RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/126 
17 December 2003  
 
(03-6640) 
Trade Policy Review Body Original:  English 
   
 
  
 
TRADE POLICY REVIEW 
 
UNITED STATES 
 
Report by the Government 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by the Government of the United States is 
attached. 
 
 
Note: This report is subject to restricted circul ation and press embargo until the end of the meeting 
 of the Trade Policy Review Body on the United States. United States WT/TPR/G/126 
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CONTENTS 
 
 
 
 Page 
I. THE UNITED STATES IN THE MULTILATERAL SYSTEM 5 
II. THE UNITED STATES ECONOM IC AND TRADE ENVIRONMENT 6 
III. TRADE POLICY DEVE LOPMENTS, 2001-2003 10 
 (1) WTO  AGREEMENTS AND INITIATIVES  10 
 (2) R EGIONAL INITIATIVES  12 
 (3) B ILATERAL INITIATIVES  19 
 (4) T RADE -RELATED CAPACITY BUILDING INITIATIVES  22 
 (5) L EGISLATIVE AGENDA  23 
 (6) L ABOUR ISSUES  24 
 (7) E NVIRONMENTAL ISSUES  25 
 (8) A GRICULTURAL ISSUES  26 
IV. OPENNESS AND ACCOUNTABILITY:  BUILDING SUPPORT FOR TRADE 27 V. LOOKING FORWARD 28 
 
 
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I. THE UNITED STATES IN THE MULTILATERAL SYSTEM 
1. The United States remains steadfast in its s upport of the rules-based multilateral trading 
system of the World Trade Organization (WTO).  As a key architect of the postwar trading system and a leader in the pursuit of successive trade liber alizations, the U.S. shares a common purpose with 
our WTO partners:  expanding ec onomic opportunities to the world’s citizens by reducing trade 
barriers.  The successful completion of the seven  multilateral trade rounds following the establishment 
of the General Agreement on Tariffs and Trad e (GATT), and the launch in 2001of the Doha 
Development Round, stands as a testament to the po wer and durability of this shared purpose.  This 
was confirmed in a recent statement published by the Bretton Woods institutions: “...collectively 
reducing barriers is the single most powerful tool that countries, working together, can deploy to 
reduce poverty and raise living standards.” 
2. Since the launch of the Doha Development Round in 2001, the United States has formally 
tabled seventy submissions to dramatically reduce barriers to trade in servi ces, agricultural products 
and industrial goods, and to strengthen the rules and disciplines of the WTO system.  The market access related negotiations of the Doha Development Agenda (DDA) offer the greatest potential to 
create jobs, advance economic refo rm and development, and reduce poverty worldwide.  The United 
States recognizes there are many important issues in the national economic strategies of our developing country WTO partners, yet believes the fo cus of the WTO must rema in concentrated on its 
mandate of reducing trade barriers and providing a stable, predictabl e, rules-based environment for 
world trade.  As the experience at the Fifth Minist erial Conference in Cancun clearly showed, this is 
work that requires the focus, flexibility and politic al will of all Members.  The United States is 
prepared to meet these requirements in order to reach an ambitious outcome in the DDA negotiations. 
3. The fundamental features of U.S. trade policy -- maintenance of an open, competitive market 
at home, compliance with WTO obligations, and lead ership in the multilateral trading system -- are 
unchanged despite challenging economic  times.  Over the period of review, the U.S. faced a recession 
followed by a moderate recovery, with job lo ss and worsening economic conditions abroad 
throughout.  The U.S. response has been continued l eadership in trade libera lization, maintenance of 
an open market and strong macroec onomic policy action to restore growth at home and to help avoid 
an even greater worsening of economic conditions  abroad.  U.S. leadership in global trade 
liberalization was bolstered domestically by the renewal of the Executive-Congressional partnership 
embodied in Trade Promotion Authority in 2002. This  legislation re-established special procedures to 
implement comprehensive trade agreements. 
4. Despite a reflective stance following Cancun, the objectives agreed in Doha remain a priority 
in U.S. liberalization efforts.  The WTO’s mandate to reduce barriers and to provide a stable trading 
system in order to raise standards of living and re duce poverty continue to be  an essential element of 
the broader international economic landscape.  Give n its magnitude and scope, the potential of the 
DDA to transform world trade commands such priority attention.  As part of its broader efforts to 
liberalize trade, but still within the scope of WTO rules, the U.S. is pursuing several regional and 
bilateral initiatives for free trade area s.  The U.S. view that regional and bilateral agreements can act 
as an incubator and catalyst for multilateral liberaliz ation is not new.  Between 1934 and 1945, the 
United States entered into thirty-two reciprocal trade agreements, many of which had clauses that 
foreshadowed those currently in the GATT.  It is  notable that a recent IMF study of U.S. trade 
agreements concluded the U.S. model for bilateral and regional trade agreements meets many of the 
criteria for ensuring these agreements yield the greatest possible benefits. 
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5. The United States plays an important role in fo stering the further integration of developing 
countries into the multilateral trading system.  The United States supports efforts to increase the 
transparency of the negotiations and to allow for the effective participation of all WTO Members in 
the DDA.  In support of developing country pa rticipation in the negotiations, as well as the 
development and implementation of trade policies within developing countries, the United States has 
contributed more than $3 million to the WTO for trade-related technical assistance since the DDA 
launch in November 2001.  The United States also  supports the Integrated Framework (IF), both 
through contributions to the IF Trust Fund and para llel bilateral activities in several least developed 
countries.  To enhance market access opportuniti es for beneficiary countries the United States 
provides duty-free access for most products from developing countries through several preferential 
trade programs.  These programs include the Generali zed System of Preferences, the African Growth 
and Opportunity Act, the Caribbean Basin Trade Partnership Act and the Andean Trade Preference 
and Drug Eradication Program. 
6. The United States maintains various progr ams to engender domes tic support for open 
international trade policies.  An important way the United States ensures critical domestic support for 
its trade policies is through extensive solicita tion of input and advice from the public on key 
negotiations, as well as extensive outreach th rough a large network of congressionally mandated 
advisory committees1.  Representatives on these advisory committees are drawn from the business and 
agricultural communities, as well as labor, environmen tal, consumer and other domestic groups.  Such 
involvement enables development of trade libera lization policies that support protection of the 
environment and other goals.  Another element in maintaining domestic support for trade 
liberalization is the Trade Adjustment Assistan ce (TAA) program.  TAA, which was expanded and 
reformed by TAA Reform Act of 2002, provides tr ansitional assistance to workers adversely affected 
by foreign trade through the provision of re-emp loyment services, including skills training for 
displaced workers, income support while in trai ning and job search and relocation assistance.  
Important changes to the program under the TAA Re form Act of 2002 include expanded eligibility to 
more worker groups, increased benefits and tax cr edits for health insurance coverage assistance. 
7. As noted above, the United States steadfastly supports the multilateral trading system of the 
WTO.  An important element of this support is the recognition that the system, and the WTO, is a work in progress.  Members, therefore, must  take responsibility for important institutional 
improvements.  The United States will continue  to press for increased transparency in WTO 
operations, in WTO negotiations and in Members’ tr ade policies.  The WTO needs to expand public 
access to dispute settlement proceedin gs, to circulate panel decisions promptly, to encourage more 
exchange with outside organiza tions and continue to encourag e timely and accurate reporting by 
Members. 
II. THE UNITED STATES ECONOMIC AND TRADE ENVIRONMENT 
Trade policy 8. The United States is committed to pursuing open market policies at home and the negotiation 
of agreements further liberalizing U.S. and global  trade.  The United States is fully committed to 
achieving such liberalization through the WTO-base d multilateral trading system, complemented by 
bilateral and regional free trade agreements.  The United States, together with other WTO members, 
launched the Doha Development Ne gotiations just 9 weeks after th e terrorist attacks on the United 
States of September 11, 2001.  The launch under those circumstances bears witness to the United 
States commitment to and hopes for the WTO-based multilateral trading system. 
                                                     
 
1 See Section 135 of the Trade Act of 1974, as amended. United States WT/TPR/G/126 
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9. The current U.S. simple average tariff is 3.6 percent on a legally bound basis under the WTO.  
When GSP and other preferences are taken into account , the U.S. trade weighted average tariff is just 
1.6 percent on an applied basis.  After the full implementation of Uruguay Round commitments in 
2004, the U.S. bound and applied tariff averages are exp ected to fall further.  Last year 66 percent of 
all U.S. imports (including under preference progr ams) entered the United States duty free.  U.S. 
service markets are open to competition and U.S. re gulatory processes are transparent and accessible 
to the public. 
Growth 
10. After strong economic growth in the late 1990s, the United States experienced a short 
recession from March 2001 to November  2001.  On a year-over-year basis, U.S. real gross domestic 
product (GDP) in 2001 increased by just 0.3 percent.  The increase in 2002 was 2.4 percent, a modest 
rate for the first year of economic recovery and one  that left a considerable gap between actual and 
potential GDP as well as slack in labor markets.  Th e pace picked up in 2003's first three quarters, 
with a 2.7 percent increase over the corresponding period of 2002.  Notable was the quickening of 
growth during 2003 with the year’s second quarter expa nding at a 3.3 percent annualized rate relative 
to the first and with an annualized growth rate of 8. 2 percent in the third quarter, the most rapid in the 
United States in 20 years.  At th e same time, inflation continued to be subdued with the GDP price 
deflator increasing by 2.4 percent in 2001, by 1.1 pe rcent in 2002 and 1.6 perc ent in 2003s’ first three 
quarters. 
11. As a result of both the response of the economy’ s fiscal stabilizers to the recession, and of 
discretionary fiscal policy measures aimed at r estoring economic growth, the U.S. government budget 
balance shifted to deficit during the period of review.  In the year prior to the review period, 2000, the 
United States recorded a budget surplus of $206.9 bi llion or 2.1 percent of GDP.  The surplus fell to 
$72.0 billion in 2001, or 0.7 percent of GDP.  L ast year, the balance turned into a deficit of 
$202.1 billion, or 1.9 percent of GDP.  In 2003,  the budget deficit is expected to be larger. 
Saving 
12. Largely because of the impact of the recession and the slow recovery  on federal and sub-
federal budget positions, national savi ng in the United States fell from 18.4 percent of GDP in 2000 to 
15.0 percent in 2002.  Gross government saving declined from $435.8 billio n in 2000 to negative 
saving of $24.5 billion in 2002.  Private saving,  however, increased from $1.4 trillion in 2000 to 
$1.6 trillion in 2002.  The recession and the early r ecovery were characterized by weak investment -- 
gross government investment fell from $2.08 trillion in 2000 to $1.95 trillion in 2002.  The decline in 
U.S. gross savings, however, exceeded the more modest reduction in gross private domestic and 
government investment, resulting in a change in the U.S. net foreign investment, from a net inflow to 
the United States $395.8 billion in 2000 to $488.9 billion in 2002 (account taken of statistical 
discrepancies). 
13. In the first three quarters of 2003, gross savi ng weakened further to 13.8 percent of GDP.  
Gross private domestic and government investment, however increased to $2.0 trillion (annualized) in the first three quarters of 2003.  As a result, the net inflow of foreign investment to the United States 
increased to $562.0 billion. 
Labor Markets  
14. After a period of strong growth, the U.S. dom estic recession and slow initial recovery took 
their toll on U.S. employment levels.  Non-farm em ployment peaked at 132.45 million in December 
2000, declining to an apparent trough of 129.9 mi llion in July 2003, a reduction of 2.6 million WT/TPR/G/126 Trade Policy Review 
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employed workers in a little over two and one half  years.  Between July and November of 2003, 
however, a 328,000 net increase in employment occu rred as the pace of recovery quickened.  These 
employment developments were re flected in changes in rates of unemployment of the U.S. work 
force.  The unemployment rate was 3.9 percent in December 2000, the low for the previous business 
cycle.  The rate rose to what appears to be a peak  of 6.4 percent in June 2003. It subsequently began 
declining, reaching 5.9 percent in November 2003. 
15. The net loss of U.S. employment since 2000 can be accounted for entirely by the loss of 
manufacturing jobs.  Manufacturing employment stood at 14.5 million in October 2003, 2.6 million 
less than in December 2000.  Since July 2000 when  manufacturing output peaked, the United States 
has lost 2.8 million manufacturing jobs, a 16 percen t reduction.  The principal causes of the job loss 
appear to be the reduction in manufacturing output  associated with the recent recession (which was 
sharper than that of overall output) and strong grow th in U.S. labor productivity.  Manufacturing 
output, according to the U.S. Federal Reserve Bank , peaked in June 2000, completing a nine-year 
long increase of 63 percent in the preceding economic  expansion.  Manufacturing output reached its 
trough in December 2001, completing a 6.8 percent reduction from its peak a year and a half earlier.  
Between December 2001 and Oc tober 2003 (latest available data), a modest, halting advance made up 
little more than one quarter of the production loss that occurred in the second half of 2000 and in 
2001.  The recession was thus sharper for manufacturi ng than for the overall economy, as is often the 
case, helping to concentrate U.S. job loss in the manufacturing sector. 
16. Services employment currently accounts for 83 percent of U.S. non-agricultural employment.  
Since 2000, services employment has increased by more than one million jobs, even as overall 
employment declined.  In fact, since 1993 service jobs have accounted for slightly more than all net new employment in the U.S. economy. 
Productivity 
17. With performance of employment lagging that of output over the past few years, U.S. 
manufacturing labor productivity, extending the resu rgence of the late 1990s, has continued to grow 
strongly since 2000.  Between the last quarter of 2000 and the third quarter of 2003 real output-per-
hour worked in U.S. manufacturing grew at an av erage annual compound rate of 4.3 percent.  This 
compares to an average rate of 3.0 percent for the period 1985-1997.  While strong productivity 
growth is a source of living standard improvement, it  also meant that for U.S. manufacturing to have 
simply maintained its 1998 or 2000 level of employme nt would have required strong sustained growth 
in output. 
18. Even more striking than the productivity devel opments in manufacturing have been those in 
the much broader overall U.S. business economy, domi nated by service employment.  In the reference 
period of 1985-1997, pro ductivity growth in the U.S. overall business sector, at 1.6 percent a year, 
was just over one-third the rate for manufacturing.  Since the later 1990s the gap has disappeared with 
the convergence occurring at high rates of productivit y growth.  Between the last quarter of 2000 and 
the third quarter of 2003, the annual productivity growth rate for the overall U.S. business economy, 
at 4.3 percent, matched that of manufacturing a nd was more than 2.5 times greater than in the 
reference period of 1985 through 1997. 
19. The continuation of the stronger U.S. productivity  growth that was a ha llmark of the U.S. 
economic resurgence in the second half of the 1990s is one of the most positive elements of U.S. 
economic performance during the peri od under review.  As is well known, rising labor productivity is 
perhaps the central factor underlying improvements in the material standard of living.  Many factors 
could be mentioned to help account for the U.S. pr oductivity resurgence, technological advance, most United States WT/TPR/G/126 
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notably.  It is appropriate to note in the U.S. tr ade policy review that the U.S. commitment to open 
markets and the fulfillment of our WTO obligations have contributed importantly to competition in 
the U.S. market, to the efficiency with which th e United States employs current resources and invests 
for the future, and to strong U.S. productivity growth and higher living standards. 
Business Investment  
20. As the growth of business investment (non-residential fixed investment in structures, 
equipment and software) played an important role in  the last U.S. economic expansion, its decline has 
been a hallmark of the 2001 recession and its aftermath.   From its peak in the second quarter of 2000, 
business investment fell by 12.6 percent to its trough in the first quarter of 2003.  Investment in 
structures fell by 24.7 percent;  investment in equi pment and software fell by 8.2 percent.  Reflecting 
the strengthening of growth prospects in 2003, a 6.4 pe rcent increase in fixed investment in equipment 
and software between the first and third quarter le d a revival of business investment (up 5.2 percent 
overall between the two quarters). 
Exports, Imports, and Trade Balance  
21. The economic recession in 2001, and the relativel y modest pace of economic expansion in the 
early recovery phase, has affected U.S. imports.  E xports of the United States were likewise affected 
by weak rates of economic expansion in many of our major trade partners since 2000.  From 2000 to 
2002, U.S. real imports of goods and services increased  just 0.7 percent while real exports of goods 
and services fell by 6.9 percent.  That picture is somewhat less somber if the comparison since 2000 is 
extended to the third quarter of 2003, as stronger gr owth, particularly in the United States quickened 
the growth of trade.  U.S. real goods and servi ces imports show a 4.7 percent increase from 2000 to 
2003's third quarter, while U.S. exports  show a decline of 4.7 percent. 
22. In nominal terms, U.S. imports of goods and services totaled $1.44 trillion in 2002 while 
exports totaled $1.01 trillion.  As a share of no minal GDP, U.S. imports of goods and services fell 
from 14.9 percent in 2000 to 13.8 percent in 2002.  The export share fell from 11.2 percent of nominal GDP in 2000 to 9.7 percent in 2002.  The U.S. trade deficit in goods and services increased from 
$365.5 billion in 2000, or 3.7 per cent of U.S. nominal GDP, to $423.8 billion or 4.1 percent of GDP 
in 2002.   
23. As U.S. growth quickened in 2003, absolutely and relative to many U.S. trade partners, the 
import share of GDP grew again, to 14.2 percent of GDP in 2003s’ first three quarters or $1.54 trillion 
annualized.  Exports increased slightly to $1.04 tri llion (annualized) in the first three quarters of 2003, 
falling slightly, however, as a share of GDP to 9.6 pe rcent.  As a result the U.S. goods and services 
trade deficit increased from 4.1 percent of GDP in  2002 to 4.6 percent of GDP in 2003's first three 
quarters. 
24. The restoration of stronger growth, in the econo mies of other WTO members as well as the 
United States, can be expected to stimulate globa l trade and the exports as well as imports of the 
United States. 
Conclusion  
25. The United States remains firmly committed to  the WTO-based multilateral trading system 
and shares with other Members the hope for further significant liberalization of trade through the WTO.  The strengthening and further opening of  global markets to trade through a successful 
conclusion to the DDA negotiations and other trade liberalizing efforts should support global WT/TPR/G/126 Trade Policy Review 
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economic recovery and the income-increasing expans ion of world trade for low-, middle-, and high-
income countries alike. 
III. TRADE POLICY DEVELOPMENTS, 2001-2003 
(1) WTO  AGREEMENTS AND INITIATIVES  
(i) U.S. Proposals in the Doha Development Agenda 
26. At the launch of the Doha Round in November  2001, U.S. Trade Representative Robert B. 
Zoellick stated, "Our work here can mark a new era in economic cooperation between developing and 
developed nations.  On a range of issues, such as ag ricultural liberalization and reduction of tariffs on 
non-agricultural goods, we’ve shown how our interests can converge with the developing world.”  
The United States played a critical role in launching the Doha round, in making ambitious proposals 
to advance the negotiations, and in offering compro mises to promote progress.  This high level of 
involvement is based on the belief that unleashi ng economic activity throug h the multilateral removal 
of trade barriers is a vital interest we share with all WTO Members.  The Fifth Ministerial Conference was a missed opportunity to move this agenda forw ard, and the United States stands by the ambitious 
proposals and other submissions we have tabled thus far in the Round.  (See Annex I.) 
(ii) Implementation of Existing Agreements 
27. Since entry into force of the Uruguay Round Ag reements in 1995, a central theme of U.S. 
policy has been to ensure the effective and tim ely implementation of our WTO commitments.  We 
believe it is not only important for American trad e interests, but for the WTO system as a whole to 
ensure all Members meet their commitments.  The various manifestations of this policy range from 
constructive participation in the deliberations of WTO committees to the active use of the dispute 
settlement mechanism.  U.S. trad e policy seeks to support and advance the rule of law.  The United 
States continues to be among the most active par ticipants in the WTO dispute settlement process, 
ensuring the enforcement of trade agreements and U.S.  rights in the trading system.  With respect to 
dispute settlement, we have accepted the need to implement the rulings of the WTO Dispute Settlement Body in cases to which we are a party;  and where legislation has been required, we have 
worked with Congress to secure the necessary legislation and will continue to do so. 
28. For example, we have invoked authority under U. S. law to make determinations in response 
to DSB recommendations and rulings involving anti- dumping and safeguard inv estigations.  Congress 
has introduced legislation in response to DSB reco mmendations and rulings concerning, for example, 
the 1916 Act, the FSC/ETI legislation, the Conti nued Dumping and Subsidy Offset Act, and section 
211.  We have also agreed to the first arbitrati on proceeding under Article 25 of the DSU in order to 
help resolve the dispute concerning section 110 of  the U.S. copyright law and Congress passed 
legislation necessary to facilitate reaching a resolution. 
(iii) Steel Trade Policy Initiative 
29. In 2002, the Administration continued to implem ent the President’s comprehensive strategy 
to respond to the challenges facing the United States steel industry.  This strategy, announced on June 
5, 2001, is designed to restore market forces to world steel markets and to eliminate practices that 
harm the U.S. steel industry and its workers. 
30. The Administration’s initiative contains three el ements.  First, the President directed the 
United States Trade Representative to  request the initiation of an investigation of injury to the steel 
industry by the International Trade Commission under S ection 201 of the Trade Act of 1974.  Second, United States WT/TPR/G/126 
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the President directed the United States Trade Repr esentative, in cooperation with the Secretaries of 
Commerce and Treasury, to initiate negotiations with our trading partners to eliminate inefficient 
excess capacity in the steel industry worldwide.  Fi nally, the President directed the United States 
Trade Representative, together with the Secretaries of Comme rce and Treasury, to initiate 
negotiations on the rules that will govern steel trad e in the future, so as to eliminate the underlying 
market-distorting subsidies th at led to current conditions. 
31. The President, in March 2002, imposed temporary safeguard measures after a comprehensive 
investigation by the U.S. International Trade Commission (ITC), which found that imports of certain steel products were a substantial cause  of serious injury to domestic steel industries.  These safeguards 
took the form of tariffs, ranging from 8 to 30 pe rcent on ten steel products, and a tariff-rate quota 
(TRQ) on steel slab.  In order to minimize the impa ct of these tariffs on U.S. consumers, more than 
1,000 niche steel products were excluded from the re lief.  In addition, exports from our free trade 
partners and most exports from de veloping countries were excluded. 
32. After the safeguards were implemented, several WTO Members requested consultations 
under the WTO Dispute Settlement Understanding.  When  consultations failed to resolve the dispute, 
a panel was established to consider the complaints .  The WTO panel issued a report in July 2003 
finding that the United States did not establish a suffi cient basis for imposing the safeguard measures.  
The United States appealed the panel report, an d the Appellate Body report was released on 
November 10, 2003.  The WTO Appellate Body upheld the Panel’s ultimate conclusion that each of the ten U.S. safeguard measures was inconsistent with WTO rules. 
33. On September 19, 2003, the ITC issued its midterm report regarding the steel safeguard 
measures.  The ITC midterm report documented a num ber of changes that have occurred in domestic 
and global steel markets.  The ITC reported that “si nce the imposition of the safeguard measures, the 
industries producing steel products [subject to the safeguard] have undergone major restructuring and 
consolidation.”  The ITC report also indicated  that steel producers and workers “negotiated 
groundbreaking collective bargaining agreements si nce the imposition of the safeguard measures.” 
34. On December 4, 2003, President Bush signed a proclamation terminating the steel tariffs and 
the TRQ.  The proclamation stated: “the U.S. steel industry wisely used the 21 months of breathing 
space we provided to consolidate and restructure.  The industry made progress increasing productivity, lowering production costs, and making America more competitive with foreign steel 
producers.”  As indicated in the proclamation, th e President concluded that the safeguard measures 
have achieved their purpose, and as a result of changed economic circumstances, maintaining the 
measures was no longer warranted.  In his proc lamation, the President indicated that the 
Administration would continue its steel import licensing and monitoring program, which was established concurrently with the safeguards so it  can respond to future import surges that could 
unfairly damage the industry. 
35. Significant progress was made in implementing the other elements of the Administration’s 
steel strategy.  In December 2002, the world's ma jor steel-producing countries began negotiations in 
the OECD to eliminate market-distorting governme nt practices in steel trade, focusing first on the 
substantial reduction and elim ination of market-distorting steel subs idies. The agreement by all of the 
world's major steel producers to begin these negotiations  was a historic achievement in a sector of the 
world economy that has defied previous reform effort s. Participants also r eached consensus on a work 
schedule that aims to produce an advanced working text  by the spring of 2004.  The participants in the 
OECD discussions of excess inefficient steel cap acity have forecasted significant closure of such 
capacity, and have commenced a robust peer review  process in which governments report information 
and answer questions about capacity developments with in their territories.  Projections by participants WT/TPR/G/126 Trade Policy Review 
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in this process show that excess inefficient capacity will fall by 140 million metr ic tons through 2005.  
The ongoing work on steel at the OECD repr esents the most sustained and comprehensive 
commitment of any Administration – and any country  – to address the root causes of ongoing market 
distortions in the world steel market. 
(2) REGIONAL INITIATIVES  
36. The United States pursues an active agenda of ambitious trade liberalization on the 
multilateral, regional and bilateral le vels.  Regional and bilateral agreem ents that are fully consistent 
with WTO rules and objectives can both support an d expand trade liberalization in the multilateral 
trading system.  With this in mind, and in order to  capture and multiply the benefits of an expanding 
global trading system, the United States is activel y embarked on an agenda of greater commercial 
interaction in emerging markets. 
37. The United States is pursuing regional trade initiatives in the Western Hemisphere, the 
Middle East and Africa, such as the Free Trade Area of the Americas (FTAA), the Central American Free Trade Area (CAFTA), the Middle East Free Trade Area (MEFTA), and U.S–Southern Africa Customs Union (SACU).  Regional work also includes monitoring compliance with, and improving 
functioning of, current agreements and program s, including the North America Free Trade Area 
(NAFTA), the Asia Pacific Economic Cooperation (A PEC), the African Growth and Opportunity Act 
(AGOA), the Caribbean Basin Economic Recovery Act (CBERA), and the Andean Trade Promotion 
and Drug Eradication Act (ATPDEA).  At the same time, we seek to cultivate our economic ties and 
cooperation with Europe through the Transa tlantic Economic Partnership Initiative.  
38. Without exception, the regional initiatives in wh ich the United States is involved look to the 
WTO as a solid foundation upon which to build.  The WTO recognizes the desirability of increasing 
freedom of trade by the development, through volunt ary agreements, of closer integration between the 
economies of the countries party to such agreemen ts, as long as the agreements do not result in 
increasing the external barriers of the parties.  Su ch agreements challenge the multilateral system to 
keep pace with the interests and needs of Members, and contribute to the WTO system by introducing 
innovation and strengthened disciplines.  These agreem ents can become models for future multilateral 
liberalization in new areas, such as agriculture , services, investment, and environmental and labor 
standards.  The following regional initiativ es are each examples of this potential. 
(i) North American Free Trade Area 
39. In January 1994, the United States began to implement the NAFTA, the world's largest free 
trade area.  Built on the U.S.-Canada Free Trad e Agreement (CFTA) of 1989, NAFTA includes over 
427 million people producing more than $11 trillion wort h of goods and services.  NAFTA increases 
opportunities for all three partners, Mexico, Cana da, and the United States, to expand trade and 
enhance growth.  Countries outside the free-trade area also benefit from stronger growth in North 
America, as the Agreement acts to enhance the si ze of the NAFTA market and purchasing power of 
NAFTA countries.  Since the Agreement’s entry into force, the United States has worked to ensure 
that its provisions are implemented swiftly;  ind eed, the Parties have implemented four rounds of 
accelerated tariff reductions.  The three government s also implemented agreements on labor and 
environmental cooperation along with the NAFTA. 
40. Since January 1, 1994, when the NAFTA ente red into force, three-way trade amongst the 
NAFTA countries has reached over $621 billion, more  than double the pre-NAFTA level. Foreign 
direct investment by other NAFTA partners in  the NAFTA countries more than doubled to reach 
$299.2 billion in 2000.  Canada is the largest trad ing partner of the United States and Mexico became United States WT/TPR/G/126 
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its second largest trading partner in 1999.  U.S. ex ports to these two North American markets account 
for approximately 37 percent of total U.S. global exports. 
41. On January 1, 2003, most of the remaining tariffs between the Parties were eliminated.  
Except for a handful of items, trade in North America is duty- and quota-free.  At the October 2003 
meeting of the NAFTA Free Trade Commission (FTC ), the body responsible for the implementation 
of the Agreement, the trade ministers from the NAF TA Parties agreed to launch an initiative to study 
the Parties’ most-favoured-nation tariffs, in orde r to determine whether harmonizing these tariffs 
could further promote trade by reducing export-rela ted transaction costs.  The FTC also agreed to 
pursue further liberalization of the NAFTA rules of origin and it issued two statements aimed at 
improving the transparency and efficiency of invest or-state arbitration under the investment chapter of 
NAFTA (Chapter 11). 
(ii) Free Trade Area of the Americas Negotiations 
42. At the first Summit of the Americas, which was held in Miami in 1994, the leaders of the 
United States and the other 33 democratically elect ed governments in the Western Hemisphere agreed 
to create the Free Trade Area of the Americas (FTAA) .  The FTAA will be the la rgest free trade area 
in the world, covering North America, South Am erica, and the Caribbean Basin, and encompassing 
nearly 800 million people.  When they met again fo r the third Summit of the Americas in Quebec City 
in 2001, the leaders reaffirmed their commitmen t to the FTAA process and provided momentum to 
the negotiations by agreeing to conclude FTAA ne gotiations no later than January 2005 and to seek 
the Agreement's entry into force as soon as po ssible thereafter, but in any case no later than 
December 2005. 
43. At the Eighth FTAA Ministerial meeting whic h was held on November 20, 2003 in Miami, 
Florida, the FTAA ministers responsible for trade met under the leadership of the United States and 
Brazil, as current FTAA co-chairs.  The minist ers reaffirmed their commitment to the FTAA’s 
comprehensive agenda and the negotiation of a co mmon and balanced set of rights and obligations 
applicable to all in nine negotiating disciplines (agricultural and non-agricultural goods, services, 
investment, government procurement, intellectua l property, competition policy, subsidies, anti-
dumping and countervailing duties, and dispute settlem ent.)  They also reaffirmed their commitment 
to the ultimate goal of establishing an area of free trade and regional integration and to completing negotiations by January 2005.  In support of this timetable, the minister s have directed that 
negotiations on market access in the areas of ag ricultural and non-agricultural goods, services, 
investment and government procurement be completed by September 30, 2004. 
44. Ministers also recognized that in the FTAA process, countries might assume higher-
level commitments above and beyond the core set of  obligations.  In furtherance of their commitment 
to ensure that even the smallest  economies in the FTAA are able to participate in and benefit from the 
negotiation of the FTAA, the Ministers also made decisions intended to ensure that measures to 
account for differences in size of economies and levels  of development are included in the agreement, 
and that the Hemispheric Cooperati on Program is fully implemented.  The Ministers continued the 
tradition of transparency in the FTAA negotiations by making public the third draft of the text of the 
agreement.  They again met with representatives from civil society and business to receive and 
consider their views on the FTAA.  In addition, th ey heard from Ministers of Labor from Brazil, 
Canada and Mexico on the results of work of the Inter-American Conference of Ministers of Labor 
examining, inter alia , questions of globalization rela ted to employment and labor. 
45. The FTAA will support and enhance our commitment to the multilateral system.  In 
November 2003, the trade ministers from throughout the hemisphere reiterated their pledge that the WT/TPR/G/126 Trade Policy Review 
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FTAA will be a balanced, comprehensive agreement that  is consistent with the rules and disciplines of 
the WTO, and that will coexist with existing bilate ral and sub-regional agreements, to the extent that 
rights and obligations under these agreements are not covered by or go beyond the rights and obligations of the FTAA. The increase in ec onomic growth and improved access to new ideas 
resulting from liberalized trade brought about by the FTAA will also reinforce democratic principles 
in the region. 
(iii) Central American Free Trade Negotiations 
46. The United States and Costa Rica, El Salv ador, Guatemala, Honduras, and Nicaragua 
launched negotiations in January 2003 to creat e the Central American Free Trade Agreement 
(CAFTA). Eight rounds of negotiations have been  held during 2003 in both Central America and the 
United States.  The ninth and final round is sch eduled for December 2003.  The United States also 
expects to broaden CAFTA disciplines next year to  include the Dominican Republic. The first formal 
negotiating round between the U.S. and the Dominican  Republic will be held in January 2004 in the 
Dominican Republic. 
47. The United States and the five Central Ameri can countries share almost $25 billion in total 
two-way trade in goods.  U.S. goods exports to Cent ral America are on track to reach $11.5 billion in 
2003, better than a 42 percent increase since 1996.  That total is about the same as U.S. exports to Russia, India and Indonesia combined.  The United States is expected to import $13 billion worth of goods from Central America in 2003. 
48. The United States is pursuing the CAFTA agr eement to help increase trade, overcome 
poverty, foster development, and strengthen demo cracy.  Establishing free trade between the United 
States and Central America is an important part of President Bush’s vision for a closer, more unified 
and more prosperous hemisphere.  CAFTA will also  advance free trade in the hemisphere by further 
expanding a growing core of pro-free trade countri es that includes our FTA partners Canada, Chile 
and Mexico. 
(iv) U.S. - Southern Africa Customs Union Free Trade Agreement 
49. On November 4, 2002, U.S. Trade Representa tive Robert B. Zoellick notified Congress of 
President Bush’s decision to negotiate a free trad e agreement (FTA) with the five member countries 
of the Southern African Customs Union (SACU) .  These nations—Botswana, Lesotho, Namibia, 
South Africa and Swaziland—comprise the largest U. S. export market in sub-Saharan Africa, with 
$2.5 billion in U.S. exports in 2002.  SACU a nd the United States held successful rounds of FTA 
negotiations in June, August, and October 2003. 
50. This FTA— the first ever between the United States and sub-Sahara n African countries — 
offers an opportunity to craft a groundbreaking agreem ent that will serve as a model for similar efforts 
in the developing world.  The SACU countries are strong economic reformers and leading AGOA beneficiaries.  They have seen the positive role that  trade can play in promoting economic growth and 
development and, through the FTA negotiations, are ta king an important step toward deeper economic 
engagement with the United States.  Through an FTA with SACU, U.S. businesses will gain 
preferential access to their largest export market in  sub-Saharan Africa.  By building on the success of 
AGOA, the SACU countries would secure the kind of guaranteed access to the American market that 
supports long-term investment and economic pros perity.  The FTA would also reinforce ongoing 
regional economic reforms and lower the perceive d risk of doing business in southern Africa. United States WT/TPR/G/126 
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(v) Asia – Pacific Economic Cooperation 
51. The United States has continued its active i nvolvement in the Asia Pacific Economic 
Cooperation (APEC) Forum.  Founded in 1989, APEC is a unique combination of the world's largest 
established markets and emerging markets.  Th e organization now counts 21 member economies on 
both sides of the Pacific, and accounts for about half of world trade and a growing proportion of world 
output.  The United States considers APEC an important vehicle for building a regional economic structure to ensure prosperity and stability over the long term.  In the past few years, APEC has made 
concrete progress toward its objectives of advanci ng economic cooperation and trade and investment 
liberalization and facilitation, and toward the long- term goal of “free and open trade and investment” 
in the region. 
52. APEC leaders met in Bogor, Indonesia, in 19 94 and agreed to dismantle, over the next 
25 years, barriers that impede trade and investme nt among their economies.  In the 2001-2003 period, 
important activity has taken place at all levels of APEC, from the Leaders and Ministerial Agreements 
to the work of Senior Officials and the Committee on Trade and Investment, to give effect to APEC’s 
vision of free and open regional trade and investme nt.  APEC’s Committee on Trade and Investment 
and its sub-fora have developed specific work progr ams in sixteen substantive issue areas: tariffs, 
non-tariff measures, services, investment, governme nt procurement, standa rds and conformance, 
customs, competition policy, deregulation, intellectua l property rights, dispute mediation, mobility of 
business people, rules of origin, information ga thering/analysis, and implementation of WTO 
obligations (including rules of origin), and Strengthening Economic Legal Infrastructure.  
53. In 2001 APEC Leaders gathered in Shanghai and ag reed to an ambitious agenda to increase 
transparency in economic governance, improve regi onal trade facilitation, and advance trade in the 
digital economy.  At the 2002 and 2003 meetings in Los Cabos and Bangkok, respectively, Leaders 
endorsed frameworks for implementing the agreements  made in each of these areas.  Additionally, 
APEC members began a more meaningful process for reviewing the openness of each other’s trade and investment regimes.  Throughout this period A PEC Leaders and Ministers have maintained their 
commitment to advancing negotiations under the WTO’s Doha Development Agenda (DDA).  In 
Bangkok, Leaders and Ministers called on all WT O members to quickly re-energize the DDA 
negotiation process.  They provided leadership in calling for WTO members to build off the Cancun 
text in the resumption of DDA negotiations.  Lastly, they asserted that a successful outcome to the negotiations requires political flex ibility and will, and is essential fo r strengthening the global trading 
system and promoting global econom ic development and well being. 
(vi) Middle East Free Trade Area 
54. The United States Middle East Free Trade Ar ea initiative (MEFTA) seeks to promote trade 
expansion and economic reforms in North Africa and the Middle East leading to a Middle East Free 
Trade Area within a decade.  To re-ignite econom ic growth and expand opportunity in the Middle 
East, the U.S. will build on the free trade agreements  (FTAs) with Israel, Jordan and the soon to be 
concluded agreement with Morocco, and take a series of graduated steps with countries in the region 
that will culminate in the MEFTA.  These steps include supporting reforming countries with WTO applications for accession, enhancing access to the Generalized System of Preferences (GSP) program for eligible countries, negotiating Trade and Invest ment Framework Agreemen ts, negotiating Bilateral 
Investment Treaties, negotiating comprehensive Free  Trade Agreements, melding sub-regional FTAs 
into MEFTA, and helping with technical assistance. WT/TPR/G/126 Trade Policy Review 
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(vii) U.S.-Andean Free Trade Negotiations 
55. On November 18, 2003, U.S. Trade Representa tive Robert B. Zoellick formally notified 
Congress, on behalf of President Bush, of the Admini stration's intent to initiate negotiations for a free 
trade agreement with Colombia, Peru, Ecuador, and Bolivia. The Administration plans to structure the 
negotiations to begin in the second quarter of 2004, initially with Colombia and Peru. The United 
States is prepared to work intensively with Ecua dor and Bolivia in order to include them in the 
agreement as well. As a destination for U.S. exports , the Andeans collectively represented a market of 
$7 billion in 2002, while the U.S. imported $9.8 bill ion from the region. The stock of U.S. foreign 
direct investment in the four countries was $4.5 billion in 2002.  
(viii) Trans-Atlantic Economic Partnership 
56. The United States-European Union relationship, one of the most durable in the world, is 
further strengthened by the New Transatlantic Ag enda (NTA), an initiative which seeks to deepen 
transatlantic relations by initiating specific, joint U.S.-EU actions to address global economic, 
political, humanitarian and environmental challenges mo re effectively.  This is a key component of 
U.S. efforts to meet the challenges posed by the post-Cold War reality, including the need to build a 
strong transatlantic community of democratic, free market economies.  The 1995 NTA Action Plan 
included a commitment on the part of the United Stat es and the EU to expand bilateral trade through 
an initiative called the New Transatlantic Marketplace  (encompassing a number of specific joint 
cooperative steps in the economic polic y area to which both sides committed). 
57. The Transatlantic Economic Partnership ( TEP) initiative, which seeks to deepen and 
systematize the cooperation in trade, was launche d at the May 1998 U.S.-EU Summit as a further 
evolution of the NTA’s New Transatlantic Mark etplace initiative. Under the TEP, the two sides 
identified seven broad areas in which they committe d to work together to increase trade, avoid 
disputes, address disagreements, remove barriers and achieve mutual interests.  These areas covered: 
technical standards, agriculture, intellectual prope rty, government procurement, services, electronic 
commerce, environment, and labor.  In addition, th e United States and EU agreed to put an emphasis 
throughout the initiative on shared values, i.e. they  agreed to more fully involve citizens and civil 
society on both sides of the Atlantic in trade policy so as to strengthen the consensus for open trade.  
Cooperation under the TEP is envisioned to occur on b ilateral matters as well as in the context of 
multilateral activities such as in the WTO.  The TEP Action Plan lays out specific goals under each of 
the above categories that the two sides hope to achieve as soon as possible. 
58. In the 1999-2001 period the US and EU agreed to try to utilize the TEP mechanisms also to 
carry out part of a joint effort to identify – and hopefully defuse – potential trade problems at an early stage. The two sides worked to develop co mmon guidelines for regulatory cooperation and 
transparency – an area increasingl y seen by the business community  as important to the further 
deepening of transatlantic commercial ties. 
59. At the June 24, 2001 U.S.-EU Summit in Göte borg, Sweden, President Bush and EU Leaders 
agreed to strengthen their transatlantic bond.  At  the following bilateral Summit in May 2002, the two 
sides unveiled the Positive Economic Agenda (PEA) in itiative, which identified several priority areas 
for joint cooperation, including further work  on the TEP-initiated guidelines for regulatory 
cooperation and transparency, informal dialogue on financial market issues, and resolution of certain agricultural trade problems.  Work on these issues has continued through 2003, leading to a number of 
projects launched under the regulatory cooperation guide lines and the completion of a bilateral mutual 
recognition agreement (MRA) covering marine safety.   Further progress (including signature of the 
marine safety MRA) on these and additional i ssues as appropriate is envisaged for 2004. United States WT/TPR/G/126 
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60. The United States and the EU have supplem ented the TEP and NTA initiatives through the 
establishment of a series of private dialogues between European and American businesses, labor organizations and consumer  groups.  The first of these to be established, the Transatlantic Business 
Dialogue (TABD), is a forum in which top Ameri can and European business leaders can meet to 
discuss ways to reduce barriers to United States-Eu ropean trade and investment.  Additional dialogues 
– the Transatlantic Labor Dialogue (TALD), the Tr ansatlantic Consumer Dialogue (TACD), and the 
Transatlantic Legislative Dialogue (TLD) – start from a similar premise, i.e., that corresponding 
organizations on both sides of the Atlantic shoul d share views and, where possible, present joint 
recommendations to the United States and the EU on how to improve transa tlantic relations and 
elevate the debate among countries in multilateral fora.  The United States is committed to full 
participation of civil society in the trade policy pr ocess and intends to cooper ate closely with all the 
dialogue groups as it works to implement the TEP initiative.  
(ix) African Growth and Opportunity Act 
61. The African Growth and Opportunity Act (AGOA) , enacted in May 2001 as part of the Trade 
and Development Act of 2000, is the centerpiece of U.S. trade policy for sub-Saharan Africa.  AGOA 
provides a number of key economic benefits and incentives to promote economic reform and trade 
expansion in sub-Saharan Africa.  The Act also institutionalizes a process for strengthening U.S. trade 
relations with sub-Saharan African countries by est ablishing an annual ministerial-level forum with 
AGOA-eligible countries. 
62. AGOA offers beneficiary sub-Saharan African countries duty-free access to the U.S. market 
for essentially all products.  It extended the ex isting Generalized System of Preferences (GSP) 
program for beneficiary countries through September 30, 2008 and added 1,835 products to the 4,650 
products already eligible for duty-free treatment under GSP.  It eliminated the GSP competitive-need 
limitation for beneficiary sub-Saha ran African countries, lifted all existing quotas on apparel products 
from eligible countries that are determined to ha ve effective measures in place to prevent illegal 
transhipment, and allows less developed country bene ficiary countries to use regional or third-party 
fabric in apparel imported into the United Stat es under the program.  For the fiscal year beginning 
October 1, 2003, AGOA apparel imports are subject to a cap of 4.7931 percent of total U.S. apparel 
imports.  This cap will increase by roughly a half  a percent each year through the end of AGOA’s 
authorization in September 2008.  Apparel importe d under the special, third-country fabric provision 
is subject to a cap of 2.3571 percent of total U.S. apparel imports.  The third-country fabric provision 
is set to expire on September 30,  2004, though legislation has been introduced in the U.S. Congress 
that would extend the provision beyond this date. 
63. AGOA requires the President to determine annua lly whether sub-Saharan African countries 
are, or remain, eligible for benefits based on thei r progress in meeting criteria set out in the Act.  
These criteria include establishment of a market-based  economy and the rule of law, the elimination 
of barriers to U.S. trade and investment, implementation of economic policies to reduce poverty, the 
protection of internationally recognized worker ri ghts, and establishment of a system to combat 
corruption.  Additionally, countries cannot engage in: 1) violations of internationally-recognized 
human rights, 2) support for acts of internationa l terrorism, or 3) activities that undermine U.S. 
national security or foreign policy interests.  An interagency AGOA Implem entation Subcommittee, 
chaired by USTR, conducts the annual eligibility review, drawing on information from the public, 
NGOs, the private sector, and the prospective beneficiary governments.   Following the last eligibility 
review in December 2002, and based on the reco mmendation of the U.S. Trade Representative, the 
President determined that 38 countries met the Act’ s requirements for eligib ility.  Of these, 22 had WT/TPR/G/126 Trade Policy Review 
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instituted acceptable customs measures to prevent illegal trans-shipme nt and, accordingly, had been 
certified for AGOA’s textile  and apparel benefits.2 
64. The Trade Act of 2002 included several enhancem ents to AGOA, including:  1) a doubling of 
the annual quantitative limit on apparel produced in th e region from regional fabric;  2) the extension 
of lesser developed countr y benefits to Botswana and Namibia, allowing producers there to use third-
country fabric in qualifying apparel;  3) the inclus ion of knit-to-shape appa rel in the list of goods 
eligible for quota-and duty-free treatment under AGOA;   and 4) correction of a technical definition 
for the use of fine merino wool. 
65. In the three years since its passage, AGOA has had a significant impact on growth and 
economic development in several beneficiary coun tries.  AGOA-related trade and investment has 
created over 190,000 African jobs and over $340 milli on in investments.  AGOA imports totaled $9 
billion in 2002 and represented almost half of tota l U.S. imports from sub-Saharan Africa.  Over 92 
percent of U.S. imports from AGOA-eligible c ountries now enter the United States duty-free, under 
AGOA, GSP, or zero-duty MFN rates.  While most U. S. imports from the region continue to be in the 
energy sector, AGOA has begun to diversify U.S.-A frican trade.  For example, in 2002 non-fuel 
AGOA imports totaled $2.2 billion,  with apparel imports totaling $803 million, roughly twice the 
amount in 2001.  AGOA transportation equipment impor ts were up 81 percent, to $545 million, and 
AGOA agricultural imports increased 38 percent, to $212 million.  Trade in these key areas continued 
to rise in 2003.  In the first nine months of 2003, AGOA apparel imports increased 42 percent over the 
same period in 2002;  transportation equipment impor ts increased 24 percent, and agricultural imports 
were up 17 percent during the same period. 
(x) The Caribbean Basin Initiative 
66. The trade programs known collectively as the Caribbean Basin Initiative (CBI) remain an 
important part of U.S. economic relations with its  neighbors in Central America and the Caribbean.  
Initially launched in 1983 through  the Caribbean Basin Economic R ecovery Act (CBERA), the CBI 
provides 24 beneficiary countries with duty-free access to the United States market for most goods.  
In 1990, the CBERA was amended to extend furthe r market access opportunities to the United States 
and was made permanent. 
67. In May 2000, the United States enacted a further expansion of the CBI through the Caribbean 
Basin Trade Partnership Act (CBTPA).  The CB TPA enhanced CBERA benefits by authorizing 
preferential tariff treatment for certain qualifying  apparel articles.  The CBTPA also extended 
NAFTA-equivalent duty treatment to a number of products previously excluded from the CBERA, 
including certain tuna, petroleum products, certain fo otwear, and some watches and watch parts.  The 
Trade Act of 2002, passed on August 6, 2002, furt her amended the CBERA to expand the type and 
quantity of textile and apparel ar ticles eligible for the preferen tial tariff treatment accorded to 
designated beneficiary CBTPA countries.  Among othe r benefits, the Trade Act of 2002 expands the 
duty-free treatment available for clothing made in beneficiary countries from U.S. and regional inputs, 
and increases the quantity of clothing made from re gional inputs that regional producers can ship 
duty-free to the United States annually. 
68. U.S. imports (preferential and non-preferen tial imports combined) from CBERA countries 
remained steady during 2002.  However, impor ts in the preferential portion—those under CBERA 
including CBTPA—rose sharply, reflecting the expans ion of CBERA benefits to include certain types 
                                                      
2 The list of eligible countries for AGOA and of those that have met requirements for textiles and 
apparel benefits can be found at www.agoa.gov. United States WT/TPR/G/126 
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of apparel.  Total U.S. imports from CBERA benefi ciary countries amounted to $21.3 billion in 2002.  
Of this amount, $10 billion, or 47 percent, en tered under CBERA (including CBTPA) preferences. 
69. In 2002, the Dominican Republic continued to lead all countries in taking advantage of 
CBERA, as it has done in virtually every year si nce the program became effective, accounting for 
almost 27 percent of U.S. imports under the CBE RA provisions.  Honduras continued to be the 
second largest user with 20 percent of the share, the same as 2001.  Costa Rica, El Salvador, Trinidad 
and Tobago, and Guatemala round out the leading users of the program, accounting for a combined 43 percent of the share 
70. The CBERA and CBTPA impose conditions that coun tries must meet to be designated and to 
maintain beneficiary status.  These criteria in clude protection of inte llectual property rights, 
internationally recognized worker rights, implemen tation of WTO obligations, and transparency in 
government procurement practices. 
(xi) Andean Trade Preferences 
71. President Bush signed the Andean Trade Pr omotion and Drug Eradication Act (ATPDEA) 
into law on August 6, 2002. The signing renewed a nd expanded the product coverage of the Andean 
Trade Preference Act (ATPA), which had expired on December 4, 2001. The ATPA was originally 
enacted in 1991 in order to provide incentives to Bo livia, Colombia, Ecuador and Peru to diversify 
their economies away from narcotics production. It h as strengthened the legitimate economies in these 
Andean countries and created viable alternatives to  the profitable drug trade.  The original ATPA 
enacted in 1991 provided beneficiary countries duty-fr ee treatment for most of their exports to the 
United States, except for textiles, apparel, footwear, leather, tuna in airtight containers, and certain 
other items. 
72. The ATPDEA restored all of the benefits of the original ATPA program, providing for 
retroactive reimbursement of duties paid during th e period since the program’s lapse in December 
2001.  It also expanded the list of items eligible for duty-free treatment to about 700 more products.  
The most significant expansion of benefits in the ATPA as amended by the ATPDEA is in the apparel 
sector. Other new products benefiting from the program  includes: tuna in pouches, leather products, 
footwear, petroleum and petroleum products, and wa tches and watch parts.  In 2001 U.S. imports 
from the Andean region under the provisions of AT PA were about $1.7 billion, though in 2002 they 
dropped to $1 billion due to the lapse in the progr am.  However, the 2003 yea r-to-date (January to 
August) imports under the program ha ve already reached $3.7 billion. 
(3) B
ILATERAL INITIATIVES  
(i) U.S. - Chile Free Trade Agreement 
73. In December 2002 the United States and Chile concluded negotiation of a comprehensive 
bilateral free trade agreement.  The Parties si gned the agreement on June 6, 2003 and it has been 
approved by the legislatures of both Parties.  It w ill go into effect on January 1, 2004.  The agreement 
eliminates tariffs and quotas covering all trade betwee n the two countries at the end of a twelve-year 
transition period, with 85 percent of goods traded re ceiving duty-free treatment in the first year.  In 
addition to trade in goods, the U.S. – Chile FTA includes services, investment, competition policy, 
intellectual property, electronic commerce, tel ecommunications, financial services, government 
procurement, labor, environment, sanitary and phyt osanitary measures, technical barriers to trade, 
customs administration, dispute settlement and rules of origin.  The agreement is expected to have 
significant commercial benefits for both countries.  It will expand trade and investment between the WT/TPR/G/126 Trade Policy Review 
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United States and Chile, which  was the United States 36th largest trading partner in goods in 2002 
(with $2.6 billion in exports and $3.8 billion in imports).  
(ii) U.S. - Singapore Free Trade Agreement 
74. The U.S.-Singapore Free Trade Agreement was signed in Washington on May 6, 2003.  
President Bush signed the legislation to implement the United States-Singapore Free Trade 
Agreement (FTA) on September 3, 2003.  The Un ited States and Singapore expect to complete 
ratification procedures in December 2003 and the Agreement is expected to enter-into-force on 
January 1, 2004.  This FTA is comprehensive and covers aspects of trade in goods, services, 
investment, government procurement, protection of  intellectual property, competition policy and the 
relationship between trade and la bor and environment.  This Agreement eliminates duties and 
commercial barriers to bilateral trade in goods and services. 
(iii) U.S. – Jordan Free Trade Agreement 
75. The U.S.-Jordan Free Trade Agreement, signe d in October 2000, entered into force in 
December 2001.  The Agreement eliminates virtuall y all tariffs on industrial goods and agricultural 
products, as well as commercial barriers to bilatera l trade in goods and services originating in the 
United States and Jordan.  Provisions address intellectual property rights protection, balance of 
payments, rules of origin, safeguards, labor, en vironment, electronic commerce, and procedural 
matters such as consultations and dispute settlement.  The agreemen t builds on other U.S. initiatives 
in the region designed to encourage economic de velopment, integration, and peace.  Under the 
Agreement, U.S. goods exports to Jordan in 2002 were $404 million, up 19 percent ($65 million) 
from 2001.  U.S. goods imports from Jordan totaled $412 million in 2002 , an 80 percent increase 
($183 million) from 2001. 
(iv) U.S. – Israel Free Trade Agreement 
76. The United States-Israel Free Trade Area Agreem ent (FTA), signed in 1985, provided for 
phased tariff reductions culminating in the complete elimination of duties on all trade by 1995.  With 
respect to the United States, it is estimated that 97. 8% of chapter 1 through 97 tariff lines are currently 
either MFN Free or U.S.-Israel FTA duty-free.  Since its signing, the FTA has been an essential 
catalyst in facilitating the growth in trade and i nvestment between the two countries.  During 2002 
two-way trade in goods totaled $19.5 billi on, making Israel the United States’ 21st largest goods 
trading partner.  Trade in services with Israel (e xports and imports) account for 18% of the level of 
goods trade with Israel.  U.S. foreign direct inv estment (FDI) in Israel (stock) was $4.1 billion in 
2001, a 21.7 percent increase from 2000.  Israel FDI in the United States (stock) was $2.9 billion in 
2001, up 6.9% from 2000.  
77. The U.S.-Israel FTA applies to trade in all goods between the two countries. However, the 
United States and Israel held differing interpreta tions as to the meaning of certain rights and 
obligations related to agricultural goods under the agre ement.  In 1996, in the interest of achieving 
practical improvements in agricultural trade between  the two countries and without prejudice to the 
parties’ rights and obligations under the FTA, the Un ited States and Israel signed an adjunct to the 
FTA, the U.S.-Israel Agreement on Trade in Agricultu ral Products.  Since its expiration in 2001, the 
parties have extended the benef its provided under Agriculture Agreement as they negotiated a 
successor arrangement.  The new Agriculture Agreem ent, which will go into effect in 2004, will 
provide duty-free treatment for over 90 pe rcent of bilateral agricultural trade. United States WT/TPR/G/126 
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(v) U.S. - Australia Free Trade Negotiations 
78. In November 2002, the Administration notified the Congress of the President’s intent to 
launch negotiations for a comprehensive bilateral free trade agreement with Australia.  Five rounds of 
negotiations have been held.  Trade between the United States and Australia has grown significantly 
in the past decade, totaling nearly $20 billion in 2002, and the agreement is expected further boost 
trade in both goods and services and encourage a dditional foreign investment between the two 
countries. 
(vi) U.S. - Morocco Free Trade Negotiations 
79. President Bush and King Mohammed VI announced  in April 2002 their intention to launch 
negotiations on a FTA between the U.S. and Morocco .  Negotiations commenced in January 2003 and 
have continued through the year.  The FTA will enhance the trade and investment relationship 
between the two countries and contribute towards the President's trade agenda for the region to build a 
Middle East Free Trade Area (MEFTA). The agreement would eliminate tariffs and other barriers to 
trade in goods, agriculture, services, and i nvestment between the U.S. and Morocco. 
(vii) U.S. – Thailand Free Trade Negotiations 
80. Following the APEC Leader’s meeting in Bangkok in October 2003, President Bush 
announced that the United States intends take the steps required to initiate negotiations on a Free 
Trade Agreement (FTA) with Thailand.  The a nnouncement is recognition of the progress both 
countries have made in deepening trade relations during the past year.  Thailand is prepared to 
negotiate an agreement that contains the comp rehensive coverage and high standards that the 
United States seeks. 
(viii) U.S. – Panama Free Trade Agreement 
81. On November 18, 2003, U.S. Trade Represen tative Robert Zoellick formally notified 
Congress, on behalf of President Bush, of the Admini stration’s intent to initia te negotiations for a free 
trade agreement with the Republic of Panama.  Th e launch of negotiations is expected during the 
second quarter of 2004.  In 2002, bilateral trade between the United States and Panama totaled 
$1.7 billion.  U.S. exports accounted for $1.4 billion of  that amount.  Nearly half of Panama’s total 
imports come from the United States, and the Unite d States holds approximately $25 billion in foreign 
direct investment in Panama.  Such investment s range from finance, to maritime, to energy. 
(ix) U.S. – Bahrain Free Trade Agreement 
82. On August 4, 2003, USTR notified Congress of th e President’s intent to negotiate a Free 
Trade Agreement (FTA) with Bahrain.  This is a first step in implementing the President Bush’s 
initiative for advancing economic reforms in the Mi ddle East and pursuing the goal of a Middle East 
Free Trade Area (MEFTA) by 2013. A U.S.-Bahrain FTA could serve as a regional anchor for the 
Gulf facilitating greater economic integration and refo rms, and leading toward the eventual goal of a 
Middle East Free Trade Area.  The successful conclusion of a comprehensive U.S.-Bahrain FTA 
would enhance commercial relations with an econom ic leader in the Gulf and set the stage for 
improving trade relations and expanding openn ess with other countries in the region, increasing 
prosperity, opportunity, and hope.  The two countries expect to start formal negotiations in January 
2004. WT/TPR/G/126 Trade Policy Review 
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(4) TRADE -RELATED CAPACITY BUILDING INITIATIVES  
83. The United States is the largest single-country donor of trade-related technical assistance in 
the world, reflecting its commitment to helping de veloping countries participate fully in the global 
trading system.  The President’s Trade Policy Ag enda for 2003 states that the “United States is 
committed to expanding the circle of nations that  benefit from global trade...[and] to help[ing] 
developing economies build the capacity to take part  in trade negotiations, implement the rules, and 
seize opportunities.” 
84. U.S. trade capacity building efforts stem from the basic belief that trade and globalization is 
critical to the growth of developed and developi ng countries.  By having increased capacity to take 
part in trade negotiations, implement the rules,  and seize opportunities, developing countries can 
achieve win-win results for themselves and their trading partners. 
85. As the largest single-country donor, the Unite d States devotes substantial resources to TCB 
activities through USAID and a dozen or so other agen cies, totaling more than $2.5 billion in funding 
(FY2000 through FY2003).  The USG provided $752 million in TCB activities in FY2003, up 18 percent from FY2002. This funding is allocated as follows: 
$174 million in the Middle East and North Africa; 
$150 million in Latin America and the Caribbean; $133 million in sub-Saharan Africa; $92 million in Asia; $84 million in the former Soviet Republics; 
$65 million in Central and Eastern Europe;  and 
$53 million for non-targeted global projects. 
86. The United States is also the largest single-country contributor to the World Bank and other 
multilateral development banks, which provide an in creasingly broad range of TCB assistance to the 
Doha Development Agenda. 
87. In Cancun, the United States pledged an add itional $1.2 million for trade-related technical 
assistance (TRTA) to the World Trade Organization (WTO).  This contribution augments $1 million 
given earlier in 2003, bringing total U.S. support fo r WTO TRTA to more than $3 million since the 
launch of Doha negotiations in N ovember 2001.  This money is in direct support of programs like the 
annual WTO Technical Assistance Plan. 
88. The United States is also a strong supporter of the Integrated Framework (IF).  For example, 
the United States has contributed funds for the past  three years to the Integrated Framework Trust 
Fund in order to finance the Diagnostic Trade Integr ation Studies (DTIS).  This includes $200,000 of 
the Cancun pledge being specifically reserved for th e Trust Fund.  USAID also set aside $3 million in 
FY02 to support follow-up projects managed by USAI D missions. Those funds have been allocated to 
USAID’s missions in Cambodia,  Mozambique, and Senegal. 
89. The United States also supports countries that  are negotiating accession to the WTO.  For 
example, USAID will provide WTO accession and implementation services for up to three countries, including a current project in Cape Verde.  This project is planned for up to $4 million dollars over 
three years, subject to Congressional appropriations. 
90. The WTO and the Integrated Framework are prior ities of the U.S. TCB effort, which includes 
other elements as well.  The United States recognizes the need to build the capacity of developing 
countries with which it is negotiating free trade agreem ents, particularly in the areas of environment United States WT/TPR/G/126 
 Page 23 
 
 
and labor.  To complement the on-going CAFTA, FTAA and SACU free trade negotiations, separate 
cooperative groups on trade capacity building were  established with the purpose of defining and 
identifying priority needs.  The United States also s eeks to give eligible countries the capacity to take 
advantage of preference programs like the African Growth and Opportunity Act (AGOA).  For 
example, U.S. technical assistance linked to AGOA assists eligible countries to identify markets, 
establish linkages with American businesses, and me et U.S. food safety and other standards. 
91. Moving forward, the United States aims to continue helping the developing world incorporate 
trade into their development assistance strategies.   This includes supporting multilateral institutions 
and other donors to promote initiatives such as th e FTAA’s Hemispheric Cooperation Program, the 
WTO Technical Assistance Plan and the Integrat ed Framework.  As it concludes bilateral 
negotiations, the United States will assist its tradi ng partners to implement their commitments and 
transition to free trade.  The United States will also actively work with nations  with which it launches 
new negotiations to build their greater capacities to trade.  Finally, the United States will help 
qualifying countries to maximize the benefits of preference programs like AGOA. 
(5) LEGISLATIVE AGENDA  
92. President Bush’s legislative agenda for inte rnational trade demonstrates his continued 
commitment to opening global markets, which will lead to lower prices, more employment 
opportunities, and greater worldwide choices for consumers, farmers, manufacturers, service providers, and other industries.  The Bush administ ration will continue to work in close partnership 
with the Congress to maintain Am erican leadership in trade. 
93. The Bush administration has initiated a strong effort to seek enhanced market access around 
the world and to strengthen trading relationships with developing country trade partners through 
bilateral and regional trading initiatives.  The Pr esident will seek congressional implementation upon 
completion of free trade agreements (FTAs) w ith Morocco, the CAFTA countries (Costa Rica, 
Guatemala, El Salvador, Honduras, and Nicaragua ), the Dominican Republic and Australia.  The 
President will also seek congressional approval of an extension of the African Growth and 
Opportunity Act (AGOA) to encourage and promot e continued economic growth and reform in sub-
Saharan Africa. 
94. Building on the enactment of the Trade Act of 2002, which gave the President Trade 
Promotion Authority (TPA), President Bush will con tinue to utilize this authority in a collaborative 
manner with the Congress in seeking additional mark et-opening opportunities bilaterally, regionally, 
and globally.  In 2003, the President signed, a nd the Congress implemented, FTAs with Singapore and 
Chile.  In 2004, the Bush administration will cont inue his close consultations with the Congress 
regarding negotiations on the D oha Development round of the WT O, and ongoing FTA negotiations, 
including those with Australia, the five countri es of the South African Customs Union (SACU), 
Bahrain, the Dominican Republic, Thailand, the four countries benefiting from the Andean Trade 
Preference Act (ATPA), and Panama;  the Free Trade Area of the Americas (FTAA);  and the Middle 
East Free Trade Area (MEFTA). 
95. A priority of the President’s legislative trade agenda is to work with the Congress to comply 
with WTO rulings.  This important objective incl udes seeking concrete legislative progress regarding 
cases involving the foreign sales corporation/extra-terr itorial income (FSC/ETI) tax regime;  the Byrd 
rule;  the 1916 antidumping act;  section 211 of th e 1999 omnibus appropriati ons act;  and hot-rolled 
steel, among others. WT/TPR/G/126 Trade Policy Review 
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(6) LABOUR ISSUES  
96. Participation in the global economy through in ternational trade is a primary avenue for 
growth and development today.  International trad e also increases opportunities for workers to expand 
their earnings and employment options.  The challe nge for governments is to ensure that citizens 
benefit from globalization while minimizing the economi c and social costs of adjustment.  It is now 
widely recognized that respect for and adherence to  internationally recognized core labor standards is 
an important element in responding to this challenge. 
97. The labor-related overall U.S. trade negotiating obj ectives are threefold.  First, to promote 
respect for worker rights and rights of children consistent with the core labor standards of the 
International Labor Organization (ILO).  TPA defin es core labor standards as:  (1) the right of 
association;  (2) the right to organize and bargain co llectively;  (3) a prohibition on the use of forced 
or compulsory labor;  (4) a minimum age for th e employment of children;  and (5) acceptable 
conditions of work with respect  to minimum wages, hours of work, and occupational safety and 
health.  Secondly, to strive to ensure that par ties to trade agreements do not weaken or reduce the 
protections of domestic labor laws  as an encouragement for trade.  And finally, to promote the 
universal ratification and full compliance with ILO Convention 182—which the United States has 
ratified—concerning the elimination of  the worst forms of child labor. 
98. The principal trade negotiating objectives in TPA include, most importantly for labor, the 
provision that a party to a trade agreement with th e United States should not fail to effectively enforce 
its labor laws in a manner affecting trade.  TPA  recognizes that the United States and its trading 
partners retain the sovereign right  to establish domestic labor laws , and to exercise discretion with 
respect to regulatory and compliance matters, and to make resource allocation decisions with respect 
to labor law enforcement.  To strengthen the capacity  of our trading partners to promote respect for 
core labor standards is an additional principal negot iating objective, as is to ensure that labor, health 
or safety policies and practices of our trading partne rs do not arbitrarily or unjustifiably discriminate 
against American exports or serve as disguised trad e barriers.  A final principal negotiating objective 
is to seek commitments by parties to trade agreements  to vigorously enforce their laws prohibiting the 
worst forms of child labor. 
99. In addition to seeking greater cooperation betw een the WTO and the ILO, other labor-related 
priorities in TPA include the establishment of consultative mechanisms among parties to trade 
agreements to strengthen their capacity to promot e respect for core labor standards and compliance 
with ILO Convention 182.  The Department of La bor is charged with cons ulting with any country 
seeking a trade agreement with the United States concerning that country’s labor laws, and providing 
technical assistance if needed.  Finally, TPA manda tes a series of labor-related reviews and reports to 
Congress in connection with the negotiation of new tr ade agreements.  These include an employment 
impact review of future trade agreements, the pr ocedures for which are modelled after the Executive 
Order establishing environm ental impact reviews of trade agreements.  A meaningful labor rights 
report, and a report describing the extent to whic h there are laws governing exploitative child labor, 
are also required for each of the countries with which we are negotiating. 
100. WTO ministers renewed their commitment to the observance of internationally recognized 
core labor standards in the 2001 Doha Ministerial D eclaration.  Recognizing that there is a connection 
between labor standards and trade issues, we believe that the subject of implementation of core labor 
standards is relevant for TPRM reviews.  In review s of other countries, the United States has raised 
questions about the application of core labor standa rds. In that spirit, we are including, in this 
statement, relevant information on U.S. labor la w and practice as it relates to fundamental workers' 
rights. United States WT/TPR/G/126 
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United States Labor Law and Practice 
101. U.S. labor law is consistent with the principles underlying fundamental workers' rights.  For 
example, the U.S. Constitution assures the right of freedom of association.  National legislation, 
including the National Labor Relations Act (NLR A) of 1935 and the Railway Labor Act of 1926, 
provides the right to organize and bargain collec tively.  Section 7 of the NLRA guarantees that 
"[e]mployees shall have the right to self organization,  to form, join or assist labor organizations, to 
bargain collectively through representatives of their own choosing. ..." 
102. The Thirteenth Amendment of the United Stat es Constitution, ratified in 1865, provides that 
"[n]either slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within th e United States, or any place subject to their 
jurisdiction."  Implementing federal legisla tion prohibits forced or compulsory labor. 
103. The United States applies and seeks to enforce prohibitions against ha rmful child labor.  
The United States has also ratified the ILO Wo rst Forms of Child Labor Convention (1999) 
(Convention 182).  The Fair Labor Standards Act prohi bits "oppressive child labor" and the interstate 
transportation of products made w ith such labor.  Similarly, U.S. laws - both Federal and State - 
prohibit discrimination with respect to occupati on and employment on the grounds of race, creed, 
national origin, or gender.  Such laws are vigorously  enforced in both the public and private sectors to 
assure non-discrimination at work. 
(7) E
NVIRONMENTAL ISSUES  
104. The United States believes that international tr ade, complemented by appropriate national 
environmental policies, can make an important co ntribution to environmental protection.  Such 
policies can serve this purpose by reducing market distor tions that interfere with cost internalization;  
helping governments generate the resources that they need to address environmental challenges;  and 
creating markets for environmental goods, services, and technologies. 
105. The United States has been quite active in the work of the WTO addressing the linkages 
between trade and environment policies, particular ly with respect to the mandates set forth in 
paragraphs 31, 32, 33 and 51 of the Doha Minister ial Declaration.  This reflects our shared 
commitment to sustainable development, as refl ected in the Preamble to the WTO Agreement. 
106. We believe it is important to identify and pursue areas where trade liberalization holds 
particular promise for yielding both trade and envi ronmental benefits.  Three areas that hold such 
promise are the reduction or elimination of trade distorting measures in the agriculture sector, the elimination of subsidies that contribute to over-fi shing, and opening market s for environmental goods 
and services. 
107. The President's 2003 International Trade Agenda identifies several ways in which trade and 
environmental protection can be mutually reinforcin g.  As a general matter, trade helps create the 
economic wealth needed to build and sustain support for improved envir onmental standards around 
the world.  Trade agreements are a means both to  accelerate trade liberalization and to enhance the 
relationship between trade and e ffective environmental protection.  The Trade Act of 2002 provides 
guidance for pursuing environment objectives in the context of trade negotiations, and the 
United States has pursued such objectives across va rious fronts, particularly with respect to 
negotiations on free trade agreements. 
108. In addition to seeking commitments on levels of environmental protection and effective 
enforcement of environmental laws, the United States has sought to establish robust cooperative WT/TPR/G/126 Trade Policy Review 
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mechanisms in parallel with our free trade agreements to provide assistance to other countries in 
building their capacity to protect the environment a nd conserve natural resour ces.  Additionally, the 
United States has established an effective system of  environmental reviews of trade negotiations and 
has increased the scope and rigor of such reviews sin ce in recent years.  We have complemented these 
domestic actions with assistance to other countries as they consider how they can consider the 
environmental implications of trade agreements. 
109. More generally, we continue to think that it is  vitally important that trade and environmental 
officials work together closely with respect to the agendas of  both the WTO and international 
environmental fora.  We are committed to ensuri ng such coordination within the United States and 
believe it is important to the effective functioning  of the WTO that all members ensure that such 
coordination takes place. 
(8) AGRICULTURAL ISSUES  
110. Domestic agricultural programs are governed  until 2008 by the Farm Security and Rural 
Investment Act of 2002 (commonly referred to as the 2002 Farm Bill), signed into law on May 13, 
2002.  Its provisions support the production of a re liable, safe, and affordable supply of food and 
fiber;  promote stewardship of agricultural land and water resources;  facilitate access to American 
farm products at home and abroad;  encourage con tinued economic and infrastructure development in 
rural America;  and ensure continued research to ma intain an efficient and innovative agricultural and 
food sector. 
111. Of particular relevance to U.S. trade obl igations are the 2002 Farm Bill’s commodity 
provisions.  Income support for wheat, feed grains, upland cotton, rice, and oilseeds is provided 
through 3 programs:  direct payments, counter-cyc lical payments, and marketing loans.  Support for 
peanuts is changed from a price support program wi th marketing quotas to a program with marketing 
loans, counter-cyclical payments, direct payments , and a quota buyout.  To the extent possible, the 
sugar program is to operate as a "no net cost" program.  A new dairy income support program is 
introduced.  Using the WTO classification system, direct payments are green box measures, counter-
cyclical payments are non-product specific ambe r box measures, and marketing loans and sugar and 
dairy price supports are product-specific amber box measures.  The United States makes very limited 
use of the export subsidies allowed it under the Agreement on Agriculture, mainly for dairy products. 
112. The 2002 Farm Bill extends the two U.S. e xport subsidy programs:  The Dairy Export 
Incentive Program and the Export Enhancement Program  (EEP).  However, the U.S. has made very 
little use of the export subsidy opportunities pr ovided by these programs and allowed under the 
Agreement on Agriculture.  In the last few years, only dairy products have received export subsidies, 
EEP hasn’t been used since 2001.  At $31.6 million,  average dairy export subsidies in 2001-2002 
were roughly a quarter of the WTO ceiling amount. 
113. The Commodity Credit Corporation (CCC) is the entity responsible for managing U.S. farm 
programs through loans, purchases, payments, and othe r operations. CCC total net direct payments in 
2003 were $12.9 billion, a 35% declin e from the average over 1999 and 2000.3  These net direct 
payments are notified as a mix of blue and green box measures.  CCC Commodity loan program net outlays–a significant component of U.S. amber box s upport–declined 32% over this  period.  Trends in 
outlays, as well as the nature of new programs, suggest  that the United States will continue to meet its 
Agreement on Agriculture domestic support obligations .  If the Secretary of Agriculture determines 
that the AMS ceiling will be exceeded, the 2002 Farm Bill has a provision by which the Secretary 
                                                     
 
3 The average of 1999 and 2000 is used here because approximately $5 billion in payments made 
during the 1999 crop year were counted as CCC outlays for 2000. United States WT/TPR/G/126 
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shall, to the maximum extent practicable, adjust expenditures to avoid exceeding allowable levels.  
Before making any adjustments, the Secretary is  required to submit a report to Congress on the 
adjustments to be made. 
IV. OPENNESS AND ACCOUNTABILITY:  BUILDING SUPPORT FOR TRADE 
114. Building support for trade among our diverse do mestic constituencies and the international 
community is one of the most important challe nges the WTO and its members face.  Improving the 
transparency and openness of both the WTO and our individual domestic processes, and ensuring that 
we hear the concerns of stakeholders are among th e keys to meeting this challenge.  These issues are 
of great importance in the United States and are f undamental to the way our government operates and 
interacts with the American citizenry.  We thi nk it important that other WTO Members know more 
about how our system works, as they consider ho w best to build support for trade in their own 
countries and as we collectively explore how to address the same issues for the WTO. 
The U.S. System 
115. Consulting with those interested in and affected by issues is an important part of any 
government’s responsibility, and is a hallmark of th e U.S. system.  Advice from stakeholders is both a 
critical and integral part of the trade policy pro cess.  The United States government consults with 
interested parties on a regular basis through a va riety of mechanisms, both formal and informal. 
Soliciting Public Comment 
116. U.S. Government agencies regularly solicit public comment on trade issues.  The 
United States has notices in the Federal Register  seeking public comment on the mandated 
negotiations on agriculture, services, and the prio rities for future market access negotiations on 
industrial goods4, institutional improvements to the WTO partic ularly with respect to the transparency 
of its operations and outreach,5 and the DDA negotiations and the agenda in the World Trade 
Organization.6 
Advisory Committee Process 
117. The U.S. Congress established the private sector  advisory committee system in 1974 to ensure 
that U.S. trade policy and trade negotiation obj ectives adequately reflect U.S. commercial and 
economic interests.  Congress expanded and enhanced the role and objectives of this system in three 
subsequent Trade Acts.  This system is arranged in three tiers:  the President’s Advisory Committee 
for Trade Policy and Negotiations (ACTPN);  seven  policy advisory committees;  and 25 technical, 
sectoral, and functional advisory committees.  As tr ade has developed and br oadened, the composition 
of these official bodies has grown to better reflect  society’s interests in the trading system. 
118. The President appoints up to 45 ACTPN member s for two-year terms;  membership must 
broadly represent key economic sectors affected by trade.  The committee considers trade policy 
issues in the context of the overall national inter est.  Representatives are drawn from the agriculture, 
business, labor, environmental, and consumer communities. 
119. The policy advisory committees are the Inte rgovernmental Policy Advisory Committee 
(IGPAC), Trade Advisory Committee on Africa (T ACA), Agricultural Policy Advisory Committee 
                                                      
4 Federal Register, Vol. 65, No. 60, March 28, 2000. 
5 Federal Register, Vol. 65, No. 111, June 8, 2000. 
6 Federal Register, Vol. 67, No. 53, March 19, 2002. WT/TPR/G/126 Trade Policy Review 
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(APAC), Labor Advisory Committee (LAC), Defense Policy Advisory Committee on Trade 
(DPACT), and Trade and Environment Policy Advisory Committee (TEPAC).  Each committee provides advice based upon the perspective of its specific sector or area. 
120. Finally the 26 sectoral, functional, and techni cal advisory committees are organized in two 
areas:  industry and agriculture.  Each sectoral or  technical committee represents a specific sector or 
commodity group (such as textiles or dairy pro ducts) and provides specific technical advice 
concerning the effect that trade policy decisions may have on its sector.  The functional advisory 
committees provide cross-sectoral advice on customs matters and trade facilitation, standards and 
technical barriers to trade, intellectual property rights. 
121. The 22 industry sectoral and functional committe es jointly administered by USTR and the 
U.S. Department of Commerce recen tly have been restructured to create 17 Industry Trade Advisory 
Committees (ITACs), including the Committee of Chai rs of the ITACs, to ensure these committees 
reflect today’s U.S. economy and vision for the fu ture.  The restructuring is consistent with 
recommendations in a recent U.S. General Accounting Office Report, “International Trade:  Advisory 
Committee System Should be Updated to Bette r Serve U.S. Policy Needs” (GAO-02-876), and 
reflects the commitment of Commerce and USTR to  improve the trade advisory committee system. 
122. The Trade Act of 2002 requires these committee s to prepare reports on proposed trade 
agreements subject to Trade Promotion Authority (TPA) for the USTR, the President, and the Congress, assessing the expected effects of the trad e agreement on the particular sectors.  These 
reports are made public on USTR 's website at www.ustr.gov. 
V. LOOKING FORWARD 
123. Pursuit of trade liberalization continues to be at the forefront of U.S. international economic 
policy.  The GATT/ WTO has had a powerful and pos itive impact on trade over the past half century 
and the Doha Development Agenda of the WTO con tinues to hold the greatest potential for catalyzing 
global economic growth through further trade libera lization.  As has always been true of the 
GATT/WTO, the extent of liberalization – and to a la rge degree the distribution of the benefits of that 
liberalization – depends on the participation by each of the WTO Members.  In the DDA, the United 
States will continue to work towards an ambitious  conclusion to the Round in order to reduce poverty 
and raise living standards across the globe.  Expandi ng market access in the three key sectors of the 
international economy:  industria l and consumer goods, agricultural products and services will yield 
the greatest impact on trade flows, thereby reduc ing poverty and raising living standards.  An 
ambitious result in market access will be the greatest legacy of our work in the DDA. 
124. The President’s 2003 Trade Agenda also calls for advancing free trade through regional and 
bilateral agreements with our trading partners.  Ou r aim in all of the negotiations for new agreements 
is comprehensive trade coverage, innovative and strengthened disciplines on trade and consistency 
with our WTO obligations.  Trade ministers in Mi ami, Florida recently reaffirmed their commitment 
to the FTAA’s comprehensive agenda.  In the coming year, FTAA negotiations will continue on a 
common and balanced set of rights and obligations a pplicable to all in nine negotiating disciplines.  
CAFTA negotiations are expected to be completed in  the near future, and the United States looks to 
broaden application of CAFTA disciplines next year to include the Dominican Republic.  The 
United States will pursue comprehensive trade cove rage in negotiations on our other regional and 
bilateral agreements in 2004 and beyond. 
125. The United States will encourage increased trad e with many developing countries through our 
preferential trade measures, such as the Generalized System of Preferences, the African Growth and United States WT/TPR/G/126 
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Opportunity Act, the Andean Trade Promotion a nd Drug Eradication Act, and the Caribbean Basin 
Economic Recovery Act.  The United States will al so continue its commitment to increasing trade 
capacity in developing countries. 
126. By undertaking these various elements – forg ing global, regional, and bilateral trade 
agreements;  encouraging developing countries’ mu ltilateral integration;  building support for open 
trade;  encouraging sustainable development and core labor standards;  and fostering greater transparency – the United States will continue to play  its traditional leadership role in promoting trade 
liberalization and developing a trading system of benefit to all. WT/TPR/G/126 Trade Policy Review 
Page 30 
 
 
ANNEX 1 
U.S. SUBMISSIONS TO THE WTO IN SUPPORT 
OF THE DOHA DEVELOPMENT AGENDA 
 
Committee on Agriculture, Special Session  
• Export Competition, Market Access & Domestic Support (JOB(02)/122) 
 
Council on Trade in Services, Special Session  
• Modalities for the Special Treatment For Least-Dev eloped Country Members in the Negotiations on 
Trade In Services – JOB (03)/133 
• US Government Points of Contact in Least-Developed Country Members – JOB (03)/33 
• Small and Medium Sized Enterprises (TN/S/W/5) 
• Initial Offer (TN/S/O/USA) 
• An Assessment of Services Trade and Liberalizati on in the United States and Developing Economies 
(TN/S/W/12) 
 
Negotiating Group on Market Access 
• Tariffs & Trade Data Needs Assessment (TN/MA/W/2) 
• Environmental Goods (TN/MA/W/3) 
• Modalities Proposal (TN/MA/W/18) 
• Proposal on modalities for addressing Non-Tariff Barriers (NTBs) (TN/MA/W/18/Add.1) 
• Revenue Implications of Trade Li beralization (TN/MA/W/18/Add.2) 
• Vertical NTB Modality (TN/MA/W/18/Add.3) 
• Contribution on an Environmental Goods M odality (TN/TE/W/38) & (TN/MA/W/18/Add.5) 
• Liberalizing Environmental Goods In The WTO:  Approaching The Definition Issue (TN/TE/W/34) 
& (TN/MA/W/18/Add.4) 
• Non-Agricultural Market Access:  Modalities (TN/MA/W/44) 
 Joint communication from the United States, Canada, and the EU  
 
Negotiating Group on Rules 
• Fisheries Subsidies (TN/RL/W/3) 
Joint communication from the United States, Australia, Chile, Ecuador, Iceland, New Zealand, Peru, and the Philippines 
• Fisheries Subsidies (TN/RL/W/21) 
• OECD Steel Paper (TN/RL/W/24) 
• Questions on Papers Submitted to Rules Negotiating Group (TN/RL/W/25) 
• Basic Concepts of the Trade Remedies Rules (TN/RL/W/27)  
• Special and Differential Treatment and the Subsidies Agreement (TN/RL/W/33)  
• Second Set of Questions from the United States on Papers Submitted to the Rules Negotiating Group 
(TN/RL/W/34) 
• Investigatory Procedures Under The Antidumping and Subsidies Agreements (TN/RL/W/35) 
• Communication From The United States Attach ing A Communiqué From The Organization For 
Economic Cooperation And Development (OECD) (TN/RL/W/49) 
• Circumvention (TN/RL/W/50) 
• Replies To Questions Presented To The United States On Submission TN/Rl/W/27 (TN/RL/W/53) United States WT/TPR/G/126 
 Page 31 
 
 
• Third Set Of Questions From The United States  On Papers Submitted To The Rules Negotiating 
Group (TN/RL/W/54) 
• Responses By The United States  To Questions From Australia On Investigatory Procedures Under 
The Anti-Dumping And Subsidies Agreements (TN/RL/W/71) 
• Identification Of Certain Major Issues Under The Anti-Dumping And Subsidies Agreements 
(TN/RL/W/72) 
• Possible Approaches To Improved Disciplines On Fisheries Subsidies (TN/RL/W/77) 
• Subsidies Disciplines Requiring Clarification And Improvement (TN/RL/W/78) 
• Elements Of A Steel Subsidies Agreement  (TN/RL/W/95) 
• Identification of Additional Issues under the Anti-du mping and Subsidies Agreements (TN/RL/W/98) 
• Fourth Set Of Questions From The United Stat es On Papers Submitted To The Rules Negotiating 
Group (TN/RL/W/103)  
• Further Issues Identified Under The Anti-Dumping And Subsidies Agreements For Discussion By the 
Negotiating Group On Rules (TN/RL/W/130)  
 
Committee on Antidumping Practices 
• Proposal for Operationalization of Art. 15 (G/ADP/AHG/W/138) 
• Draft Recommendation on Operationalizing Art. 15 (G/ADP/AHG/W/143) 
• Para. 7.4:  Annual Reviews of the Antidumping Agreement (G/ADP/W/427) 
 Committee on Subsidies and Countervailing Measures 
 
• Approval of Qualifying Requests under SCM Article. 27.4 (G/SCM/W/521) 
 Joint communication from the United States, Australia, Canada, the EU, Japan and 
 Switzerland  
 
Dispute Settlement Body, Special Session 
• Contribution of the United States  to the Improvement of the Dispute Settlement Understanding of the 
WTO-Related to Transparency (TN/DS/W/13) 
• Negotiations on Improvements And Clarifications  of the Dispute Settlement Understanding on 
Improving Flexibility and Member Control in WTO Dispute Settlement (TN/DS/W/28) 
Joint communication from United States and Chile 
 
• Further Contribution of The United States to The Improvement of The Dispute Settlement 
Understanding of the WTO Related to Transparency  – suggested text (TN/DS/W/46) 
• Negotiations on Improvements and Clarifications  of the Dispute Settlement Understanding on 
Improving Flexibility and Member Control in  WTO Dispute Settlement  – suggested text 
(TN/DS/W/52) 
Joint communication from United States and Chile  
 
Committee on Trade and Environment, Regular and Special Session 
• Para. 31 (ii) WTO - Multilateral Environmental Ag reements (MEAs) Co-operation  (TN/TE/W/5) 
• Para. 31 (iii) Environmental Goods (TN/TE/W/8) 
• Para. 31 (i) Multilateral Environmenta l Agreements (MEAs)  (TN/TE/W/20)  
• Paragraph 33 of the Doha Declaration (WT/CTE/W/227)  
 
(Dual submissions on Environmental Goods are lis ted under the Negotiating Group on Market Access) WT/TPR/G/126 Trade Policy Review 
Page 32 
 
 
Council on TRIPS, Regular & Special Session 
• Proposal on GIs for Wine & Spirits (TN/IP/W/6) 
• Questions and Answers:  Comparison of Proposals (TN/IP/W/1) 
• Issues for Discussion, Article 23.4 (TN/IP/W/2) 
• Second submission on TRIPS & Public Health, Paragraph.6 (IP/C/W/358) 
• Implications of Article 23 Extension (IP/C/W/386) 
• Moratorium to Address Needs of Developing and Least-Developed Members With No or Insufficient 
Manufacturing Capacities in the Pharmaceutical Sector (IP/C/W/396) 
 
Committee on Trade and Development, Special Session  
• Remarks on the review of Special and Differential Treatment (TN/CTD/W/9) 
• Monitoring Mechanism (TN/CTD/W/19)  
• Approach to Agreement-Specific Proposals  (TN/CTD/W/27)  
 
Working Group on Transparency in Government Procurement 
• Capacity Building Questions (WT/WGTGP/W/34) 
• Workplan Proposal (WT/WGTGP/W/35)  
• Considerations Related to Enforcement of an Agreement on Transparency in Government  
Procurement (WT/WGTGP/W/38)  
 
Trade Facilitation 
• Article VIII - Fees and Formalities (G/C/W/384) 
• Article X - Publication and Administration (G/C/W/400) 
• Integrated and Comprehensive Approach to Sp ecial and Differential Treatment (G/C/W/451) 
 
Work Program on Electronic Commerce 
• Work Program on Electronic Commerce (WT/GC/W/493/Rev.1) 
 
Working Group on the Relationship between Trade and Investment 
• Covering FDI & Portfolio Investment in an Agreement (WT/WGTI/W/142) 
 
I. WORKING GROUP ON THE INTERACTION BETWEEN TRADE AND 
 COMPETITION POLICY 
• Technical Assistance (WT/WGTCP/W/185) 
• Hardcore Cartels (WT/WGTCP/W/203) 
• Voluntary Cooperation (WT/WGTCP/W/204) 
• Transparency & Non-discrimination (WT/WGTCP/W/218) 
• Procedural Fairness (WT/WGTCP/W/219) 
• The Benefits of Peer Review in the WTO Competition Context (WT/WGTCP/W/233) 
 
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