Background

The U.S. increased its trade enforcement activities and saw higher trade values in 2017, according to the International Trade Commission’s annual review of trade-related activities. The Year in Trade 2017 includes information on (a) antidumping, countervailing, safeguard, intellectual property rights infringement, national security, and section 301 cases active in 2017; (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) negotiations on fisheries subsidies under the WTO, renegotiation of NAFTA, and other FTAs already in effect, (e) bilateral trade issues with major trading partners such as the European Union, Canada, China, Mexico, Japan, Korea, Taiwan, and India; and (g) U.S. trade in goods and services.

Highlights of the 2017 report include the following.

Safeguards. The ITC conducted new safeguard investigations of crystalline silicon photovoltaic cells and large residential washers, made affirmative injury determinations in both, and recommended remedy measures to the president that were subsequently implemented.

Section 301. In an investigation first instituted in 1987 concerning European Union directives prohibiting the use of certain hormones that promote growth in farm animals, the Office of the U.S. Trade Representative continued its consideration of a request to reinstate additional duties that were imposed on imports of EU products in 1999 but lifted in 2012. Separately, USTR self-initiated an investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation, which in 2018 has resulted in the actual or potential imposition of tariffs on $50 billion worth of imports from China.

AD/CV. The ITC instituted 58 new antidumping injury investigations (up from 36 in 2016) and made 54 preliminary determinations (up from 35) and 36 final determinations (down from 41). AD duty orders were issued in 33 of the final investigations on 15 products from 16 countries (compared to eight and 16).

The ITC instituted 26 new countervailing injury investigations (up from 16) and made 17 preliminary determinations (up from 14) and 16 final determinations (down from 25). CV duty orders were issued in 11 of the final investigations on nine products from five countries (compared to seven and seven).

The ITC instituted 32 sunset reviews of existing AD and CV duty orders and suspension agreements (down from 53) and completed 46 reviews (down from 53), resulting in the continuation of 45 AD and CV duty orders for up to five additional years.

IPR Infringement. There were 130 active section 337 investigations and ancillary proceedings (up from 122), 74 of which were instituted in 2017 (down from 80 the previous year). The ITC completed a total of 64 investigations and ancillary proceedings (down from 66) and issued five general exclusion orders (up from three), 12 limited exclusion orders (up from 9), and 30 cease and desist orders (up from 11). Technology products accounted for about 38 percent of the active proceedings (up from 30 percent), followed by pharmaceuticals and medical devices at 13 percent (up from 11 percent) and automotive, transportation, and manufacturing products at 10 percent (down from 11 percent).

National Security. In April 2017 the Department of Commerce initiated two new investigations under the national security provisions of section 232 of the Trade Expansion Act of 1962 covering steel and aluminum. In 2018 both resulted in the imposition of additional import tariffs of 25 percent and 10 percent, respectively.

GSP. U.S. imports under the Generalized System of Preferences increased 11.9 percent to $21.2 billion. These imports accounted for 9.9 percent of total U.S. imports from GSP beneficiary countries and 0.9 percent of total U.S. imports. The top five beneficiary countries (India, Thailand, Brazil, Indonesia, and Turkey) accounted for 74.5 percent of GSP imports. In 2017 GSP duty-free status was extended to all GSP beneficiaries for 23 categories of travel goods (including luggage, backpacks, handbags, and wallets) that in 2016 had become eligible for duty-free treatment when exported by least-developed beneficiary developing countries and African Growth and Opportunity Act countries.

In December 2017 Argentina’s GSP eligibility was reinstated after a nearly six-year suspension but Ukraine’s was partially removed due to failure to adequately protect intellectual property rights. In June 2017 USTR self-initiated a country practice review of Bolivia over worker rights issues.

AGOA. In 2017, 38 sub-Saharan African countries were eligible for AGOA benefits. Another two (The Gambia and Swaziland) were redesignated as eligible effective Dec. 22, 2017. Of these 40 countries, 27 were also eligible for AGOA textile and apparel benefits for all or part of 2017.

Imports entering exclusively under AGOA (excluding GSP) were valued at $12.5 billion in 2017, a 32.4 percent increase from 2016 that can be attributed to an increase in the value and quantity of imports of crude petroleum. An additional $1.3 billion from AGOA beneficiary countries entered duty-free under GSP. In total, AGOA and GSP accounted for 55.4 percent of total imports from AGOA beneficiary countries in 2017.

Nepal. In 2017, the first full year the Nepal Trade Preference Act was in effect, U.S. imports from Nepal under this program were $2.3 million, accounting for 2.5 percent of total U.S. imports from Nepal.

Caribbean. At the end of 2017, 17 countries and dependent territories were eligible for preferences under the Caribbean Basin Economic Recovery Act, eight of which were designated eligible for Caribbean Basin Trade Partnership Act preferences. In 2017, the value of U.S. imports under CBERA (including CBTPA) increased by 10.3 percent to $961 million, mainly reflecting an increase in U.S. imports of methanol and polystyrene from Trinidad and Tobago and The Bahamas, respectively. U.S. imports under CBERA of crude petroleum continued to decline as U.S. production increased. Trinidad and Tobago was the leading supplier of U.S. imports under CBERA in 2017, followed by Haiti.

The value of U.S. imports of apparel from Haiti increased 2.1 percent to $866.7 million and the value of such imports entering under the Haitian Hemisphere Opportunity through Partnership Encouragement Act of 2006 and 2008 (HOPE Acts) increased 7.9 percent to $577.0 million. Garments of manmade fibers accounted for a growing share of U.S. apparel imports from Haiti, in contrast to the declining share accounted for by cotton apparel.

Trade with FTA Partners. Total two-way (exports and imports) goods trade between the U.S. and its 20 FTA partners was $1.5 trillion in 2017, which accounted for 39.0 percent of total U.S. goods trade with the world.

The value of imports that entered under FTAs and subject to FTA duty reductions and eliminations totaled $385.1 billion in 2017, up 2.8 percent. Imports subject to FTA duty reductions and eliminations accounted for 48.3 percent of total imports from FTA partners and 16.5 percent of total U.S. imports from the world. The majority of U.S. imports from FTA partners that do not enter under an FTA generally enter free of duty under normal trade relations rates.

NAFTA. U.S. trade with Canada and Mexico accounting for $1.1 trillion or 75.1 percent of total U.S. trade with FTA partners. U.S. exports to the NAFTA countries rose 5.8 percent to $525.4 billion while imports rose 7.4 percent to $614.0 billion. U.S. trade with non-NAFTA FTA partners was valued at $378.0 billion, up 3.7 percent, as U.S. exports increased 8.8 percent to $195.0 billion and imports increased 3.7 percent to $183.0 billion.

In August 2017 the U.S., Canada, and Mexico launched negotiations to (a) update NAFTA with modern provisions on digital trade, intellectual property, cybersecurity, good regulatory practices, and treatment of state-owned enterprises and (2) rebalance NAFTA and reduce the U.S. trade deficit with Canada and Mexico. By the end of 2017, five negotiating rounds had been completed.

WTO Dispute Settlement. WTO members filed 17 requests for dispute settlement consultations in new disputes in 2017, which was about the average for the five preceding years. The U.S. was the complainant in three of these cases and the named respondent in four. Four new dispute settlement panels were established in which the U.S. was either the complainant or the respondent.

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