Note: Advance written questions by WTO Members and replies provided by the U.S. Government 
are reproduced in document WT/TPR/M/126/Add. 1 and subsequent A ddenda, and will be 
available online at:  http:/www.wto.org/ English/tratop_e/tpr_e/tp_rep_e.htm.  WORLD TRADE  
ORGANIZATION  WT/TPR/M/126  
15 March 2004 
 (04-1114) 
Trade Policy Review Body 
14 and 16 January 2004  
 
 
 
TRADE POLICY REVIEW 
 
UNITED STATES 
 
Minutes of Meeting  
 
Chairperson:  H.E. Ms. Mary Whelan (Ireland) 
 
 
   Page 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF  
 THE UNITED STATES 4 
III. STATEMENT BY THE DISCUSSANT 11 
IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 16 V. REPLIES FROM THE REPRESENTA TIVE OF THE UNITED STATES 
 AND ADDITIONAL COMMENTS 55 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 65 
 
  WT/TPR/M/126 
 Page 3 
 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The Chairperson welcomed members of the Trad e Policy Review Body to the seventh Review 
of the United States.  She greeted the delegation of the United States led by H.E. Ms. Linnet F. Deily, 
and the discussant, H.E. Mr. Eui Yong Chung (Republic  of Korea).  As usual, the discussant would 
speak in his personal capacity.  In accordance with  established procedures, the discussant had made 
available, in advance, outlines of the themes he intended to raise (document WT/TPR/D/104). 
2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of 
the procedures of meetings.  The report of the G overnment of the United States was contained in 
document WT/TPR/G/126 and that of the Secretaria t in document WT/TPR/S/126.  Copies of advance 
written questions, submitted by:  New Zealand;  India;   China;  Hong Kong, China;  Argentina;  
Canada;  Cuba;  Japan;  Switzerland;  Chinese Taipei;  Chile;  Norway;  European Union;  Colombia;  
Republic of Korea;  Venezuela;  Indonesia;  Me xico;  Thailand;  Brazil;  and Turkey had been 
transmitted to the delegation of the United States.  These questions and the responses provided by the 
United States Government are reproduced in WT/TPR/M/126/Add.1. 
3. The Chairperson noted that the documentation prep ared for the review showed that the period 
since 2001 had been eventful.  Both the Secretaria t and Government Reports described the challenging 
economic times experienced by the United States ;  although growth had resumed and inflation 
remained subdued, the issue of the "twin deficits" ha d again come to the fore.  The Secretariat Report 
noted that security concerns had brought significan t changes to U.S. import regulations, and no doubt 
Members would seek further information on this an d other market-access issues, such as contingency 
measures. 
4. The Secretariat also observed that the Farm Ac t of 2002 ran the risk of increased assistance, 
but the Government Report stressed that expenditu res would be adjusted, to the maximum extent 
practicable, to avoid assistance exceeding WTO allowe d levels.  In view of the ongoing expansion of 
its network of preferential agreements, she appreciat ed the United States' engagement to ensure the 
WTO-consistency of such agreements.  The Unite d States' renewed commitment to its traditional 
leadership role in promoting trade liberaliza tion was welcome following the recent Ministerial 
Conference in Cancun. WT/TPR/M/126 
Page 4  
 
II. OPENING STATEMENT BY THE REPRESEN TATIVE OF THE UNITED STATES 
5. The representative of the United States
 stated that her country continued to believe that the 
Trade Policy Review process played a vital role in increasing the understanding of U.S. trading 
partners of the factors that shaped both the devel opment and the administration of U.S. trade policy.  
The open and transparent character of the U.S. trad e regime would be clearly shown in the Review, 
not least through the valued par ticipation of other delegations. 
6. Recalling the circumstances of the last U.S. Re view, she noted that, originally scheduled for 
12 September 2001, the review had been postponed  briefly following the terrorist attacks on 
New York and Washington.  Two elements of that  14 September meeting stood out.  The first was the 
sense of gratitude felt by the members of her dele gation for the respectful actions taken by the WTO 
Secretariat and Membership to honor the victims of those attacks.  The second was the sense of 
tremendous uncertainty and insecurity towards the future felt by many.  She believed that the 
collective effort to strengthen the global economy and provide a firmer basis for prosperity, taken by WTO Members two months later in Doha, had been a critical statement that the future would be governed by the positive actions of many, rather  than the destructive efforts of a few.  
7. This shared purpose to strengthen the globa l economy and to lay the basis for broader 
prosperity through multilateral trade lib eralization remained at the center of U.S. trade policy, as it had 
been for over half of a century.  Both the certainty regarding the future benefits, and the ability to lock 
arms with WTO partners, had combined to provide  the will needed to conclude successfully seven 
multilateral trade rounds thus far.  She was confiden t that the collective effort begun in Doha would 
also conclude successfully, provided WTO Member s reminded themselves that they were working 
towards a claim on the future and that solidarity w ith WTO partners could bolster a Member's ability 
to open its own markets further than would be palatable otherwise. 
8. The United States was an extremely open and dynamic economy, reflecting a 70-year policy 
commitment to trade liberalization.  Americans currently consumed more than US$1.5 trillion of 
goods and services from abroad.  As stated in the S ecretariat Report the United States remained the 
world's largest single importer and a main engine of growth.  Much of the dynamism of the U.S. 
economy, and its ability to absorb shocks, was attri butable to this openness.  Certainly, U.S. trade 
policy reflected some domestic sensitivities, and thes e could be clearly seen given the transparency of 
the U.S. trade regime, but the United States stood by  the strength of its record on the openness of its 
markets.  Since the global economic slowdown be gan in 2001, U.S. polic ies had supported global 
growth by maintaining markets largely open and by undertaking strong fiscal action. 
9. The 70 papers and proposals submitted by th e United States in support of the Doha 
Development Agenda since 2001 spoke clearly of the United States' continued leadership on ambitious 
multilateral trade liberalization.  In July 2002, the U. S. agriculture proposal had called for the eventual 
elimination of all export subsidies,  all tariffs and all trade-distorti ng domestic support.  In November 
2002, the United States had proposed a tariff-free worl d on all consumer and i ndustrial goods by 2015.  
Both proposals reflected extensive consultations wi th both Congress and the private sector.  The 
proposals had called on all WTO Members to advance free trade and complete the tariff-cutting work 
that had begun more than 50 years ago with the creation of the General Agreement on Tariffs and 
Trade.  The proposals reflected the U.S. belief that  the market access negotiations in the DDA offered 
the greatest potential to create jobs, to advance economic reform and deve lopment, and to reduce 
poverty worldwide.  The United States had ente red the new year with renewed energy and 
commitment to ensuring that 2004 was not a lo st year, but rather a year that would exceed 
expectations and deliver for the DDA.  WT/TPR/M/126 
 Page 5 
 
 
10. U.S. trade policy sought to support and advance the rule of law in international trade.  The 
recognition of the strong influence of the rule of  law on economic growth and development was near 
universal.  A strong global economy required a st rong multilateral rules-based system.  The 
United States was the most active participant in WTO dispute settlement proceedings.  The 
United States expected compliance in disputes where it prevailed, and accepted the need to implement 
the recommendations and rulings of the DSB in  cases where U.S. measures had been found 
inconsistent with U.S. obligations.  Where legisl ation had been required to  implement these rulings, 
the Administration had worked strenuously with Congress to secure the necessary legislation, and 
would continue to do so. 
11. Over the review period, the United States had pursued actively numerous regional and 
bilateral initiatives to liberalize trade.  It had r ecently concluded bilateral agreements with Singapore 
and Chile, and a regional agreement with the Cent ral American countries of Guatemala, Honduras, 
El Salvador, and Nicaragua.  Di scussions to join CAFTA conti nued with Costa Rica, and were 
commencing with the Dominican Republic.  The Un ited States was also in the final stages of 
negotiations of bilateral agreements with Austra lia and Morocco.  Each of these agreements was 
comprehensive and fully consistent with WTO rul es in all areas.  The United States believed these 
regional and bilateral agreements could act to acc elerate and deepen multilateral liberalization, and 
greatly valued the enhanced market access they provided to all parties involved. 
12. The greatest changes over the review period ha d stemmed from the U.S. recognition that the 
safety and well-being of U.S. citizens and shores re quired heightened security measures.  The need 
was unequivocal, and everybody had been affected in some way by these measures, most visibly in 
airports and commercial shipping ports.  The United States recognized that some  adjustment might be 
necessary to adapt to these changes,  which had been put in place not only to enhance U.S. security but 
to protect world trade.  A shutdown of global sea contai ner traffic caused by a terrorist attack would be 
consequential to the economies of a ll trading nations.  These measures reflected the U.S. twin goals of 
increasing security and facilitating legitimate trade.  In developing measures such as the Container 
Security Initiative, the 24-Hour Rule and the Cust oms-Trade Partnership, the United States had invited 
and taken into account advice from stakeholders in the trade community, including WTO Members, to minimize disruptions and delays to lawful commerce.  As it implemented these measures, the United States would continue to welcome input from the trade community to assess whether they 
could be further improved over time. 
(1) T
RADE AND ECONOMIC DEVELOPMENTS 2001-03 
13. In the period since the last review, the U.S.  economy had experienced an economic recession, 
a modest rate of recovery and, most recently, a resurgence of strong growth.  Budget policy action by 
the U.S. government, aimed at restoring growth, co mbined with the automatic  corrective mechanisms 
of a healthy market economy, appeared to be payi ng off in supporting a more rapid recovery.  Among 
the most positive features during this period of reces sion and recovery had been the continuation of a 
secular improvement in U.S. rates of productivity growth  in both the goods and service sectors.  It was 
well known that rising labour productivity was a central factor underlying improvements in the 
material standard of living.  The United States be lieved that its commitment to open markets and the 
fulfilment of its WTO obligations had contributed im portantly to competition in the U.S. market, to 
the efficiency with which the United States employe d resources and invested for the future, and to 
strong U.S. productivity growth and increasing living standards.  
14. The United States had not been the only country experiencing an economic slowdown, and 
now appeared to be in the vanguard in restori ng healthy rates of economic growth.  Despite the 
recession and moderate recovery until recently, U.S. r eal imports had grown by nearly 5% since 2000.  
In contrast, U.S. real exports had declined at a lik e rate over the period, in part, under the impact of WT/TPR/M/126 
Page 6  
 
slow growth in many U.S. export markets.  With imports rising and exports falling, the United States had continued to contribu te net demand to the rest of the worl d through the external trade sector.  
However, as a result, the U.S. deficit in trade in  goods and services had also grown from 3.8% of GDP 
in 2000 to 4.5% in the first three quarters of 2003.   This was an increase of in US$115 billion in the 
annual deficit level to an  annualized US$495 billion. 
15. The period of review corresponded for the United States to a transition from the ending of one 
period of strong economic expansion through recession to the launching of another period of healthy 
growth.  Success in the Doha negotiations and other efforts to open markets and expand trade could 
clearly contribute to more broad-based growth th roughout the world economy.  The United States had 
worked actively to help restore growth at hom e and abroad through domestic fiscal and monetary 
policy and through its commitment to more open trad e.  Stronger economic growth outside as well as 
inside the United States was in the direct interest of  affected trading partners and would contribute to 
an easing of U.S. and global trade and current account imbalances. 
16. After strong growth in the late 1990s, the United States had experienced a brief recession 
between March and November 2001.  According to re cently revised data, the GDP growth rate had 
fallen to just 0.5% in 2001 and picked up to only  2.2% in 2002.  However, the pace had quickened, 
and in 2003 third-quarter GDP was 3.6% higher than a year earlier and, relative to the second quarter 
of 2003, had achieved an annualized growth rate of  8.2%, the most rapid in the United States in 
20 years.  Inflation had remained subdued, at 1.5%  in 2002 and 1.7% in the first three quarters of 
2003. 
17. Largely because of the impact of recession a nd slow initial recovery on federal and sub-
federal government budget balances, U.S. savings had declined from 18.4% of GDP in 2000 to 13.8% 
in the first three quarters of 2003.  The federal budge t balance itself had shifted from a surplus equal to 
2.4% of GDP in 2000 to a deficit equal to 1.5% of GDP in 2002.  In the third quarter of 2003, domestic investment, which fell during the recession, w as back close to its real dollar value prior to 
the recession.  The decline in gross saving and the small change in the level of domestic investment 
between the beginning and end of the period had resu lted in a change in foreign investment in the 
United States from a net inflow of US$396 billion in 2000 to an annualized ra te of net inflow of 
US$562 billion in the first three quarters of 2003. 
18. Manufacturing had continued the resurgence of its productivity growth begun in the late 
1990s.  Between the last quarter of 2000 and the third quarter of 2003, output per hour worked in U.S. 
manufacturing had risen at a 4.7% annual rate.  Th is compared to a rate of 3% between 1985 and 
1997.  More striking still had been the productivity r esurgence in the overall bus iness sector which, in 
the United States, was dominated by service jobs.  Output per hour worked for overall employment 
had grown at an annual rate of 4.4% during the review  period, compared to a 1.6% growth rate in the 
reference period of 1985-97.  Not only had produc tivity growth been strong, but overall business 
employment productivity had almost closed the large gap between it and productivity in the 
manufacturing sector. 
19. The recession and slow initial recovery, combin ed with strong productivity growth, had taken 
a toll on U.S. employment levels.  Between Dece mber 2000 and July 2003, employment had fallen by 
2.6 million to a level of 129.9 million.  Employment  recovery had so far been modest, with the 
addition of just over a quarter of a million jobs in  the second half of 2003.  The unemployment rate 
had risen from 3.9% in December 2000, the low for the previous business expansion, to a peak of 
6.3% in June 2003;  it had subseque ntly fallen back to 5.7% in Dece mber 2003.  The net loss of U.S. 
employment could be accounted for entirely by the loss of U.S. manufacturing jobs.  Since July 2000, when U.S. manufacturing output had peaked, manufactured employment in the United States had fallen by 16%.  Accounting for this concentration of job loss in the U.S. manufacturing sector were the  WT/TPR/M/126 
 Page 7 
 
 
sharper decline in manufactured production than overa ll U.S. production, the modest rate of recovery 
from recession until recently, and sustained strong productivity growth. 
20. The United States continued to maintain an extr emely open foreign trade regime.  The simple 
average of U.S. MFN bound tariffs was 3.6%.  This average would fall further with the full phase-in of 
U.S. Uruguay Round tariff commitments.  The trade- weighted average applied tariff was 1.6%.  In 
2002, two thirds of imports had ente red the United States free of duty.  Of particular note, estimates 
indicated that 2003 was the first year in which the value of U.S. goods imports from middle and low income countries, at US$642 billion, exceeded that from high income countries, at US$624 billion.  
U.S. service markets were open to competition, a nd U.S. regulatory processes were transparent and 
accessible. 
21. U.S. trade flows over the period under review had been restrained by the pattern of recession 
and recovery in the United States and weak economic  conditions in a number of countries outside the 
United States.  Since 2000, U.S. real imports had increased and exports had fallen by 5% each.  This 
lack of growth in U.S. trade was also reflected in  the value of trade relative to the size of the U.S. 
economy:  U.S. exports plus impor ts of goods and services fell from 26% of GDP in 2000 to 24% in 
2002.  Nevertheless, the United States, long the world' s largest trading nation, was expected to report 
US$2.6 trillion in trade in 2003, with over US$1.5 tril lion in imports alone.  As noted earlier, the U.S. 
trade deficit in trade in goods and services for 2003 currently annualized to nearly US$500 billion.  
This represented an increase of well over one third since 2000. 
22. The strengthening and further opening of globa l markets through successful conclusion of the 
DDA negotiations and other trade liberalizing e fforts should support economic recovery and the 
income-increasing expansion of world trade for low- , middle-, and high-income countries alike.  The 
United States believed that strengthe ned growth, not just in the Unite d States, but more broadly among 
WTO Members, should likewise contribute to the moderation of global trade imbalances. 
(2) T
RADE POLICY DEVELOPMENTS  
(i) Multilateral initiatives 
23. Over the review period, the United States had sustained a vision of ambitious multilateral 
trade liberalization and had worked energetically in it s pursuit.  Bearing in mind its role in world trade, 
the United States had worked to ensure a successful  launch at Doha and an agenda sufficiently broad 
to enable all participants to bene fit.  The launch at Doha had been a considerable achievement for the 
WTO.  The magnitude and scope of the DDA gave it the potential to transform world trade, and 
command continued efforts to ensure its success. 
24. Reducing trade barriers was a powerful method of increasing opportunities to the world's 
citizens to achieve prosperity, an especially co mpelling goal for the developing world.  The 
United States believed strongly that 2004 should not be a lost year.  U.S. Trade Representative Robert 
Zoellick had recently conveyed to all WTO Mini sters some ideas to reinvigorate the Doha 
negotiations.  He had offered what he viewed as common sense ideas for narrowing differences and 
re-energizing the momentum in the dialogue among WTO Members.  The United States looked 
forward to others' ideas and assessments of how to advance together;  this exchange was an essential 
element in making 2004 a year of accomplishment. 
25. The United States believed that multilateral trade liberalization was a tool that must be 
employed to help accelerate growth in the developing  world.  To leave it unused made little sense.  In 
this regard, funding for trade capacity building and trade-related technical assistance was an important 
element in enabling developing countries to wield this  tool effectively.  The United States had chosen WT/TPR/M/126 
Page 8  
 
to be a partner with developing countries in their e fforts to liberalize trade.  The United States was the 
single largest donor of trade-related technical  assistance in the world, having contributed 
US$752 million in fiscal year 2003.  The United States had contributed more than US$3 million to the WTO for trade-related assistance since the launch of  the DDA.  U.S. bilateral programmes providing 
trade-related assistance complemented WTO efforts in many countries.  In addition, the United States 
contributed to the Integrated Framework, whic h it viewed as an important effort by the donor 
community to rationalize and prioritize the special trad e-related needs of the least developed countries.  
Substantial funding for technical assistance was an integr al part of programmes like AGOA to better 
enable countries to capture market access opportunities.   In fiscal year 2003, total U.S. funding for 
capacity-building support in AGOA had been nearly US$69 million. 
(a) Regional and bilateral initiatives 
26. Over the review period, the United States had actively pursued trade liberalization on a 
regional and bilateral basis.  Three free-trade agreements, with Chile, Singapore, and CAFTA, had 
been concluded successfully, and the United States had announced its intent to negotiate eight more:  
the U.S.-Southern Africa Free Trade Agreement, a nd agreements with Australia, Morocco, Thailand, 
Panama, Colombia, Peru, and Bahrain.  Several of  these negotiations were pa rt of broader regional 
initiatives, such as the Enterprise for ASEAN initiative, the Middle East Free Trade Area, and the 
U.S.-Andean Free Trade Area.  In the ongoing ne gotiations on the Free Trade Area of the Americas, 
Ministers of the 34 FTAA countries had recently reaffirmed their commitment both to its comprehensive agenda and to its conclusion by January 2005. 
27. The United States looked to WTO rules as the foundation for negotiating these agreements 
and was committed to the comprehensive covera ge of products upon entering negotiations on an 
agreement.  U.S. FTA policy also emphasized diversity in regional coverage, which yielded a greater complementarity of trade patterns.  The United St ates expected these agreem ents to also lock-in 
broader reform agendas among the participants.  In  a recent study, the International Monetary Fund 
had concluded that the combination of these characte ristics in free-trade agr eements resulted in the 
greatest potential economic benefits. 
28. The United States continued to benefit from th e operation of its existing agreements with 
Israel and Jordan, and the North American Free Tr ade Agreement.  Under the world's largest free-
trade agreement, NAFTA, three-way trade among  the U.S., Canada, and Mexico had reached 
US$621 billion, more than double the pre-NAFTA level.  Since its entry into force in 1994, the parties 
had implemented four rounds of accelerated tari ff reductions, had implemented side environmental 
and labour agreements, and had in itiated the exploration of improvements, on such issues as 
harmonization of tariffs, rules of origin , and investor-state arbitration.  
(b) Autonomous initiatives to foster development 
29. Another aspect of U.S. trade policy comprised e fforts to foster the further integration of 
developing countries and newly emerging economi es into the multilateral trading system through 
enhanced market access opportunities.  The United States provided duty-free access for most products 
from developing countries through several preferen tial trade programmes.  These programmes were 
the Generalized System of Preferences (GSP), which included enhanced benefits for the least developed countries, the African Growth and Oppo rtunity Act (AGOA), the Caribbean Basin Trade 
Partnership Act, and the Andean Trade Promo tion and Drug Eradication Act.  These programmes 
offered important and effective access opportunities to the U.S. markets for a wide range of products.  
Over the period of review, market access under the regional programmes had been expanded further.  
These programmes indicated the importance the Unite d States attached to helping these countries 
become full participants in the global trading system.  WT/TPR/M/126 
 Page 9 
 
 
(3) TRADE POLICIES BY MEASURE  
(i) Security initiatives 
30. During the review period, the United States had created the Department of Homeland Security 
and had reconfigured several federal agencies to respond to the need for heightened security.  The 
United States had also adopted significant changes in its import procedures to protect and facilitate 
trade.  By using advance information, risk mana gement and technology, a nd by partnering with other 
nations and with the private sector, the twin goals of security and trade facilitation did not have to be 
mutually exclusive.  Since 11 September, the Unite d States had developed ways to make its borders 
more and ensure the efficient flow  of legitimate trade and travel. 
31. The major measures adopted included the Containe r Security Initiative (CSI), the 24-hour rule 
and the Bioterrorism Act.  All of these measures s ought to increase systematically the level and quality 
of information available in order to better assess a nd isolate risk.  Under the CSI, the U.S. Customs 
and Border Protection had entered into bilateral pa rtnerships with other governments to identify high-
risk cargo containers and to pre-screen them befo re they were loaded on vessels destined for the 
United States.  The 24-Hour Rule required the electr onic transmission of detailed manifest information 
24-hours in advance of a container's loading and w as designed to work in conjunction with CSI.  The 
Bioterrorism Act of 2002 (BTA) was designed to prot ect the United States against bioterrorist threats 
to its food supply, including food from foreign sources, through both registration and prior notice 
requirements.  
(ii) Steel safeguards 
32. In June 2001, President Bush had announced a strategy to respond to the challenges facing the 
U.S. steel industry.  President Bush had requested  the U.S. International Trade Commission (ITC) to 
investigate injury to the U.S. industry and direct ed initiation of negotiations on two fronts, including 
negotiations on rules to govern steel trade in the fu ture.  The comprehensive investigation by the ITC 
had found that imports of certain steel products ha d been a substantial cause  of serious injury to 
domestic steel producers and, in March 2002, Presi dent Bush had imposed  temporary safeguard 
measures.  These steel safeguard measures had b een found inconsistent with WTO rules in 
November 2003.  President Bush had issued a proc lamation terminating these measures in December.  
This proclamation had stated that the U.S. steel industry had wisely used the 21 months of breathing space the safeguards provided to consolidate and restructure.  The industry had made progress 
increasing productivity, lowering production costs,  and making America more competitive.  The 
President had concluded that the safegua rd measures had achieved their purpose. 
33. An integral part of President's Bush's 2001 st eel initiative strategy had been to address the 
underlying, structural problems of the global steel industry, which had contributed to a decades-long, 
cyclical proliferation of unfair trade competition and trade remedy responses.  In the last year, the United States had helped to spearhead international efforts in the OECD to bring about market-driven 
rationalization of the world's excess and inefficien t steelmaking capacity while also formulating better 
disciplines over practices that could distort market s and artificially sustain such capacity.  In the 
intervening year, the nearly 40 participating governments representing the world's major steel-
producing countries had made good progress in outlining an agreement and defining its core elements. WT/TPR/M/126 
Page 10  
 
(4) T
RADE POLICIES BY SECTOR  
(i) Farm legislation 
34. The Farm Security and Rural Investment Ac t of 2002 had laid out food assistance and 
nutrition, agriculture, resource conservation and ru ral development policies for the United States for 
the following six years.  The 2002 farm legislati on continued past programmes to support agricultural 
prices and farm incomes, and was fully consistent  with U.S. obligations under the Uruguay Round 
Agreement on Agriculture.  Programmes in the 2002 farm legislation were designed to meet policy 
goals in a targeted, transparent manner, thereby keeping trade-distorting support to a minimum.  
Further, due to concern that the United States rema in consistent with its international obligations, 
Congress had included a "circuit breaker" in this legislation, which required the Secretary of 
Agriculture to ensure that the Unite d States did not exceed any WTO ceilings. 
35. While concern was expressed when the legislati on was enacted that it constituted a significant 
increase in U.S. farm spending over the previous farm  legislation, this was not actually the case when 
account was taken of annual supplem ental spending for disaster and emergency assistance that had 
also been provided by Congress.  Looking at actua l spending, which was influenced both by the 
legislation and market conditions, trade distorti ng domestic subsidies we re on a downward trend. 
36. The United States continued to focus on the bold  vision for agricultural reform, reflected in 
the proposals offered in July 2002 in the DDA.  The United States was committed to negotiating on a 
multilateral basis a broad programme of agricultur al reform.  The United States stood ready to 
substantially reduce tariffs, incr ease market access, eliminate expor t subsidies, and substantially 
reduce trade-distorting domestic support, provided its pa rtners in the WTO were prepared to join it.  
These U.S. proposals had been developed in clo se consultation with Congress, and enjoyed broad 
Congressional support. 
(ii) Textile phase-out 
37. The United States had been faithfully implementing the phase-out of textile quotas as 
provided for by the Agreement on Textiles and Clothing (ATC).  During the course of ATC 
implementation, U.S. imports of textiles and clothing had increased 122%.  The United States was 
committed to the completion of the implementation of  this Agreement at the end of 2004.  Although 
the domestic U.S. textile industry had been undergoing a difficult period of adjustment, the 
United States expected a smooth transition wh en ATC textile restraints were removed. 
(5) LOOKING FORWARD  
38. Over the review period, the United States had pursued trade and economic policies geared to 
strengthening the global economy and providing a firm er basis for prosperity.  The United States 
viewed the rules-based multilateral system of th e WTO as an essential feature of the global economy 
in the 21st century, and appreciated the hard wo rk and professionalism of the WTO staff.  The 
United States was committed to the successful conc lusion of the DDA, and was prepared to engage 
constructively and energetically with its WTO part ners to move the negotiations forward.  The 
United States believed the DDA offered a compelling vision of a world trading system that offered 
significantly greater opportunities for achieving prosperity for all WTO Members.  WT/TPR/M/126 
 Page 11 
 
 
III. STATEMENT BY THE DISCUSSANT 
39. The discussant  emphasized the importance of the U.S. economy in the global context, noting 
that the United States had long served as a locomotive of world economic growth.  The United States had kept its market open during th e Asian financial crisis in th e late 1990s, thereby enabling many 
Asian countries hit by the crisis, including Korea, to  overcome their difficulties earlier than expected.  
Additionally, the U.S. economy, with its huge open domestic market, had also greatly contributed to 
the recent global economic recovery.  According to  a recent IMF report, the world economic growth 
rate in 2004 was projected to reach 4.1%, no doubt largely linked with U.S. economic growth.  
Continued U.S. leadership was need ed to create a freer global trading environment, to the benefit of 
the international trading community as a whole, and in particular, trading partners heavily dependent 
on trade, such as Korea. 
40. The most noteworthy event since the last Trad e Policy Review of the United States had been 
the launching of the Doha Development Agenda  (DDA) negotiations in November 2001.  He 
appreciated U.S. leadership in that respect.  Th e enactment of TPA legislation in mid 2002 represented 
another testimony to the strong U.S. commitment to work toward trade liberalization.  It was 
reassuring to note that the United States, as stated in the Government Report, remained steadfast in its 
support of the rules-based multilateral trading system of the WTO.  Given the struggle to put the DDA 
negotiations back on track, it was all the more important  that the United States continued to play a key 
role in bringing about a successful conclusion of these negotiations.  In this regard, he had been 
particularly pleased to learn of the recent letter sen t by U.S. Trade Representative Zoellick to all trade 
ministers of WTO Members, in which he had indicat ed that the United States wished to put the Doha 
agenda "front and center" and ma ke substantial progress in the ne gotiations in 2004, notwithstanding 
elections in the United States.  Once again, the Un ited States had proven itself to be a champion of the 
multilateral trading system and had challenge d the rest of the world to follow suit. 
(1) M
ACROECONOMIC ENVIRONMENT  
41. The discussant congratulated the Government of the United States on the recent signs that its 
economy had resumed growth.  The U.S. economy had gone over a bumpy road since the last TPR 
meeting in 2001, with economic growth oscillating at  low levels.  However, growth had rebounded to 
3.3% in the second quarter of 2003, accelerating to an impressive level of 8.2% in the third quarter.  
Many sources predicted that U.S. GDP growth woul d continue and this proved the effectiveness of 
U.S. counter-cyclical economic policy, which had been geared towards fostering recovery and 
sustaining growth.  
42. The U.S. recovery was all the more solid in th at it had been underpinned by a diversity of 
factors.  The increase in demand had come not onl y from expanded government expenditure, but also 
from rising consumer spending.  The increase in resi dential investment had also been a factor boosting 
the recovery.  The rapid expansion of labour pr oductivity in the period from 2001 to mid-2003 also 
bolstered this positive assessment of the U.S. recovery.  It was particularly notable that labour 
productivity in the non-farm business sector had grow n by 5.4% in 2002 and ha d reached 6.8% in the 
second half of 2003.  As a result, the U.S. economy seemed to be set for sustained growth.  The IMF 
had recently forecast that U.S. economic growth would accelerate in 2004, in line with what had been observed since the second quarter of 2003.  All these developments seemed to underscore the 
resilience of the U.S. economy.  In addition, in flation had remained low despite the accelerating 
economic growth. 
43. However, there were a few lingering downside ri sks.  The first was th e sharp increase in the 
fiscal deficit.  He noted with concern that the U. S. fiscal surplus of 1.3% of GDP in 2001 had turned 
into a deficit of 3.7% in 2003, the largest fiscal turnabout over two years in recent history.  Such a WT/TPR/M/126 
Page 12  
 
large fiscal deficit seemed to have resulted in  part from expansionary fiscal policy, which had 
contributed to the resumption of economic growth.  However, expansionary fiscal policy, like any 
policy, had both advantages and disadvantages.  The continuation of such deficits, and the 
accumulation of public debt as a result, might not only adversely affect the U.S. economy in the longer term, but also have negative implica tions for the global economy as a whole. 
44. In its recent report dated 7 January 2004, the IMF had emphasized the need for the 
United States to adjust taxes and spending to bri ng its finances under control.  The IMF was of the 
view that the economic recovery alone was not enough.  The alarming level of the federal budget 
deficit had also had an effect on the value of the dol lar, which had depreciated by 30% against the euro 
since the end of 2001.  The IM F warned that the United States was on course to increase its net 
external liabilities to around 40% of GDP within the next  few years.  This trend was likely to continue 
to put pressure on the U.S. dollar a nd, with an abrupt weakening of investor sentiments, could possibly 
lead to adverse consequences both domestically and ab road.  He was interested in learning what kind 
of solutions the U.S. government intended to  employ to tackle its fiscal situation.  
45. The rise of the unemployment rate was another i ssue that the U.S. government might want to 
pay particular attention to.  The recent economic recovery in the United States had often been 
characterized as jobless growth, a view bolstered by the near zero job growth in December 2003 despite the original forecasts of 150,000 new jobs .  The unemployment rate had increased from 3.9% 
at the end of 2000 to a peak of 6.4% in the second qu arter of 2003.  During the last quarter of 2003, 
the jobless rate had declined to 5.7%.  This recen t decline was reportedly due to workers leaving the 
workforce rather than an increase in new jobs, as was obvious from the fact that in December 2003, 
only 1,000 new jobs were created.  The relatively high unemployment rate was widespread throughout 
the manufacturing sector, with the metals, machinery, and computers and electronics industries being particularly affected.  This situation might cause co ncern to the trading partners of the United States 
because it could lead to an increase in domestic pres sure for protectionism and a decline in aggregate 
consumer spending, thereby contracting the U.S. domestic market in the long run. 
46. The increase in the deficit in the current account of the balance-of-payments (BOP) was 
another point to be looked at.  The BOP deficit had declined in 2001, but  had increased in 2002, 
reaching a record US$480.9 billion.  It was also repor ted that the deficit might increase further to over 
5% of GDP in both 2003 and 2004.  The widening deficits in the current account as well as in the federal budget remained risks to the medium- and l ong-term growth prospects for the U.S. economy.  
As the IMF had recently reported, the United States faced an "unprecedented level of external debt for 
a large industrial country", as a result of the comb ined fiscal and current account deficits.  Such 
deficits would inevitably put downward pressure on U.S. exchange rates, thus undermining the 
United States' ability to absorb imports, which histor ically had helped pull the global economy out of 
recession.  He was interested in hearing what the Un ited States intended to do to address this situation, 
which could have negative effects on global trade. 
47. Summing up, there seemed to be two major macr oeconomic forces that had the potential to 
undermine the ability of the United States to drive a robust and free trading environment.  On the one 
hand, there was the current account and fiscal de ficits, which put downward pressure on exchange 
rates, and on the other, there was the relatively high unemployment in certain sensitive manufacturing 
sectors, which would tend to increase domestic dema nd for protective policies.  The solution to these 
macroeconomic challenges might lie in a sound policy mix that incorporated free trade as an important 
component, in line with the basic principles of the WTO.  He hoped the U.S. delegation would 
comment on the strategies the United States inte nded to pursue to solve these macroeconomic 
problems.  WT/TPR/M/126 
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(2) TRADE POLICY REGIME  
48. The United States deserved credit for maintaini ng its trading regime largely transparent and 
open, thereby continuing to support global growth  despite its difficulties since 2001.  The 
United States was an original signatory to the GATT and a founding member of the WTO.  It had 
continued to reaffirm its strong support of th e multilateral trading system and remained a key 
participant in all areas of the trade negotiations, as demonstrated by its large number of contributions 
and proposals on a range of topics in the ongoing DDA negotiations.  Without the United States' active 
engagement, WTO Members would not be able to successf ully conclude the Doha round of talks at all.  
This was the unique status of the United States in the WTO. 
49. One of the main developments in the trade polic y area since the last review in 2001 had been 
the introduction of the bipartisan Trade Promo tion Authority Act of 2002 (TPA), the successor of 
"fast-track" authority.  By requiring Congress to approve or reject trade legislation without amendment and within a fixed period, the TPA brought greater predictability to trade negotiations.  In this respect, 
the TPA represented a commitment by the Congress and th e President to work together towards trade 
liberalization.  Nonetheless, some were of the view that it was regrettable that the passage of the TPA 
Act had come about on the heels of compromises with protectionist forces, in particular with the steel 
industry and the farm lobbies.  While the logic that it was sometimes necessary to take one step back 
in order to take two steps forward was understandable, the right longer term strategy lay in standing up 
to the pressure for protection and concentrati ng on building domestic consensus on free trade. 
50. Another salient feature of the U.S. trade po licy was its increasing reliance on regional and 
bilateral initiatives for FTAs.  Such agreements were  in force or had been completed with Canada, 
Mexico, Israel, Jordan, Chile, and Singapore.  Negotiations for further FTAs were under way with 
Australia, the Central American Common Market, Mo rocco, and the SACU members, to name a few.  
These regional and bilateral FTAs coul d have positive effects.  For example, they could act as catalyst 
for multilateral trade liberalization by creating a clim ate for competitive liberalization.  Further, they 
led to greater liberalization among the members concer ned, thus lowering the overall barriers to trade.  
Such arrangements could be particularly beneficial  for developing countries in the sense that they 
created strong incentives and pressures for enacting domestic reforms as well as provide exporting opportunities to the large U.S. market. 
51. At the same time, however, regional and bilateral FTAs could have negative side effects.  The 
negotiating and administrative resources might be distracted away from the multilateral process, and 
trade and regulatory structures based on preferentia l agreements could hinder trade.  As some 
Members had suggested in their written questions, U.S.  pursuit of regional, subregional, and bilateral 
agreements should not lessen the United States' w illingness to move forward on the DDA negotiations.  
There was also the risk that the growing numbe r of preferential tariff schemes could somewhat 
complicate the U.S. trading regime and have a trad e-diversion effect on countries that did not belong 
to the free-trade arrangement.  It would be intere sting to hear the United States' view on how it 
intended to reconcile its multilatera l approach on the one hand and its  regional and bilateral initiatives 
for FTAs on the other. 
52. A new development in the U.S. trade policy area in the aftermath of the 11 September terrorist 
attacks was that security considerations had unders tandably become an essential component of U.S. 
trade and investment policy.  These security consid erations had led to significant changes in U.S. 
import procedures, like the introduction of new regu lations on U.S.-bound cargo, including the prior 
notice requirements on food shipments destined to the United States under the Bioterrorism Act of 
2002.  As the written questions showed, many WT O Members seem to be concerned.  Balancing 
security concerns with the principles of an open society, including open markets, was an ongoing 
challenge.  Members would be inter ested in hearing how the United Stat es intended to strike the right WT/TPR/M/126 
Page 14  
 
balance and what measures it intended to take to mainta in it, in particular with respect to minimizing 
the distortionary impact of such security measures on trade. 
53. On tariffs, the United States accorded MFN ta riff treatment to all but one WTO Member 
(Cuba) and all except two tariff lines were bound.  A pproximately 31% of all tariff items entered the 
United States duty free.  The average MFN tariff in 2002 was just over 5%, a slight decline from 2001.  
The historical U.S. commitment to lowering tari ff barriers had given additional momentum to the 
process of enhancing the level of liberalization across the globe.  U.S. leadership was not limited to the 
past, but was also revealing itself during the DDA negotiations;  good examples were its proposal to 
eliminate all industrial tariffs by 2015 and its recent suggestion for a substantial reduction of 
agricultural tariffs.  However, the problems of tari ff peaks and high tariffs in some sensitive sectors, 
such as agriculture, textile and clothing as well as non- ad valorem  tariffs, remained sources of concern 
and needed to be addressed in the course of the DDA negotiations.  Addressing these issues would 
benefit not only U.S. consumers but also developi ng countries.  Many delegations would be interested 
in hearing the views of the U.S. delegation on this issue. 
54. Another area in which U.S. policies had been questioned by WTO Members was trade 
remedies, like anti-dumping, countervailing duty, and safeguard measures.  The United States had 
consistently been quite active in resorting to trad e remedies, particularly in recent years.  As an 
example, during the 2001-02 period, the number of anti-dumping investigations conducted by the 
United States had increased to 112 cases, up from 91 dur ing 1999-00.  As this was an issue of great 
concern to virtually all Members, the discussant as ked for the United States' opinion on the proposition 
that WTO Members should be extremely cautious in r esorting to contingency measures, given that the 
initiation of an investigation itself adversely affect ed exporters' trade performance.  The frequent use 
of trade remedies also ran the risk of undoing th e benefits of the liberalization secured through long 
and arduous negotiations. 
55. The United States continued to be an active user  of the dispute settlement DS mechanism of 
the WTO.  According to the Secretariat Report, out of around 60 new consultations from mid 2001 to 
mid 2003, the United States had been complainant in one tenth of the cases and respondent in nearly 
half.  Recent complaints initiated by the United St ates had been concentrated on agricultural products, 
and most of the cases against the United States had been concerned with cont ingency measures.  Of 
the U.S. anti-dumping or countervailing duty measur es challenged in WTO disputes, most had been 
found inconsistent with WTO rules.  This was an other reminder for the U.S. authorities that they 
needed to exercise greater caution in deciding on  the imposition of such contingency measures. 
56. Another issue of systemic interest for the WTO was the proper implementation of panel and 
the Appellate Body rulings.  Unfortunately, con cern about the United States' failure to implement 
several of these rulings involving le gislative change had been a consta nt feature of the regular Dispute 
Settlement Body (DSB) meetings for quite a long time.  Of particular concern was the lack of 
compliance with regard to the cases involving the FSC and the Continued Dumping and Subsidy 
Offset Act (CDSOA) of 2000.  As the issue of implementation of DSB rulings and recommendations 
directly affected the credibility of the multilateral tr ading system itself, he requested the view of the 
United States as to what institutional changes might be possible so as to ensure timely implementation. 
(3) S
ECTORAL POLICIES  
57. The United States maintained a basically open and transparent trade regime.  The 
United States had historically enjoyed a high leve l of competitiveness and openness in various areas, 
thereby enhancing the level of liberalization across the world.  With respect to both goods and 
services, the United States had generally opened its domestic market to foreign competition.  WT/TPR/M/126 
 Page 15 
 
 
58. Despite such general openness, however, a few area s needed to be further liberalized.  In the 
field of manufacturing, steel and  textile/clothing indu stries in particular, had continued to benefit from 
various forms of import restriction.  As noted abov e, the steel industry had been the main source of 
petitions in the United States for anti-dumping,  countervailing duty, and safeguard measures. 
59. Imports of textile and clothing to the United States were subject to relatively high MFN 
import duties, with an average of 10.8% for clothing and 9.3% for textiles.  However, the steps to 
protect such sensitive industries could do damage no t only to foreign exporters but also to domestic 
consumers.  The best way to protect such indus tries would be to enhance their competitiveness 
through continuous restructuring rather than through resorting to short-term measures.  He was pleased 
to note that the United States had been pursuing such a strategy, for example, with the Trade 
Adjustment Assistance (TAA) Act, but there were many that worried that such well-intentioned 
policies sometimes got hijacked as an excuse to increase the overall level of domestic support.  
Several members had raised issues in their written qu estions about the scope of the United States' TAA 
programmes being expanded in 2002 to  cover the agriculture sector and he thought this would be a 
topic of interest for further discussion. 
60. In the field of services, the U.S. market was al so largely open to foreign competition, though 
some issues merited attention.   Although the U.S.  international maritime transport market was 
generally open to foreign competition, internationa l cargoes carried by U.S.-flagged vessels benefited 
from government financial assistance.  Of greater concern in the maritime transport area was that domestic water-borne trade remained subject to na tional treatment limitations under the Jones Act.  
The United States also retained measures protective of  its air transport industr y, which required U.S. 
airlines to be substantially owned and effectively c ontrolled by U.S. citizens.  Such regulations were 
proving to be an obstacle to the global consolidatio n of the aviation industry.  He asked whether the 
U.S. administration had any plans to eliminate the remaining protective elements in these areas in the 
near future. 
61. The United States remained one of the world’s largest producers, exporters, and importers of 
agricultural products.  The average applied tariff on agricultural products was 9.8% in 2002, but 
certain products received considerably higher tariff protection.  He noted from the Secretariat report 
that significant assistance had been provided to the ag riculture sector by the U.S. government.  Also, a 
number of delegations had raised is sues and questions on this important  issue, and he trusted that it 
would be an issue of lively discussion. 
62. Despite some of the issues just pointed out , there was little doubt that the United States 
maintained a basically open trade regime and c ontinued to serve as a leading locomotive for global 
economic growth.  It was critical for the United States  to keep an open and transparent trade regime in 
place.  This would benefit the United States as well as other countries.  The importance of the 
United States trade policy could not be overemphasized.  He stressed the importance of active leadership by the United States in the multila teral trading system and commended the U.S. 
Government for its efforts towards further liberalization since the last review.  He hoped his statement 
would trigger an active discussion a nd exchange of opinions between the U.S. delegation and the other 
Members present. WT/TPR/M/126 
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IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 
63. Members welcomed the delegation of the United Stated led by Ambassador Deily.  Numerous 
Members welcomed the letter issu ed by Ambassador R. Zoellick to  WTO trade ministers providing 
ideas on how to push forward the DDA negotiations in 2004.  Several Members also took the 
opportunity to pay tribute to the discussant, Ambassa dor Chung, for his contribution to the work of the 
WTO.  Some Members acknowledged the constructive role of the U.S. delegation in Geneva, under 
the leadership of Ambassador Deily. 
64. The representative of India
 noted that the Trade Policy Review of the United States was no 
ordinary or routine exercise.  As the world's larg est economy, and its largest trader, U.S. policies and 
practices carried considerable influence globa lly.  For a large number of WTO members, the 
United States represented the largest market and ofte n the largest source of imports.  With its big share 
in global trade, the United States had a significant part to play in trade negotiations.  India welcomed the U.S. economic recovery from the slowdown in 2 001.  India was especially happy that recent U.S. 
growth numbers had belied all exp ectations, and hoped that the recovery would be deep, broad, and 
sustained, so as to provide sufficient impetus to economic growth worldwide. 
65. The United States was India's second largest trad ing partner, after the European Union.  
India's merchandise exports to the United States in  2002 were US$11.8 billion, 21.4% higher than in 
2001.  In the first ten months of  2003, exports of goods had sto od at US$10.6 billion, 11.5% higher 
than the same period the previous year.  U.S. ex ports to India had also shown significant growth 
during the same ten months and, at US$4.1 billion, had been 25% higher than in the same period the 
previous year.  India's exports of services to the United States were an increasingly important 
component of their bilateral trade;  thei r value was estimated at US$7 billion in 2003. 
66. Textiles constituted a major export item for India in  the U.S. market.  Members were aware of 
the crucial importance of this sector in the economy of developing countries, including India.  India 
was, therefore, concerned to note that, to date, the United States had lifted quota restrictions on only 
about 10% of the quotas maintained in 1990.  The elimination of the remaining 90% had been back-
loaded for the final stage at the end of 2004.  Although this was not a violation of the Agreement on 
Textiles and Clothing (ATC), India believed that this approach went against the spirit of ATC.  India 
also urged the United States to grant carry-forward and other flexibilities for the year 2004.  In the 
final year before the full liberalization, denial of  flexibilities that had been available during the earlier 
quota years would hit developi ng country exporters hard. 
67. Article IV of GATS called upon Members to facilitate the increasing participation of 
developing country Members in trade in services, inter alia , through liberalization of market access in 
sectors and modes of supply of export interest to th em.  India enjoyed a strong comparative advantage, 
with a pool of highly competitive and skilled manpower  resources, in computer software, accountancy, 
health services, and a range of other professional services.  Highly tedious and cumbersome visa procedures, and lack of adequate procedures for r ecognition of professi onal qualifications had blunted 
this edge in the U.S. market.  Although the Indian  software industry had been a major beneficiary of 
access to the U.S. market, Indian software compan ies now complained of delays in the grant of 
business visas or short time work permits.  These dela ys had interfered with their ability to meet 
contractual obligations.  Further, the validity of H1B visas had been state-specific, restricting inter-
state mobility for Indian professionals.  Social security  taxes also continued to be levied on software 
professionals, even though they were unable to deri ve any social security benefits because of the 
limited duration of their stay.  India proposed to negotiate a Totaliza tion Agreement with the 
United States, and was keen on early forward movement.  WT/TPR/M/126 
 Page 17 
 
 
68. In recent years, a number of U.S. corporati ons had taken advantage of the competitiveness and 
professional strengths available for outsourcing a ra nge of services to a number of countries including 
India.  Such business process outsourcing had st rengthened the competitive position of U.S. 
businesses, while generating substantia l employment and revenues in the outsourced countries.  This 
win-win situation was a unique opportunity thrown up by globalization.  India was concerned at recent 
moves in some U.S. states, as well as at the federa l level, to prohibit the outsourcing of government 
work, for example, the adoption of an amendment by the Senate in October 2003 to the Treasury and 
Transportation Appropriations Bill, which was awaiti ng further consideration in the Congress.  India 
hoped that short-term anxieties would not spur protectionist actions a nd imperil the long-term 
economic gain of these new opportunities. 
69. Some recent U.S. measures taken on national secu rity considerations had imposed additional 
costs on exports to the United St ates.  The Container Security Initiative (CSI) launched by the 
Customs and Border Protection involved pre-screening of cargo containers at exporting country ports.  
Such a programme could penalize developing countr ies, which might not be able to afford the 
installation of the required facilities at their ports, and would thus be unable to join the U.S. initiative.  
The implementation of the U.S. Bioterrorism Act, which, inter alia , required all facilities involved in 
the export of food items to be registered with th e Food and Drug Administration (FDA), besides prior 
notice of shipments, would also cause trade disrupti on, especially in developing countries like India.  
India hoped that the practical implementation of the Bioterrorism Act and other security-related measures would proceed in an exporter-friendly mann er, so as not to become new non-tariff barriers. 
70. The representative referred to the strict and burdensome sanitary and phytosanitary 
requirements applicable to the export of agricultural products to the United States.  In respect of the 
export of Indian mangoes, these requirement s had amounted, effectively, to a ban. 
71. The United States was one of the largest users of trade remedial measures, and developing 
countries, including India, had been significantly aff ected by these measures.  India's steel exports 
were facing a number of anti-dumping and countervailing duties, virtually ruling them out of the U.S. 
market for many items.  India was only a marginal ne t exporter of steel:  its exports of steel to the 
United States in 2002 had amounted to a mere 2% of total U.S. steel imports.  Just a few days ago an 
anti-dumping petition against shrimp exports from six developing countries, including India, had been 
submitted to the U.S. authorities by the domestic proc essors and shrimpers.  Over 80% of U.S. shrimp 
consumption was catered to by imports, and imports  were not responsible for the current situation 
facing the U.S. shrimp industry.  India, along with  other affected developing countries, had therefore 
urged the U.S. authorities to give careful consider ation to this matter before taking any decision to 
initiate an investigation. 
72. The U.S. authorities had often initiated both anti- dumping and anti-subsid y investigations for 
the same export product.  Even the rumour of ini tiation of such an investigation could affect the 
behaviour of prospective importers in the invest igating country, who tended to switch to other 
exporters.  There had been several instances of U.S. rules and methodology over anti-dumping and 
countervailing duty investigations a nd measures being disputed by its  trading partners.  However, 
recourse to dispute settlement involved substantial co sts to developing countries.  India requested the 
United States to exercise great restraint in launching anti-dumping and countervailing duty 
investigations, especially against developing countries.  It was also of concern that sunset reviews of 
anti-dumping and countervailing duties had resulted, in most cases, in these measures being retained 
beyond five years. 
73. With respect to the bilateral and regional trade arrangements being negotiated by the 
United States, while agreeing that regional agreements  that were fully consistent with WTO rules and WT/TPR/M/126 
Page 18  
 
objectives could support and expand multilateral trade liberalization, India emphasized the importance 
of U.S. adherence, not only to the letter, but to the spirit of WTO rules. 
74. The United States maintained various non-reciprocal preferential programmes.  India was a 
beneficiary of the GSP, however since 1992, India had been denied GSP benefits on 824 tariff lines in 
agricultural chemicals and pharmaceuticals.  India had been urging the United States to restore these 
benefits.  For GSP schemes to be effective vehicles of special and differential treatment for developing 
countries, they should be extended on a generalized , non-discriminatory, and non-reciprocal basis.  
India had serious concerns regarding the use of pr eferential tariff arrangeme nts to achieve non-trade 
objectives, and urged the United States to consider  dispensing with the conditionalities to its GSP 
scheme. 
75. The U.S. Government Report noted, in the contex t of the Doha Ministerial Declaration, that 
the subject of implementation of co re labour standards was relevant for Trade Policy Reviews.  India 
wished to draw attention to the view of Ministers,  both at Singapore and at Doha, that while they were 
committed to the observance of internationally reco gnized core labour standards, the competent body 
to set and deal with labour standards was the In ternational Labour Organization.  It was clear, 
therefore that the WTO was not competent to deal  with this matter.  The representative of India 
recalled the mandate of the TPRM exercise and stated that it could not be used as an open forum to discuss non-trade issues or address issues not discussed elsewhere in the WTO. 
76. The representative of China
 noted that the economy of the United States had experienced a 
short period of recession after the previous Review, wh ich, in China's opinion, was mainly attributable 
to its domestic structural problems.  China was pleased that there had been some strong recovery 
during recent months.  The United States had played the role of engine many times in the long history 
of the world economy and China hoped that the current momentum would be maintained and strengthened so as to help promote furt her world economic and trade growth.  
77. Given its prominent and important position in  the world economy, the macroeconomic and 
trade policy and practices of the United States ha d a significant impact on the evolution of the 
multilateral trading system.  As a founding member of GATT and WTO, the United States had made 
great contributions to the development and stre ngthening of the multilateral trading system.  The 
United States had been constantly in favour of an open international trade regime and had on many 
occasions played a leading role in the previous r ounds of negotiations.  The current simple average 
U.S. tariff was only 3.6% and its average applied ta riff rate was even lower.  All these developments 
were commendable.   
78. However, given the United States' high level of development, its large economic scale, and its 
pivotal position in the multilateral trading system, there was much room for improvement with respect to the implementation of multilateral trading rules a nd the principle of free and open trade.  It was 
regrettable that, in certain areas, the standards the Un ited States set for itself were even lower than that 
of the newly acceded Members.  U.S. tariffs were yet to be fully bound.  The United States had 
maintained tariff peaks and tariff escalation on a number of products such as agricultural goods, 
textiles and clothing.  Trade-distorting subsidies to U.S. agriculture remained at a high level.  The 
United States had been a frequent user of trad e remedies such as anti-dumping and countervailing 
measures, as well as technical barriers to trade and sanitary and phytosanitary measures.  The restrictions the United States imposed on export of  technologies had seriously hampered normal trade 
relations with some countries.  The excessively tight  security measures it had adopted in the trade area 
were barriers to trade facilitation.  The United States ha d, in quite a few cases, refused to implement or 
tried to postpone the implementation of DSB or Textile  Monitoring Body rulings with respect to trade 
disputes.  All of the above had not only damaged the image of the United States as a promoter of open trade, but had also had a negative effect on worl d trade and economic growth and on U.S. long run  WT/TPR/M/126 
 Page 19 
 
 
expansion.  China was interested in knowing what  measures the United States envisaged to address 
these existing problems. 
79. The representative referred to the 2002 U.S.  Farm Bill as a serious deviation from the 
principles and objectives enshrined in the Doha  Development Agenda for the negotiations on 
agriculture, which were strongly supported by the United States.  The enormous amount of domestic 
subsidies provided under the Bill had se vere trade distorting effects.  Such a Bill not only undermined 
the capacity of the United States and its influence on the Doha Round negotiations, in which the issue 
of agriculture was at the centre, but also had a ser ious adverse impact on the healthy and sustainable 
development of U.S. agriculture.  
80. Trade and economic cooperation between the Unite d Stated and China had been developing 
rapidly since the establishment of the Sino-U.S. dipl omatic relations in 1979.  The United States was 
now the China's second largest trading partner, while China ranked fourth among U.S. trading partners.  The economies of the two countries were highly complementary. 
81. However, some of the current U.S. trade policy and practices were of great concern to China.  
The United States still regarded Chin a as a "non-market economy" in its anti-dumping investigations.  
This was unfair since after 25 years of reform a nd opening to the outside world, tremendous changes 
had taken place in China's economic and trade regi me.  China hoped that the United States would 
acknowledge such changes and put an end to the "non-market economy" treatment in any possible 
future anti-dumping investigations, giving normal treatment to Chinese enterprises and stopping the practice of taking a "surrogate country" for reference. 
82. China welcomed the repeal of the steel  safeguards by the U.S. Government on 
5 December 2003;  these measures had greatly disrupted international steel trade in their period of 
implementation.  China hoped that the United States would hold a broad vision in making future decisions on its trade policy and practices, and refra in from doing anything to damage the interests of 
other Members and the credibility of the United Stat es in the multilateral trading system just for the 
sake of short-term domestic political objectives. 
83. China believed that the United States had special obligations and responsibilities for the 
economic and trade development of the world and for the healthy development of the multilateral 
trading system.  China hoped that the United Stat es would faithfully fulfil these obligations and 
responsibilities and play a positive and constructive role , proportioned to its level of development and 
economic capacity, so as to bring the current tr ade negotiations back on track and make its due 
contributions to the growth of the world trade and economy.  
84. The representative of Hong Kong, China
 stated that Hong Kong, China and the United States 
had long established economic and trade relations.  The United States was Hong Kong's largest export 
market and second largest trading partner, while H ong Kong, China was the United States' 14th largest 
export market and 17th largest trading partner.  Total trade amounted to US$54.4 billion in 2002, accounting for 13% of Hong Kong's overall trade.  U.S. business interests in Hong Kong were 
substantial.  In 2002, Hong Kong was the third largest  receiver of U.S. direct investment in Asia.  
Over 1,100 U.S. companies were present in Hong  Kong.  There were about 50,000 U.S. citizens 
residing in Hong Kong, representing one of the most  significant foreign communities in Hong Kong. 
85. Although the slowdown in the U.S. economy durin g part of the review period had induced 
domestic demands for import protec tion and government support which might have impinged on U.S. 
trade policy, Hong Kong, China agreed with the Secretariat's observation that "the U.S. economy 
continued to support global growth by maintaini ng its market largely open".  WTO Members looked 
to the United States to continue to demonstrate its le adership in trade liberalization and maintenance of WT/TPR/M/126 
Page 20  
 
open markets.  Hong Kong, China was pleased with the U.S. authorities' continued commitment in this 
respect as stated in the Government Report. 
86. Security considerations had played an impor tant role in the formulation of trade and 
investment policies in the United States during th e period under review.  Since the attacks in 
September 2001, significant changes to U.S. trad e practices had been implemented to ensure the 
nation's security.  Prominent examples included the Container Security Initiative (CSI), Customs-
Trade Partnership Against Terrorism initiative (C-T PAT), the 24-hour Advance Vessel Manifest Rule, 
and the Bioterrorism Act on food security.  While  Hong Kong, China supported initiatives to enhance 
security in trade, it hoped that these measures w ould not result in unnecessary barriers to legitimate 
trade and investment flows. 
87. Hong Kong, China appreciated the active particip ation of the United States in the launch of 
the Doha Development Agenda (DDA ) and its negotiations.  It agreed with the United States that 
focus, flexibility, and political will of all Members we re what the WTO required in the current state of 
play of the DDA negotiations.  In this regard, it looked forward to the United States acting out its 
leadership role in strengthening a multilateral trading system capable of delivering benefits to all, and 
it welcomed the letter issued recently by Ambassa dor Zoellick to the WTO Trade Ministers providing 
some thoughtful ideas for WTO Members to consider how to push forward the DDA negotiations in 
2004. 
88. Apart from pursuing an active agenda of trad e liberalization at multilateral level, the 
United States had also stated its intention to wo rk on regional and bilateral initiatives to promote free 
trade.  During the review period, the United St ates had concluded three FTAs and was negotiating new 
agreements with several countries.  Hong Kong, Ch ina hoped that such initiatives would be fully 
consistent with the WTO rules and would not jeopardize multilateral liberalization efforts.  
Hong Kong, China shared the Secretariat's view that "care should be taken that negotiating and 
administrative resources are not distracted away fro m the multilateral system", that "vested interests 
are not created that complicate multilateral negotiati ons", and that “trade and regulatory structures 
attendant on preferential agreem ents do not hinder trade". 
89. Hong Kong, China was pleased to note the Unite d States' active participation in the non-
agricultural market access negotiations under the DDA,  which was of paramount importance to further 
multilateral trade liberalization.  Although the Un ited States maintained a low average applied MFN 
tariff (5.1% in 2002), there was room for improvement.  Hong Kong, China hoped that in the DDA negotiations it would address:  high tariffs on certa in sectors like textiles and clothing (15-30%) and 
footwear (up to 58.5%), which were of particular  interests to many developing Members;  and non- ad 
valorem  tariffs, applied on about 12 % of all tariff lines, which reduced the transparency and 
predictability of the U.S. tariff regime.  
90. Hong Kong, China noted that certain sensitive domestic industries in the United States had 
continued to petition actively for contingency measu res, which generated uncertainty for foreign 
exporters.  Hong Kong, China was particularly conc erned that anti-dumping measures could be abused 
by some petitioners for protectionist purposes, as the imposition of provisional measures or even the 
mere initiation of investigations would bring about  a trade-stifling effect.  Hong Kong, China was 
therefore pleased to note a considerable drop in  the number of anti-dumping cases initiated by the 
United States during the review period (from 77 in 2001 to 35 in 2002), and hoped the United States 
would continue to exercise utmost caution in consid ering the initiation of anti-dumping investigations.  
It was equally important to impose a tight di scipline on the conduct of investigations and 
determinations of dumping and injury and to ensu re that such proceedings were WTO-consistent.  
Concerns had been raised by some Members about the lack of progress by the United States in remedying legislation and practices  ruled by the Appellate Body as inconsistent with the relevant  WT/TPR/M/126 
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provisions of the WTO Agreements, e.g. the Anti- dumping Act of 1916 and the Byrd Amendment.  
Hong Kong, China encouraged the United States to expe dite its action to bring the relevant legislation 
and practices into conformity w ith the relevant WTO provisions. 
91. The year 2005 was long-awaited by all textile  and clothing exporting economies, as the quota 
system imposed for decades would be completely phased out.  Hong Kong, China was glad that the 
United States, the world's leading importer of tex tiles and clothing, had reite rated on various occasions 
its commitment to abolish all remaining quotas by end 2004 as required under the Agreement on Textiles and Clothing (ATC).  Hong Kong sincerely urged the U.S. Administration to honour its ATC 
commitment.  The full benefits of the ATC to th e exporting economies would not be realized unless 
restraining countries refrain from replacing the quot a system by other protectionist measures.  
Hong Kong trusted that this view was shared by the United States. 
92. It was disappointing that the United States had not tabled any offer on maritime transport 
services in its initial offer in the GATS negotiations.  Substantial liberalization of this important sector 
would benefit all economies, given its  key facilitating role in the conduct of world trade.  The lack of 
offer was not commensurate with the United States' l eading role in pursuit of trade liberalization both 
in goods and services, nor with the general openn ess maintained by the United States on international 
maritime transport market.  Hong Kong, China urged the United States to consider making 
commitments in the maritime transport services in this round of services negotiations.  Hong Kong, 
China shared a common goal with the United States to "expand economic opport unities to the world's 
citizens by reducing trade barriers".  Hong Kong look ed forward to carrying out a substantial review 
of the Jones Act, which in its view had constitute d a major access barrier to the U.S. market and a 
major derogation from the fundamental principles of the WTO Agreement. 
93. On domestic regulations, Hong Kong noted that , in telecommunication services, individual 
state commissions had the authority to regulate the rates, terms, and conditions of intra-state, non-
radio-based basic telecommunications services.  In  professional services, the power to regulate was 
reserved also for the states, which generally set up licensing boards to administer their licensing or 
registration procedures.  This meant different ma rket access conditions for different states.  Though 
transparent, these complex domestic regulations w ould still constitute barrier s to trade and hinder 
international trade.  Hong Kong, China urged th e United States to consider setting up a uniform 
regulatory regime at the national level, and looked fo rward to working closer with the United States in 
developing possible disciplines at the Working Party on Domestic Regulations. 
94. The representative of the European Union
 stated that European Union and the United States 
were each other's main trading partners and accounted  for the largest bilateral trade relationship in the 
world.  The European Union and the United Stat es both account for around one fifth of each other's 
bilateral trade, a matter of €1 billion a day.  In 2002, exports of EU goods to the United States 
amounted to €240 billion (17.7% of total EU expor ts), while EU imports from the United States 
amounted to €175 billion (24.2% of  total EU imports).  Investment volumes were even more 
substantial.  Total two-way investment amounted  to over €1.1 trillion, with companies from the 
European Union and the United States each employin g about 4 million people in the other trading 
partner.  Over the period 1998-01, EU investment in the United States amounted to more than 52% of 
EU foreign direct investment outflows while U.S. investment in the Europ ean Union amounted to 
more than 61% of EU foreign direct investment inflows. 
95. The two economies were therefore interdependent to a high degree.  Close to a quarter of all 
U.S.-EU trade consisted of transactions within firm s based on their investments on either side of the 
Atlantic.  The transatlantic relationship was also of  vital importance to define the shape of the global 
economy as a whole, as either the European Union or  the United States was also  the largest trade and 
investment partner for almost all other countries.  Accounting between them for roughly 40% of total WT/TPR/M/126 
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world trade in goods and services, the European Un ion and the United States were also therefore 
committed to a politically and economically significan t cooperation agenda, on bilateral issues and in 
the multilateral framework of the WTO. 
96. On the bilateral front, there was a structured di alogue in place, through the New Transatlantic 
Agenda (NTA), the EU-U.S. Joint Action Plan of December 1995, and the Transatlantic Economic 
Partnership created in May 1998.  This partnership had laid the foundations to intensify efforts to 
reduce or eliminate barriers to trade and investment  between the two trading partners, notably through 
closer cooperation between regulators.  This dial ogue had also allowed the European Union to go 
further with the United States towards achievable and mutually beneficial objectives especially by 
focusing on initiatives on areas where there was goodwill on both sides and where gains could be 
enormous, for example financial markets. 
97. The last EU-U.S. Summit of June 2003 had ta ken stock of the latest progress achieved under 
the bilateral Positive Economic Agenda, notably the financial markets dialogue, the launch of 
regulatory cooperation in four priority sectors (cosmetics, automobile safety, nutritional labelling, and metrology), and the conclusion of the MRA on marine safety equipment.  The summit had also 
launched negotiations to establish an Open Aviation Area.  This cooperation had also covered trade 
and labour rights and discussion on the protection of  core labour rights.  The European Union was 
pleased that the important issues of trade and labour rights had been included in the U.S. trade policy 
review. 
98. The EU-U.S. relationship showed clearly the benefits from further trade liberalization.  The 
close trade-ties between the Europ ean Union and the United States had spurred and stimulated global 
trade and thus had brought benefits to a great num ber of other countries in a position to derive the 
benefits of the increasingly liberalized trade.  EU -U.S. cooperation had at its core the development of 
the multilateral agenda.  The EU-U.S. relationship had proved vital for the history of multilateral 
trade:  an effective EU-U.S. leader ship had been key for the success of the previous rounds and for the 
launch of the DDA.  Conscious of this partic ular responsibility, and in response to calls for 
transatlantic leadership to energize the round, the European Union and the United States had agreed in 
August 2003 on a joint position paper on agriculture.  In the absence of such a joint initiative, the 
negotiations would have remained stuck before Ca ncun.  The European Union would continue to 
pursue such cooperation in the future, with the Un ited States, the G20 and others, in the hope of 
reviving the DDA to the benefit of the world at larg e.  It was paramount to enter as soon as possible 
into substantive negotiations in a "give and take" mode. 
99. The European Union welcomed the recent declar ation in the letter from the USTR Zoellick to 
ministers.  It was crucial that the United States send out strong signals underscoring that its primary trade policy was based on a desire to pursue multilateral trade liberalization and establish new 
multilateral rules, a goal that was entirely shared by the European Union.   The European Union 
welcomed the indication that the U.S. electoral calendar would not be an obstacle to substantial 
progress on the DDA in 2004.  The European Union would work with the United States and other 
partners to ensure that this was achieved.  Bilate ral and regional trade agreem ents were important tools 
for promoting trade, but they could not replace the be nefits of global trade and the need for continuing 
liberalization in the context of the WTO.  The European Union had made it clear that it would 
continue to give priority to the multilateral trade route. 
100. The European Union had some concerns with r espect to U.S. trade policy.  Since the last 
Review of the United States, despite its overall strong commitment to the WTO and the DDA, the 
United States had introduced an increased package of support to U.S. agriculture through the approval 
of the Farm Bill.  This had occurred when the tre nd in the rest of the world was to reduce support and 
negotiate additional reduction commitments in the DDA.  Another point of concern had been the  WT/TPR/M/126 
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introduction of safeguard measures for steel, which had been found to be WTO-inconsistent.  The 
European Union was pleased to note that the safegu ard measures had been eliminated.  However, in 
the meantime the measures had cau sed severe adverse effects on EU exports of steel and disruption of 
the global steel market.  The European Union stro ngly encouraged the United States to combat this 
tendency towards sectoral measures and to ensure its trade policy reflected the general interest in open 
markets. 
101. U.S. trade policy had undergone significant cha nges as a consequence of increased attention 
on security.  The European Union would continue to wo rk strongly with the United States in order to 
counter terrorism and remained strongly committed to  combating it.  The United States had every right 
to ensure that trade regulations di d not undermine legitimate security concerns, and the EU trusted that 
security concerns would not be used as an excuse fo r implementing a disguised form of protectionism.  
102. The European Union was becoming increasingly concerned about the perception of the WTO 
that seemed to be gaining ground in the United States.   The legitimacy of the WTO and its agreements 
rested on compliance with the obligations provided by  those agreements.  The United States had been 
a high user of dispute settlement, as both compla inant and defendant.  Wh ere the United States had 
been the complainant, including in cases against the European Union, it had pursued its interests 
vigorously so as to preserve the established balance of rights and obligations in the WTO.  But when 
the situation had been reversed, and U.S. measures ha d been at stake, reactions in the United States 
had sometimes tended to be dismis sive of WTO findings.  Even though U.S. practice and legislation in 
a number of fields had been established as being in compatible with U.S. obligations under the WTO, 
the United States had not complied several years after such findings, notwithstanding any efforts by 
the Administration.  As stated in the Dispute Settlement Understanding (Ar ticle 21.1) the prompt 
compliance with recommendations and rulings of the DSB was essential for ensuring effective 
resolution of disputes to the benefit of the Member s.  The United States had quite a depressing record 
with regard to "prompt compliance":  the Euro pean Union had been waiting patiently for the 
United States to comply with the DSB's rulings in  four cases.  In the Anti-dumping Act 1916 case, the 
act in question and the related judicial proceedings should have been terminated by 
20 December 2001;  the United States had still not taken any significant action towards compliance.  
In the FSC/ETI case, compliance with the DSB's ruli ngs had been originally due by 1 October 2000;  
after four years, the European Union would start suspending concessions on U.S. imports on 
1 March 2004, if the non-compliance persisted.  In the Byrd Amendment case the United States had 
again failed to meet the 27 December 2003 deadline to implement the ruling.  Finally, in the case 
regarding Section 211 of the U.S. Omnibus Appr opriations Act, the United States should have 
complied by 31 December 2002.  The European Un ion had granted the United States an extension 
until the end of 2004 hoping that the "calls for le gislative action by the U.S. Congress" would not 
remain unheard. 
103. The European Union had shown patience and understanding with the United States when it 
came to the implementation of the decisions of th e DSB.  The EU understood that it could be difficult 
to implement findings going into very technical asp ects of societal regulation.  The lack of any 
movement by the United Stated in a number of vital cases was, however, a cause for concern.  It was 
in the interests of all that legitimacy of the DS B and the respect of the agreements under the WTO 
should not be called into question.  Therefore, the European Union called upon the United States to 
demonstrate through its compliance of DSU rulings that it strongly supported the multilateral trading 
system. 
104. The representative of Argentina  noted that since its last Trade Policy Review in 2001, the U.S. 
economy had faced several shocks, which, thanks to  the openness and strength of the U.S. trade 
regime, had not eroded competitiveness.  The Secr etariat Report highlighted, however, that market WT/TPR/M/126 
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access barriers, as well as export subsidies and m easures with an equivalent effect, and domestic 
support measures persisted in a few but important sect ors for developing countries, such as Argentina.  
105. While the average U.S. tariff was one of the lowest in the world, the average tariff for 
agricultural goods was twice the gene ral average.  Several products of  export interest for Argentina 
faced tariff peaks;  in the case of lemon juice concentrate, tariffs were as high as 70%. 
106. The Secretariat Report noted that less than 2%  of U.S. imports were subject to quotas.  
However, tariff quotas affected important Argentinia n export products such as bovine meat, peanuts, 
dairy products, sugar, and tobacco , through high out-of-quota tariff rates.  In the case of peanuts and 
dairy products, out-of-quota tariffs were prohib itive.  Argentina was also concerned with the 
administration of quotas particularly with respect to p eanuts.  With respect to diary products, the main 
problem was the nature of the quotas, administered  on a "first-come first-served" basis, as well as the 
use of grouped tariff classifications, which did not allow effective market access for differentiated 
products. 
107. Another point of concern for efficient producers and exporters of agricu ltural products was the 
use by the United States of export subsidies and othe r equivalent measures, such as credits, guarantees, 
and insurance, as well as the substantial increase of  funds for domestic support programmes.  The new 
Farm Act of 2002 had increased support by 70%, gear ed mainly to traditional commodities (wheat, 
soja, rice, cotton, and peanuts).  Likewise, and as poi nted out in the Secretariat report, this law was a 
step backwards with respect to the 1996 Law, and a return to a system of producer dependency with 
respect to the federal Government.  Apart from ha ving trade effects, these developments seriously 
affected the process of multilateral negotia tions to liberalize the agricultural sector. 
108. The September 2001 attacks had led the U.S. Administration to include national security 
considerations as a special component of its trad e policy.  Argentina fully shared U.S. security 
concerns;  however, the new policies and practices should not constitute unnecessary barriers to trade.  
Although it was premature to evaluate the commercial impact of the new security measures, Argentina requested clarification of certain aspects of these polic ies.  First was the issue of duplication:  some 
security projects were administered by more than one Government agency.  The Container Security 
Initiative and cargo advance notification requirements were the responsibility of Customs, while the 
bioterrorism regulations were the responsibilit y of the Food and Drug Administration (FDA).  
Argentina sought clarification on the level of inte r-agency coordination to ensure that delays and 
related costs were minimal.  Also of concern were  the extraterritorial requirements on enterprises that 
had no direct links with foreign markets.  The Bi oterrorism regulations re quired the registration of 
businesses that produced, processed or stocked food wit hout further processing, to be shipped to the 
United States.  This implied that a warehouse renting out  space to third parties had to be registered if it 
wished to be eligible to stock goods to be expor ted to the United States.  Moreover, the warehouse was 
required to have an agent in the United States, despite not having any direct foreign link.  
109. The FDA had decided to apply the bioterrorism regulations flexibly, over an eight-month 
transition period, during which opera tors would be trained to make the regulations operational.  
Argentina suggested the incorporation of transparen cy mechanism so as to inform both importers and 
exporters of any problems the U.S. authorities might identify. 
110. The representative of Canada
 noted that the Canada-U.S. bila teral relationship was founded on 
a commitment to the rule of law, to the mutual be nefits of trade agreements, and to the understanding 
that the unimpeded flow of goods, services, invest ment, technology, and ideas enriched the common 
wealth of the two nations.  At US $1.1 billion a day, it had more than doubled from the first days of the 
Canada-U.S. Free Trade Agreement in 1988.  The Ca nada-U.S. FTA had then grown into the North 
American Free Trade Agreement (NAFTA), incor porating Mexico.  NAFTA had marked its 10th  WT/TPR/M/126 
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anniversary on 1 January 2004, and had been a tremendous success in making North America one of 
the most efficient, integrated, and competitive regions  in the world.  By strengthening the rules and 
procedures governing trade and investment on that continent, it had allowed trade and investment 
flows between the three countries to increase significantly. 
111. Despite the huge success, growth in two-way tr ade had been constrained by the economic 
slowdown in the United States and the effects of several economic and political shocks that the 
United States, Canada, and the world had encountered  since the last Review:  a high-tech and stock 
market downturn;  the attacks of 11 September and their economic fallout;  and some high profile business failings and disappointments in corporate governance.  Nonetheless, Canada applauded the 
resilience of the U.S. economy and the U.S. people in rebounding from these shocks.   
112. The dimension and complexity of the Canada-U .S. bilateral relations hip could hardly be 
overstated.  Most of their mutual business byp assed higher levels of government altogether, and 
brought industries, firms, associations, and individu als into profitable daily contact.  The same was 
true of the many agencies and officials who manage d the large and intricate network of agreements 
between the two countries.  The close compatibility of interests and the ongoing working relationships 
allowed the two countries to face challenges cooperativ ely.  For example, the recent cases of BSE in 
North America had required the North American b eef industry, and government agencies in both 
countries, to work closely together to manage risk  and reassure trading partners that North American 
beef was safe.  
113. One of Canada's highest objectives was to improve security and law enforcement while 
ensuring the efficient movement of legitimate goods, services, and people across the Canada-U.S. 
common border.  In light of these concerns, Canada attached great importance to U.S. leadership in 
advancing the global trade policy agenda.  Canada recognized the legitimacy of increased security 
measures at borders and within the corridors of trade that had arisen as a necessary response to 
terrorist activity, but called upon the United States to continue to demonstrate trade policy leadership 
in this area and to ensure that these measures di d not become unnecessary barriers to trade.  Canada 
also saw the need for that leadersh ip to transcend the influence of sp ecial interests in the formulation 
and application of trade policy.  In part because of the growth of these narrow interests, and not in the 
United States alone, the pursuit of broad trade lib eralization had become an increasingly complex and 
difficult task.  A strong hand was thus required to rise above these demands and to ensure that the 
principal objective of trade liberalization, greater prosperity for all, continued to be vigorously 
pursued.  As Ambassador Zoellick had recently note d, the two major trade agreements signed by the 
United States in the 1990s, the Uruguay Round and NA FTA, had increased the in come of the average 
U.S. family of four by up to US$2,000 a year. 
114. Canada welcomed the public pronouncements of President Bush, Ambassador Zoellick, and 
Secretary Evans, and of Ambassador Deily, who had all articulated the case for trade liberalization, and the benefits to U.S. producers and consumers.  These messages should resonate in all parts of the 
United States, as well as in other countries where gove rnments sought to generate informed debate on 
the role of trade in a nation's economic growth.  All countries clearly stood to benefit from further 
trade liberalization, as well as from expanding and strengthening the rules that govern the multilateral 
trading system.  There was no better time to show l eadership and support for liberalizing trade than 
during periods of economic uncertainty, because protectionism only depressed investor confidence and delayed recovery.  In this regard , Canada would naturally continue to work with the United States in 
promoting trade liberalization multilaterally, regionally,  and bilaterally.  Bilateral and regional trade 
negotiations should augment, not detract from, efforts in the WTO, and Canada sought the 
United States' continued commitment to multilateral trade liberalization to ensure no one was left 
behind. WT/TPR/M/126 
Page 26  
 
115. An area of concern to Canada was the U.S. record in implementing WTO decisions:  the 
United States was currently not in compliance with several decisions.  Of greatest concern to Canada, 
was the Continued Dumping and Subsidy Offset Act of 2000 (Byrd Amendment), which had been 
successfully challenged at the WTO and found to be in consistent with U.S. obligations.  A reasonable 
period of time to bring this measure into complia nce had now passed and Ca nada believed that the 
United States should implement the WTO decision immediately.  
116. Canada's second concern dealt with agriculture.  Canada-U.S. agricultural trade was large and 
mutually beneficial.  However, Canada, like other WTO members, had been negatively affected by the 
Farm Security and Rural Investment Act (the Farm  Bill), particularly the increase in, and broadened 
coverage of, trade distorting dom estic support and the mandatory c ountry of origin labelling (COOL) 
requirements.  The domestic support increases caused harm to agricultural producers in Canada and 
other countries, and ran counter to the agreed objective in the WTO agriculture negotiations to 
substantially reduce trade-distorting domestic support.  The COOL initiative sought to undo the 
benefits that trade liberalization had brought to  producers and consumers throughout North America 
and many other parts of the globe.  It mandated that  certain agricultural products be labelled on the 
basis of requirements that were fundamentally flaw ed and unworkable.  It ignored the reality of an 
integrated market in North America.  Producers a nd retailers would be forced to make costly and 
difficult decisions that ultimately could reduce the choices available to consumers.  Existing labelling 
schemes already provided adequate consumer inform ation and there was no reasonable justification 
for the new mandatory programme. 
117. A recurring agricultural irritant for Canada were  the politically motivated investigations into 
Canada's wheat policies, and particularly Ca nadian marketing arrangements.  As numerous 
investigations had shown, Canada 's wheat policies were consistent  with its international trade 
obligations.  Canada's success in th e U.S. market was due to its abilit y to provide a consistently high 
quality product.  Canada also found it unsettling that U.S. agriculture producers' traditional commitment to trade liberalization appeared to be losing ground to an interest in securing greater 
government support.  Canada hoped that this perception would prove to be unfounded.  U.S. 
leadership was especially importa nt in the agriculture component of the Doha negotiations. 
118. The third area of concern was softwood lumber .  For two decades, the United States had 
launched one countervailing investigation after a nother against the natural resources management 
practices of Canada.  In each instance, disput e settlement mechanisms under the FTA, the NAFTA, 
and the WTO had determined the results of the U.S. i nvestigations to be incons istent with international 
obligations and U.S. trade laws.  Canada continued to pursue its lega l interests, but had also engaged 
in bilateral negotiations to try to resolve this long- standing dispute.  Canada appreciated the spirit in 
which the U.S. Government had engaged in efforts to  achieve a negotiated resolution to the dispute.  
The lumber dispute was not good for either Canada  or the United States.  Resolution of the trade 
dispute should continue to be a priority for the tw o governments, a resolution that would lead to free 
trade in lumber between Canada and the United Stat es.  This would constitute strong evidence of the 
U.S. commitment to free trade. 
119. The United States should proceed in accordance w ith obligations it had voluntarily undertaken 
in successive rounds of GATT/WTO negotiations, particularly in difficult cases such as softwood 
lumber and the Byrd Amendment.  Doing so w ould enhance confidence in the United States as a 
reliable trading partner and in the credibility of th e multilateral system.  Cana da recognized and valued 
the leadership the United States had demonstrated in efforts to achieve global economic and trade 
liberalization, and was confident that the United States  would continue to build on this legacy.  Canada 
welcomed the U.S. commitment to keep the Doha negotiations moving forward in 2004, as demonstrated by Ambassador Zoellick's 11 January le tter to WTO Ministers, which shared U.S. views  WT/TPR/M/126 
 Page 27 
 
 
on some of the critical issues.  U.S. engagement in reinvigorating trade negotiations this year was 
critical to success and a strong multilateral trading sy stem was of vital importance to all Members. 
120. The representative of Cuba  stated that her country shared with other delegations the 
preoccupation with respect to the security measures r ecently adopted by the Unit ed States, due to their 
effect on trade, in particular in Latin America, a region heavily dependent on the U.S. market for its 
exports.  Cuba noted with satisfac tion the recovery in the U.S. economy for the positive effect it would 
have on the world economy.  Cuba was interested  in hearing the U.S. delegation's views on the 
measures the United States envisaged to correct its macroec onomic imbalances. 
121. The United States maintained, unilaterally, a sy stem of economic, financial, and commercial 
sanctions against Cuba, which for over 40 years had affected significantly Cuba's economy and trade, 
with a direct effect on its population's quality of life.  As mentioned in previous reviews of the 
United States, these sanctions responded clearly to po litical objectives, and were in no way backed by 
the principles and norms that the WTO supported.  The sanctions violated one of the WTO's fundamental principles, MFN treatment, since Cuba was subject to treatment that was different from 
the other WTO Members and discriminatory.  The sanctions ignored the principles of Part IV of the 
GATT 1994, with respect to trade and development,  which invited developed countries to adopt 
measures to foster the development of developing countries, and recognized that international trade 
should be guided by rules compatible with these deve lopment objectives.  The sanctions also violated 
the principles of the Agreement on Trade-Related Investment Measures, geared to promote and 
facilitate investment to foster economic growth in all WTO Members, in particular developing 
countries. 
122. The United States had traditionally justified its policy towards Cuba through the use of Article 
XXI of the GATT 1994, by stating that Cuba was a national security threat to the United States.  However, even the U.S. Defense Department, ha d acknowledged in a 1998 repor t that Cuba did not 
represent a national security threat to the United States. 
123. The Trade Sanctions Reform and Export Enhan cement Act of 2000, through which Cuba had 
purchased food and agricultural products in the United States, had not implied a softening of the 
commercial embargo.  It had made evident that countless restrictions persisted, limiting possibilities 
and affecting Cuba by not having access to the U.S. agricultural market.  Amongst the main restrictions limiting access were the licence and visa requirements for potential U.S. exporters to 
Cuba;  the prohibition of using public and private cred its for sales to Cuba;  the obligation of making 
the payments in cash, in advance and through thir d-country banks, which implied an increased in 
transaction costs;  the ban on ships carrying cargo between Cuba and the United States from loading 
cargo in Cuba to other destinations, which increa sed considerably transportation costs;  and the 
prohibition on the use of Cuban ships for these op erations.  The United States also maintain an 
embargo on the purchase of Cuban goods and services,  to the detriment of Cuba's purchasing power 
and to prevent access to important sources of revenue.  Linked to the ban on service purchases were 
the travel restrictions to Cuba applied to U.S. citizens. 
124. Cuba wished to highlight the United Stat es' negligence in the multilateral arena:  
inconsistently with its assumed role of leader in th e liberalization of trade in service, it had failed to 
respond to Cuba's May 2003 petition to eliminate the restrictions imposed on Cuba by the economic 
embargo, which affected all service sectors and wher e inconsistent with the principles and objectives 
of the GATS as well as with the Directives and Procedures agreed by WTO Members for these 
negotiations in March 2001.  The rest rictions of the Torricelli Act with respect to the sale of medicines 
and medical equipment were still in place, as well as the restrictions on maritime transportation and 
trade with U.S. subsidiaries of foreign firms.  Th e nature of the Helms-Burton Act of 1996 had been 
questioned in the WTO.  Cuba had witnessed the U.S. Government's unwillingness to abide by the WT/TPR/M/126 
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recommendations of the DSB in the dispute with th e European Union with respect to Section 211 of 
the Omnibus Appropriation Act of 1998, which had extended the embargo to the area of intellectual 
property and violated the MFN and national treatment principles.  Cuba requested that the United States abide by the DSB rulings in this case. 
125. Cuba requested that the United States provide an  answer to the following questions:  (a) under 
what arguments did the United States maintain economic, financial and commercial sanctions against 
Cuba? (b) when did the United States intend to comp ly with the 12 resolutions of the U.N. General 
Assembly, which had condemned the embargo agains t Cuba since 1992  (c) when and how would the 
United States comply with the DSB ruling with r espect to Section 211 of the Omnibus Appropriation 
Act of 1998? 
126. The representative of Japan
 stated that 2004 marked the 150th anniversary of the first treaty 
signed between Japan and the United States, which ha d provided market access  to water and wood and 
accorded MFN treatment to United States vessels.  Th at had been the first of a long series of trade 
agreements signed by the two sides, both bilateral and multilateral, which had favoured the opening of 
Japan's market. 
127. The United States was the largest trading natio n and the predominant economic force in the 
world.  Japan highly appreciated  that the United States had been assuming a pivotal role in the 
international economic system, committed to main taining and strengthening a free and open market 
economy, as well as to taking the lead on rule-making and establishing a rule of law for world trade.  
Without such leadership, the world would not have b een able to benefit from the prosperity that it had 
been enjoying over the past decad es and, in Japan's case, over the p ast 150 years.  The current U.S. 
Administration was taking active leadership in strengthening the rules-based multilateral trading 
system, which the WTO embodied.  Japan looked forwar d to working closely with the United States to 
bring the DDA negotiations to a timely and successful  conclusion.  Japan's believed that, while much 
work needed to be done in th is round on market access issues, th e rules aspect of the multilateral 
trading system was equally important.  Japan w as pleased that the United States had been firm on 
supporting the rules negotiations a nd looked forward to seeing initiatives by the United States in this 
area in the days ahead. 
128. In recent months, many countries had been taking a serious look at, if not actually negotiating, 
FTAs.  The United States was no exception.  It w as vigorously pursuing bilateral and regional FTAs.  
The ongoing FTAA negotiations and the new FTAs w ith Singapore and Chile, which were entering 
into force, were just some examples.  Japan shared  with the United States the view that FTAs could 
complement the multilateral trading system.  Ho wever, while accepting the basic notion that 
promoting FTAs and RTAs could complement the multilateral efforts, depe nding upon the way it was 
put into practice, this exercise could create unwarrant ed, though unintentional, side effects that  could 
negatively affect the WTO and particularly the DDA.   Thus, Japan welcomed the opportunity to better 
appreciate, not only the U.S. policies in this ar ea, but also its assessment on how the active pursuit of 
FTAs/RTAs would reinforce the multilateral trading system. 
129. According to an announcement by the United States  administration, real GDP growth rate in 
the third quarter of 2003 had reached 8. 2%, the highest level recorded over 191/2 years.  This was 
welcome, although the so-called "twin deficits", the fiscal and current account deficits, persisted.  The 
U.S. economy was showing a robust recovery through the effect of tax reductions and a stimulative 
monetary policy.  Japan hoped that the United States would get back on the track of sustained growth, 
while avoiding the twin deficits that could negativ ely affect this process, through appropriate fiscal 
and monetary measures.  WT/TPR/M/126 
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130. The prompt and proper implementation of the r ecommendations and rulings of the DSB were 
critical for the credibility of the WTO dispute se ttlement system.  Japan welcomed the announcement 
by the United States of the complete and immediat e abolition of its safeguard measures on the imports 
of certain steel products, made in December 200 3.  However, regarding both the anti-dumping 
investigations on certain hot-rolled steel pr oducts and the Byrd Amendment, the WTO 
recommendations had not been implemented with in the reasonable period of time accorded.  
Concerning the Anti-Dumping Act of 1916, foreign,  including Japanese enterprises had continued to 
be forced to pay the cost of large legal fees in th e relevant litigation brought on under this Act, despite 
the recommendations of the DSB in August 2001.  Japan called on the United States to rectify this 
situation as soon as possible.  Prompt action would greatly contribute to the credibility of the WTO 
dispute settlement system.  In this respect, Japan to ok note of the reference made to this issue in the 
statement by Ambassador Deily, at the start of the session. 
131. As one of the largest importers of U.S. agricultural products, Japan had a strong interest in 
U.S. agricultural policy.  Japan was concerned by the counter-cyclical payments institutionalized in 
the Farm Security and Rural Investment Act in 2 002.  The measure seemed to go counter to the notion 
in paragraph 13 of the Doha Ministerial Declarati on, which called for substa ntial reductions in trade-
distorting domestic support. 
132. Japan shared the common objective of fight ing terrorism and understood that security 
measures were necessary under the current requirement  to enhance U.S. national security.  However, 
since these trade-related measures greatly affected  the world economy, he encouraged the U.S. 
authorities to ensure that such measures did not gi ve rise to any negative effects world-wide on the 
active and smooth economic intercha nge.  Specifically, he referred to the anti-terrorism measures 
affecting distribution, such as the requirement to  present cargo information prior to departure, for 
which the final draft rule had been recently ann ounced, and the system for regulating food shipments 
based on the Bioterrorism Act.  Japan believed that such laws and legislati on should be operated in a 
manner that did not prevent the swiftness, smoothness and effectiveness of the flow of goods.  Also, 
unencumbered movement of persons was the basis for steady trade a nd investment.  In this respect, the 
reinforcement of U.S. immigration controls had a direct and serious impact on a large number of 
foreigners intending to conduct ec onomic activities in the United States.  Japan hoped that when 
implementing such measures, the United States would fulfil its responsibilities of being the main player in free trade. 
133. Another area of traditional concern on the part of Japan related to a number of unilateral 
measures stipulated in the U.S. Trade and Comp etitiveness Act, such as Section 301 of the Act, 
Special 301 and, in the field of telecommunications, Section 1377 of the Omnibus Trade and Competitive Act of 1988.  Japan strongly hoped that  the U.S. Government would implement such 
measures in a manner consistent  with the WTO agreements. 
134. The representative of Switzerland
 noted that trade flows between Switzerland and the 
United States had increased steadily over the y ears.  The United States had become Switzerland's 
second largest export market with 10.6 % of overall e xports in 2003.  The United States was also the 
most important non-European supplier of goods to Sw itzerland with 4.3 % of overall imports in 2003.  
The United States was the most important destinatio n of Swiss foreign direct investment, accounting 
for one quarter of the total Swiss stock. As the si xth largest foreign investor in the United States, 
Switzerland held very close ties with the U.S. economy. 
135. The present TPR was taking place in an improving economic environment.  Economic growth 
in the United States had picked up after the 2001 recession.  Counter-cyclical policies, including strong public spending and historically low interest rates, had contributed significantly to the present recovery.  However, previous fiscal and current account imbalances had been exacerbated.  Although WT/TPR/M/126 
Page 30  
 
strong capital inflows into the United States had helped sustain the twin deficits so far, the U.S. dollar 
had continuously depreciated towards other major currencies in recent months.  A correction of the 
deficits would be necessary in the near future  to avoid strong exchange rate distortions, inter alia , 
endangering the current recovery on the way in par ticular in Europe, Japan, and several parts of the 
developing world.  
136. Switzerland fully understo od and shared the United States' quest  to enhance the security of its 
territory under the threat of terrorist actions.  At  the same time, Switzerland urged the United States to 
consider and minimize the trade impact of the measures taken since the last TPR.  Onerous requirements under statutes such as the Public Hea lth Security and Bioterrorism Preparedness and 
Response Act of 2002, the Container Security Initiative, and new travel requirements to the 
United States, coupled with the problematic handli ng of confidential data, were taking a cumulative 
toll on economic actors, both in the United States and abroad.  The issue should be taken very seriously.  Efforts to increase homeland security shou ld not unduly impair the smoothness of the flow 
of goods.  Switzerland was convinced that econo mic openness was a major element in ensuring 
healthy economic growth and a participative world trad e order.  It was also one of the tools available 
in the fight against international insecurity and so me of its key underlying factors such as poverty, 
underdevelopment, and inequality.  
137. The United States had put a strong emphasis recently on the conclusion of trade agreements at 
the bilateral and regional levels.  Such agreements were useful to pave the way toward future 
liberalization at the multilateral level, but Switzer land called upon the United States not to reduce the 
efforts and resources that it devoted to multilateral tr ade negotiations.  In this respect, Switzerland 
welcomed the recent expression of commitment by th e United States to the multilateral approach.  
Despite the present difficulties, the successful conclusion of the Doha  Development Round was 
crucial.  Only multilateral liberalization could lead to the participation of all nations in sustained 
economic development and thereby increased international stability. 
138. A large number of trade disputes were brought against the United States under the Dispute 
Settlement Understanding, particularly  with regard to U.S. trade remedy measures.  Given the adverse 
impact of such measures on international trade, Switzerland welcomed the clear findings in the panel 
and Appellate Body reports in the recent steel sa feguard case.  Such findings should be viewed as 
occasions to critically review the underlying trade re medy laws and their application.  Switzerland 
underlined the importance it attached to full comp liance with DSB recommendations, and noted with 
satisfaction the repeal by the United States of the steel safeguards that had been found inconsistent 
with WTO obligations. 
139. Switzerland was fully confident that the United States would assume its leadership and its 
systemic responsibilities in the multilateral trade syst em by keeping its market s open to international 
trade and investment, and by continuing to play a major constructive role in the Doha Development 
Round negotiations. 
140. The representative of Brazil
 noted the crucial role played by  the United States in the global 
economy and the multilateral trading system.  It was the world's largest importer, a key supplier of 
goods and services, a major magnet for global savings  and an international source of capital and 
technology.  The stability of international trade flows and even the growth of the world economy 
depended, to a significant extent, on the United States.  The United States was Brazil's single most important trading partner, accounting for about a fifth of its total foreign trade.  The United States was 
also a main source of foreign direct investment in Brazil. 
141. The United States maintained a generally open and transparent trade regime.  It also retained, 
however, an array of tariff and non-tariff barriers that disproportionately affected sectors of export  WT/TPR/M/126 
 Page 31 
 
 
interest for developing countries, such as agriculture, textiles, steel, and footwear.  This reduced the 
potential role of international trade as a tool to  foster economic and social development and the 
integration of developing countries in the world economy. 
142. The average tariff on agricultural products in  2002 had been nearly twice as high as the 
average of MFN tariffs.  About 7% of tariff lines had rates exceeding 15%;  some ranged from 50% to 
350%, like tobacco, peanuts, dairy pro ducts, sugar, and certain footwear.  Products of great interest for 
Brazil were affected by these tariff peaks:   in 200 2, the tariff on soybean oil had been 19.1%;  tariffs 
on textiles and clothing had varied from 15% to 30%;  the ad valorem  equivalents for frozen orange 
juice and for raw sugar had been 52% and 234%.  Brazil was among the countries that suffer most from this "selective protectionism".  Contrary to some perceptions, the average Brazilian tariff for the 
top 20 U.S. exports to the world in 2002 was 11.54%, while the average U.S. tariff on Brazil's top 20 
export products to the world was 44.4%.  There clearly was an imbalance. 
143. Agricultural subsidies were another disturbing f eature of U.S. trade policy, for Brazil and for 
the many developing countries that depended on farm  exports.  It was estimated that soybeans had 
received US$10.9 billion in subsidies in the pe riod 1998-2002 and that corn producers had received 
US$34.5 billion between 1995-2002.  Cotton, subsidi es, at US$4 billion in 2001-02, had exceeded the 
total value of production in the United States. 
144. Since the last U.S. Trade Policy Review, in 200 1, the extent of this selective protectionism 
had increased.  The Farm Security and Rural Investment Act of 2002 involved subsidies estimated at more than US$20 billion a year for the agriculture sect or.  Moreover, there had been a noticeable shift 
towards more trade-distorting subsidies.  This w as clearly inconsistent with the express commitments 
of WTO Members, reinforced at Doha in November  2001, to move towards less trade-distorting forms 
of support.  The Brazilian Confederation of Agricu ltural Producers estimated Brazil's losses with the 
2002 Farm Bill at US$2.4 billion a year.  In this c ontext, the Secretariat's assessment of increased 
liberalization should be taken with a grain of salt. 
145. The extensive recourse by the United St ates to anti-dumping and countervailing 
investigations, affecting mainly the steel sector, ha d continued to generate uncertainty for foreign 
exporters and had been particularly  damaging to the Brazilian industry.  In the WTO, Brazil and other 
trading partners had increasingly questioned the rules and methods used by the United States concerning anti-dumping and countervailing measures, in cluding the continued application of the Byrd 
Amendment.  According to estimates by the Brazi lian Embassy in Washington, the losses derived 
from the imposition of anti-dumping and countervailing duties by the United States in the period 
1991-2001 had amounted to US$1.8 billion.  Another pe tition had been filed recently, this time against 
shrimp imports from Brazil and other countries. 
146. In recent years, security considerations ha d become an essential component of trade and 
investment policy in the United States.  The Biote rrorism Act of 2002, for example, required the 
registration of most food manufacturing and handlin g facilities and prior notice of all food shipments 
to the United States.  It was important to ensure  that these new U.S. security-related policies and 
practices did not become trade or investment barriers.  Whilst the U.S. trade regime remained relatively open, it still presented significant barriers, particularly to developing country exporters.  
Addressing these would be to the benefit of the multilateral trading system. 
147. Brazil continued to follow with interest internal  developments in the United States with regard 
to trade policy and trusted that the U.S. Governme nt would retain its commitment to the multilateral 
trading system and exercise its leadership in the fait hful implementation of the Doha mandate.  In this 
Brazil appreciated the recent initiative presented by USTR Robert Zoellick.  Brazil had submitted 
written questions to the United States delegation on  several issues, including agriculture, customs WT/TPR/M/126 
Page 32  
 
procedures, tariffs and preferential agreements , technical standards, subsidies, government 
procurement, intellectual property, anti-dumping and countervailing duties, safeguard measures, and 
services, and looked forward to the replies. 
148. The representative of New Zealand
 welcomed the United States' broad commitment to liberal 
conditions for world trade.  The United States ha d demonstrated this commitment through its strong 
support for the broad based and balanced round of rules-based multilateral trade negotiations, as well 
as its support for the continued drive to achieve the APEC Bogor goals, and th e negotiation of bilateral 
and plurilateral free-trade agreements.  New Zealand shared this commitment to liberal world trade 
and valued the opportunity to work with the United States to increase trade liberalization and advance 
more open and transparent trade regimes.  New Zeal and specifically welcomed the recent letter sent by 
Ambassador Zoellick designed to advance negotiations on the Doha Development Agenda, and agreed 
that it was imperative to take full advantage of th e year ahead to significantly advance negotiations. 
149. New Zealand agreed with the United States that  regional and bilateral free-trade agreements 
could also advance the cause of trade liberalization.   The way to do this, in New Zealand's view, was 
to adopt an "open regionalism" appr oach;  to contribute to genuine global liberalization by expanding 
these agreements in an open way to those economi es willing to meet high standards of openness and 
market-orientation.  This was important to create a positive dynamic for greater international liberalization rather than a patchwork of  preferential and exclusive arrangements. 
150. New Zealand was disappointed that direct governme nt payments to U.S. farmers continued to 
play such a prominent role in the U.S. agriculture sector, distorting market practices and reinforcing a 
reliance upon U. S. government outla ys, which were now provided fo r until 2008 under the 2002 Farm 
Bill.  While New Zealand acknowledged that for a variety of factors, including drought, the U.S. 
government support had dropped in 2002, it noted that in  2003 total direct payments had increased to 
almost US$20 billion.  In addition, the 2002 Fa rm Act increased reliance upon price-dependent 
support, thus departing from the objectives of gr adually reducing production-distorting support in 
favour of income supplements as established in th e Federal Agriculture Impr ovement and Reform Act 
of 1996.  New Zealand urged the United States to hol d true to its original stated goals in the WTO 
agricultural negotiations and renew its efforts to  substantively reduce trade-distorting domestic 
subsidies, in as short a timeframe as practicable. 
151. Market access was the flip side to subsidies.  Here, the Secretariat Report noted that tariff 
protection remained inconsistently high on U.S. agri cultural products where the average applied rate 
was nearly 10% compared with 4% for non-agricu ltural products.  New Zealand had particular 
concerns in the area of dairy policies.  The co mplex and prescriptive nature of the regulations 
governing dairy imports;  the high tariffs, small quotas,  complex systems of admission, of tariff, and of 
licensing, the liberal use of export subsidies, and th e generous resort to domestic income support, all 
seemed out of step with the overall trend in Un ited States trade policy towards a more open, 
competitive and market-orientated trading system.  New Zealand had consistently expressed concern 
about U.S. recourse to export subsidies and the Da iry Export Incentive Programme.  These practices 
contributed to depressed dairy prices, substantially  below the prevailing world price.  New Zealand 
continued to put great store in the United States meet ing its WTO obligations on existing dairy trade at 
a time when there were domestic proposals that if implemented would breach those obligations, for 
example on milk protein concentrates. 
152. With its broad commitment to promote global liberalization and to open markets, the 
United States provided valuable leadership in the WTO.  New Zealand was encouraged by the 
Administration's latest initiative, and hoped that th e United States further enhanced its reputation as a 
proponent of free trade and a liberal international trading system by further addressing the sectors in  WT/TPR/M/126 
 Page 33 
 
 
its own economy that retained high levels of protecti on.  This would not only promote the prosperity 
of its own economy, but would also furthe r advance the Doha Development Agenda. 
153. The representative of Chinese Taipei  congratulated the United States on the success of its 
macroeconomic policy, which had been directed uncompromisingly towards recovering and sustaining 
economic growth.  After the short and shallow rece ssion in 2001, the pace of U.S. economic growth 
had started to accelerate again in 2003 and there were  positive signs that the current relatively strong 
rate of growth could be sustained into 2004.  As the United States was the world's largest single importer and the main engine of gr owth, this would greatly benefit its  trading partners and the global 
economy alike.  His delegation wished to register their admiration for U.S. trade policy over the period 
under review.  It had not only encouraged further liberalization;  it had also remained steadfast in its 
support of the rules-based multilateral tradi ng system, both before and after Cancun. 
154. In the meantime, as another pillar of its tr ade policy-making, the United States had pursued 
several regional and bilateral initiatives to promote free trade.  Chinese Taipei  shared the U.S. view 
that those initiatives could be precursors of initiatives in  the multilateral trading system.  In light of the 
long-standing and important economic ties between Ch inese Taipei and the United States, reflected in 
the size of their two-way trade and investment flow s, his delegation looked forward to these initiatives 
being further pursued by the United States in the Asia-Pacific region, and with Chinese Taipei in 
particular. 
155. Chinese Taipei was the United States' eighth larg est trading partner, while the United States 
was Chinese Taipei's largest trading partner.  In 2002, the value of two-way trade had reached 
US$45 billion.  This represented 18.5% of Chinese Taip ei's total foreign trade.  Even though Chinese 
Taipei had enjoyed a trade surplus with the United States over the past few years, there were still 
many opportunities for further trade and investment in  areas of particular interest to U.S. companies, 
such as telecommunications, environm ental protection, agriculture, and fisheries.  It was important, 
therefore, to continue the bilateral dialogue and main tain a close, mutually beneficial relationship in 
the years ahead. 
156. His delegation admired the U.S. trade regime, based on values of transparency, competition, 
and respect for the rule of law.  Chinese Taipei  also acknowledged the United States' commitment to 
and extremely active role within the WTO.  Howeve r, a few aspects of U.S. trade policy remained a 
source of some concern.  The first related to so me of the new customs procedures.  Chinese Taipei 
recognized and sympathized with the need for secur ity considerations as a component of U.S. trade 
and investment policy, especially since 11 Septem ber 2001.  Chinese Taipei wished to signal its 
concern that the need to extend border measures fo r security purposes would not result in a too heavy 
extra burden being placed on foreign exporters.  Th e second area of concern centred on the active use 
of contingency measures by the United States.  Chinese Taipei had noticed from the Secretariat Report that all the cases in which safeguard measures ha d been applied by the United States since 1998 had 
been challenged in the WTO.  Bearing in mind the repeated DSB rulings, it would be interesting to 
hear whether the United States envi saged any future improvements in its procedures that might help 
reduce the feeling of uncertainty among foreign export ers.  The third issue related to U.S. monitoring 
of foreign compliance with intellectual property ag reements through Special 301 investigations.  In 
2003, the USTR had placed 11 Members, including Chinese Taipei, on its Priority Watch List.  
Bearing in mind the wider and potentially damaging imp lications that identification on this list could 
have for the international image of the countries c oncerned, his delegation asked the United States to 
ensure the greatest possible care in  the decision-making process.  Rather than relying solely on 
statistics of counterfeit products seized by U.S. cu stoms, Chinese Taipei enc ouraged the United States 
to take other factors into account, such as a country 's efforts to achieve TRIPS minimum standards, 
crack down on piracy, and establish effective enforcement. WT/TPR/M/126 
Page 34  
 
157. Chinese Taipei welcomed the recent announcemen t by the United States that it planned to 
adopt a softer approach to trade negotiations, and was also very pleased to see the United States 
actively encouraging all Members to re-engage in the Doha round negotiations so that real progress 
could be made by the end of this year.  Chinese Taip ei was ready and willing to play an active role in 
support of this objective.  
158. The representative of Chile
 noted that the United States was an important trading partner for 
her country.  It was the main destination for Chilean  exports and Chile's main source of imports.  U.S. 
firms were active investors in Chile.  The coming in to force of the FTA between Chile and the United 
States on 1 January 2004 represented a new stage in the dynamic bilateral relationship between the 
two countries, as well as a challenge for Chilean export firms in particular and the Chilean economy in 
general.  The agreement covered trade in goods, services, investme nt, government procurement, and 
intellectual property.  It also included chapters on the environment and labour issues, which were in 
accordance with Chilean legislation,  and Chile's sovereign capacity to establish standards, but subject 
to monitoring and enforcement.  Chile believed that  the agreement would result in enhanced market 
access for its goods and services, in the diversificat ion and enhanced value added of its exports, as 
well in clear and permanent bilateral trade and investment rules, and that it would stimulate and 
diversify U.S. investment in Chile. 
159. The United States had recently given an important si gnal with respect to the priority granted to 
the multilateral trading system and the negotiations  under way.  Chile was ready to engage in 
discussions with respect to the ideas contained in Am bassador Zoellick's letter.  Chile followed with 
interest the negotiations taking place between the United States and several trading partners.  The 
negotiation of bilateral and regional agreements co uld be positive for trade liberalization at the 
multilateral level, provided that trade creation preva iled over trade diversion.  To achieve the latter, 
substantial coverage in all areas, was of the utmost importance. 
160. Chile would continue collaborating regionally w ith the United States and other partners in the 
creation of an FTAA with wide and comprehensive coverage.  Chile truste d that the negotiations 
would be concluded within the agr eed timeframe.  This would show the capacity of countries in the 
Americas to assume engagements and dismantle tariff and non-tariff barriers to trade in goods, 
services, and investment. 
161. Despite progress at the bilateral and regional leve ls, Chile shared with the United States the 
view that the multilateral trading system remained of  central importance.  Some topics of particular 
interest to Chile, such as the improvement of anti-dumping rules and the elimination of export 
subsidies and domestic support to ag riculture could only be negotiate d multilaterally.  Chile took note 
of the engagement of the U.S. Administration to c ontinue working with Congress to reach a solution to 
the pending implementation of WTO rulings in those cases where U.S. measures had been found 
inconsistent with WTO rules. 
162. The representative of Norway  noted that the United States and the European Union had been 
the motors of international trade negotiations in th e GATT, and that the United States had always been 
a key player in both launching and ensuring th e successful outcome of previous rounds of 
negotiations.  Norway registered the leadership shown by the United States along with the European 
Union by tabling the joint proposal ahead of the WTO Ministerial Conference in Cancun.  Norway 
hoped the United States would continue to show lead ership as WTO Members c ontinued their work to 
bring the process of negotiation forward.  The recent letter by USTR Zoellick was interesting in this 
context.  Norway hoped that the focus on bilatera l trade agreements since the Cancun ministerial 
meeting would prove complementary to the commi tment to multilateral trade negotiations in the 
WTO, and not detract focus from contributing to the successful outcome of the Doha Round.  The remarks by Ambassador Deily on this topic, in her introduction, were welcome.  WT/TPR/M/126 
 Page 35 
 
 
163. The United States had a very open economy, with lo w tariffs and generally few restrictions on 
trade in goods and services as well as on foreign in vestment.  This was very commendable, and its 
importance for the world economy could not be over stated.  There were, however, certain aspects of 
U.S. trade policy that continued to give reason fo r concern.  First, the use of trade remedies was 
prevalent, and had been the subject of numerous ch allenges before WTO dispute panels.  Certain types 
of cases repeated themselves, indicating that a more rigorous implementation of WTO-law was needed 
in respect of such measures.  Norway welcomed  the decision by the United States in December 2003 
to terminate all its safeguard measures on steel, whic h the WTO had confirmed were in breach of U.S. 
obligations under the WTO.  However, these measur es had been in place for almost two years, with 
serious consequences to a Norwegian producer, who ha d lost almost all its traditional exports to the 
United States.  That producer would now try to regain  its long-standing position in the U.S. market for 
tin mill products.  Norway expected that this coul d be achieved without any negative impact caused by 
the continuation of the U.S. licensing and monitoring system. 
164. Secondly, the United States was an important ma rket for Norwegian exports of fish and fish 
products.  The main obstacle for further increase in Norwegian exports to the U.S. market was related 
to the anti-dumping and countervailing measures imposed on fresh, whole Norwegian salmon since 
1991.  Norway's assessment was th at there was no basis for the application of anti-dumping and 
countervailing measures on Norwegian salmon.  Norway  would continue to assess this situation in 
light of developments in the WTO and elsewhere. 
165. Thirdly, maritime transport was important for Norway.  Norway appreciated that the U.S. 
market for international maritime transportati on, with some exemptions, was open to foreign 
participants.  Norway would like to see this liberal  policy reflected in the U.S. services offer, and 
encouraged the United States to participate constructi vely in the negotiations on maritime services in 
the GATS negotiations.  Regarding subsidies to the ma ritime sector, Norway noted that the Secretariat 
report stated that the Federal Budget for 2003 an d 2004 had taken a number of steps to reduce 
corporate subsidies for a number of specific progra mmes, including federal subsidies to U.S. shipyards 
and shipbuilding companies to encourage private fina ncing.  Norway was interested in knowing how 
much aid was awarded to shipyards and shipbuildi ng companies, and when the United States intended 
to reduce such aid. 
166. Fourthly, regarding cross-border non-life insu rance, the U.S. regulatory and supervisory 
regime for cross-border insurance services like MAT,  energy, and reinsurance was significantly less 
open than in many other countries, and compared with the U.S. regime for cross-border banking and 
other financial services.  Norway believed that these kinds of larger commercial risk, where the 
professional parties involved were able to assess the risks involved, could and should be subjected to 
lighter regulation.  Cross-border transactions should, subjected to prudential regulation, be allowed to 
occur in the most business-friendly way possible.  No rway therefore urged the United States to further 
open its cross-border insurance market  for larger commercial risks.  
167. The information provided in the Secretaria t Report provided a relatively good, general 
overview of the United States federal subsidy regime.  However, Norway encouraged the 
United States to provide more information about subsid ies and incentives at State level, particularly in 
the larger U.S. states with diversified economies. 
168. The representative of Hungary  stated that the United States was one of Hungary's most 
important trading partners.  In recent decades the bila teral turnover had developed at an even faster 
pace than the otherwise fast growing Hungarian forei gn trade.  With a share of about 5% of Hungarian 
imports, the United States was an important sour ce of high-technology products, technology, and 
equipment.  One third of total foreign direct invest ment in Hungary was provided by U.S. investors.  
Hungarian exports to the United States had also devel oped at a fast pace, in part due to GSP benefits;  WT/TPR/M/126 
Page 36  
 
Hungary could confirm from its own experience that the United States was largel y an open market for 
most products and services. 
169. Although the United States maintained one of the most open and transparent trade and 
investment regimes, some sensitiv e sectors enjoyed special protecti on, and certain measures raised 
questions and concerns in other countries.  Despite the fact that U.S. agriculture was very competitive 
internationally, support had recently increased furthe r under the Farm Act of 2002.  There were also a 
few specific measures governing trade in farm product s that caused concern to Hungarian exporters.  
Of special interest was the level of protection for products containing geogra phical indications.  While 
intellectual property in general enjoyed a high leve l of protection in the United States, there were 
shortcomings with respect to the protection of geogr aphical indications.  Thus, so-called semi-generic 
wine names, including certain Hungarian geographica l names, continued to be used in a manner that 
could mislead consumers;  this had an adverse im pact on the recognition and value of the original 
Hungarian names. 
170. Another issue of concern was the existence of  stringent SPS requirements, which in some 
cases, seemed to have unduly adverse effects on impor ts from other countries.  As the international 
reaction to a single recent BSE case in the United Stat es had shown, the trade effects of SPS measures 
could be devastating for whole sectors.  Hungary trusted that the U.S. authorities concerned would 
apply only the measures necessary and in a manner th at would allow imports of agricultural products 
from countries posing no risks. 
171. Hungary fully understood the particular  situation of the United States since 
11 September 2001, and supported its  fight against terrorism.  While Hungary also understood that 
these circumstances needed measures that might have  an impact on trade, those measures should be 
applied in a manner that minimized the possible adve rse effects on other countries, including Hungary.  
One such recent example was the Bioterrorism Ac t, which contained registration and preshipment 
requirements that seemed to be quite burde nsome for exporters to the United States. 
172. Those specific concerns notwithstanding, Hungary  reaffirmed its overall positive appreciation 
of U.S. trade policies and urged the Administration not to give way to protectionist pressures and to 
maintain the open and transparent nature of the trade regime.  The United States had been a major 
driving force of the multilateral process, and of th e launching of the DDA in 2001.  Hungary had thus 
applauded when the United States had teamed up with the European Union to submit joint proposals for the core market access issues.  These submissions contained important openings from the two major trading powers and Hungary was sorry that the initiatives had been unable to bring about the 
breakthrough hoped for.  Hungary hoped that in sp ite of this set-back, the United States remained 
committed to the multilateral process, because experi ence showed that without its taking a leading 
role, there was no chance for a successful outcome  of any negotiation.  Therefore Hungary was 
heartened by the recent letter of Ambassador  Zoe llick to all WTO Members.  Hungary shared the U.S. 
conviction that decisions to provide a basis for detailed negotiations shoul d be taken as soon as 
possible. 
173. The representative of Colombia
 welcomed the signs of recovery of the U.S. economy.  Taking 
into account the results of the second half of 2003,  Colombia trusted that the recovery would be 
maintained and its impact felt on the rest of the international system.  Colombia valued the U.S. 
decision to maintain its engagement with the multila teral trading system as well as U.S. efforts to 
complement this engagement through regional initiati ves such as the FTAA.  In  this respect, Colombia 
shared the U.S. initial vision of a free-trade zone  among the countries of the Americas, encompassing 
a broad coverage and in-depth liberalization.  At  the multilateral level, Colombia shared the U.S. 
position that market access for goods and services w as the central element of the current round of 
negotiations.  Colombia hoped that these would follow the path defined in the Doha Declaration, so as  WT/TPR/M/126 
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to reduce the disparities between the disciplines  governing market access for agricultural and 
industrial goods.  Colombia welcomed the ideas pr esented by USTR Zoellick to give a push to the 
negotiations;  these ideas were a sign of leadersh ip and would undoubtedly help to reactivate the 
negotiations. 
174. Colombia shared the U.S. view with respect to the three pillars of the agricultural negotiations.  
Noting the importance for Colombia of moving forward on domestic support, the representative 
praised the pragmatic treatment proposed by Ambas sador Zoellick with respect to the timing for the 
elimination of export subsidies and for the Singapore issues.  These ideas could be a starting point for the discussions in 2004.  
175. Colombia underlined the constructive attitude of the United States with respect to the 
implementation of WTO Agreements.  Colombia hope d this attitude would translate into additional 
proposals that resulted in favourable treatment for developing countries such as Colombia.  
176. The United States was Colombia's main trading partner.  The na ture of their bilateral trade 
flows showed the complementarity of the two econom ies.  In 2003, Colombian exports to the United 
States had increased at a monthly rate of 1%.  Th e recent coverage expansion of the system of 
unilateral preferences had fostered exports with  a higher value added to the U.S. market. 
177. Colombia placed great importance on the negot iation of a free-trade agreement with the 
United States as a complement to the support initiati ves of which Colombia had benefited in other 
areas. 
178. The representative of Thailand
, also speaking on behalf of Brunei Darussalam, Indonesia, 
Malaysia, Myanmar, and the Philippines, stated that  the United States was an important destination for 
these countries' exports.  In this regard, they em phasized that the continued robustness of the United 
States economy remained an issue of importance to them, as well as to the global economy.  It was 
important that the United States maintained an open and transparent trade regime, amidst an effective 
system of international trade disciplines and pr ocedures.  The United States should refrain from 
adopting protectionist measures, and instead a dopt liberalization procedures supportive of pro-
competitive policies.  The United States was a very important trading partner, it played an important 
role in the multilateral trading system, its trad e policies had an impact on all WTO Members. 
179. The Secretariat Report had highlighted the significant changes in U.S. import procedures 
resulting from several security-related measures en acted in 2002.  Brunei Darussalam, Indonesia, 
Malaysia, Myanmar, the Philippines, and Thailand were  concerned with respect to the trade disruptive 
effects of the Bioterrorism Act 2002 and the tight  screening procedures/requirements on cargo shipped 
to the United States.  They hoped that these measur es would not become unnecessary barriers to trade. 
180. In 2002, the U.S. average MFN tariff had been  just over 5%, while the average tariff on 
agricultural products had been nearly twice as hi gh.  However, tariffs for certain products had 
exceeded 15%, and some were even in the 50-350% range of in terms of ad valorem  equivalents.  
These tariffs tended to be concentrated in a few sen sitive products, some of which, notably footwear, 
were of particular interest to developing-country ex porters.  There was also tariff escalation in certain 
sectors, including textiles and clothing.  They look forward to the United States further addressing 
tariff peaks and escalation in these sec tors, which were of export inte rest to developing countries.  
They expressed their concern with respect to U.S. im plementation of the ATC so far.  Notwithstanding 
that 2004 was the final year of the transition peri od, developing exporting countries were still faced 
with over 80% of quota restrictions carried over fro m the previous Multi-fibre Arrangement (MFA).  
Despite the backlog of quota restraints, they hope d the United States would remain fully committed to 
abolishing all quantitative restrictions by the end of 2004 as foreseen in the ATC. WT/TPR/M/126 
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181. On steel safeguards, they welcomed the U. S. Government's decision to terminate the 
safeguard action against steel products in December 2003.  However, they were concerned that the 
number of anti-dumping investigations initiated by the United States in 2001 had reached its highest 
level since 1992.  This developm ent continued to generate uncer tainty and could affect  the 
performance of foreign exporters, through the app lication of preliminary duties in most cases.  
Although the number of investigati ons initiated in 2002 had been some what lower than  in preceding 
years, the active use of the measure had continued to generate uncertainty for foreign exporters.  
Despite the fact that some 40-70% of anti-dumping investigations were terminated without final 
measures being taken, trade was disrupted in most if not all cases, largely due to the effects of the investigation.  In this respect, they urged th e United States to be more prudent in initiating 
investigations, including the recent shrimp initiation case.  They also underlined that countervailing 
duties applied in 2002 had affected imports from several ASEAN countries. 
182. Under the Byrd Amendment, the U.S. Government distributed the proceeds from the 
collection of anti-dumping and countervailing duties to  those U.S. companies that had brought forward 
the cases.  Offset payments were paid to cover certain expenses incurred after the imposition of the 
anti-dumping and countervailing duty measures for the production of the good subject to the measures.  
This legislation had effectively been a major motiva tion for U.S. companies to file many anti-dumping 
actions.  In the first annual distribution in Janua ry 2002, almost US$207 million had been distributed, 
mostly to steel producers.  More than US$270 million had been available for di stribution in 2003.  The 
measure had long been found to be in consistent with the WTO, and conc rete steps were yet to be taken 
by the U.S. Administration to repeal it.  In this re gard, they appreciated the United States' intention to 
comply with the rulings and recommendations of the Appellate Body.  They had been informed by the 
United States that it had been working with Cong ress on this issue and would continue to do so.  
However, it was in the interest of their countries'  private sectors to learn from the United States 
whether it intended to double its efforts to rep eal the laws at issue as ruled and recommended. 
183. The representative of Mexico
 noted that over a decade ago, Mexico, the United States, and 
Canada had initiated an ambitious integration process, which had resu lted in the North American Free 
Trade Agreement (NAFTA).  On 1 January, NAFTA had celebrated its 10th anniversary.  The results 
had been clearly positive in terms of employment creation and welfare for both the United States and Mexico.  The United States was currently Mexico's  first trading partner, and Mexico was the 
United States' second trading partner.  Two-way trade flows had increased from US$366 million per 
working day in 1993 to over US$1 billion. 
184. The above notwithstanding, Mexi co's relationship with the United States was not exempt from 
problems, some of which could not be resolved under NAFTA rules.  Mexico wished to draw attention 
to three trade policy issues that had a negative impact on the Mexican economy, and had been criticized multilaterally.  These issue were:  the Biot errorism Act and its im plementing regulations;  
the Farm Act of 2002;  and the Byrd Amendment. 
185. Mexico was worried about the effect of the Bi oterrorism Act and its implementing regulations 
on its bilateral trade flows with the United States.  While acknowledging the right of the United States to adopt measures to protect the health and safety of its citizens, especially after the tragic events of 
11 September 2001, Mexico considered that these me asures should comply with WTO rules.  There 
were always groups or sectors that took advantag e of this kind of opportunity to seek rents.  
Considering this, Mexico deemed indispensable th at the United Sates examine regulatory options or 
alternatives to protect legitimate U.S. interests and, at the same time, prevent the creation of 
unnecessary barriers to international trade as well as the extr aterritorial application of its provisions.  It 
was also necessary for the authorities of both countr ies to continue collaborating to put in place 
mechanisms to allow the mutual recognition of  their inspection as well as customs procedures 
facilitation.  WT/TPR/M/126 
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186. Mexico was also concerned with respect to the subsidies derived from the Farm Act of 2002. 
The possible effects of the Act on agricultural trade we re contrary to a fairer and more market-oriented 
agricultural trade, as sought by WTO Members.  Me xico hoped that the negotiations on agriculture 
would fix this situation, which was adverse for Mexican producers and for those of many other WTO 
Members.  In this respect, he expressed surprise with  respect to the apparent inconsistencies in the 
U.S. position in the negotiations on agriculture.  In November 2001, in Doha, the United States had 
backed an ambitious declaration with respect to these negotiations.  However,  in May 2002, President 
Bush had signed the Farm Act.  In September 2002, the United States had presented a good proposal, 
which had revived hopes, but in  August 2003, it had moved to a less ambitious position, which had 
generated the results known to all.   Ambassador Zoellick's recent lette r had again revived hopes and it 
was to be desired that the position reflected in  that letter would be definitive this time. 
187. Mexico expressed its satisfaction with the measu res implemented by the U.S. Government to 
comply with the DSB ruling with respect to steel.  N onetheless, the lack of U.S. action to comply with 
the DSB rulings in the Byrd Am endment case was of concern.  The United States should show 
leadership with regard to the consolidation and resp ect of the trading system's institutions and rules.  
This would strengthen the multilateral trading syst em and the credibility of the dispute settlement 
mechanism as a fair and effective tool to settle disputes. 
188. The multilateral trading system needed the Unite d States to engage in complying with its 
international commitments, and in participating in  the current round of WTO negotiations.  In this 
respect, Mexico offered its support to all U.S. initia tives aimed at building a fairer, more transparent 
and efficient multilateral trading system. 
189. The representative of Venezuela highlighted the important contribution of the United States to 
the multilateral trading system.  This contributi on corresponded to the size of the U.S. economy, 
which had the capacity of being a growth engine  for countries exporting to the U.S. market.  
Venezuela encouraged the United States to continue with the policies that had helped to overcome the 
recession affecting the U.S. economy since 2001. 
190. Venezuela observed with concern the continue d application of certain non-tariff measures 
affecting market access in the fisheries sector, a very  important sector for Venezuela.  Venezuela had 
also taken note of information provided in the contex t of this Review with respect to the Bioterrorism 
Act, which had entered into force in December 2003.  
191. Bilateral trade flows were the cornerstone of Venezuela's relationship with the United States 
and had benefited both countries.  With respect to  investment, both U.S. and Venezuelan firms had 
invested heavily in the other country.  The United States was the main market for Venezuelan exports, 
mainly petroleum products, which represented 88% of  Venezuela's exports to the United States.  
Venezuela hoped to diversify its exports, as well as to  conclude agreements for joint projects in the 
area of energy and cooperation in agriculture. 
192. Venezuela had raised questions regarding the Bioterrorism Act;  market access for fish 
products;  services;  and certain regulations rega rding genetically modified products.  It looked 
forward to receiving timely replies from the United States. 
193. Venezuela joined the representative of India in  his assessment that it was not pertinent to 
discuss labour issues in the context of the Trad e Policy Review Mechanism.  Discussion on those 
issues belonged in the International Labour Organization. 
194. The representative of Korea  stated that Korea and the United States had maintained a very 
close bilateral relationship.  Since the last Trade Policy Review of the United States in 2001, WT/TPR/M/126 
Page 40  
 
developments in the bilateral economic and trade relationship between Korea and the United States 
had been positive.  Korean exports to the United St ates increased by more than 3.2 % in 2003, to about 
US$31 billion, while U.S. exports to Korea had incr eased by around 8%.  U.S. investment in Korea 
had increased steadily, reaching US$4.5 billion in 2002 , while Korean investment in the United States 
for the same year had been US$1.4 billion.  The vol ume of mutual investment had declined sharply in 
2003, but Korea hoped it would bounce back in 2004. 
195. The United States had long served as the world's single largest importer and a main engine of 
growth for the world economy.  It had continued to s how unflagging leadership in the efforts to create 
a freer global trading environment  through bilatera l, regional, and multilateral trade initiatives, which 
had greatly benefited its trading partners, including Korea, as well as the United States itself. 
196. As the multilateral trade liberalization efforts seemed to be losing momentum following the 
fifth Ministerial Meeting, the U.S. role had become all the more important.  Strong U.S. leadership in 
reigniting and spearheading such efforts would tr emendously help to further promote stability in 
international trade relations a nd rekindle robust growth in the world economy.  Korea highly 
appreciated the leadership role the United States had played in strengthening the multilateral trading 
system, and took note, with great appreciation of th e United States' critical ro le in launching the DDA 
negotiations and setting up the roadmap towards a successful conclusion.  The continued commitment 
of the United States to the WTO was essential to  the success of the DDA negotiations and Korea 
looked forward to working in close cooperation with the United States in this regard. 
197. The representative noted that the United States  had frequently resorted to the use of 
contingency measures.  It had initiated 112 anti-dum ping investigations during 2001-02, a substantial 
increase over the 91 cases during the period 1999-00.   The contingency measures used by the 
United States could have negative impacts not onl y on foreign exporters but also on U.S. domestic 
consumers, and more often than not, domestic producers using the affected products as inputs.  The 
frequent use of those measures reduced the predictab ility of U.S. trade policy and weakened leadership 
in further promoting trade liberalization.  In this context, Korea concurred with the WTO Secretariat's 
view that the frequent use of contingency measures by the United States remained a source of serious 
concerns to its trading partners.  Furthermore, it a ppeared that a few recent rulings in the DSB pointed 
towards the need for the United Stat es to be more cautious with its use of contingency measures.  In 
this regard, the Korean Government welcomed the U.S. Government's termination of the Section 201 
Safeguards on steel imports in December 2003, whic h had contributed to reducing disruption in steel 
trade substantially.  At the same time, Korea ur ged the U.S. Government to implement the WTO 
ruling against the Continued Dumping and Subsidy Offset Act of 2000, also known as the Byrd 
Amendment Act.  
198. Korea wished to comment on the recent heightened importance of security considerations.  
Korea fully understood the U.S. Government's securi ty concerns since 11 September 2001.  However, 
Korea also had concerns that the predictable and transparent business environment of the United States 
might be undermined by these security concerns.  In this regard, Korea wished to convey its hope that 
the U.S. Government weighed-in not only security co ncerns but also economic and trade interests in 
designing and implementing its visa policy, heading off the potential negative impacts on the movement of people. 
199. The United States maintained relatively low tariff levels, which remained at an average of just 
over 5%.  However, despite this, the United States  still maintained relatively high tariffs on certain 
sensitive products.  Korea hoped that the United States would continue its efforts to further reduce the 
tariffs on those products.  WT/TPR/M/126 
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200. The United States showed a tendency to be more  active in promoting bilateral and regional 
free-trade agreements.  There was no doubt that th e FTA system could serve as an efficient way to 
expand trade liberalization, but it could also have si de effects, including trade diversion.  The FTA 
system could create preferential tariff schemes and thereby bring complexity to the tariff structure.  As a result, third countries that did not belong to the system would be disadvantaged.  Korea hoped that 
the United States would continue to focus on trade liberalization through the multilateral forum and to 
play an active, leading role in the ongoing DDA negotiations. 
201. Korea had submitted written questions to the U. S. delegation through the Secretariat and was 
looking forward to receiving the U.S. responses soon.   Korea expressed once again its appreciation for 
the strong U.S. commitment to and leadership role in further strengthening the sound global trading 
regime.  
202. The representative of Turkey
 noted that, as reflected in Secretariat Report, despite facing 
several serious shocks, such as the 11 September terro rist attacks, and the wars in Afghanistan and 
Iraq, the U.S. economy had remained amongst the most  competitive.  Appropriate fiscal and monetary 
policies had played an important role in the quick  recovery and stabilization of the economy and in 
overcoming these shocks.  Despite the depreciating dollar and expansionary macroeconomic policies, 
inflation had been under control due to the larg e gains in productivity.  U.S. macroeconomic 
management had been successful with regard to eco nomic growth and inflation, proving that the U.S. 
economy had the ability to provide positive externaliti es through the trade transmission mechanism.  
However, this had not prevented the resurgence of so me concerns, such as the issue of twin deficits, 
also cited by the Secretariat Report.  It was st rongly hoped that the increasing budget and current 
account deficits would not cause an increase in protec tionism in the United States and would not have 
negative effects on global financial markets. 
203. Turkey appreciated the vital role played by th e United States in the global trading system.  In 
its report, the U.S. Government had stressed its  commitment to further liberalization through the 
WTO-based multilateral trading system, complemented by bilateral and regional free-trade 
agreements.  Among the several re gional initiatives that the U.S. Government was working on, the 
Government of Turkey supported the idea of cr eating a Middle East Free Trade Area and sought 
possible cooperation with the parties involved.  Within  that context, Turkey was also about to sign an 
FTA with Morocco and had submitted a draft FTA proposal to various middle eastern countries including Jordan. 
204. Turkey maintained good economic and commercia l relations with the United States, although 
the volume of bilateral trade was well below its pot ential, totalling around US$6.3 billion in 2002.  For 
the same year, the share of the U.S. market for Tu rkey's total exports was close to 9%, and imports 
from the United States were around 6% of Turkey's  total imports.  Foreign direct investment 
opportunities had not been exploited satisfactorily.  Turkey wished to further deepen its economic, 
commercial, and investment relations with the Un ited States, as well as to achieve better cooperation 
both in the bilateral and multilateral trade areas.  Turkey also appreciated the latest initiative and 
commitments from the United States to revive the Doha  talks.  Turkey believed that, considering the 
current status of global trade talks and the shape of the global economy, it was in all WTO Members' 
interests to resume and advance the Doha Development talks. 
205. The representative of Bulgaria
 noted that, despite a series of difficulties since the last Trade 
Policy Review in 2001, the U.S. economy had remained amongst the world's most competitive.  The 
United States had continued to play a leading ro le in international trade and to maintain a 
macroeconomic policy aimed at fostering growth and preventing the further deterioration of the 
economic climate.  U.S. trade and economic achieve ments served as an example of how to achieve 
economic development and higher standard of living through trade liberalization. WT/TPR/M/126 
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206. Bulgaria and the United States had a traditi onally strong and good b ilateral relationship 
evidenced by the recent 100th anniversary of the fo rmal establishment of diplomatic relations.  
Bilateral cooperation was being deve loped in all spheres.  Trade a nd economic relationships had been 
steadily growing after the conclusion of a bilatera l trade agreement in 1991 , granting MFN treatment 
to Bulgaria, and a bilateral investment promoti on treaty in 1992.  The Un ited States ranked seventh 
among Bulgaria's trading partners and was Bulgar ia's ninth largest investor.  Bulgaria highly 
appreciated U.S. support for its reforms.  As a c ountry making significant efforts to respond to the 
challenges of the global economy and to forthcomi ng EU membership, Bulgaria believed that it would 
continue to be assisted by the United States in  its reforms through improved market access for its 
products, including the provision of GSP schemes.  The representative recalled that at the recently 
held Trade Policy Review of Bulgaria there had been the recommendation that Bulgaria's economic 
reforms be assisted through improved market access from its MFN partners.  Bulgaria was interested, in particular, in increased market  access for its dairy products, which faced country-specific quotas on 
the U.S. market.  Bulgaria had not participated in  the Uruguay Round and its access to the U.S. market 
had been affected negatively by the system of c ountry-specific quotas.  Therefore he believed that a 
closer look by the Secretariat on the trade diverting effects of country-specific quotas would have been 
useful.  Bulgaria would pursue its interest in impr oved access to the markets of its MFN partners also 
in the current negotiations, but was also asking them  for steps of autonomous liberalization – such as 
those which Bulgaria had undertaken, in response to  members' requests and in spite of its economic 
difficulties and trade deficit. 
207. Bulgaria also wished to commend the Unite d States for its strong commitment to the 
multilateral trading system and its active partic ipation in the multilateral trade negotiations. 
208. The representative of Uruguay
 noted the important role played by the United States in the 
adoption of the DDA, and its active participation in  the preparatory process for the Cancun Ministerial 
and its aftermath.  The success of the DDA as well as  its timely conclusion woul d depend in great part 
on the attitude and political vision of the largest tr ading partners in the WTO, as well as on their 
support of the main principles of the multilateral tr ading system.  Uruguay noted with satisfaction the 
renewed engagement of the United States in the negotiations, and thanked the United States for its 
recent initiatives and efforts to give the negotiations a push during 2004. 
209. With respect to regional and hemispheric agre ements, Uruguay also wished to note that the 
number of trade agreements signed as well as the nego tiations initiated with others testified to the 
willingness of the United States to liberalize and strengt hen trade at that level, creating new trade and 
investment opportunities.  Uruguay hoped that such ag reements would continue to be signed with an 
increasing number of countries, and that, in complia nce with WTO principles and rules, they would 
open new opportunities for developing countries. 
210. Uruguay maintained similar views to those of the United States in various issues of the 
international trade agenda, particularly those discu ssed in the WTO.  Uruguay considered that the 
multilateral trading system should be strengthened and that the free trade goal was imperative to 
enhance development.  Uruguay shared with the Un ited States the view that reform of agricultural 
trade and the dismantlement of protectionist polici es was necessary, but differed with respect to the 
way to achieve this.  Uruguay hoped that the United States would continue to work with the Cairns 
Group and all those who shared the goal to reform trade in agricultural products, to finally achieve 
freer and fairer trade in this sector. 
211. Trade flows between Uruguay and the United States  had been characterized in recent years by 
an asymmetry in the value-added content of exports .  Uruguayan exports had been concentrated in a 
few products, mainly agri-industrial goods.  Since 2003, Uruguayan exports to the United States had 
gathered strength, aided by the reopening of the U.S. meat market to exports from Uruguay.  The  WT/TPR/M/126 
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United States was one of the main export markets for Uruguay, representing, almost 8% of exports in 
2002.  The United States was Uruguay's third largest  import supplier, accounting for 8.4% of total 
imports. 
212. With respect to sanitary and phytosanitary meas ures, access for citrus products to the U.S. 
market continued to be a high-priority issue for Uruguay.  Technical and scientific discussion to 
satisfy U.S. phytosanitary requirements had intens ified in 2003.  Uruguay considered it necessary, 
however, to define a timeframe for the Pest Risk Analysis, so as to facilitate trade.  Uruguay would be 
interested to know the technical criteria to be used  for the Pest Risk Analysis.  This would increase 
certainty and put time limits on a process that had dragged for about ten years. 
213. Regarding agricultural policy, OECD data incor porated in the Secretariat Report showed that 
support to U.S. producers declined substantially in  the years prior to 2002, with respect to the 
maximum level attained in 1999, US$56 billion.   Total support to farmers in 2002 had been 
US$90 billion, compared with US$99 billion in 1999.  In May 2002 the Farm Act had been approved, 
to govern production support for the period 2002-07.   This Act had changed the approach and some 
mechanisms related to domestic support, incr easing the use of price-based support, without 
establishing global expenditure ceilings.  These chang es were a subject of concern for Uruguay, since 
they could have a negative impact on some products of  special interest for the country, such as rice.  
Despite its small economic size, Uruguay was one of the seven or eight largest rice exporters in the 
world.  Uruguay exported over 80% of its rice production, which exposed it directly to distortions and changes in world markets.  The main variety exporte d by Uruguay, long grain rice, similar to the best 
U.S. quality rice available in international markets, had suffered a drastic decline in prices in 2002.  
Uruguay considered that U.S. support policies for th is product were directly linked to increased 
production volumes and stocks in the United States.  Through their depressive effect on prices, these 
policies directly affected Uruguay's commercial inte rests, as well as its producers and exporters.  
Uruguay asked whether there had been an evaluation on the part of the U.S. authorities with respect to 
the effect of this support mechanism on rice prices, and whether price forecasts were available for the 
period of duration of the Farm Act.  
214. The representative of Morocco
 highlighted the historical ties between the United States and 
Morocco, the first country to have recognized the Un ited States of America in 1783.  At the bilateral 
trade level, trade relations were encouraging, although there was always room for improvement.  In 
2002, Morocco had been the U.S.' 73rd trading partner, while the Un ited States had been Morocco's 
seventh largest trading partner and the market fo r only 4% of Moroccan exports.  U.S. imports from 
Morocco had declined in 2002, to US$409.6 milli on, from US$428.5 million in 2001.  U.S. exports to 
Morocco had almost doubled, from US$283.5 million in 2001 to US$560.4 million in 2002.  In 2003, 
two-way trade had reached some 7 billion Moroccan dirhams (US$700 million).  To foster bilateral 
cooperation, the U.S. and Moroccan authorities had launched, in January 20 03, negotiations for the 
conclusion on an FTA.  This was expected to be finalized in the coming weeks, and would help to 
encourage trade and foster U.S. investment in Moro cco.  The FTA would have the added advantage of 
consolidating Morocco's economic opening and refo rms, while creating an economic and social 
environment favourable to development, which would benefit operators and businesses from both 
countries.  His delegation was convinced that FTAs, if compliant with the rules and principles of the 
multilateral trading system, played a major role in international trade liberalization, market opening, 
and the encouragement of investment, all fundame ntal factors for a country's development and 
prosperity. 
215. The United States had made considerable e fforts to attain the objectives of the DDA 
programme adopted by the Ministers of WTO Memb ers in November 2001.  His delegation expressed 
appreciation for the U.S. support for the multilateral tr ading system, in particular to the process that 
had led to the historical decision on paragraph 6 of  the Doha Declaration on the TRIPS Agreement and WT/TPR/M/126 
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Public Health.  U.S. leadership on U.S. particip ation had been very active in the different WTO 
bodies.  USTR Robert Zoellick had just sent to Mi nisters of WTO Members a letter with concrete 
proposals aimed at preventing 2004 from becoming a lost year for the WTO negotiations.  His delegation hoped that the initiative would introduce a new dynamic to the DDA and that negotiations  
could be re-engaged in 2004 so as to fu lfil the engagements undertaken in Doha. 
216. Despite an overall trade deficit of over US $480 billion, and increasing trade deficits with 
certain partners, the volume of U.S. trade had incr eased in 2003 and the rate of economic growth had 
been amongst the highest in the world.  This re flected the relevance of a trade policy based on 
institutionalized cooperation, as well as the adheren ce to the fundamental principles guiding the WTO. 
217. Morocco noted with satisfaction the progr essive reduction of MFN tariffs by the 
United States, and that some 30% of tariff lines we re admitted duty free.  However, a number of 
products from developing countries still faced market access difficulties.  His delegation was also satisfied by the U.S. Administration's recent decisi on to terminate the definitive safeguard measures 
applied on certain steel products, which illustrated U. S. commitment toward the orderly functioning of 
the WTO. 
218. The representative of the Czech Republic
 commended the U.S. authorities for its efforts to 
face the challenging economic times.  Thanks to th e authorities' strong and proactive response and the 
economy's efficiency, the 2001 recession had been short-lived and the economy had taken rapidly a recovery path that seemed to be gathering moment um.  However, some downside risks remained, and 
these had been described in the respective reports.  He encouraged the authorities to gear domestic 
policies toward addressing these risks.  The United Stat es was a powerful growth engine for the rest of 
the world, and its contribution to global growth coul d not be underestimated.  Therefore, the interests 
of both the United States and its trading partners  would best be served by healthy U.S. economic 
growth. 
219. The U.S. authorities' attachment to the principl e of liberal trade was important.  Except for a 
few areas, access to the U.S. market remained open and the Government had been reasonably 
successful in resisting pressures to increase import protection.  The United States had continued to 
exercise a leadership role in strengthening the rules- based multilateral trading system.  This role would 
be enhanced by early action to comply with DSB ru lings, by steps to further reduce the existing trade 
barriers, and by ensuring that security-related measures had the least  possible trade restrictive effect.  
The United States' commitment to put the Doha rou nd back on track had been reaffirmed by USTR 
Robert Zoellick's recent call to inject fresh life in the trade talks.  The Czech  Republic welcomed this 
call and stood ready to work closely with the Un ited States and other Members, with a view to 
ensuring that 2004 was not a lost year.  
220. U.S. increased participation in regional and b ilateral arrangements highlighted an important 
systemic question regarding the relationship betwee n trade liberalization at the global and regional 
levels.  While these arrangements  could have a positive effect on world trade, provided GATT and 
GATS rules were observed, the Czech Republic hoped th at the U.S. commitment to the primacy of the 
multilateral trading system remained unchanged and that any free-trade initiatives were intended to 
complement, rather than substitute fo r, multilateral efforts in the WTO. 
221. The United States had long been one of the major trading and economic partners of the 
Czech Republic.  According to Czech statistics, mutu al trade had increased by more than 45% over the 
last five years, from US$l,638 million to more  than US$2,400 million.  The Czech Republic's 
accession to the European Union would offer a range of new benefits to both sides and would 
contribute to the deepening of trade and econom ic relations within a new policy framework.  WT/TPR/M/126 
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222. The representative of Australia  stated that Australia and the United States had shared a record 
for over 50 years since the Bretton Woods accords of promoting free trade.  They shared a vibrant 
economic partnership.  Australia and the United States had worked together, and with other WTO 
Members, for decades in support of the multilateral trading system as a key vehicle for economic growth and development.  The United States was Australia's largest single trade and investment 
partner, taking into account both merchandise trade and services.  The United States was also the 
principal destination for Australian foreign direct  investment and Australia was the eighth largest 
foreign direct investor in the United States.  Thei r close economic relationship was also evidenced by 
the current FTA negotiations, which were enteri ng an important stage.  The FTA which had 
widespread business support in both countries, w ould be comprehensive and with the highest 
standards possible. 
223. Australia-U.S. strong economic links  did not mean that the two countries saw eye to eye on all 
issues.  Australia had a number of concerns about U.S. trade barriers:  many were being addressed in 
the free trade negotiations and others  would continue to be pursued vigorously in the WTO.  The size 
of U.S. farm assistance packages in recent years c oncerned Australia.  Australia urged all the major 
agriculture subsidizers, including the United States , to show greater flexibility and leadership to 
achieve global reform of agriculture in the D oha round.  USTR Zoellick's recent letter to WTO 
Ministers was hopefully a positive step in this regard. 
224. Australia welcomed the ambition evident in the United States' bilateral and regional free-trade 
agenda.  Australia also welcomed the renewed U. S. commitment to moving the Doha negotiations 
forward, and shared the view that the Doha rou nd was most likely to succeed if Members focused on 
the core market access topics of agriculture, goods, and services.  Sustained commitment by the 
United States to free trade even in difficult economic times would continue to be vital to the health of 
the global economy and of the multilateral trading system. 
225. The representative of Mauritius
 stated that, as a major player in the multilateral trading 
system, the United States had consistently advocat ed and practised a free-trade regime and trade 
liberalization:  it was the world's single largest impor ter.  In this respect, Mauritius welcomed the firm 
commitment of the United States to the multilateral tr ading system as re-affirmed in the report of the 
U.S. Government and more recently by the USTR, Mr. Robert Zoellick in his letter addressed to the 
Ministers of WTO Members. 
226. Mauritius and the United States were oceans  apart, geographically speaking, and had 
considerable differences in terms of size and economy.  Yet, Mauritius and the United States had been 
linked by commercial interests since 1794.  Mauritius  enjoyed a dynamic bilateral trade relationship 
with the United States, which represented Mauritius' third largest market.  Mauritius' exports to the 
United States, which comprised mainly textile products, had increased from 4.7 billion Mauritian 
Rupees in 1997 to 10.3 billion in 2002;  they had increased by almost 50% since 1999.  Mauritius also 
exported some 12,000 tons of sugar annua lly under the U.S. Sugar Quota Program. 
227. Mauritius and the United States were exploring wa ys to further the benefits of the existing 
relationship.  Mauritius' authorities were consider ing a U.S. proposal for a Trade and Investment 
Framework Agreement (TIFA).  Mauritius hoped that  the TIFA, once concluded, would create the 
necessary enabling environment for U.S. firms to tap the investment opportunities and incentives it 
offered in a number of areas, including infrastructure projects and services and the Freeport.   This would help those firms establish their regional h eadquarters and, thereby, improve their competitive 
position in the sub-Saharan African market. 
228. Mauritius shared the U.S. view that regional a nd bilateral agreements could act as catalyst for 
multilateral liberalization and serve as an importa nt building block for enhancing the multilateral WT/TPR/M/126 
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trading system.  Mechanisms such as the GSP, the Andean Trade Preference Act, the Caribbean Basin 
Trade Partnership Act and the Africa Growth  and Opportunity Act (AGOA) had enabled many 
developing and least developed countries to effectiv ely export to the U.S. market.  Mauritius benefited 
from the provisions of AGOA, which extended pr oduct coverage under the GSP to sub-Saharan 
African countries and allowed for tariff- and quota-fr ee exports of certain tex tile and apparel products 
to the United States, namely those produced from local fabric or fabric imported from the United 
States.  The AGOA had evolved since its concep tion.  Mauritius felt reassured that the U.S. 
Administration had been sensitive to the cha llenges facing countries like Mauritius, and the 
amendment (AGOA II) in 2002 had been a step in  the right direction.  Under AGOA II, the 
preferential treatment for qualifying products ha d been extended until 2008 and the import cap had 
been doubled to 7%.  The number of beneficiary countries had increased from 36 to 38 and 
amendments had improved the existing rules on te xtiles to the benefit of the poorest and most 
vulnerable countries in Sub Saharan Africa. 
229. However, there were areas where more flexibility would be welcome.  The precept that fabric 
used should be produced either by the United States or be a local product or from other AGOA-
qualified countries was a challenge to the textile industry of Mauritius in terms of the flow of 
investment in that sector.  The end of the Multi -fibre Agreement in early 2005 represented another 
major challenge.  At the U.S.-Sub Saharan Tr ade and Economic Cooperation Forum held in 
Washington in December last year, a number of countries had exchanged views on how to render the 
AGOA more predictable and flexible to  the needs of its trading partners. 
230. In its efforts to diversify the economic base, Mauritius had opened to foreign investment, the 
Mauritius Freeport, geared towards the warehousi ng of goods and their re-export to neighbouring 
countries, and the ICT Industry, which had been pr ovided with the appropria te policy and regulatory 
framework for a Cyber Island Project.  These we re two areas where Mauritius would welcome the 
interest of the United States in terms of investment , expertise and partnership.  Mauritius would also 
be interested to seek U.S. collaboration to enhan ce the sanitary and phytosanitary standards of its 
horticultural products so as to be able to meet U. S. norms and standards.  The feasibility study of a 
project on Flights Safety System and Management for Africa and the Indian Ocean Region had been completed and Mauritius hoped to receive U.S. support for its implementation. 
231. Mauritius encouraged the United States to continue  to provide leadership to ensure stability 
and predictability in internationa l trade relations and in the world economic growth.  Mauritius was 
thankful for the significant resources that the Unit ed States provided to all economic regions and 
groupings in the area of trade-related capacity-build ing initiatives, particularly to sub-Saharan Africa, 
which had been allocated US$133 million.  Mauritius welcomed the support of the U.S.' contribution 
to the WTO for trade-related technical assistance since the launch of the DDA.  Mauritius reiterated its 
commitment and, in its capacity as Coordinator of the WTO African group, the intention of the Group 
to work constructively with the United States fo r a successful conclusion of the Doha Development 
Round. 
232. The representative of El Salvador
 noted that the United States and El Salvador maintained a 
close trade and investment relationship.  El Salv ador's exports to the United States had increased by 
134% between 1995 and 2002.  Remittances from Salva dorians living in the United States were an 
important source of foreign exchange for El Salva dor;  they had helped to keep the current account 
deficit of the balance of payments under control durin g the past few years, to finance consumption and 
to keep national savings stable. 
233. El Salvador acknowledged the importance of th e United States in the world economy and its 
leadership in the current negotiations under the DDA.  El Salvador acknowledged the importance of 
trade in the promotion of sustainable growth and ec onomic development.  In this respect, El Salvador  WT/TPR/M/126 
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reaffirmed its commitment to move forward in th e DDA negotiations so as to benefit all countries, in 
particular developing countries, through enhanced ma rket access, the elimination of export subsidies, 
and the substantial reduction of tr ade-distorting domestic support.  
234. Measures implemented by the United States to liber alize trade in the past few years included 
regional and bilateral initiatives to promote free tr ade, increase market openness and create a climate 
conducive to "competitive liberalization".  Despite  the difficulties since 2001, the U.S. economy had 
succeeded in keeping inflation under control and had continued to support world growth by keeping its 
markets open.  El Salvador shared the United States'  view with respect to the importance of promoting 
a model of freedoms, among which economic freedom, as a means to ensure growth and development.  
El Salvador was pleased by the conclusion, in December 2003, of a free-trade agreement with the 
United States, and with other Cent ral American nations.  This agr eement opened great opportunities to 
El Salvador, including an increase in trade flows, which would be achieved through the elimination of 
barriers to trade, tariff reductions, and a stable an d secure investment climate, among other things.  
Through the implementation of this agreement,  which El Salvador hoped would be as from 
1 January 2005, as well as through the work of the trading partners involved, El Salvador expected to 
achieve an increase in output and employment, a reduction of poverty indices, and an improvement of 
living standards. 
235. The representative of Honduras  noted that his country and the United States maintained close 
commercial ties, and that these had been strengthe ned by the Caribbean Basin Initiative, which had 
been extended by the Caribbean Basin Trade Part nership Act (CBTPA) in 2000.  Honduras and the 
United States had deepened their economic integr ation through the conclusion of the Central 
American Free Trade Agreement in  December 2003.  Honduras hoped that the work to integrate the 
two economies would continue in th e context of the FTAA negotiations. 
236. The representative of Nicaragua  noted the United States' active participation in bilateral and 
regional initiatives to liberalize trade, ensuring th ose initiatives were in co mpliance with WTO rules 
and objectives.  In this respect, the United St ates had concluded negotia tions with Nicaragua, 
El Salvador, Guatemala, and Honduras, for the establis hment of a Central American Free Trade Area.  
This agreement would facilitate b ilateral merchandise trade between the United States and the Central 
American countries, which was currently running at some US$25 billion a year.  Nicaragua trusted 
that Central American exports, some US$12 billion , would increase substantially once the agreement 
came into force.  Signing this agreement had been  an important step to promote free trade at the 
hemispheric level.  Free trade promotion requi red flexibility and political will on the part of 
governments.  In this respect, it was indispensable to keep in mind the WTO mandate to reduce trade 
barriers, thus building a multilateral trading system aimed at reducing poverty, fostering development, 
and increasing economic growth in all Members. 
237. The representative of Jamaica  noted his country's appreciation for the United States' 
continuing efforts to promote a vibrant, open, transp arent, and rules-based multilateral trading system.  
It was well known that the United States was also a keen proponent of  regional and bilateral trade 
initiatives.  Jamaica was a participant in the Free Tr ade Area of the Americas negotiations, and in the 
Caribbean Basin Initiative (CBI), comprising the Caribbean Basin Economic Recovery Act and the 
Caribbean Basin Trade Partnership Act.  Jamaica,  and other regional members, had benefited from 
these important CBI programmes. 
238. The United States was Jamaica's most significant trade and investment partner.  It was 
Jamaica's leading source of imports, main destinati on of exports, primary source of investment and 
remittances, and the main point of origin of to urists for Jamaica's US$1 billion-a-year tourism 
industry.  Against this background,  Jamaica was particularly pleased to see that after a brief recession 
in March to November 2001, the United States economy had shown quite strong and, importantly, WT/TPR/M/126 
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continuing recovery.  The strong recovery of trade in particular was welcome, although the emergence 
of the so-called twin deficits on the current account and in the fiscal budget, underscored the 
importance of stronger growth in the global economy as a whole.  For this reason, among others, the 
successful conclusion of the Doha Round, and the im petus this would give to the global economy, was 
in the interest of all Members.  However, the benefits to the global economy would not be fully 
realized unless the outcome of the Doha Round t ook full account of the interests of developing 
countries.  Jamaica appreciated the United States' commitment to trade capacity building with the 
objective of assisting developing countries sei ze opportunities and achieve win-win results. 
239. Trade in goods and services accounted for 22% of U.S. GDP, which reflected the 
United States' continuing and growing role as the loco motive of the global economy.  This crucial role 
was being facilitated by, among other factors, low MF N average tariffs and a network of preferential 
schemes in respect of which many developing countri es were beneficiaries.  While Jamaica noted the 
information in the Secretariat Report regarding hi gh tariffs in some areas, tariff escalation, and 
contingency measures, which ge nerated uncertainty among exporters, it seemed evident that the 
United States was committed to the tenets of the ope n, rules-based multilateral trading system and to 
continuing its leading role in the global trading econom y.  In this context, Jamaica joined others in 
urging that every effort be made to ensure th at legitimate security concerns were met through 
measures that had minimal or no adverse impact on trade. 
240. Jamaica was a small, open economy seeking to  enhance its competitiv eness and deepen its 
integration into the regional and global economi es.  This created opportunities but also involved 
difficult adjustments that were in some cases disr uptive in the short to medium term.  Developed 
countries, which had stretched out elements of thei r own adjustment over 50 years or more, and were 
still continuing to do so, would readily appreciate de veloping countries' concerns.  In this context, 
Jamaica was appreciative of the United States expres sed willingness to take account of the concerns of 
small economies at the hemi spheric and global levels. 
241. The representative of Singapore
 stated that the United States had always been one of 
Singapore's most important trading partners.  It was also the world's largest producer and importer, and 
remained a main engine of growth for the worl d economy.  In 2002, the United States was still 
Singapore's second largest trading partner, after Malaysia, with bilateral trade amounting to 
S$62.4 billion.  Total trade in the first 11 months of 2003 amounted to S$59.2 billion, an increase over 
the same period in 2002.  Singapore' s main trade with the United States was in the area of electronics.  
U.S. foreign direct investment stock in Singapor e had totalled S$37.3 billion at the end of 2001, 
making it Singapore's largest foreign investor.  The Un ited States also continued to be an attractive 
investment destination for Singapore companies in manufacturing, real estate and finance.  Singapore 
was the second largest Asian foreign inv estor in the United States, after Japan. 
242. Within the multilateral trading system, the Unit ed States played a key leadership role.  
Singapore commended the United States for its firm comm itment to maintaining an open, transparent, 
and effective rules-based multilateral trading sy stem, and for securing the renewal of its Trade 
Promotion Authority, which was important for U. S. participation in trade negotiations.  This 
commitment by the United States, and the leadership  displayed by it in the WTO, had been crucial in 
launching and keeping the momentum of the DDA ne gotiations, and in upholding the integrity of the 
WTO.  In the key area of agriculture, the U.S.-E U joint paper had signalled the start of actual 
negotiations in this area.  In other key areas of th e DDA, such as market access for industrial goods, 
services, and the development issues, the United States had actively participated, and tabled a series of 
contributions to move the process along.  As a sm all trading country that depended strongly on free 
and open international trade, Singa pore, too, had a keen interest to see the successful and timely 
conclusion of the DDA.  In this regard, Si ngapore welcomed U.S. support and commitment to  WT/TPR/M/126 
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theDDA negotiations and its early conclusion.  In  particular, Singapore welcomed the letter from 
USTR Robert Zoellick to provide new impetus to the DDA negotiations. 
243. The United States had a simple average bound ta riff of 3.6% and had proposed a tariff-free 
world for industrial goods in the context of the DDA.  Its service markets were generally open, and the 
United States was undertaking continuous liberalization and streamlining of the regulatory structure in 
various service sectors.  Singapore welcomed this and shared the view that real and meaningful access 
to all markets worldwide was essential for th e trade and development of all Members. 
244. The United States had also undertaken various efforts to promote regional and bilateral 
economic cooperation, such as within APEC.  Singa pore welcomed and supported the efforts of the 
United States in promoting strong cooperation and dialogue within APEC, including in the areas of 
trade facilitation, investment, and competition.  Su ch cooperative efforts between the United States, 
Singapore and other APEC economies helped to prom ote a more predictable trading environment in 
the APEC context.  These regional efforts w ould complement the multilateral trade process. 
245. The ambitious and comprehensive U.S.-Singa pore Free Trade Agreement (USSFTA) had been 
the first FTA to be concluded between the Unite d States and an Asian country.  The USSFTA was 
jointly notified to the relevant WTO bodies in  December 2003 (via WT/REG161/N/1 and S/C/N/263).  
The FTA, which had entered into force on 1 Janua ry 2004 had served to deepen the bilateral 
relationship, and as an impetus for a deeper U.S.  economic engagement in the ASEAN region.  The 
state-of-the-art provisions contained within th e agreement went beyond WTO commitments:  it 
contained provisions on e-commerce and ICT services,  and tighter protection of intellectual property 
rights.  Singapore looked forward to its forthcomi ng wide-sweeping benefits, and hoped that this FTA 
could serve as a useful template for future FTA s, which in turn, could catalyze global trade 
liberalization efforts. 
246. Singapore was pleased to note that U.S. economic growth in 2004 was expected to accelerate.  
An upturn in real GDP growth was also forecasted.  A robust U.S. economy bode well for Singapore and the rest of the world economy. 
247. The representative of Romania
 stated that the United States was an important partner of 
Romania, with exports totalling US$567 million in the first 11 months of 2003, a 2.7% increase over 
the same period the previous year, and imports reaching US$511 million for the same period, representing a 4.8% increase.  Exports to the Un ited States represented 3.5% of overall Romanian 
exports, which was a significant figure for a single partner but far from the potential of the U.S. 
market.  Of special significance was the stock of U.S. direct investment in Romania, which had 
reached US$701.4 million at the end of November  2003, representing 6.9% of foreign direct 
investment in Romania.  
248. Romania was pleased that, in 2003, the U.S. au thorities had positively completed the review 
of the market-economy status of the country, and officially accepted Romania in the group of market economies, thus recognizing the steady efforts and actions taken by the post-communist governments 
to establish an economy based on market rules.  Ro mania was confident that, as an outcome of this 
process, the treatment for several trade-defence measures still in force against several Romanian 
products would be reviewed, and Ro manian exporters would have the opportunity to benefit from such 
a large market. 
249. The representative of Sri Lanka
 stated that the United States was a very important trading 
partner for Sri Lanka.  Since 1979, the United States had been the single largest buyer of Sri Lanka's 
exports, of which 80% were textiles and garments.  Therefore, developments and changes in the U.S. WT/TPR/M/126 
Page 50  
 
trade policy regime had a critical impact on many WTO Members, particularly trade-dependent countries like Sri Lanka. 
250. The growth of the U.S. economy and its robustness was key for achieving stability in the 
global economy and improving the welfare of the wo rld's citizens.  The stronger the U.S. economic 
recovery, the better it was for the world trading syst em.  Sri Lanka was pleased that the United States 
had kept its markets open even during the slowdown a nd recession in 2001.  This clearly showed that 
the United States had pursued mark et-based solutions to the problem s it faced in the domestic and 
global arenas.  Sri Lanka was confident that the quickening of U.S. economic growth beginning in 
2003 would bring benefits to all those trading part ners who had also relied on market-based solutions. 
251. Sri Lanka was pleased to note continuous commi tment of the United States to keep the 
multilateral trading system intact.  Sri Lanka we lcomed this commitment,  since only rule based 
international trade and multilateralism could ensure e qual benefits to Members.  The leadership role 
that the United States had played in establishing the postwar trading system under the GATT and in 
concluding several rounds of trad e negotiations had to be duly recognized.  Similarly, WTO 
membership looked upon U.S. leadership for a su ccessful and timely conclusion of the DDA.  The 
letter sent by Ambassador Robert Zoellick to Trade Ministers, demonstrated the preparedness of the 
United States to play a constructive leadership ro le to re-invigorate the Doha Round, currently lagging 
behind schedule.  Sri Lanka fully shared the letter' s view that significant gains could be derived by 
focusing on core market access issues, namely ag riculture, NAMA, and services liberalization.  A 
number of useful and constructive proposals had also  been laid down to move the negotiation process 
back on track.  Sri Lanka agreed with most of the proposals tabled by Ambassador Zoellick.  Building 
upon the Cancun outcome and this new initiative, Memb ers should now re-engage in the negotiations.  
Ambassador Zoellick's letter had given hope as it had injected much needed momentum to the round, 
and 2004 would not be a lost year for the WTO.  
252. Sri Lanka was of the view that the global tr ading system under the WTO could not deliver a 
fair outcome unless developing member countries had the technical capacity.  Technical and capacity 
building (TCB) was a pre-requisite for developing c ountries to keep pace with the negotiations in the 
multilateral trading system, and for effective partic ipation.  Many develope d country partners had 
pledged their support to build trad e-related technical capacity when the DDA was launched.  It was 
encouraging that the United States had emerged as the single largest donor country, devoting a significant amount of financial resources through va rious agencies for TCB, totalling US$2.5 billion 
for the period 2000-03.  Furthermore, the U. S. government had provided US$752 million in TCB 
activities in 2003.  Sri Lanka wished to place on record that it had been a direct beneficiary of several 
of the TCB activities and thanked the U.S. delegation.   
253. The United States had also adopted a regional appr oach as an integral part of its trade policy 
based on "competitive liberalization" while largel y relying on multilateral so lutions.  There were 
mixed views on the regional approach to trade lib eralization, which could create an uneven playing 
field.  Trade preferences accorded under certain regional and bilateral ar rangements in one region 
could be at the expense of developing countries in another region.  Therefore, regionalism should be 
pursued consistently with WTO rules.  However, if the multilateral trading system did not move in 
parallel with the pace of global developments, count ries would be compelled to follow the path of 
regionalism to meet these new challenges.  Perhap s this could be the reason that regional initiatives 
were becoming an integral part of the trade policy of many developed countries including the 
United States. 
254. The representative of the Slovak Republic
 noted that the United States remained the world's 
largest single importer and had a transparent and ope n trade regime.  Since 2001, the United States had 
taken further steps to liberalize its trade regi me, on both an MFN and preferential basis.  The  WT/TPR/M/126 
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Slovak Republic had no doubt that the bilateral free- trade agreements concluded by the Government of 
the United States could also contribute to further tr ade liberalization.  However, in some sectors trade 
distortions still existed, for example in agriculture, textiles and clothing, in some services sectors (e.g. 
telecommunications, audiovisual, and professional ser vices) as well as in government procurement.  
255. After a short recession in 2001, the economy of th e United States was geared to growth and 
the pace of expansion had accelerated in 2003.  R ecent U.S. macroeconomic policy had been directed 
towards recovering and sustaining growth, with bene fits to the global economy.  The Slovak Republic 
was pleased that the U.S. economy had continued to support global growth by maintaining its markets 
largely open, although the slowdown might have encouraged demands for import protection and 
government support.  
256. The United States remained supportive of the rules-based multilateral trading system and 
considered the multilateral trading system as the core  of international trade relations.  It played an 
active and important role in the ongoing multilatera l negotiations within the framework of the DDA, 
and had made contributions or proposals on a majori ty of trade topics.  On the other hand, the 
United States had also intensified its work on regi onal and bilateral initiatives.  As of June 2003, the 
United States had concluded three FTAs and was ne gotiating new agreements with several countries. 
257. The Slovak Republic appreciated that 31% of all tariff items entered the United States duty 
free and that the average MFN tariff was at a level of just 5%.  However, certain products received 
protection in the 50-350% range, notably tobacco, pea nuts, certain dairy produc ts, sugar, and certain 
footwear.  High out-of-quota tariffs for products su bject to tariff quotas constituted one of the main 
forms of import protection.  Another form of import protection used by the United States was 
contingency measures.  The active use of an ti-dumping and countervailing duty measures could 
generate uncertainty for foreign exporters.  Also, the application of the WTO Agreement on 
Government Procurement was somewhat restrictive in several areas.  With regard to other measures 
affecting trade, the United States was among the worl d's largest producers, exporters, and importers 
and for this reason domestic support measures, a lthough not targeted at exports, could significantly 
affects trade.  Assistance to domestic producers could take the form of tax exemptions, financial 
outlays, and credit programmes. 
258. The services sector was the largest contributor  to output in the U.S. economy and market 
access in services was generally open, with some exceptions.  In this area, current U.S. practice was considerably more liberal than U.S. commitments in the WTO.  However, restrictions in the areas of 
domestic air transport, in the audiovisual subsector , as well as in professional services affected trade in 
services. 
259. The Slovak Republic and the United States had excellent bilateral relations.  The Slovak 
Republic appreciated the high level of trade a nd economic bilateral cooperation between the two 
countries.  In 2003, Slovak exports to the United States had increased to US$1.3 billion, seven times the level of the previous year.  Imports from the United States had reached US$393.8 million.  The 
United States was the ninth most important foreign investor in the Slovak Republic, with a stock of 
US$375 million.  
260. The representative of Poland
 stated his country's recognition of the essential role of the 
United States in the WTO.  Poland appreciated the fact that the United States considered the 
multilateral trading system as the core of current commi tments in U.S. international trade relations.  Its 
engagement in the process of trade liberalization had always been one of the key points of the trade 
policy agenda of U.S. Administrations.  The most  recent initiative of USTR Zoellick was one of the 
best examples of that, and was especially important  for Poland from the perspective of the coming EU 
enlargement and the ensuing further opening of the Polish market to imports. WT/TPR/M/126 
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261. For many years the United States had been one of Poland's most significant trading partners.  
In 2002, the United States had been Poland's eighth trading partner, its twelfth for exports and its 
eighth with respect to imports.  In the first ten m onths of 2003, the U.S.-Polish bilateral trade turnover 
had reached US$2.4 billion.  Poland's exports to the United States had totalled almost US$1 billion, 
much less than could be expected and hope for, but nevertheless 4% higher than during the same 
period in 2002.  Polish imports from the United Stat es had totalled US$1.5 billion, 4% below the same 
period the previous year.  Poland had a trade defi cit of some US$500 million with the United States in 
the first three quarters of 2003;  this should be  treated as a challenge for business people as well as for 
trade policy makers. 
262. The United States was the third largest foreign di rect investor in Poland, with investments 
totalling US$8.3 billion in 2003;  global foreign dir ect investment was some US$70 billion at end June 
2003.  The bulk of investments was in the manufac turing sector, financial services, and transport and 
communications. 
263. The forthcoming accession of Poland to the European Union should intensify its trade 
relations and closer bilateral contacts with the Un ited States.  As a result of EU accession the average 
level of tariff protection would decrease, and Poland  would open its market to third countries to a 
much larger extent. 
264. The representative of Pakistan
 stated that the United States rema ined one of Pakistan's largest 
trading partners.  Trade exceeded US$2.5 billion.   The United States, being the largest economy, 
remained the engine for world economic growth.  In  this context, his delegation noted with great 
satisfaction and appreciation the U.S. renewed co mmitment to the strengthening of the multilateral 
trading system.  Pakistan expressed his delegati on's full commitment and assured cooperation to the 
United States to achieve the shared purpose of strengthening the global economy and laying the basis for broader prosperity through the multilateral trading system.  In this regard the oft quoted letter from 
Ambassador Zoellick was a positive reflection of the U.S. desire to advance the DDA. 
265. His delegation was also appreciative of the cons tructive and active participation of the U.S. 
delegation in the WTO and the number of proposals it had put forward in various WTO bodies.  
266. With respect to some specific concerns Pakistan had with respect to U.S. trade policy, the U.S. 
visa and sub-federal professional certification requi rements served as undue rest ricted access to the 
U.S. market for foreign professionals.  He enquired about the latest policy towards issuance of visas 
for professionals.  In the same context, the Unite d States had Mutual Recognitition Agreements with 
many developed countries.  To ensure fulfilm ent of its GATS Article IV and Article VII 
commitments, Pakistan wished to know whether the U.S. Government envisaged undertaking such 
MRAs also with developing countries, to effectivel y ensure the increasing participation of developing 
countries and ensure the movement of professionals. 
267. Pakistan believed that the levy of specific duties, with ad valorem  equivalents varying 
between approximately 40% and 232%, were effectively a barrier to trade.  Pakistan hoped that the 
United States would, during the course of the curre nt negotiations, substitute the specific duties by 
ad valorem  ones. 
268. The prevalence of tariff escalation, especially in food, beverages, tobacco, textiles, clothing 
and leather industries, were of much concern to Pakistan.  Pakistan believed that tariff escalation 
negatively impacted exports of such items from de veloping countries.  Pakistan hoped that the United 
States would take due note of this concern and ta ke remedial measures during the course of current 
negotiations.  WT/TPR/M/126 
 Page 53 
 
 
269. His delegation was interested in knowing how many  contingency actions had so far been taken 
by the United States against textiles and clothing e xports from developing countries.  With regard to 
the recently promulgated 24-hour rule and other security measures put in place by the U.S. Government vis-à-vis imported cargo, Pakistan fu lly appreciated the security concerns of the 
United States.  However, the long waiting time for lo aded ships before docking into U.S. ports not 
only led to undue delays and clearances but also adde d to the cost of shipment and spoilage of 
perishable commodities.  Pakistan was interested  in knowing what measures the U.S. Government 
envisaged for streamlining port clearance as a trade facilitative measure. 
270. Regarding the regional and preferential trad ing arrangements which the United States had 
entered into or intended to enter, although Pakist an understood the political and economic fallout of 
such arrangements, the multilateral trading system  remained of paramount importance and it hoped 
that the proliferation of such arrangements would not undermine the collective efforts of the WTO to 
achieve the shared objectives of economic prosperity for every Member. 
271. The representative of Panama
 noted that the multilateral trading system had been strengthened 
by the launch of the DDA with the important partic ipation of the United States.  The United States had 
continued to show leadership with respect to trad e liberalization despite the problems it had faced in 
the last two years, as witnessed by its engagement  in bilateral and regional agreements, its active 
participation in the FTAA negotiations, and by envisaging new bilateral agreement negotiations, 
including with Panama.  All this while maintain ing a very active participation in the multilateral 
trading system. 
272. The United States had been compelled to put in  practice anti-terrorist measures in different 
areas.  Panama seized the opportunity to express its  support to the United States.  These measures had 
been put in place in a transparent manner and info rmation regarding them had been made widely 
available. 
273. The United States had actively participated in the DDA negotiations, bearing in mind its 
partners interests.  This had been reflected in th e U.S.' openness to dialogue as well as in the different 
negotiating proposals, and in partic ular in the special and differential treaty granted to developing 
countries.  In USTR Zoellick's recent letter to WT O Ministers the United States showed once more its 
leadership, and tried to push forward the negotiatio ns.  Panama welcomed that initiative.  President 
Bush had also devoted attention to internationa l trade recently, in the Monterrey Summit of the 
Americas. 
274. Ambassador Deily, in her initial statement, ha d presented statistics showing that the U.S. 
economy was on its way to recovery.  Panama welcomed that statem ent and congratulated the United 
States for its trade and economic achievement. 
275. The representative of Kenya  welcomed the U.S. Government's continued commitment and 
support to the rules-based multilateral trading system, as well as the leadership that the United States 
had shown in economic and tr ade liberalization globally. 
276. As a beneficiary of the AGOA, Kenya noted with  interest that through this unilateral U.S. 
initiative, sub-Saharan African countries had been able  to expand their U.S. market share, covering 
over 1,800 new products eligible for duty-free market access.  Kenya urged the U.S. Government to 
ensure that trade-related technical assistance and capacity building was enhanced and remained an 
integral part of AGOA so as to boost the competitiv eness of exports from sub-Saharan Africa.  Such 
assistance could be targeted towards improving produc tivity and the ability of exporters to meet the 
mandatory U.S. sanitary and phytosanitary requirem ents, which were a source of concern for Kenya. WT/TPR/M/126 
Page 54  
 
277. The representative of Malaysia
 noted that there were still some grey areas in terms of the 
implementation of the Bioterrorism  Act of 2002 and its implementing re gulations.  They included:  the 
enforcement of the regulations, the effectiveness of their implementation, due to the large volume of 
transactions involved;  and the bearing of the cost , if unloading was delayed or if a consignment was 
delayed for further inspection.  The mandatory require ment to appoint an agent had meant extra costs, 
in particular for Malaysian palm oil and pepper ex porters.  With respect to the Bioterrorism Act, 
Malaysia requested the United States to provide in formation on:  section 305, especially on liability 
issues if foreign government agencies acted as agent;  section 306 and section 303, providing 
guidelines on how these regulati ons would be implemented. 
278. On phytosanitary measures, Malaysia was con cerned that pest risk analysis would imply 
additional costs to Malaysian fruit exporters as it wa s a lengthy process, and could take several years 
to complete.  This discouraged Malaysian exports of  tropical fruit to the United States.  Malaysia 
asked the United States to simplify and shorte n the processes involved to facilitate trade. 
279. The agricultural subsidies currently available en couraged U.S. farmers to plant more oilseed 
crops when the market price was low.  The huge 2003 oilseed crop, which could be attributed to this 
government support, had further depressed oilseed pri ces, as well as those of oil and fats.  Malaysia 
considered that U.S. export support progra mmes took markets away from exporting developing 
countries. 
280. On tropical timber, cities such as New York had restricted its use to timber certified by the 
Forest Stewardship Council.  Malaysia considered that this was a discriminatory measures.  If cities 
and local authorities wished to speci fy that tropical timber must be certified, they should have an 
inclusive policy that would accept certified timber from all credible third-party certification schemes.  
In the case of Malaysia, the Malaysian Timber Cer tification Council (MTCC) operated an independent 
certification scheme using third party assessors.  MT CC-certified timber products were now available 
for sale in the international market.  The Dani sh Government had included MTCC as one of the 
accepted certification schemes for tropical timber, a nd Malaysia invited the U.S. cities and local 
authorities concerned to follow suit. 
281. On labelling, the United States mandated that  gloves and medical equipment made from 
natural rubber be labelled with allergy-caution statements, while those made from synthetic rubber 
were exempted from that requirement, even if they  were made under the same method and contained 
similar protective chemicals.  Malaysia consid ered this labelling requirement discriminatory, 
misleading, and lacking justification.  Malaysia wa s also concerned that overly stringent requirements 
were imposed on natural examinati on gloves in terms of tensile strength and elongation compared to 
those imposed on nitrile and PVC gloves.  Tho se requirements affected Malaysian rubber glove 
manufacturers directly, as additional costs had to be incurred to comply with them.  Malaysia 
requested that the same standard be applied on all types of gloves for medical use, irrespective of the 
materials used.  WT/TPR/M/126 
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V. REPLIES FROM THE REPRESENTATIVE  OF THE UNITED STATES AND 
 ADDITIONAL COMMENTS 
(1) ECONOMIC AND INSTITUTIONAL ENVIRONMENT  
(i) Twin deficits 
282. The representative of the United States  noted that Ambassador Chung and a number of 
Members’ written questions expressed concerns about, or made reference to, the U.S. federal budget 
and trade imbalances – the so-called twin deficits .  Also, with reference to U.S. macroeconomic 
policy, and budget and trade imbalances, a number of Members had expressed appreciation for U.S. 
actions in recent years to help sustain U.S. a nd global economic growth.  Since the recent recession, 
the United States had clearly used monetary and fi scal policies to fight recession and promote U.S. 
and global economic growth, even at the expense of increases in the trade defi cit and weakening of the 
budget balance.  Markets had been kept open as we ll, as noted by a number of Members, in recent 
difficult times, even as U.S. manufacturing employmen t declined by some 16%.  She appreciated the 
understanding shown by a number of Members of the context in which the twin deficits had recently 
increased and of underlying U.S. motivations to restore U.S. growth and help stimulate global 
economic expansion in the context of increasingly open global markets. 
283. Turning specifically to the budget deficit, the re cession and weakness of recovery in its early 
phase by themselves would have shifted the U.S. budge t position.  Much of the shift from surplus to 
deficit had also come about as the result of a time ly fiscal response to the weakening of the U.S. 
economy.  Restoration of healthy growth had been  a high economic priority for the United States and 
one which would benefit the global economy as we ll.  The federal budget balance shifted from a 
US$230 billion surplus in 2000 to an actual deficit of US$370 billion in 2003 and an expected deficit 
of about US$500 billion in 2004, a figure likely to somewh at exceed 4% of U.S. GDP.  Deficits of this 
magnitude were obviously a legitimate subject of concern, and the United States fully intended to 
reduce the budget deficit.  Under U.S. Administra tion policies, the deficit was projected to begin 
declining after 2004, to a US$300 billion range for 2005 and 2006.  By 2009, the deficit was expected 
to fall to half its 2004 level, or around 1.7% of GDP.   This was lower than th e average deficit-to-GDP 
ratio over the last four decades.  The ratio of gove rnment debt to GDP would decline over this period 
as well.  This progress, of course, required mainta ining the fundamentals of strong economic growth 
together with spending restraints in the United States. 
284. Turning to the twin deficits, the linkage betwee n trade and budget deficits was not at all clear, 
both according to academic analysis and to recent U.S.  historical experience.  For example, over the 
last seven years, the most significant increases in the U.S. trade deficit occurred during the years of 
fiscal surpluses.  In the mid 1990s, the U.S. goo ds and services trade balance appeared to stabilize 
around 1.5% of U.S. GDP.  In 1997, at US$107 billion, the U.S. trade deficit represented just 1.3% of GDP.  However, in the three years from 1997 to 2000 , the U.S. budget surplu s rose substantially while 
the U.S. trade deficit more than tripled to US$375 billion, with its share of GDP rising from 1.3% to 
3.8%.  A number of factors during this period were  consistent with the sharply rising U.S. trade 
deficit.  The United States provided the market to absorb the bulk of import increases from countries 
involved in the Asian financial crisis and caught in  rapid balance-of-payments adjustment processes.  
U.S. economic growth accelerated further to an aver age annual rate of 4.1% and was more rapid than 
that of many of its trading partners, contributing to greater U.S. demand for imports than foreign 
demand for U.S. exports.  Net capital inflow s to the United States more than doubled, to 
US$456 billion, with foreign direct investment acc ounting for more than two thirds of the total 
increase.  This increase in net capita l inflow also was  consistent w ith corresponding large increases in 
the current account and trade deficits. WT/TPR/M/126 
Page 56  
 
285. Between 2000 and 2002, u nder the impact of the U.S. recession and poor growth conditions in 
many foreign markets, the trade deficit cha nged relatively little, rising from US$375 billion to 
US$418 billion, or from 3.8% to 4.0% of GDP.  With  stronger U.S. economic recovery, however, in 
2003, the goods and services trade deficit rose fro m US$418 billion to an annualized US$506 billion, 
or 4.6% of U.S. GDP.  During the sharp increase in 2003, U.S. imports were rising three times faster 
than exports – clear evidence that U.S. demand gr owth fuelled economic e xpansion around the globe. 
286. This recounting of the past six years in which the U.S. trade deficit had risen from 
US$107 billion to US$506 billion illustr ated how the trade deficit increases reflected far more than the 
budget balance and had supported trad e partners’ balance-of-payments adjustment requirements and 
economic growth.  Also, any correction of trade and current account imbalances would likewise be 
related to many factors other than the budget bala nce, many of which were out of the immediate 
control of the government.  These include changes in relative rates of economic and productivity growth among countries, relative infl ation rates and exchange rates. 
287. One development having a positive effect on the U.S. external deficit would be a 
strengthening of economic growth rates in a numbe r of other Members, especially among the group of 
high-income countries where growth had weakened.  The United States believed that no-one at the 
present time would argue instead for policies to weaken U.S. economic performance in order to 
address the U.S. trade deficit.  It also believed that  further substantial multilateral trade liberalization, 
and its consequent domestic structural adjustments,  could make a significant contribution to enhancing 
global growth – thereby reducing the recent growth  disparities among countries that had contributed 
significantly to the increase in U. S. and global trade imbalances. 
(ii) Free-trade agreements 
288. No doubt prompted by the large number and hi gh visibility of free-trade agreements initiated 
and concluded by the United States in 2002 and 2003, this was a topic of inquiry by the discussant, and a concern raised by most delegations.  As all WTO Members except Mongolia currently 
participated in, or were actively negotiating prefer ential trading arrangements, she understood that the 
concern of other Members was not with U.S.  participation in free-trade agreements per se .  Rather, 
Members were seeking assurance that these regional and bilateral agreements were not viewed by the 
United States as a substitute for multilateral liberaliza tion and that its agreemen ts would be consistent 
with WTO rules. 
289. The United States did not see FTAs as a substitute fo r multilateral liberalization, but rather as 
a complement to it.  She agreed with others that  the best way to ensure that FTAs were building 
blocks rather than stumbling bloc ks to multilateral liberalization w as to negotiate agreements that 
were fully consistent with WTO rules.  For that  reason, the United States ensured that negotiations 
resulted in FTAs with coverage of "substantially all trade."  While there had been much discussion in 
the WTO over the years over the definition of "subst antially all trade," the U.S. standard on trade 
coverage in FTAs was indisputably among the high est.  Moreover, U.S. agreements were fully 
consistent with WTO rules, including those on other restrictions of commerce as well. 
290. The U.S. view was that FTAs could and should accelerate multilateral trade liberalization.  
The United States believed the process of negotia ting FTAs could re-orient the fundamental policy 
stance of participants towards trade liberalization and strengthen administrative and trade capacity.  
FTAs could also serve as laboratories for innovation.  Many of the ideas embodied in the GATT 1947 originated in the reciprocal trad e agreements the United States ente red into between 1934 and 1945.    WT/TPR/M/126 
 Page 57 
 
 
(iii) Dispute settlement 
291. The discussant and a number of delegations ha d expressed interest in U.S. compliance with 
rulings by WTO dispute settlement panels.  Since the creation of the WTO, U.S. measures had been 
found WTO-inconsistent on a number of occasions.  In the large majority of those cases, the United States had brought its measures into full complian ce with the recommendations and rulings of the 
Dispute Settlement Body within the reasonable period of time. At the same time, she recognized that 
implementation remained unresolved in a number of disputes. The U.S. Administration remained 
committed to pursuing efforts to achieving resolution in those disputes and, where statutory changes 
were required to implement DSB rulings, would cont inue to work strenuously with the U.S. Congress 
to obtain the necessary legislation. 
292. The U.S. Administration proposed repeal of th e Byrd Amendment in its budget proposal for 
fiscal year 2004.  Legislation to bring the Act into  conformity with U.S. WTO obligations had been 
introduced in the U.S. Senate.  Work  would contin ue with the Congress to enact legislation, and the 
Administration  would continue to confer with the complaining parties in these disputes, in order to 
reach a mutually satisfactory resolution of this matter.  Similarly, the Administration  would continue 
to work with Congress to achieve further progress on other disputes that Members raised in their 
statements and questions, such as the hot-rolled steel  dispute and the 1916 Act dispute.  Legislation 
that would repeal the 1916 Act was pending before both houses of Congress. 
293. The discussant
 noted that the intense participation of  Members reflected their high level of 
expectation;  the United States was for most their main market as well as a locomotive for growth and 
a leader of the multilateral trading system.  Memb ers wanted the United States to engage actively 
towards success of the DDA, and to  lift the remaining barriers to its markets.  On macroeconomic 
imbalances, he enquired whether th e envisaged tax cuts might not increase deficits further, and 
whether these deficits were not at alarmingly high levels.  Turning to FTAs, he stressed that competitive liberalization could work only if it di d not deviate attention and resources from the 
multilateral process.  On disputes, implementati on was an important systemic issue, and non-
compliance was going to be a central issue at the ne xt DSU meeting.  He called upon the United States 
authorities to work strenuously with Congress to obtain necessary legislation, as well as to institutionalize improvements in this process. 
294. The representative of Japan
 stressed the importance of implementing WTO rules on such 
issues as the Byrd Amendment Anti-Dumping Act of  1916 and anti-dumping investigations on certain 
hot-rolled steel products.  In this connection he stated that three years had gone by since the 1916 AD 
Act had been found WTO inconsistent.  He asked a bout the status of consultations with Congress, and 
what the remaining problems were.  Meanwhile, a Japanese company had been fined in Iowa under 
the 1916 AD Act.  He therefore called upon the United States to work not only with the Congress, but 
also with its judicial branch so that the judiciary would not make decisions based upon WTO-inconsistent legislation. 
295. The representative of the European Union
 also referred to the problem of non-DSB 
compliance as a major credibility issue, and asked the United States to elaborate on any developments 
in the FSC case. 
296. The representative of the United States  said that these issues would be considered by 
Congress when it resumed on 20 January. WT/TPR/M/126 
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(2) T
RADE POLICIES AND MEASURES  
(i) Tariffs, tariff peaks and non- ad valorem  tariffs 
297. The representative of the United States  noted that there had been many comments regarding 
the importance of further liberalization of the U.S. market, and said that the United States was ready to 
negotiate with others in the DDA.  Regarding the fe w remaining bound U.S. industrial tariffs that were 
higher than average U.S. tariffs, and the issues of tariff escalation and non -ad valorem  rates, the U.S. 
schedule did contain specific rates in some areas, reflecting historical factors, preferences by industries that were producing high-value produc ts, product sensitivities and changing interests of 
trading partners in the U.S. market. 
298. However, looking forward rather than backwa rds, the 2002 U.S. (Non Agriculture Market 
Access (NAMA)) proposal was to eliminate all U.S.  tariffs, on every line of non-agricultural goods, if 
others – including developing countries – would undertake a similar degree of liberalization and 
ensure that U.S. exporters could gain access oppor tunities to new markets.  How NAMA collective 
goals would be accomplished  was a subject for further negotiation.  The U.S. NAMA proposal signalled U.S. readiness to definitiv ely address the remaining issues of escalation in the U.S. schedule.  
Tariff escalation would be totally eliminated if ot hers – including developing countries, which also 
had employed escalation extensively – did  the same .  In addition, the United States was willing to 
reduce significantly or eliminate non- ad valorem  rates in these negotiations.   The U.S. proposal for 
NAMA was developed in close consultation with  Congress and the private sector, who believed 
strongly that realizing the market access opportunitie s of the DDA would be the litmus test for success 
for both developed and developing countries. 
(ii) Security measures 
(a) Container Security, 24-Hour Rule and Customs-Trade Partnership 
299. The representative of the United States
 noted that many delegations had raised concerns that 
recently implemented U.S. security procedures might affect adversely the free flow of international 
trade.  She confirmed that President Bush and Secr etary Ridge were sensitive to this issue and fully 
understood the need to work closely with the intern ational trade community to ensure this did not 
happen. 
300. U.S. Customs and Border Protection took a step -by-step approach to the examination and 
screening of arriving international cargo.  It was fully  recognized that the U.S. economy, as well as the 
global economy, could not thrive w ithout the expeditious movement of international trade.  These 
initiatives had been designed to identify and car efully screen high-risk cargo shipments while 
facilitating the expeditious movement of legitimate trade.   To comply with the 24-hour rule, shipment 
specific information was provided electronically to  U.S. Customs and Border Protection 24 hours 
prior to lading on board the importing sea carrier.  Although there was some initial skepticism, this 
requirement, which had been in force almost one fu ll year, had been implemented successfully by the 
international trade community.  The information rece ived via the 24-hour rule requirement enabled the 
electronic screening of international cargo destin ed to the United States during the time it was in 
transit to the foreign port of departure or while it was being prepared for lo ading on board the vessel 
which would transport it to the United States. 
301. The vast majority of cargo, well over than 99% of shipments destined to U.S. markets, was 
determined to be low risk and was laden exped itiously on board the exporting vessel without further 
scrutiny.  These determinations were based upon use of a highly sophisticated, fully automated 
rules-based risk assessment system that quickly identified any poten tially questionable shipments.  In  WT/TPR/M/126 
 Page 59 
 
 
the event that a shipment was determined to be somewhat suspicious, the cargo was screened for the 
presence of weapons of mass destruction or other implements of terror. Again, to eliminate any 
possible delay, this all took place prior to the c ontainer being laden on board the vessel that would 
transport it to the United States.  There had been no instances where a legiti mate shipment had been 
detained and prevented from sailing on board the vessel upon which it was originally scheduled to 
depart the foreign port. 
302. The Container Security Initiative (CSI) was also referred to by a number of delegates.  Every 
year some 200 million sea containers moved among the world’s top seaports. In the United States, nearly 50% of the value of all imports arrived vi a sea container.  In Janua ry 2002, U.S. Customs 
launched the Container Security Initiative to help prevent the global containerized cargo system from 
being exploited by terrorists.  The CSI involved the placing of U.S. officers at the world’s busiest 
seaports to screen, jointly with the host government  Customs service, cargo destined for the United 
States.  Within the Department of Homeland Secu rity, Customs and Border Protection continued to 
implement CSI at major ports around the world.  Ma ny countries already had CSI operational  or had 
signed declarations of principles that would enable  U.S. personnel to be assigned to ports to work 
jointly with Customs officers to id entify and examine, where necessary, high risk containers.  The 
programme was fully reciprocal and all countries wh ere U.S. officers were assigned were welcome to 
send their Customs officers to the United States to wo rk with U.S. Customs and Border Protection to 
screen cargo destined for their countries.  So fa r, both Japan and Canada had stationed Customs 
officers in the United States to do so. 
303. While CSI was a great example of governme nt-to-government cooperation, the Customs 
Trade Partnership Against Terrorism (C-TPAT), w as an excellent example of industry/government 
cooperation.  C-TPAT particip ants, including importers, cust oms house brokers and freight 
forwarders, carriers, warehouse proprietors, port authorities, terminal operators and foreign manufacturers completed a self-assessment of their inte rnal security procedures and agreed to work to 
improve any identified weaknesses.  They also agreed  to share their supply chain security procedures 
with others in their supply chain.  For example, an  importer was encouraged to ensure that the customs 
house brokers and freight forwarders to whom they entrusted their shipments shared their commitment 
to ensuring the security of their sh ipments.  CBP considered the participation of entities involved in 
the international trade supply chain in the C- TPAT programme when assessing the risk associated 
with specific importations. Particip ation in C-TPAT was strictly voluntary. Interestingly, though, 
many involved companies had found that when they examined procedures associated with their 
respective international trade supply chain operati ons for C-TPAT purposes, they identified additional 
opportunities for savings in ar eas such as loss prevention. 
304. The United States had fully engaged in open di alogue on these and other security measures 
with third country Customs services through the mu ltilateral forum provided by the World Customs 
Organization. In addition, U.S. CBP maintained an  ongoing, open dialogue with the international trade 
community through a variety of mechanisms, including the Commercial Operations Advisory 
Committee, to ensure that potential problems or scenarios, that might lead to any delays, were quickly 
identified and addressed.  The United States was  committed to ensuring both the security and 
facilitation of the international trade supply chai n, and appreciated the cooperation received from 
other governments, from many entities in the impor ting and exporting communities, and from other 
international organizations. 
(b) Bioterrorism Act 
305. The bioterrorism Act served a legitimate public  purpose in helping protect residents of the 
United States from the use of the food supply as means of  terrorist attacks.  Its registration procedures 
applied to domestic and foreign f acilities alike.  Registration required little more than provision of WT/TPR/M/126 
Page 60  
 
name, address, emergency contact information, produc t identification, and the name of the individual 
authorized to submit the registration form to the FDA.  This collection of information could be 
submitted electronically or by mail.  The U.S. F ood and Drug Administration made every effort to 
minimize the burden while meeting the requirements of the Act.  It consulted with both domestic and 
foreign stakeholders, including numerous foreign embassies in the United States. 
(iii) Contingency measures 
306. Ambassador Chung and several Members had commented on the U.S. use of measures 
available under the WTO Agreements on Anti-dumpi ng, Subsidies and Countervailing Measures, and 
Safeguards.  Several Members called upon the Unite d States to exercise restraint in launching 
investigations that could lead to the imposition of trade remedies.  As a preliminary matter, the United 
States could not predict and had no control over th e number of petitions filed by private parties from 
year to year.  Further, domestic law provided that  investigations should be  initiated if the petitions 
satisfy statutory requirements.  That said, the numbers of anti-dumping cases initiated during the years covered by this Trade Policy Review, 2002 and 2003,  were significantly lower than the number of 
such cases initiated in 2001.   These variations di d not represent any change in policy by the U.S. 
government, but merely shifts in the number of ade quately supported petitions filed by private parties 
with the Department of Commerce and the Interna tional Trade Commission.  However, if this recent 
decrease in filings reflected a decrease in the use of unfair trade practices, it was indeed welcome. 
307. Trade remedies were imposed where an objectiv e and transparent examination of the facts 
revealed that such a measure wa s warranted under the relevant WTO Agreements and U.S. law.  In 
this regard, a review of the number of U.S. preliminary and final measures imposed as a result of 
initiations was useful.  The Secretariat’s Report not ed that over the review period, no provisional 
measures were taken in almost a quarter of the anti-dumping cases initiated, and in over half of cases 
final measures were taken.  The numbers for c ountervailing duty investigations were similar. 
308. Some might argue that these statistics demonstr ated that some cases should not have been 
initiated, but the complex facts necessary to establis h whether injurious dumping  or subsidizations had 
taken place were established only during the course of a thorough investigation.  The number of cases 
in which measures were not imposed reflected the due process provided to respondents, as well as the 
stringent examination of the facts required of the ITA and ITC before any measures could be imposed.  
The Agreements recognized anti-dum ping and countervailing duties as  legitimate tools to counter 
unfair trade practices.  However, she agreed that th ese measures should not be abused.  In this spirit, 
the strong procedural protections for firms involve d in U.S. anti-dumping and countervailing duty 
proceedings would be maintained.  Some of these  protections well exceeded what was required under 
the Agreements, and the U.S. Administration worked to  ensure that U.S. exporters involved in foreign 
trade remedy actions were afforded similar protections. 
309. Another key aspect of U.S. policy with respect to anti-dumping and countervailing duty 
measures was the use of administrative reviews to en sure that the duties being applied were based on 
recent pricing patterns.  Several Members had also asked about the sunset reviews used by the United 
States under Article 11.3 of the AD Agreement a nd 21.3 of the SCM Agreement to determine 
whether, after five years, a trade remedy measure  continued to be necessary to offset dumping or 
countervailable subsidization and to prevent material  injury.  Such reviews were also subject to 
stringent procedural protections, and the Secretaria t’s Report noted that during the review period 38% 
of the measures subject to sunset review were revoked.  The dispute settlement system had not 
overturned the results of any sunset review that had been challenged.  WT/TPR/M/126 
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310. While  WTO dispute settlement panels had fo und some U.S. anti-dum ping and countervailing 
duty measures to be WTO-inconsistent, in fact th e vast majority of those measures had never even 
been challenged. 
311. The United States had applied safeguard measures in six of its ten safeguards investigations 
under the WTO Safeguards Agreement.  Only one su ch measure, on certain steel products, had been 
applied since the last Trade Policy Review, and ther e had been no investigations initiated during this 
period.  The United States continued to believe that the Agreement on Safeguards played an essential 
role within the WTO framework and remained comm itted to the use of the me chanism in conformity 
with domestic legislation and WTO rules.  While the U.S. measures challenged in the WTO had been 
found inconsistent with Safeguards Agreement requirements, the Dispute Settlement Body had yet to 
find any safeguard measure, by any country, to ha ve been applied consistently with WTO rules. 
312. Only four measures were in place on textile products under the AD, SCM, and Safeguards 
Agreements.  For many exporters these measures impo sed very low rates of duty, and other exporters 
were currently exempt from payment of any duty at all.  The United States had not imposed a new 
measure on textile products under the AD, SCM, and Safeguards Agreements in over a decade.  The 
United States could not predict whether expiry of the MFA would result in the filing of trade remedy 
petitions. 
313. Finally, the United States had also been one of the most active participants in the Rules 
Negotiating Group, where it had proposed for further discussion numerous provisions of the Agreements where clarification and improvement mi ght be possible on ways in which to minimize the 
opportunity for misuse of trade remedy measures while also increasing the effectiveness of those 
remedies.  The United States would continue  its active engagement in this area. 
(iv) SPS measures 
314. Several questions focused on both general a nd specific aspects related to sanitary and 
phytosanitary measures.  All Members were increasing ly confronted with these complex issues arising 
due to disease or health risks associated or belie ved to be associated w ith food and agricultural 
products traded internationally.  The U.S. Depart ment of Agriculture had substantially increased 
staffing and resources to perform and review risk  assessments, and thus in many cases further open 
market access.  Unfortunately, the demand for this specialized work also continued to increase.  In 
order to provide a maximum of information and tran sparency in this process,  for example, the USDA 
now allowed anyone to track on its we b site the requests for pest-risk assessments.  At the same time, 
the United States continued to provide major SPS tec hnical assistance to a large number of developing 
countries. 
315. The discussant
 stated that many participants had e xpressed concerns about the new security 
measures.  He welcomed the U.S. commitment to co llaborate with trading partners so that security 
measures did not impede the flow of legitimate trade. 
(3) SECTORAL POLICIES AND MEASURES  
(i) Agriculture 
316. The representative of the United States  considered that U.S. policy toward agricultural reform 
in the WTO had been consistent, and agricultural reform was the lynchpin of the negotiations.  The 
U.S. negotiating proposal on agriculture called for fundamental reform in all three pillars.  This 
proposal reflected in depth consultations with th e Congress and the agricultural community.  In 
August 2003, the United States had worked with th e EU to bridge the substantial differences in WT/TPR/M/126 
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positions.  The result was not put before Members as a take-it-or-leave-it proposition but rather as a platform on which to build.  While Members had raised  concerns  with the joint text, it nevertheless 
stimulated engagement.  The United States had had,  and would continue to have, a high level of 
ambition for the DDA negotiations on agriculture on a ll three pillars, as Ambassador Zoellick’s letter 
to his counterparts made clear. 
(ii) 2002 Farm Act 
317. Many delegations expressed concern that the Farm  Security and Rural Investment Act of 2002 
(the 2002 Farm Act) increased federal transfers to U.S. farmers, which they believed contrasted in 
approach with U.S. proposals for substantial reduc tions in production-distorting domestic support in 
the Doha Development Agenda.  First, U.S. Ur uguay Round commitments on agriculture would be 
honoured, and the 2002 Farm Act allowed it to meet  these commitments.  Second, the 2002 Farm Act 
did not increase support; the USDA net outlays show ed trade-distorting domestic support trending 
downward; and U.S. farm progra mmes were still oriented toward fewer trade-distorting forms of 
support.  Finally, with full knowle dge and understanding of the potentia l implications for U.S. farm 
policy, U.S. farmers and ranchers had expressed th eir willingness to reform further and liberalize by 
supporting and developing with the Administrati on the U.S. agriculture negotiating proposal. 
(iii) U.S. agriculture notifications to the WTO 
318. A number of delegations had raised concerns th at the United States had been slow to submit 
agriculture notifications to the WTO.  The Un ited States was currently preparing domestic support 
notifications for submission to the WTO Secretariat and would submit them as soon as possible. 
(iv) Market access for agricultural products 
319. Some delegations had pointed to the very lim ited number of U.S. agricultural products where 
producers were afforded substantiv e tariff-based protection, in particular, the sugar and dairy sectors, 
or where non- ad valorem  tariffs or tariff escalation were applied.   In general, U.S. agricultural tariffs 
were low, very low when compar ed to most other WTO Members.  The average bound U.S. tariff was 
12%, while the average foreign tariff was 62%.  No netheless, certain "sensitive" sectors did receive 
tariff protection in excess of the U.S. average.  In these sectors, effective market access opportunity 
was provided through tariff-rate quotas (TRQs).  Th e U.S. administration of agricultural TRQs was 
transparent, fair, and sought to provide the conditions to permit foreign suppliers maximum access to 
U.S. TRQs.  The United States had complied with all of its Uruguay Round commitments regarding 
TRQs and agricultural market access, and stood read y to provide additional market access as all WTO 
Members moved to open their markets upon conclusion of the DDA negotiations.  The United States 
also remained committed to the elimination of tari ff escalation and simplification of tariff application, 
including the elimination of th e Special Agricultural Safeguard. 
(v) Country of origin labelling 
320. The issue of product labelling had been the subj ect of considerable thought and work over the 
past two years in efforts to ensure clarity on the existing rules, as well as discussing options for 
additional understandings in this area.  In the br oadest sense this included both direct product labelling 
as well as product documentation to assure proper produc t designations in the marketplace.  Several 
different questions had been raised in regard to pending U.S. Country of Orig in Labelling regulations.  
At present, only fish and seafood labelling regulatio ns were funded and scheduled for implementation 
in 2004 under this programme, while additional re flection was necessary for the other designated 
products.  This was a complicated issue, and the underlying thrust was how to provide meaningful  WT/TPR/M/126 
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information to the consumer and the product’s r espective production, processing and retail segments, 
while not allowing the costs to exceed the value-added. 
(vi) Textiles 
321. The important, watershed event of the completion of the quota phase-out programme required 
by the Agreement on Textiles and Clothing (ATC) was 11 months away.  Se veral delegations had 
raised questions about the manner in which the United States had implemented its commitments under 
the ATC.  The main concern appeared to be the hard y perennial of the textile debate in Geneva:  why 
had the United States decided to integrate the most sensitive products on 1 January 2005?  The answer 
was the same, the United States never viewed  inte gration as the primary way to liberalize textile 
restraints.  Rather, liberalization was designed to occur as a result of progressively accelerating quota 
growth rates at the beginning of each successive stage of the ATC. 
322. The benefits for exporting countries had been more  than impressive.  U.S. textile imports had 
grown by 122% since the start of the ATC.  This  increase in imports had led to an intense process of 
structural adjustment for the textile and apparel sectors.  Textile employment in 2002, at 557,000 
workers, was 25% below the 1994 level.  Apparel employment in 2002, at 395,600 workers, was 56% 
below the 1994 level.  Textile and apparel employment declined 42% between 1994 and 2002, for a 
total job loss of 697,800.  The United States had continually reaffirmed that it would fully and faithfully implement the ATC as scheduled. 
323. Several delegations also pointed out that U.S. te xtile and apparel tariffs remained high, at an 
average rate of 15%.  Although this was high compar ed to the overall industrial tariff average, it was 
low compared to the rates mainta ined on textile products by many e xporting developing countries.  
The ATC provided for the liberalization of import rest raints for all WTO Members.  The barriers that 
U.S. textile exports continued to face were a sever e disappointment.  This was one of the reasons for 
the U.S. trade imbalance in this sector.  For tho se exporting countries that wanted a reduction of U.S. 
textile tariffs, the DDA provided another opportuni ty to harmonize and/or eliminate textile and 
apparel tariffs and eliminate non-tariff barriers.  Given the sensitivity of these products for a large 
number of WTO Members, progress in this area c ould only be achieved in the context of broad 
participation encompassing key players, both develope d and developing.  This could be facilitated by 
a sectoral approach. 
(vii) Financial services 
324. The United States had received a number of de tailed questions regard ing banking, securities, 
and insurance, had answered many and intended to qui ckly respond to the remaining ones.  In regard 
to questions on the number of foreign banks licen sed in the United States, over 70 foreign bank 
applications had been approved by the Federal Re serve since April  2001.  Those banks had also 
obtained any necessary additional licences at the federa l or state level.  The United States was very 
open to foreign participation in the U.S. banking s ector.  In fact, foreign banks held approximately 
18% of all U.S. banking assets. 
325. In connection with the securities sector, delega tions requested information on U.S. corporate 
governance issues, specifically regarding implementa tion of the Sarbanes-Oxley Act.  The Securities 
and Exchange Commission had reached out aggressively  to foreign regulators and market participants 
to understand more fully how the requirements of the Act related to local law or local stock exchange 
requirements.  Where appropriate, the SEC had made  accommodations for foreign market participants, 
including for audit committee requirements and internal controls reporting. WT/TPR/M/126 
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326. Regarding comments on U.S. state-level regime s, the United States already provided quite 
good access through its current GATS commitments.  In some areas, the states had liberalized further, 
as evidenced in the initial U.S. GATS offer on servi ces.  The United States would continue its active 
outreach to the states for the purpose of the GATS negotiations.  
327. The United States had tabled the possibility of enabling mutual funds in the United States to 
obtain investment advice and portfolio management  services from financial services suppliers located 
outside the United States.  U.S. willingness to pu rsue this issue would depend on whether other 
countries also were interest ed in binding such access. 
328. The representative of Korea
 referred to his delegation's written question about the possibility 
of deducting Section 201 and CVD duties from the constructed export price in the calculation of 
dumping margins.  He asked when the United States  would finalize its position on this very important 
issue, as  increased margins would negate the effe cts of removing the safeguard on steel.  He also 
noted that Korea had requested the suspension of concessions in the Byrd Amendment dispute, and 
asked when the WTO ruling would be implemented. 
329. The representative of China  expressed concern at the U.S. failure to implement the ruling of 
the TMB concerning his country.  In banking, co mplicated approval procedures and requirements 
partly explained why all Chinese applications fo r banking licences bar one were still pending.  He 
awaited the written replies to his delegation's questions on these issues. 
330. The representative of the European Union  thanked the United States for the written responses 
that had been provided and looked forward to receiving the remainder. 
331. The representative of the United States  responded that no specific deadline had been set for 
the decision whether to deduct Section 201 and CVD du ties.  Public consultations had begun on this 
issue, including with Korea.  With respect to th e question on textiles, the United States believed that 
benefits of accession should begin on the day of joining, not at a prior date.  The 100 questions from 
China would be answered as soon as possible.  In conclusion, she said that the TPR process provided a 
unique occasion to pose questions and was very valuable for that reason. 
332. She concluded by noting that, as each Trade Polic y Review tended to demonstrate, there was a 
lot more work to be done to achieve the objectives set out in first the GATT and then the WTO.  Such 
a reminder was particularly timely, since the DDA presented a once in a generation opportunity to 
made a significant advance towards those goals, w ith enormous potential benefits in terms of 
economic growth and development.  The United States was fully committed to working with fellow Members to seize this opportunity.  WT/TPR/M/126 
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VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
333. This seventh Trade Policy Review of the Un ited States has provided a fruitful dialogue 
between the United States and its trading partners.  The high level of participation by Members in the 
Review underlines the key role that the U.S. plays in world trade.  I should like to emphasize that 
Members recognized that the U.S. economy has remained  an engine of global growth and that, in part 
thanks to its general openness, has demonstrated st rong resilience in the face of various shocks since 
2001.  However, although counter-cyclical macr oeconomic policy has promoted growth, many 
Members raised the matter of the su stainability of the twin deficits. 
334. Members acknowledged the unique status of th e United States in the multilateral trading 
system, and were greatly appreciative of the U.S. l eadership in the WTO, of its commitment to trade 
liberalization and to the successful completion of the DDA.  In this context, many Members expressed 
their appreciation for Ambassador Zoellick's recent letter on how the DDA may be moved forward. 
335. Several Members were critical of the U.S. uneven record of compliance with WTO rulings, 
pointing out that this could undermine the credib ility of the DSU.  Members noted the growing 
involvement of the United States in regional trade ag reements, with many considering such initiatives 
supportive of multilateral efforts while others queried  their possible impact on third countries and on 
the multilateral trading system.  A number of develo ping countries praised U.S. unilateral preferences 
and the U.S. contribution to trade capacity building. 
336. Members agreed that the U.S. trade regime is  open and transparent, but many noted that 
market access barriers exist in a few important areas.  Several Members expressed concern about tariff 
peaks, non- ad valorem  duties, tariff escalation, and the U.S. tariff-quota system, particularly in sectors 
such as textiles and clothing of concern to developi ng countries.  Various Members referred to certain 
SPS and environmental measures as unjustified barriers  to trade.  Questions were posed on other 
measures like customs fees, rules of origin, labelling requirements, and trade restrictions.  New U.S. 
security-related measures constituted a major theme of  discussion.  In this respect, concerns were 
expressed regarding compliance costs, and Members urged the United States to implement security 
measures in the least trade-restrictive manner. 
337. The continued active use of contingency measures by the United States was a source of 
concern, and the United States was invited to exer cise restraint in initiating investigations.  While 
satisfaction was expressed for the recent dismantle ment of safeguards on steel products, following a 
WTO ruling, concern was voiced with respect to the lack of progress in rep ealing other legislation 
found to be WTO inconsistent. 
338. Another issue raised was assistance to the agricu lture sector.  Members pointed out that the 
2002 Farm Act was yet to be notified.  They were  concerned about different aspects of the Act, 
including its potential for increased market-distorting support.  Members also questioned the Act's 
compatibility with the aims of the DDA, as well as  the effect of export credit guarantee schemes. 
339. Discussions on market access in services focused  mainly on telecommunications, maritime, 
financial, and professional services, and on movement  of natural persons.  Members encouraged the 
United States to review the Jones Act, and to c onsider tabling an offer on maritime transport.  
Questions were raised with respect to the effect  that visa and qualification recognition requirements 
may have on market access for foreign workers. 
340. I conclude by thanking the U.S. delegation fo r the numerous oral and written responses and 
explanations it provided during the meeting;  we  look forward to receiving answers on outstanding 
questions.  I hope that our discussions in this review will contribute to our ongoing liberalization 
efforts, to the benefit of the United States and the WTO community at large.  And I thank the 
United States for the motor-role it has c ontinued to play in the world economy. 
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