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

Monday, August 01, 2016
Sandler, Travis & Rosenberg Trade Report

The International Trade Commission has released 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 and India; and (g) U.S. trade in goods and services.

Highlights of the 2015 report include the following.

Trade Statistics. U.S. goods trade was valued at $3.75 trillion, down 5.6 percent from 2014. Goods exports fell by 7.2 percent to $1.50 trillion while imports decreased 4.5 percent to $2.24 trillion. The drop in petroleum prices was a major factor in both declines, although the quantity of U.S. exports of crude and refined petroleum products increased. Private services trade increased 1.4 percent to $1.16 trillion, with exports virtually unchanged at $690.1 billion and imports up 3.5 percent to $469.1 billion. The U.S. trade deficit for goods and services rose from $508.3 billion to $539.8 billion, including a 2.4 percent increase in the goods deficit and a 5.8 percent drop in the services surplus.

Trade with FTA Partners. Goods trade between the U.S. and its 20 free trade agreement partners amounted to $1.5 trillion, accounting for 41.2 percent of total U.S. goods trade with the world. Canada and Mexico continued to dominate U.S. trade with FTA partners, accounting for 74.6 percent, and the U.S. goods trade deficit with its NAFTA partners fell 17.6 percent to $73.5 billion. Total U.S. trade with other FTA partners fell 5.4 percent to $376.8 billion and the U.S.’ goods trade surplus with them fell nearly 50 percent to $13.2 billion.

AD/CV. The ITC instituted 43 new antidumping injury investigations and made 17 final determinations and the International Trade Administration issued 14 AD duty orders on eight products from seven countries. The ITC instituted 23 new countervailing injury investigations and made 12 final determinations and the ITA issued nine CV duty orders on nine products from four countries. The ITC instituted 56 sunset reviews of existing AD and CV duty orders and suspension agreements and completed 55, resulting in 49 orders being continued for five years.

IPR Infringement. There were 88 active investigations and ancillary proceedings under section 337 of the Tariff Act of 1930, 42 of which were instituted that year (including 36 new investigations). The ITC completed 46 investigations and ancillary proceedings and issued two general exclusion orders, five limited exclusion orders and 17 cease and desist orders. Technology products continued to dominate section 337 investigations, with about 27 percent of the active proceedings involving computer and telecommunications equipment, 10 percent involving consumer electronics, and eight percent involving memory chips or integrated circuits.

GSP. The Generalized System of Preferences was renewed retroactively on July 29, 2015, through Dec. 31, 2017. Imports claiming GSP preferences totaled $17.4 billion, accounting for 8.4 percent of total U.S. imports from GSP beneficiary countries and 0.8 percent of total U.S. imports. India was the leading supplier of imports under GSP, followed by Thailand and Brazil. The value of imports of crude petroleum, formerly the top U.S. import under GSP, dropped from substantial levels in 2013 and 2014 to zero in 2015, contributing to the 6.9 percent decline in U.S. imports under GSP. Angola, the United States’ former source of crude petroleum under GSP, is also an African Growth and Opportunity Act beneficiary and supplied crude petroleum to the U.S. under AGOA, albeit at a lower value.  

AGOA. The Trade Preferences Extension Act of 2015 extended AGOA for 10 years, through Sept. 30, 2025. U.S. duty-free imports under AGOA were valued at $9.3 billion, a 35.0 percent decrease from 2014 that was driven primarily by a decline in both the value and quantity of U.S. imports of crude petroleum, which made up 64.5 percent of the value of imports under AGOA in 2015. Angola and South Africa were the largest suppliers of U.S. imports under AGOA in 2015. Crude petroleum accounted for almost 100 percent of U.S. imports under AGOA from Angola while passenger motor vehicles were the leading U.S. import under AGOA from South Africa.

CBERA. U.S. imports under the Caribbean Basin Economic Recovery Act (including the Caribbean Basin Trade Preferences Act) fell by 21.9 percent to $1.5 billion, mostly due to a decline in the value of U.S. imports of methanol, crude petroleum and polystyrene, which are major imports from CBERA countries. Trinidad and Tobago continued to be the leading supplier of U.S. imports under CBERA, accounting for 53.7 percent of the total value, followed by Haiti (28.1 percent) and The Bahamas (5.7 percent). Crude petroleum was the leading U.S. import under CBERA from Trinidad and Tobago, while apparel was the leading U.S. import under CBERA from Haiti.

Haiti. Virtually all U.S. imports of apparel from Haiti received duty-free treatment under trade preference programs, including the CBTPA, the Haitian Hemisphere Opportunity through Partnership Encouragement Acts of 2006 and 2008, and the Haitian Economic Lift Program of 2010, and the TPEA extended the duty-free provisions of the HOPE acts through Sept. 30, 2025. U.S. imports of textiles and apparel from Haiti rose 8.4 percent to $913.7 million and the number of apparel jobs in Haiti reached the highest level (41,200) since the HOPE and HELP acts were signed in 2006.

WTO Dispute Settlement. World Trade Organization members filed 13 requests for dispute settlement consultations in new disputes and 16 new dispute settlement panels were established. The U.S. was the complainant in two of the 13 requests (concerning Chinese export subsidies and value-added tax exemptions for certain types of domestically produced aircraft) and the named respondent in one (concerning U.S. AD/CV measures on coated paper products from Indonesia).

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