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

Wednesday, August 06, 2014
Sandler, Travis & Rosenberg Trade Report

The International Trade Commission’s annual Year in Trade report finds that in 2013 the number of new trade remedy cases saw a big jump but there were fewer new intellectual property rights infringement cases. 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 and India; and (g) U.S. trade in goods and services.

Highlights of the 2013 report include the following.

AD/CV. The ITC instituted 42 new preliminary antidumping injury investigations (up from five the year before) and completed 10 final investigations (down from 16). AD duty orders were issued in eight of the final investigations on five products from five countries. The ITC instituted 14 new preliminary countervailing injury investigations (up from nine) and completed 12 final investigations (up from nine). CV duty orders were issued in four of the final investigations on four products from three countries. Fifty sunset reviews of existing AD and CV duty orders and suspension agreements were instituted (up from 42) and 26 were completed (down from 46), resulting in 22 AD and/or CV duty orders being continued for up to five additional years.

IPR Infringement. There were 109 active section 337 investigations and ancillary proceedings (down from 127 in 2012), 53 of which were new (up from 52), including 42 new investigations and 11 new ancillary proceedings relating to previously concluded investigations. The ITC completed a total of 55 investigations and ancillary proceedings and issued nine exclusion orders and 25 cease and desist orders. Slightly less than 40 percent of the active proceedings involved computer and telecommunications equipment, while consumer electronics products, small consumer items, and pharmaceuticals and medical products each accounted for slightly more than 10 percent. At the close of 2013, 54 investigations and ancillary proceedings were pending.

GSP. Imports from developing countries for which Generalized System of Preferences treatment was claimed totaled $18.5 billion (down from $19.9 billion), accounting for 6.7 percent of total U.S. imports from GSP beneficiary countries (up from 5.9 percent) and 0.8 percent of total imports from all trading partners (down from 0.9 percent). Once again India, Thailand and Brazil were the leading beneficiaries. Authorization for GSP lapsed on July 31, 2013, and has not been renewed. A review for the possible addition of Laos and Burma was initiated in April, while Bangladesh was suspended on June 27 because of worker rights issues.

AGOA. There were 39 sub-Saharan African countries designated as eligible for benefits under the African Growth and Opportunity Act and 27 designated eligible for AGOA textile and apparel benefits. South Sudan became AGOA eligible as of Dec. 20, 2012, while Guinea-Bissau and Mali lost eligibility on Jan. 1, 2013 (eligibility was later restored for Mali on Jan. 1, 2014). Duty-free U.S. imports under AGOA, including those covered by GSP, were valued at $26.8 billion (down 22.8 percent), while U.S. imports under AGOA, excluding those also covered by GSP, were valued at $24.8 billion (down 24.6 percent). The latter decrease was driven mainly by a decline in the value of U.S. imports of petroleum-related products, which made up 85.4 percent of imports under AGOA in 2013.

CBERA. At the end of 2013, 17 countries and dependent territories were eligible for preferences under the Caribbean Basin Economic Recovery Act (down from 16) and eight of those (down from seven) were eligible for additional preferences under the Caribbean Basin Trade Partnership Act. Curaçao became eligible for both CBERA and CBTPA on Dec. 31, 2013, and Panama left CBERA on Oct. 31, 2012, when the U.S.-Panama Trade Promotion Agreement entered into force. U.S. imports under CBERA (including CBTPA) fell by 24.4 percent to $2.4 billion, reflecting a decline in the value of U.S. imports of crude petroleum, knitted apparel products, undenatured ethyl alcohol and melamine. Trinidad and Tobago continued to be the leading supplier of U.S. imports under CBERA, accounting for 69.2 percent of the total.

Haiti accounted for nearly all U.S. imports of apparel entering under CBTPA. U.S. imports of apparel from Haiti were up 4.9 percent to $765.9 million, of which $341.7 million entered under CBTPA (down from $423.6 million). U.S. imports of apparel entering under the Haitian Hemispheric Opportunity through Partnership Encouragement Acts and the Haiti Economic Lift Program rose by almost 40 percent to $421.9 million. U.S. imports of apparel from Haiti under the Earned Import Allowance Program almost tripled to $90.0 million.

Trade with FTA Partners. Two-way merchandise trade (exports and imports) between the U.S. and its free trade agreement partners was unchanged at $1.4 trillion, or 39.1 percent of total U.S. merchandise trade (down from 37.7 percent).

Canada and Mexico accounted for 73.9 percent of total U.S. merchandise trade with FTA partners. U.S. merchandise exports to these NAFTA partners expanded by 3.3 percent and imports by 2.4 percent, resulting in a decline in the U.S. merchandise trade deficit with them to $177.2 billion.

U.S. two-way merchandise trade with FTA partners other than the NAFTA countries rose 8.7 percent to $368.7 billion. Imports increased 10.5 percent to $185.8 billion while exports gained 7.0 percent to $182.9 billion. The U.S. registered a $3.0 billion merchandise trade deficit with these countries, compared to a $2.7 billion surplus in 2012. This change was largely due to sharply reduced exports of machinery and equipment to Australia.

WTO Dispute Settlement. WTO members filed 20 new requests for dispute settlement consultations (down from 27 in 2012). The U.S. was the complainant in three of the requests (involving Indonesia and India) and the named respondent in two (brought by Korea and China). Of the 12 new dispute settlement panels established, the U.S. was the complaining party in two and the responding party in two.

Safeguards. The ITC conducted no new safeguard investigations during 2013 and no safeguard measures under these provisions were in effect during any part of the year. In addition, the authority to conduct investigations and apply measures under the China safeguards provision in section 421 of the Trade Act of 1974 ceased to be effective Dec. 11, 2013.

Trade Deficit. The annual U.S. trade deficit decreased for the second straight year, from $535 billion to $475 billion. This figure includes a decline in the goods trade deficit from $741.5 billion to $703.9 billion and an increase in the services surplus from $206.8 billion to a record $229.0 billion.

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