef has continued for more than ten years,
despite a WTO ruling that the ban is inconsistent with multilateral trade
rules. Other major barriers include Member State government financial
support to the aircraft industry; and widely differing EU standards,
testing, and certification procedures.

Many U.S. trade concerns stem from the lack of transparency in the
development of EU regulations. The United States views transparency and
public participation as essential to promoting more effective transatlantic
regulatory cooperation, to achieving better quality regulation, and to
reducing the number of possible bilateral trade disputes.

India:

With the elimination of longstanding quantitative restrictions in the past
year, access to the Indian market has improved. Nonetheless, a broad range
of impediments remain, including high taxes and tariffs, and non-tariff
barriers, affecting most trade. Serious deficiencies in intellectual
property rights protection also persist.

Japan:

Structural rigidity, excessive regulation, and market access barriers
continue to limit opportunities for U.S. companies trading with, and
operating in Japan, our third largest trading partner. The report
underscores our continuing concern with a number of these obstacles.

For example, competition in Japan's $130 billion telecommunications sector
remains stifled by the absence of an independent regulator; weak dominant
carrier regulation; high interconnection rates for both wired and wireless
services; and inadequate access to rights-of-way, facilities and other
services to competitors.

Japan also continues to maintain significant barriers to its agricultural
market. These barriers are of particular concern to the United States as our
exports of farm, forest and seafood products totaled $11 billion in 2001.
There appears to have been an increase in Japan's use of standards and other
administrative requirements to limit agricultural imports and a greater
tendency to deviate from scientific principles in setting new import
policies. Japan's restrictions on apples because of alleged concerns about
the potential transmission of fire blight is one such example.

The United States also continues to urge Japan to remove regulatory and
trade barriers and address systemic inefficiencies in the medical device and
pharmaceutical sectors. The United States is particularly concerned about
Japanese plans to implement a new "foreign reference pricing" system for
medical devices that arbitrarily sets a cap on prices without taking into
full account the high cost of doing business in Japan.

Korea:

Korea is one of the United States' major trading partners, and President Kim
Dae Jung has made progress toward a more open, market-oriented economic
policy. However, Korea continues to impose significant barriers to U.S.
imports.

Korea's high tariffs and related taxes combine to seriously restrict access
for U.S. exports. U.S. companies access to Korea's auto market remains
extremely limited. Korea also imposes high duties and maintains other
barriers on many agricultural and fishery products.

The lack of transparency in rulemaking and in Korea's regulatory system is a
principal problem cited by investors or exporters seeking to compete in the
Korean market. These transparency-related barriers are significant in a wide
variety of sectors, including food and medical equipment.

Inadequate protection of intellectual property rights continues to be a
serious problem in Korea.

The United States has long-standing concerns about the Korean Government's
involvement in, and support for, the Korean steel industry, including
government-directed lending.

Mexico:

Mexico has failed to ensure competition in its market for international
telecommunications services as required by its WTO commitments. It has also
failed to enforce its rules to prevent its major telecommunications
supplier, Telemex, from engaging in anti-competitive conduct. The United
States has filed a case against Mexico in the WTO on this matter.

On January 1, 2002, the Mexican Congress imposed a consumption tax on
certain beverages sweetened with ingredients other than cane sugar,
including high fructose corn syrup. This discriminatory and
counterproductive action established a major barrier to a settlement of
broader sweetener disputes between the United States and Mexico. In March
2002, the tax was suspended by President Fox. However, the Mexican Congress
continues to threaten new restrictions and HFCS sales remain well below
prior volumes.

The Unites States remains concerned about the continuing high levels of
piracy and counterfeiting in Mexico and will closely monitor how the Mexican
Government addresses these problems.

Russia:

Russia has undertaken a comprehensive economic reform program which includes
the ongoing negotiation of Russia's terms of accession to the World Trade
Organization (WTO). Principal among Russia's trade-restricting import
policies is the current ban on U.S. poultry exports, which the United States
is actively working with the Russian Government to resolve as soon as
possible. Despite reforms underway, several Russian policies continue to
pose significant barriers to U.S. economic interests. These include
trade-restricting import policies, Russia's licensing regime and standards
and certification procedures, sanitary and phytosanitary measures, services
and investment barriers and an inadequate enforcement regime with respect to
intellectual property.

Ukraine:

Despite continued efforts by the U.S. Government to urge Ukraine to
implement laws and regulations adequately protecting optical disc media
products, Ukrainian legislative and legal efforts to combat CD and DVD
piracy remain weak. Although Ukraine passed an Optical Disc licensing law in
January, it contains numerous flaws and exceptions (including the exclusion
from coverage of discs in transit). We continue to stress the importance of
adequate protection for the rights of copyright holders and will continue to
seek ways to facilitate reliable and enforceable IPR protection in Ukraine.

Ukraine has recently imposed a ban on imports of U.S. poultry meat based on
unjustified food safety claims.