Report Highlights Accomplishments in Reducing Foreign Trade Barriers to American Exports

On March 31, 2020, the Office of the United States Trade Representative released the 2020 National Trade Estimate Report

The National Trade Estimate Report on Foreign Trade Barriers (NTE) covers 63 countries, customs territories and regional associations, including each of the 20 United States’ free trade agreement (FTA) partners and all of the 50 largest markets for U.S. goods exports. These partners together account for over 95% of the United States’ $5.5 trillion in two-way goods and services trade. The NTE Report reviews each in detail, highlighting concerns regarding issues ranging from industrial tariffs and import licensing to digital data flow, customs, agricultural quotas, industrial subsidies, restrictions on provision of telecommunications services, and more.

Each year’s edition of the NTE Report changes and evolves. Sometimes this reflects the creation of new barriers to U.S. exports, and at other times new conceptual challenges and opportunities arising from the progress of science, technology, and logistics. Changes in the NTE Report from one year to the next also reflect the success of U.S. negotiations and enforcement efforts. Such successes have been worldwide since the publication of the 2019 NTE Report, highlighted by examples including:

WESTERN HEMISPHERE

Canada and Mexico – United States-Mexico-Canada Agreement (USMCA): The USMCA represents a generational, comprehensive revision of the old North American Free Trade Agreement. In addition to landmark revisions of automotive rules of origin, state-of-the-art labor and environmental provisions, and 21st-century digital trade rules, the USMCA contains numerous provisions that – once in force – will address outstanding trade-related irritants with Canada and Mexico. For example, under the USMCA and related instruments, Canada agreed to eliminate milk classes 6 and 7, discriminatory grading of U.S. wheat, and British Columbia’s discriminatory treatment of U.S. wine in grocery stores. The USMCA also includes obligations to strengthen enforcement against counterfeiting and piracy, camcording of movies, satellite and cable signal theft, transparency with respect to new geographical indications, and copyright protection and enforcement in the digital environment. The USMCA also cracks down on data localization measures for services providers and financial services providers and locks in Mexico’s telecommunications and energy reforms.

Colombia – End of the “1x1” Truck Scrappage Policy: Due to U.S. engagement and enforcement efforts, Colombia ended the “1x1” truck scrappage policy on June 30, 2019. In March 2013, the Colombian government eliminated an option to pay a “scrappage fee” to legally register a heavy truck (over 10.5 metric tons) in Colombia, which negatively affected previously robust sales of imported trucks (which were generally over 10.5 metric tons).

EUROPEAN UNION

Technical Standards for Certain Heavy Electrical Products: The EU's requirements for restricting hazardous substances in electronic and electrical products are burdensome and arbitrary, and force companies to pursue an onerous and lengthy exemption process. In 2017, companies applied for exemptions to continue to use two substances (DEHP phthalate in rubber and lead in solder) that would have otherwise been banned in 2019 in engines, because there are no viable alternatives that provide the necessary flexibility in rubber and heat-resistance in solder. Following engagement by the U.S. government and industry, the EU approved in September 2019 the continued use of those two substances in engines for an additional five years. Those exemptions were fully implemented by EU member states in early 2020.

MIDDLE EAST

North Africa Markets Open to U.S. Beef, Poultry, Eggs, and Genetics: In April 2019, the United States and Tunisia finalized U.S. export certificates to allow imports of U.S. beef, poultry, and egg products into Tunisia. In June 2019, the United States and Morocco completed export certificates for U.S. processed eggs and beef genetics to Morocco, and reached agreement to improve U.S market access under the U.S.-Morocco FTA tariff rate quotas.

SUB-SAHARAN AFRICA

Ghana – Automobile Standards: In 2019, Ghana proposed measures that would only recognize automobile standards developed by the Economic Commission for Europe (ECE) as international standards. The proposal would have moved towards the wide adoption of the ECE standards and regulations as equivalent and significantly narrow the acceptance of U.S. Federal Motor Vehicle Safety Standards (FMVSS). The United States provided comments and background information on FMVSS and their use. Following U.S. action, Ghana agreed to incorporate U.S. standards into its new standards policy, which are pending publication by the Ghana Standards Authority.

Standards Alliance Implementation with USAID: USTR worked with USAID to implement the Standards Alliance, a public-private partnership that provides technical assistance to developing countries and regions to help ensure that those countries’ standards-related measures do not impose unnecessary obstacles to trade and comply with other important obligations under the WTO TBT Agreement. In 2019, the Standards Alliance operated in five sub-Saharan African countries: Côte d’Ivoire, Ghana, Mozambique, Senegal, and Zambia. The programs included workshops to increase the application of good regulatory practices, the use of international standards in regulations, and the use of regulatory impact assessments. These procedures help to reduce unnecessary obstacles to U.S. trade by ensuring, for example, that proposed regulations are made available for public comment and that potential impacts of proposed measures are analyzed and taken into account.

CHINA AND TAIWAN

China – Historic “Phase One” Agreement: The United States and China reached an historic Phase One agreement that requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The Phase One agreement also includes a commitment by China to make substantial additional purchases of U.S. goods and services in the coming years. Importantly, the agreement establishes a strong dispute resolution arrangement that ensures prompt and effective implementation and enforcement. At the same time, the United States maintains tariffs on many Chinese goods while monitoring and additional negotiations continue.

Taiwan – Adoption of Mechanism for Early Resolution of Potential Patent Disputes: In August 2019, following sustained engagement by USTR, final implementing regulations for Taiwan’s December 2017 amendments to the Pharmaceutical Affairs Act entered into force. The establishment of a mechanism for early resolution of potential patent disputes, including coverage for biologics, represents a promising step forward for Taiwan in its efforts to develop an innovative pharmaceutical sector. Taiwan – Passage of Amendments to Trade Secrets Act: On December 31, 2019, Taiwan passed amendments to the Trade Secrets Act that provided authority to prosecutors to issue protective orders during investigation proceedings. These changes, long sought by USTR, are expected to improve Taiwan’s ability to effectively prosecute cases of trade secrets theft by protecting information from unauthorized disclosures.

JAPAN

New Access in Japan for U.S. Agricultural Exporters: The U.S.-Japan Trade Agreement, which entered into force on January 1, 2020, further opens a critically important market for U.S. food and agricultural goods exporters, including through the reduction or elimination of tariffs or allowance of a specific quantity of imports from the United States. This agreement eliminates many long-standing barriers and ensures that over 90% of U.S. food and agriculture exports have access to Japan either on a duty-free or other preferential basis.

U.S.-Japan Digital Trade Agreement: The U.S.-Japan Digital Trade Agreement, which also entered into force on January 1, 2020, parallels the USMCA as the most comprehensive and high-standard trade agreement addressing digital trade barriers ever negotiated. The Agreement covers over $40 billion in digital trade between the United States and Japan. It incorporates strong rules prohibiting data localization measures, including for financial services data, and ensuring that data can be transferred across borders by all suppliers, as well as rules ensuring non-discriminatory treatment of digital products, and protecting against forced disclosure of proprietary source code and algorithms.

Access for Passenger Airlines: Following amendment of the 1952 U.S.-Japan Civil Air Transport Agreement in March 2020, Japan opened up 12 new slot pairings for U.S. passenger airlines at Tokyo's Haneda Airport, significantly improving access at commercially viable times long sought by U.S. air carriers.

SOUTHEAST ASIA

Vietnam – Automobile Regulations: After the United States raised concerns, Vietnam rescinded a decree that required lot-by-lot testing and replaced it with a new program that requires autos to be tested by model. Vietnam revised its auto import testing regulatory system, which now facilitates the import of U.S.-manufactured autos.