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Enforcement, Trade Preference and Other Activities Examined in Annual ITC Report

Monday, July 15, 2013
Sandler, Travis & Rosenberg Trade Report

The International Trade Commission released July 11 The Year in Trade 2012, its annual review of the previous year's trade-related activities. This report includes information on (a) antidumping, countervailing, safeguard, intellectual property rights infringement and section 301 investigations; (b) the operation of trade preference programs; (c) significant activities in the World Trade Organization, the Organization for Economic Cooperation and Development and the Asia-Pacific Economic Cooperation forum; (d) developments in bilateral and regional free trade agreements; (f) bilateral trade issues with major trading partners such as the European Union, Canada, China, Mexico, Japan, Korea, Taiwan, Brazil, India and Russia; and (g) U.S. trade in goods and services.

Highlights of the 2012 report include the following.

AD/CV. The ITC instituted five new preliminary AD injury investigations and completed 16 final investigations, and seven AD duty orders were issued on six products from four countries. Nine new preliminary CV injury investigations were launched and nine final investigations were completed, with two CV duty orders issued on two products from China. The ITC instituted 42 sunset reviews of existing AD and CV duty orders and suspension agreements and completed 46 reviews, resulting in 38 orders being continued for up to five additional years.

IPR Infringement. There were 127 active section 337 investigations and ancillary proceedings, 52 of which were new. In all but four of the new investigations patent infringement was the only type of unfair act alleged. Approximately 40% of active investigations involved telecommunications and computer equipment, integrated circuits, and display devices such as digital televisions.

GSP. Imports entering duty-free under the Generalized System of Preferences totaled $19.9 billion, 5.9% of total U.S. imports from GSP beneficiary countries and 0.9% of total imports from all trading partners. India was the leading GSP beneficiary, followed by Thailand, Brazil and Indonesia. Crude petroleum and new pneumatic rubber tires for motorcars were the top products entered under GSP. Argentina was suspended from GSP effective May 28, South Sudan became a beneficiary (effective April 15) and a least-developed beneficiary (effective May 28), and Senegal became eligible for least-developed beneficiary treatment (effective Sept. 3). St. Kitts and Nevis, Gibraltar, and the Turks and Caicos Islands were removed from the list of GSP beneficiaries based on high income (effective Jan. 1, 2014).

AGOA. Forty sub-Saharan African countries were designated for benefits under the African Growth and Opportunity Act and 27 were eligible for AGOA textile and apparel benefits. Duty-free U.S. imports under AGOA, including those covered by GSP, were valued at $34.7 billion. Imports under AGOA exclusive of GSP were valued at $32.9 billion, down 36.9% from 2011 largely due to a decline in the value of U.S. imports of petroleum-related products, which made up 90% of imports under AGOA in 2012. South Sudan became eligible for AGOA benefits as of Dec. 20, 2012, while Guinea-Bissau and Mali were removed as of Jan. 1, 2013.

CBERA. At the end of 2012, 16 countries and dependent territories were eligible for preferences under the Caribbean Basin Economic Recovery Act and seven were eligible for Caribbean Basin Trade Partnership Act preferences. U.S. imports under CBERA decreased by 13.3% to $3.1 billion, reflecting a decline in U.S. imports of crude petroleum, methanol, knitted apparel products, and undenatured ethyl alcohol, which are major imports from CBERA countries. Although Trinidad and Tobago remained the leading supplier of U.S. imports under CBERA, Haiti accounted for nearly all of U.S. imports of apparel entering under CBTPA. U.S. imports of apparel from Haiti totaled $730.1 million, up 4.1% from 2011, of which $423.6 million entered under CBTPA. U.S. imports of apparel entering under the Haitian Hemispheric Opportunity through Partnership Encouragement Act and the Haiti Economic Lift Program, which added special provisions to CBERA, rose by one-third to $303.4 million.

Trade with FTA Partners. Two-way merchandise trade between the U.S. and its FTA partners amounted to $1.4 trillion, or 37.7% of total U.S merchandise trade. Canada and Mexico accounted for 75% of this amount ($1 trillion), and the U.S. merchandise trade deficit with these countries fell 2.4% to $181.0 billion. U.S. merchandise trade with other FTA partners increased 4.4% to $228.8 billion and the U.S. registered a $23.3 billion surplus in such trade with these 15 partners, up 24.6% from 2011. The completion of FTAs with Korea, Colombia and Panama added an additional $110.3 billion (8.8%) to trade with FTA partners. Imports entered under FTA provisions were valued at $393.7 billion, accounting for 17.5% of total U.S. imports.

WTO Dispute Settlement. Of the 27 new requests for dispute settlement consultations filed with the WTO, the U.S. was involved in five as the complainant and six as the respondent. There were 11 new dispute panels established, including three at the request of the U.S. against China and two by China against the U.S.

Safeguards. The ITC conducted no new safeguard investigations and the last remaining safeguard measure in effect, on passenger vehicle and light truck tires from China, expired in September.

Section 301. One section 301 case, concerning the EU ban on hormone-treated beef, remained ongoing and no new section 301 petitions were filed.

Trade Deficit. The annual U.S. trade deficit decreased from $560.0 billion to $540.0 billion, largely on a rise in the services surplus from $178.5 billion to a record $195.8 billion.

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