RESTRICTED  
  
WT/TPR/S/382  
12 November 2018  
(18-7116) Page: 1/240 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRET ARIAT  
UNITED STATES 
This report, prepared for the fourteenth Trade Policy Review of the United States, has been drawn 
up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the 
Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement 
Establishing the World Trade Organization), sought clarification from the United States on its t rade 
policies and practices.  
 
Any technical questions arising from this report may be addressed  to Mr. Angelo Silvy 
(tel.: 022 739 5249), Mr. Cato Adrian (tel.: 022 739 5469), Mr. Pierre Latr ille (tel.: 022 739 5266) 
Mr. Usman  Ali Khilji, (tel.:  022 739 69 36), Ms Fatima Chaudhri (tel.:  022 739 6384) . 
 
Document WT/TPR/G/ 382 contains the policy statement submitted by the United States.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on the United States. This report was drafted 
in English.  
  WT/TPR/S/ 382 • United States  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ .....................  11 
1   ECONOMIC ENVIRON MENT  ................................ ................................ .......................  17 
1.1   Main Features of the Economy  ................................ ................................ ...................  17 
1.2   Economic Developments  ................................ ................................ ............................  17 
1.2.1    Fiscal policy  ................................ ................................ ................................ ..........  21 
1.2.2    Monetary policy  ................................ ................................ ................................ ..... 24 
1.2.3    Balance of payments  ................................ ................................ ..............................  24 
1.3   Developments in Trade and Investment  ................................ ................................ ...... 28 
1.3.1    Trends and patterns in merchandise and servi ces trade  ................................ ..............  28 
1.3.2    Trends and patterns in Foreign Direct Investment (FDI)  ................................ .............  31 
2   TRADE AND INVEST MENT REGIMES ................................ ................................ ..........  34 
2.1   General Framework  ................................ ................................ ................................ .. 34 
2.2   Trade Policy Formulation and Objectives  ................................ ................................ ...... 35 
2.2.1    Trade policy objectives  ................................ ................................ ...........................  35 
2.2.2    Trade policy formulation  ................................ ................................ .........................  36 
2.3   Trade Agreements and Arrangements  ................................ ................................ .........  37 
2.3.1    WTO ................................ ................................ ................................ ....................  37 
2.3.2    Regional  and preferential agreements  ................................ ................................ ...... 38 
2.3.2.1    Reciprocal agreements  ................................ ................................ ........................  38 
2.3.2.2    Unilateral preferences  ................................ ................................ ..........................  39 
2.3.2.2.1    Generalized System  of Preferences (GSP)  ................................ ...........................  39 
2.3.2.2.2    The African Growth and Opportunity Act (AGOA)  ................................ ..................  40 
2.3.2.2.3    Caribbean Basin Initiative (CBI)  ................................ ................................ .........  41 
2.3.2.2.4    The Nepal Trade Preference Program (NTPP)  ................................ .......................  41 
2.4   Investment Regime  ................................ ................................ ................................ .. 42 
3   TRADE POLICIES A ND PRACTICES BY MEAS URE ................................ .......................  45 
3.1   Measures Directly Affecting Imports  ................................ ................................ ............  45 
3.1.1    Customs procedures, valuation, and requirements  ................................ .....................  45 
3.1.1.1    Introduction  ................................ ................................ ................................ ....... 45 
3.1.1.2    Single window  ................................ ................................ ................................ .... 45 
3.1.1.3   Other trade facilitation measures  ................................ ................................ ..........  47 
3.1.1.4    Foreign Trade Zones (FTZs)  ................................ ................................ .................  48 
3.1.1.5    Bonded warehouses  ................................ ................................ ............................  49 
3.1.1.6    Customs valuation  ................................ ................................ ..............................  50 
3.1.1.7    Marking requirements  ................................ ................................ ..........................  50 
3.1.2    Rules of origin  ................................ ................................ ................................ ....... 50 
3.1.2.1    Non-preferential  ................................ ................................ ................................ . 50 
3.1.2.2    Preferential  ................................ ................................ ................................ ........  50 
3.1.3    Tariffs  ................................ ................................ ................................ ..................  51 WT/TPR/S/ 382 • United States  
 
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  3.1.3.1    Applied rates  ................................ ................................ ................................ ...... 51 
3.1.3.2    Tariff rate quotas  ................................ ................................ ................................  53 
3.1.4    Other charges affecting imports  ................................ ................................ ...............  53 
3.1.4.1    Customs user fees  ................................ ................................ ..............................  53 
3.1.4.2    Excise taxes  ................................ ................................ ................................ ....... 56 
3.1.5    Import prohibitions, restrictions, and licensing  ................................ ..........................  57 
3.1.5.1    Prohibitions and restrictions  ................................ ................................ .................  57 
3.1.5.2    Import licensing  ................................ ................................ ................................ .. 58 
3.1.5.3    Controls, special procedures, or diplomatic measures  ................................ ..............  58 
3.1.6    Anti-dumping, countervailing, and safeguard measures  ................................ ..............  59 
3.1.6.1    Anti-dumping and countervailing measures  ................................ ............................  59 
3.1.6.1.1    Legal and administrative framework  ................................ ................................ ... 59 
3.1.6.1.1.1    Main laws and regulations  ................................ ................................ ..............  59 
3.1.6.1.1.2    Administrative procedures  ................................ ................................ ..............  62 
3.1.6.1.1.3    Suspension agreements  ................................ ................................ .................  63 
3.1.6.1.1.4    Administrative reviews  ................................ ................................ ...................  64 
3.1.6.1.1.5    Sunset reviews ................................ ................................ ..............................  64 
3.1.6.1.2    Anti-dumping measures  ................................ ................................ ....................  64 
3.1.6.1.3    Countervailing measures  ................................ ................................ ...................  66 
3.1.6.1.4    EAPA investigations  ................................ ................................ ..........................  67 
3.1.6.2    Safeguards  ................................ ................................ ................................ .........  70 
3.1.6.2.1    Global safeguards  ................................ ................................ ............................  70 
3.1.6.2.1.1    Main laws and regulations  ................................ ................................ ..............  70 
3.1.6.2.1.2    Safeguard investigations 2016 -18 ................................ ................................ ... 70 
3.1.7    Other measures affecting imports  ................................ ................................ ............  74 
3.1.7.1    Section 232 investigations  ................................ ................................ ...................  74 
3.1.7.1.1    Legal and administrative framework  ................................ ................................ ... 74 
3.1.7.1.2    Steel investigation  ................................ ................................ ............................  75 
3.1.7.1.3    Aluminium investigation  ................................ ................................ ....................  78 
3.1.7.1.4    Investigation into auto imports  ................................ ................................ ..........  80 
3.1.7.1.5    Investigation into uranium imports  ................................ ................................ ..... 80 
3.1.7.2    Section 301 of the Trade Act of 1974  ................................ ................................ ..... 81 
3.1.7.2.1    Section 301 procedures  ................................ ................................ ....................  81 
3.1.7.2.2    Section 301 determinations  ................................ ................................ ...............  82 
3.1.7.2.3    Section 301 cases  ................................ ................................ ............................  83 
3.1.7.2.3.1    China technology transfer regime  ................................ ................................ .... 83 
3.1.7.2.3.2    EU beef trade  ................................ ................................ ................................  85 
3.2   Measures Directly Affecting Exports  ................................ ................................ ............  85 
3.2.1    Export procedures and requirements  ................................ ................................ ........  85 
3.2.2    Export taxes, charges, and levies  ................................ ................................ .............  85 WT/TPR/S/ 382 • United States  
 
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  3.2.3    Export prohibitions, restrictions, and licensing  ................................ ...........................  85 
3.2.4    Export support and promotion  ................................ ................................ .................  89 
3.2.4.1    Drawback regime  ................................ ................................ ................................  90 
3.2.5    Export finance, insurance, guarantees  ................................ ................................ ...... 91 
3.2.5.1    The Export -Import Bank (EXIM)  ................................ ................................ ............  91 
3.2.5.2    Small Business Administration (SBA) export loan programmes  ................................ . 92 
3.2.5.3    Overseas Private Investment Corporation (OPIC)  ................................ ....................  93 
3.3   Measures Affecting Production and Trade  ................................ ................................ ..... 94 
3.3.1    Incentives  ................................ ................................ ................................ .............  94 
3.3.2    Standards and other technical requirements  ................................ .............................  96 
3.3.3    Sanitary and phytosanitary (SPS) requirements  ................................ .........................  99 
3.3.4    Competition policy  ................................ ................................ ...............................  101 
3.3.4.1    Competition policy framework  ................................ ................................ ............  101 
3.3.4.2    Enforcement developments during the review period  ................................ .............  102 
3.3.4.3    Policy developments  ................................ ................................ ..........................  105 
3.3.4.4    Legislative and institutional framework developments  ................................ ............  106 
3.3.4.5    Sectoral coverage  ................................ ................................ .............................  107 
3.3.5    State trading, state -owned enterprises, and privatizat ion ................................ .........  108 
3.3.6    Government procurement  ................................ ................................ .....................  110 
3.3.6.1    Institutional and legal framework  ................................ ................................ ........  110 
3.3.6.2    U.S. government procurement  market  ................................ ................................ . 114 
3.3.6.3    Market access conditions  ................................ ................................ ...................  115 
3.3.6.4    Bidding procedures  ................................ ................................ ...........................  117 
3.3.6.5    Set-asides and preferences  ................................ ................................ ................  117 
3.3.6.6    Enforcement  ................................ ................................ ................................ ..... 119 
3.3.7    Intellectual property rights  ................................ ................................ ....................  120 
3.3.7.1    Overview  ................................ ................................ ................................ .........  120 
3.3.7.2    General regulatory framework  ................................ ................................ ............  121 
3.3.7.3    Patents  ................................ ................................ ................................ ............  123 
3.3.7.4    Industrial designs  ................................ ................................ .............................  126 
3.3.7.5    Trademarks  ................................ ................................ ................................ ...... 127 
3.3.7.6    Geographical indications  ................................ ................................ ....................  129 
3.3.7.7    Trade secret protection  ................................ ................................ ......................  129 
3.3.7.8    Copyright  ................................ ................................ ................................ .........  131 
3.3.7.9    Enforcement  ................................ ................................ ................................ ..... 134 
3.3.7.9.1    Main provisions, institutions and actions ................................ ............................  134 
3.3.7.9.2    Special 301 ................................ ................................ ................................ ... 137 
3.3.7.9.3    Section 337 investigations  ................................ ................................ ...............  138 
3.3.7.9.4    IP and technology transfer  ................................ ................................ ..............  139 
4   TRADE POLICIES B Y SECTOR  ................................ ................................ ..................  141  WT/TPR/S/ 382 • United States  
 
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  4.1   Agriculture  ................................ ................................ ................................ .............  141 
4.1.1    Main features  ................................ ................................ ................................ ...... 141 
4.1.2    Major support programmes  ................................ ................................ ...................  144 
4.1.2.1    General legal framework  ................................ ................................ ....................  144 
4.1.2.2    Price Loss Coverage (PLC)  ................................ ................................ ..................  145 
4.1.2.3    Agricultural Risk Coverage (ARC)  ................................ ................................ ........  145 
4.1.2.4    Marketing Loan Programme  ................................ ................................ ................  146 
4.1.2.5    Crop insurance  ................................ ................................ ................................ . 147 
4.1.2.6    Cotton  ................................ ................................ ................................ .............  148 
4.1.2.7    Sugar  ................................ ................................ ................................ ..............  149 
4.1.2.8    Dairy sector  ................................ ................................ ................................ ..... 150 
4.1.2.9    Other programmes  ................................ ................................ ............................  152 
4.1.3    Trade measures  ................................ ................................ ................................ ... 152 
4.1.3.1    Imports  ................................ ................................ ................................ ...........  152 
4.1.3.2    Exports  ................................ ................................ ................................ ............  153 
4.1.3.3    Food aid  ................................ ................................ ................................ ..........  153 
4.1.4    Levels of support  ................................ ................................ ................................ . 154 
4.2   Energy  ................................ ................................ ................................ ..................  157 
4.2.1    General  ................................ ................................ ................................ ..............  157 
4.2.2    Crude oil  ................................ ................................ ................................ .............  159 
4.2.3    Natural gas  ................................ ................................ ................................ .........  160 
4.2.4    Coal ................................ ................................ ................................ ...................  160 
4.2.5    Renewable energy  ................................ ................................ ...............................  160 
4.2.6    Nuclear energy  ................................ ................................ ................................ .... 161 
4.2.7   Electricity  ................................ ................................ ................................ ...........  161 
4.3   Manufacturing  ................................ ................................ ................................ ........  162 
4.4   Services  ................................ ................................ ................................ ................  164 
4.4.1    Financial services  ................................ ................................ ................................ . 164 
4.4.1.1    Overview  ................................ ................................ ................................ .........  164 
4.4.1.2    Legislation and regulation  ................................ ................................ ..................  165 
4.4.1.3    Consolidated financial sector regulation  ................................ ...............................  169 
4.4.1.4    Banking services  ................................ ................................ ...............................  170 
4.4.1.5    Insurance services  ................................ ................................ ............................  171 
4.4.1.5.1    Structure and performance  ................................ ................................ ..............  171 
4.4.1.5.1.1    Legislation and regulation  ................................ ................................ .............  172 
4.4.1.6    Securities market regulation  ................................ ................................ ...............  173 
4.4.2    Telecommunications  ................................ ................................ .............................  175 
4.4.3    Postal and courier services  ................................ ................................ ....................  181 
4.4.3.1    Postal services  market overview  ................................ ................................ .........  181 
4.4.3.2    Courier and express services market overview  ................................ ......................  182 WT/TPR/S/ 382 • United States  
 
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  4.4.3.3    Regulatory regime  ................................ ................................ ............................  185 
4.4.3.4    GATS and bilateral commitments  ................................ ................................ ........  186 
4.4.4    Distribution services  ................................ ................................ .............................  186 
4.4.4.1    Wholesale trade  market overview  ................................ ................................ ....... 186 
4.4.4.2    Retail trade market overview  ................................ ................................ ..............  191 
4.4.4.3    Regulatory regime  ................................ ................................ ............................  194 
4.4.4.4    GATS and bilateral commitments  ................................ ................................ ........  194 
4.4.4.5    Franchising  ................................ ................................ ................................ ...... 195 
4.4.4. 5.1   Market overview  ................................ ................................ ............................  195 
4.4.4.5.2    Regulatory regime  ................................ ................................ ..........................  196 
4.4.5    Construction services  ................................ ................................ ...........................  197 
4.4.5.1    Market overview  ................................ ................................ ...............................  197 
4.4.5.2   Regulatory  regime  ................................ ................................ ............................  200 
4.4.5.3    GATS and bilateral commitments  ................................ ................................ ........  201 
4.4.6    Transport  ................................ ................................ ................................ ............  201 
4.4.6.1    Air transport and airports  ................................ ................................ ...................  201 
4.4.6.1.1    Air transport  ................................ ................................ ................................ .. 201 
4.4.6.1.2    Airports ................................ ................................ ................................ .........  204 
4.4.6.2    Maritime transport, port services, and shipbuilding  ................................ ................  205 
4.4.6.2.1    Maritime transport  ................................ ................................ .........................  205 
4.4.6.2.2    Port services  ................................ ................................ ................................ .. 210 
4.4.6.2.3    Shipbuilding and ship repairs  ................................ ................................ ...........  210 
4.4.7    Tourism services  ................................ ................................ ................................ .. 211 
4.4.7.1    Market overview  ................................ ................................ ...............................  211 
4.4.7.1.1    General  ................................ ................................ ................................ .........  211 
4.4.7.1.2    Travel a gencies and tour operators  ................................ ................................ ... 214 
4.4.7.2    Regulatory regime  ................................ ................................ ............................  214 
4.4.7.3    GATS and bilateral commitments  ................................ ................................ ........  215 
4.5   E-commerce  ................................ ................................ ................................ ..........  216 
5   APPENDIX TABLES  ................................ ................................ ................................ . 219  
 
CHARTS  
 
Chart 1.1 Value added by industry, 2017  ................................ ................................ ............  17 
Chart 1.2 Contributions to percentage change in real GDP, 2010 -18Q2  ................................ ... 20 
Chart 1.3 U.S. Current account and net financial flows, 2006 -17 ................................ ............  26 
Chart 1.4 U.S. Current account and oil products trade, 2010Q1 -18Q2  ................................ .... 27 
Chart 1.5 Merchandise trade by main HS sections, 2014 and 2017  ................................ .........  29 
Chart 1.6 Merchandise trade by main origin and destination, 2014 and 2017  ...........................  30 
Chart 1.7 Foreign Direct Investment into the United States, 2008 -17 ................................ ..... 31 WT/TPR/S/ 382 • United States  
 
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  Chart 1.8 Direct investment position on a historical -cost basis, by selected partners,  
2012 and 2017  ................................ ................................ ................................ ..................  32 
Chart 3.1 Frequency distribution of MFN tariff rates, 2018  ................................ ....................... 53 
Chart 3.2 Export control decision tree  ................................ ................................ ................... 88 
Chart 4.1 Exports and imports of agricultural products, 2000 -17 ................................ ............  144 
Chart 4.2 Green Box support, 2001 -15 ................................ ................................ ...............  156 
Chart 4.3 Amber Box support, 2001 -15 ................................ ................................ ..............  157 
Chart 4.4 Primary energy consumption by major sources, 1950 -2017 ................................ .... 158 
Chart 4.5 Primary energy consumption by source and sector, 2017  ................................ ........  158 
Chart 4.6 Electricity net generation by major sources, 1950 -2017 ................................ ..........  162 
Chart 4.7 Postal services trade, 2009 -16 ................................ ................................ ............  182 
Chart 4.8 Air freight services trade, 2009 -16 ................................ ................................ ....... 184 
Chart 4.9 Air freight services: cross -border exports, imports, and  trade balance, by major  
trading partners, 2016  ................................ ................................ ................................ ...... 185 
Chart 4.10 Foreign Direct Investment in wholesale trade in t he United States, by country of  
ultimate beneficiary owner, 2017  ................................ ................................ .......................  188 
Chart 4.11 Wholesale services supplied to U.S. persons by foreign MNEs  through their  
MOUSAs, by country, 2015 ................................ ................................ ................................  190 
Chart 4.12 FDI in retail trade in the United States, by country of ultimate benefici ary owner,  
2017  ................................ ................................ ................................ .............................  192 
Chart 4.13 Retail services supplied to U.S. persons by foreign MNEs through their MOUSAs, by 
country, 2015  ................................ ................................ ................................ ..................  194 
Chart 4.14 Franchise services trade, 2009 -16 ................................ ................................ ...... 195 
Chart 4.15 Construction services trade, 2009 -16 ................................ ................................ . 199 
Chart 4.16 Construction: cro ss-border exports, imports, and trade balance, by major trading 
partners, 2016 ................................ ................................ ................................ .................  199 
Chart 4.17 Tourism services trade, 2011 -17 ................................ ................................ ........  212 
 
TABLES  
 
Table 1.1 Main economic indicators, 2013 -18Q2  ................................ ................................ ....18 
Table 1.2 U.S. international transactions, 2013 -18Q2  ................................ ............................. 24 
Table 2.1 Foreign investment "covered transactions" reviewed by CFIUS, 2013 -15 .................... 43 
Table 2.2 Origin  of foreign investor and industry reviewed by CFIUS, 2013 -15 .......................... 44 
Table 3.1 Structure of the tariff schedules, selected years  ................................ ....................... 52 
Table 3.2 COBRA fees, applicable from 1 January 2018  ................................ ........................... 54 
Table 3.3 Agricultural fees, applicable since 28 December 2015  ................................ ............... 55 
Table 3.4 Federal excise taxes  ................................ ................................ ............................. 56 
Table 3.5 Anti -dumping investigations, 2015 -June 2018  ................................ ......................... 65 
Table 3.6 AD measures in force, by trading partner (including suspension agreements),  
2015-18 ................................ ................................ ................................ ........................... 65 
Table 3.7 CVD investigations and measures imposed, 2015 -June 18  ................................ ........ 67 
Table 3.8 EAPA investigations (eligible for public disclosure), 2016 -July 2018  ............................ 68 WT/TPR/S/ 382 • United States  
 
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  Table 3.9 Safeguard measures applied on imports of crystalline  silicon photovoltaic cells,  
2018-22 ................................ ................................ ................................ ........................... 72 
Table 3.10 Safeguard measures applied on large residential washers, 2018 -21 .......................... 74 
Table 3.11 Items subject to export controls, including licensing  ................................ ............... 87 
Table 3.12 CCL and USML  ................................ ................................ ................................ ...89 
Table 3.13 EXIM Bank authorizations, 2014 -17 ................................ ................................ ......91 
Table 3.14 Approved applications and loan amounts under SBA export loan programmes,  
2014-17 ................................ ................................ ................................ ........................... 92 
Table 3.15 Overvie w of OPIC activities, FY2015 -17 ................................ ................................ 94 
Table 3.16 Federal subsidy programmes (non -agriculture), 2015 -16 ................................ ........ 95 
Table 3.17 Sherman Act violations yielding a corporate fine of US$10 million or more in  
FY2016, 2017 and 2018  ................................ ................................ ................................ .... 103 
Table 3.18 Government corporations, 2018  ................................ ................................ .........  109 
Table 3.19 Government -sponsored enterprises  ................................ ................................ .... 110 
Table 3.20 Reported statistics for open procedures, limited procedures, and small and minority 
owned enterprise set -asides at the federal government level, FY2015  ................................ .... 114 
Table 3.21 U.S. thresh olds in Appendix I of the GPA, expressed in SDR and in the national 
currency, 2018 -19 ................................ ................................ ................................ ...........  116 
Table 3.22 Central Government thresholds  for the application of other trade agreements,  
in national currency, 2018 -19 ................................ ................................ ............................  116 
Table 3.23 Government -wide procurement goal and overall, FY2017  ................................ ...... 118 
Table 3.24 Summary of IP protection, June 2018  ................................ ................................ . 122 
Table 3.25 Number of patent and trademark filings and pendencies, FY2013 -17 ......................  125 
Table 3.26 Patents issued FY2010 -FY2017  ................................ ................................ ..........  125 
Table 3.27 Patents issued by the Unite d States to residents of foreign countries and territories 
(FY2013 –17) ................................ ................................ ................................ ...................  126 
Table 3.28 Trademarks registered, renewed, and published (FY2010 –17) ...............................  128 
Table 3.29 Trademarks issued by the United States to residents of foreign countries and  
territories (FY 2013–17) ................................ ................................ ................................ .... 128 
Table 3.30 Main Amendments to the Copyright Act since 1995  ................................ ..............  131 
Table 4.1 Value of production, 2010 -17 ................................ ................................ ..............  141 
Table 4.2 U. S. and world production and trade of selected commodities, 2010 -19 ....................  142 
Table 4.3 Exports and imports of selected products, 2012 -18a ................................ ...............  142 
Table 4.4 MPP -Dairy, premium payments in 2018  ................................ ................................  151 
Table 4.5 Total PSE and single commodity trans fer values for selected commodities, 2008 -17 ... 154 
Table 4.6 Federal subsidy programmes for agriculture, 2015 -16 ................................ ............  155 
Table 4.7 Value added by the manufacturing sector as a percentage of GDP  ............................  163 
Table 4.8 Asset size and other thresholds in P.L. 115 -174 ................................ .....................  169 
Table 4.9 Selected telecommunications indicators, 2011 –16 ................................ ..................  176 
Table 4.10 Employment and number of es tablishments in courier and messenger services,  
2010-18Q1  ................................ ................................ ................................ .....................  183 
Table 4.11 Value added in other transportation and support activities, 2010 -17 .......................  183 
Table 4.12 Employment, number of establishments and value added in wholesale trade,  
2010-18Q1  ................................ ................................ ................................ .....................  187 WT/TPR/S/ 382 • United States  
 
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  Table 4.13 FDI position, 2010 -17 ................................ ................................ .......................  187 
Table 4.14 Selected data for majority -owned U.S. affi liates of foreign multinational  
enterprises, 2010, 2012 and 2015  ................................ ................................ .....................  189 
Table 4.15 Wholesale trade services supplied to U.S. persons by foreign MNEs through their 
MOUSAs, 2010 -15 ................................ ................................ ................................ ............  190 
Table 4.16 Value added in retail trade, 2010 -17................................ ................................ ... 191 
Table 4.17 Employment and number of establishments in retail trade, 2010 -18Q1  ...................  191 
Table 4.18 FDI position in retail trade, 2010 -17 ................................ ................................ ... 192 
Table 4.19 Selected data for majority -owned U.S. affiliates of foreign multinational enterprises, 
2010, 2012 and 2015  ................................ ................................ ................................ ....... 193 
Table 4.20 Retail trade services supplied to U.S. persons by foreign MNEs through their  
MOUSAs, 2010 -15 ................................ ................................ ................................ ............  194 
Table 4.21 Value added in construction, 2010 -17 ................................ ................................ . 198 
Table 4.22 Employment and number of establishments in construction, 2010 -18Q1  .................  198 
Table 4.23 Foreign Direct Investment position in construction in the United States, 2010 -17 ..... 200 
Table 4.24 Selected data for MOUSAs of forei gn MNEs in construction, 2010, 2012 and 2015  .... 200 
Table 4.25 Construction services supplied to U.S. persons by foreign MNEs throug h their  
MOUSAs, 2010 -15 ................................ ................................ ................................ ............  200 
Table 4.26 Trade balance in the tourism sector, 2011 -17 ................................ ......................  212 
Table 4.27 Accommodation and food services, number of employees and establishments,  
2011-18Q1  ................................ ................................ ................................ .....................  213 
Table 4.28 Value added and Foreign Direct Investment in accommodation and food services,  
2010-17 ................................ ................................ ................................ .........................  213 
Table 4.29 Selected data for majority -owned U.S. affiliates of foreign multinational enterprises, 
2010, 2012 and 2015  ................................ ................................ ................................ ....... 214 
Table 4.30 Accommodation and food services supplied by foreign MNEs through their MOUSAs, 
2010-15 ................................ ................................ ................................ .........................  214 
Table 4.31 Selected measures affecting e -commerce  ................................ ............................  216 
 
BOXES  
 
Box 1.1 The  Tax Cuts and Jobs Act of 2017 (TCJA)  ................................ ...............................  22 
Box 3.1 The New Madison approach  ................................ ................................ .................  106 
Box 4.1 Main provisions of the Economic Growth, Regulatory Relief and Consumer Protection  
Act, Public Law 115 -174, of 24 May 2018  ................................ ................................ ..........  167 
 
APPENDIX TABLES  
 
Table A1.1 Merchandise exports by HS sections and main chapters, 2012 -17 ........................  219 
Table A1.2 Merchandise imports by HS sections and main HS chapters, 2012 –17 ..................  221 
Table A1.3 Merchandise exports by trading partner, 2012 -17 ................................ ..............  223 
Table A1.4 Merchan dise imports by trading partner, 2012 –17................................ ..............  224 
 
 
 
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  Table A2.1 Selected U.S. notifications to the WTO, August 2016 -July 2018  ...........................  225 
Table A2.2 United States as a complainant in WTO disputes 2016 -July 2018  .........................  228 
Table A2.3 United States as a respondent in WTO disputes 2016 -July 2018  ...........................  229 
 
 
Table A3.1 Analysis of United States MFN tariff, 2018  ................................ .........................  230 
Table A3.2 Prohibitions, restrictions or other special requirements  ................................ ....... 231 
Table A3.3 Products subject to import licensing  ................................ ................................ . 232 
Table A3.4 Changes in U.S. export controls, July 2016 -June 2018  ................................ ........  234 
 
 
Table A4.1 Commodity Loan Rates and Price Loss Coverage Reference  Prices,  
Agricultural Act of 2014 (as amended)  ................................ ................................ ..............  237 
Table A4.2 Insurance: direct premiums written  ................................ ................................ .. 238 
 
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  SUMMARY  
1.  This is the 14th Trade Policy Review of the United States. Since the last Review in 2016, the 
focus of U.S. trade policy has shifted to adopting policies that are intended to su pport its national 
security and strengthen its economy . These priorities  are reflected in t he President's 2018 Trade 
Policy Agenda, which also calls for negotiating better trade deals, enforcing U.S. trade laws and U.S. 
rights under existing trade agreemen ts, and reforming the multilateral trading system.  
2.  The U.S. economy is in its ninth consecutive year of expansion. In 2017, real GDP growth 
averaged 2.2%, up from 1.6% in 2016. In the first quarter of 2018, real GDP rose at an annual rate 
of 2.2%, before a ccelerating in the second quarter to 4.1%.  
3.  Fiscal policy turned pro -cyclical in 2018, with the enactment of the Tax Cuts and Jobs Act of 
2017, the Bipartisan Budget Act of 2018 and the Consolidated Appropriations Act of 2018. Tax rates 
were lowered for bus inesses and individuals: the top corporate tax rate was reduced from 35% to 
21%, and the tax system was changed from global to territorial. Federal budget deficits are projected 
to continue increasing, from 4.2% of GDP in 2018 to 5.1% in 2022.  
4.  The Federal Reserve tightened the monetary stance  during the review period . A sustained 
increase in economic activity, the continued strengthening of the labour market and firming inflation 
have resulted in moderate rises in the federal funds rate since 2015. In the f irst half of 2018, the 
rate was increased twice, bringing it to a range of 1.75 -2.0%. Inflation, as measured by the 
12-month percentage change in the personal consumption expenditures (PCE) index, has remained 
at or around the 2% target throughout the revi ew period.  
5.  The U.S. current account deficit has been increasing since 2013, and reached US$469.1 billion 
in 2017 (2.4% of GDP), mirroring a widening of the gap between gross national savings and gross 
investment. Exports of goods totalled US$1.55 trillion in 2017, while imports reached 
US$2.35  trillion. The merchandise trade deficit reached US$807.5 billion (4.2% of GDP) in 2017. On 
the other hand, the services and primary income balances showed important surpluses in 2017.  
6.  The United States is one of the w orld's largest exporters and it has a diversified export base. The 
largest export category is machinery and mechanical appliances, accounting for nearly a quarter of 
merchandise exports, followed by vehicles and chemicals; their share of total exports did not vary 
substantially during the review period. The share of mineral products experienced a sharp decline 
between 2014 and 2016, before rising again in 2017. This behaviour can be ascribed to the fall in 
oil prices and their subsequent recovery in 2017. T he United States is also one of the world's main 
importers. U.S. i mports are diversified: the largest categories are machinery and mechanical 
appliances, vehicles, mineral products, and chemicals. Reflecting sustained GDP growth, the shares 
of machinery an d mechanical appliances, vehicles, and chemicals in total imports have risen. In 
contrast, the share of mineral products has declined. The EU -28, China, Japan, Canada and Mexico 
are the United States' main trading partners. The United States continues to b e the world's main 
recipient of foreign direct investment (FDI). The main FDI sources are: the EU -28 (59% of the FDI 
stock in the United States in 2017), Japan (12%), Canada (11%), and Switzerland (8%).  
7.  The U.S. Congress has legislative and oversight autho rity over trade issues; Congress works 
together with the Executive Branch, which negotiates and implements trade agreements. The main 
executive agency responsible for trade policy formulation continues  to be the Office of the 
United  States Trade Representa tive (USTR), which is part of the Executive Office of the President.  
8.  As mentioned above, the thrust of trade policy changed during the review period. The President's 
2018 Trade Policy Agenda is driven to achieve "free, fair, and reciprocal" trade relations , considered 
critical to the U.S. national security policy. It also focuses on renegotiating and revising trade deals. 
In terms of reforming the multilateral trading system, the Agenda advocates for "sensible and fair 
reforms to the WTO". It notes that the  United States remains committed to working with all WTO 
Members who share the United States' goal of fair and reciprocal trade deals.  
9.  The United States is an original Member of the WTO. It is a party to the Agreement on 
Government Procurement (GPA), a par ticipant in the expanded Information Technology Agreement 
(ITA), and a signatory to the Agreement on Trade in Civil Aircraft. The United States deposited its 
instrument of acceptance of the Trade Facilitation Agreement (TFA) to the WTO in January 2015. WT/TPR/S/ 382 • United States  
 
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  The United States submitted numerous notifications during the period under review, covering areas 
such as agriculture, anti -dumping, subsidies and countervailing measures, SPS, TBT, and import 
licensing, among others. During the review period, the United Stat es was involved in 21 dispute 
settlement cases as a respondent and 13 as a complainant.  
10.  The United States has 14 FTAs in force with 20 countries, as was the case at the time of the 
previous Review. Most of them cover both goods and services, ex cept the FTA  with Israel 
(goods  only). The United States has notified all its FTAs to the WTO. At the time of completion of 
this report, the United States was renegotiating NAFTA, with the aims of modernizing the Agreement, 
and reducing the U.S. trade deficit with NAF TA partners. In August 2018, the United States and 
Mexico reached an agreement in principle to amend NAFTA. In October, an agreement with Canada 
was announced. The United States -Korea Free Trade Agreement (KORUS) has also been 
renegotiated, and the revised  Agreement was signed on 24 September 2018. The United States 
withdrew from the proposed Trans -Pacific Partnership (TPP) in 2017. Negotiations with the European 
Union on the proposed Trans -Atlantic Trade and Investment Partnership (T -TIP) agreement were 
paused at the end of 2016. Currently, the United States has four main unilateral preference 
programmes: the African Growth and Opportunity Act (AGOA), the GSP, the Caribbean Basin 
Initiative (CBI)/Caribbean Basin Trade Partnership Act (CBTPA), and the Nepal Trade Preference 
Program (NTPP).  
11.  The U.S. foreign investment regime remained unchanged during the review period. The 
investment regime is generally open, with a few sector -specific limitations, and review procedures 
on foreign investment in a few industrie s, including the airline and nuclear energy industries. 
Additionally, the United States has a national security review process, applicable to foreign 
investment that might affect national security interests. International investment agreements and 
investme nt chapters in FTAs are used by the United States to foster foreign investment.  
12.  The Committee on Foreign Investment in the United States (CFIUS) continues to oversee the 
national security implications of foreign investment. CFIUS reviews transactions based  on voluntary 
notifications filed by the parties, or on its own initiative if it believes the transaction is a covered 
transaction and may raise national security concerns. Each transaction is reviewed on a case -by-
case basis, based on individual facts and  circumstances. If national security concerns are identified 
during the review, CFIUS may impose conditions, or CFIUS and the transacting parties may negotiate 
a mitigation agreement to resolve any national security concerns. If CFIUS determines that the 
national security concerns cannot be resolved and the parties do not withdraw and abandon the 
transaction, the Committee will recommend that the President prohibit the transaction.  
13.  Having formally accepted the WTO TFA in January 2015, the United States provided its 
notification on transparency, the operation of its single window, measures on the use of customs 
brokers, and the TFA contact point in June 2017. In February 2018, the U.S . Customs and Border 
Protection (CBP) announced that its Automated Commercial Environment (ACE) had been 
completed. Importers and exporters may use the electronic portal to declare goods, obtain permits, 
and access transaction and trade data. Within CBP, t en Centers of Excellence have been established 
to specialize in all aspects of customs processing in several areas.  
14.  The United States operates several programmes to facilitate trade, while also addressing 
national security concerns as a joint public -private partnership. Among these programmes, the 
Customs -Trade Partnership Against Terrorism (C -TPAT) encompasses the entire supply chain, 
involving enhanced security measures and best practices, the Importer Self -Assessment Program 
(ISA) builds on C -TPAT to ac hieve an even higher level of compliance, and the Free and Secure 
Trade (FAST) Program speeds the clearance of low -risk shipments arriving from Canada or Mexico. 
Maritime cargo destined for the United States is pre -screened at foreign ports under the Conta iner 
Security Initiative (CSI). CBP has security -based arrangements in force with 11 other customs 
administrations, and has signed joint work plans towards mutual recognition with six countries.  
15.  The MFN tariff regime is generally characterized by stable an d, for the most part, low or no 
tariffs. At 4.8% overall, the simple average tariff remains virtually unchanged. Duty -free entry is 
provided for 37.5% of all tariff lines, and a further 30.4% of the lines' items face import duty of 5% 
or less. The highest tariffs, sometimes exceeding 100%, are applied on certain agricultural items 
(e.g., tobacco and peanuts). Outside of agriculture, above -average applied rates are mainly found 
in textiles, clothing and footwear.  WT/TPR/S/ 382 • United States  
 
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  16.  The United States continues to be an active u ser of anti -dumping (AD) duties. Between 2015 
and 2017, the number of AD investigation initiations increased, totalling 133 . There were 340 AD 
orders in place as of end -July 2018, compared with 269 on 30 June 2016. The trading partners most 
affected by the  measures were China, Chinese Taipei, the European Union, India, Japan and the 
Republic of Korea. The investigations initiated during the period were mainly concentrated in the 
steel industry. Of the 109 countervailing duty (CVD) measures in place as of en d-July 2018, some 
50.5% were also applied on iron and  steel products. There were 123  sunset review initiations of AD 
orders during the period from 1 January 2016 to end -June 2018. During the same period, there were 
eight revocations, while 104 orders were continued. There were 52 sunset review initiations of CVD 
orders during the period from 1 January 2016 to end -April 2018. During the same period, 27 sunset 
reviews of CVD orders were conclud ed; there were six revocations, while the remaining orders were 
continued.  
17.  Between 2016 and 2018, two new safeguard investigations (on Crystalline Silicon Photovoltaic 
Cells; and Large Residential Washers) were conducted by the United States under Sections 201 -204 
of the Trade Act of 1974. Both investigations were notifi ed to the WTO. The USITC made affirmative 
serious injury determinations in both cases, and the President applied a safeguard measure in each 
one. 
18.  The Enforce and Protect Act of 2015 (EAPA), which entered into force in 2016 and aimed at 
preventing evasion o f contingency measures, created a new framework for CBP to investigate 
allegations of evasion of AD/CVD orders. Between August 2016 and 1 July 2018, 19 investigations 
stemming from allegations of evasion of duties were initiated. In all but one of these in vestigations, 
interim measures were applied. As of July 2018, a final determination had been made for 
12 investigations. Remedies generally involve suspending the liquidation for any entry after a certain 
date, and requiring that the importer post a cash d eposit prior to the entry's release.  
19.  During the review period, the United States reverted to conducting  Section 232 investigations 
to determine the effects of imports of any article on national security, and to recommend the 
application of countermeasures,  including an increase in tariffs, to the President. The Department of 
Commerce has conducted 18 Section 232 investigations since 1980, of which 14 were concluded 
before or in 2001. In 2018, four new investigations were initiated on: steel, aluminium, auto  imports, 
and uranium imports. Up to September 2018, import surcharges were announced on the first two 
investigations. This announcement was followed by countermeasures by trading partners.  
20.  In August 2017, an investigation under Section 301 of the Trade Ac t of 1974 was initiated into 
China's acts, policies, and practices related to technology transfer, intellectual property, and 
innovation. On 15 June 2018, USTR issued a list of products covering 1,102 separate tariff lines, 
valued at approximately US$50 bi llion, which would be subject to an additional ad valorem  tariff of 
25%. The measure entered into effect on 6 July for 818 lines, covering  approximately US$34 billion 
worth of imports from China; public comment was sought on the application of the duty on 284 tariff 
lines, covering some US$16 billion worth of imports. China responded to the initial action by imposing 
increased duties on goods imported from the United States. In response, USTR proposed to take 
further action in the form of an additional 10% ad valorem  duty on Chinese products covered in 
6,031 tariff subheadings,  with an annual trade value of approximately US$200  billion.  Under the 
new Section 306(c) of the 1974 Trade Act, the USTR may reinstate, upon written request from the 
industry, a previ ously terminated Section 301 action in order to exercise a WTO authorization to 
suspend trade concessions. One such case emerged in December 2016 concerning a 1999 beef 
dispute with the European Union; as of mid -2018 no action had been taken.  
21.  The Office of  Foreign Assets Control (OFAC) of the U.S. Department of the Treasury administers 
nearly 30 programmes involving economic and trade sanctions. In general, the measures are 
designed to counter terrorism, transnational criminal organizations, cyber -related c rimes, drugs 
trafficking, human rights abuses, corruption, trade in rough diamonds, and the proliferation of 
weapons of mass destruction. Many of the measures target individuals or entities rather than 
jurisdictions. Country -specific sanctions have been ti ghtened against the Democratic People's 
Republic of Korea, Iran and Cuba during the period under review, while programmes related to 
Myanmar and Côte d'Ivoire were terminated in 2016.  
22.  The framework for export promotion and export finance has remained broad ly unchanged during 
the period under review. The United States has no overarching legal framework governing assistance 
to sectors or industries at the federal or sub -federal level. Traditionally, federal assistance WT/TPR/S/ 382 • United States  
 
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  programmes have been in the form of grant s, tax concessions, loan guarantees, and direct 
payments; they are listed in the Catalog of Federal Domestic Assistance (CFDA), and are mostly 
related to public health and safety, the environment, education, infrastructure, community 
assistance, and resear ch and development.  
23.  The basic legal framework for the preparation and adoption of standards and technical 
regulations has not changed during the review period. Federal law specifically prohibits any 
government agency from engaging in any standards -related activity that creates unnecessary 
obstacles to the foreign commerce of the United States, and federal agencies are obliged to ensure 
that imported goods are treated no less favourably than like domestic products in the application of 
standards -related acti vities.  
24.  In the area of sanitary and phytosanitary measures, work has continued on certain trade -related 
aspects of the implementation of the 2011 Food Safety Modernization Act, including risk -based 
supplier identification, the certification of food -produci ng entities in foreign countries, and the launch 
of the Voluntary Qualified Imports Program (VQIP), an expedited review and entry programme for 
food. No applications for admittance into the VQIP were received before this year's deadline, as the 
process to issue accreditations to third -party auditors was still ongoing.  
25.  U.S. federal antitrust laws are applied on domestic and foreign conduct that has a substantial 
and intended effect in the United States. Government institutions, including those engaging in 
commercial activity, are exempted from federal antitrust legislation unless a statute clearly provides 
otherwise. Limited immunity also applies to specific aspects of agriculture, fisheries, shipping, and 
insurance. During the review period, the U.S. authori ties have devoted substantial resources to 
prosecutions and sentencings in criminal antitrust proceedings; as a result, some US$400 million in 
criminal fines and penalties were obtained by the U.S. Department of Justice, mainly with respect 
to auto parts, real estate, and foreign currency exchange. The number of mergers reviewed 
increased during the review period: in FY2017, 2,052 transactions were reviewed, representing a 
12.0% increase from FY2016.  
26.  The United States is a party to the WTO GPA. The Protocol  amending the GPA entered into force 
for the United  States in April  2014. No major institutional or legal changes with respect to 
government procurement have taken place since the last Review in 2016. Procurement at the federal 
level is decentralized, and is carried out through the procurement systems of the various executive 
agencies. Procurement at the state level is also decentralized. U.S. government procurement policy 
encourages the participation of small businesses, including veteran -owned, women -owne d, and 
disadvantaged small businesses. To this end, it carries out a policy of fixing set -asides when market 
research concludes that small businesses are available and able to perform the work or provide the 
products being procured by the Government. The B uy American Act (BAA) and the Trade Agreements 
Act (TAA) remain the main laws regarding government procurement. The BAA requires the Federal 
Government to purchase domestic goods, while the TAA provides authority for the President to waive 
purchasing requi rements, such as those contained in the BAA. These requirements are waived for 
GPA participants, trading partners with which the United States has an FTA that covers procurement, 
and beneficiaries of preferences.  
27.  The United States remains one of the main p roducers and exporters of goods and services that 
embody intellectual property (IP). IP is present in some 60% of U.S. goods exports, and IP -intensive 
industries account for over one third of U.S. GDP. No major changes with respect to IP legislation 
have t aken place since the last Review in 2016. The protection and enforcement of IP rights (IPRs) 
has remained a top trade policy priority for the U.S. Administration, as IP is considered critical for 
economic growth. The objectives are to reduce counterfeit an d infringing goods in domestic and 
international supply chains and identify unjustified impediments to effective enforcement action 
against the financing, production, trafficking, or sale of counterfeit or infringing goods.  
28.  Among IPR enforcement tools, US TR conducts annual reviews of the state of IPR protection and 
enforcement in U.S. trading partners around the world under "Special 301" provisions. As a result 
of these reviews, USTR identifies trading partners found to deny adequate and effective IPR 
protection, or deny fair and equitable market access to U.S. persons that rely upon IPR protection. 
In its 2018 Special 301 report, released on 30 April 2018, 36 trading partners were identified as 
failing to provide adequate and effective IPR protection. Unde r Section 337 of the Tariff Act of 1930, 
investigations into allegations of infringement of certain statutory IPRs and other forms of unfair 
competition in import trade are conducted. Between early January 2016 and late May 2018, 137 WT/TPR/S/ 382 • United States  
 
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  Section 337 investigat ions were initiated. Most of them dealt with patent infringement; the 
remainder dealt with copyright, trade secrets and trademarks or with several IPRs combined. 
Investigations covered products from 37 trading partners and from the United States.  
29.  Support t o agriculture is primarily authorized by "farm bills", i.e. multi -year omnibus legislation 
covering a wide array of agricultural and food programmes. While some of the programmes have 
permanent authorization (e.g. crop insurance), others are authorized onl y for the life of the farm 
bill. Authorization for most programmes under the Agricultural Act of 2014 was to expire on 
30 September 2018. Based on expected and actual outlays, the 2014 Farm Bill has been dominated 
by the Supplemental Nutrition Assistance P rogram (SNAP), providing food assistance to low -income 
households, which has accounted for nearly 80% of the projected expenditure. The 2014 Farm Bill 
was amended in early 2018, through the passage of the Bipartisan Budget Act of 2018, to provide 
support f or seed cotton, to make the Margin Protection Programme more attractive for small and 
medium -sized dairy farms, and to make additional disaster relief available. A programme to support 
the cost of cotton ginning was re -introduced as a temporary measure in March 2018. The legislative 
process for the 2018 Farm Bill is ongoing.  
30.  The United States is a major producer and consumer of primary energy resources, and 
technological breakthroughs in the domestic production of shale oil and gas have had a profound 
effect on global energy markets over the last ten years. U.S. production of crude oil reached 
11 million barrels per day in July 2018, for the first time in history, and the United States is now a 
net exporter of petroleum products and natural gas. On the deman d side, U.S. primary energy 
consumption has levelled off, as the economy has become ever more energy efficient. Natural gas 
has replaced coal as the principal resource in electricity generation, but coal -fired power plants still 
deliver 30% of the electric ity produced. About 17% of the electricity generated in the United States 
in 2017 was made from renewable energy resources. The United States does not have a national 
target for renewable energy or an explicit federal support mechanism. However, 29 states and the 
District of Columbia have adopted "renewable portfolio standards" or similar binding targets, and a 
further 8 states (and one territory) have set non -binding targets. States apply numerous measures 
to promote the development and use of renewable en ergy resources.  
31.  The Economic Growth, Regulatory Relief and Consumer Protection Act, enacted in May 2018, 
introduced several amendments to the regulation of financial services, including with respect to 
regulatory relief, consumer access to mortgage credit,  and regulations for bank holding companies. 
The most noteworthy changes include: allowing banks with between US$50 billion and 
US$250  billion in assets to be run with less regulatory oversight; exempting banks with less than 
US$10  billion from the Volcker  Rule (banning banks from engaging in proprietary trading); requiring 
the Federal Reserve to tailor regulations with respect to bank size rather than "one size fits all"; and 
enabling large foreign banks to avoid regulations by allowing them to tally their  U.S. assets in certain 
ways that keeps them below the US$250 billion threshold.  
32.  A new regulatory order on telecommunications was issued in December 2017, which removed 
the prior requirements that providers of broadband Internet access services be subject  to some of 
the same rules that apply to common carriers, including a prohibition on unjust or unreasonable 
practices or unreasonable discrimination. The 2017 Restoring Internet Freedom Order reversed the 
policy applied in the sector, and returned to the l ighter -touch framework that had been in place 
before. The Order, among other things, ended utility -style regulation of the Internet in favour of 
market -based policies, restored broadband Internet access service to the information service 
classification, el iminated certain reporting requirements, and restored the authority of the Federal 
Trade Commission (FTC) to police the privacy practices of Internet service providers (ISPs).  
33.  Postal and courier services are open to competition, with the exception of servi ces reserved for 
the United States Postal Service (USPS), the designated operator for universal service. Private 
carriers may accept and deliver any item which does not fall within the reserved category , including 
items not considered as letters, such as m erchandise, newspapers, and periodicals. However, under 
"the mailbox rule", delivery must be made by means that do not involve access to mailboxes or post 
office boxes in USPS retail units, unless postage is affixed to the privately carried matter. USPS ra tes 
and fees are established by its Board of Governors, and are subject to a review process by the Postal 
Regulatory Commission, which regulates the USPS but not the postal services activities of the private 
sector.  WT/TPR/S/ 382 • United States  
 
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  34.  With the exception of some sub -federal a nd local non -discriminatory limitations on the sales of 
alcohol and firearms, the applied regime for distribution services does not contain any market access 
or national treatment limitations. There is no federal law governing franchising; however, there a re 
both federal  regulations and state laws regulating it. State laws vary from state to state. Franchising 
is regulated by the FTC and by various state agencies.  
35.  Construction is not regulated at the federal level, but safety issues are. Safety regulations 
concerning  the construction industry are enforced by the Occupational Safety and Health 
Administration  at the federal level, or by equivalent state agencies. All states require contractors to 
have workers' compensation insurance. There are also a number of  environment -related laws, 
including those related to asbestos, lead, and industrial waste. The construction industry has few 
economic barriers to entry, and there are no restrictions on the repatriation of capital or profits. 
Market access conditions vary  somewhat, depending on whether the project is public or private. 
Private construction activities are open to foreigners with few limitations, while public construction 
activities are subject to Buy American provisions and to the provisions of the GPA and FTAs.  
36.  The regulatory framework of maritime transport and air transport services has not changed 
during the period under review and restrictions to cabotage remain. Regarding maritime transport, 
preferences are accorded to U.S. -flag vessels to encourage a p rivately -owned and operated U.S. -flag 
merchant marine. The United States maintains two maritime transport programmes related to 
national defense: the Maritime Security Program (MSP) and the Voluntary Intermodal Sealift 
Agreement (VISA) Program. No domestic  preferential treatment is granted with respect to the use 
of port and harbour facilities. An MFN exemption is maintained, covering restrictions on performance 
of longshore work by crews of foreign vessels owned and flagged in countries that similarly rest rict 
U.S. crews on U.S. -flag vessels from longshore work.  
37.  Only U.S. -built ships qualify for domestic service; the United  States was granted an exemption 
from GATT rules for measures prohibiting the use, sale, or lease of foreign -built or foreign -
reconstruc ted vessels in commercial applications between points in national waters or the waters of 
an exclusive economic zone. There are no restrictions on foreign investment in U.S. shipyards or 
ship-repair facilities, but floating dry -docks are eligible for loan guarantees under the Federal Ship 
Financing Program only if owned by U.S. citizens.  
38.  The tourism services regime is open; the United States undertook full market access GATS 
commitments for modes 1, 2 and 3, and full national treatment commitments for all f our modes for 
all four sectors. The National Travel and Tourism Office (NTTO), part of the U.S. Department of 
Commerce, coordinates travel and tourism policies and programmes across federal agencies through 
the Tourism Policy Council, and works to enhance the international competitiveness of the travel and 
tourism industry and increase its exports.  
39.  The United States does not have a general e -commerce law; however, e -commerce is subject 
to a number of federal and state measures that address various aspects o f it. Two federal agencies 
oversee different aspects of e -commerce: the Federal Trade Commission (FTC) and the Federal 
Communications Commission (FCC). The FTC has authority over unfair and deceptive practices in 
commerce on various aspects of e -commerce, and it may bring enforcement actions for such 
practices. The FCC regulates the communications aspect of e -commerce. Electronic contracts are 
governed by the Electronic Signatures in Global and National Commerce Act of 2000 (ESIGN Act), 
as well as by state laws that meet the requirements in the ESIGN Act.  
 WT/TPR/S/ 382 • United States  
 
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  1  ECONOMIC ENVIRONMENT  
1.1  Main Features of the Economy  
1.1.  The U nited States is the largest economy in the world, and is highly integrated into the global 
economy. Any changes in it have far -reaching consequences for the world at large , as was evidenced 
by the financial crisis of 2008, the impact of which reverberated around the world. The United States 
continues to be the largest recipient of international capital flows , which has resulted in a 
strengthening of the U.S. dollar. An appreciating U.S. dollar has implications for competitiveness , 
and thus trade. As such, coupled with we aker international demand, the share of total trade in goods 
and services (imports and exp orts) on a balance -of-payments (BOP) basis has declined from 29.8% 
of Gross Domestic Product (GDP) in 2014 to 27% of GDP in 2017 . 
1.2.  The U.S. economy is dominated by the services sector (including government services), whose 
share in GDP has risen since 2015; services now account for over 80% of GDP, while the share of 
manufacturing has fallen below 12% (11.6% in 2017) and agriculture's  contribution was less than 
1% in 2017 (Chart 1.1).  
Chart 1.1 Value added by industry, 2017  
 
Source:  WTO Secretariat, based on Bureau of Economic Analysis (BEA) online information.  
1.2  Economic Developments  
1.3.  The U.S. economy is in its ninth consecutive year of expansion , buoyed by rising incomes, 
wealth gains, high levels of consumer confidence, business sector confidence, supportive financial 
conditions, and a favorable external environment, and in the later stag es, buoyed by  the strong 
labour market. In 2017, real GDP growth averaged 2.2%, up from 1.6% in 2016 (Table 1.1). In the 
first quarter of 2018, real GDP rose at an annual rate of 2.2%, before accelerating in the second 
quarter to 4.2%. 
Chart 1.1
Value added by industry, 2017
Gross domestic product: US$19,391 billion
Source: WTO Secretariat, based on Bureau of Economic Analysis (BEA) online information.Govt
12.7%Other services
9.3%Federal
3.9%
Educational, healthcare
8.4%Manufacturing
11.6%
Retail trade
5.9%Utilities
1.5%
Private industries
87.3%
Finance, insurance, 
real estate
20.9%State & local
8.8%Construction
4.3%
Professional & business 
services
12.1%Agri., forestry, 
fishing & hunting
0.9%Mining
1.7%
Wholesale trade
5.9%
Information
4.8%WT/TPR/S/ 382 • United States  
 
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  Table 1.1 Main economic indicators, 2013 -18Q2  
 2013  2014  2015  2016  2017  2018Q2  
GDP (current US$ billion)  16,785  17,522  18,219  18,707  19,485  20,412  
Real GDP (chained 2012 US$ billion)  16,495  16,900  17,387  17,659  18,051  18,515  
Real GDP growth (%)  1.8 2.5 2.9 1.6 2.2 4.2 
GDP per capita (current US$)  53,016  54,935  56,701  57,797  59,774  .. 
GDP by expenditure (as a % share of current GDP)  
Personal consumption expenditures  67.4 67.5 67.5 68.2 68.4 68.0 
  Goods  22.2 22.0 21.5 21.4 21.3 21.2 
    Durable goods  7.1 7.1 7.2 7.2 7.2 7.1 
    Non-durable goods  15.1 14.9 14.3 14.2 14.1 14.1 
  Services  45.2 45.4 46.0 46.9 47.0 46.8 
Gross private domestic investment  16.8 17.3 17.6 16.9 17.3 17.6 
  Fixed investment  16.2 16.9 16.9 16.8 17.2 17.6 
    Non-residential  13.2 13.7 13.4 13.1 13.3 13.7 
    Residential  3.0 3.2 3.5 3.7 3.9 3.9 
  Change in private inventories  0.6 0.5 0.7 0.2 0.1 0.0 
Net exports of goods and services  -2.9 -2.9 -2.9 -2.8 -3.0 -2.7 
  Exports  13.5 13.5 12.4 11.9 12.1 12.6 
    Goods  9.3 9.2 8.2 7.7 7.9 8.4 
    Services  4.3 4.3 4.2 4.1 4.2 4.2 
  Imports  16.5 16.4 15.3 14.6 15.0 15.3 
    Goods  13.7 13.6 12.6 11.9 12.2 12.4 
    Services  2.8 2.8 2.7 2.8 2.8 2.9 
Government consumption 
expenditures and gross investment  18.7 18.1 17.8 17.6 17.3 17.2 
  Federal  7.3 6.9 6.7 6.6 6.5 6.4 
  State and local  11.4 11.1 11.1 11.0 10.8 10.7 
GDP by expenditure (real growth rates)  
Personal consumption expenditures  1.5 2.9 3.7 2.7 2.5 3.8 
  Goods  3.1 4.0 4.7 3.6 3.7 5.4 
    Durable goods  6.1 7.2 7.6 5.5 6.8 8.6 
    Non-durable goods  1.8 2.6 3.4 2.7 2.1 3.7 
  Services  0.6 2.4 3.2 2.3 2.0 3.1 
Gross private domestic investment  6.9 5.4 4.8 -1.3 4.8 0.4 
  Fixed investment  5.6 6.3 3.4 1.7 4.8 6.2 
    Non-residential  4.1 6.9 1.8 0.5 5.3 8.5 
    Residential  12.4 3.9 10.1 6.5 3.3 -1.6 
  Change in private inventories  .. .. .. .. .. .. 
Net exports of goods and services  .. .. .. .. .. .. 
  Exports  3.6 4.3 0.6 -0.1 3.0 9.1 
    Goods  3.2 4.6 -0.3 0.3 3.3 13.3 
    Services  4.5 3.6 2.4 -0.9 2.5 1.6 
  Imports  1.5 5.1 5.5 1.9 4.6 -0.4 
    Goods  1.8 5.6 5.8 1.4 4.6 -0.3 
    Services  0.5 2.6 4.0 4.2 4.4 -0.8 
Government consumption 
expenditures and gross investment  -2.4 -0.9 1.9 1.4 -0.1 2.3 
  Federal  -5.5 -2.6 0.0 0.4 0.7 3.7 
  State and local  -0.3 0.1 3.0 2.0 -0.5 1.6 
Federal government revenue and expenditure (US$ billion)  
Current receipts  3,138  3,292  3,446  3,476  3,559  3,469  
  Current tax receipts  1,745  1,900  2,021  2,035  2,055  1,945  
  Contributions for government social 
insurance  1,092  1,140  1,191  1,225  1,283  1,341  
  Income receipts on assets  243 172 160 138 135 113 
  Current transfer receipts  69 87 78 80 87 80 
  Current surplus of government 
enterprises  -10 -7 -4 -2 -2 -9 
Current  expenditures  3,777  3,894  4,015  4,141  4,254  4,454  
  Consumption expenditures  957 950 956 968 987 1,028  WT/TPR/S/ 382 • United States  
 
- 19 - 
 
   2013  2014  2015  2016  2017  2018Q2  
  Current transfer payments  2,344  2,447  2,573  2,657  2,725  2,829  
  Interest payments  416 439 429 455 481 538 
  Subsidies  59 58 57 61 61 59 
Net federal government saving  -638 -602 -569 -665 -695 -985 
Social insurance funds  -289 -286 -309 -330 -333 -350 
Other  -349 -316 -260 -336 -362 -635 
Addenda:        
Total receipts  3,160  3,311  3,467  3,496  3,832  3,492  
Total expenditures  3,857  3,962  4,050  4,200  4,348  4,529  
Net lending or net borrowing ( -) -697 -651 -584 -704 -516 -1,037  
   As share of current GDP (%)  -4.2 -37 -3.2 -3.8 -2.6 -5.1 
Public debt (US$ billion)a 11,983  12,780  13,117  14,168  14,666  .. 
   As share of current GDP (%, fiscal 
year)  73.1 76.1 75.8 80.4 82.3 .. 
Prices        
Consumer price index (annual 
average, % change)  1.5 1.6 0.1 1.3 2.1 2.2 
Interest rates        
Federal funds rate, effective (%, 
annual average)  0.11 0.09 0.13 0.39 1.00 .. 
Treasury note (%, annual average)  2.35 2.54 2.14 1.84 2.33 .. 
Employment        
Total employmentb ('000)  141,186  143,878  146,631  148,658  .. .. 
Employment in manufacturingc ('000)  12,023  12,190  12,332  12,343  .. .. 
  as share of total employment (%)  8.5 8.5 8.4 8 .. .. 
Unemployment rate (%)  7.4 6.2 5.3 4.9 4.4 .. 
Memorandum        
Goods trade to GDP ratio  23.2 23.0 20.8 19.6 20.1 .. 
.. Not available.  
a Fiscal year.  
b Full-time and part -time employees.  
c Estimates are based on the 2002 North American Industry Classification System (NAICS).  
Source:  WTO Secretariat, based on B ureau of Economic Analysis  online information. Viewed at: 
http://www.bea.gov/ ; Board of Governors of the Federal Reserve System online information . Viewed 
at: http://www.federalreserve.gov/econresdata/default.htm ; and Bureau of Labor Statistics online 
information . Viewed at: http://www.bls.gov/ . 
1.4.  Accounting for some 68% of GDP, growth  in personal consumption expenditures is essential to 
overall growth. In fact, in 2017, real GDP growth was driven by consumer spending, which grew at 
2.5% and accounted for 78.6% (1.73 percentage points) of the growth. Consumption of goods 
represented 35%  of total consumption, while consumption of services accounted for 65%. They 
contributed 0.95 and 0.78 percentage point s to GDP growth, respectively. Consumption of non -
durable goods represented 64.3% of consumption of goods and 22.5% of total consumption,  while 
consumption of durable goods accounted for 35.9% and 12.6%, contributing 0.48 and 0.30 
percentage points to annual GDP growth, respectively. Consumption growth was spread over a 
number of different categories: housing and utilities, and health care accounted for the largest share 
of consumer expenditures , with approximately 17% of the total each. Other important items include d 
food and beverages (7.5% of total spending), financial services and insurance (6.8%), motor 
vehicles and parts (4.0%), recrea tional goods and vehicles (3.8%), clothing and footwear (3.1%), 
and furnishings and household equipment (2.9%).1 
1.5.  Gross private domestic investment contributed 22% to growth. Government consumption and 
gross investment have been slightly positive , and net e xports have made a negative contribution of 
3% to real GDP growth on an accounting basis (Chart 1.2). Non -residential fixed investment grew 
by 6.3% in 2017, compared with 0.7% in 2016. Equipment spending went up by 8.8%, spending on 
structures rose by 3.7% , while spending on intellectual property products increased 4.8%. Growth 
                                                
1 Based on chained (2012) dollars data. BEA online information. Viewed at: 
https://www.bea.gov/iTable/iTable.cfm?reqid=19&step=2#reqid=19&step=3&isuri=1&1910=x&0= -9&1921= 
survey&1903=36&1904=2016&1905=2018&1906=a&1911= 0. WT/TPR/S/ 382 • United States  
 
- 20 - 
 
  in overall private fixed investment (residential and non -residential) was 5.4% in 2017, compared 
with virtually zero growth in 2016, and 2.4% the year before.  
Chart 1.2 Contributions to percentage change in real GDP, 2010 -18Q2  
Percentage points  
Source:  WTO Secretariat, based on BEA online information. Viewed at: http://www.bea.gov . 
1.6.  The acceleration of growth in the second quarter of 2018 to an annual rate of 4. 2% was caused 
by strong consumption expenditures and a sharp increase in exports, in particular exports of goods. 
The BEA GDP Advanced Estimate shows that consumption rose at an annual rate of 4% and 
contributed 2.7 percentage  points to GDP growth, while net exports of goods expanded at an annual 
rate of 13.3% and contributed 1.1 percentage points to growth.2 The contribution of fixed capital 
formation was slightly negative ( -0.1%), while governmen t spending contributed 0.4 percentage 
points to GDP growth.3 
1.7.  Despite solid economic growth, productivity growth has been weak and below the rates 
recorded during previous expansions. In the current expansion, labo ur productivity growth has 
averaged only 1. 2%, well below the 2.6% observed in the previous expansion (1994 -2007) and the 
long run average of 2.1% during the post -World War II period from 1947 to 2016. According to the 
OECD, contributing factors to slowing productivity include the slow pace of non -residential 
investment, weak rates of business entry and exit, tighter regulations , and the lack of knowledge 
spillovers among firms.4 According to the Office of Management and Budget's (OMB), the 
Administration has already adopted policies to deal with the issue of low productivity. These include 
the passage of the Tax Cut s and Jobs Act in December 2017 , and the elimination of unnecessary 
                                                
2 BEA online information. Viewed at: https://www.bea.gov/news/2018/gross -domestic -product -2nd-
quarter -2018-advance -estimate -and-comprehensive -update . 
3 BEA online information. Viewed at: 
https://www.bea.gov/iTable/iTable.cfm?reqid=19&step=2#reqid=19&step=3&isuri=1&1921=survey&1903=2 . 
4 OECD (2018), OECD Economic Surveys, United States, Sustaining Growth and Raising Employment, 
June 2018. The Overview may be viewed at: http://www.oecd.org/eco/surveys/Overview -United -States -2018-
OECD.pdf . 
-4-20246810
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2
2010 2011 2012 2013 2014 2015 2016 2017 2018
Personal consumption expenditures Gross private domestic investment
Total GDP growthExports of goods & services Imports of goods & services
Government consumption & gross investmentWT/TPR/S/ 382 • United States  
 
- 21 - 
 
  regulations under Executive Orders 13771 and 13777. In addit ion, the OMB notes that the 
Administration is pursuing policies to encourage domestic energy development and investments in 
infrastructure, reform welfare program mes, negotiate more attractive trade agreements, and reduce 
federal budget deficits ; all actio ns together should encourage investment by U.S. firms and stimulate 
productivity growth.5 
1.8.  Based on the assumption that all the policy proposals mentioned in the President 's fiscal year 
2019 budget proposal would be  implemented, the U.S. authorities estimat e that the economy would 
expand by 3.1% in 2018 and increas e slightly to 3.2% in 2019 before edging down to 2.8% in the 
long run.6 
1.9.  In the last United States Article IV consultation, the IMF noted that the near -term outlook for 
the economy is one of strong growth and job creation, aided by a fiscal stimulus, a recovery of 
private investment, and supportive financial conditions. These positive outturns have su pported, and 
been reinforced by  a favo urable external environment. However, despite good near -term pr ospects, 
a number of vulnerabilities are being built  up, and the IMF estimates that potential GDP growth could 
decline to 1.8% over the medium term. The higher federal deficit could trigger a faster -than-
expected rise in inflation , prompting a more rapid r ise in interest rates that could increase market 
volatility both in the U nited States and abroad. There is also a risk of a reversal of capital flows. The 
IMF also considers that the net effect of budget and tax policy choices will result in an increase in  
public debt , and leave few budget resources available to invest in needed supply -side reforms, 
including infrastructure spending. Recent trade tensions have added to these risks.7 
1.10.   The U.S. Administration regards the IMF's forecasts as pessimistic, particularly concerning the 
prospects for long -term growth; it noted that the Administration's framework is based on average 
growth of 3% over 2018 –28. This higher  growth, relative to IMF staff forecasts, incorpo rates long -
run growth effects arising from a US$1.5 trillion investment in infrastructure, the impact of the 
overhaul of the tax system, higher labour force participation, and a continuing process of de -
regulation that has already eliminated 22 existing re gulations for each new one that was created.  
With respect to trade, the U.S. Administration notes that its trade policy agenda seeks to address 
serious, long -term challenges that have been facing the multilateral trading system.8 
1.2.1   Fiscal policy  
1.11.   In recent ye ars, a number of deficit -reducing measures were put in place, including both tax 
increases (rates on top earners, termination of the temporary payroll tax holiday) under the Tax 
Relief, Unemployment Reauthorization, and Job Creation Act of 2010, and spendi ng cuts under the 
Budget Control Act of 2011. Additionally, the Bipartisan Budget Act of 2015 suspended the debt 
ceiling until March 2017 , and avoided the risk of government shutdown by locking in appropriations 
for 2016. This Act also raised the caps on d iscretionary funding by US$50 billion in 2016 , and by 
US$30 billion in 2017. The fiscal deficit  came in at  2.6% of GDP in 2017. Public debt as a share of 
GDP, however, continued to rise (Table 1.1).  
1.12.   There was a policy  shift in 2018, when fiscal policy turn ed pro -cyclical, with the enactment of 
the Tax Cuts and Jobs Act of 2017 (TCJA) (Box 1.1), the Bipartisan Budget Act of 2018 and the 
Consolidated Appropriations Act of 2018. The TCJA substantially altered the taxation of personal and 
business income. The B ipartisan Budget Act of 2018 increased the caps on discretionary funding in 
                                                
5 OMB (2018), An American Budget Mid -Session Review . Viewed at: https://www.whitehouse.gov/wp -
content/uploads/2018/07/19msr.pdf . 
6 OMB (2018), Economic Assumptions and Interactions with the [Administration 's Fiscal Year 2019] 
Budget. Viewed at : https://www.whitehouse.gov/wp -content/uploads/2018/02/ap_2_assumptions -fy2019.pdf . 
7 IMF (2018), United States : 2018 Article IV Consultation – Press Release; Staff Report and Statement 
by the Executi ve Director for United States . Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/07/03/United -States -2018-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-46048 , and OMB  (2018), Economic Assumptions and Interactions 
with the [Administration 's Fiscal Year 2019] Bu dget. Viewed at : https://www.whitehouse.gov/wp -
content/uploads/2018/02/ap_2_assumptions -fy2019.pdf . 
8 IMF (2018), United States: 2018 Article IV Consultation – Press Release; Staff Report and Statement 
by the Executive Director for United States. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/07/03/United -States -2018-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-46048 . WT/TPR/S/ 382 • United States  
 
- 22 - 
 
  2018 and 2019 , and provided substantial funding for emergency disaster assistance. The 
Consolidated Appropriations Act, 2018 , provided appropriations for 2018.  
Box 1.1 The Tax Cuts and Jobs Act of 2017 (TCJA)  
The President signed into law the Tax Cuts and Jobs Act (TCJA) of 2017 on 22 December 2017. The Act 
introduced a number of tax reforms aimed at: making the U.S. business tax competit ive; providing tax relief 
to lower - and middle -income Americans; lowering statutory rates and broadening tax bases; and simplifying 
the tax system for some taxpayers.  
The Act:  
(i) Lowers tax rates for businesses and individuals;  
(ii) Simplifies personal  taxes by increasing the standard deduction and child and family tax credits;  
(iii) Eliminates personal exemptions and makes it less beneficial to itemize deductions;  
(iv) Limits deductions for state and local taxes, property taxes and mortgage interest;  and  
(v) Eliminates the alternative minimum tax for corporations and raises the threshold for individuals. The 
TCJA also reduces the number of estates impacted by the estate tax, and repeals the individual mandate of 
the Affordable Care Act.  
Most of the changes to personal income tax are temporary and will expire at the end of 2025, after which 
the tax system will revert to that which was operational in 2017. However, changes affecting corporations 
are permanent.  
The main changes with respect to personal  income tax include:  
(i) Although the number of income tax bands with regard to personal income tax remains unchanged, at 
seven, the income range for most bands has changed, and each band has a lower rate, but a change in the 
indexation methodology of the tax bands to reflect inflation more accurately will result in people moving to 
higher tax bands quicker;  
(ii) The estate tax threshold was doubled to US$11.2 million per decedent;  
(iii) Personal exemptions were eliminated, while state and local tax deducti ons were capped at US$10,000;  
(iv) Deductions in lieu of mortgage interest were capped at US$750,000 worth of loans, a decline with respect 
to the previous US$1 million cap;  
(v) Deductions for education and medical expenses were also reduced; and  
(vi) The TCJA allows for a temporary 20% deduction on qualified business income received from pass -
through businesses; this is significant as many businesses are unincorporated entities, such as sole 
proprietorships, partnerships and S -Corporations, whereby owners pay taxes at individual rates.  
The main changes in corporate taxation include:  
(i) A reduction in the top corporate tax rate from 35% to 21%, probably the most significant change in the 
TCJA, as well as a change from a global towards a territorial tax sy stem with base erosion protections for 
corporate income tax. The implication of this is that a foreign subsidiary can generally distribute earnings to 
corporate U.S. shareholders free of additional U.S. tax. However, the foreign subsidiary may be subject to 
tax in the United States on its exce ss returns, to the extent such returns are not subject to at least a 13.125% 
effective foreign tax rate. In other words, under this system, the corporation could save the difference 
between the generally higher U.S. tax rate and the lower tax rate of the c ountry in which the subsidiary is 
established, if the subsidiary is subject to tax at a rate of at least 13.125%; and (ii) The TCJA allows for a 
one-time tax on un -repatriated foreign earnings. The tax will be levied at a rate of 8% for illiquid assets and  
15.5% on cash. The purpose of this measure is to avoid providing a windfall for U.S. MNEs with an 
accumulated stock of previously untaxed unrepatriated earnings, which are estimated at nearly US$3 trillion.  
The authorities expect the new tax law to resul t in higher levels of investment, employment and GDP. They 
consider that a lower corporate income tax rate and temporary expensing should serve as an incentive for 
increased investment, while lower personal income tax rates should be a motivating factor fo r increased 
participation in the labour force. According to the Congressional Budget Office (CBO), the heightened 
economic activity is projected to increase GDP by 0.7% on average annually, between 2018 and 2028. On 
the other hand, the CBO also expects the  total budget deficit to increase b y about US$1 trillion over a 10 -year 
period. Furthermore, the stronger output growth would also result in slightly higher inflation and an 
appreciation of the U.S. dollar. The CBO also expects that the strengthening of th e labour market and higher 
inflation may lead the Federal Reserve to raise interest rates.  
Source:  CBO: The Budget and Economic Outlook: 2018 to 2028 April 2018. Viewed at: 
https://www.cbo.gov/system/files?file=115th -congress -2017-2018/reports/53651 -outlook.pdf . 
1.13.   The implementation of the three previously -mentioned Acts would result in reduced revenues 
and increased outlays. According to CBO estimates, r evenues are expected to remain at the  2018 
level of 16.6% of GDP for the next few years , before increasing steadily to 17.5% of GDP by 2025. 
At the end of that year, many provisions of the 2017 TCJA expire, causing receipts to rise sharply , 
to a projected 18.1% of GDP in 2026 , and 18.5% in 2027 and 2028. The CBO projects that outlays 
for the next three years will remain near 21% of GDP, after which they will grow more quickly than 
the economy, reaching 23.3% of GDP by 2028. Against a background of an ageing  population, an WT/TPR/S/ 382 • United States  
 
- 23 - 
 
  increase in expenditure is expected on account of significant growth in mandatory spending due to 
rising health care costs per beneficiary and increased spending for Social Security and Medicare, 
among other program mes. The increase in expe nditure  also reflects growth in interest costs, which 
are projected to grow more quickly than any other major component of the budget ; this will be as 
a result of rising interest rates and mounting debt. By 2028, net outlays for interest are projected 
to be roughly triple what they are this year in nominal terms , and roughly double when measured 
as a percentage of GDP. In contrast, discretionary spending in the projections declines in relation to 
the size of the economy.9 
1.14.   Consequently, the CBO projects budg et deficits to continue increasing after 2018, from 4.2% 
of GDP in 2018 to 5.1% in 2022. Deficits are expected to remain  at 5.1% of GDP between 2022 and 
2025, before declining at the end of the period, mainly on account of the expiration of the tax 
provisi ons previously mentioned, which is expected to lead to an increase in revenues. The projected 
annual average budget deficit over the 2021 –28 period is 4.9% of GDP.10 As a result of rising deficits, 
the CBO estimates that public debt will rise from 78% of GD P (or US$16 trillion) at the end of 2018 
to 96% of GDP (or US$29 trillion) by 2028. According to the CBO, the rising debt could have negative 
consequences for the budget and the economy.11 
1.15.   The IMF staff considers that the combination of revenue losses from the TCJA and the 
approved increase in spending will lead to an increase in the fiscal deficit in the next few years; it is 
estimated  that the deficit will be 4.5% of GDP in 2019. In the IMF staff's view, the increase in the 
federal deficit will exacerbate the upward dynamic in the public debt -to-GDP ratio. Even with the 
planned fiscal consolidation scheduled to start in 2020, the feder al debt will continue to climb, 
exceeding 90% of annual GDP by 2024. The IMF staff deems that the expansion in the deficit leaves 
few budget resources available to invest in a range of needed supply -side reforms that could boost 
medium -term growth and rais e living standards.12 
1.16.   The U.S. A dministration has a differing view with respect to the effect of the tax reforms, as 
noted in its budget proposal.13 It noted that the stronger growth path envisaged under the new 
legislation will reduce the fiscal deficit by an average of around 0.25% of GDP each year over the 
next 10 years. Additionally, it recalled that the Administration plan s to reduce federal non -defense 
expenditures while providing an additional US$200 billion to finance infrastructure spending. The  
Administration  noted that half of these expenditure savings would come from a reorganization of the 
Federal Government. The remainder would accrue mostly from the repeal of the Affordable Care Act, 
reforms to the welfare system and student loans, reductions in  Medicare spending, and a phase -
down of defense spending currently being undertaken through Overseas Contingency Operations 
funding. According to the Administration 's budget, over the 10 -year budget horizon, these envisaged 
spending cuts would result in a 44% real reduction in discretionary, non -defense spending. However , 
mandatory spending would increase to 78% of non -interest federal spending.14 As a result of these 
measures, and faster growth, the authorities expect the fiscal deficit to fall to 1.1% of G DP by 2028, 
and public debt to peak at 82% of GDP in 2022, declining afterwards. The authorities consider that 
no negative growth effects are anticipated from the various reductions in federal program mes, and 
that this policy is fully consistent with an ex pansionary growth outlook, as jobs are expected to be 
                                                
9 CBO: The Budget and Economic Outlook: 2018 to 2028 , April 2018. Viewed at: 
https://www.cbo.gov/system/files?file=115th -congress -2017-2018/reports/53651 -outlook.pdf . 
10 CBO: The Budget and Economic Outlook: 2018 to 2028 , April 2018 . Viewed at: 
https://www.cbo.gov/system/files?file=115th -congress -2017-2018/reports/53651 -outlook.pdf . 
11 CBO: The Budget and Economic Outlook: 2018 to 2028 , April 2018 . Viewed at : 
https://www.cbo.gov/system/files?file=115th -congress -2017-2018/reports/53651 -outlook.pdf . 
12 IMF (2018), United States: 2018 Article IV Consultation – Press Release; Staff Report and Statement 
by the Executive Director for United States. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/07/03/United -States -2018-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-46048 . 
13 OMB (2018), Economic Assumpti ons and Interactions with the [Administration’s Fiscal Year 2019 ] 
Budget . Viewed at: https://www.whitehouse.gov/wp -content/uploads/2018/02/ap_2_assumptions -fy2019.pdf . 
14 CBO: The Budget and Economic Outlook: 2018 to 2028 , April. Viewed at: 
https://www.cbo.gov/publication/53651 ; and OMB (2018), Economic Assumptions and Interactions with the 
[Administration’s Fiscal Year 2019 ] Budget . Viewed at: https://www.whitehouse.gov/wp -
content/uploads/2018/02/ap_2_assumptions -fy2019.pdf . WT/TPR/S/ 382 • United States  
 
- 24 - 
 
  created in the private sector at a pace that more than offsets the economic drag from reductions in 
inefficient federal spending.15 
1.2.2   Monetary policy  
1.17.   The Federal Reserve conducts monetary policy in the United States. Legislation specifies that, 
in conducting monetary policy, the Federal Reserve System and the Federal Open Market Committee 
(FOMC) should seek "to promote effectively the goals of maximum employment, stable prices, and 
moderate long -term int erest rates".16 The Federal Reserve adjusts the key tools of monetary policy 
— open market operations, the discount rate, reserve requirements, and interest on reserves — to 
influence demand and supply conditions in the federal funds market , and keep the fe deral funds rate 
within the target range established by the FOMC. The FOMC specifies a longer -run goal for inflation , 
rather than a target. The goal is currently 2% , and is for the price index for personal consumption 
expenditures rather than for consumer price inflation.17 
1.18.   In the aftermath of the 2008 financial crisis, the Federal Reserve pursued an accommodative 
monetary policy , so as to support employment and growth, and stem disinflationary pressures. The 
nominal federal funds rate was held near zero for  seven years. As unemployment dropped and 
inflation started to edge towards the Federal Reserve's goal of 2%, the FOMC raised the target range 
for the federal funds rate by 25 basis points at the end of 2015. A sustained increase in economic 
activity, the continued strengthening of the labour market and firming inflation have resulted in 
moderate rate rises since 2015. In the first half of 2018, the FOMC raised the federal funds rate 
twice, to bring it to its current range of 1.75 -2.0%. According to the Fed eral Reserve , "the decisions 
to increase the target range for the federal funds rate reflected the economy's continued progress 
toward the Committee's objectives of maximum employment and price stability. Even with these 
policy rate increases, the stance o f monetary policy remains accommodative, thereby supporting 
strong labour market conditions and a sustained return to 2% inflation".18 
1.19.   After remaining at below , or close to , the FOMC's objective of 2% between 2013 and 2017, 
the 12 -month percentage change in  the personal consumption expenditures  (PCE)  index exceeded 
this goal in the first half of 2018. The 12 -month change  in the PCE index  in June 2018 was 2.2 %, 
boosted by a sizable increase in consumer energy prices. With inflation near its objective , and 
continued strong labour market conditions, the FOMC has indicated that, based on its economic 
outlook, further gradual increases in the federal funds rat e are likely to be appropriate.  
1.2.3   Balance of payments  
1.20.   The U.S. current account deficit has been incr easing since 2013 , and reached  US$4 49.1 billion 
in 2017 (2.4% of GDP), as the gap between gross national savings and gross investment widened 
(Table 1.2).  
Table 1.2 U.S. international transactions, 2013 -18Q2  
(US$ million)   
2013  2014  2015  2016  2017  2018 Q2  
Current account        
Exports of goods and 
services, and income 
receipts (credits)  3,212,991  3,341,768  3,207,288  3,183,783  3,433,239  1,838,572  
 Exports of goods and services  2,294,199  2,376,657  2,266,691  2,215,844  2,351,072  1,255,827  
  Goods  1,593,708  1,635,563  1,511,381  1,456,957  1,553,383  840,680  
  Services  700,491  741,094  755,310  758,888  797,690  415,146  
                                                
15 IMF (2018), United States: 2018 Arti cle IV Consultation – Press Release; Staff Report and Statement 
by the Executive Director for United States. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/07/03/United -States -2018-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-46048 . 
16 Federal Reserve Board, Purposes and Functions . Viewed at: http://www.federalreserve.gov/pf/pf.htm . 
17 Federal Reserve Board online information, Statement on Longer -Run Goals and Monetary Policy 
Strategy. Adopted effective January 24, 2012; as amended effective January 26, 2016 . Viewed at: 
https://www.federalreserve.gov/monetarypolicy/files/FOMC_LongerRunGoals_20160126.pdf . 
18 Federal Reserve (2018), Monetary Polic y Report - July 2018 . Viewed at: 
https://www.federalreserve.gov/monetarypolicy/2018 -07-mpr-summary.htm . WT/TPR/S/ 382 • United States  
 
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2013  2014  2015  2016  2017  2018 Q2  
 Primary income receipts  792,819  824,543  810,073  830,174  928,118  515,959  
  Investment income  786,206  818,040  803,494  823,709  921,816  512,760  
  Compensation of employees  6,613  6,503  6,578  6,466  6,302  3,199  
 Secondary income (current 
transfer) receipts  125,973  140,567  130,525  137,764  154,049  66,787  
Imports of goods and 
services, and income 
payments (debits)  3,561,792  3,706,967  3,615,053  3,616,656  3,882,380  2,061,742  
 Imports of goods and 
services  2,755,334  2,866,241  2,765,216  2,717,846  2,903,349  1,543,628  
  Goods  2,294,247  2,385,480  2,273,249  2,208,008  2,360,878  1,264,640  
  Services  461,087  480,761  491,966  509,838  542,471  278,988  
 Primary income payments  586,842  606,152  606,464  637,151  706,386  393,939  
  Investment income  570,816  589,093  588,809  618,013  686,699  383,967  
  Compensation of employees  16,026  17,059  17,656  19,139  19,687  9,972  
 Secondary income (current 
transfer) payments       124,175  
Capital account        
Capital transfer receipts 
and other credits  0 0 0 0 24,788  0 
Capital transfer payments 
and other debits  412 45 42 59 42 2 
Financial account        
Net U.S. acquisition of 
financial assets excluding 
financial derivatives (net 
increase in 
assets/financial outflow 
(+)) 649,587  866,523  202,208  348,625  1,182,749  76,014  
 Direct investment assets  392,796  387,528  307,058  312,975  379,222  -168,298  
 Portfolio investment assets  481,298  582,676  160,410  36,283  586,695  280,357  
 Other investment assets  -221,408  -100,099  -258,968  -2,723  218,522  -39,106  
 Reserve assets  -3,099  -3,583  -6,292  2,090  -1,690  3,061  
Net U.S. incurrence of 
liabilities excluding 
financial derivatives (net 
increase in 
liabilities/financial inflow 
(+)) 1,052,068  1,109,443  501,121  741,529  1,537,683  383,337  
 Direct investment liabilities  288,131  251,857  509,087  494,455  354,829  82,514  
 Portfolio investment liabilities  511,987  697,607  213,910  231,349  799,182  311,574  
 Other investment liabilities  251,949  159,979  -221,876  15,725  383,671  -10,751  
Financial derivatives other 
than reserves, net 
transactions  2,222  -54,335  -27,035  7,827  23,074  12,055  
Statistical discrepancy  -51,046  67,989  81,859  47,855  92,536  -72,095  
Balances        
Balance on current account  -348,801  -365,199  -407,764  -432,873  -449,142  -223,170  
 Balance on goods and 
services  -461,135  -489,584  -498,525  -502,001  -552,277  -287,801  
  Balance on goods  -700,539  -749,917  -761,868  -751,051  -807,495  -423,960  
  Balance on services  239,404  260,333  263,343  249,050  255,219  136,158  
 Balance on primary income  205,977  218,391  203,608  193,023  221,731  122,020  
 Balance on secondary income  -93,643  -94,006  -112,848  -123,895  -118,597  -57,389  
Balance on capital account  -412 -45 -42 -59 24,746  -2 
Net lending (+) or net 
borrowing ( -) from 
current - and capital -
account transactions  -349,213  -365,244  -407,807  -432,932  -424,395  -223,172  
Net lending (+) or net 
borrowing ( -) from 
financial -account 
transactions  -400,259  -297,255  -325,948  -385,078  -331,860  -295,267  
Source:  Bureau of Economic Analysis . WT/TPR/S/ 382 • United States  
 
- 26 - 
 
  1.21.   Exports of goods declined from US$1.63 trillion in 2014 to US$1.46 trillion in 2016, but 
subsequently increased to US$1.55 trillion in 2017. The decline was due to lower exports of food, 
animal feeds, and beverages, industrial supplies and materials ; and c apital goods except automotive 
products. In 2015 and 2016, the real exchange of the dollar appreciated, prices for many commodity 
exports fell, and trade growth outside the United States was weak. In 2017, the dollar depreciated, 
commodity prices rose, and  trade growth outside the United States was stronger. Goods imports 
also declined from US$2.38 trillion in 2014 to US$2.2 1 trillion in 2016, before increasing to 
US$2.3 6 trillion in 2017. All categories of goods showed an increase in imports , except indust rial 
supplies and materials. Consequently, the balance on goods deteriorated from US$749.9 billion 
(4.3% of GDP) in 2014 to US$807.5 billi on (4.2% of GDP) in 2017 (Chart  1.3). 
Chart 1.3 U.S. Current account an d net financial flows, 2006 -17 
 
Source:  Bureau of Economic Analysis. Viewed at: http://www.bea.gov . 
1.22.   There has been a significant shift within the goods balance . The U.S. petroleum deficit has 
fallen to its lowest level in decades , due to lower international prices and higher domestic production. 
In contrast , the non -oil goods deficit is nearing its historic peak (Chart 1.4). The increasing non -oil 
goods deficit is due to strong import growth and very sluggish export grow th, which is manifested 
in the relatively stronger domestic demand in the United States compared to its trading partners , as 
well as the strengthening of the U.S. dollar.19 Furthermore, the strong demand and the trade -in-
goods deficit is also reflected in t he U.S. savings pattern. Since the mid -1970s , the United States 
has seen a secular decline in the household saving s rate. This downward trend was temporarily 
reversed after the financial crisis but has, more recently, resumed. The evidence instead points t o 
the 2008 –13 increase in the personal saving s rate as being mainly the result of the path for lower 
disposable income, higher unemployment and the significant fall in wealth that was experienced 
during this period  and that led people to save more for the future . The IMF predicts that the 
household savings rate will continue falling , and will eventually revert to the downward trend that 
was in place before 2007. Additionally, disposable income growth and household wealth gains will 
lead to a further decline  in the savings rate , resulting in an increase in the U.S. current account 
deficit.20 On the other hand, a recent comprehensive National Income and Products Accounts revision 
                                                
19 Department of the Treasury, Macroeconomic and Foreign Exchange P olicies of Major Trading Partners 
of the United States , April 2018. Viewed at: https://home.treasury.gov/sites/default/files/2018 -04/2018 -04-
13-Spring -2018-FX-Report -FINAL.pdf . 
20 IMF (2018), United States: 2018 Article IV Consultation – Press Release; Staff Report and Statement 
by the Executive Director for United States. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2018/07/03/United -States -2018-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-46048. 
-900-800-700-600-500-400-300-200-1000100200300
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Balance on current account Balance on goods Balance on services
Balance on income Unilateral current transfers, netChart 1.3
U.S. current account and net financial flows, 2006 -17
US$ billion
Source: Bureau of Economic Analysis.  Viewed at: http://www.bea.gov.WT/TPR/S/ 382 • United States  
 
- 27 - 
 
  by the BEA shows significant upwards revisions for the personal savings rate over the past five 
years.21 
Chart 1.4 U.S. Current account and oil products trade, 2010Q1 -18Q2  
 
Source:  Bureau of Economic Analysis. Viewed at: http://www.bea.gov . 
1.23.   The United States is the world's largest exporter and importer of services (15% and 10% of 
global trade in 2016, respectively), and has been running a surplus on the services account for many 
years (Chart 1.3). However, between 2014 and 2016 , the surplus was on a dec lining trend , before 
increasing in 2017, when it totaled US$255.2 billion (1.4% of GDP). It was up 4.4% for the first six 
months of 2018  on a BOP basis .  
1.24.   The main service s export categories are travel, other business services, charges for use of 
intellectu al property, financial services , and transport. Exports of other business services and travel 
have shown a marked increase since 2014, while exports of transport services and use of intellectual 
property have declined. With regard to services imports, the largest categories are travel, other 
business services, transport, insurance , and charges for the use of intellectual property. Since 2014, 
imports of transport services, travel services, other business services , and charges for the use of 
intellectual pro perty have risen, while those of insurance services have declined . The latter  declined 
in 2015 by over 6% , to US$47,822 million from US$51,011 million, but slightly increased in 2016 to 
US$48,077 million. In this period, imports of auxiliary insurance serv ices rose, but a decline in 
import s of direct insurance and reinsurance appea rs to account for the decrease.  
1.25.   Europe accounted for the majority of U.S. total trade in services. The United Kingdom 
accounted for 9% of U.S. services exports and 10% of services  imports in 2016,  28% of U.S. exports 
of services went to other European destinations, and 32% of U.S. imports of services came from 
there . Canada accounted  for 7% of U.S. services exports and was the source of 6% of U.S. services 
imports; China's shares w ere 7% and 3%, respectively, while other Asian and Pacific countries 
accounted for 23% and 24% , respectively . Japan 's consumption of U.S. services was similar to that 
of China, but it accounted for approximately double the amount of U.S. services imports.  
1.26.   The United States also runs a significant surplus on the primary income account, which rose 
to US$221.7 billion in 2017 (1.1%  of GDP). Primary income receipts rose mainly on the back of 
reinvested earnings and dividends on equity other than investment fund  shares, while the increase 
                                                
21 BEA online information. Viewed at: https://www.bea.gov/news/2018/personal -income -and-outlays -
june-2018. 
-150-100-50050
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2
2010 2011 2012 2013 2014 2015 2016 2017 2018
Balance on current account Balance on oil productsChart 1.4
U.S. current account and oil products trade, 2010Q1 -18Q2
US$ billion
Source:  Bureau of Economic Analysis.  Viewed at: http://www.bea.gov.WT/TPR/S/ 382 • United States  
 
- 28 - 
 
  on primary income payments was due mainly to reinvested earnings and interest on debt securities. 
The surpluses realized on the services and primary income account partially offset the trade deficit.  
1.27.   According to the BEA, at the  end of 2017, the U.S. net international investment position stood 
at a deficit of US$7.8 trillion (40.5% of GDP), an improvement of more than US$470 billion compared 
to end -2016. The value of U.S. -owned foreign assets was US$27.6  trillion, while the value  of foreign -
owned U.S. assets stood at US$35.5 trillion. Recent improvement in the net position has been 
supported by valuation effects that increased the dollar value of U.S. assets held abroad, as well as 
by the strong relative performance of foreign equ ity markets in 2017, which also boosted the value 
of U.S. assets held abroad.22 
1.3  Developments in Trade and Investment  
1.3.1   Trends and patterns in merchandise and services trade  
1.28.   After peaking at US$1.6 2 trillion in 2014, merchandise exports declined to US$1.46 tri llion in 
2016, before rising to US$1.55 trillion in 2017. Over the same period , merchandise imports also 
declined , albeit negligibly. As per balance of payments data, total merchandise trade (the sum of 
exports and imports) declined from the equivalent of 23.1% of GDP in 2014 to 20.4% of GDP in 
2017.  
1.29.   Services exports rose from US$741.1 billion in 2014 to US$797.7 billion in 2017. Services 
imports also increased over the same period , from US$480.8 billion to US$542.5 billion. Total trade 
in services (the sum  of exports and imports) as a share of GDP declined slightly from 7% to 6.8%.  
1.30.   The United States has a highly diversified export base. The largest export category is 
machinery and mechanical appliances, accounting for nearly a quarter of exports. These are followed 
by vehicles and chemicals (Chart 1.5 and Table A1.1) ; the shares of these in total exports have 
remained steady since 2014. On the other hand, the shares of mineral products in total exports 
exhibit a sharp decline between 2014 and 2016, before ri sing again in 2017. The change can be 
attributed to the sharp fall in international oil prices and their subsequent recovery in 2017.  
1.31.   Imports are equally diversified. The largest import categories are machinery and mechanical 
appliances, vehicles, mineral products , and chemicals (Chart 1.5 and Table A1.2). Since 2014, the 
shares of machinery and mechanical appliances, vehicles , and chemical s in total imports have risen. 
This reflects the sustained growth of the economy  and a strengthening of the labour mark et. In 
contrast, the share of mineral products has declined , mainly on account of increased domestic 
production of oil and gas , as well as the fall in the internation al prices of those commodities.  
                                                
22 Department of the Treasury (2018),  Macroeconomic and Foreign Exchange Policies of Major Trading 
Partners of the United States , April . Viewed at: https://home.treasury.gov/sites/default/files/2018 -04/2018 -
04-13-Spring -2018-FX-Report -FINAL.pdf ; and BEA online information. Viewed at:  
https://www.bea.gov/da ta/intl -trade -investment/international -investment -position . WT/TPR/S/ 382 • United States  
 
- 29 - 
 
  Chart 1.5 Merchandise trade by main HS sections, 2014 and 2017  
 
Source:  UNSD, Comtrade database.  
1.32.   The EU -28 is the largest destination for U.S. exports, followed by Canada, Mexico, China and 
Japan (Chart 1. 6 and Table A1.3). Since 2014, the shares of EU -28, Mexico,  China and Japan have 
risen, while the share of exports d estined for Canada has declined.  
Chart 1.5
Merchandise trade by main HS sections, 2014 and 2017
2014 2017
(a)    Exports
Total: US$1,620 billion
(b)    Imports
Total: US$2,411 billion Total: US$2,407 billion
Source:   UNSD, Comtrade database.Total: US$1,546 billionBase metals
4.9%Other
19.1%
Precision 
instruments
5.4%Other
19.1%
Chemical 
products
7.8%Base metals
4.4%Machinery & 
electrical 
equipment
24.4%
Base metals
5.5%
Mineral 
products
15.2%Misc. manuf.
3.8%Machinery & 
electrical 
equipment
27.0%Other
20.0%
Precision instruments
3.8%
Chemical 
products
8.3%Base 
metals
5.5%Misc. 
manufactures
4.4%Machinery & 
electrical 
equipment
29.3%Other
21.4%
Precision 
instruments
3.4%
Textiles
4.8%
Mineral 
products
8.7%Textiles
4.7%Mineral products
10.3%Mineral products
9.6%Machinery & electrical 
equipment
24.2%
Chemical 
products
10.3%Plastics
4.9%Chemical 
products
10.2%
Precision 
instruments
5.5%Plastics
4.8%
Vehicles & 
transport 
equipment
17.3%Vehicles & 
transport 
equipment
16.6%
Vehicles & 
transport 
equipment
12.6% Vehicles & 
transport 
equipment
13.7%Vegetable 
products
4.6%Vegetable products
4.4%WT/TPR/S/ 382 • United States  
 
- 30 - 
 
  Chart 1.6 Merchandise trade by main origin and destination, 2014 and 2017  
 
Source:  UNSD Comtrade database.  
1.33.   The main so urces of U.S. imports in 2017 were China, EU -28, Mexico, Canada and Japan 
(Chart 1.6 and Table A1.4). Mirroring changes in export destinations, the shares of China, the EU -
28, Mexico and Japan as sources of imports ha ve risen, while the share of Canada has  declined since 
2014. The United States and Canada have a substantial two -way trade in petroleum and natural gas 
products that does not exist with the other large trading partners of the United States. Falling world 
prices for those commodities therefore h ad the greatest effect, both for imports and exports, on U.S. 
trade with Canada.  
Chart 1.6  Merchandise trade by main origin and destination, 2014 
and 2017
2014 2017
(a)    Exports
Total: US$1,620 billion
(b)    Imports
Total: US$2,411 billion Total: US$2,407 billion
Source:   UNSD Comtrade database.Total: US$1,546 billionBrazil
2.6%Others
7.9%Canada
19.3%
EU-28
18.4%Other 
Americas
8.7%Japan
4.1%
Mexico
12.3%Americas
43.7%Canada
18.3%
Other 
Americas
7.3%China
8.4%Others
6.3%
Other Asia
16.4%
Americas
45.4%Other Asia
15.3%
Canada
14.7%
Other Americas
5.2%Japan
5.7%
EU-28
17.7%Korea, 
Rep. of
3.0%
China
20.2%Other Asia
11.0%Others
7.1%
Canada
12.7%Mexico
13.2%
Other 
Americas
3.8%
EU-28
18.5%Japan
5.8%
China
21.9%Other Asia
12.6%Others
5.0%
Americas
33.5%Americas
30.9%
Other 
Europe
1.9%Other 
Europe
2.2%Asia
39.8%Asia
43.4%Korea, Rep. of
3.1%Other Europe
2.4%Japan
4.4%
EU-28
17.2%Brazil
2.4%
Brazil
1.3%Mexico
14.8%Mexico
15.7%
Brazil
1.3%China
7.6%
Other Europe
2.4%Europe
19.6%Asia
27.1%
Europe
20.8%Asia
29.2%
Europe
20.7%Europe
19.6%WT/TPR/S/ 382 • United States  
 
- 31 - 
 
  1.3.2   Trends and patterns in Foreign Direct Investment (FDI) 
1.34.   The United States continues to be the world's foremost destination for Foreign Direct 
Investment (FDI) because of its op en markets, liberal investment regime, large consumer base, 
higher education system, skilled and productive workforce, a business environment that encourages 
innovation, legal protections , and the world's largest venture capital and private equity market. FDI 
inflows on a historic cost basis reached a record amount of US$468 billion in 2015 and US$472 billion 
in 2016 , before dropping to US$277 billion in 2017 (Chart 1.7). As a result, the stock of FDI increased 
to US$4.0 trillion in 2017. Increased investme nt in 2015 and 2016 was driven mainly by 
manufacturing, specifically the chemicals industry. In 2017 , the largest investments were in 
wholesale trade, chemicals, and finance. Manufacturing account s for 40% of the FDI stock, followed 
by banking, finance and  insurance (18%) ; other industries (17%) ; and wholesale trade (11%).  
Chart 1.7 Foreign Direct Investment into the United States, 2008 -17 
 
Source:  Bureau of Economic Analysis online information. Viewed at: http://www.bea.gov . 
1.35.   FDI in to the United States is highly concentrated with respect to origin. The EU -28 is 
responsible for 59% of the FDI stock in the United States, followed by Japan (12%), Canada (11%) , 
and Switzerland (8%) (Chart 1.8). However, in terms of growth, the rising amount of investment 
from Asian economies such as China and Singapore has been particularly high in recent years.  
1.36.   According to the most recent data available, majority -owned U.S. af filiates of foreign entities 
exported nearly US$353 billion in goods in 2015, accounting for over 23% of total merchandise 
exports. Such entities were also responsible for nearly 16% of R&D spending in 2015 in the 
United  States and employed 6.8 million U.S . workers in 2015.23 
 
                                                
23 BEA online information. Viewed at: http://www.bea.gov . 
-50050100150200250300350400450500
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Manufacturing Wholesale trade Banking and finance All othersChart 1.7
Foreign direct investment into the United States, 2008 -17
(US$ billion)
Source:   Bureau of Economic Analysis online information.  Viewed at: http://www.bea.gov/.WT/TPR/S/ 382 • United States  
 
- 32 - 
 
  Chart 1.8 Direct investment position on a historical -cost basis, by selected partners, 
2012 and 2017  
(% of total investment)  
 
Source:  WTO Secretariat, based on Bureau of Economic Analysis  online information. Viewed at: 
http://www.bea.gov . 
1.37.   The United States continues to be the largest foreign investor abroad. On a historical cost 
basis, the stock of outward FDI was US$5.3 trillion in 2016. Nearly 54% of th is was invested in the 
EU-28, followed by Canada (7%), Bermuda (6%), British Caribbean islands (6%), and Singapore 
(5%). Furthermore, 96% of this outward FDI stock comprised of reinvested earnings, 10% of equity 
capital and -5.8% of intercompany debt (paym ents to the United States). More than half of outward  
Chart 1.8
Direct investment position on a historical -cost basis, by selected 
partners, 2012 and 2017.
Inward
2012
Total: US$2,585 billion
Total: US$4,025 billion2017
Total: US$6,013 billion
Source:    WTO Secretariat, based on Bureau of Economic Analysis online information. Viewed at: 
http://www.bea.gov.Total: US$4,410 billionAustralia
2.0%
Australia
3.7%
Japan
11.7%EU(28)
50.0%
Canada
8.3%Bermuda
6.3%United Kingdom 
Islands, Caribbean
5.0%Japan
2.8%
Switzerland
7.7%Australia
1.7%
Canada
11.3%
Japan
11.7%EU(28)
58.7%Mexico
1.8%
Canada
6.5%EU(28)
53.9%
Bermuda
5.8%United Kingdom 
Islands, Caribbean
5.5%Australia
2.8%
Switzerland
4.2%EU(28)
62.2%Switzerland
7.7%
Canada
8.3%Others
5.6%
Switzerland
2.8%Others
15.4%
Others
6.9%Others
12.8%Outward(% of total investment)
Singapore
3.3%
Singapore
4.6%United Kingdom 
Islands, Caribbean
2.6%
United Kingdom 
Islands, Caribbean
2.2%
Japan
2.1%Mexico
2.4%WT/TPR/S/ 382 • United States  
 
- 33 - 
 
  FDI is invested in holding companies; around 12% of the total in the financial sector , and 13% in 
manufacturing.24 
1.38.   The effect of U.S. direct investment abroad on U.S. workers and wages was addressed in a  
recent report to Congress. The report shows that 74% of the accumulated U.S. FDI abroad is 
concentrated in high -income developed countries, and , in recent years , the share of investment 
going to developing countries has fallen. Evidence also shows that U. S. firms invest abroad to serve 
the foreign local market rather than to produce goods to export back to the United States.25 
1.39.   The Administration expects that the recent tax measures (Box 1.1) may result in increased 
investment in the United  States and will encourage U.S. firms to increase repatriated earnings that 
can be invested in the United States.
                                                
24 Congressional Research Service (2017), U.S. Direct Investment Abroad: Trends and Current Issues, 
29 Ju ne 2017. Viewed at: https://fas.org/sgp/crs/misc/RS21118.pdf . 
25 Congressional Research Service (2017), U.S. Direct Investment Abroad: Trends and Current Issues, 
29 June 2017. Viewed at: https://fas.org/sgp/crs/misc/RS21118.pdf . WT/TPR/S/ 382 • United States  
 
- 34 - 
 
  2  TRADE AND INVESTMENT  REGIMES  
2.1  General Framework  
2.1.  The United States Constitution assigns authority over the regulation of foreign trade to 
Congre ss. Article I, Section 8, gives Congress the power to " regulate  Commerce with foreign 
Nations…" and to " …lay and collect Taxes, Duties, Imposts, and Excises… ".1 Congress  has legislative 
and oversight authority  over trade policy, and works with the Executiv e Branch to shape  and 
implement trade agreements.  Trade legislation is enacted in the same manner as other laws, through 
passage by both houses of Congress and approval by the President. Generally, multiple  Executive 
Branch agencies are involved in develop ing and implementing trade policy , therefore interagency 
coordination is an important part of the process.  
2.2.  Under Article II of the Constitution, the President of the United States has authority to negotiate 
treaties and international agreements, and exerci ses broad authority over the conduct of the nation's 
foreign affairs.2 If any such agreement requires changes in statutory law, however, it can be 
implemented only through legislation enacted by Congress.  
2.3.  U.S. law and policy regarding international trade i n goods is largely the responsibility of the 
Federal Government. The U.S. legal regime for services, invest ment and intellectual property is a 
combination of federal and state law, with state regulation  predominant in certain areas, such as 
insurance, prof essional services, and franchising (Section 4). Intellectual property rights issues are 
covered by federal legislation in the case of pat ents and copyright, while trade marks are protected 
by both federal and state laws.  
2.4.  Over time, Congress has delegated t o the President the administration o f certain trade policy 
functions. For instance, s ince the 1 930s, Congress has recurrently given the President authority to 
implement tariff cuts and reductions in other barriers to trade in exchange for trade concessions  
from other countries.3 Beginning with  the Trade Act of 1974, the Congress has passed several acts 
providing for trade authorities procedures  to be known as the "fast track", and more recently the 
Trade Promotion Authority (TPA), that provide for  the expedited ratification of trade agreements  on 
the condition that the administration fulfil the trade policy priorities and negotiating objectives  set 
by Congress.4 The current trade authorities procedures are contained in the Bipartisan Congressional 
Trade Priorities and Accountability Act of 2015 (Title I of Public Law (P.L.) 114 –26) (TPA 2015), 
enacted on 29 June 2015. The procedures were designed to preserve Congress' constitutional role 
in the regulation of foreign commerce, while offering the Presi dent and U.S. trading partners the 
assurance of an up or down vote within a specific time frame when an agreement is brought before 
Congress. Without this process, such legislation would follow the general rules of procedure, which 
would allow Congress to introduce amendments to the implementing legislation of the agreement, 
which could risk the reopening of negotiations . The TPA also establishes a Congressional requirement 
for the Executive B ranch to notify  and consult with Congress, with trade advisory co mmittees, and 
with the public, when  conduct ing trade agreement negotiations.  
2.5.  In order to be  eligible for this fast -track procedure,  a trade agreement must be negotiated 
during the limited time per iod in which the TPA is in effect. The current Act granting TPA applies with 
respect  to any trade  agreement entered into by the U nited States before 1 July 2018 . The TPA 
timeframe was extended to 1 July 2021 as a result of the President request ing such extension on 20 
                                                
1 The Constitution of the United States, Article I, Section 8.  
2 The Constitution of the United States, Article II, Section 2 . 
3 Under the Reciprocal Trade Agreements Act  of 1934, Congress delegated authority to the President to 
modify or reduce tariffs up to 50%, in exchange for reciprocal concessions negotiated with U.S. trading 
partners. The renewal of this authority was the base for U.S. participation in the early GATT  rounds of tariff 
negotiations. The Act was extended 11 times. When negotiations in the GATT advanced to include non -tariff 
measures, Congress extended the President's tariff proclamation authority, and also put in place fast -track 
procedures, first enacte d in the Trade Act of 1974. Under these procedures, Congress agreed to expedited 
consideration and vote, without amendment, on trade legislation submitted by the President to implement 
trade agreements, provided that the President notified and consulted wi th Congress over the course of the 
negotiation according to prescribed rules.  
4 United States Trade Representative ( USTR ) online information. Viewed at: https://ustr.gov/trade -
topics/t rade-promotion -authority , and the Bipartisan Congressional Trade Priorities and Accountability Act of 
2015, Senate Report, 12 May 2015, p. 4. Viewed at: 
https://www.finance.senate.gov/imo/media/doc/TPA%20Report%20as%20filed.pdf . WT/TPR/S/ 382 • United States  
 
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  March 2018, and neither House of Congress adopt ing an extension disapproval resolution before 
1 July 2018.  
2.2  Trade Policy Formulation and Objectives  
2.2.1   Trade policy objectives  
2.6.  The President's 2018 Trade Policy Agenda is driven "to open foreign markets, obtain more 
efficient global markets and fairer treatme nt for American workers".5 The trade policy focuses on 
five major priorities:  
• Adopting trade policies that support U.S. national security policy;  
• Strengthening the U.S. economy;  
• Negotiating better trade deals that work for all Americans;  
• Enforcing U.S. trade laws and U.S. rights under existing trade agreements; and  
• Reforming the multilateral trading system.  
2.7.  The Agenda notes that free, fair, and reciprocal trade relations are critical to the U.S. national 
security policy. It also focuses on strengthening the U.S. economy, and renegotiating and revising 
trade deals. In terms of reforming the multilateral trading system, the Agenda advocates "for 
sensible and fair reforms to the WTO, promoting rules for efficient markets, expanded trade, and 
greater wealth f or all nations".6 The Agenda notes that the United States remains committed to 
working with all WTO Members who share in the United States' goal of fair and reciprocal trade 
deals. The Agenda also points to its current negotiations to improve the North Ame rican Free Trade 
Agreement (NAFTA) and the U.S. -Korea Free Trade Agreement (KORUS), as well as its plans for 
negotiating a trade agreement with the United Kingdom after it leaves the European Union.  
2.8.  Congress outlines the trade negotiating objectives in TPA  legislation. For an agreement to 
qualify for trade authorities ' procedures, it must make progress in achieving the applicable purposes, 
policies, priorities, and objectives of the TPA. The trade negotiating objectives of the United States 
are set out in t he Bipartisan Congressional Trade Priorities and Accountability Act of 2015; some 
objectives were added in the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). The 
trade objectives are divided into three categories: overall objectives (broad g oals and the general 
direction trade negotiations are expected to take); principal objectives (considered more specific 
and politically critical); and capacity building and other priorities (include the provision of technical 
assistance to trading partners ). 
2.9.  The overall trade objectives state the goals of U.S. trade negotiations, including: to obtain 
more open, equitable, and reciprocal market access; to obtain reductions in barriers to trade and 
investment which decrease U.S. market opportunities; to stren gthen the system of international 
trade and investment disciplines, including dispute settlement; to foster economic growth and rising 
living standards, enhanced competitiveness and full employment in the United States, and to 
enhance the global economy; t o ensure trade and environmental policies are mutually supportive; 
to promote respect for workers' rights; to seek provisions in trade agreements ensuring that they 
do not weaken or reduce the protections afforded in domestic environmental and labour laws;  to 
ensure equal access to trade opportunities to small and medium -sized enterprises (SMEs); to 
promote the universal ratification of the International Labour Organization (ILO) Convention 
concerning the prohibition of child labour; to ensure that trade ag reements reflect the inter -
relatedness and multi -sectoral nature of trade and investment; to recognize the growing significance 
of the digital economy; to take into account legitimate domestic objectives, such as protection of 
health, safety, security, and  consumer interests, and the laws and regulations pertaining thereto; to 
take account of the religious freedom of any party negotiating a trade agreement with the United 
States; to ensure trade agreements do not require changes to immigration laws or oblig ate the 
                                                
5 USTR  (2018), 2018 Trade Policy Agenda and 2017 Annual Report of the President of the United States 
on the Trade Agreements Program . Viewed at: 
https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20FINAL.PDF . 
6 USTR online information, 2018 Trade Policy Agenda and 2017 Annual Report  of the President of the 
United States on the Trade Agreements Program . Viewed at: 
https://ustr.gov/sites/default/files/files/Press/Reports/ 2018/AR/2018%20Annual%20Report%20FINAL.PDF . WT/TPR/S/ 382 • United States  
 
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  United States to grant access or expand access to visas; and to ensure that trade agreements do 
not establish obligations regarding greenhouse gas emissions.7 
2.10.   In TPA 2015, Congress updated its principal negotiating objectives, including addressing 
barriers to innovation and digital trade, state -owned enterprises and localization policies. The 
principal negotiating objectives on services were also expanded by considering the utilization of 
global chains in the goal of trade liberalization, and callin g for liberalized trade in services including 
through plurilateral trade agreements. In terms of agriculture trade, TPA 2015 added three new 
negotiating objectives: more detail included on trade rules on sanitary and phytosanitary (SPS) 
measures; ensuring transparency in tariff -rate quota administration; and seeking to prevent 
improper use of geographical indications.  
2.2.2   Trade policy formulation  
2.11.   The procedure to formulate trade policy in the United Stat es remains the same since the last 
Review . Trade policy is  developed and administered through: Congress; the Executive Branch; 
independent agencies; and the private and public sectors.  Congress also sets trade negotiating 
objectives and the scope of notifications and consultation requirements for proposed negotia tions 
through the TPA.  
2.12.   In Congress , the House Ways and Means Committee and the Senate Finance Committee have 
primary responsibility for trade matters , due to the revenue implications in most trade agreements 
and trade policy changes. Other c ommittees may b e involved when they have jurisdiction over  a 
specific  legislation that could be af fected by a trade agreement. TPA 2015 replace d the Congressional 
Oversight Group (COG), which had been established by the Trade Act of 2002, with the 
Congressional Advisory Groups on Negotiations (CAGs). CAGs are established for a House Advisory 
Group on Negotiations (HAG), presided by the chair of the Ways and Means Committee, and a Senate 
Advisory Group on Negotiations (SAG), led by the chair of the Finance Committee.  
2.13.   Through its legislative and oversight authority , Congress works together with the Executive 
Branch , which  negotiate s and implement s trade agreements . 
2.14.   The principal trade advisor  to, and negotiator and spokesperson on  trade policy for the 
President  is the United  States Trade Representative (the USTR). The USTR  is also responsible for 
developing and coordinating United States international trade, commodity, and direct investment 
policy, and overseeing negotiations with other countries.8 The USTR reports annually on the 
President 's trade policy agenda and on foreign trade barriers . The main agency responsible for trade 
policy formulation is the Office of the USTR, which is part of the Executive Office of the President  
and is headed by the USTR.  
2.15.   USTR deals with all WTO matters, and with trade, commodity, and direct investment issues 
in the OECD and UNCTAD. It works in consultation with Congress, particularly with the House Ways 
and Means Committee, the Senate Finance Committee, the five Members from each House who ar e 
appointed as official Congressional advisors on trade policy, and other Senators or Representatives 
who have been appointed as advisors on particular issues or negotiations. It reports annually to 
Congress, on behalf of the President, on the U.S. trade a greements program and its implementation, 
including WTO activities. USTR is also in charge of monitoring foreign countries' compliance with 
trade agreements, representing the United States in dispute settlement procedures in the WTO and 
under free trade agreements  (FTAs), and applying and enforcing certain trade laws. It also 
administers the Generalized System of Preferences (GSP).  
2.16.   Under the Trade Expansion Act of 1962, Congress established an interagency trade policy 
mechanism to advise the USTR  on trade p olicy. The mechanism has three tiers: the Trade Policy 
Committee (Cabinet level), the sub -cabinet -level Trade Policy Review Group (TPRG), and the staff -
level Trade Policy Staff Committee (TPSC).  USTR consults with other government agencies on trade 
policy matters through the TPRG and the TPSC , both composed of 20 federal agencies and offices . 
Both the TPSC and TPRG are chaired by the USTR , and they consist of staff- and sub -cabinet -level 
officials, respectively,  of the Departments of Treasury, Commerce, Sta te, Agriculture, Labour,  
                                                
7 Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (Title I of Public Law (P.L.) 
114–26). Viewed at: https://ww w.congress.gov/114/plaws/publ26/PLAW -114publ26.pdf . 
8 USTR online information, "Mission of the USTR". Viewed at: https://ustr.gov/about -us/about -ustr. WT/TPR/S/ 382 • United States  
 
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  Defense, Energy, Health and Human Services, Homeland Security, Interior, Justice, and 
Transportation; the Environmental Protection Agency; the U.S. Agency for International 
Development;  the Small Business Administration; the Office  of Management and Budget; the Council 
on Environmental Quality; the Council of Economic Advisors; the National Economic Council; and 
the National Security Council .9 
2.17.   The TPSC is the primary operating group, with representation at the senior civil service l evel. 
Supporting the TPSC are more than 90 subcommittees  responsible for specialized areas , and several 
task forces that work on particular issues. If agreem ent is not reached in the TPSC, then issues may 
be brought to the TPRG  or to Cabinet Principals .10 
2.18.   The pr ivate and public sector also have  a role in the formulation of U.S. trade policy  through 
the trade advisory committee system, established by Congress in the Trade Act of 1974.  Congress 
enhanced the role of this system most recently in the Trade Act of  2002.  The system was created to 
ensure that trade policy and trade negotiating objectives adequately reflect public and private sector 
interests. It also ensures that USTR senior officials receive input from a wide range of public 
interests. It consists o f 26 advisory committees, with up to 1,000 advisors, administered by the 
USTR 's Office of Intergovernmental Affairs and Public Engagement (IAPE) in collaboration with the 
U.S. Departments of Agriculture, Commerce, and Labor. The system includes: the Presid ent's 
Advisory Committee for Trade Policy and Negotiations (ACTPN)11; five general policy advisory 
committees dealing with environment, labour, agriculture, Africa, and intergovernmental issues ; and 
20 technical advisory committees in the areas of industry and agriculture.12 The committees provide 
information and advice on U.S. negotiating objectives and positions for trade agreement  negotiations 
and other matters arising in connection with the development, implementation, and administration 
of U.S. trade pol icy. They are  required to prepare a report on proposed trade agreements subject to 
trade authorities ' procedures for the Adm inistration and Congress, which are made public on USTR 's 
website.13 
2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
2.19.   The United States is an or iginal Member of the WTO. It is a party to the Agreement on 
Government Procurement (GPA), a participant in the Information Technology Agreement (ITA) and 
the expanded Information Technology Agreement (ITAE), and a signatory to the Agreement on Trade 
in Civ il Aircraft. The United States deposited its instrument of acceptance of the Trade Facilitation 
Agreement (TFA) to the WTO in January 2015.  
2.20.   According to the 2018 Trade Policy Agenda, the WTO is viewed as an important institution, 
and the United States has a "strong track record of building coalitions of like -minded Members to 
use the WTO committee system, in particular, to pressure non -complying economies to bring 
measures into conformity with WTO rules, to advance transparency and predictability in global  trade 
rules, and to avert the need to resort to dispute settlement ".14 Furthermore, the United States views  
that the WTO has achieved positive results and has the potential to achieve even more in the future.  
At the same time, the Trade Policy Agenda notes that the United States has long been concerned 
that the WTO is not operating as the contracting parties envisioned. In addition, the Agenda 
emphasizes that, if the WTO is to be a vibrant negotiating and implementing forum, Members must 
take advantage of e very opportunity to advance work and seize results as they present themselves .15 
                                                
9 USTR online information, "Mission of the USTR". Vi ewed at: https://ustr.gov/about -us/about -ustr. 
10 USTR online information, "Mission of the USTR". Viewed at: https://ustr.gov/about -us/about -ustr. 
11 The President appoints up to 45 ACTPN members  administered by the USTR  for two -year terms . The 
1974 Trade Act requires that membership broadly represent key economic sectors affecte d by trade.  
12 USTR online information, " Advisory Committees ". Viewed at:  https://ustr.gov/about -us/advisory -
committees ; and "Mission of the USTR". Viewed at: https://ustr.gov/about -us/about -ustr. 
13 USTR online infor mation, "Mission of the USTR". Viewed at: https://ustr.gov/about -us/about -ustr. 
14 USTR (2018), 2018 Trade Policy Agenda and 2017 Annual Report of the President of the United States 
on the Trade Agreement s Program . Viewed at: https://ustr.gov/about -us/policy -offices/press -office/reports -
and-publications/2018/2018 -trade -policy-agenda -and-2017. 
15 USTR (2018), 2018 Trade Policy Agenda and 2017 Annual Report of the President of the United States 
on the Trade Agreements Program. Viewed at: https://ustr.gov/about -us/policy -offices/press -office/reports -
and-publications/2018/2018 -trade -policy -agenda -and-2017. WT/TPR/S/ 382 • United States  
 
- 38 - 
 
  2.21.   The Trade Policy Agenda also notes that Members agreed on  several important outcomes at 
the WTO 's Eleventh Ministerial Conference in Buenos Aires in December 2 017. These outcomes 
included: the Ministerial decision on fisheries subsidies; a work program me on electronic commerce, 
including an extension of the moratorium on customs duties on electronic transmissions; and the 
creation of a working party on accession  for South Sudan, among others.16 Going forward , the 
United  States seeks to work with other WTO Members before the twelfth Ministerial Conference "to 
begin the process of identifying opportunities to achieve accomplishments, even if incremental ones, 
and av oid buying into the predictable, and often risky, formula of leaving everything to a package 
of results for Ministerial action".  
2.22.   The last U.S. TPR took place in 2016 , and U.S. trade policies have been reviewed 13 times. 
The United States submitted numerous notifications during the period under review, covering  areas 
such as agriculture, anti -dumping, subsidies and countervailing measures, SPS, TBT, and import 
licensing, among o thers (Table A2.1 ). The United States also submitted several counter -notifications 
during the period under review, including one on India's market price support for wheat and rice, its 
fourth one on China's subsidies, its second one on China's state-tradin g enterprises (STEs), and one 
on Viet Nam's STEs .17 
2.23.   During the review period, t he United States  was involved in 13 dispute settlement cases as a 
complainant (Table A2.2) and 21 cases as a respondent (Table A2. 3). During the period under 
review , the United S tates has continued to raise concerns with respect to  the functioning of the WTO 
dispute settlement system .18 
2.3.2   Regional and preferential agreements  
2.3.2.1   Reciprocal agreements  
2.24.   The United States has 14 free trade agreements (FTAs) in force with 20 countries: Austra lia; 
Bahrain;  Chile;  Colombia;  Israel;  Jordan;  Korea, Rep. of; Morocco;  Oman;  Panama;  Peru;  
Singapore; DR -CAFTA (Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and 
Nicaragua); and NAFTA (Canada and Mexico). These include 12 bilateral agreements and 2 
plurilateral  agreements (NAFTA and CAFTA -DR). Most of the agreements cover bo th goods and 
services , except the FTA with Israel (goods only). The United States has notified all of its FTAs to 
the WTO Committee on Regional Trade Agreements.  
2.25.   The United States is renegotiating NAFTA, which came into force on 1 January 1994, with the 
aim of improving market access for agriculture, expanding investment and intellectual property 
protections , enhancing regulatory transparency, and including chapters on competition and SMEs, 
among other things .19 Through the renegotiation, the Administration  has two principal objectives: 
(a) to modernize  the Agreement , including  through  improved provisions to protect intellectual 
property and facilitate efficient cross -border trade , among other updates, and through  new 
provisions on digital trade;  and (b) to rebalance NAFTA with a view to reduc ing the U.S. trade deficit  
with the NAFTA countries .20 The U.S. Administration's proposals include correcting policies that have 
encouraged outsourcing , and ensuring strong, enforceable provisions on labour and the enviro nment 
that will help level the playing field for U.S. workers.21 In August 2018, the United States and Mexico 
                                                
16 USTR (2018), 2018 Trade Policy Agenda and 2017 Annual Report of the President of the United S tates 
on the Trade Agreements Program . Viewed at: https://ustr.gov/about -us/policy -offices/press -office/reports -
and-publications/2018/2018 -trade -policy -agenda -and-2017. 
17 WTO documents G/AG/W/174, 9 May 2018; G/SCM/Q2/CHN/71, 19 April 2017; G/C/W/749 and 
G/STR/Q1/CHN/9, 13 December 2017; and G/C/W/750 and  G/STR/Q1/VNM/4, 11 January 2018, respectively.  
18 See for example, WTO documents WT/DSB/M/409, 6 June 2018; WT/DSB/M/412, 1 August 2018; and 
WT/DSB/M/413, 31 August 2018.  
19 USTR online information. Viewed at: https://ustr.gov/about -us/policy -offices/press -office/press -
releases/2017/november/ustr -releases -updated -nafta. 
20 USTR (2018), 2018 Trade Policy Agenda and 2017 Annual Report o f the President of the United States 
on the Trade Agreements Program . Viewed at: 
https://ustr.gov/sites/default/files/files/Press/Reports/20 18/AR/2018%20Annual%20Report%20FINAL.PDF . 
21 USTR (2018), The President 's Trade Agenda and Annual Report , Fact Sheet. Viewed at: 
https://ustr.gov/sites/default/files/uploads/factsheets/USTR%20 -%20POTUS%20Trade%20Agenda%20 -
%20Fact%20Sheet%20 -%20FINAL.pdf . WT/TPR/S/ 382 • United States  
 
- 39 - 
 
  reached an agreement in principle to modernize NAFTA. The agreement in principle makes 
amendments to existing provisions on different areas  and cov ers some new issues.22 
2.26.   The United States -Korea Free Trade Agreement (KORUS), which came into force on 15 March 
2012, is also being renegotiated. The United States and the Republic of Korea reached an agreement 
in principle in March  2018, which includes outc omes related to truck tariffs, trade in au tomobiles, 
and investment . In addition, outcomes to address implementation concerns related to 
pharmaceuticals and customs were also secured.23 
2.27.   The United States withdrew from the proposed Trans -Pacific Partnership (TPP) in 2017.24 In 
2013, the United States and the European Union launched negotiations on the proposed Trans -
Atlantic Trade and Investment Partnership (T -TIP) agreement. At the end of 2016, t he negotiations 
were paused.  
2.3.2.2   Unilateral preferences  
2.28.   Since the Trade Act of 1974, which established  the Generalized System of Preferences (GSP), 
the United States trade preference program mes have provided special duty -free privileges to goods 
from developing countries which meet certain eligibility criteria.  These preference program mes aim 
to support domestic reforms and economic growth through trade. Currently , the United States has 
four main program mes: the African Growth and Opportunity Act (AGOA), the GSP, the Caribbean 
Basin Initiative (CBI)/Caribbean Ba sin Trade Partnership A ct (CBTPA), and the Nepal Trade 
Preference Program (NTPP). In 2017 , each program me's share of total U.S. preferential (non-
reciprocal) imports was: GSP, 61.8%  (US$21.3 billion) ; AGOA (excluding GSP), 35.4% 
(US$12.2  billion) ; CBI/CBTP A, 2.8% (US$960 million) ; and NTPP, 0.01 % (US$2.4 million) . Also i n 
2017, imports benefiting from preferential access under these program mes amounted to US$34.5 
billion , an 18. 7% increase from 2016.25 
2.3.2.2.1   Generalized System of Preferences (GSP)  
2.29.   The GSP is a pre ference program me designed to promote economic growth in developing and 
least-developed countries (LDCs) by providi ng preferential duty -free entry. To qualify for GSP, a 
beneficiary country must meet mandatory GSP eligibility criteria  established by Congre ss, including 
respecting arbitral awards, combating child labour, respecting internationally -recognized worker 
rights, providing adequate and effective intellectual property prote ction, and providing the 
United  States with equitable and reasonable market a ccess. The program me has effective dates, 
specified in relevant legislation, and requires periodical reauthorization in order to remain in effect. 
The GSP expired on 31 December 2017 ; legislation to renew it (the Consolidated Appropriations Act, 
2018, P.L. 115 -141) was enacted on 23 March 2018, and extended the program me from 1 January 
2018 to 31 December 2020.26 
2.30.   The GSP program me currently provides duty -free treatment for over 3,500 products (based 
on eight-digit U.S. Harmonized Tariff Schedule tariff li nes (HTSUS) ) from 121 developing countries 
and an additional 1,500 products from 44 LDCs.  GSP rules of origin require that a good must be 
either obtained or sufficiently manufactured in a GSP beneficiary country , and at least 35% of the 
                                                
22 USTR (2018), United States –Mexico Trade Fact Sheet Modernizing NAFTA into a 21st Century Trade 
Agreement , viewed at : https://ustr.gov/about -us/policy -offices/press -office/fact -sheets/2018/august/united -
states%E2%80%93mexico -trade-fact-sheet -1; United States –Mexico Trade Fact Sheet Strengthening North 
American Trade in Agriculture , viewed at: https://ustr.gov/about -us/policy -offices/press -office/fact -
sheets/2018/august/united -states%E2%80%93mexico -trade-fact-sheet -0; and United States –Mexico Trade 
Fact Sheet Rebalancing Trade To Support Manufacturing , viewed at: https://ustr.gov/about -us/policy -
offices/press -office/fact -sheets/2018/august/united -states%E2%80%93mexico -trade-fact-sheet . 
23 USTR online informat ion. Viewed at: https://ustr.gov/about -us/policy -offices/press -office/press -
releases/2018/march/joint -statement -united -states-trade . 
24 USTR (2018), 2018 Trade Policy Agenda and 2017 Annual Report of the President of the United States 
on the Trade Agreements Program . Viewed at: 
https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20FINAL.PDF . 
25 USITC DataWeb . Viewed at: https://dataweb.usitc.gov/  [7 August 2018 ]. 
26 The Consolidated Appropriations Act , effective 22 April 2018,  provided for the retroacti ve extension of 
GSP benefits for eligible goods having entered during the period  1 January 2018 through 21 April 2018.  Viewed 
at: https://www.cbp.gov/trade/priority -issues/trade -agreements/special -trade -legislation/generalized -system -
preferences . WT/TPR/S/ 382 • United States  
 
- 40 - 
 
  appraised value of the product must have  been added in the beneficiary country. Products eligible 
for duty -free entry are presented in the HTSUS, published by the United States International Trade 
Commission (USITC) . Under the program me, eligible products include: selected m anufactured and 
semi-manufactured goods; certain agricultural and fishery products; and several types of chemicals, 
minerals, and b uilding materials. The programme does not grant duty -free entry to certain sensitive 
import s, such as textiles and apparel, w atches, most footwear, certain glassware, and some gloves 
and leather products.  
2.31.   GSP country and product eligibility are subject to an annual r eview conducted by the GSP 
Subcommittee of the TPSC, which receives and considers requests seeking to add or remov e 
products from the duty -free list under the GSP. Any person may petition the GSP Subcommittee to 
request modifications to the list of countries eligible for GSP treatment , and modifications are made 
following the annual review , and are implemented by Pres idential Proclamation . 
2.32.   The 2018 Trade Policy Agenda placed new emphasis on enforcement of the GSP eligibility 
criteria, to ensure that all countries receiving GSP benefits are meeting the criteria established by 
Congress. This new effort includes a trienni al assessment  by the USTR and other relevant agencies 
of each GSP beneficiary country' s compliance with the s tatutory eligibility criteria.27 This interagency 
process complements the current petition and public input process for country practice reviews, 
which will remain unchanged.  
2.33.   During the period under review, Argentina was reinstated as a beneficiary developing country 
on 1 January 2018, and Seychelles, Uruguay, and the Bolivarian Republic of Venezuela were officially 
graduated from GSP status on 1 January 2017 . In addition, Ukraine' s GSP status was partially 
suspended; this became effective 120 days after the Presidential Proclamation issued on 22 
December 2017; the transition period granted to provide Ukraine the opportunity to improve its 
protection of intellectual property rights . Cases for GSP eligibility are open for: Indonesia and 
Uzbekistan  (intellectual property rights ); the Plurinational State of Bolivia, Georgia,  Iraq, 
Kazakhstan, Thailand and Uzbekistan ( worker rights and/or child labour conc erns); India, Indonesia, 
and Thailand (market access); and Ecuador ( arbitral awards ). An application for n ew GSP benefits 
for Laos is pending.28 
2.34.   In 2017, the top GSP products (by value) imported into the United States were: motor vehicle 
parts (US$1.3 billi on); ferroalloys (US$769 million); precious metal jewellery (US$756  million); 
monumental or building stone (US$557 million); and rubber tyres (US$480  million). The leading 
developing country exporters (by value) to the United States under the GSP programme  in 2017 
were India, Thailand,  Brazil,  Indonesia, and  Turkey. In addition, LDC exporters were led by 
Cambodia, Myanmar , Democratic Republic of Congo, Nepal, and Mozambique.  
2.3.2.2.2   The African Growth and Opportunity Act (AGOA)  
2.35.   The AGOA  was enacted on 18 May 2000 ( P.L. 106-200).29 It provides eligible sub -Saharan 
African countries with duty-free market access for more than  5,000 product tariff lines , by opening 
1,800 product tariff lines beyond those already eligible for duty -free treatment under the GSP. 
Theref ore, the AGOA provides tariff benefits well beyond those available under the GSP. The 
additional products under the AGOA include apparel and footwear, wine, certain motor vehicle 
components, a variety of agricultural products, chemicals, and certain steel products, among other 
products. The AGOA expires in 2025. In 2017, the leading AGOA exporters were Nigeria, Angola, 
South Africa, Chad, and Kenya . Mineral fuels, motor vehicles and parts, woven apparel, ferroalloys, 
and knit apparel were the t op U.S. impo rts under the AGOA programme.30 Total U.S. goods imported 
from s ub-Saharan Africa were US$24.9  billion in 2017, up 23. 7% from 2016.  Total imports under 
the AGOA were US$6.2 b illion in 2017, a 58% year -on-year increase from 2016 . In the same year, 
                                                
27 USTR online information. Viewed at: https://ustr.gov/about -us/policy -offices/press -office/press -
releases/2017/october/ustr -announces -new-enforcement . 
28 USTR online information. Viewed at: https://ustr.gov/issue -areas/trade -development/preference -
programs/generalized -system -preference -gsp/current -review -0. 
29 P.L. 106–200. Viewed at: https://agoa.info/images/documents/2/ AGOA_legal_text.pdf . 
30 USTR (2018), 2018 Biennial Report on the Implementation of the African Growth and Opportunity Act . 
Viewed at: https://ustr.gov/sites/default/files/ 2018%20AGOA%20Implementation.pdf . WT/TPR/S/ 382 • United States  
 
- 41 - 
 
  GSP import s from Africa increased 11.2%.  In 2018, 40 sub -Saharan African countries are eligible 
for AGOA benefits .31 
2.36.   The AGOA requires the U.S. President to  determine annually the eligibility of a sub -Saharan 
African beneficiary country, based on criteria established  by Congress. These criteria require, among 
other things, a country to have established, or make continual progress toward establishing: (i) 
political pluralism, the rule of law, and a market -based economy; (ii) elimination of barriers to U.S. 
trade and in vestment; (iii) protection of internationally recognized worker rights; (iv) a system to 
combat corruption and bribery; and (v) economic policies to reduce poverty. AGOA criteria also 
require that countries not engage in gross violations of internationally  recognized human rights. On 
22 December 2017, the U.S. President reinstated The Gambia and Eswatini (formerly Swaziland) as 
AGOA beneficiaries, effective 1 January 2018.  
2.37.   The legislation that extended the AGOA through 2025 established a petition process to  allow 
an interested party to petition the Government regarding whether an AGOA beneficiary is mee ting 
eligibility requirements. On 20 June 2017, an out -of-cycle review of Rwanda, Tanzania, and Uganda 's 
AGOA eligibility was initiated in response to a petition. As a result of the actions undertaken by 
Tanzania and Uganda to address the concerns raised in the petition, the U.S. President determined 
that both countries meet the AGOA's eligibility requirements. On 30 July 2018, the President 
determined th at Rwanda was out of compliance with the AGOA's eligibility requirements, and issued 
a proclamation suspending the application of duty -free treatment for all AGOA -eligible apparel 
products from Rwanda, effective 31 July 2018.  
2.3.2.2.3   Caribbean Basin Initiative (CB I) 
2.38.   The CBI provides beneficiary countries with duty -free access to the U.S. market for many 
goods. Initially  launched in 1983 by the Caribbean Basin Economic Recovery Act (CBERA) and  
substantially expanded in 2000 with the U.S. -Caribbean Basin Trade Partne rship Act (CBTPA) , the 
CBI was further expanded in the Trade Act of 2002. In 1990, the CBERA was made permanent. The 
CBTPA is scheduled to expire on 30 September 2020 .32 There are 17 CBERA beneficiary countries , 
8 of whom  are also beneficiaries under the CB TPA. U.S imports from CBI beneficiary countries in 
2017 totalled US $5.9 billion , while U.S. exports were US $12.2 billion  in the same year . 
2.39.   The United States provides additional apparel and textile benefits to Haiti through the Haitian 
Hemispheric Opportuni ty through Partnership Encouragement Act of 2006 ("HOPE Act"), the Haitian 
Hemispheric Opportunity through Partnership Encouragement Act of 2008 ("HOPE II"), and the Haiti 
Economic Lift Program Act of 2010 ("HELP Act").  These preferences are scheduled to e xpire on 30 
September 2025.  
2.40.   In December 2017, the USTR submitted its twelfth biannual report to Congress on the 
operation of CBERA.33 On an annual basis, the USTR  is required to submit a report to Congress  
regarding  the implementation of HOPE II.34 
2.3.2.2.4   The Nepal  Trade Preference Program (NTPP)  
2.41.   The Nepal Trade Preference Program (NTPP)  provides duty ‐free entry to the United States for 
certain  products imported from Nepal. Under Section 915 of the Trade Facilitation and Trade 
Enforcement Act (TFTEA)  of 2015 , passed by Congress in February 2016, the United States may 
grant duty-free access for 66 eight -digit HTS US tariff lines from Nepal. The program me was 
implemented by Presidential Proclamation on 15 December 2016 , and provides non -reciprocal 
preferential t rade benefits to Nepal until 31 December 2025. These preferences were provided to 
assist Nepal in its recovery from the April 2015 earthquake and subsequent aftershocks. Due to 
                                                
31 USTR online information. Fact Sheet: African Growth and Opportunity Act: 2018 Biennial Report . 
Viewed at: https://ustr.gov/about -us/policy -offices/press -office/fact -sheets/2018/june/fact -sheet -african -
growth -and-opportunity . 
32 USTR online information. Viewed at: https://ustr.gov/issue -areas/trade -development/preference -
programs/caribbean -basin -initiative -cbi. 
33 USTR (2017), Twelfth Report to Congress on the Operation of the Caribbean Basin Economic Recovery 
Act. Viewed at: https://ustr.gov/sites/default/files/assets/reports/2017%20CBI%20Report.pdf . 
34 The latest HOPE II Report is available at: 
https://ustr.gov/sites/default/files/2018%20USTR%20Report%20Haiti%20HOPE%20II.PDF . WT/TPR/S/ 382 • United States  
 
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  changes in the U.S. Harmonized Tariff System, the number of eight -digit tariff lines for which Nepal 
is exempt from customs duties increased in July 2016 to 77. Of the se, 31 are also duty free under 
the GSP scheme. The remainder were not GSP -eligible at the time. In 2017, the first full year the 
NTPP had been in place, total imports under the program me were US$2 million , and accounted for 
2.5% of total imports from Nepal ; the largest import products included hats and headgear 
(US$778,000) and shawls and scarves ( US$453,000).35 
2.4  Investment Regime  
2.42.   During the review period , the U.S. foreig n investment regime remained unchanged. Despite 
the investment regime  being open, there are some sector -specific limitations , with review 
proced ures on foreign investment in a few industries, including the airline and nuclear energy 
industries. Additionall y, the United States has a national security review process applicable to  foreign 
investment that might affect national security interests.  
2.43.   International investment agreements are used in the United States to foster foreign 
investment. These agreements inc lude trade and investment framework agreements (TIFAs), 
bilateral investment treaties (BITs), and FTAs that contain investment provision s. TIFAs provide 
frameworks for dialogue on trade and investment issues between the United States and the other 
parties to the TIFA , and are generally the first step in establishing stronger trade and investment 
links. The objective of these agreements is to develop opportunities for the United States and partner 
countries to enhance opportunities for trade and investment. Topics for cooperation usually include: 
market access issues; labour; environment al protection; and the enforcement of intellectual 
property rights.36 
2.44.   BITs are at the core of promoting a rules -based system for international investment. These 
treaties may contain provisions on non -discriminatory treatment of investments by the host country, 
limits on expropriation of investments, and access to impartial binding procedures to settle 
investment -related disputes with host governments, among other things.  BITs, as international 
treaties, only require Senate ratification, unlike FTAs which require a vote in Congress on 
implementing legislation. FTA investment chapters generally contain provisions identical or similar 
to those in BITs.  Of the 14 FTAs signed by the  United States, 12 contain investment provisions.  
2.45.   SelectUSA, established in 201137, is a government programme led by the  Department of 
Commerce  to promote inward investment in the United States.38 The programme has two main 
stakeholders: foreign -owned firms considering investing in the United States, and U.S. economic 
development organizations (EDOs) seeking to attract high -impact FDI. The services it provides 
include information, counselling, and advisory services; ombudsman assistance; investment 
advocacy; and marketing and promotion through global events.  
2.46.   For analytical and statistical purposes, the International Investment and Trade in Services 
Survey Act requires that U.S. businesses report all foreign direct investment to relevant authorities 
if a foreig n person (or foreign entity) owns 10% or more of the voting interest in a U.S. entity.39 The 
Bureau of Economic Analysis, in the Department of Commerce, collects information on FDI to compile 
statistics on the scale of foreign -owned business activities in t he United States and the effects these 
activities have on the U.S. economy . 
2.47.   The Committee on Foreign Investment in the United States (CFIUS) continues to oversee the 
national security implications of foreign investment . CFIUS is an inter -agency committee a uthorized 
to review transactions that could result in control of a U.S. business by a foreign person ("covered 
transaction"), in order to determine the effect of such transactions on the national security of the 
                                                
35 USTR (2018), 2018 Trade Policy Agenda and 2017 Annual Report of the President of the United States 
on the Trade Agreement s Program . Viewed at: 
https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20FINAL.PDF . 
36 USTR online inf ormation. "Trade and Investment Framework Agreements". Viewed at: 
https://ustr.gov/trade -agreements/trade -investment -framework -agreements . 
37 Established in 2011 by Executive Order. Viewed at: https://obamawhitehouse.archives.gov/the -press -
office/2011/06/15/executive -order -13577 -selectusa -initiative . 
38 About SelectUSA. Viewed at: https://www.selectusa.gov/about -selectusa . 
39 P.L. 94 -472. Viewed at: https://www.gpo.gov/fdsys/pkg/USCODE -2011-title22/html/USCODE -2011-
title22 -chap46.htm . WT/TPR/S/ 382 • United States  
 
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  United States.40 CFIUS was established by Exe cutive Order 11858 in 1975, with the primary 
responsibility of monitoring the impact of foreign investment in the United States. In 1988, Congress 
passed the "Exon Florio" amendment, which gives CFIUS  the authority to review and approve, or 
approve with co nditions, covered transactions and gives the President the authority to prohibit or 
suspend covered transactions that threaten national security .41 The F oreign Investment and National 
Security Act of 2007 (P .L. 110 -49) strengthene d Exon-Florio and enhanced the CFIUS process , in 
order to enable greater oversight by Congress and increase  transparency and reporting by the 
Committee on its decisions. In addition, the Act broadened the factors considered in determining 
whether a transaction poses a  national secur ity risk42, and required greater scrutiny by CFIUS of 
certain types of FDI.43 
2.48.   CFIUS reviews transactions based on voluntary notifications filed by the parties , or on its own 
initiative in the absence of a voluntary notification  if it believes the transaction is a covered 
transaction and may raise national security concerns. Each transaction is reviewed on a case -by-
case basis based on individual facts and circumstances. Once a formal notification is submitted, 
CFIUS conducts an initial review . If during the initial review period CFIUS cannot make a final 
determination, the case will proceed to an investigation phase. If national security concerns are 
identified during the review and investigation phase, CFIUS may impose condition s, or CFIUS and 
the transacting parties may negotiate a mitigation agreement to resolve  any national security 
concerns. If CFIUS determines that the national security concerns cannot be resolved and the parties 
do not withdraw and abandon the transaction,  the Committee will recommend that the President  
prohibit the transaction.  
2.49.   In 2015, 143  notices were filed with CFIUS and 66 transactions were subject to investigation 
(Table 2.1). The number of notices decreased slightly from 2014, although the number of 
investigations increased.  
Table 2.1 Foreign investment "covered transactions" reviewed by CFIUS, 2013 -15 
Year Number of 
notices  Notices 
withdrawn 
during review  Number of 
investigations  Notices 
withdrawn 
during 
investigation  Presidential 
decisions  
2013 97 3 48 5 0 
2014 147 3 51 9 0 
2015 143 3 66 10 0 
Total  387 9 165 24 0 
Source:  Annual Report to Congress, Report Period CY 2015, Committee on F oreign Investment in the 
United  States, September 2017.  
2.50.   In the period 2013 -15 (latest data available), the manufacturing sector accounted for the 
largest number of industry review s by CFIUS (172 out of a total 387). Within the manufacturing 
sector, 43% of all the investment transactions notified to CFIUS between 2013 and 2015 were in 
the computer and electronic products sectors. This was followed by the machinery; transportation 
equipment; and electrica l equipment, ap pliance, and component manufacturing sectors . There were 
112 reviews regarding finance , information, and services  industries; 66 reviews with respect to 
mining, utilities, and construction ; and 37 of wholesale trade and retail trade  transactions. According  
to data based on notices provided to CFIUS by foreign investors, Chinese investors were the most 
active in the number of filings during the 2013 -15 period, followed by Canada, the United Kingdom, 
Japan and France. With respect to  China , investment notific ations were concen trated in the following 
sectors: manufacturing; finance, information, and services ; and m ining, utilities, and construction . 
                                                
40 Treasury online information. Viewed at: https://www.treasury.gov/resource -
center/international/foreign -investment/Documents/CFIUS -Final-Regulations -new.pdf . 
41 The Exon -Florio Provision was implemented in 1988 and is covered under Section 721 of the Defence 
Production Act of 1950.  
42 The term national security includes issues relating to homeland security, including its application to 
critical infrastructure. The term critical infrastructure includes "systems and assets, whether physical or virtual, 
so vital to the United States that the incapacity or destruction of such systems or assets would have a 
debilitating impact on national security". Viewed at: https://www.congress.gov/110/plaw s/publ49/PLAW -
110publ49.pdf . 
43 On 13 August 2018, the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) was 
enacted,  modernizing and strengthening the CFIUS process . WT/TPR/S/ 382 • United States  
 
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  Investment notifications from Canada were focused on the m ining, utilities, and construction  sector, 
and the Unit ed Kingdom had its largest number of filings in manufacturing.  
Table 2.2 Origin of foreign investor and industry reviewed by CFIUS, 2013 -15 
Partner  Manufacturing  Finance, 
information, 
and services  Mining, 
utilities, and 
construction  Wholesale 
trade and 
retail trade  Total  
China  39 15 13 7 74 
Canada  9 9 19 12 49 
United Kingdom  25 15 3 4 47 
Japan  20 12 5 4 41 
France  8 9 1 3 21 
Germany  9 5 0 0 14 
Netherlands  4 8 2 0 14 
Switzerland  10 2 0 0 12 
Singapore  3 5 3 1 12 
Hong Kong , China  6 3 0 0 9 
Israel  7 2 0 0 9 
Australia  1 2 4 1 8 
South Korea  2 3 2 1 8 
Other  31 22 14 4 71 
Total  172 112 66 37 387 
Source:  Annual Report to Congress,  Report Period CY 2015,  Committee on F oreign Investment in the 
United  States, September 2017.WT/TPR/S/ 382 • United States  
 
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  3  TRADE POLICIES AND P RACTICES BY MEASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures, valuation, and requirements  
3.1.1.1   Introduction  
3.1.  Since the passage of the Customs Modernization Act (P.L. 103 -182) in 1993, complianc e with 
customs rules has been regarded as a joint responsibility between the Government and traders, and 
measures have been put in place gradually to facilitate th is partnership. The Department of 
Homeland Security (DHS) was created in 2002 among efforts t o safeguard the United States against 
terrorism; its new border security agency, the U.S. Customs and Border Protection (CBP), was 
formed in 2003 by merging the legacy organizations of the U.S. Customs Service with other services 
overseeing the cross -borde r movement of goods and persons. Nonetheless, some 30 federal 
agencies continue to be involved in trade enforcement activities on the Government's side.  
3.2.  Provisions to constitute a body of the trade community were included in the Omnibus Budget 
Reconciliati on Act of 1987, and the current Commercial Customs Operations Advisory Committee 
(COAC) is mandated by the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114 -125). 
The role of the 20 -member COAC is to provide advice on any aspect of the commerc ial operations 
of CBP and related Treasury and DHS functions. It meets periodically with CBP officials to discuss 
the balance of security and trade facilitation measures. The present COAC has held quarterly 
meetings open to the public since April 2015. The  COAC has formed six subcommittees covering the 
following topics: One U.S. Government at the Border; safe and expedited movement of cargo 
through the Global Supply Chain; Exports (procedures, enforcement, and facilitation issues); input 
for the Trusted Tra der Program of CBP; Trade Modernization; and Trade Enforcement and Revenue 
Collection. Moreover, the subcommittees have established working groups to examine specific issues 
in further detail, including emerging technologies and e -commerce.  
3.3.  The United Stat es formally accepted the WTO Agreement on Trade Facilitation (TFA) on 
23 January 2015. Since the entry into force of the TFA on 22 February 2017, the United States has, 
as a developed country Member, been bound by all the commitments contained in the Agree ment. 
It provided its notification on transparency, the operation of its single window, measures on the use 
of customs brokers, and TFA contact point in June 2017.1 The Office of the United States Trade 
Representative (USTR) leads an interagency National T rade Facilitation Committee that organizes 
coordination and implementation of the TFA as part of its responsibilities to develop, coordinate, and 
implement trade policy. This is the national committee on trade facilitation for Article 23.2 of the 
TFA.2 More than 20 federal agencies participate in the national committee, including the Departments 
of Agriculture, Commerce, Defense, Energy, Health and Human Services, Homeland Security 
(including CBP), Interior, Justice, Labor, State, Transportation, and Treasu ry; the Environmental 
Protection Agency, the Small Business Administration, and the U.S. Agency for International 
Development (USAID). Input from the private sector is mainly sought through the In dustry Trade 
Advisory Committee (ITAC) on Customs Matters an d Trade Facilitation. For agricultural trade issues, 
the national committee is aided by an Agricultural Policy Advisory Committee as well as six technical 
advisory committees.  
3.1.1.2   Single window  
3.4.  The planning of an Automated Commercial Environment (ACE) to ensure proper assessment 
and collection of duties and taxes was initiated in 1994. It was initially foreseen to be deployed 
gradually between 1998 through 2005. The Security and Accountability for Every Port Act of 2006 
(P.L. 109-347) subsequently called f or the establishment of a "single portal" International Trade 
Data System (ITDS) to , among other things,  enhance the enforcement of laws and regulations 
related to trade,  and eliminate redundant information requirements. After several unsuccessful 
efforts to complete ACE as a single window application, including a complete standstill of work in 
2010, CBP switched its focus to the development and launch of "core capabilities " in ACE in small 
                                                
1 WTO document G/TFA/N/USA/1, 13 June 2017. The notification regarding resources for technical 
assistance and capacity building is available in WTO document  G/TFA/N/USA/2 of 12 June 2017. Updated 
information has been provided in WTO document G/TFA/N/USA/2/Add.1 of 14 June 2018.  
2 WTO do cument G/TFA/W/5, 4 April 2018.  WT/TPR/S/ 382 • United States  
 
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  consecutive stages from 2013. Consistent with an Executive Order is sued in February 2014, the end 
of 2016 was set as the new deadline for the completion of the single window for import and export 
processing.3 The Executive Order also mandated the creation of a  Border Interagency Executive 
Council (BIEC) to enhance coordin ation between the border management authorities. The Trade 
Facilitation and Trade Enforcement Act of 2015 reinforced the deadline, as it called for all core trade 
processing capabilities to be included in ACE by 30 September 2016.  
3.5.  The mandatory filing of a ll electronic manifests in ACE took effect on 1 May 2015, and the 
obligatory filing of other data was introduced gradually during 2016. At the same time CBP began 
to phase out its legacy Automated Commercial System (ACS) to support the new system. However,  
it became apparent that the deadline for the completion of ACE would slip during summer 2016. 
After further delays, CBP announced in June 2017 that the remaining sets of core capabilities would 
be launched in three stages, the final stage ending in Februa ry 2018. The deployment of core 
capabilities was finalized on 24 February 2018 with the inclusion in ACE of post -release functions 
covering reconciliation, liquidation, and drawback.4 
3.6.  The Lacey Act (16 U.S.C. §§ 3371 –3378) is a conservation law that combats trafficking in 
wildlife, fish, and plants, and Lacey Act declarations (PPQ Form 505) are required for the importation 
of certain plants and plant products. CBP encourages such declarations to be filed electronically, and 
more than 90% of them are c urrently filed in ACE . In the event that declarations are filed in hard 
copy, CBP will not forward the paper forms to the U.S Department of Agriculture's ( USDA ) Animal 
and Plant Health Inspection Service (APHIS) , but will return them to the importer (or hi s agent) for  
onward  submission. Areas still requiring paper forms include Kimberley Certificates for conflict 
diamonds, and ATF Form 6 for imports of firearms.  
3.7.  According to CBP, the elimination of paper -based procedures through ACE has automated 269 
forms used by CBP and its 47 partner government agencies, including the 22 partner agencies that 
require documentation to verify and release cargo for import or export.5 Among the many positive 
effects, ACE is credited with having speeded up the processing of bo nd applications by around 
68 times, and having cut the waiting time for the processing of trucks at land ports of entry by 44%. 
The estimated savings from CBP investments in automated and streamlined systems, including ACE, 
is said to have reduced importat ion costs by 1.42% on average, or US$6.5 billion in total, in FY2016.6 
As for the costs of deploying ACE, CBP expenditures totalled US$3.81 billion through FY2017, and a 
further US$890 million is estimated to be needed for maintenance and further developme nt until 
2026, i.e. through the anticipated life cycle of ACE.7 
3.8.  The United States Government Accountability Office (GAO) released a report to the 
Congressional Committees on ACE in March 2018.8 Regarding the organization of future work on 
ACE, the GAO note d some differences of opinion between CBP and other users of ACE as to whether 
certain functions not included in ACE at present could be considered core capabilities and, in the 
absence of a cost -sharing strategy, would need to be funded by CBP. Moreover, it noted that a 
process for the establishment of priorities in the further improvement of ACE had not been 
established. In response to the report, CBP agreed to work with the BIEC to develop a cost -sharing 
plan for the operation, maintenance, and further d evelopment of ACE, including a mechanism to 
prioritize all ACE/Single Window enhancements. The plan for the interagency approach to the post -
                                                
3 Executive Order 13659 on "Streamlining the Export/Import Process for America's Businesses" , 
19 February 2014 .  
4 Reconciliation refers to the opportunity for importers to update the information provided to CBP at the 
time of entry . The final amounts of du ties, fees, and taxes due to CBP are determined during liquidation. Until 
February 2019, the drawback function in ACE allows the users to file either for drawback in accordance with 
existing legislation or under a new drawback procedure  required by the Tra de Facilitation and Trade 
Enforcement Act of 2015.  
5 The 22 partner agencies have signed memoranda of understanding with CBP that grant them access to 
ACE and detail the information they are entitled to receive from the system.  
6 CBP online information. Vi ewed at: https://www.cbp.gov/newsroom/national -media -release/cbp -
reaches -historic -milestone -final-core-trade-processing . For ACE in isolation, savings are difficult to calculate in 
the absence of a reliable baseline, i.e. an environment without ACE.  
7 ACE also imposes costs on the trade community, as brokers, importers, and exporters may need to 
invest in software compatible with AC E. 
8 GAO, Customs and Border Protection, Automated Trade Data System Yields Benefits, but Interagency 
Management Approach is Needed , GAO-18-271, March 2018 . The report was required according to the Trade 
Facilitation and Trade Enforcement Act of 2015.  WT/TPR/S/ 382 • United States  
 
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  core management of ACE, which utilizes a pay as you go model, should be finalized by 31 October 
2018.  
3.1.1.3   Other trade f acilitation measures  
3.9.  Customs -Trade Partnership Against Terrorism (C -TPAT) was launched in November 2001 as a 
voluntary public private partnership programme (PPP) to strengthen international supply chains and 
to improve security along U.S. borders. C -TPAT w as codified in 2006 through the Security and 
Accountability for Every Port Act of 2006. It spans the entire community engaged in cross -border 
trade including U.S. importers and exporters, foreign manufacturers (Mexico and Canada), licensed 
customs brokers,  transporters and carriers (air, rail, highway, and sea), and transportation 
intermediaries. The application  to join C -TPAT, performed online at :https://ctpat.cbp.dhs.gov/trade -
web/regis terUser.html , is as such free of charge. However, by joining it, the applicant agrees to 
protect the supply chain, identify potential security gaps, and implement specific security measures 
and best practices.  
3.10.   On the basis of the Company Profile and Securi ty Profile submitted b y the applicant, CBP will 
determine the company's ability to fulfil the minimum security requirements set by C -TPAT, and 
arrange for an on -site inspection of the company's security practices. Enterprises found to satisfy 
the C -TPAT re quirements upon inspection are validated as Tier II companies and eligible for the full 
benefits of the programme. A higher level (Tier III) is reserved for companies that employ security 
measures above and beyond the minimum requirements of C -TPAT.  
3.11.   Partic ipation in C -TPAT does not pre -empt security examinations of cargo at the border, but 
Tier II and III companies are considered to be of low risk and may therefore be exempt from 
stratified exams, their merchandise is inspected with much less frequency, and  priority access and 
expedited procedures apply at the border. C -TPAT members may be eligible to participate in pilot 
programmes of CBP partner agencies such as the Secure Supply Chain Program of the U.S. Food 
and Drug Administration.  
3.12.   Participation in the Free and Secure Trade (FAST) programme, a commercial clearance 
programme for low -risk shipments entering the United States from Canada or Mexico, requires all 
elements of the supply chain (i.e. manufacturers, carriers, drivers, and importers) to be enrolle d in 
C-TPAT. CBP inspects and validates the supply -chain security measures of the foreign C -TPAT 
members on a regular basis. Truck drivers who are U.S., Canadian or Mexican citizens may enrol in 
FAST and use the streamlined procedures of dedicated FAST lan es at 34 land border crossings. More 
than 78,000 commercial drivers have joined the programme. The processing fee for a five -year 
membership in FAST is US$50/Can$50. T he fee applies only to drivers.  
3.13.   Importers that are C -TPAT members, reside in the United S tates or Canada, and have a 
minimum of two years import experience, may also submit a memorandum of understanding (MoU) 
to CBP to join the Importer Self -Assessment Program (ISA). By signing the MoU and completing an 
ISA questionnaire, the importer, inter a lia, agrees to comply with all applicable customs law and 
regulations; establish, document, and implement internal controls; conduct regular risk -based tests 
of the internal systems and make appropriate adjustments (as necessary); and confirm, once a year,  
that all ISA requirements continue to be met. In return, the importer is exempted from all 
comprehensive compliance audits, has access to a dedicated customs team (account manager, 
auditor, and trade analyst), and receives various other benefits including  expedited cargo release 
and enhanced prior disclosure. CBP has established Centers of Excellence and Expertise at 10 points 
of entry across the United States, and the Centers serve as single points of processing with priority 
access for enterprises that p articipate in C -TPAT and the ISA.  
3.14.   CBP began the development of its Centers of Excellence and Expertise as a test programme 
in 2012. At the end of 2016, CBP decided to make the Centers a permanent organizational 
component with effect from 19 January 2017.9 The Centers specialize in all aspects of the customs 
processing of a particular industry. The centralization of the decision -making authority implies, for 
example, that the Los Angeles office handles imports and exports for the electronics industry, while  
the Miami office deals with the agricultural sector. In general, importers are assigned to their 
                                                
9 81 FR 92978.  WT/TPR/S/ 382 • United States  
 
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  respective centres based on the predominant (HS four -digit) classification of the types of  goods that 
they are importing.  
3.15.   Participation in the C -TPAT of the U nited States also provides recognition as a trusted trade 
partner by foreign customs administrations that have signed mutual recognition agreements (MRAs) 
with the United States. Consistent with the SAFE Framework of Standards to Secure and Facilitate 
Global Trade of the World Customs Organization, CBP has security -based arrangements in force with 
11 other customs administrations. The last such MRA was signed with the Dominican Republic on 7 
December 2015. Joint work plans towards mutual recognition have be en signed with China, Peru, 
Uruguay, Brazil, India, and Australia. As of July 2018, the number of C -TPAT operators totalled 
11,549, including 4,112 importers, 352 exporters, and 1,695 foreign manufacturers.10 
3.16.   Upon request, CBP issues binding advance rulings  on how it will treat a prospective import or 
carrier transaction. Advance rulings are not provided on hypothetical issues or on matters subject 
to ongoing litigation. The ruling control number should be indicated (or a copy of the ruling provided) 
with th e filing of the entry documents at the time of importation. Advance rulings must be requested 
by letter for decisions concerning valuation or carriers, whereas requests pertaining to tariff 
classification or certain marking, country of origin, NAFTA, AGOA,  and other trade programme rulings 
may be submitted online to the National Commodity Specialist Division (NCSD) of Regulations and 
Rulings (in New York). The NCSD confirms receipt of properly filed requests within one business day 
and generally aims at iss uing its eRulings within 30 calendar days of receipt. Requests that require 
referral to Regulations and Rulings headquarters are issued by mail, normally within 90 days of 
receipt. CBP issued more than 4,500 rulings in 2017.  The CBP inventory of advance ru lings and other 
binding decisions may be consulted at its  Customs Rulings On -line Search (CROSS) facility 
(http://rulings.cbp.gov/ ).11 Rulings are also published in the weekly Customs Bulletin and Decisions 
(http://www.cbp.gov/trade/ rulings/bulletin -decisions ), or in some cases through pertinent notices 
in the Federal Register.  
3.17.   For goods shipped to the United States by ocean vessel, certain advance  cargo information 
must be submitted electronically in the form of an Importer Security Filing (ISF - commonly known 
as "10+2").12 The requirement applies to goods destined for the customs territory of the 
United  States or to a Foreign Trade Zone (FTZ) loca ted in the United States. Information regarding 
the seller, buyer, importer of record number (or FTZ applicant identification nu mber), and consignee 
number must be provided no later than 24 hours before the cargo is laden aboard the vessel in the 
foreign p ort. Information pertaining to the manufacturer (or supplier), country of origin, HS tariff 
line number, and ship to party must be indicated prior to departure, and the ISF may be updated to 
include precise data on these elements no later than 24 hours pri or to the arrival of the cargo in the 
United States. Information regarding the container stuffing location and the consolidator must also 
have been provided by that time. The purpose of the filing requirement is to allow CBP to identify in 
advance high -risk shipments prone to smuggling or giving rise to other potent ial safety and security 
issues.  
3.18.   About 80% of all maritime cargo destined to the United States is pre -screened at foreign ports 
under the Container Security Initiative (CSI). Launched in 2002, the  CSI is authorized under the 
2006 SAFE Port Act (PL 109 -347). It is operational at 61  ports world -wide. All containerized cargo 
deemed high -risk is inspected manually by using large scale non -intrusive imaging (NII) and 
radiological detection equipment. Fu rther to Section 232 of the Act, the Secure Freight Initiative 
(SFI) was launched, in an effort to test the feasibility of 100% scanning of cargo awaiting shipment 
to the United States at selected ports. However, all pilot ports, with the exception of Qasi m 
(Pakistan), were reverted to targeting for high -risk cargo after an evaluation of the costs versus 
potential benefits and various other concerns.  
3.1.1.4   Foreign Trade Zones (FTZs)  
3.19.   FTZs have been established in every U.S. State, although some of the designated FTZs may 
be without activity at any given moment. FTZs are located at, or close to, U.S. ports of entry, in 
industrial parks, or at terminal warehouse facilities, but FTZ subzones or "usage driven sites" may 
be created in any designated area, including on the private facility of a user. Goods may be brought 
                                                
10 Only manufacturers in Canada and Mexico are eligible to participate in C -TPAT.  
11 CROSS contains approximately 200,000 searchable rulings.  
12 The requirement does not apply to cargo arriving by  other modes of transportation.  WT/TPR/S/ 382 • United States  
 
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  into the zones for processing, or held for storage and exhibition purposes. In 2016, active operations 
were carried out in 195 out of 263 approved FTZs, and the 3,300 firms that used FTZ facilities 
emplo yed more than 420,000 workers.13 
3.20.   FTZs are proposed, sponsored, and managed by agencies at the regional and local level. 
However, decisions to establish or modify FTZs are taken centrally by the Foreign -Trade Zones Board 
in accordance with the Foreign Trade Zones Act (19 U.S.C. 81a -81u) of 18 June 1934. Proposed 
sites for FTZ activation must be approved by CBP prior to the Board's decision, and activities carried 
out in the zones remain under close CBP supervision. FTZs are legally outside the customs territo ry 
of the United States. Thus, formal customs entries are not filed for foreign goods, no customs duties 
are levied, and U.S. excises and other taxes may be deferred. Domestic goods brought into the 
zones are considered exported, and excise tax rebates and  duty drawback may be claimed for such 
goods. For foreign goods subject to processing in FTZs before entry into the customs territory of the 
United States, the owner may choose between payment of import duty on the finished product or 
on the original forei gn materials. Apart from customs matters, FTZs are geographically part of the 
United States, and federal and local laws apply within them. FTZ activities are governed by 
regulations issued by the Foreign -Trade Zones Board and CBP (15 CFR Part 400 and 19 CF R Part 
146). Since January 2009, expanding general -purpose FTZs have had the option to reorganize their 
zones under the Alternative Site Framework, offering a more flexible link between the designated 
FTZ space and the space activated with CBP.  
3.21.   Retail trad e is prohibited in FTZs, and manufacturing or processing must be specifically 
authorized by the Foreign -Trade Zones Board. The processing activities typically combine significant 
amounts of domestically -produced goods with foreign inputs. In 2016, the valu e of domestic status 
merchandise constituted 63% of the total value goods brought into the zones (US$610 billion), and 
the ratio was markedly higher for production (72%) than for warehousing and distribution activities 
(48%).14 Oil refining, motor vehicle p arts, electronics, and pharmaceuticals constitute the main 
industrial output of FTZs. Based on the value of the entering merchandise, the most important FTZs 
are located in Texas, Louisiana, and California. Net direct export s from FTZs amounted to 
US$75.7  billion in 2016, a decline of nearly US$25  billion since the peak year 2014.15 Falling oil 
prices, which also affect the value of refined products, was the main factor behind this decline.  
3.1.1.5   Bonded warehouses  
3.22.   About 1,500 bonded warehouses exist across the Uni ted States. As set forth in Title 19 U.S.C. 
Section 1555, customs bonded warehouses are buildings or other secured areas where imported 
merchandise may be stored, manipulated, or undergo manufacturing operations without payment 
of import duty, but are subj ect to a warehouse bond covering the customs liability when goods enter 
a warehouse.16 Import duty is not collected until the goods are withdrawn for consumption in the 
United States, which must occur within five years from the date of importation unless ex tended upon 
request. Alternatively, the merchandise may be exported, withdrawn for supply to a vessel or 
aircraft, or destroyed under CBP supervision.  
3.23.   Applications to establish a bonded warehouse are addressed to the local CBP port director. 
Applications should indicate the general nature of the goods to be kept in storage and include an 
estimate of the maximum duties and taxes due on the stored goods at any time. CBP does not 
charge application or supervisory fees for bonded warehouses, but the warehouse operator is 
responsible for the safekeeping of goods held in custody, and the facilities must be available for CBP 
inspection at any time. Imported merchandise and goods for export may be stored simultaneously 
at a bonded facility, but must be separated ph ysically in accordance with security measures approved 
by the port director.  
                                                
13 Foreign -Trade Zones Board (2017), 78th Annual Report to the Congress of the United States , 
November. Viewed at: https://enforcement.trade.gov/ftzpage/annualreport/ar -2016.pdf . 
14 Domestic status merchandise may include goods of foreign origin imported into the customs territory 
of the United States (with duty paid) before being admitted into an FTZ.  
15 The export figures are based on  material inputs only, and do not take in to account value added in 
FTZs.  
16 The operation s of bonded warehouses are covered by Regulations 19 CFR Part 19. WT/TPR/S/ 382 • United States  
 
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  3.1.1.6   Customs valuation  
3.24.   Title II of the Trade Agreements Ac t of 1979 (45 FR 45135) subjects  goods imported into the 
United States to a uniform system of valuation,  stipulating the trans action value as the principal and 
preferred method of appraisement. The hierarchy of alternative valuation methods is presented in 
sequential order as laid down in the WTO Customs Valuation Agreement. Customs value excludes 
transportation and landed costs.  
3.25.   The Trade Agreements Act of 1979 implemented the Customs Valuation Agreement 
negotiated in the Tokyo Round. In 1996, the United States notified the WTO that the legislation it 
had notified to the GATT had not been changed and thus remained valid under the  WTO Customs 
Valuation Agreement.17 No changes have been made to the customs valuation regulations during 
the period under review.  
3.1.1.7   Marking requirements  
3.26.   In accordance with longstanding laws and regulations, the United States requires every article 
of foreign  origin to be legibly marked to indicate  the English name of the country of origin  to an 
ultimate purchaser in the United States.18 These rules are distinct and separate from eligibility 
determinations for customs purposes. Additional labelling requirements  apply to specific products, 
e.g. clothing (fabric content and washing instructions), tobacco ( Warning Statement  of the Surgeon 
General ), food, pharmaceuticals, and motor vehicles.  
3.1.2   Rules of origin  
3.1.2.1   Non-preferential  
3.27.   U.S. n on-preferential  rules of origin distinguish between "wholly obtained" products, i.e. those 
entirely grown, produced or manufactured in a particular country, and goods that have been subject 
to "substantial transformation", i.e. a change in name, character or use, in the country of origin. The 
substantial transformation criterion is applied case -by-case. For certain transactions, CBP may also 
use value added or change in nature or essential character of a product to determine the country of 
origin. The United States notifi ed its non -preferential rules of origin to the WTO in 1995 and 
administrative rulings of the U.S. Customs Service in 1996.19 
3.1.2.2   Preferential  
3.28.   Each FTA concluded by the United States has its own set of origin criteria. The variety of 
methods applied reflects the  outcome of the negotiations, including industry preferences for 
particular methods, notably in textiles. NAFTA and other FTAs concluded by the United States have 
incorporated a change in tariff classification ("tariff shift") method to determine the eligi bility for FTA 
benefits. However, it also uses other methods, e.g. local/regional value content or technical criteria, 
to determine origin beyond the "wholly obtained" criterion. Importers claiming preferential tariff 
treatment must certify the origin of t he good and present certificates of origin or other supporting 
documents when requested by CBP. NAFTA prescribes a specific format for the certificates of origin, 
but most other FTAs or preferential agreements do not.  
3.29.   The United States notified preferentia l rules of origin to the WTO in 1995, and again in 2013.20 
Minor changes to the preferential rules of origin may b e introduced from time to time.  
                                                
17 WTO document G/VAL/N/1/USA/1, 1 April 1996 . 
18 The main marking provisions are set out in Section 304 of the Tariff Act of 1930, 19 U.S.C. §1304 
(2018).  
19 WTO documents G/RO/N/1, 9 May 1995; G/RO/N/1/Add.1, 22 June 1995; G/RO/N/6, 19 December 
1995; and G/RO/N/12, 1 October 1996.  
20 WTO documents G/RO/N/1/Add.1, 22 June 1995; and G/RO/N/88, 18 January 2013. The 2013 
notification covered the rules in the FTAs with Chile; Singapore; Australia; Morocco; Bahrain; Central America -
Dominican Republic; Oman; and Korea, Republic of; and the Trade Promotion Agreements with Peru, 
Colombia, and Panama.  WT/TPR/S/ 382 • United States  
 
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  3.1.3   Tariffs  
3.30.   The Harmonized Tariff Schedule of the United States (HTSUS) is published and maintained by 
the U.S. Int ernational Trade Commission (USITC). The tariff schedule is updated regularly to reflect 
changes in applied tariff rates and other provisions, including preferential rules of origin. Goods are 
classified according to the Harmonized System nomenclature of t he World Customs Organization 
(WCO) in Chapters 1 through 97, and Chapters 98 and 99 are added to specify special duty treatment 
(with or without quantitative limits) pertaining to certain goods, such as imports by non -profit 
institutions, commitments unde r FTAs and the AGOA, and temporary tariff remissions. Importers 
claiming special treatment must identify the tariff line number (within HS Chapters 1 to 97), as well 
as the functional number within Chapters 98 and 99.  
3.31.   The United States implemented the 2017  edition of the nomenclature established under the 
International Convention on the Harmonized Commodity Descriptio n and Coding System effective 
1 January 2017. The revised U.S. nomenclature was consistent with the Recommendation of 27 June 
2014 of the WCO.  As for the corrections and complementary amendments to HS Chapter 44, 
contained in a WCO Recommendation of 11 June 2015, the United States obtained a WTO waiver to 
implement these changes until 31 December 2017.21 It implemented these changes in Presidenti al 
Proclamation 9771 of 30 July 2018, effective on 1 October 2018.22 
3.32.   Schedule XX contains the  WTO tariff commitments of the United States.  The last modifications 
to Schedule XX were undertaken in 2016 to incorporate the formal adherence of the United States  
to the Declaration on the Ex pansion of Trade in Information Technology Products.23 The United 
States remains under waiver to implement changes stemming from HS2012.24 Over the years, 
various changes to the HTSUS have not been notified to the WTO as changes to Schedule XX, 
including Chapter Notes, the Article XXVIII renegotiation (tobacco), and the third and fourth 
revisions to the pharmaceutical coverage.  
3.33.   In Schedule XX, the United States has bound all its tariffs (except for two tariff lines) and all 
"other duties and charges" (ODCs) within the meaning of Article II.1(b) of the GATT. Left unbound 
for reasons of national security, the two tariff lines concern crude pet roleum (HS 2709.00.10 and 
2709.00.20).25 Except for seven tariff lines, all ODCs are bound at zero.  
3.1.3.1   Applied rates  
3.34.   The current HTSUS , in effect since 1 January 2018, has 10,878 tariff lines at the eight -digit 
level. The three -column tariff distinguishes betw een imports from trading partners that are subject 
to either : (i) the general rate (i.e. MFN treatment), (ii) "special" duty (i.e. preferential treatment) 
stemming from unilateral or reciprocal agreements and arrangements26, or (iii) other (i.e. higher) 
import duty.27 The MFN rates are mostly ad valorem, but specific and comp ound duty rates are 
applied for approximately 11% of the tariff lines (predominantly  agriculture, fish, fuels, textiles, and 
footwear items).  The MFN rates are generally identical to thei r bound levels and have remained 
virtually unchanged for 10 years or more.  
3.35.   The MFN tariff regime is generally characterized by stable and, for the most part, low or no 
tariffs. At 4.8% overall, the simple average tariff remains virtually unchanged year by year 
(Table  3.1).28 Duty-free entry is provided for 37.5% of all tariff lines, and a further 30.4% of the 
                                                
21 WTO General Council Decision of 7 December 2016, circulated  in WTO document WT/L/999, 
12 December 2016.  
22 83 FR 37993.  
23 WTO document G/MA/TAR/RS/440/Rev.1 of 10 August 2016 and its Addendum 1 of 11 November 
2016. The modifications were certified in WTO document WT/Let/1213 of 29 November 2016.  
24 WTO document WT/L /969, 2 December 2015.  
25 The current applied rates are 5.25 cents and 10.5 cents per barrel respectively.  
26 The preferential trading partners are indicated in each instance.  
27 Cuba and the Democratic People's Republic of Korea are the only countries fallin g in the latter 
category.  
28 Annual fluctuations, for example the observed moderate increase in agricultural tariffs, are due to 
changes in import prices. Leaving specific and compound duty rates unchanged, lower import prices will raise 
their estimated ad valorem  equivalents.  WT/TPR/S/ 382 • United States  
 
- 52 - 
 
  line items face import duty of 5% or less (Chart 3.1).29 The highest tariffs (i.e. above 100% 
ad valorem  or estimated ad valorem  equivalent (AVE)) affec t certain agricultural items, in particular 
dairy products, peanuts, and tobacco. Outside of agriculture, above -average applied rates are mainly 
found in textiles, clothing and footwear (Tables 3.1 and A3.1). Overall, the U.S. tariff structure shows 
little or no tariff escalation.  
Table 3.1 Structure of the tariff schedules, selected yearsa 
(%)   
2009  2012  2014  2016b 2018c 
1. Total number of tariff lines  10,253  10,511  10,514  10,516  10,878  
2. Non-ad valorem  tariffs (% of all tariff lines)  10.7 10.9 10.9 10.9 10.6 
3. Non-ad valorem  with no AVEs (% of all tariff lines)  0.0 0.0 0.0 0.0 0.0 
4. Lines subject to tariff quotas (% of all tariff lines)  1.9 1.9 1.9 1.9 1.9 
5. Duty free tariff lines (% of all tariff  lines)  36.3 37.0 36.8 36.8 37.5 
6. Dutiable lines tariff average rate (%)  7.6 7.5 7.6 7.6 7.8 
7. Simple average tariff (%)  4.8 4.7 4.8 4.8 4.8 
8. WTO agriculture  8.9 8.5 9.0 9.1 9.4 
9. WTO non -agriculture (incl. petroleum)  4.0 4.0 4.0 4.0 4.0 
10. Agriculture, hunting, forestry and fishing (ISIC 1)  5.7 5.6 6.7 6.5 5.8 
11. Mining and quarrying (ISIC 2)  0.4 0.4 0.4 0.4 0.4 
12. Manufacturing (ISIC 3)  4.8 4.7 4.8 4.8 4.8 
13. First stage of processing  3.7 3.7 4.3 4.3 3.9 
14. Semi-processed products  4.2 4.2 4.2 4.2 4.2 
15. Fully processed products  5.3 5.2 5.3 5.3 5.4 
16. Domestic tariff "peaks" (% of all tariff lines)d 6.7 6.7 6.7 6.7 6.7 
17. International tariff "peaks" (% of all tariff lines)e 5.3 5.0 5.1 5.1 5.1 
18. Overall standard deviation  11.8 11.9 13.7 14.0 13.6 
19. Applied rates greater than 0% but inferior or equal to 
2%. (% of tariff lines)  7.2 7.7 7.8 7.8 7.7 
20. Bound tariff lines (% of all tariff lines)f 100.0  100.0  100.0  100.0  100.0  
a The tariff is provided at the 8 -digit level. Averages exclude in -quota rates and lines. Calculations 
include AVEs for non -ad valorem  duties that were calculated by the authorities using import price 
data.  
b As of January 2016.  
c As of February 2018.  
d Domestic tariff peaks are defined as whose exceeding three times the overall average applied rate.  
e International tariff peaks are defined as those exceeding 15%.  
f Two lines applying to crude petroleum are not bound.  
Source:  WTO Secretariat calculations, based on data provided by the authorities and notifications.  
3.36.   The United States has not been granting temporary tariff suspensions for several years, as 
the enabling legislation for such relief on several hundred products of interest to U.S. manufacturers 
expired at the end of 2012.30 The American Manufacturing Competitiveness Act of 2016 (H.R. 4923) 
introduced a new procedure for the consideration of temporary tariff suspensions and reductions. 
Petitions for relief are addressed to the USITC, which examines them and invites comments from 
the public. Key criteria to be evaluated with respect to petitions include (i) whether the petition is 
enforceable by CBP; (ii) whether the estimated revenue loss associated with the petition would 
exceed US$500,000; and (iii ) whether there is domestic production and objections have been raised 
by a domestic supplier or other party. Based on more than 2,500 petitions filed between 15 October 
and 12 December 2016, the USITC prepared a preliminary report in June 2017 and a final  report for 
Congressional consideration in August 2017.31 The USITC recommended that duty suspensions be 
accorded to more than 1,600 products, mostly chemicals. The House of Representatives approved 
the Miscellaneous Tariff Bill Act of 2018 (H.R. 4318) in J anuary 2018. The Miscellaneous Tariff Bill 
Act of 2018 was approved with amendments by the Senate in July 2018 (S.Amend. 3664). After 
reconciliation, the Miscellaneous Tariff Bill Act was submitted to the President, who signed it on 13 
September 2018. The tariff suspensions are valid until the end of 2020.  
                                                
29 The high incidence of zero MFN duty is a reflection of close U.S. involvement in WTO initiatives and 
agreements such as the ITA, the Agreement on Trade in Civil Aircraft, and zero -for-zero tariff outcomes in the 
Uruguay Round.  
30 The tariff suspensions for two tariff lines were in effect until the end of 2014.  
31 The final report is available at: https://www.usitc.gov/documents/mtbps/pub4712_introduction.pdf . WT/TPR/S/ 382 • United States  
 
- 53 - 
 
  Chart 3.1 Frequency distribution of MFN tariff rates, 2018  
 
a The total number of lines is 10,878.  
Source:  WTO Secretariat calculations based on data provided by the authorities.  
3.1.3.2   Tariff rate quotas  
3.37.   The 54 tariff -rate quotas (TRQs) maintained by the United States cover approximately 1.9% 
of the tariff lines in the HTSUS (Table 3.1). Among them, 19 TRQs concern the dairy sector (dried 
milk, butter, butter  oil, cream, cheeses, ice cream, etc.), and 6 cover cotton. Other imports subject 
to TRQs include beef, peanuts and peanut butter, sugar, chocolate, cocoa, olives, mandarin oranges 
(satsumas), animal feed, and tobacco. Fill rates may vary significantly bet ween the TRQs and over 
time as a result of differing market conditions. Quotas with low fill rates are generally administered 
on a first come, first served basis.32 
3.1.4   Other charges affecting imports  
3.1.4.1   Customs user fees  
3.38.   The principal customs user fee is the Merc handise Processing Fee (MPF), equal to 0.34674% 
of the customs value (not including duty, freight, or insurance charges) of formally declared 
commercial imports.33 Although the fee is ad valorem  and its rate has remained unchanged in the 
period under review , the prescribed minimum and maximum levels of the MPF were adjusted 
upwards on 1 January 2018 to US$25.67 and US$497.99, respectively. For informal entries, e.g. 
personal imports and commercial imports valued at less than US$2,500, the MPF is not applied ad 
valorem, but at flat rates  depending on whether the customs entries are (i) entirely automated 
(US$2.05); (ii) prepared manually, but not by CBP staff (US$6.16); or (iii) requiring preparation by 
CBP officials (US$9.24). The MPF is not levied on express  and postal shipments, e.g. the receipt of 
online orders from abroad, below the de minimis  threshold of US$800.34 Instead, a fee capped at 
US$1.03 (minimum US$0.36) is charged for each waybill or bill of lading. Some of the preferential 
trade program mes of the United States and many of its FTAs include provisions that exempt such 
imports from the MP F.35  
                                                
32 TRQ allocation methods are described in WTO document G/AG/N/USA/2/ Add.3, 5 October 2001.  
33 A surcharge of US$3.08 is applied for manual processing of declarations.  
34 The threshold was raised from US$200 in March 2016.  
35 CBP has compiled an informal overview of such exempt or non -exempt agreements and 
arrangements. Viewed at: https://www.cbp.gov/sit es/default/files/assets/documents/2017 -Nov/B%20MPF% 
20Table%2C%2011%2724%2717.pdf . 
(37.5%)
(30.4%)
(21.2%)
(5.8%)
(2.2%)
(1.0%)(1.9%)
0102030405060708090100
05001,0001,5002,0002,5003,0003,5004,0004,500
Duty free >0-5 >5-10 >10-15 >15-20 >20-25 >25Chart 3.1
Frequency distribution of MFN tariff rates, 2018
Number of tariff linesaPer cent
Cumulative per cent
Number of lines (% of total)
The total number of lines is 10,878.
WTO Secretariat calculations, based on data provided by the authorities.a
Source :WT/TPR/S/ 382 • United States  
 
- 54 - 
 
  3.39.   The Consolidated Omnibus Reconciliation Act of 1985 (PL 99 -272) (COBRA) - introduced a 
number of customs user fees, including fees for processing and inspect ion services. The Fixing 
America's Surface Transportation Act of 2015 (PL 114 -94) (FAST Act) - subsequently amended 
COBRA by requiring the user fees to be adjusted periodically to account for inflation, taking 2014 as 
the base year. CBP accordingly determi ned that these fees should be increased by 2.677% for fiscal 
year 2018 with effect from 1 January 2018. COBRA fees are collected for services such as the 
issuance of annual customs broker permits, the treatment of dutiable mail, and the processing of 
private vessels, commercial trucks, and passengers and cargo arriving by air, sea or rail. The fees 
vary according to the mode of transport and may be collected for each passage or on a yearly basis 
with the use of decals or transponders (Table 3.2).36 
Table 3.2 COBRA fees, applicable from 1 January 2018  
Fee Reference  Fee rate/annual decal/cap/  
user fee  Note  
Commercial vessel  19 CFR 
24.22(b)(1)  US$448.70 /US$6,114.46 (cap)   
Commercial vehicle  19 CFR 24.22(c)  US$5.65/US$102.68 (annual 
cap)  
Rail cars  19 CFR 24.22(d)  US$8.47/US$102.68 (prepay)   
Private aircraft/vessel  19 CFR 24.22(e)  US$28.24 (annual decal)   
Air/sea passenger  19 CFR 24.22(g)  US$5.65 (per arrival)  Exemption for Canada, 
Mexico, and 
U.S. territories, 
possessions or 
adjacent islands  
Cruise vessel and ferry 
passenger travel from 
Canada, Mexico, and U.S. 
territories, possessions or 
adjacent islands  19 CFR 
24.22(g)(ii)  US$1.98 (per arrival)   
Dutiable mail  19 CFR 24.22(f)  US$5.65 (per dutiable package)   
Customs broker permit  19 CFR  24.22(c)  US$141.70 (annual fee)   
Barge/bulk carriers from 
Canada and Mexico  19 CFR 
24.22(b)(2)(i)  US$112.95/US$1,540.17 (cap)   
Source:  WTO (2016), updated according to the relevant announcement in the Federal Register (82 FR 
 50659).  
3.40.   The Water Resources Development Act of 1986 (P.L. 99 -662) established a harbour 
maintenance fee, thereby requiring users (i.e. importers, exporters, and pass engers) to contribute 
to the upkeep of U.S. ports and harbours. The collection of the tax on exports was discontinued in 
1998, as the Supreme Court  ruled that such practice was unconstitutional. Currently, the tax, 
collected by CBP on loading or unloading from commercial cargo or passenger cruise vessels, 
amounts to 0.125% of the value of waterborne commercial cargo, i.e. imports, admissions into FTZs, 
as well as domestic cargo moved between ports, and 0.125% of the ticket price for cruise ship 
passengers. The proceeds from the tax are deposited into the Harbor Maintenance Trust Fund 
(HMTF), from which Congress appropriates amounts to maintain harbours and development work 
carried out by the U.S. Army Corps of Engineers. Over the years, approximately US$9 bi llion has 
been accumulated in the HMTF. However, spending is set to increase, as the Water Resources Reform 
and Development Act of 2014 (P.L. 113 -121) established minimum levels of total target budget 
resources to be made available to the Secretary of the Army from the HMTF over a 10 -year period. 
Calculated as a percentage of the revenues collected in the previous year, the targeted minimum 
percentage is set to increase annually until reaching 100% in 2025.37 
3.41.   The A nimal  and Plant Health Inspection Service (A PHIS), an agency within the Department of 
Agriculture (USDA), collects Agriculture and Quarantine Inspection (AQI) fees and shares them with 
CBP under an agreed allocation. The fees were amended in late 2015, in response to a 2013 report 
                                                
36 Decals are stickers placed on private aircraft and vessels (longer than 30 feet) proving that the 
annual user fee has been paid. Affixed to the inside of windscreens of ve hicles, transponders contain radio 
frequency identification chips transmitting information about the vehicle and its user fee status. The 
transponder is updated as the user fee is paid and may have a life span of 10 years. If the annual fee has not 
been ac quitted, the transponder will continue to transmit, and a per -crossing fee will be applied.  
37 Thus, the budget resources made available to the Secretary from the HMTF for fiscal year 2018 
corresponds to 74% of the total amount of harbour maintenance taxes received in fiscal year 2017.  WT/TPR/S/ 382 • United States  
 
- 55 - 
 
  from the GAO, to i mprove the alignment of fee revenues with programme costs.38 The alignment led 
to significantly lower fees for some services (railway cargo and international air passengers) but 
markedly higher charges for aircraft clearance, commercial vessels, and truckin g fees. A new fee for 
the treatment of pests of quarantine significance prescribed by APHIS is being phased in over a five -
year period. The fee, US$142 in 2018, is s et to rise to US$237 as from 28  December 2019.39 Fees 
are also collected for veterinary and laboratory services (Table 3.3).  
Table 3.3 Agricultural fees, applicable since 28 December 2015  
Fee Legal reference  Reason  Amount of fee  
AQI Aircraft Clearance  Food, Agriculture and 
Conservation Act of 1990; 
also MOU  Agricultural quarantine and 
inspection services  US$225.00 per arrival  
AQI Commercial Cargo 
Vessel  Food, Agriculture and 
Conservation Act of 1990; 
also MOU  Agricultural quarantine and 
inspection services  US$825.00 per arrival  
AQI Commercial Truck  Food, Agriculture and 
Conservation Act of 1990; 
also MOU  Agricultural quarantine and 
inspection services  US$7.55 per arrival  
AQI Commercial Truck with 
transponder (one annual 
payment)  Food, Agriculture and 
Conservation Act of 1990; 
also MOU  Agricultural quarantine and 
inspection services  US$301.67  
AQI Commercial Vessel 
(Cruise) Passenger  Food, Agriculture and 
Conservation Act of 1990; 
also MOU  Agricultural quarantine and 
inspection services  US$1.75 per arrival  
AQI International Air 
Passenger  Food, Agriculture and 
Conservation Act of 1990; 
also MOU  Agricultural quarantine and 
inspection services  US$3.96 per arrival  
AQI Loaded Rail Car  Food, Agriculture and 
Conservation Act of 1990; 
also MOU  Agricultural quarantine and 
inspection services  US$2.00 per arrival  
AQI Treatment  Food, Agriculture and 
Conservation Act of 1990; 
also MOU  Agricultural quarantine and 
inspection services  First year: US$47.00  
Second year: US$95.00  
Third year: US$142.00  
Fourth year: US$190.00  
Fifth year: US$237.00  
Avocado Import 
Assessment  7 CFR 1219.54  Avocado research, promotion, 
consumer information  US$0.025 per pound  
Beef Import Assessment  7 CFR Part 1260  Beef research, promotion, 
consumer information  Varies according to the 
product and HTS code 
Blueberry Import 
Assessment  7 CFR 1218.52  Blueberry research, 
promotion, consumer 
information  US$0.01984 per kg  
Christmas Tree Import 
Assessment  7 CFR 1214.52  Christmas tree research, 
promotion, consumer 
information  US$0.15 per Christmas 
tree 
Cotton Import Assessment  Cotton Research and 
Promotion Act of 1989 7 CFR 
1205  Cotton research, promotion, 
consumer information  Varies according to the 
product and HTS number  
Dairy Import Assessment  7 CFR Part 1150  Dairy research, promotion, 
consumer information  US$0.01327 per kg of milk 
solids  
Honey Import Assessment  7 CFR 1212.52  Honey research, promotion, 
consumer information  Varies according to the 
product and HTS number  
Mango Import Assessment  7 CFR 1206.42  Mango research, promotion, 
consumer information  US$0.0075 per pound  
Mushroom Import 
Assessment  Food, Agriculture and 
Conservation Act of 1990 
7 CFR 1209  Mushroom research, 
promotion, consumer 
information  Varies according to the 
product and HTS number  
Paper and Packaging 
Import Assessment  7 CFR 1222.52  Paper and packaging 
research, promotion, 
consumer information  US$0.00000386 per kg  
Pork Import Assessment  7 CFR Part 1230  Pork research, promotion, 
consumer information  Varies according to the 
product and HTS number  
Potato Import Assessment  Food, Agriculture and 
Conservation Act of 1990 
7 CFR 1207  Potato research, promotion, 
consumer information  Varies according to the 
product and HTS number  
Raspberry Import 
Assessment  7 CFR 1208.52  Raspberry research, 
promotion, consumer 
information  Varies according to the 
product and HTS number  
                                                
38 OMB Circular No. A -25 requires user charges to match the full cost to the Federal Government. 
Viewed at: https://www.whitehouse.gov/wp -content/uploads/2017/11/Circular -025.pdf . 
39 The fee covers only the cost of APHIS supervision. The charge for the required treatment is paid 
separately.  WT/TPR/S/ 382 • United States  
 
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  Fee Legal reference  Reason  Amount of fee  
Softwood Lumber Import 
Assessment  7 CFR 1217.52  Softwood lumber research, 
promotion, consumer 
information  US$0.1483 per cubic metre  
Veterinary Diagnostic User 
Fees 9 CFR 130.14 through 130.19  Costs for tests  from the 
national Veterinary Services 
Laboratories  Varies depending on the 
type of test  
Veterinary Services User 
Fees 9 CFR 130.2 through 130.30  Costs for veterinary services  Varies by type of service  
Watermelon Import 
Assessment  Watermelon Research and  
Promotion Act 7 CFR 1210  Watermelon research, 
promotion, consumer 
information  Varies according to the 
product and HTS number  
Source:  CBP online information. Viewed at: 
 http://www.cbp.gov/sites/default/files/documents/userfee0407_3.pdf  and 
 https://www.aphis.usda.gov/aphis/ourfocus/business -services/user_fees/aqi_user_fees ; and 
 information provided by the authorities.  
3.1.4.2   Excise taxes  
3.42.   Excise taxes may be levied at the federal, state, local, or municipal level, and some products 
are taxed at more than one level. More than 100 excise taxes are maintained at the federal level 
(Table 3.4). The revenue from these taxes are either dedicated to specific purposes (trust funds) or 
held for general expenditure (general funds). Goods taxed at state or local level include fuels, 
cigarettes and other tobacco products, and alcoholic beverage s. Rates vary widely from state to 
state. Excise taxes are applied equally to imported and domestically produced goods and services.  
Table 3.4 Federal excise taxes  
Fund/subject  Products  
Trust funds  
Highway Trust Fund  Petrol, diesel, and alcohol fuels; ethanol, liquid fuel, ethanol, methanol, 
bio-diesel, CNG, LPG, LNG, other special fuels, highway tractors, heavy 
trucks, trailers, tyres for heavy vehicles, highway use by heavy vehicles  
Airport and Airway Trust Fund  Domestic and international air passengers transportation, air cargo, 
aviation fuelsa 
Inland Waterways Trust Fund  Diesel fuel and other liquid fuels  
HMTF  Commercial cargo  
Leaking Underground Storage Tank 
Trust Fund Excise Tax Certain fuels; methanol and ethanol fuels produced from coal  
Oil Spill Liability Trust Fund  Crude oil and imported petroleum products  
Sport Fish Restoration and Boating 
Trust Fund  Fishing rods, reels, and other fishing equipment, motorboat fuel, small-
engine fuel  
Land and Water Conservation Fund  Bows and arrows, regular firearms and ammunition, motorboat fuel  
Black Lung Disability Trust Fund  Coal 
Vaccine Injury Compensation Trust 
Fund Certain taxable vaccines  
Patient -Centered Outcomes Research  
Trust Fund  Specified health insurance policy; self -insured plans  
Medicare Part B Trust Fund  Annual fee on branded prescription pharmaceutical manufacturers and 
importers  
General funds  
Distilled spirits, wine, and beer  Distilled spirits, wine (including  champagne and hard apple cider), and 
beer 
Tobacco  Tobacco products, cigarette papers and tubes  
Communications  Local telephone service, local teletypewriter service, and telephone 
cards (local -only service)  
Gas guzzlers  Automobiles (tax is related to vehicle fuel economy rating)  
Water transportation passengers  Per passenger per covered voyage on commercial vessels  
Ozone -depleting chemicals  Certain CFC and related chemicals  
Foreign procurement  Specified federal procurement payments  
Health care  Indoor tanning services; certain medical devices; and health insurance 
providers  
Non-regular firearms  Machine guns, destructive devices, sawed off shotguns, etc.  
Wagering  Tax on the amount of wager and on persons engaged or employed in 
business of accept ing wagers  
Domestic private foundation net 
investment income  Tax on tax -exempt and taxable foundations  
Foreign private foundation net 
investment income  Tax on gross investment income from sources within the United States  
Insurance policies issued by foreign 
insurers  Insurance (tax on premium paid)  WT/TPR/S/ 382 • United States  
 
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  a 26 U.S.C. 4221 provides for an exemption, based on reciprocity, from U.S. excise taxes on fuel for 
 civil aircraft engaged in foreign trade with the United States and any of its possessions, where the 
 Department of Commerce has made a finding that a foreign country allows, or will allow, 
 substantially reciprocal privileges in respect of aircraft registered in the United States.  
Note:  Excise taxes related to certain private foundations, excess lobbying ex penses, real estate  
 investment , "golden parachutes", or miscellaneous regulatory excise taxes are not included as they 
 are not trade related.  
Source:  Joint Committee on Taxation (201 5), Present Law and Background Information on Federal Excise 
 Taxes , 13 July. Viewed at: https://www.jct.gov/publications.html?func=showdown&id=4798 . 
3.43.   Excise taxes have been accounting for a steadily declining share of Federal Government 
revenue, and their current share is somewhat less than 3%.40 The most important revenue -raising 
taxes, each contributing more than US$10 billion annually, are the excise taxes on motor fuels, 
domestic air tickets, tobacco, and alcoholic beverages, and the yearly fee on health insurance 
providers.41 Many excise taxes have a permanent legal basis, while others would expire at regular 
intervals unless renewed. For example, the excise tax on crude oil for the Oil Spill Liability Trust 
Fund, which had expired at the end of 201 7, was reinstated effective 1 March 2018 until the end of 
the year at the same rate as that applied in 2017 (9 cents per barrel). Taxes on domestic and 
international air passengers are adjusted annually for inflation.  
3.44.   The annual fee for health insurance pr oviders is imposed on the industry as an aggregate 
amount, and subsequently apportioned among the covered entities based on their respective market 
shares.42 The annual fee on branded prescription drugs is imposed according to the same method. 
A moratorium on the 2.3% excise tax on medical devices is currently in force until the end of 2019.43 
3.45.   The Tax Cuts and Jobs Act (P.L. 115 -97)44 provides for lower federal excise taxes on beer, 
wine, and spirits during a two -year period (2018 and 2019). In addition to fur ther reduced tax rates 
for small producers, measures include the reclassification of certain wines (14% -16% alcohol 
content) to the lower tax bracket; extension of tax credits to all wineries, including producers and 
importers of sparkling wine; and relaxe d rules on tax -free transfers of production between 
manufacturers.  
3.1.5   Import prohibitions, restrictions, and licensing  
3.1.5.1   Prohibitions and restrictions  
3.46.   CBP enforces laws that may prohibit or restrict the importation of certain goods on behalf of 
over 40 federal agencies. Importation may be: (i)  prohibited outright; (ii) allowed under certain 
conditions; or (iii) subject to special requirements such as designated ports of entry or routing 
restrictions (Table A3.2).  
3.47.   The National Oceanic and Atmospheric Administrati on's National Marine Fisheries Service 
(NOAA Fisheries) issued its final rule regarding the establishment of a Seafood Import Monitoring 
Program (SIMP) in December 2016.45 The Program is set up pursuant to the Magnuson -Stevens 
Fishery Conservation and Manag ement Reauthorization Act (MSRA) of 2006 to cover imported fish 
and fish products at particular risk of illegal, unreported, and unregulated (IUU) fishing and seafood 
fraud. It requires the importers of record to obtain an annual International Fisheries Tr ade Permit 
                                                
40 Fifty years ago, excise taxes represented close to 10% of federal government revenue. Joint 
Committee on Taxation (2018), Overview of the Federal Tax System as in Effect for 201 8 (JCX-3-18), 
7 February. Viewed at: https://www.jct.gov/publications.html?func=startdown&id=5060 . 
41 Regarding the taxation of alcoholic beverages, reduced tax rates apply to small brewers and wineries, 
and there is an exemption on limited production for ow n consumption. A portion of the distilled spirits excise 
tax on rum (US$10.50 per proof gallon) is remitted to Puerto Rico and the U.S. Virgin Islands.  
42 The annual fee has been set at US$13.9 billion for calendar year 2017 and US$14.3 billion for 2018. 
It is to be indexed to the rate of premium growth after 2018. However, H.R. 195 " Making further continuing 
appropriations for the fiscal year ending September 30, 2018, and for other purposes. " (P.L. 115 -120) has 
suspended the annual fee for the year 2019.  
43 The original two -year moratorium introduced through the Consolidated Appropriations Act, 2016 
(P.L. 114-113) was extended for another two years through  H.R. 195 (PL 115 -120).  
44 The formal title is "An Act to Provide for Reconciliation Pursuant to Titles I I and V of the Concurrent 
Resolution on the Budget for Fiscal Year 2018".  
45 81 FR 88975.  WT/TPR/S/ 382 • United States  
 
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  (IFTP), report data on the harvest of fish and fish products, retain additional supply chain data, and 
retain the records supporting their import filings for a period of two years. The harvest and landing 
documentation for U.S. imports (and expo rts) is filed electronically through the Automated 
Commercial Environment of the U.S. International Trade Data System (ITDS). SIMP may eventually 
cover additional seafood products.46 However, the Program has been introduced for 13 "priority 
species" identif ied as particularly vulnerable to IUU fishing or seafood fraud, including tunas 
(albacore, bigeye, skipjack, yellowfin, and bluefin), swordfish, sharks, Atlantic and Pacific cod, 
grouper, red snapper, and sea cucumber. Although SIMP is only applicable to i mported seafood, 
similar reporting requirements also apply to domestic capture fisheries and aquaculture. SIMP 
entered into force for 11 of the 13 species on 1 January 2018.47 As for the two remaining priority 
species (abalone and shrimp), the effective dat e has been delayed for one year, as the enforcement 
of SIMP for these two species is linked to the establishment of appropriate reporting and/or record -
keeping disciplines for the domestic aquaculture pr oduction of abalone and shrimp.  
3.48.   Section 607 of the Hi gh Seas Driftnet Fishing Moratorium Protection Act (PL 104 -43) requires 
the Secretary of Commerce to provide a biennial report to Congress identifying countries whose 
fishing vessels are engaged in IUU fishing, or whose fishing activities result in bycatch  of certain 
protected living marine resources, or whose vessels are engaged in shark fishing on the high seas 
under certain practices. NOAA Fisheries then engages with countries thus identified to seek 
improvement in their fisheries management and enforcem ent practices. Following a two -year 
consultative process, the countries receive either a positive or negative certification that the fishing 
activities for which they were identified have been adequately addressed. The consequences of a 
negative certificat ion include U.S. port restrictions and potential import restrictions on certain fish 
and fish products from the country concerned.48 
3.1.5.2   Import licensing  
3.49.   The United States has provided two notifications covering its import licensing regime in the 
period under r eview.49 The system, applied in accordance with various statutes and for various 
purposes, has remained stable (Table A3.3). Seven agencies enforce import licensing: the 
Departments of Agriculture, Commerce (steel), Energy (natural gas), Interior (fish and wildlife), and 
Justice (firearms, explosives, and drugs), the Treasury (alcohol and tobacco), and the Nuclear 
Regulatory Commission. Licences are either automatic or non -automatic. The Steel Import 
Monitoring and Analysis System (SIMA), a programme operate d under the authority of the 
International Trade Administration (ITA) of the Department of Commerce, is designed to provide 
statistical data seven weeks in advance of when it would normally become available. Dating back to 
2002, the original programme has been extended at regular intervals. SIMA was prolonged until 21 
March 2017 further to a decision taken in 201350, and a further extension – until 21 March 2022 – 
was announced on 5 January 2017.51 No additional changes have been made in the monitoring 
progra mme other than its extension.  
3.1.5.3   Controls, special procedures, or diplomatic measures  
3.50.   The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury 
administers nearly 30 programmes that involve economic and trade sanctions directed agains t 
specific countries or measures generally designed to counter terrorism, transnational criminal 
                                                
46 NOAA Fisheries online information. Viewed at:  
https://www.iuufishing.noaa.gov/Portals/33/SIMPComplianceGuide2017.pdf . 
47 According to NOAA Fisheries, the initial phase of SIMP affects approximately 215,000 customs entries 
per year, filed by around 2,000 importers and 600 customs brokers.  
48 The report t o Congress released in January 2017 contained positive certifications for five countries 
identified  in the previous report  (Colombia, Ecuador, Nicaragua, Nigeria, and Portugal) . NOAA Fisheries 
addressed a negative certification in a formal communication to  the authorities of Mexico on 18 January 2017. 
Further evidence of action taken provided by the Government of Mexico resulted in a positive certification 
announced in April 2018 (Addendum to the Biennial Report), for Mexico's 2015 IUU fishing identificatio n. For 
the next biennial report (June 2019), consultations are ongoing with Ecuador, the Russian Federation, and 
Mexico regarding the activities of some of their fishing vessels.  Viewed at:  
https://www.fisheries.noaa.gov/foreign/international -affairs/identification -iuu-fishing -activities#magnuson -
steven -reauthorization -act-biennial -reports -to-congress . 
49 WTO documents G/LIC/N/3/USA/13, 8 November 2016; and G/LIC/N/3/USA/14, 22 January 2018.  
50 78 FR 11090.  
51 82 FR 1183. The decision has also been notified to the WTO (document G/LIC/N/1/USA/7, 
20 March  2017).  WT/TPR/S/ 382 • United States  
 
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  organizations, cyber -related crimes, drugs trafficking, human rights abuses, corruption, trade in 
rough diamonds, or the proliferation of weapons of mass destr uction. Due to the many sanctions 
programmes that target individuals and entities (rather than jurisdictions), OFAC maintains a current 
Specially Designated Nationals and Blocked Persons (SDNs) list on its website that identifies the 
individuals and entiti es whose assets are frozen under its authorities. The SDN list currently contains 
around 6,400 individuals and entities that U.S. persons are precluded from dealing with regardless 
of location. Beyond the main SDN list, OFAC also maintains some other lists  identifying individuals 
or entities subject to sanctions other than asset freezes.52 Countries with the broadest set of 
sanctions levied against their business include the Democratic People's Republic of Korea (DPRK), 
Iran, Syria, Sudan, and Cuba. Programm es related to Myanmar and Côte d'Ivoire were terminated 
in 2016.  
3.51.   The current sanctions programmes targeting the DPRK, introduced in 2008, have been 
tightened in successive steps. On 21 September 2017, the President issued Executive Order 13810, 
which, inter alia, contained new prohibitions related to aircraft and vessels and provided additional 
broad designation authority, including authority to target foreign financial institutions. The 
Countering America's Adversaries Through Sanctions Act (CAATSA), signe d into law on 2 August 
2017 (P.L. 115 -44), included measures that, inter alia , prohibit the importation of goods produced 
with DPRK labour. CAATSA also tightened sanctions applicable to Iran, directed against its military 
capability and as a response to hu man rights issues. The United States lifted nuclear -related 
sanctions on Iran in early 2016 as part of a Joint Comprehensive Plan of Action (JCPOA) agreed 
between Iran and the United States and its partners on 14 July 2015.53 The President announced on 
8 May 2018 the end of U.S. partici pation in the JCPOA.  
3.52.   Although an easing of certain policies, including sanctions, against Cuba took place during 
2015 and 2016, the embargo essentially remained in place. As a result of the National Security 
Presidential Memor andum on Strengthening the Policy of the United States Toward Cuba of 16 June 
2017, the Cuban Assets Control Regulations (CACR) have been amended with effect from 
9 November 2017. The changes seek to, among others: "end economic practices that 
disproportio nately benefit the Cuban Government or its military, intelligence, or security agencies 
or personnel at the expense of the Cuban people; ensure adherence to the statutory ban on tourism 
to Cuba; support the economic embargo of Cuba; amplify efforts to supp ort the Cuban people 
through the expansion of Internet services, free press enterprise and association, and lawful travel; 
advancing Cuban human rights; and encouraging the growth of a Cuban private sector independent 
of government control."54 
3.53.   Title IV of t he Trade Act of 1974 (known as the Jackson -Vanik amendment) is still applied 
with respect to Azerbaijan, Belarus, Cuba, Kazakhstan, People's Democratic Republic of Korea, 
Tajikistan, Turkmenistan, and Uzbekistan. Following the accessions of Tajikistan and Kazakhstan to 
the WTO, Congress needs to pass legislation to allow the United States to grant permanent normal 
trade relations (PNTR) to these two countries.  
3.1.6   Anti-dumping, countervailing, and safeguard measures  
3.1.6.1   Anti-dumping and countervailing measures  
3.1.6.1.1   Legal and administrative framework  
3.1.6.1.1.1   Main laws and regulations  
3.54.   Title VII of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 contains 
the main U.S legislation with respect to anti -dumping (AD) and countervailing duties (CVD). The 
Trade and Tariff Act of 1984, the Omnibus Trade and Competitiveness  Act of 1988, and the Uruguay 
Round Agreements Act of 1994 (URAA) introduced further modifications to AD and CVD legislation. 
                                                
52 All official acti ons of OFAC are published as soon as practicable in the Federal Register under the 
index heading "Foreign Assets Control".  
53 The European Union, China, France, Germany, the Russian Federation, and the United Kingdom.  
54 Strengthening the Policy of the Unite d States Toward Cuba, A Notice by the State Department on 
20 October 2017, FR Doc. 2017 -22928 . Viewed at: 
https://www. federalregister.gov/documents/2017/10/20/2017 -22928/strengthening -the-policy -of-the-united -
states -toward -cuba. WT/TPR/S/ 382 • United States  
 
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  The main regulations governing AD and CVD investigations (including reviews) are included in Title 
19 of the Code of Federal Regul ations, Parts 201, 207, and 351. The most recent substantive changes 
to AD and CVD legislation were included in the Trade Preferences Extension Act (TPEA) of 2015, P.L. 
114-27, and in the Trade Facilitation and Trade Enforcement Act of 2015 , P.L. 114 -125. The main 
amendments to regulations since early 2016 include the Modifications of Regulations Regarding Price 
Adjustments in Anti -dumping Duty Proceedings, 81 Fed. Reg. 15641 (24 March 2016), and the 
procedures for the Investigation of Claims of Evasion of Anti-dumping and Countervailing Duties, 81 
Fed. Reg. 56477 (22 August 2016).55 
3.55.   Title V  of the TPEA56, Improvements to Anti -dumping and Countervailing Duty Laws, also 
known as t he American Trade Enforcement Effectiveness Act, introduced five amendments to U.S . 
AD and CVD laws: (i) Section 502 amends Section 776 of the Tariff Act of 1930, to modify the 
provisions addressing the selection and corroboration of certain information that may be used as 
facts otherwise available with an adverse inference in an AD or CVD proceeding; (ii) Section 503 
amends Section 771(7) of the Tariff Act of 1930 in certain respects, pertaining to determinations of 
''material injury'' or "threat of material injury" in AD and CVD proceedings; (iii) Section 504 amends 
Sections 771(15) an d 773 of the Tariff Act of 1930, to modify the definition of ''ordinary course of 
trade'' and the provisions governing the treatment of a ''particular market situation (PMS)'' in AD 
proceedings; (iv) Section 505 amends Section 773(b)(2) of the Tariff Act o f 1930, to modify the 
treatment of distorted prices or costs in AD proceedings; and (v) Section 506 amends Section 782(a) 
of the Tariff Act of 1930, to modify the provision regarding accepting voluntary respondents in AD 
and CVD proceedings. The Department  of Commerce (USDOC) issued a notice stating that all 
sections of the Act, except Section 503, would be applied to de terminations made on or after 
6 August 2015.57 The USITC has applied the amendments in Section 503 of the TPEA to its AD and 
CVD determinati ons since September 2015.58 
3.56.   In addition, the Trade Facilitation and Trade Enforcement Act of 2015 amended the Tariff Act 
of 1930. Title IV of the Act, Prevention of Evasion of Anti -dumping and Countervailing Duty Orders, 
known also as the Enforce and Protec t Act of 2015 (EAPA), contains provisions to strengthen 
enforcement to prevent the evasion of the payment of duties. The EAPA, notified to the WTO in 
201659, is aimed at preventing evasion of contingency measures. To strengthen enforcement of 
these measures , the Act created the Trade Remedy Law Enforcement Division (TRLED) within U.S. 
Customs and Border Protection (CBP) in the U.S. Department of Homeland Security, to: (a) develop 
and administer policies to prevent and counter evasion, including procedures fo r investigating claims 
of evasion of AD and CVD orders; (b) direct enforcement and compliance assessment activities 
concerning evasion; (c)  develop and conduct commercial risk assessment targeting, with respect to 
cargo destined for the United States; (d) issue trade alerts; and (e) develop policies for the 
application of single entry and continuous bonds for entries of covered merchandise to sufficiently 
protect the collection of AD and CV duties commensurate with the level of risk of non -collection.  
3.57.   The E APA created a new framework for CBP to investigate allegations of evasion of AD/CVD 
orders, under the newly created Section 517 (Procedures for Investigating Claims of Evasion of Anti -
dumping and Countervailing Duty Orders). Section 421 of the EAPA require s the CBP Commissioner 
to initiate an investigation within 15 business days of the receipt of a properly filed allegation from 
an interested party or referral from another Federal agency that reasonably suggests that 
merchandise covered by an AD/CVD order has entered the customs territory of the United States 
through evasion. EAPA allegations may be filed via the EAPA option on the e -Allegations web portal 
or through other means.60 The party submitting the allegation may provide information to CBP during 
                                                
55 Notified to the WTO in WTO documents G/ADP/N/1/USA/1/Suppl.24, 1 April 2016,  and 
G/SCM/N/1/USA/1/Suppl.24, 26  August  2016, respectively . 
56 Notified to the WTO in WTO document G/ADP/N/1/USA/1/Suppl.20 -G/SCM/N/1/USA/1/Suppl.20, 
16 July 2015.  
57 See Notice of Determination for the Dates of Application of Amendments to the Anti -dumping and 
Countervailing Duty Laws Made by the Trade Preferences Extension Act of 2015.  80 Fed. Reg. 46793 (6 August 
2015). Notified to the WTO in WTO document  G/ADP/N/1/Suppl.21 -G/SCM/N/1/USA/1/Suppl.20, 13 August  
2015.  
58 See, e.g.,  Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes from Korea, Mexico, and 
Turkey, Inv. Nos. 701 -TA-539 and 731 -1280-1282 (Preliminary), USITC Publication 4563, September 2015.  
59 WTO document s G/ADP/N/1/USA/1/Suppl.23  and G/SCM/N/1/USA/1/Suppl.23, 1 April 2016.  
60 CBP online information. Viewed at: https://eallegations.cbp.gov/Home/Index . WT/TPR/S/ 382 • United States  
 
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  the proceeding, and will receive notification of interim measures and the final determination from 
CBP; small businesses may receive technical assistance.61 
3.58.   The EAPA provides for an interim measures mechanism to ensure that duties can be collected 
on entries o f covered merchandise made during the pendency of an investigation. Under this 
mechanism, CBP will determine within 90 calendar days of initiation of an EAPA investigation whether 
there exists reasonable suspicion that covered merchandise subject to an all egation was entered 
through evasion. If CBP determines that such reasonable suspicion exists, it will suspend the 
liquidation of unliquidated entries of the covered merchandise entered after the date of initiation, 
and extend the period for liquidating the  unliquidated entries that entered before the initiation of 
the investigation. It will also take any additional measures necessary to protect the ability to collect 
appropriate duties, which may include requiring a single transaction  bond or posting cash d eposits.  
3.59.   The EAPA also requires CBP to determine, not later than 300 calendar days (or 360 calendar 
days in extraordinarily complicated cases) after the date of initiation of an EAPA investigation, 
whether there is substantial evidence that merchandise covered by an AD/CVD order was entered 
into the customs territory of the United States through evasion. The EAPA further requires CBP, no 
later than five business days after making a determination, to communicate the determination to 
the interested party w ho made an allegation that initiated the evasion investigation. CBP posts its 
decisions as to interim measures and final determination of evasion on its website.62 
3.60.   If CBP makes an affirmative evasion determination, it will suspend the liquidation of 
unliqui dated entries of the covered merchandise, and extend the period for liquidating the 
unliquidated entries that entered before the initiation of the investigation. It will also, when 
necessary, notify the USDOC of the determination, and request that it deter mine the appropriate 
duty rates for such covered merchandise, and require importers of covered merchandise to post 
cash deposits and assess duties on the covered merchandise. Additionally, if a violation of the 
Customs Act is identified as part of an affir mative determination, CBP may impose penalties under 
Section 1592 of the Tariff Act of 1930, or use any of its other enforcement authorities.63 In August 
2016, the United States introduced interim regulations for the application of the EAPA, and notified 
them to the WTO (see below).64 
3.61.   The EAPA also calls for cooperation with foreign countries on preventing evasion of trade 
remedy laws, by seeking to negotiate and enter into bilateral agreements with their customs 
authorities or other appropriate authorities. These bilateral agreements should allow for the provision 
of production, trade, and transit documents and other information necessary to determine whether 
exports from the exporting country are subject to the importing country's trade remedy laws; they 
should also allow the importing country to participate in verification in the exporting country, 
including through a site visit. Interim regulations on CBP Investigations of Claims of Evasion of Anti -
dumping and Countervailing Duties became effective in Augus t 2016.65 
3.62.   A Presidential Executive Order on Establishing Enhanced Collection and Enforcement of Anti -
dumping and Countervailing Duties and Violations of Trade an d Customs Laws was issued on 
31 March 2017. The Order establishes that it is the policy of the U nited States to impose appropriate 
                                                
61 CBP online information. Viewed at: https://ww w.cbp.gov/sites/default/files/assets/documents/2017 -
Apr/EAPA%20Investigation%20Process%20Overview_FINAL%20%28002%29.PDF . 
62 CBP online information. Viewed at: https://www.cbp.gov/trade/trade -enforcement/tftea/enforce -and-
protect -act-eapa. 
63 Section 1592 of the Tariff Act of 1930 is the main customs penalty provision regarding the 
importation of goods. The Section is the enforcement tool used by CBP to ensure customs laws concerning 
tariff classification, customs valuation, and others are followed when importing into the United States; it gives 
CBP authority to impose penalties for customs laws violations. Section 1592 prohibits the importation of, or 
attempt t o import, merchandise by means of false and material documents or electronic data or material 
omissions; it also prohibits aiding or abetting any other person to violate the statute.  
64 The interim regulations (Investigation of Claims of Evasion of Anti -dumping and Countervailing 
Duties, U.S. Customs and Border Protection, Department of Homeland), effective 22 August 2016, are 
contained in Federal Register Volume 81, Number 162 (Monday, 22 August 2016), Rules and Regulations, pp. 
56477 -56490. They were notif ied to the WTO in WTO document G/ADP/N/1/USA/1/Suppl.25 -
G/SCM/N/1/USA/1/Suppl.24 , 26 August 2016.  
65 Section 421 of the EAPA requires that regulations be prescribed as necessary and , within 180 days of 
TFTEA's enactment , to implement the provisions of the E APA that establish procedures for investigating claims 
of evasion of AD/CVD ord ers. WTO document s G/ADP/N/1/USA/1/Suppl.2 5 and G/SCM/N/1/USA/1/Suppl.24, 
26 August 2016.  WT/TPR/S/ 382 • United States  
 
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  bonding requirements, based on risk assessments, on entries of articles subject to AD and CV duties, 
when necessary to protect the revenue of the United States in cases where importers unlawfully 
evade AD and CV duties, a nd mandates the development of an Implementation Plan within 90 days 
of the date of the Order.66 
3.63.   In 2016, some changes in practice related to AD and CVD investigation procedures were 
introduced. The USDOC modified its regulation concerning the extension of time limits for 
submissions in AD and CVD proceedings.67 The USDOC also modified its regulations pertaining to 
price adjustments in AD duty proceedings, to clarify that it does not intend to accept a price 
adjustment made after the time of sale unless the i nterested party demonstrates its entitlement to 
such an adjustment.68 
3.64.   In the WTO Committee on Anti -Dumping Practices, Members have expressed concerns with 
respect to some issues linked to AD inv estigations procedures or rules .69 
3.1.6.1.1.2   Administrative procedures  
3.65.   Responsibility for the administration of laws and agreements with respect to AD and CVD 
measures in the United States lies jointly with the U.S. Department of Commerce's (USDOC) 
International Trade Administration (ITA) and with the United States International  Trade Commission 
(USITC). The ITA's Enforcement and Compliance Unit (E&C) is responsible for the enforcement of 
AD and CVD laws. The ITA is in charge of the determination of the existence and amount of dumping 
and subsidy in AD and CVD investigations. The  Customs Unit within E&C serves as the liaison with 
U.S. Customs and Border Protection (CBP) on matters pertaining to the collection of AD/CVD duties, 
and on issues of potential fraud associated with AD/CVD proceedings.70 The USITC determines 
whether an ind ustry, or the establishment of an industry, is materially retarded by reason of dumped 
or subsidized imports.71 The TRLED, within the Office of Trade at CBP, is entrusted with the 
development and administration of policies to prevent and counter evasion, an d is responsible for 
directing enforcement and compliance assessment activities concerning evasion, as well as for 
conducting commercial risk assessment targeting, with respect t o cargo destined for the 
United  States; and for the development of policies fo r the assessment of risk of importers, to better 
determine the application of single entry and continuous bonds for entries of covered merchandise, 
to sufficiently protect the collection of AD and CV duties.  
3.66.   AD and CVD investigations may be initiated at th e request of petitioners, or may be self -
initiated by the USDOC, although this has seldom been the case. There was one such case during 
the period under review: on 28 November 2017, the USDOC announced the self -initiation of AD and 
CVD investigations of im ports of common alloy aluminium sheet from China. Prior to 2017, there 
had been three such self -initiations by the USDOC since 1980, most recently in 1991. Investigation 
petitions must be filed simultaneously with the USDOC's ITA and the USITC. A U.S. indu stry 
petitioning for the initiation of an AD or CVD investigation must provide a reasonable basis to believe 
or suspect that dumping and/or subsidization of a particular product is occurring, that there is 
material injury or threat thereof to the domestic industry, and that there is a causal link between 
them. Before initiating an investigation, the ITA must determine whether the petition contains 
information reasonably available to the petitioner supporting the allegations. This includes 
determining that a  petition is filed by an interested party and has industry support, for which it must 
meet two criteria: (a) domestic producers or workers who support the petition must account for at 
least 25% of the total production of the domestic like product; and (b) the domestic producers or 
workers who support the petition must account for more than 50% of the production of the domestic 
like product produced by that portion of the industry expressing support for, or opposition to, the 
petition. The petition must also  clearly identify and define the domestic like product as well as all its 
producers, and must provide information relating to the degree of industry support for the petition, 
including the total volume and value of U.S. production of the domestic like prod uct, and the volume 
                                                
66 Whitehouse online information. Viewed at:  
https://www.whitehouse.gov/search/?s=residential+executive+order+est ablishing+enhanced+collection+enfo
rcement+antidumping+countervailing+duties+violations+trade+customs+laws . 
67 WTO document G/ADP/N/1/USA/1/Suppl.15 -G/SCM/N/1/USA/1/Suppl.15, 10 October 2013.  
68 WTO document G/ADP/N/1/USA/1/Suppl.24, 1 April 2016.  
69 WTO docum ent G/ADP/M/52, 28 July 2017.  
70 USDOC online information. Viewed at: http://trade.gov/enforcement/operations/ . 
71 USITC online information. Viewed at: https://www.usitc.gov/press_room/usad.htm . WT/TPR/S/ 382 • United States  
 
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  and value of U.S. production of the domestic like product produced by the petitioner(s) and eac h 
domestic producer identified.  
3.67.   In general, a determination on whether or not to initiate an investigation is made within 20 
days after the d ate of filing of the petition, as specified in Section 732(c) of the Act and 19 CFR 
351.203. However, the ITA has the authority to postpone the initiation of an investigation by up to 
20 days to "poll the industry", or otherwise determine support for the p etition. The USITC has 45 
days from the filing of the petition or self -initiation by the USDOC or, if the time has been extended 
to poll the industry, 25 days after USDOC informs it of the initiation of the investigation, to make a 
preliminary determinatio n of whether there is a reasonable indication of material injury or threat 
thereof. If the USITC's injury determination is negative, the investigation is terminated; if it is 
affirmative, the investigation continues. After a determination of injury has bee n made by the USITC, 
the ITA has 115 days to issue a preliminary AD  determination, or 85 days to issue a preliminary CVD 
determination.72 Whether the preliminary determination is affirmative or negative, the investigation 
continues, even if no margin of dum ping or subsidization is found, or the margin found is below the 
de minimis  threshold.73 The ITA has an additional 75 days to determine the final margin of dumping . 
For the determination of the margin of dumping, the ITA compares prices in the United States  to a 
Normal Value (NV), the calculation of which varies according to the circumstances. For example, the 
NV may be based on the company's actual costs and prices in the comparison market, which can be 
either the respondent's home country or some other sui table third country or, if the ITA does not 
find a suitable comparison market, it may base the NV on the Constructed Value (CV) which is a 
cost-based  build-up of a surrogate price.  
3.68.   If a "reasonable indication" of material injury is found by the USITC, and the ITA makes an 
affirmative preliminary determination, preliminary AD or CVD measures, generally the posting of a 
cash deposit in an amount equivalent to the estimated margin of dumping or preliminary subsidy 
rate, may be applied for a period of six month s. If the ITA makes a preliminary determination of 
critical circumstances, preliminary measures may be applied retroactively to subject imports entered 
up to 90 days before the determination was published in the Federal Register.74 If the ITA's final 
determ ination finds a margin of dumping or a subsidy rate above the de minimis  level, the 
investigation goes back to the USITC, which has 45 days to issue a final determination of injury. A 
final decision must then be taken within 280 days from the filing of the  petition for AD investigations 
or 205 days for CVD investigation, or 260 (185) days after the beginning of the investigation. If the 
USITC's final determination is affirmative, the ITA issues an order imposing AD or CVD duties; if it 
is negative, the inve stigation is terminated, no order is issued, provisional measures are lifted, and 
any cash deposits are returned, with interest.75 The imposition of an order in the case of an 
affirmative determination, or of the termination of the application of provisiona l measures and return 
of the bond, in case of a negative determination, takes place within the 287th day (212th for CVDs) 
and is published in the Federal Register . 
3.69.   Affirmative determinations are subject to administrative reviews at the request of an 
intere sted party, and to sunset reviews after five years (see below).  
3.1.6.1.1.3   Suspension agreements  
3.70.   AD and CVD investigations may be suspended under some circumstances, based on an 
agreement to cease exports, or to eliminate the injurious effect (suspension agreements).  These 
agreements are generally voluntary limits on exports or price undertakings, or involve the 
elimination of subsidies by the investigated countries.76 In the case of AD investigations, under 
suspension agreements, exporters may agree to accept price un dertakings or to cease exports. AD 
                                                
72 In some cases, the determination can be postponed, in accordance with 19 CFR 351.205.  
73 The de minimis  threshold is 2% for AD investigations (0.5% for reviews) and, in the case of 
countervailable subsidies, 1% for developed countries, 2% for developing countries.  
74 A determination of critical circumstances results from a history of dumping and material inj ury, 
knowledge of dumping, presumed to exist when there is a margin of dumping of 25% or more for export price 
sales, and a margin of 15% or more for constructed export price sales, together with massive imports over a 
short period of time (normally, when imports increase by 15% or more in the three months following the 
petition as compared to the three -month period prior to the petition).  
75 An affirmative determination of injury requires that at least half of the participating USITC 
commissioners find inju ry; if there is a tie in the vote, it is deemed to be an affirmative determination, and 
final duties are imposed.  
76 In cases where a suspension agreement is interrupted, the investigation resumes where it was left . WT/TPR/S/ 382 • United States  
 
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  suspension agreements reached with non -market economies (NMEs) may combine price 
undertakings and additional elements, in order to prevent price suppression or undercutting. In CVD 
cases, a suspension agreement may be rea ched if the Government alleged to be providing the 
subsidy agrees to eliminate the subsidy, to completely offset the net subsidy, or to cease or limit 
exports to the United States. Suspension agreements entered into with a WTO Member considered 
a market ec onomy may involve only price undertakings in the case of AD investigations. Agreements 
with respect to CVD investigations may also involve quantitative restrictions.  
3.1.6.1.1.4   Administrative reviews  
3.71.   Administrative reviews of CVD and AD orders in effect each year may  be requested by 
interested parties during the anniversary month of the publication of the order.77 The list of orders 
eligible for review is published in the Federal Register. An interested party must specify the individual 
producers or exporters covered b y the order or suspension agreement for which they are requesting 
a review, and the basis for the request.78 In a review of a suspension agreement, the USDOC reviews 
the current status of, and compliance with, the agreement. In administrative reviews of AD/ CVD 
orders, the USDOC examines a particular company's entries, exports, or sales made 12 months 
immediately preceding the anniversary month in which the review was requested (review period). 
The review determines the actual weighted -average amount of dumpi ng/subsidy and duty 
assessments for that period, and the future cash deposit rate. If no review is requested for a 
particular 12 -month period, final duties are assessed in the amount deposited for that period. 
Requests for duty absorption rulings may also be made in administrative reviews, but only for those 
initiated two or four years after publication of the AD order. The results of the reviews are normally 
issued within 12 months from the date of initiation.  
3.1.6.1.1.5   Sunset reviews  
3.72.   Sunset reviews of AD and CVD or ders are provided for under Section 751(c) of the Tariff Act 
of 1930, as amended by the URAA. The USDOC and the USITC initiate sunset reviews no later than 
30 days before the fifth anniversary of publication in the Federal Register of an AD or CVD order or  
suspension agreement, with the aim of determining whether the revocation of the order would be 
likely to lead to continuation or recurrence of dumping or countervailable subsidies (USDOC) and of 
material injury to the domestic industry (USITC). Initiation s of the reviews are automatic. USDOC 
policy is to provide a one -month advance notification of sunset r eviews in the Federal Register.  
3.73.   Sunset reviews are order -specific (country - and product -specific) but may be grouped in an 
investigation; suspension agre ements are also subject to sunset review. In its determination of 
whether revocation of an order or termination of a suspended investigation would likely lead to 
continuation or recurrence of dumping, the USDOC considers the rates established in the 
invest igation and/or reviews conducted during the sunset review period, as well as the volume of 
imports for the periods before and after issuance of the order or acceptance of the suspension 
agreement. There are no sunset reviews for AD orders on products from non-WTO Members.  
3.1.6.1.2   Anti-dumping measures  
3.74.   Between 2015 and 2017, the number of AD investigation initiations totalled  133. Although 
the number of initiations decreased from 42 in 2015 to 37 in 2016, it  increased to 54 in 2017 
(Table  3.5). Of the 37 investigations initiated in 2016, 34 resulted in the imposition of definitive 
measures by end April 2018; in one case, no final duty was applied. In all the 2016 investigations, 
provisional duties were applied. As of 30 June 2018, 22 of the investigatio ns initiated in 2017 had 
resulted in the imposition of definitive measures, and 8 had been terminated due to a no -injury 
finding. Between 1995 and 2017, the United States initiated 659  AD investigations.79 
                                                
77 USDOC Regulations, 19 CFR 351.213.  
78 USDOC Regulations, 19 CFR 351.213(b) . 
79 WTO online information. Viewed at: 
https://www.wto.org/english/tratop_e/adp_e/AD_InitiationsByRepMem.pdf . WT/TPR/S/ 382 • United States  
 
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  Table 3.5 Anti-dumping investigations, 2015 -June 2018  
 2015  2016  2017  2018 (June)  
Investigation initiations  42 37 54 22 
Provisional measures applied  10 53 38 26 
Duty orders imposed  15 35 32 24 
Suspension agreements  0 0 0 0 
Sunset review initiations  36 50 46 19 
Continuation of orders  31 23 25 21 
Revocations  5 6 1 1 
Source:  WTO Secretariat based on data received from the USDOC; the USITC; and notifications.  
3.75.   The number of AD measures in force increased during the per iod under review. As of 
31 December 2017, excluding suspension agreements, 321 definitive AD measures were in force. At 
that date, 314 AD duty orders and seven suspension agreements were in effect, compared with 293 
in December 2016, and 265 in December 2015. In accordance with information f rom the USDOC 
and the USITC, 340 AD orders were in place as of 17 July 2018 (Table 3.6).80 
Table 3.6 AD measures in force, by trading partner (including suspension agreements), 
2015 -17 July 2018  
 2015  2016  2017  17 July 2018  
Trading partner/region  265 293 321 340 
Argentina  1 1 1 2 
Australia  2 2 2 2 
Belarus  1 1 1 2 
Brazil  7 11 11 12 
Canada  2 2 3 3 
Chile 1 1 1 1 
China  97 102 110 116 
Chinese Taipei  21 22 22 23 
EU (28)  20 22 30 32 
India 15 19 21 21 
Indonesia  8 9 9 10 
Iran 1 1 1 1 
Japan  15 17 19 19 
Kazakhstan  1 1 1 1 
Korea, Rep. of  15 18 23 24 
Malaysia  4 4 4 4 
Mexico  11 12 13 13 
Republic of Moldova  2 2 2 2 
Oman  1 3 3 2 
Pakistan  0 1 1 1 
Philippines  1 1 1 1 
Russian Federation  6 4 4 5 
South Africa  3 3 3 5 
Switzerland  0 0 0 1 
Thailand  7 7 7 7 
Turkey  5 7 8 9 
Trinidad and Tobago  1 1 1 1 
Ukraine  7 6 6 5 
United Arab Emirates  2 3 3 4 
Venezuela, Bolivarian Rep. of  1 1 1 1 
Viet Nam  9 9 9 10 
Source:  G/ADP/N/308/USA, 21 March 2018; G/ADP/N/294/USA, 9 March 2017; and G/ADP/N/280/USA, 
11 March 2016; information received from the USDOC; and USITC online information. Viewed at: 
http://w ww.usitc.gov/trade_remedy/documents/orders.xls . 
3.76.   The trading partners subject to the largest amount of AD orders as of July 2018 were China 
(116); the European Union (32); Korea, the Republic of (24); Chinese Taipei (23); and India (21). 
Of the 340 AD measu res in place as of 17 July 2018, 179 (52.6% of the total) were applied on iron 
and steel products, 55 (16.2%) on miscellaneous manufactured products, 40 (11.8%) on chemicals 
and pharmaceuticals, 25 (7.4%) on metals and minerals, 21 (6.2%) on agricultural p roducts, 14 
                                                
80 USITC online information . Viewed at: 
https://www.usitc.gov/sites/default/files/trade_remedy/documents/orders.xls . WT/TPR/S/ 382 • United States  
 
- 66 - 
 
  (4.1%) on plastics and rubber, 3 (0.9%) on textiles and apparel, and 2 (0.6%) on machinery and 
equipment.81 
3.77.   Of the 333 AD measures in place (excluding suspension agreements) at 17 July 2018, 215 
had been renewed after a sunset review, that is, t hey had been in place for over five years. The 
average duration of an AD measure in place at the end of 2017 was some 11 years. At the end of 
2017, 61 AD and 5 CVD measures had been in place for more than 20 years; and 159 AD and 14 
CVD measures had been i n place for over 10 years. The longest -lasting AD measure in place dates 
from 1977, and is applied on pressure sensitive plastic tape from Italy; a measure on pre -stressed 
concrete steel wire strand from Japan dates from 1978.  
3.78.   Duties applied during the per iod under review varied significantly. The level of AD definitive 
duties applied during 1 January 2016 –31 December 2017 range from 0.00% to 493.46%; provisional 
duties applied over the same period also range from 0.00% to 493.46%.  
3.79.   At the end of 2017, seven  suspension agreements were in place, with Argentina (1), Mexico 
(2), Russian Federation (2), and Ukraine (2), relating to lemon juice, fresh tomatoes, sugar, carbon 
steel plate, uranium, and oil country tubular goods, respectively. Four of the agreements involve 
price undertakings, one involves export limits, and the other involves export limits com bined with a 
price undertaking.  
3.80.   According to information provided by the U.S. Department of Homeland Security, in FY2016, 
US$14 billion of imported goods were s ubject to AD/CVD, and CBP collected US$1.5 billion in AD/CVD 
cash deposits. CBP's collection of AD/CVD cash deposits increased by over 25% since FY2015, and 
by almost 200% since FY2014.82 As of the end of FY2017, US$3.1 billion of AD/CVD duties were 
owed to  the U.S. Government for imports going back to 2001.  
3.81.   There were 123 sunset review initiations of AD orders during the period from 1 January 2016 
to end -June 2018 (50 in 2016, 46 in 2017 and 21 in 2018). During the same period, there were 
eight revocations (six in 2016, one in 2017, and one in 2018), while 104 orders were continued.83 
The revocations during that period included iron and steel products as well as chemicals and food; 
they covered five  trading partners.84 There were 104 administrative reviews of AD orders initiated 
in 2016, and 119 administrative reviews initiated in 2017.  
3.82.   During the review period, some aspects of U.S. AD investigation procedures and findings were 
the subject of WTO disputes (Table A2. 3). 
3.1.6.1.3   Countervailing measures  
3.83.   Between 2015 and 2 017, the number of CVD investigation initiations totalled 63, of which 
23 in 2015, 16 in 2016, and 24 in 2017 (Table 3.7). There were also 1 7 initiations in the first six 
months of  2018. Of the investigations initiated in 2017, 21 had resulted in the impos ition of definitive 
measures by April 2018, and 2 had been terminated without duties being applied due to a negative 
injury determination by the USITC. As of 30 April 2018, eight of the investigations initiated in 2017 
had resulted in the imposition of def initive duties. Twenty -four investigations initiated in 2017 were 
subject to provisional measures.85 
                                                
81 USITC online information. Viewed  at: https://www.usitc.gov/sites/default/files/trade_remedy/  
documents/orders.xls . 
82 DHS online information. Viewed at: https://www.dhs.gov/news/2017/03/31/fact -sheet -enhanced -
collection -and-enforcement -antidumping -and-countervailing -duties . 
83 According to information from the USITC, 114 AD orders were revoked between 1 January 2006 and 
end-April 2018. USITC  online information. Viewed at: 
http://www.usitc.gov/trade_remedy/do cuments/orders.xls . 
84 USDOC online information. Viewed at: http://ia.ita.doc.gov/sunset/ ; and WTO documents 
G/ADP/N/294/USA, 9 March 2017, and G/ADP/N/300 /USA, 6 September  2017. 
85 Some of these measures were ap plied in the first half of 2016. WTO documents G/SCM/N/298/USA, 
11 March 2016 ; and G/SCM/N/305, 26 September 2016.  WT/TPR/S/ 382 • United States  
 
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  Table 3.7 CVD investigations and measures imposed, 2015 -June 18  
 2015  2016  2017  June 2018  
Investigation initiations  23 16 24 17 
Provisional measures applied  14 53 20 13 
Duty orders imposed  10 16 11 13 
Suspension agreements  0 0 0 0 
Note:  Figures refer to the year in which the investigation was initiated. Some provisional or definitive 
duties may have been  applied the following year.  
Source:  WTO, based on information from the USDOC, the USITC, and notifications.  
3.84.   Overall, there were 109 CVD orders in place and one suspension agreement with Mexico 
regarding sugar as at 17 July 2018, involving 17 trading partn ers, where China was the most 
affected.86 Of these 109 CVD measures, 55 (50.5% of the total) were applied on iron and steel 
products, 18 (16.5%) on miscellaneous manufactured products, 13 (11.9%) on chemicals and 
pharmaceuticals, 9 (8.3%) on plastics and ru bber, 7 (6.4%) on agricultural products, 2 (1.9%) on 
metals and minerals, 2 (1.8%) on textiles and apparel, and 1 (1%) on machinery and equipment.  
3.85.   There were 52 sunset review initiations of CVD orders during the period from 1 January 2016 
to end -April 2018  (43 in 2016, 4 in 2017 and 5 in 2018). During the same period, 27 sunset reviews 
of CVD orders were concluded; there were six terminations revocations (all in 2016), while the 
remaining orders were continued.  
3.1.6.1.4   EAPA investigations  
3.86.   As previously described, t he EAPA created a new framework for CBP to investigate allegations 
of evasion of AD/CVD orders, under the newly created Section 517 (Procedures for Investigating 
Claims of Evasion of Anti -dumping and Countervailing Duty Orders). EAPA allegations must be fi led 
via the EAPA option on the e -Allegations web portal.87 The Trade Remedy Law Enforcement 
Directorate (TRLED) within CBP is responsible for conducting EAPA investigations.  
3.87.   Since the EAPA came into effect in August 2016, and until July 2018, the TRLED init iated 19 
investigations from allegations of evasion of duties. After consolidation of some of those 
investigations, the TRLED issued 10 notices of initiation and one notice of non -initiation during that 
period. In all but one of these initiated investigati ons, interim measures were applied.88 Interim 
measures have generally consisted of: extension of suspension of the liquidation of entries; a "live 
entry" requirement for all future imports, meaning that all entry documents and duties are required 
before car go is released by CBP into the U.S. commerce; rejecting previously filed entries that are 
within the entry reject period and requiring them to be refiled with applicable AD/CVD cash deposits; 
and collection of a bond equivalent to the application or adjust ment of AD/CVD duties to imports 
previously subject to no or lower AD/CVD duties due to their being identified as having entered the 
United States through evasion. As of July 2018, the TRLED had made a final determination in five 
cases, one of them involvi ng eight investigations (Table 3.8).  
                                                
86 The trading p artners affected were: Argentina (1); Brazil (4); Canada (2); China (50); India (18); 
Indonesia (5); Iran  (2); Italy (3); Kore a, Republic of (7 ); Mexico (1); Oman (1); Sri Lanka (1); South 
Africa  (1); Chinese Tai pei (1); Thailand (1); Turkey (8 ); and Viet Nam ( 3). 
87 CBP online information. Viewed at: https://eallegations.cb p.gov/Home/Index2 . 
88 On 5 September 2017, CBP initiated its EAPA investigation based on a properly filed allegation that 
reasonably  suggested that  LM Supply had entered merchandise into the customs territory of the United States 
through evasion of the AD O rder. CBP was unable to determine whether the  imported merchandise was subject 
to the AD Order. Accor dingly, pursuant to the EAPA, CBP  referred this matter to  the USDOC  for a determination 
as to whether the merchandise at issue was within the scope of the AD Order . CBP Notice of Scope Referral, 4 
December 2017. Viewed at: https://www.cbp.gov/trade/eapa -investi gation -number -7212-lm-supply -inc-
notice -scope -referral -december -4-2017. WT/TPR/S/ 382 • United States  
 
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  Table 3.8 EAPA investigations  (eligible for public disclosure), 2016 -July 2018  
Investigation/date of 
initiation  Interim measures  Final determination  
Eastern Trading NY Inc.: 
Evasion of the AD duty 
order on steel wire 
garment hangers from 
China (circumvention 
through Thailand)/ 11 
October 2016  Yes. Entries under this investigation that entered the 
United States as not subject to AD duties were rate -
adjusted to reflect that  they were subject to the AD duty 
order on steel wire garment hangers from China, and 
cash deposits were owed. Additionally, "live entry" is 
required for all future imports for Eastern Trading, before 
cargo is released by CBP into the U.S. commerce. CBP 
suspended the liquidation for any entry that had entered 
on or after 11 October 2016; and extended the period for 
liquidation for all unliquidated entries that entered before 
that date.  Affirmative Determination of 
Evasion. CBP will continue to 
suspend the l iquidation for any 
entry that has entered on or 
after 11 October 2016; and will 
continue to extend the period 
for liquidation for all 
unliquidated entries that 
entered before that date. CBP 
will continue to request that 
Eastern Trading post cash 
deposits o f 187.25% on its 
entries of steel wire hangers, 
and for any future imports of 
covered hangers, CBP will 
require live entry, which 
requires Eastern Trading to 
post cash deposits in the 
amount of 187.25% prior to 
their release. Eastern Trading's 
continuous b ond will remain at 
the increased level and will be 
reviewed in accordance with 
CBP's policies.  
Diamond Tools Technology 
LLC: Suspicion of evasion 
of the AD duty order on 
Diamond Sawblades from 
China/ 22 March 2017  Yes. On -site verification: measures applied after walk -
through of production floor. Entries under this 
investigation that entered the United States as not 
subject to AD duties, to be rate -adjusted to reflect that 
they are subject to the AD duty order on diamond 
sawblades from China; cash dep osits are owed. 
Additionally, ''live entry" is required for all future imports 
for Diamond Tools Technology . Pending a determination on a 
scope referral to the USDOC.  
Aspects Furniture 
International, Inc.: Evasion 
of the AD duty order on 
Wooden Bedroom Fu rniture 
from China/ 9 May 2017  Yes. Entries of subject merchandise under this 
investigation that entered the United States as not 
subject to AD duties were rate -adjusted, and cash 
deposits were owed. Additionally, "live entry" was 
required for all future imports for Aspects. CBP to further 
suspend the liquidation for any entry that entered on or 
after 9 May 2017, and extend the period for liquidation 
for all unliquidated entries that entered before that date.  Pending a determination on a 
scope referral to the USDOC.  
Certain importers of wire 
hangers from Malaysia: 
Evasion of the AD duty 
order on Wire Garment 
Hangers from China (eight 
investigations consolidated 
into one)/ 12 May 2017  Yes. Entries under this investigation for Brooklyn 
Knights, Garment Cover,  Casa USA, Nice Guy, GL Paper, 
Newtown Supply, Subcos Percha, and Masterpiece 
Supply that entered the United States as not subject to 
AD duties, were rate -adjusted to reflect that they are 
subject to the AD order on steel wire garment hangers 
from China, a nd cash deposits were owed. In addition, 
"live entry" was required for all future imports of each of 
the named importers. CBP suspended the liquidation for 
any entry that had entered on or after 12 May 2017, and 
extended the period for liquidation for all unliquidated 
entries that entered before that date. CBP would 
reliquidate any entries liquidated and for which CBP's 
reliquidation authority had not yet lapsed. CBP would 
also evaluate the continuous bonds for each of the 
named importers to determine their  sufficiency.  Affirmative Determination of 
Evasion. In light of CBP's 
determination, CBP will 
continue to suspend the 
liquidation for any entry that 
has entered on or after 12 May 
2017. CBP will also continue to 
extend the period for liquidation 
for all u nliquidated entries that 
entered before that date. CBP 
will continue to require live 
entry, which requires that the 
importer post the applicable 
cash deposit prior to the entry's 
release. Finally, CBP will 
evaluate the continuous bonds 
of these companies i n 
accordance with CBP's policies.  
Power Tek Tool, Inc. and 
Lyke Industrial Tool, LLC: 
Evasion of the AD duty 
order on Diamond 
Sawblades from China/ 18 
July 2017  Yes. Unliquidated entries not subject to AD duties were 
rate-adjusted, and cash deposits owed. "Live entry" was 
required for all future imports for Power Tek and Lyke. 
CBP to further suspend the liquidation for any entry 
entered on or after 18 July 2017, and extend the period 
for liquidation for all unliquidated entries that entered 
before that date . Affirmative Determination of 
Evasion. In light of CBP's 
determination, CBP will 
continue to suspend the 
liquidation for any entry that 
has entered on or after 18 July 
2017. CBP will also continue to 
extend the period for liquidation 
for all unliquidated entries that 
entered before that date. CBP 
will continue to require live 
entry, which requires that the 
importer post the applicable 
cash deposit prior to the entry's 
release. Finally, CBP will 
evaluate the continuous bonds WT/TPR/S/ 382 • United States  
 
- 69 - 
 
  Investigation/date of 
initiation  Interim measures  Final determination  
of these companies in 
accordance  with CBP's policies.  
American Pacific Rubber, 
Inc.: Evasion of the AD 
duty order on Oil Country 
Tubular Goods from Viet 
Nam/ 18 July 2017  Yes. All unliquidated entries of subject merchandise that 
entered the United States as not subject to AD duties to 
be rate-adjusted, and cash deposits owed. "Live entry" 
required for all future imports. CBP to suspend the 
liquidation for any entry entered on or after 18 July, and 
extend the period for liquidation for all unliquidated 
entries entered before that date.  Affirmative Determination of 
Evasion. In light of CBP's 
determination, CBP will 
continue to suspend the 
liquidation for any entry that 
has entered on or after 18 July 
2017. CBP will also continue to 
extend the period for liquidation 
for all unliquidated entri es that 
entered before that date. CBP 
will continue to require live 
entry, which requires that the 
importer post the applicable 
cash deposit prior to the entry's 
release. Finally, CBP will 
evaluate the continuous bonds 
of these companies in 
accordance with  CBP's policies.  
Ceka Nutrition Inc.: 
Evasion of the AD duty 
order on Glycine from 
China/ 28 August 2017  Yes. Entries under this investigation that entered the 
United States as not subject to AD duties to be rate -
adjusted, and cash deposits owed. "Live ent ry" required 
for all future imports for Ceka Nutrition. CBP to suspend 
the liquidation for any entry that has entered on or after 
28 August 2017, and extend the period for liquidation for 
all unliquidated entries entered before that date.  Affirmative Deter mination of 
Evasion. In light of CBP's 
determination, CBP will 
continue to suspend the 
liquidation for any entry that 
has entered on or after 28 
August 2017. CBP will also 
continue to extend the period 
for liquidation for all 
unliquidated entries that 
entered before that date. CBP 
will continue to require live 
entry, which requires that the 
importer post the applicable 
cash deposit prior to the entry's 
release. Finally, CBP will 
evaluate the continuous bonds 
of these companies in 
accordance with CBP's polic ies. 
Choice Refrigerants: 
Evasion of the AD duty 
order on Hydrofluorocarbon 
Blends from China/ 5 
September 2017  Pending. CBP was unable to determine whether the 
merchandise imported by LM Supply is subject to the AD 
order. Accordingly, pursuant to the EAPA, it referred this 
matter to the USDOC for a determination as to whether 
the merchandise at issue is within the scope of the AD 
order.  Pending a determination on a 
scope referral to the USDOC.  
Sun Bright International, 
Corp. and Fair Importing 
Corp.: Evasion of the AD 
and CVD duty orders on 
Aluminium Extrusions from 
China/ 5 February 2018  Yes. Entries under this investigation that entered the 
United States as not subject to AD and CVD duties to be 
rate-adjusted, and cash deposits owed. "Live entry" 
required for all future imports for Sun Bright and Fair 
Importing. CBP to suspend the liquidation for any entry 
that has entered on or after 5 February 2018, and 
extend the period for liquidation for all unliquidated 
entries entered before that date.  Pendi ng. Final determination to 
be issued not later than 3 
December 2018.  
Columbia Aluminium 
Products, LLC: Evasion of 
the AD and CVD duty 
orders on Aluminium 
Extrusions from China/9  
February 2018  Yes. Entries under this investigation that entered the 
United S tates as not subject to AD and CVD duties to be 
rate-adjusted, and cash deposits owed. "Live entry" 
required for all future imports for Columbia Aluminium. 
CBP to suspend the liquidation for any entry that has 
entered on or after 9 February 2018, and exten d the 
period for liquidation for all unliquidated entries entered 
before that date.  Pending. Final determination to 
be issued not later than 6 
December 2018.  
Royal Brush Manufacturing, 
Inc.: Evasion of the AD 
duty order on Cased Pencils 
from China/ 27 March 2018  Yes. Entries under this investigation that entered the 
United States as not subject to AD duties to be rate -
adjusted, and cash deposits owed. "Live entry" required 
for all future imports for Royal Brush. CBP to suspend 
the liquidation for any en try that has entered on or after 
27 March 2018, and extend the period for liquidation for 
all unliquidated entries entered before that date.  Pending. Final determination to 
be issued not later than 21 
January 2019.  
Source:  WTO Secretariat based on CBP online in formation. Viewed at:  
 https://www.cbp.gov/trade/trade -enforcement/tftea/enforce -and-protect -act-eapa. WT/TPR/S/ 382 • United States  
 
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  3.1.6.2   Safeguards  
3.1.6.2.1   Global safeguards  
3.1.6.2.1.1   Main laws and regulations  
3.88.   In the period under review, the United States initiated its first safeguard investigation since 
2001. Safeguard action is authorized under U.S. law in Sections 201 -204 of the Trade Act of 1974, 
as amended. Sections 201 -204 provide the legal fra mework through which the President may 
provide import relief. This authority relates to the rights of a WTO Member under Article XIX of the 
GATT 1994 to take emergency action by suspending obligations it has incurred. Under Section 201, 
domestic industries  alleging that they are seriously injured, or threatened with serious injury, by 
increased imports may petition the USITC for import relief.89 An investigation may also start with a 
request from the President or the USTR, or with  a resolution of the House C ommittee on Ways and 
Means  or the Senate Committee on Finance. The USITC may also self -initiate an investigation . A 
petitioner may submit to the USITC an adjustment plan, detailing steps it envisions will facilitate 
positive adjustment to import competitio n. An adjustment plan may be submitted either at the time 
the petition is filed or within 120 days of the filing of the petition.90 
3.89.   Upon receipt of a petition, request, or resolution as described above, the USITC is required, 
under Section 202(b)(1), to mak e an investigation to determine whether an article is being imported 
into the United States in such increased quantities as to be a substantial cause of serious injury, or 
the threat thereof, to the domestic industry producing an article like, or directly competitive with, 
the imported article. If the USITC makes an affirmative determination, or is equally divided in its 
determination, it must recommend to the President the action that would address the serious injury, 
or threat thereof, to the domestic ind ustry, and be most effective in facilitating the efforts of the 
domestic industry to make a positive adjustment to import competition (Section 202(e)). The types 
of actions the USITC may recommend, and limitations on the actions, are set out in Section 
202(e)(2) -(5). The USITC  is authorized to recommend an increase in, or the imposition of, any duty 
on the imported article; a tariff rate quota; a modification or imposition of any quantitative restriction 
on the importation of the article; one or more approp riate adjustment measures, including the 
provision of trade adjustment assistance; or any combination of the actions previously described. In 
addition, the USITC may also recommend that the President initiate international negotiations to 
address the under lying cause of the increase in imports of the article, or otherwise to alleviate the 
injury or threat; implement any other action authorized under law.  In general, the USITC is required 
to make its determination under Section 202(b) within 120 days of the filing of the petition, receipt 
of the request or resolution, or adoption of the motion, and to transmit its report, including its 
findings and any recommendations, and an explanation of the basis therefor e, within 180 days of 
the filing of the petition, r eceipt of the request or resolution, or adoption of the motion. These periods 
are extended if a request for provisional relief is included with the petition. If the President decides 
to apply a safeguard measure, the USITC must monitor developments in the industry and submit a 
report on the results of its monitoring during the period of application of the measure (relief period). 
At the termination of any relief period, the USITC is required to report to the President and Congress 
on the effectiveness of th e safeguard measure in facilitating the positive adjustment of the domestic 
industry to import competition.91 
3.90.   No amendments were made to regulations pertaining safeguards during the period under 
review. The most recent amendments date from 2015, as notified  by the United States to the WTO, 
and relate to provisions of the USITC's Rules of Practice and Procedure concerning safeguard actions. 
The amendments are part of the USITC's retrospective analysis of its Rules that attempt to determine 
whether rules shoul d be modified, streamlined, expanded, or repealed so as to make the agency's 
regulatory programme more effective or less burdensome in achieving regulatory objectives.  
3.1.6.2.1.2   Safeguard investigations 2016 -18 
3.91.  Between 2016 and 2018, two new safeguard investigatio ns were conducted by the 
United  States under Sections  201-204 of the Trade Act of 1974. Both investigations were notified to 
                                                
89 USITC online information. Viewed at: https://www.usitc.gov/press_room/us_safeguard.htm . 
90 USITC (2014), Summary of S tatutory Provisions Related to Import Relief, USITC Publication 4468 , 
August 2014 . Viewed at: https://www.usitc.gov/oig/documents/pub4468_2014.pdf . 
91 USITC online information. Viewed  at: https://www.usitc.gov/press_room/us_safeguard.htm . WT/TPR/S/ 382 • United States  
 
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  the WTO. The USITC made affirmative serious injury determinations in both cases, and the President 
applied a safeguard measure in eac h (see below) . 
Crystalline Silicon Photovoltaic Cells  
3.92.   The first safeguard investigation notified to the WTO during the period under review involved 
Crystalline Silicon Photovoltaic Cells (Whether or Not Partially or Fully Assembled into Other 
Products). On  25 May 2017, pursuant to Article 12.1(a) of the WTO Agreement on Safeguards, the 
United States notified that the USITC had initiated, on 17 May 2017, a safeguard investigation with 
respect to certain crystalline silicon photovoltaic (CSPV) cells, whether or not partially or fully 
assembled into other products, including, but not limited to, modules, laminates, panels, and 
building -integrated materials. The investigation was initiated following receipt of a petition filed by 
Suniva, Inc., a producer of CSPV  cells and CSPV modules in the United States. The investigation 
covered CSPV cells of a thickness equal to or greater than 20 micrometers (HTSUS subheading 
8541.40.60), whether or not the cell had undergone other processing.92 Excluded from the 
investigatio n were CSPV cells manufactured in the United States, whether or not partially or fully 
assembled into other products.93 The petition alleged that the quantity of imports had risen by 51.6% 
between 2012 and 2016, while the value of imports had risen by 62.8% , from US$5.1  billion in 2012 
to US$8.3 billion in 2016; domestic market share had fallen from 21.0% in 2012 to 11.0% in 2016. 
The petition also noted that capacity utilization for CSPV cell operations had fallen from 81.7% in 
2014 to 28.9% in 2016, and CS PV module production utilization had declined from 66.7% in 2013 
to 32.9% in 2016. The petition cited information on serious injury and threat of serious injury to the 
domestic industry. The petition also stated that Suniva, Inc. and SolarWorld AG, two lar ge domestic 
producers in the United States, had reported operating losses between 2012 and 2016, that 1,200 
manufacturing jobs in the United States had been lost, and wages had fallen by 27% in the same 
period. The petitioner did not allege critical circum stances in the petition.94 
3.93.   On 22 September 2017, the USITC determined that imports of CSPV cells (whether or not 
partially or fully assembled into other products) are being imported into the United States in such 
increased quantities as to be a substantial cause of serious injury to the domestic industry.95 The 
investigation was concluded, and the USITC forwarded its report containing its determination and 
the separate recommendations of the Commissioners, with an explanation of the basis thereof, to 
the Pres ident on 13 November 2017.96 On 27 November 2017, USTR requested additional 
information from the USITC to assist him in making a determination. The USITC's supplemental 
report was forwarded to USTR on 27 December 2017.97 On 23 January 2018, the President sig ned 
a proclamation applying a safeguard measure on imports of CSPV products.98 The measure was 
notified to the WTO.99 In addition, the United States notified the non -application of the safeguard 
measure to developing countries under Article 9.1 of the Safegu ards Agreement.100 The following 
                                                
92 These comprise: CSPV cells assembled into modules or panels (HTSUS 8541.40.6020 ); CSPV cells not 
assembled into modules (8541.40.6030 ); inverters or batteries with CSPV cells attached (8501.61.00 and 
8507.20.80, respectively ); and  DC generators (8501.31.80 ). 
93 Also excluded from the investigation were certain thin film photovoltaic cells and CSPV cells not 
exceeding 10,000 mm2 permanently i ntegrated into a consumer good whose function was other than power 
generation and that consumed electricity generated by the integrated CSPV cell.  
94 WTO document G/SG/N/6/USA/11, 29 May 2017.  
95 WTO document G/SG/N/8/USA/9, 4 October 2017.  
96 WTO documents G/SG/N/8/USA/9, 4 October 2017, and G/SG/N/8/USA/9/Supp.2, Supp.2, 
4 December 2017. The USITC report may be viewed at:  
https://usitc.gov/trade_remedy/publications/ safeguard_pubs.htm . 
97 WTO document G/SG/N/8/USA/9/Suppl.3, 8 Janua ry 2018. 
98 Proclamation 9693 of 23 January 2018, To Facilitate Positive Adjustment to Competition From Imports 
of Certain Crystalline Silicon Photovoltaic Cells (Whether or Not Partially or Fully Assembled into Other 
Products) and for Other Purposes, 542 Feder al Reg ister, Vol. 83, No. 17, Thursday, 25 January 2018 , 
Presidential Documents . 
99 WTO document G/SG/N/8/USA/9 /Suppl.4 , 26 January 2018 . 
100 Afghanistan, Albania, Angola, Armenia, Azerbaijan, Belize, Benin, Bhutan, Bolivia, Bosnia and 
Herzegovina, Botswana, Brazil , Burkina Faso, Burma (Myanmar), Burundi, Cambodia, Cameroon, Cape Verde, 
Central African Republic, Chad, Congo (Brazzaville), Côte d 'Ivoire, Djibouti, Dominica, Ecuador, Egypt, Fiji, 
Gabon, The Gambia, Georgia, Ghana, Grenada, Guinea, Guinea -Bissau, Guyan a, Haiti, India, Indonesia, 
Jamaica, Jordan, Kazakhstan, Kenya, Kyrgyzstan (Kyrgyz Republic), Lesotho, Liberia, Madagascar, Malawi, 
Maldives, Mali, Mauritania, Mauritius, Moldova, Mongolia, Montenegro, Mozambique, Namibia, Nepal, Niger, 
Nigeria, Pakistan, Papua New Guinea, Paraguay, Rwanda, Saint Lucia, St. Vincent and the Grenadines, Samoa, 
Senegal, Sierra Leone, Solomon Island, South Africa, Sri Lanka, Suriname, Swaziland, Tanzania, Togo, Tonga, 
Tunisia, Turkey, Uganda, Ukraine, Vanuatu, Yemen (Republic o f), Zambia, and Zimbabwe. The measure will WT/TPR/S/ 382 • United States  
 
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  CSPV products are covered by the safeguard measure: (a) solar cells, whether or not assembled 
into modules or made up into panels, provided for in HTSUS subheading 8541.40.60; (b) parts or 
subassemblies of solar cells, provid ed for in subheadings 8501.31.80, 8501.61.00, and 8507.20.80; 
(c) inverters or batteries with CSPV cells attached, provided for in subheadings 8501.61.00 and 
8507.20.80; and (d) DC generators with CSPV cells attached, provided for in subheading 
8501.31.80.  
3.94.   The measure, to be in effect for four years, became effective on 7 February 2018, and took 
the form of: (a) a tariff rate quota on imports of solar cells not partially or fully assembled into other 
products, with unchanging within -quota quantities and ann ual reductions in the rates of duty 
applicable to goods entered in excess of those quantities in the second, third, and fourth years (Table 
3.9); and (b) an increase in duties on imports of modules, with annual reductions in the rates of 
duty in the second , third, and fourth years. The safeguard measure was applied to imports from all 
countries, except for the developing countries mentioned above.101 Both NAFTA partners were 
included in the scope of the measure. The in -quota quantity in each year under the ta riff rate quota 
is allocated among all countries to which the measure applies. The following temporary HTSUS 
subheadings were created for the goods subject to the measure: subheading 9903.45.21 (CSPV cell 
imports originating in covered countries, within th e tariff rate quota (i.e., not exceeding 2.5 
gigawatts)); subheading 9903.45.22 (CSPV cell out -of-quota imports); and subheading 9903.45.25 
(imports of CSPV modules).  
Table 3.9 Safeguard measures applied on im ports of crystalline silicon photovoltaic cells, 
2018 -22 
HTSUS subheading  Applied 
rate 
before 
the 
increase  Year 1  Year 2  Year 3  Year 4  
7 February 
2018 -
6 February 
2019  7 February 
2019 -
6 February 
2020  7 February 
2020 -
6 February 
2021  7 February 
2021 -
6 February 
2022  
9903.45.21 (in -quota 
CSPV cells)  0% 0% 0% 0% 0% 
9903.45.22 (out -of-
quota CSPV cells)  0% 30%  25%  20% 15% 
9903.45.25 (CSPV 
modules)  0% 30%  25%  20% 15% 
Source:  WTO documents G/SG/N/8/USA/9/Supp.3, 8 January 2018;  and G//SG/N/8/USA/9/Supp.4, 
26 January 2018; and Presidential Proclamation 9693 of 23 January 2018.  
3.95.   China ; the Republic of  Korea ; and Japan notified to the WTO proposed suspensions of 
substantially equivalent concessions from 7 February  2021, or from the date of a decision by the 
WTO Dispute Settlement Body that the safeguard measure imposed by the United States is 
incompatible with the WTO Agreements, whichever is the earlier date .102 
Large Residential Washers  
3.96.   The second investigation, regarding large resid ential washers (LRWs) and certain parts 
thereof, was initiated on 5 June 2017.103 The investigation was initiated following the receipt of a 
petition filed by Whirlpool Corporation (Whirlpool), a producer of LRWs in the United States, which 
alleged that LRWs and certain parts (covered parts) are being imported into the United States in  
                                                
not be applied either to the following developing countries which are not WTO Members: Algeria, Azerbaijan, 
Comoros, Congo (Kinshasa), Eritrea, Ethiopia, Iraq, Kiribati, Kosovo, Lebanon, Macedonia, Sao Tomé and 
Principe, Serbia, Somalia, South Sudan, Timor -Leste, Tuvalu, and Uzbekistan.  
101 As long as such a developing country's share of total imports of the product, based on imports during 
a recent representative period, does not exceed 3%, and provided that imports  that are the product of all such 
countries collectively account for not more than 9% of tot al imports, as specified in the Safeguards Agreement.  
102 WTO documents G/L/1220 and G/SG/N/12/CHN/2, 5  April 2018 ; G/L/1224 and G/SG/N/12/KOR/3, 
6 April 2018; and G/ L/1226 and G/SG/N/12/JPN/3, 6 April 2018, respectively.  
103 For the investigation, t he term LRWs denote d all automatic clothes washing machines, regardless of 
the orientation of the rotational axis, with a cabinet width (measured from its widest point) of at  least 24.5 
inches (62.23 cm) and no m ore than 32.0 inches (81.28 cm) . Also covered were certain parts used in LRWs, 
namely: all cabinets, or portions thereof, designed for use in LRWs ; all assembled tubs designed for use in 
LRWs; all assembled baskets des igned for use in LRWs ; and any combination of the foregoing parts or sub -
assemblies.  WTO document  G/SG/N/6/USA/12, 12 June 2017.  WT/TPR/S/ 382 • United States  
 
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  such increased quantities as to be a substantial cause of serious injury, or threat thereof, to the 
domestic industry producing an article like, or directly competitive with, the imported article. The 
petition cited information demonstrating that these in creased imports seriously injured and 
threatened further serious injury to the domestic LRW industry. On 5 October 2017, the USITC 
determined that LRWs and certain parts are being imported into the United States in such increased 
quantities as to be a subs tantial cause of serious injury to the domestic industry. The USITC 
forwarded its report to the President on 4 December 2017.104 On 23 January 2018, the President 
signed a proclamation applying a safeguard measure to imports of LRWs and certain parts. The 
measure was notified to the WTO.105 The following products are covered by it: (a)  washers, provided 
for in HTSUS subheadings 8450.11.00 and 8450.20.00; (b) all cabinets, or portions thereof, 
designed for use in washers, and all assembled baskets designed for u se in washers that incorporate, 
at a minimum, a side wrapper, a base, and a drive hub, provided for in HTSUS subheading 
8450.90.60; (c) all assembled tubs designed for use in washers that incorporate, at a minimum, a 
tub and a seal, provided for in HTSUS s ubheading 8450.90.20; and (d) any combination of the 
foregoing parts or subassemblies, provided for in HTSUS subheadings 8450.90.20 or 8450.90.60.106 
3.97.   The measure, approved for three years and one day, took effect on 7 February 2018, and 
took the form of: (a)  a tariff rate quota on imported finished washers, with unchanging within -quota 
quantities, annual reductions in the rates of duty for goods entered within those quantities in the 
second and third years, and annual reductions in the rates of duty applicabl e to goods entered in 
excess of those quantities in the second and third years; and (b) a tariff rate quota on imports of 
covered washer parts, with increasing within -quota quantities and annual reductions in the rates of 
duty applicable to goods entered i n excess of those quantities in the second and third years 
(Table  3.10). The safeguard measure was applied to imports from all countries, except for Canada 
and the same list of developing countries excluded from the CSPV safeguard. For the application of 
the measure, new temporary HTSUS subheadings were created: subheading 9903.45.01 (imports 
of finished washers within the tariff -rate quota (i.e., not exceeding 1.2 million units); subheading 
9903.45.02 (out -of-quota imports of finished washers)107; subheading  9903.45.05 (in -quota imports 
of washing -machine parts as described in HTSUS subheadings 8450.90.20 or 8450.90.60); and 
9903.45.06 (out -of-quota imports of covered parts).  
3.98.   China and the Republic of Korea  notified to the WTO proposed suspensions of substant ially 
equivalent concessions from 7 February  2021, or from the date of a decision by the WTO Dispute  
Settlement Body that the safeguard measure imposed by the U nited States is incompatible with the 
WTO Agreements , whichever is the earlier date .108 
                                                
104 WTO document s G/SG/N/8/USA/ 10, 13 October 2017 ; and G /SG/N/8/USA/10 /Supp.2,  11 Decem ber 
2017. The USITC report may be viewed at: https://usitc.gov/trade_remedy/publications/safeguard_pubs.htm . 
105 WTO document G/SG/N/8/USA/ 10/Suppl.3 , 26 January 2018 . 
106 Proclamat ion 9694 of 23 January 2018, To Facilitate Positive Adjustment to Competition From 
Imports of Large Residential Washers.  3554 Federal Register, Vol. 83, No. 17, Thursday, 25 January 2018, 
Presidential Documents.  
107 For the purposes of subheadings 9903.45.01  and 9903.45.02,"household -type (residential) washing 
machines, including machines which both wash and dry, whether or not with a dry linen capacity exceeding 10 
kg" (goods provided for in subheadings 8450.11.00 and 8450.20.00 and reported under statistica l reporting 
numbers 8450.11.0040, 8450.11.0080, 8450.20.0040 and 8450.20.0080, respectively) include automatic 
clothes washing machines, regardless of the orientation of the rotational axis, each with a cabinet width 
(measured from its widest point) of at least 62.23 cm and no more than 81.28 cm.  
108 WTO documents G/L/1221 and G/SG/N/12/CHN/3, 5  April 2018 ; and G/L/1223 and 
G/SG/N/12/KOR/2, 6 April 2018, respectively.  WT/TPR/S/ 382 • United States  
 
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  Table 3.10 Safeguard measures applied on large residential washers, 2018 -21 
HTSUS subheading  Applied rate 
before the 
increase  Year 1  Year 2  Year 3  
7 February 2018  
6 February 2019  7 February 2019  
6 February 2020  7 February 2020  
6 February 2021  
9903.45.01 (in -quota 
LRWs)  1.4% 
(8450.11.00)  
1% 
(8450.20.00)  1.4% + 20% 
(8450.11.00)  
1% + 20% 
(8450.20.00)  1.4% + 18% 
(8450.11.00)  
1% + 18% 
(8450.20.00)  1.4% + 16% 
(8450.11.00)  
1% + 16% 
(8450.20.00)  
9903.45.02 (out -of-
quota LRWs)  1.4% 
(8450.11.00)  
1% 
(8450.20.00)  1.4% + 50% 
(8450.11.00)  
1% + 50% 
(8450.20.00)  1.4% + 45% 
(8450.11.00  
1% + 45% 
(8450.20.00)  1.4% + 40% 
(8450.11.00)  
1% + 40% 
(8450.20.00)  
9903.45.05 (in -quota 
covered parts of 
LRWs)  2.6%  2.6% for 50,000 
units (tariff  quota)  2.6% for 70,000 
units (tariff quota)  2.6% for 90,000 
units (tariff quota)  
9903.45.06 (out -of-
quota covered parts of 
LRWs)  2.6%  2.6% + 50%  2.6% + 45%  2.6% + 40%  
Source:  WTO document G/SG/N/8/USA/10 Supp.3., 26 January 2018; and Presidential Proclamation 9694 of 
23 January 2018.  
3.1.7   Other measures affecting imports  
3.99.   The current administration has emphasized its "commitment to trading regimes that are free, 
fair, and reciprocal."109 In this sense, it considers that U.S. trade policy should be based on the 
recognition that U.S. economic security is critical to its national security. The current trade agenda 
aims to accelerate U.S. exports, including through the renegotiation and moder nization of its trade 
agreements, as well as stepping up enforcement of its trade laws and seeking the elimination of 
foreign barriers to its products and services. Some of the trade enforcement tools available that 
have an impact on imports and have been utilized during the review period include investigations 
under Section 232 of the Trade Expansion Act of 1962, and Section 301 of the Trade Act of 1974 . 
According to the U.S. authorities, these investigations, which can lead to the adoption of measures 
affecting imports, are meant to addres s U.S. concerns such as forced transfer of technology , 
excessive capacity build -up, and threatened impairment of national security.  
3.1.7.1   Section 232 investigations  
3.1.7.1.1   Legal and administrative framework  
3.100.   Under Section 232 of the Tr ade Expansion Act of 1962 (19 U.S.C. §1862), the Secretary of 
Commerce is granted authority to conduct investigations to determine the effects of imports of any 
article on the national security of the United States. Investigations may be initiated based on  an 
application from an interested party, on a request from the head of any department or agency, or 
may be self -initiated by the Secretary of Commerce.  Section 232 requires that the Secretary of 
Commerce notify the Secretary of Defense that an investigati on has been initiated. Under Section 
232 procedures, the Secretary of Commerce must also consult with the Secretary of Defense 
regarding methodological and policy questions raised in the investigation, and seek information and 
advice from, and consult with , other appropriate officials . The USDOC may, "if it is appropriate and 
after reasonable notice", hold public hearings or afford interested parties an opportunity to present 
information and advice relevant to the investigation.110 This usually takes place th rough a notice in 
the Federal Register.  
3.101.   The Secretary of Commerce has 270 days to present a report of the USDOC's findings and 
recommendations to the President. This report must address whether the importation of the article 
in question is in such quantities, or under such circumstances, as to threaten to impair U.S. national 
security. If the Secretary finds that the imports threaten to impair national security, t he President 
has 90 days to determine whether he agrees with the Secretary's findings, and to determine whether 
                                                
109 President Donald J. Trump Proclaims May 20 through May 26, 2018, as World Trade Week.  Viewed 
at: https://www.whitehouse.gov/presidential -actions/president -donald -j-trump -proclaims -may-20-may-26-
2018-world -trade-week/ . 
110 19 U.S.C. § 1862 (b)2A(iii).  WT/TPR/S/ 382 • United States  
 
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  to use his statutory authority to adjust the imports. The Secretary of Commerce can recommend, 
and the President can take, actions other than th e adjustment of imports to address the threat. No 
later than 30 days after the date on which the President makes a determination, he must submit to 
Congress a written statement of the reasons for it; such statement shall be included in a report 
required to  be published under the statute.111 
3.102.   Requests for a Section 232 investigation must be submitted  in writing; they must describe 
how the quantity, availability, character, and uses of a particular imported article, or other 
circumstances related to its import, affect national security, and must contain, among other things, 
a description of the domesti c industry affected, including information regarding companies and their 
plants, locations, capacity and current output of the industry; statistics on imports and domestic 
production, showing the quantities and values of the article; the nature, sources, a nd degree of the 
competition created by imports of the article; and the effect that imports of the article may have 
upon the restoration of domestic production capacity in the event of national emergency.112 Requests 
must also contain information about the e xtent to which the economy, employment, investment, 
specialized skills, and productive capacity is, or will be, adversely affected; revenues of federal, 
state, or local governments which are, or may be, adversely affected; and national security 
supporting uses of the article, including data on applicable contracts or sub -contracts.  
3.103.   Some of the specific factors taken into account when conducting a Section 232 investigation 
for determining the effect of imports on national security include: (a) the importatio n of goods in 
terms of their quantities and use; (b) the domestic production needed for projected  national defense 
requirements113; (c) the domestic industry's capacity to meet those requirements; (d) related human 
and material resources; (e) the close relat ion of national economic welfare to U.S. national security; 
(f) the loss of skills or investment, substantial unemployment and decrease in government revenue; 
and (g) the impact of foreign competition on specific domestic industries and the impact of 
displacement of any domestic products by excessive imports.114 
3.104.   The USDOC has conducted 16 Section 232 investigations since 1980; of these 14 were 
concluded before or in 2001.115 In six cases, the USDOC found no threat to national security, and in 
eight it recommend ed the President to take action due to the finding of a threat to national security; 
in three cases, the President decided to take action.116 Apart from the decision to apply tariff 
surcharges on aluminium and steel products in 2018, action was taken with re spect to crude oil from 
Libya (1982), consisting of an oil embargo.117 In 2018, two new investigations were initiated (see 
below).  
3.1.7.1.2   Steel investigation  
3.105.   An investigation under Section 232 of the Trade Expansion Act of 1962, as amended 
(19 U.S.C. 1862), to dete rmine the effect of imported steel on national sec urity was initiated on 
                                                
111 Bureau of Industry and Security (BIS), Office of Technology Evaluation (2007), Section 232 
Investigations Program Guide:  The Effect of Imports on the National Security - Investigations conducted under 
the Trade Expansion Act of 1962, as amended . Viewed at: https://www.bis.doc.gov/index.php/forms -
documents/section -232-investigations/86 -section-232-booklet . 
112 15 CFR 705.5.  
113 15 CFR 705.4.  
114 USDOC online information. Viewed at: https://www.commerce.gov/page/sectio n-232-investigation -
effect -imports -steel-us-national -security#factsheet232 . 
115 Past investigations and remedies have included the following:  Steel (2018); Aluminium (2018); Iron 
Ore and Semi -Finished Steel (2001); the Effect of Imports of Crude Oil on Natio nal Security (1999); Crude Oil 
and Petroleum Products (1994); Ceramic Semiconductor Packaging (1993); Gears and Gearing Products 
(1992); Crude Oil and Petroleum Products (1989); Plastic Injection Molding (1989); Uranium (1989); 
Antifriction Bearings (1988) ; Crude Oil from Libya (1982);Chromium, Manganese and Silicon Ferroalloys and 
Related Materials (1981); the Effect of Imports of Nuts, Bolts, and Large Screws on the National Security 
(1983); Metal -Cutting and Metal -Forming Machine Tools (1983); and Glass -Lined Chemical Processing 
Equipment (1981). Bureau of Industry and Security (BIS) online information. Viewed at: 
https://www.bis.doc.gov/232 . 
116 BIS, Office of Technology Evaluation (2007), Section 232 Investigati ons Program Guide:  The Effect of 
Imports on the National Security Investigations conducted under the Trade Expansion Act of 1962, as 
amended. Viewed at:  https://www.bis.doc.gov/index.php/forms -documents/section -232-investigations/86 -
section -232-booklet . 
117 BIS online information. Viewed at: https://www. bis.doc.gov/index.php/forms -
documents?task=doc_download&gid=1669 . WT/TPR/S/ 382 • United States  
 
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  19 April 2017. As mandated by Section 232(b)(1)(B), the USDOC notified the Department of Defense 
the same day. A Presidential Memorandum was issued on 20 April 2017, directing the Sec retary of 
Commerce to proceed expeditiously in the conduct for the investigation, and submit a report on his 
findings to the President. A notice regarding the initiation of this investigation to determine the effect 
of imports of steel on national security  was published in the Federal Register on 21 April 2017. The 
notice also announced the opening of the public comment period, which ended on 31 May 2017.118 
The USDOC received 201 written public comment submissions concerning this investigation, which 
were re viewed and factored into the investigation process.  
3.106.   Following previous practice, the Secretary of Commerce in this investigation determined that 
"national security" for purposes of Section 232 includes the "general security and welfare of certain 
industrie s, beyond those necessary to satisfy national defense requirements, which are critical to 
minimum operations of the economy and government." The Secretary of Commerce submitted to 
the President a report with the main findings resulting from the investigati on. Some of these findings 
include the following: (a) the  United States is the world's largest importer of steel, with imports 
nearly four times exports; (b) six basic oxygen furnaces and four electric furnaces have closed since 
2000, and employment has dr opped by 35% since 1998; (c) world steelmaking capacity is 2.4 billion 
metric tons, up 127% from 2000, while steel demand grew at a slower rate; (d) the recent global 
excess capacity is 700 million tons, almost seven times the annual total of U.S. steel co nsumption; 
(e) China was identified as the largest producer and exporter of steel, and the largest source of 
excess steel capacity; and (f) for certain types of steel, such as for electrical transformers, only one 
U.S. producer remains.  
3.107.   The USDOC report co ncluded that the quantities and circumstances of steel imports 
threatened to impair national security, and recommended to the President that he consider the 
following alternative remedies  to address the problem: (a) a global tariff of at least 24% on all steel 
imports from all countries, or a tariff of at least 53% on all steel imports from 12 countries (Brazil; 
China; Costa Rica; Egypt; India; Malaysia; Korea, Republic of; Russia; South A frica; Thailand; 
Turkey; and Viet Nam), with a quota by product on steel imports from all other countries equal to 
100% of their 2017 exports to the United States; or (b) a quota on all steel products from all 
countries equal to 63% of each country's 2017 exports to the United States.119 Each of these 
remedies was intended to increase domestic steel production from its present 73% of capacity, as 
calculated by the USDOC, to 80%, the minimum rate considered necessary for the long -term viability 
of the industry . Each remedy applies measures to all countries and all steel products, to prevent 
circumvention. The tariffs and quotas would be in addition to any duties already in place. The report 
recommends putting in place a process to allow the Secretary of Commerc e to grant requests from 
U.S. companies to exclude specific products if the United States lacks sufficient domestic capacity, 
or for national security considerations.  
3.108.   In a response making reference to both the steel and aluminium (see below) Section 232 
investigations, the Department of Defense (DoD), stated that it concurred with the USDOC's 
conclusion that imports of foreign steel and aluminium based on unfair trading practices impair the 
national security. The DoD expressed its concern about the negative  impact on U.S. key allies 
regarding the recommended options within the reports, but stated that, among the reports' 
alternatives, it considered that "targeted tariffs were preferable than a global quota or global tariff ", 
and recommended that "an inter -agency group further refine the targeted tariffs, so as to create 
incentives for trade partners to work with the United States on addressing the underlying issue of 
Chinese transshipment" .120 
                                                
118 BIS, Office of Technology Evaluation, The Effect of Imports of Steel on the National Security. An 
Investigation Conducted under Section 232 of the Trade Expansion Act of 1962, as amended . 11 January 2018. 
Viewed at: 
https://www.commerce.gov/sites/commerce.gov/files/the_effect_of_imports_ of_steel_on_the_national_securit
y_-_with_redactions_ -_20180111.pdf . 
119 BIS, Office of Technology Evaluation, The Effect of Imports of Steel on the National Security. An 
Investigation Conducted under Section 232 of the Trade Expansion Act of 1962, as amended . 11 January 2018. 
Viewed at: 
https://www.commerce.gov/sites/commerce.gov/files/the_effect_of_imports _of_steel_on_the_national_securit
y_-_with_redactions_ -_20180111.pdf . 
120 Secretary of Defense, Memorandum for Secretary of Commerce. Subject: Response to Steel and 
Aluminium Policy Recommendations. Viewed at: WT/TPR/S/ 382 • United States  
 
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  3.109.   Following the recommendation made by the Secretary of Commerce in th e steel case, and 
exercising the authority granted by Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. 1862) 
and Section 604 of the Trade Act of 1974, as amended (19  U.S.C. 2483), which "authorizes the 
President to embody in the Harmonized Tariff Schedule of the United States (HTSUS) the substance 
of acts affecting import treatment, and actions thereunder, including the removal, modification, 
continuance, or imposition of any rate of duty or other import restriction", the President proclaimed 
adjus tments to the imports of steel articles by imposing, as from 23 March 2018, an additional 25% 
ad valorem  tariff on steel articles, defined as those included in USHTS six ‑digit subheadings 7206.10 
through 7216.50, 7216.99 through 7301.10, 7302.10, 7302.40 t hrough 7302.90, and 7304.10121 
through 7306.90122, including any subsequent revisions to these HTS classifications, imported from 
all countries except Canada and Mexico. The President stated that he considered this tariff necessary 
and appropriate to address t he threat that imports of steel articles pose to national security as 
defined in Section 232. In adopting the tariff, the President recognized that the United States and 
certain other countries share a concern about global excess capacity, a circumstance t hat is 
contributing to the threatened impairment of national security.123 He noted that the United States 
was ready to discuss with countries with which it has a security relationship alternative means to 
address the threat to national security which could l ead to the removal or modification of the 
restriction on steel articles imports from that country.  
3.110.   On 22 March 2018, the President amended some aspects of Proclamation 9705 to exempt 
Australia; Argentina; Korea, Republic of; Brazil; and the member countrie s of the European Union 
from the measure until 1 May 2018.124 On 30 April 2018, a new Proclamation was issued, in which 
the President noted that the United States had successfully concluded discussions with the Republic 
of Korea on alternative means to addre ss the threatened impairment to its national security posed 
by steel article imports from the Republic of Korea. The measures agreed include a quota that 
restricts the quantity of steel articles imported into the United States from the Republic of Korea. I n 
light of the measures, steel article imports from the Republic of Korea would be excluded from the 
tariff proclaimed in Proclamation 9705. The Proclamation also mentioned that the United States had 
agreed in principle with Argentina, Australia, and Brazi l on satisfactory alternative means to address 
the threatened impairment to its national security posed by steel articles imported from these 
countries, and that these countries would remain exempt from the tariff proclaimed in Proclamation 
9705, until the  details could be finalized and implemented by proclamation. Canada, Mexico, and 
the European Union would be exempted from the measure until 1 June 2018.125 
3.111.   The measures were applied to Canada, Mexico, and the European Union as from 1 June 
2018. As a result,  on 6 June 2018, the European Union and Canada requested WTO dispute 
consultations with the United States regarding the U.S. duties on certain imported steel and 
aluminium products; other Members also requested dispute settlement consultations with the Uni ted 
States.126 Subsequently, several WTO Members, including China, the European Union, India, Japan, 
the Russian Federation and Turkey, notified to the WTO proposed suspensions of substantially 
equivalent concessions, as they considered the measures as safeg uards.127 The United States 
responded by stating that tariffs imposed pursuant to Section 232 are not safeguard measures but 
                                                
https://www.commerce.gov/sites/commerce.gov/files/department_of_defense_memo_response_to_steel_and_
aluminium _policy_recommendations.pdf . 
121 Amended to HTSU S 731011 by Presidential Proclamation 9711 on Adjusting Imports of Steel into the 
United States, of 22 March 2018. Federal Register, Vol. 83, No. 60, Wednesday, 8 March 2018. Viewed at:  
https://www.whitehouse.gov/presidential -actions/presidential -proclamation -adjusting -imports -steel-united -
states/ . 
122 The current MFN tariff rate for all products affected by the measure is 0%.  
123 Presidential Proclamation on Adjusting Imports of Steel into the United States, issued on 8 March 
2018.  Viewed at: https://www .whitehouse.gov/presidential -actions/presidential -proclamation -adjusting -
imports -steel-united -states/ . 
124 Presidential Proclamation on Adjusting Imports of Steel int o the United States, issued on 22  March 
2018. Viewed at: https://www.whitehouse.gov/presidential -actions/presidential -proclamation -adjusting -
imports -steel-united -states -2/. 
125 Presidential Proclamation on Adjusting Imports of Steel into the United States.  Issued on 30 April 
2018. Viewed at: https://w ww.whitehouse.gov/presidential -actions/presidential -proclamation -adjusting -
imports -steel-united -states -3/. 
126 WTO documents WT/DS548/1 and WT/DS550/1, 6 June 2018, respectively.  
127 WTO documents G/L/1218  and G/SG/N/12/CHN/1 , 3 April 2018 ; G/L/1237  and G/SG/N /12/EU/1, 
18 May 2018 ; G/L/1239 and G/SG/N/12/IND/1, 18 May 2018; G/L/1240 and G/SG/N/12/JPN/4, 22 May 2018; 
G/L/1241 and G/SG/N/12/RUS/2, 22 May 2018; and G/L/1242 and G/SG/N/12/TUR/6, 22 May 2018, 
respectively.  WT/TPR/S/ 382 • United States  
 
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  rather measures taken pursuant to Article XXI of the GATT, and that the United States did not take 
action pursuant Section 201 of the  Trade Act of 1974, which is the law under which the United States 
imposes safeguard measures; the United States did not consider the suspension of concessions 
justified, as, in its view, the measures adopted were not safeguard measures.128 On 16 July 2018, 
the United States requested consultations with Canada, China, the European Union, Mexico and 
Turkey regarding additional duties imposed by these Members in response to the additional duties 
imposed by the United States on steel and aluminium products.129 
3.112.   In the case of the Republic of Korea, annual import quotas have been fixed for the steel 
products subject to the Section 232 investigation . Annual aggregate limits have been set for the 
different HTSUS subheadings covered (all in HTSUS Chapters 72 and 73) to apply for the period 
starting with calendar year 2018 and for subsequent years, unless modified or terminated .130 
Quarterly imports in an aggregate quantity under any of the subheadings covered by the agreement 
cannot exceed 30% of the total quota or 500 tons, whichever is greater.131 Also, once the quota is 
filled, imports cannot take place under any condition: in accordance with U.S. regulations (19 CFR 
132.5), merchandise subject to an absolute quota may not be imported for consumption after the 
quota lim it is reached; options after the quota limit is reached include warehousing, FTZs, 
exportation or destruction. The status of quotas may be viewed in the CBP website.132 
3.1.7.1.3   Aluminium investigation  
3.113.   The Secretary of Commerce initiated an investigation to determine  the effect of imported 
aluminium on national  security under Section 232 of the Trade Expansion Act of 1962, as amended 
(19 U.S.C. 1862), on 26 April 2017. Pursuant to the requirements of Section 232, the Secretary of 
Commerce notified the Defense Secretar y of this investigation. A public hearing to elicit further 
information concerning this investigation was held on 22 June 2017. The public comment period 
ended on 23 June 2017; the USDOC received 91 written submissions concerning this investigation.133 
The investigation covered the following products: unwrought aluminium (HSTSUS 7601), aluminium 
bars, rods and profiles (7604); aluminium wire (7605); aluminium plates, sheets, and strip, of a 
thickness exceeding 0.2mm (7606); aluminium foil (whether or not prin ted, or backed with paper, 
paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not 
exceeding 0.2mm (7607); aluminium tubes and pipes (7608); aluminium tube and pipe fittings 
(7609); other articles of aluminium: casting s (7616.99.51.60); and other articles of aluminium: 
forgings (7616.99.51.70).134 
3.114.   Some of the main findings in the USDOC's report include: (a) aluminium is essential to U.S. 
national security, as it is needed to satisfy requirements for the U.S. Department of  Defense (DoD) 
for maintaining effective military capabilities, and requirements for critical infrastructure sectors that 
are central to the operation of the U.S. economy and Government, including power transmissions, 
transportation systems, manufacturing industries, constru ction, and others; (b) the 
U.S. Government does not maintain any strategic stockpile of bauxite, alumina, aluminium ingots, 
billets or any semi -finished aluminium products; (c) in 2016, the United States imported five times 
as much prima ry aluminium on a tonnage basis as it produced; the import penetration level was 
                                                
128 WTO document WT/DS548/13, 6 July 2018.  
129 WTO documents  WT/DS557/1, WT/DS558/1, WT/DS5 59/1, WT/DS560/1 and WT/DS561/1, 19 July 
2018.  
130 83 Federal Register 20683, 7 May 2018. Viewed at: 
https://www.federalregister.gov/documents/2018/05/07/2018 -09841/adjusting -imports -of-steel-into-the-
united -states . 
131 See clause (3) of Proclamation 9759, viewed at: https://www.whitehouse.gov/presidential -
actions/presidential -proclamation -adjusting -imports -steel-united -states -4/. 
132 CBP online information. Viewed at: https://www.cbp.gov/trade/quota/tariff -rate-quotas . 
133 BIS, Office of Technology Evaluation , The Effect of Imports of Aluminum  on the National Security. An 
Investigation Conducted under Sectio n 232 of the Trade Expansion Act of 1962, as amended , 17 January 2018. 
Viewed at : 
https://www.comm erce.gov/sites/commerce.gov/files/the_effect_of_imports_of_ aluminium _on_the_national_s
ecurity_ -_with_redactions_ -_20180117.pdf . 
134 The MFN tariff rates for the products affected by the investigation are: 76011060, 76012090, 
76072050: 0%; 76042100: 1.5%; 760 12060: 2.1%; 7616.99.51.60 : 2.5%; 76011030, 76012030, 76041030, 
76042930, 76051100, 76052100: 2.6%; 76069160: 2.7%; 76041050, 76042950, 76061130, 76061230, 
76069130, 76069230, 76071190, 76071960: 3%; 76072010: 3.7%; 76051900, 76052900: 4.2%; 76041010, 
76042910: 5%; 76071160, 76071910: 5.3%;76071930, 76081000, 76082000, 76090000, 76081000, 
76082000, 76090000: 5.7%; 76071130: 5.8%; and 76061160, 76061260, 76069260: 6.5%.  WT/TPR/S/ 382 • United States  
 
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  about 90%, up from 66% in 2012; (d) employment has fallen by 58% between 2013 and 2016 
(from about 13,000 to 5,000 employees); (e) since 2012, six smelters have been permanent ly shut 
down: in 2017, the United States had five smelters, which were producing at 43% of capacity; only 
one of these produces the high -purity aluminium required for critical infrastructure and defense 
aerospace applications; (f) the impact so far has bee n greatest on the primary (unwrought) 
aluminium sector, but the downstream aluminium sector is also threatened by overcapacity and 
surging imports; (g)  imports accounted for 64% of total consum ption of aluminium in 2016; 
(h) imports in the aluminium catego ries subject to this investigation totaled 5.9 million metri c tons 
in 2016, up 34% from 4.4  million metric tons in 2013; (i) in the downstream aluminium se ctor, 
imports rose 33% from 1.2  million metric tons in 2013 to 1.6 million metric tons in 2016; (j) i n 
2016, for the aluminium product categories covered by this investigation, the United State s ran a 
trade deficit of US$7.2  billion; and (k) global excess aluminium capacity contributes to the 
weakening of the U.S. aluminium industry and the U.S. economy.135 
3.115.   The Secretary of Commerce recommended to the President three alternative remedies for 
dealing with excessive imports of aluminium: (a) a tariff of at least 7.7% on a ll aluminium im ports 
from all countries; (b) a tariff of 23.6% on all products from: China ; Hong Kong, China; the Russian 
Federation; the Bolivarian Republic of Venezuela; and Viet Nam, with all other countries subject to 
quotas equal to 100% of their 2017 exports to the United States; or (c) a quota on all imports from 
all countries equal to a  maximum of 86.7% of their 2017 exports to the United States. Each of the 
three proposals was intended to raise production of aluminium from the present 48% average 
capacity to 80%, a level considered to provide the industry with long -term viability. The t ariffs and 
quotas would be in addition to any duties already in place.  
3.116.   Following the recommendation made by the Secretary of Commerce, the President decided 
to adjust the imports of aluminium articles by imposing, as from 23 March 2018, an additional 10% 
ad valorem  tariff on certain aluminium articles imported from all countries except Canada and 
Mexico, through Proclamation 9704.136 On 22 March 2018, the President issued a new proclamation 
to exempt Australia; Argentina; Korea, Republic of; Brazil; and the member countries of the 
European Union from the measure until 1 May 2018.137 On 30 April 2018, a further proclamation 
was issued, which noted that the United States had agreed in principle with Argentina, Australia, 
and Brazil on satisfactory alternative mea ns to address the threatened impairment to its national 
security posed by aluminium articles imported from these countries.138 It was thus decided to extend 
the temporary exemption of these countries from the tariff proclaimed in Proclamation 9704, in order 
to finalize the details in this respect. The United States also announced the extension of the 
exemption for Canada, Mexico and members of the European Union until 1 June 2018.  
3.117.   On 31 May 2018, a new Proclamation was issued, in which the President noted tha t the 
United States had agreed on a range of measures with Argentina to address the threatened 
impairment to its national security posed by aluminium articles imports from Argentina. A quota was 
fixed, capping unwrought aluminium exports provided for in HT SUS heading 7601 at 169,658,877 
                                                
135 BIS, Office of Technology Evaluation, The Effect of Imports of Aluminum on the National  Security. An 
Investigation Conducted under Section 232 of the Trade Expansion Act of 1962, as amended , 17 January 2018. 
Viewed at: 
https://www.commerce.gov/sites/commerce.gov/files/the_effect_of_imports_of_ aluminium _on_the_national_s
ecurity_ -_with_redactions_ -_20180117.pdf . 
136 Presidential Proclamation on Adjusting Imports of Aluminum into the United S tates. Issued on 8 
March 2018. Viewed at: https://www.whitehouse.gov/presidential -actions/presidential -proclamation -adjustin g-
imports -aluminum -united -states/ . 83 Federal Register 11619, 15 March 2018. Viewed at: 
https://www.federalregister.gov/documents/2018/03/15/2018 -05477/adjusting -imports -of-aluminum -into-
the-united -states . 83 Federal Register 13355, 28 March 2018. Viewed at: 
https://www.federalregister.gov/documents/2018/03/28/2018 -06420/adjusting -imports -of-aluminum -into-
the-united -states . 
137 Presidential Proclamation on Adjusting Imports of Aluminum into the United States  (2), 2 2 March 
2018. Viewed at: https://www.whitehouse.gov/presidential -actions/presidential -proclamation -adjusting -
imports -alumi num-united -states -2/. 83 Federal Register 20677, 7 May 2018. Viewed at: 
https://www.federalregister.gov/documents/2018/05/0 7/2018 -09840/adjusting -imports -of-aluminum -into-
the-united -states . 
138 Presidential Proclamation on Adjusting Imports of Aluminum into the United States  (3), 30 April  
2018. Viewed at: https://www.whitehouse.gov/presidential -actions/presidential -proclamation -adjusting -
imports -aluminum -united -states -3/. WT/TPR/S/ 382 • United States  
 
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  kg, and wrought aluminium, provided for in headings 7604, 7605, 7606, 7607, 7608, 7609, and 
castings and forgings of aluminium, provided for in subheading 7616.99.51, at 11,279,691 kg.139 
3.118.   Aluminium and steel products that are subject to Section 232 duties are not eligible for 
preferential tariff treatment under the Generalized System of Preferences (GSP) or the African 
Growth and Opportunity Act (AGOA). They are subject to the MFN tariff rate plus the additional tariff. 
Trade p reference claims under FTAs apply for steel and aluminium products that are subject to 
Section 232, but Section 232 duties must be paid on those imports even if trade preferences apply. 
Also, they may be subject to AD and CV duties. Imports of any steel or  aluminium article subject to 
Section 232 duties admitted into U.S. FTZs on or after 23 March 2018, enter with a "privileged 
foreign status"140, except those articles eligible for admission under "domestic status"141, and will be 
subject, upon entry for consum ption, to any ad valorem  rates of duty related to the classification 
under the applicable HTSUS subheading. No duty drawback claims may be made with respect to the 
Section 232 duties imposed on any aluminium or steel article.  
3.1.7.1.4   Investigation into auto import s 
3.119.   On 23 May 2018, the USDOC initiated a Section 232 investigation into auto imports. The aim 
of the investigation is to determine whether imports of automobiles, including SUVs, vans and light 
trucks, and automotive parts into the United States threaten to  impair the national security as 
defined in Section 232. Considerations taken into account to initiate the investigation include the 
increase of the share of imports of passenger vehicles sold in the United States from 32% to 48% 
in the last 20 years; a 22 % decline in employment in motor vehicle production between 1990 and 
2017; the low share of R&D represented by U.S. vehicle manufacturers in the United States (20% 
of the total); and the fact that U.S. auto part manufacturers account for only 7% of that in dustry in 
the United States. The points analyzed in the investigation include: whether the decline of domestic 
automobile and automotive parts production threatens to weaken the internal economy of the United 
States, including by potentially reducing R&D a nd jobs for skilled workers in cutting -edge 
technologies.142 In July 2018, the USDOC held a public hearing on the investigation.143 
3.1.7.1.5   Investigation into uranium imports  
3.120.   On 17 January 2018, two U.S. uranium mining companies, UR -Energy and Energy Fuels, 
filed a pe tition requesting that the USDOC initiate a Section 232 investigation into imports of uranium 
ore and products. On 18 July 2018, the USDOC announced the initiation of an investigation into 
whether the present quantity and circumstances of uranium ore and p roduct imports into the United 
States threaten to impair national security. The investigation covers the entire uranium sector, from 
the mining industry through enrichment, defense, and industrial consumption. Some of the 
considerations taken into account to initiate the investigation include: (a) uranium powers 99 U.S. 
commercial nuclear reactors that produce 20% of the electricity for the electric grid; (b) uranium is 
a required component of the U.S. nuclear arsenal, and is used to power the Navy's nuclea r fleet of 
submarines and aircraft carriers; (c) U.S. uranium production dropped from covering 49% of U.S. 
requirements in 1987 to 5% in 2017; (d) three U.S. companies with uranium mining operations have 
been idle in recent years; (e) two U.S. petitioners,  accounting for over half of all uranium mined in 
the United States, have laid off over half their workforce over the last two years, and operate at 
                                                
139 Annex to Proclamation 9758 Adjusting Imports of Aluminum Into the United St ates of 31 May 2018. 
Federal Register Vol. 83, No. 108, Tuesday, 5 June 2018. Viewed at: https://www.gpo.gov/fdsys/pkg/FR -2018-
06-05/pdf/2018 -12137.pdf . 
140 In 19 CFR 146.41, merc handise having a privileged foreign status is defined as f oreign merchandise 
which has not been manipulated or manufactured so as to effect a change in tariff classification ; it will be given 
status as privileged foreign merchandise on proper application t o the port director.  
141 As per 19 CFR 146.43, domestic status may be granted to merchandise: (a) which is the growth, 
product, or manufacture of the United States on which all internal revenue taxes, if applicable, have been paid; 
(b) previously imported an d on which duty and tax has been paid; or (c) previously entered free of duty and 
tax. 
142 USDOC online information. Viewed at: https://www.commerce.gov/news/press -releases/2018/05/us -
department -commerce -initiates -section -232-investigation -auto-imports . 
143 USDOC online information. Viewed at: https://www.commerce.gov/news/press -releases/2018/07/us -
department -commerce -host-public -hearing -section -232-national -security . WT/TPR/S/ 382 • United States  
 
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  roughly 9% and 13% of capacity, respectively; and (f) shuttered mines would take years to reopen 
under curr ent environmental permitting regulations.144 
3.1.7.2   Section 301 of the Trade Act of 1974  
3.1.7.2.1   Section 301 procedures  
3.121.   Under Section 301 of the Trade Act of 1974, as amended (19 U.S.C. Section 2411), the 
United  States may impose trade measures on foreign countries that maintain an act, policy or 
practice that violates, or denies U.S. rights or benefits under trade agreements; or is unjustifiable, 
unreasonable, or discriminatory, and burdens or restricts U.S. commerce. Under the statute, these 
acts, policies and practices  include those which deny MFN or national treatment to U.S. exports, 
curtail the right of establishment of U.S. enterprises, and violate intellectual property rights. Section 
301 investigations may be initiated following a petition by an interested party t o USTR, or may be 
self-initiated by the USTR. If USTR receives a petition to initiate an investigation, it must determine, 
within 45 days, whether to initiate an investigation, based on considerations of the effectiveness of 
an action under Section 301 in addressing the act, policy or practice involved. After this period, 
USTR must publish in the Federal  Register a determination to initiate an investigation, in cases where 
it finds merits in the petition, or provide reaso ns for not initiating one.  
3.122.   If an inv estigation is initiated, the process is open to comment from the public, and may 
include a public hearing if requested by the petitioner or an interested person. USTR requests 
consultations with the foreign government or governments involved. Where the inv estigation 
involves an alleged violation of a multilateral trade agreement or of a regional economic agreement 
with dispute settlement provisions, USTR must follow the consultation and dispute settlement 
provisions set out in that agreement.  
3.123.   Under Section 301 proceedings, USTR must terminate investigations involving a trade 
agreement with dispute settlement provisions within 18 months after initiation, or 30 days after the 
conclusion of dispute settlement procedures, whichever comes first. If the investigat ion does not 
involve a trade agreement with a dispute settlement mechanism, it must be concluded 12  months 
after its initiation. Investigations concerning intellectual property rights (IPRs) must lead to a 
determination within six months of initiation of t he investigation, or nine months if the investigation 
involves complicated issues, or the foreign country involved is making substantial progress in legal 
and administrative reform in IPRs or undertak ing IPR enforcement measures.  
3.124.   USTR may be assisted in Se ction 301 investigations by a Section 301 Committee, a 
subordinate body of the Trade Policy Staff Committee (TPSC). USTR designates the Section 301 
Committee Chairman. The Committee consists of the Chairman and, with respect to each complaint, 
members as d esignated by agencies which have an interest in the issues raised by the particular 
complaint. The Section 301 Committee performs the following functions: (a) reviews complaints 
received pursuant to Section 301 of the Trade Act of 1974; (b) provides an opp ortunity, by the 
holding of public hearings upon request by a complainant or an interested party, for any interested 
party to present his views concerning foreign restrictions, acts, policies, and practices affecting U.S. 
commerce, and United States action s in response thereto, as provided for in Section 301 of the 
Trade Act (P.L. 93 -618, 88 Stat. 1978); (c) reports to the TPSC the results of reviews and hearings 
conducted with respect to complaints received pursuant to Section 301 of the Trade Act; and (d)  on 
the basis of its review of petitions filed under Section 301 and of the views received through hearings 
or otherwise on such petitions, makes recommendations to the TPS C for review by that Committee.  
3.125.   The TPEA amended the 1974 Trade Act to confirm that the Trade Representative may 
reinstate a previously terminated Section 301 action in order to exercise a WTO authorization to 
suspend trade concessions.145 In particular, the Act amended relevant provisions of Section 306 of 
the 1974 Trade Act by adding a ne xt section (c), that permits the Trade Representative to reinstate 
a Section 301 action following: (a) a request from the petitioner or any representative of the 
domestic industry that would benefit from the reinstatement of the action; (b) consultations u nder 
                                                
144 USDOC online information. Viewed at: https://www.commerce.gov/news/press -releases/2018/07/us -
department -commerce -initiates -section -232-investigation -uranium . 
145 P.L. 114 -25, SEC. 602. Exercise of WTO Authorization to Suspend Concessions or other Obligations 
under Trade Agreements.  Viewed at: 
https://ustr.gov/sites/defa ult/files/301/Section%20301%20Beef%20FR%20Notice.pdf . WT/TPR/S/ 382 • United States  
 
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  Section 306(d) of the Trade Act; and (c) a review under Section 307(c) of the Trade Act.146 The Act 
does not contain dates of application for any of these amendments.147 
3.1.7.2.2   Section 301 determinations  
3.126.   Under Section 301 (a) of the Trade Act of 1974, if, as a r esult of the investigation, USTR 
finds that a foreign government is violating or denying U.S. rights or benefits under a trade 
agreement, or its acts, policies or practices are unjustifiable and burden or restrict U.S. trade, it is 
required to take action.  This is unless the WTO Dispute Settlement Body (DSB) has adopted a report 
dealing with a dispute regarding the matter covered in the investigation concerned which finds no 
violation or denial of U.S. rights, or if a NAFTA panel finds no violation to the a greement or that U.S. 
rights under the agreement are not being denied. USTR is not required to take action if it is found 
that the foreign country is taking satisfactory measures to grant U.S. rights under a trade 
agreement, or has agreed to eliminate or p hase out the act, policy or practice or to provide any 
other satisfactory solution for the United States or, if this is not possible, to provide the United States 
with compensatory trade benefits.  
3.127.   Section 301 identifies three categories of acts, policies,  or practices of a foreign country that 
are potentially actionable: (i) trade agreement violations; (ii) acts, policies or practices that are 
unjustifiable (defined as those that are inconsistent with U.S. international legal rights) and that 
burden or res trict U.S. commerce; and (iii) acts, policies or practices that are unreasonable or 
discriminatory, and that burden or restrict U.S. commerce. Section 301 defines "discriminatory" to 
include, when appropriate, any act, policy, and practice which denies nat ional or MFN treatment to 
U.S. goods, services, or investment. An "unreasonable" act, policy, or practice is one that "while not 
necessarily in violation of, or inconsistent with, the international legal rights of the United States is 
otherwise unfair and inequitable." Section 301 further provides that, in determining if a foreign 
country's practices are unreasonable, reciprocal opportunities to those denied U.S. firms shall be 
taken into account, to the extent appropriate. Under Section 301(b), unreasonabl e practices include 
the denial of: (i) fair opportunities for the est ablishment of enterprises; (ii)  adequate and effective 
IPR protection; (iii) fair and equitable market access opportunities for U.S. persons that rely on IP 
protection; (iv) fair and equi table market opportunities, including a foreign government's toleration 
of anti -competitive activities that restrict access of U.S. goods or services to a foreign market; and 
(v) worker rights. They may also include export targeting.  
3.128.   After making an affirm ative determination under Section 301(a) or 301(b), USTR may reach 
a binding agreement with a foreign country to eliminate or phase out the act, policy or practice, 
eliminate any restriction on U.S. trade resulting from it, or provide compensatory trade be nefits. In 
cases where an agreement is not reached, USTR may decide to: suspend or withdraw trade 
agreement concessions; impose duties or other import restrictions on goods (preference must be 
given to duties); impose fees or restrict the terms and conditi ons or deny issuance of authorizations 
to provide services, prior consultation with the relevant federal agency or state; and withdraw, limit 
or suspend duty -free treatment under the GSP or any other preferential scheme.  
3.129.   If USTR determines that the Section  301 investigation involves a trade agreement, and if 
this agreement includes formal dispute settlement procedures, USTR may pursue the investigation 
through consultations and dispute settlement under the trade agreement. Otherwise, USTR conducts 
the inves tigation without recourse to formal dispute settlement. The measure adopted by USTR may 
be directed at any economic sector, without regard to whether the good or sector was involved in 
the act, policy or practice subject to the determination. Similarly, th e action may be taken on either 
a non -discriminatory basis or solely against the foreign country involved, but must be limited to a 
value equivalent to the burden or restriction imposed on U.S. commerce by the foreign country. 
Unless it considers that expe ditious action is required, USTR must provide an opportunity for public 
comment on any proposed action. Actions must generally be implemented within 30 days of a 
determination, but may be delayed by not more than 180 days at the petitioner's request, or if  USTR 
                                                
146 Section 306(d) of the 1974 Trade Act  requires the Trade Representative to  consult with the petitioner 
involved in the initial investigation and  with representatives of the domestic  industry concerned,  and provide 
an opportunity for the presentation of  views by interested parties. Section  307(c) requires the Trade 
Representative  to conduct a review of the effectiveness  of such an action, and of other actions  that could be 
taken (including actions  agains t other products), in achieving the  objectives of Section 301 of this title 
(19 U.S.C. 2411)  and the effects of such  actions on the U.S. economy,  including consumers . 
147 The full text of P.L. 114 -27 may be viewed at: https://www.congress.gov/bill/114th -congress/house -
bill/1295?q=%7B%22search%22%3A%5B%22antidumping%22%5D%7D&resultIndex=18 . WT/TPR/S/ 382 • United States  
 
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  determines that substantial progress is being made in negotiations with the foreign country, or if a 
delay is deemed necessary or convenient to obtain a satisfactory solution to the issue. Section 306 
of the Trade Act of 1974 mandates that USTR monit or the implementation of each measure taken 
and agreement entered resulting from a Section 301 investigation or from a dispute settlement 
proceeding under a trade agreement or the WTO. If, as result of a Section 306 monitoring, and prior 
consultations with  the petitioner in the original investigation or with the affected domestic industry 
or other interested persons, USTR considers that the foreign country is not satisfactorily 
implementing a measure or agreement, it must make a determination for further ac tion. 
3.1.7.2.3   Section 301 cases  
3.1.7.2.3.1   China technology transfer regime  
3.130.   On 18 August 2017, USTR initiated an investigation under Section 301 of the Trade Act of 
1974 into the Government of China's acts, policies, and practices related to technology transfer, 
intellectual  property, and innovation. The notice of initiation identified four specific elements of 
China's technology transfer regime for investigation, linked to: administrative approval processes, 
joint venture requirements and foreign equity limitations; the abil ity to set market -based terms in 
technology -related negotiations; facilitation of outbound Chinese investment targeting U.S. 
companies and assets in key industry sectors; and protection of trade secrets and other proprietary 
information. The notice also re quested information on other acts, policies, and practices of the 
Chinese Government related to technology transfer, IP, and innovation.148 USTR held a public 
hearing in October 2017, consulted with the private sector, initiated two rounds of public written 
comment periods, and received approx imately 70 written submissions.  
3.131.   Subsequently, USTR, with the assistance of the interagency Section 301 Committee, 
prepared a report that concluded that the acts, policies, and practices of the Chinese Government 
related to technology transfer, IP, and innovation are unreasonable or discriminatory, and burden 
or restrict U.S. commerce.149 USTR estimated that China's policies had resulted in harm to the U.S. 
economy of at least US$50 billion per year.  
3.132.   In a Memorandum signed o n 22 March 2018, the President directed his Administration to 
take a range of actions responding to China's acts, policies, and practices involving the matter 
investigated, including preparing a list of proposed additional tariffs within 15 days.150 USTR 
proposed additional 25% tariffs on certain products of China, with an annual trade value 
commensurate with the harm caused to the U.S. economy resulting from China's unfair policies. The 
proposed product list subject to the tariffs included aerospace, informa tion and communication 
technology (ICT), and machinery.151 The President also directed USTR to present a complaint with 
respect to China's technology licensing practices before the WTO's DSB. On 23 March 2018, the 
United States requested consultations with C hina concerning certain measures pertaining to the 
protection of IPRs. The United States claimed that the measures appear to be inconsistent with 
Articles 3, 28.1(a) and (b) and 28.2 of the TRIPS Agreement.152 In early April 2018, Japan, the 
European Union, Ukraine, Saudi Arabia and Chinese Taipei requested to join the consultations.  
3.133.   In the WTO Council for Goods, China expressed concerns over the final conclusions of the 
Section 301 investigation of China's IP regime , released on 22 March 2018. The United Sta tes 
referred Members to the USTR website for more information about the Section 301 actions, and 
noted that, according to the USTR report, China's technology transfer policies and practices were 
causing "billions of dollars in losses annually" to U.S. busi nesses and individuals, and that the 
                                                
148 USTR (2018), Findings of the In vestigation into China' s Acts, Policies, and Practices related to 
Technology Transfer, Intellectual Property, and Innovation under Section 301 of the Trade Act of 1974 , 
Executive Summary.  
149 USTR (2018), Executive Office of the President, Findings of the Investigation into China 's Acts, 
Policies, and Practices related to Technology Transfer, Intellectual Property, and Innovation under Section 301 
of the Trade Act o f 1974 , 22 March 2018. Viewed at:  
https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF . 
150 USTR (2018), Section 301 Fact Sheet. Viewed at: 
https://ustr.gov/sites/default/files/US TR%20301%20Fact%20Sheet.pdf . 
151 The full list may be found in : Federal Register , Vol. 83, No. 67 , Friday, 6 April 2018 , Notices . 
152 WTO document WT/DS542/4, 6 April 2018 . WT/TPR/S/ 382 • United States  
 
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  United  States had requested consultations with China under the WTO's DSU with respect to one of 
the four matters covered in the investigation.153 
3.134.   On 15 June 2018, USTR issued a list of products covering 1,102 separate U.S . tariff lines 
valued at approximately US$50 billion in 2018 trade values. The list included products from industrial 
sectors that contribute to, or benefit from, the "Made in China 2025" industrial policy, which include 
industries such as aerospace , ICT, robotics, industrial machinery, new materials, and automobiles. 
This list consists of two sets of U.S tariff lines: the first contains 818 lines of the original  1,333 lines 
that were included on the proposed list published  on the Federal  Register on 6 April. It comprises 
mostly products classified under HS Chapters 84 to 90, and covers approximately US$34 billion 
worth of imports from China.154 CBP was instructed to begin to collect the additional duties on 6 July 
2018.155 The second set  contains 284 proposed tariff lines identified by the interagency Section 301 
Committee as benefiting from Chinese industrial policies, including the "Made in China 2025" 
industrial policy, covering some US$16 billion worth of imports from China; these would undergo 
further review in a public notice and comment process , including a public hearing .156 
3.135.   On 15 June, China announced it would take countermeasures for US$50 billion in the form 
of additional  25% tariffs. Tariffs on about US$34 billion of those products would start on 6 July, and 
be applied to soybeans, corn, wheat, rice, sorghum, beef, pork, p oultry, fish, dairy products, nuts 
and vegetables, autos, etc. On 18 June, the President  directed the USTR to identify US$200 billion 
worth of Chinese goods for additional tariffs at a rate of 10%, that would go into effect after the 
appropriate legal proc ess if China refused to change its practices, and insisted on going forward with 
the new tariffs announced.157 
3.136.   On 20 June 2018 (83 FR 28710), the USTR provided notice of an initial action in the Section 
301 investigation , consisting of the imposition of an a dditional 25% ad valorem  duty on products of 
China with an annual trade value of approximately US$34 billion, effective 6 July 2018. The notice 
also sought public comment on another proposed action, in the form of an additional 25% ad valorem  
duty on produ cts of China with an annual trade value of approximately US$16  billion. The public 
comment process in connection with the proposed additional action was completed on 31 July 2018. 
On 6 July 2018, China responded to the initial action by imposing increased duties on goods of the 
United States. In response, the USTR proposed a modification of the action taken in the 
investigation, to maintain the original US$34 billion and the proposed US$16 billion actions, and to 
take further action in the form of an additi onal 10% ad valorem  duty on products of China covered 
in 6,031 tariff subheadings  with an annual trade value of approximately US$200 billion.158 In 
developing the list of tariff subheadings included in this proposed supplemental action, USTR 
considered produ cts from across all sectors of the Chinese economy. Subheadings identified as likely 
to cause disruptions to the U.S. economy, and tariff lines subject to legal or administrative 
constraints, were not included in the list. To ensure enforcement, merchandis es subject to the 
increased tariffs admitted into a U.S. FTZ on or after the effective date of the increased tariffs, 
except those eligible for admission under domestic status (as defined in 19 CFR 146.43), are to be 
admitted as "privileged foreign status"  and would be subject to the additional duty upon entry for 
consumption.159 
                                                
153 WTO online information. Viewed at: 
https://www.wto.org/english/news_e/news18_e/good_28mar18_e.htm . 
154 The full list may be viewed at: 
https://ustr.gov/sites/default/files/enforcement/301Investigations/List%201.pdf . 
155 USTR (2018), USTR Issues Tariffs on Chinese Products in Response to Unfair Trade Practices , USTR 
Press Release, 15 June 2018. Viewed at: https://ustr.gov/about -us/policy -offices/press -office/press -
releases/2018/june/ustr -issues -tariffs -chinese -products . 
156 Products included in this list are classified under Chapters 27, 34, 38, 39, 70, 73, 76, 84, 85, 86, 87, 
89 and 90, of the HTSUS. The full list may be viewed at: 
https://ustr.gov/sites/d efault/files/enforcement/301Investigations/List%202.pdf . 
157 Statement from the President Regarding Trade with China , 18 June 2018. Viewed at: 
https://www.whitehouse.gov/briefings -statements/statement -president -regarding -trade -china -2/. 
158 The full list of products was published in the Federal Register on 17 July 2018, Federal Register , Vol. 
83, No. 137 , Tuesday, 17 July 2018 , Notices , and may be viewed at: 
https://ustr.gov/sites/default/files/enforcement/301Investigations/2018 -0026%20China%20FRN%207 -10-
2018_0.pdf . 
159 As defin ed in 19 CFR 146.41 , foreign merchandise which has not been manipulated or manufactured 
so as to effect a change in tariff classification . WT/TPR/S/ 382 • United States  
 
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  3.1.7.2.3.2   EU beef trade  
3.137.   On 9 December 2016, representatives of the beef industry invoked the new Section 306(c) 
of the 1974 Trade Act, which allows the USTR to reinstate a previously terminate d Section 301 action 
in order to exercise a WTO authorization to suspend trade concessions, by filing a written request 
for reinstatement of action.160 A list of products under consideration for the imposition of increased 
duties in accordance with the WTO D SB authorization in the 1999 EU -Beef dispute was published in 
the Federal Register. No further action has been taken  under Section 306(c) ; the matter is currently 
being handled bilaterally with the European Union.161 
3.2  Measures  Directly Affecting Exports  
3.2.1   Export procedures and requirements  
3.138.   CBP is responsible for ensuring that goods leaving the United States do so in conformity with 
all applicable U.S. laws, regulations, and rules relating to exports. It also acts on behalf of other 
relevant government agenc ies in enforcing the rules. Online filing of export data is required prior to 
the departure of cargo for security purposes and for the conduct of risk assessment by CBP.162 
Licence applications, if needed, for the export, reexport or transfer (in -country) of  dual-use and less 
sensitive military items are submitted electronically to the BIS. BIS reviews the application and then 
requests review and recommendation from the other agencies (Departments of State, Defense, and 
Energy).163 
3.139.   Commodity information for all  export shipments valued over US$2,500 is submitted through 
the Automated Export System (AES) or AESDirect, a portal within the single -window Automated 
Commercial Environment (ACE).164 Commodity information for all export shipments that require a 
licence or licence exemption must be filed in the AES regardless of value. Although the Trade Act of 
2002 (P.L. 107 -210) stipulates the use of electronic export manifests in all modes of transport, no 
regulatory requirement has been established to enforce electronic filing, and paper copies continue 
to be accepted. CBP has deployed export manifest filing capabilities in ACE and has published Federal 
Register notices announcing electronic manifest pilots for air, ocean, and rail modes of transport. 
Some carriers are cu rrently submitting electronic export manifest data and bills of lading on a 
voluntary basis . CBP's Office of Field Operations  is expanding the electronic export manifest pilots 
for air, ocean and rail conveyances, and participation by carriers is encourage d. Federal Register 
notices expanding the pilots were announced in August 2017. Documentation pertinent to export 
shipments must be kept for five years by the exporter or those acting on his/her behalf.  
3.2.2   Export taxes, charges, and levies  
3.140.   Article I, Section 9 of the Constitution bans the use of export taxes. On various occasions in 
the past, general export levies or fees have been found unconstitutional when examined by the 
courts and consequently revoked. However, Article I, Section 10 of the Constitution au thorizes fees 
to be charged for specific services rendered such as inspection and certification fees for agricultural 
exports.  
3.2.3   Export prohibitions, restrictions, and licensing  
3.141.   The United States maintains export restrictions, including prohibitions, licensi ng 
requirements or additional controls on a variety of exports and re -exports for reasons of national 
security, foreign policy considerations, the non -proliferation of nuclear materials, and other 
                                                
160 USTR online information. Viewed at: 
https://ustr.gov/sites/default/files/301/Section%20301%20Beef%20FR%20Notice.pdf . 
161 Federal Register , Vol. 81, No. 249 , Wednesday, 28 December 2016 , Notices . 
162 Around 3,000 exporters have the option to file data post departure with CBP, tho ugh only 150 -200 of 
them avail of this opportunity.  
163 The Departments of State, Energy, and/or Defense frequently make applications subject to 
interagency review. The Departments of Commerce, State, and Treasury established an interagency working 
group in March 2016 to develop a Single Trade Application and Reporting System (STARS) to create a landing 
page to consolidate access points for the existing systems maintained by control agencies within these 
departments, i.e. DTRADE, SNAP -R, and OASIS. The page i s currently available at: 
https://2016.export.gov/ecr/eg_main_100285.asp . 
164 AESDirect is a free internet application developed jointly by CBP and the U.S. Census Bureau.  WT/TPR/S/ 382 • United States  
 
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  temporary objectives. The measures may be based on domestic  legislati on, policy decisions, 
UN Security Council resolutions, international agreements, or U.S. participation in non -binding 
arrangements such as the Wassenaar Arrangement, the Missile Technology Control Regime, the 
Treaty on the Non -Proliferation of Nu clear Weapons and the Exporters Committee (Zangger 
Committee), the Nuclear Suppliers Group, and the Australia Group. The Departments of State, 
Commerce, Homeland Security, Treasury, Defense, and Energy are all involved in export control and 
non-proliferati on activities in the United States and abroad. The enforcement of export controls is 
shared between the Departments of Homeland Security, Justice, and Commerce.  
3.142.   The Export Administration Act (EAA) of 1979, as amended, was until recently the principal 
imple menting statute for export controls of dual -use and less militarily significant items. The EAA 
expired on 21 August 2001, after which date the BIS carried out its provisions pursuant to Executive 
Order 13222 of 17 August 2001 (authorized under the Internat ional Emergency Economic Powers 
Act (IEEPA)) as amended by Executive Order 13637 of 8 March 2013. The EAA was largely repealed 
by the Export Control Reform Act of 2018 (P.L. 115 -232) (ECRA). The ECRA is now the principal 
implementing statute for the export  controls BIS had administered pursuant to the Executive Order 
issued under the IEEPA. All administrative actions, including licences, orders, and regulations made, 
issued, conducted, or allowed to become effective under the EAA while it was in effect cont inue to 
be in effect under the ECRA. The Atomic Energy Act of 1954, as amended, constitutes the legal basis 
for export controls on nuclear materials, facilities, and equipment for civilian purposes. These 
controls are administered by the U.S. Nuclear Regul atory Commission. Other departments and 
agencies have also been assigned responsibilities for export controls (Table 3.11), and their controls 
may in some instances (foreign policy or national security considerations) overlap with the functions 
carried out  by the USDOC.  
3.143.   As a starting point, it is the duty of the exporter to determine whether an export licence is 
needed due to the nature of the product, its destination, or possible end -uses.165 Every item subject 
to the Export Administration Regulations (EAR),  administered by the BIS, has either an assigned 
Export Control Classification Number (ECCN) or is designated as EAR99. The classification is derived 
from the technical parameters of the item, and all ECCNs are listed on the Commerce Control List 
(CCL) for  dual use and certain munitions goods. Items not on the CCL, i.e. EAR99 items, may be 
exported or re -exported without a licence unless the destination is : (i) an embargoed or sanctioned 
country; (ii) a party of concern; or (iii) in support of a prohibited end-use (Chart 3.2). 
Country -specific embargoes or other special controls primarily affect trade with Cuba, the 
Democratic People's Republic of Korea, the Russian Federation, Iran, Sudan, and Syria. The BIS 
maintains a Denied Persons List comprising person s and entities denied export privileges and with 
whom any dealings are prohibited; an Unverified List, a list of end -users the BIS has been unable to 
verify in prior transactions; and an Entity List, i.e. parties whose presence in a transaction may 
trigger  a supplementary licence requirement.166 For destinations posing a low risk of non -authorized 
or impermissible uses (37 countries), exports, re -exports or in -country transfers may be authorized 
under "Licence Exception Strategic Trade Authorization (STA)". T he determination of criminal acts 
and penalties for infringement of export controls vary depending on the product and the relevant 
agency or law.167 
                                                
165 The USDOC has developed a basic user guide for export controls maintained by the BIS. Viewed at: 
https://www.bis.doc.gov/index.php/forms -documents/regulat ions-docs/142 -eccn-pdf/file   
166 The Specially Designated Nationals and Blocked Persons (SDN) List is maintained by the Department 
of the Treasury, OFAC.  
167 In addition to the lists maintained by the BIS, the Department of the Treasury, OFAC has elaborated 
lists with respect to specially designated nationals, foreign sanctions evaders, sectoral sanctions identifications, 
the Palestinian Legislative Council, foreign financial institutions subject to Part 561, and non -SDN Iranian 
sanctions. The Arms Export Contr ol Act (AECA) Debarred List (Department of State, Directorate and Defence 
Trade Controls) enumerates entities and persons prohibited from participating, directly or indirectly, in the 
export of defence articles. Although the Department of State, Bureau of International Security and Non -
proliferation, identifies parties sanctioned under various statutes, the Federal Register is the only complete 
official source for non -proliferation sanctions determinations.  WT/TPR/S/ 382 • United States  
 
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  Table 3.11 Items subject to export controls, including licensi ng 
Product category  Responsible agencies  Legal reference  
Dual-use items, certain 
munitions and military 
items, and items 
controlled for short supply  USDOC, BIS  ECRA  
EAA 
IEEPA  
Defence services and 
defence articles  Department of State, Directorate of Defense 
Trade Controls  22 CFR parts 120 through 130  
Controlled substances and 
listed chemicals used in 
the production of 
controlled substances  Drug Enforcement Administration, Office of 
Diversion Control, Import -Export Unit 
(chemicals and controlled subst ances)  
Food and Drug Administration, 
Import/Export (drugs and biologics)  
Food and Drug Administration, International 
Affairs (investigational drugs permitted)  21 CFR parts 1311 through 
1313 
 
21 U.S.C. 301 et seq.  
 
21 CFR 312.1106  
Fish and wildlife controls; 
endangered species  Department of the Interior, Chief Office of 
Management Authority  50 CFR 17.21, 17.22, 17.31, 
17.32  
Foreign assets and 
transaction controls  Department of Treasury, Office of Foreign 
Assets Control, Licensing  31 CFR parts 500 through 590  
Medical devices  Food and Drug Administration, Office of 
Compliance  21 U.S.C. et seq.  
Natural gas and electric 
power  Department of Energy, Office of Fuels 
Programs  10 CFR 205.300 through 
205.379 and 590  
Nuclear materials and 
equipment  Nuclear  Regulatory Commission, Office of 
International Programs  10 CFR part 110  
Nuclear technology; 
technical data for nuclear 
weapons, and special 
nuclear materials  Department of Energy, Office of Export 
Control Policy and Cooperation (NA -24) 10 CFR part 810  
Ocean freight forwarders  Federal Maritime Commission, Office of 
Freight Forwarders  46 CFR part 510  
Patent filing data sent 
abroad  Department of Commerce, Patent and 
Trademark Office, Licensing and Review  35 U.S.C. 184 et seq.  
37 CFR part 5  
U.S. flagged or U.S. 
manufactured vessels 
over 1,000 gross tonnes  U.S. Maritime Administration, Division of 
Vessel Transfer and Disposal  46 CFR part 221  
Hazardous waste  Environmental Protection Agency, Office of 
Resource Conservation and Recovery  40 CFR part 262, subpart E  
40 CFR section 263.20  
40 CFR section 263.22(d)  
Source:  WTO Secretariat, based on information contained in Supplement N o. 3 to Part 730 of the Export 
Administration Regulations and BIS online information . Viewed at: 
https://www.bis.doc.gov/index.php/about -bis/resource -links. 
3.144.   Changes in the export control regime occur at regular intervals, reflecting, for example, the 
outcomes of meetings in the n on-binding arrangements in which the United States participates; 
results of review efforts, new entries, deletions, or modified entries in the list of persons and entities 
of concern; or modifications of sanctions and embargoes applicable to specific count ries or 
institutions (Table A3.4).  
 WT/TPR/S/ 382 • United States  
 
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  Chart 3.2 Export control decision tree  
 
 
Source:  Export Administration Regulations, Supplement No. 1 to Part 732, publ ished in Federal Register, 
Vol. 82, No. 247, 27 December 2017.  
3.145.   Recognizing that the export control system had become overly complex, fragmented, and 
needed updating, an export control reform was launched by Presidential initiative in 2009 and the 
establishment of an Export Enforcement Coo rdination Cente r was announced i n 2010.168 The Center 
is currently managed by Homeland Security Investigations (HSI) as part of the Department of 
Homeland Security. A major component in the reform work has been the rationalization of the two 
export control lists for dual -use (military/civilian) goods, including services, technology and data, 
certain military items, and munitions, i.e. the U.S. Munitions List (USML ) maintained by the 
Department of State, and the CCL of the USDOC (Table 3.12).169 The regulatory changes led to t he 
migration of less sensitive items from the USML to the CCL. Revisions of 18 of the 21 categories on 
the USML were completed in 2016. For the three remaining categories, the public comments on the 
proposed changes are currently under interagency review.170 
                                                
168 Executive Order 13558, 9 November 2010.  
169 The U SML identifies items controlled and regulated by the International Traffic in Arms Regulations 
(ITAR) and the CCL implements the Export Administration Regulations (EAR).  
170 83 FR 24166 . 
NoSubject to the EAR?
(See §734.2 -5)Exit the EARNo
Is your item classified under an
ECCN on the CCL?
[See §736.2(b)(1 -3)]
(See Supp No. 1 to Part 774)No
EAR99Yes
Yes
ECCN
Do General Prohibitions
4-10 apply?
[See §736.2(b)(4 -10)]Do General Prohibitions
4-10 apply?
[See §736.2(b)(4 -10)]
Is there an “X” in the 
box?
[(Using the Commerce Country 
Chart (Supp.
No.1 to Part 738)and the
CCL (Supp. No.1 to Part 774)]“No Licence Required” 
(NLR)
[See §§732.5(a) & 758.1(d, f, g)]
Is a Licence Exception 
Available?
(See Part 740, including §740.2
“Restrictions on all Licence 
Exceptions”)Use Licence Exception
(See Part 740)
Submit an application for licence
(See Part 748)No
YesNo
Yes
Yes
NoYesWT/TPR/S/ 382 • United States  
 
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  Table 3.12 CCL and USML  
CCL USML  
Category  Products  Category  Products  
0 Nuclear and miscellaneous  I Firearms, close assault weapons, and combat shotguns  
1 Materials, chemicals, 
microorganisms and toxins  II Guns and armament  
2 Materials processing  III Ammunition/Ordnance  
3 Electronics  IV Launch vehicles, guided missiles, ballistic missiles, 
rockets, torpedoes, bombs and mines  
4 Computers  V Explosives and energetic materials, propellants, 
incendiary agents and their constituents  
5 Part 1  Telecommunications  VI Vessels of war and special naval equipment  
5 Part 2  Information security  VII Tanks and military vehicles  
6 Sensors and lasers  VIII Aircraft and associated equipment  
7 Navigation and avionics  IX Military training equipment and training  
8 Marine  X Protective personal equipment and shelters  
9 Aerospace and propulsion  XI Military electronics  
 XII Fire control, range finder, optical and guidance and 
control equipment  
XIII Auxiliary military equipment  
XIV Toxicological agents, including chemical agents, 
biological agents, and associated equipment  
XV Spacecraft systems and associated equipment  
XVI Nuclear weapons, design and testing related items  
XVII Classified articles, technical data and defense services 
not otherwise enumerated  
XVIII Directed energy weapons  
XIX Gas turbine engines (GTEs)  
XX Submersible vessels, oceanographic and associated 
equipment  
XXI Miscellaneous articles  
Note:  Each broad category on the CCL is subdivided into (a) systems, equipment, and components; 
(b) test, inspection, and production equipment; (c) material; (d) software; and (e ) Technology.  
Source:  USDOC, BIS online information . Viewed at: 
http://www.bis.doc.gov/index.php/regulations/commerce -control -list-ccl and 22 CFR Part 121 
viewed at: https://www.ecfr.gov/cgi -bin/text -idx?node=pt22.1.121 . 
3.146.   Regarding export controls on energy, the Natural Gas Act of 1938, as amended, requires 
any person wishing to export or import natural gas to obtain authorization from the Department of 
Energy (DOE).171 Permission is granted in the form of short -term or long -term authorizations.172 
Applications to import or export liquefied natural gas (LNG) to countries that have concluded FTAs 
with the United States are granted without mod ification or delay as the FTAs stipulate national 
treatment and such trade is deemed consistent with public interest. The DOE also authorizes natural 
gas exports to non -FTA countries unless the proposed exports are deemed inconsistent with public 
interest or explicitly prohibited by law or policy. The first major shipment of U.S. LNG occurred in 
February 2016. In 2017, exports of LNG totalled almost 2 billion cubic feet per day, a volume four 
times higher than in 2016.173 Restrictions on crude oil exports, ef fectively banned from 1975 to 2015 
(except for minor quantities sold to Canada and Mexico), were lifted in December 2015.174 
3.2.4   Export support and promotion  
3.147.   The Trade Promotion Coordinating Committee (TPCC), created in the early 1990s, brings 
together 20 federa l government agencies with export -related programmes to ensure alignment 
among federal trade promotion activities and to better assist exporters. Trade promotion agencies 
                                                
171 The requirement applies to natural gas in any form, including LNG, co mpressed natural gas, and 
compressed gas liquids.  
172 A short term authorization enables the holder to import or export natural gas for up to two years on 
a spot basis or similar short arrangement. Long -term authorizations are granted to companies having 
concluded tolling agreements or sales/purchase contracts of more than two years duration.  
173 All exports originated from the Sabine Pass liquefaction terminal in Louisiana. U.S. Energy 
Information Administration online information. Viewed at: https://www.eia.gov/todayinenergy/detail.php? 
d=35512 . 
174 Export licences may be reintroduced in limited circumstances, e.g. a national emergency declared by 
the President or due to a sustained material  shortage. Although crude oil is now classified as EAR99 and no 
licence is required, permission is still needed for exports to embargoed or sanctioned countries or persons, or 
sales to entities and persons on the Denied Persons List.  WT/TPR/S/ 382 • United States  
 
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  or programmes also exist at the state and local level. The Trade Facilitation and Tra de En forcement 
Act of 2015 accordingly instructed the TPCC to work with representatives of state agencies to devise 
a strategy for the coordination of state and federal resources. The TPCC established a State and 
Local Working Group, to enhance coordination and created a Federal -State Export Strategic Plan 
template that federal and state trade offices use to share information and coordinate activities on 
an annual basis within each state. The TPCC is, in principle, required to publish an annual N ational 
Export Strategy, to outline government priorities and report on the effectiveness of existing export 
promotion efforts. However, after the 2012 report, which focused on export promotion priorities and 
reducing foreign trade barriers, no new report was issued until December 2016.175 According to that 
latest report, federal agency efforts inter alia  helped U.S. enterprises win US$239 billion in U.S. 
content on major projects over eight years, counselled several thousand new clients to support 
US$55 bill ion in exports of goods and services, and provided significant new market opportunities 
through the WTO and regional or bilateral instruments. The results were achieved despite strong 
economic headwinds. The next National Export Strategy is expecte d to be published in late 2018.  
3.148.   Although the mandate of the President's Export Council (PEC), an advisory body created in 
1979 by Executive Order 12131, has been extended until 30 September 2019176, the PEC has not 
met since 14 September 2016. Members of the PEC are  appointed by the President, and no 
appointments have been made in the current Administration.  
3.149.   The U.S. Trade and Development Agency (USTDA) is an independent agency that links U.S. 
businesses to overseas opportunities by funding project preparation and p artnership -building 
activities that develop sustainable infrastructure in emerging economies. USTDA's funding brings in 
U.S. industry experts to perform feasibility studies, launch pilot projects, or provide a diverse array 
of technical assistance. The Age ncy also connects project sponsors with U.S. businesses through its 
reverse trade missions, which bring overseas decision -makers to the United States to introduce them 
to the design, manufacture, and operation of U.S. goods and services. The Agency's progr amming 
provides "win -win" results: U.S. companies gain access to high -level decision makers, while overseas 
partners gain insights into the latest, most appropriate U.S. solutions to meet their infrastructure 
needs. The USTDA becomes involved strategically  in industry sectors where U.S. businesses are 
most competitive – energy, transportation, and ICT – and has prioritized its funding in the fastest -
growing emerging economies where U.S. goods and services are most in demand. According to the 
U.S. authoritie s, the USTDA is unique among federal agencies in that it is mandated to engage the 
private sector in infrastructure projects at the critical early stages when the projects' technology 
options and requirements are being defined, with the objective of creati ng a level, fair playing field 
for U.S. companies. The Agency's Global Procurement Initiative: Understanding Best Value (GPI) 
assists in this endeavour by helping public procurement officials in emerging economies establish 
practices and policies that inte grate life -cycle cost analysis and best -value determination in a fair, 
transparent manner.  
3.2.4.1   Drawback regime  
3.150.   The refund of customs duty paid on imported articles subsequently exported, destroyed, or 
incorporated in products that are exported (or destroyed) may be requested under the United States 
Code (19 U.S.C. 1313). According to the provisions of the old legislation ("core drawback") drawback 
on unused imported merchandise, exported or destroyed under CBP supervision should generally be 
filed within three  years of exportation or destruction of the articles. The drawback usually amounts 
to 99% of customs duties, certain excise taxes, and fees lawfully collected at importation, including 
the merchandise processing fee and the harbour maintenance tax.  
3.151.   The Trade Facilitation and Trade Enforcement Act ( TFTEA ) of 2015 (P.L. 114 -125), Section 
906, introduced a number of changes in the duty drawback programme. It extended the deadline 
for the exportation or destruction of imported articles under the unused merchand ise drawback 
programme from three to five years, and increased the overall data inputs required, including 
mandating the eight -digit classification number when describing the merchandise. For transfers of 
imported merchandise from importer to manufacturer or claimant, the Act relaxed the 
                                                
175 Trade Promotion Coor dinating Committee, Helping U.S. Businesses Increase Global Sales to Support 
Local Jobs, National Export Strategy 2016,  Washington D.C., December 2016. Viewed at: https://www.trade. 
gov/publications/pdfs/nes2016.pdf . 
176 Presidential Executive Order on the Continuance of Certain Federal Advisory Committees, 
29 September 2017.  WT/TPR/S/ 382 • United States  
 
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  documentation requirements, by eliminating the need to obtain a Certificate of Delivery for the 
drawback claim. Henceforth, business records kept in the normal course of business should suffice 
to document the transfer of m erchandise. The Act provided a two -year transitional period for CBP to 
implement the new provisions in full, i.e. until 24 February 2018, including a requirement that all 
drawback claims be filed and processed electronically. As from that date, all Automat ed Broker 
Interface (ABI) filings of drawback have been required to use ACE. A further transition period applies 
until 24 February 2019, during which claimants may opt to file requests for duty drawback according 
to CORE drawback or the new legislation ("T FTEA drawback"). During this period, claims for CORE 
drawback may still be submitted in hard copy to one of the four CBP drawback offices, but priority 
will be given to the processing of electronic filings. The Act mandated the Secretary of the Treasury 
to elaborate new regulations for the calculation of duty drawback by December 2017. The Notice of 
Proposed Rule Making for Modernized Drawback was published in the Fed eral Register on 2 August 
2018.  
3.2.5   Export finance, insurance, guarantees  
3.2.5.1   The Export -Import Bank (EXIM)  
3.152.   EXIM Bank is the official export credit agency of the United States. As such, it may assume 
credit and country risks that commercial lenders are unwilling or unable to accept. Nevertheless, the 
Bank's charter requires all authorized transaction s to demonstrate a reasonable assurance of 
repayment, and to comply with the Bank's policies and practices a s directed by statute, the 
EXIM Bank board, and international agreements. EXIM Bank's Country Limitation Schedule details 
limitations the bank impos es on itself with respect to the acceptance of commercial and political 
risks in individual countries.177 Support to trade with Bolivia, Cuba, Iran, the Democratic People's 
Republic of Korea, and Syria is legally prohibited. Private sector lenders normally a ct as partners in 
EXIM Bank transactions.  
3.153.   EXIM Bank is an independent executive branch agency as well as a wholly -owned 
government corporation, first organized as a District of Columbia banking corporation in 1934. It is 
financially self -sustained, and its  profits have allowed an accumulated US$9.5 billion to be 
transferred to the Treasury since 1992. EXIM Bank has exposure in 166 countries. Measured by the 
volume of exposure, the Bank's most important markets are Mexico, Saudi  Arabia, China, Australia, 
and India. Long -term project finance has traditionally been its most profitable business. However, 
in recent years its operations have been severely constrained by prolonged domestic political 
disagreement (Table 3.13).  
Table 3.13 EXIM Bank authorizations, 2014 -17 
 2014  2015  2016  2017  
No. US$ million  No. US$ million  No. US$ million  No. US$ million  
Loans  69 1,947.8  41 72.7 0 0 12 5.6 
Long term  14 1,927.6  4 57.7 0 0 0 0 
Medium term  0 0 0 0 0 0 0 0 
Working capital  55 20.2 37 15.0 0 0 12 5.6 
Guarantees  540 13,314.1  344 9,068.1  265 1,229.8  221 961.1  
Long term  51 10,786.7  42 7,917.3  0 0 1 2.6 
Medium term  58 137.5  41 149.8  28 123.3  25 119.5  
Working capital  431 2,389.8  261 1,001.0  237 1,106.5  195 839.0  
Credit Insurance  3,137  5,206.1  2,245  3,242.2  2,634  3,807.3  2,228  2,464.3  
Short term  3,078  5,107.3  2,216  3,196.5  2,625  3,797.1  2,186  2,414.3  
Medium term  59 98.8 29 45.7 9 10.2 42 50.0 
Source:  EXIM Bank, Annual Reports, 2015, 2016, and 2017. Viewed at: 
https://www.exim.gov/news/reports/annual -reports . 
3.154.   Although EXIM Bank is independent from the Government in day -to-day operations, its 
lending authority is established by Congress. In 2015, the Bank experienced an unprecedented five -
month period during which its authority to approve transactions had lapsed  and, as a result, all 
involvement in new business opportunities was curtailed. As new legislation reauthorizing EXIM Bank 
until 30 September 2019 entered into force in December 2015, its lending authority was capped 
                                                
177 The Schedule is updated regularly. The country limitation schedule applicable as from 27 March 2018 
was viewed at: https://www.exim.gov/sites/default/files/tools/countrylimitationschedule/CLSMarch2018.pdf . WT/TPR/S/ 382 • United States  
 
- 92 - 
 
  (at US$135 billion), while its small bu siness lending target was raised from 20% to 25%.178 In 
FY2017, more than 90% of its authorizations concerned small businesses, which made up more than 
63% of the total dollar value of the authorizations and nearly 76% of the direct export value 
supported by  the Bank. However, the Bank's overall financial exposure as of August 2018 (about 
US$64 billion) is well below the established ceiling and is steadily declining , as a further key 
operational roadblock persists.  
3.155.   EXIM Bank's charter stipulates a five -member  Board of Directors charged with the approval 
of individual transactions, Bank policies, and other matters that may arise. The Board members are 
appointed by the President of the United States, with the advice and consent of the Senate. Small 
loans and cer tain medium -term loans may be authorized by EXIM Bank staff, but all medium - and 
long-term authorizations above US$10 million must be approved by the Board of Directors. The 
Board has lacked a quorum of three members to take such decisions since 20 July 20 15, as the 
confirmation of the President's nominees for vacant positions have been consistently held up in the 
Senate.  
3.156.   The 2015 legislation reauthorizing EXIM Bank includes provisions (Section 55002) mandating 
the United States to initiate and pursue negot iations with other major exporting countries to reduce 
substantially, and with a view to possibly eliminating (by 2025), subsidized export -financing 
programmes and other forms of export subsidies. In addition, the United States is to initiate and 
pursue ne gotiations with countries that are not OECD members, to bring them into a multilateral 
agreement with rules and limitations on officially supported export credits. Each year, the 
Department of the Treasury delivers a report to Congress which provides an up date on the progress 
achieved in implementing the instructions set forth in Secti on 55002.  
3.2.5.2   Small Business Administration  (SBA) export loan programmes  
3.157.   The SBA, created by Congress in 1953 to "aid, counsel, assist, and protect, insofar as is 
possible, the in terests of small business concerns", administers three broad programmes through its 
Office of International Trade that offer export financing for small businesses exporting or planning 
to export (Table 3.14). In addition, it provides grants to states to as sist small businesses with 
information and tools to succeed in exporting through its State Trade and Export Promotion Program 
(STEP).179 It also contributes staff to the U.S. Export Assistance Centers (USEACs), a joint effort 
with the USDOC and EXIM Bank to provide export marketing and finance assistance to small an d 
medium sized U.S. businesses.  
Table 3.14 Approved applications and loan amounts under SBA export loan programmes, 
2014 -17 
Program  title 2014  2015  2016  2017  
No. US$ 
million  No. US$ 
million  No. US$ 
million  No. US$ 
million  
Export Express  124 23.5 156 28.0 101 22.0 53 15.0 
Export Working Capital  185 307.4  176 307.5  167 313.0  166 337.0  
International Trade Loan  193 285.4  215 394.3  215 375.0  192 308.0  
Source:  SBA (2016 & 2017), Summary of Performance and Financial Information – Fiscal Year s 2016 and 
 2017. Viewed at: 
https://www.sba.gov/sites/default/files/ aboutsbaarticle/FINAL_SBA_FY_2018_CBJ_May_22_2017c.pdf  and 
https://www.sba.gov/sites/default/files/aboutsbaarticle/SBA_FY_19_508 -Final-FINAL.PDF . 
3.158.   The SBA as such is not a bank. The specific loan terms are, therefore, negotiated between 
the qualified borrower and an SBA -approved lender. Applicants for SBA export lo ans must provide 
export business plans, including historical data, projections, and written information supporting the 
likelihood of increased export sales. No minimum borrowed amount is required, and the SBA 
guarantees loans up to US$5 million. The fee th e SBA charges for its guarantee depends on the 
loan's maturity and the guaranteed amount (up to 90% for most loans) , and is initially paid by the 
lender.  
                                                
178 Fixing America's Surface Transportation Act (PL 114 -94), Division E - The Export -Import Bank 
Reform and Reauthor ization Act of 2015 (12 U.S.C. 635), 4 December 2015.  
179 Activities include participation in foreign trade missions, sales trips, international marketing 
campaigns, export trade shows, and training sessions . WT/TPR/S/ 382 • United States  
 
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  3.159.   The most streamlined export financing provided with the assistance of the SBA is the Express 
Loan Prog ram, which allows lenders to use their own forms and procedures. Export Express loans 
can be up to US$500,000, with an SBA loan guaranty of either 75% or 90%. The Export Working 
Capital Program provides working capital financing to support an exporter's tr ansactions, from 
purchase order to final payment, with a US$5 million maximum loan amount and 90% guaranty. 
Finally, the International Trade Loan Program offers a combination of fixed asset, working capital 
financing, and debt refinancing up to US$5 millio n, with the SBA guaranteeing 90% of the total loan 
amount.  
3.2.5.3   Overseas Private Investment Corporation (OPIC)  
3.160.   Operating since 1971, the OPIC is the Government's development finance institution. It 
mobilizes private capital to help address critical development challenges by providing investor 
financing, political risk insurance, and support for private equity investment funds when such funding 
is not forthcoming from normal commercial sources. The OPIC does not compete with private 
commercial lenders. It is a fi nancially self -sustaining, independent government corporation. Since 
its inception, it has realized net collections from its operations totalling US$8  billion.  
3.161.   The OPIC is authorized to do business in more than 160 developing and post -conflict 
countries.180 It is mandated by law to prioritize investment in low -income countries. It also sets 
limits to its exposure in various countries to maintain a balanced portfolio. Its domestic clients must 
be U.S. citizens, permanent residents, or U.S. companies, or the p rojects must imply a "meaningful 
involvement" of the U.S. private sector, defined as a minimum 25% stake in the project or in the 
project company.181 The OPIC has a statutory requirement to ensure that its supported projects are 
established and maintained in  accordance with internationally recognized worker rights standards. 
It has also elaborated an Environmental and Social Policy Statement, designed to ensure that 
supported projects are environmentally and socially sustainable.182 
3.162.   The OPIC provides medium - to long-term loans (up to 30 years), typically ranging from 
US$5  million to US$50 million, primarily to cover the capital costs of a project's establishment or 
expansion.183 It will not consider requests related solely to the need for working capital or the 
financing of acquisitions, and it does not provide trade finance. Political -risk insurance covers 
possible loss of tangible assets, investment value, and earnings.  Since 1987, the OPIC has 
committed US$5.3 billion to 82 private equity funds in emerging marke ts. The funds, in turn, have 
invested US$10.4 billion in more than 670 companies across more than 65 countries. The OPIC is 
typically one of the first fund sponsors to enter an unproven market.  
3.163.   OPIC operations have been growing over the years. At the end o f September 2017, OPIC's 
combined total exposure stood at US$23.21 billion, the largest portfolio in its history (Table 3.15). 
Its authorized exposure limit is US$29 billion. At present, it is operating under the Fiscal Year 2018 
Consolidated Appropriation s Act (P.L. 115 -141).  
                                                
180 The list of authorized countries is available at: https://www.opic.gov/doing -business -us/OPIC -
policies/where -we-operate . The consideration of new financing and insurance  transactions in the Russian 
Federation and Venezuela is currently suspended.  
181 OPIC may also take into consideration other forms of participation, such as franchise or long -term 
management contracts.  
182 Following a review initiated in 2015, OPIC management  approved a revised Environmental and Social 
Policy Statement on 7 January 2017. The Statement is available at: 
https://www.opic.gov/sites/default/files /files/final%20revised%20ESPS%2001132017(1).pdf . 
183 Loans may range from US$500,000 to US$350 million per project.  WT/TPR/S/ 382 • United States  
 
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  Table 3.15 Overview of OPIC activities, FY2015 -17 
(US$ billion) 
New commitments  FY2015  FY2016  FY2017  
Financing  3.84 3.02 1.65 
Investment funds  0.39 0.56 0.59 
Insurance  0.16 0.10 1.51 
Total  4.39 3.69 3.76 
U.S. exports projected  0.26 0.10 3.09 
Total portfolio  19.93  21.48  23.21  
Active countries  96 95 90 
Source:  OPIC, Annual Reports  2015-17. Viewed at: https://www.opic.gov/media -events/annual -reports ; and 
 information provided by the authorities.  
3.3  Measures Affecting Production and Trade  
3.3.1   Incentives  
3.164.   The United States encourages private enterprise and competition based on f ree market 
economic principles.  
3.165.   It has no overarching legal framework governing subsidies at federal and sub -federal levels. 
Traditionally, federal subsidies have been in the form of grants, tax concessions, loan guarantees, 
and direct payments. The Catalog of Federal Domestic Assistance (C FDA) lists all federal financial 
(and non -financial) assistance programmes – many, if not most, related to public health and safety, 
the environment, education, infrastructure, community assistance, and research and development 
- using a five -digit classif ication to identify and sort around 2,300 programmes. On 23 May 2018, 
the CFDA was migrated to the website https://beta.SAM.gov , where the search engine is now 
referred to as "Assistance Listings". According to a databa se maintained by SelectUSA, some 108 
federal programmes and incentives exist specifically to promote small businesses, provide support 
to existing or prospective exporters, and assist enterprises with regulatory compliance.184 
3.166.   State, territorial and local go vernments also provide support and incentives, particularly in 
relation to business start -ups or the expansion of existing operations. A database developed by the 
Council for Community and Economic Research (C2ER), accessible at : 
http://selectusa.stateincentives.org/?referrer=selectusa , includes information on 1,790 
programmes enacted in the 50 states. Such support is provided in the form of tax credits, tax 
exemptions, grants, loans or loan participation, or other forms of assistance.  
3.167.   Led by the Department of Commerce, SelectUSA was created in 2011 as a government -wide 
programme to promote and facilitate business investment by foreign companies. In addition to its 
databases on federal and state incentives, it offers services such as a public, self -service data 
visualization tool that provides insights into FDI trends  (SelectUSA Stats), and the Cluster Mapping 
Tool ( https://www.clustermapping.us/ ) allowing users to identify regional concentrations of specific 
industries and potential partners. SelectUSA chairs the Federal Interagency Investment Working 
Group (IIWG), a body that brings together more than 20 federal age ncies and bureaus to enhance 
coordination, provide guidance and information, and respond to broad -based or more limited issues 
that affect investment decisions. Through its ombudsman services, SelectUSA collaborates with 
IIWG agency partners to help addres s investor questions and concerns relating to a wide range of 
federal regulatory issues.  
3.168.   The SBA supports small businesses and entrepreneurs. It provides its services through 
partnerships with private and public institutions and via an extensive network of  field offices 
throughout the United States, Puerto Rico, the U.S. Virgin Islands, and Guam. It offers loan 
guarantees, counselling, and other forms of assistance, while loans are made available through 
partner financial institutions. According to the Agen cy, loans with SBA approval totalling more than 
US$30  billion were provided to small businesses  in FY2017, and the loans supported nearly 630,000 
jobs.185 The SBA does not offer grants for business start -ups, but such support may be available 
from state or l ocal government sources. It is responsible for determining whether the government -
                                                
184 SelectUSA online information. Viewed at: https://www.selectusa.gov/federal_ince ntives . 
185 SBA online information. Viewed at: 
https://www.sba.gov/sites/default/files/aboutsbaarticle/SBA_FY_2017_AFR_.pdf . WT/TPR/S/ 382 • United States  
 
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  wide procurement goal for small businesses186 is met, and that the achievements of the reporting 
agencies relate to their individual goals negotiated with the SBA.187 The SBA pub lishes the annual 
goals for the 24 federal agencies that are subject to the Chief Financial Officers Act, and the agencies 
report their outcomes to the SBA's Office of Government Contracting and Business Development 
though the Federal Procurement Data Syst em Next Generation.188 
3.169.   Among the federal programmes, trade adjustment assistance programmes have been 
established for enterprises and workers. The Trade Adjustment Assistance for Firms (TAAF) provides 
technical assistance to eligible domestic manufacturers a ffected by import competition without 
regard to the nature of the industry. Support is provided on a cost -sharing basis for the development 
of business recovery plans, and projects outlined in them, to expand markets, strengthen operations, 
and increase co mpetitiveness. The TAAF is administered by the Economic Development 
Administration at the USDOC, and assistance is disseminated through 11 non -profit or university -
affiliated centres serving firms in the 50 states. No funds are provided directly to firms. The FY2017 
budget for TAAF was US$13 million, and the value of the technical assistance that firms received 
amounted to US$6.9 million.189 Workers losing their jobs or facing cuts in pay or hours worked due 
to increased imports a re eligible for federal assis tance under the Trade Adjustment Assistance for 
Workers programme. The programme is administered by the Employment and Training 
Administration at the Department of Labor. The program me was reauthorized  in 2015, and is 
ongoing.  Trade adjustment assistance f or farmers, administered by the Department of Agriculture, 
is authorized under PL 114 -27 to receive US$90 million annually for FY2015 through FY2021, subject 
to annual appropriations. However, Congress has not appropriated funding since the first quarter o f 
FY2011, and as a result, the programme is inactive.  
3.170.   Like other WTO Members, the United States notifies subsidy programmes to the WTO without 
prejudice to their legal status regarding specificity, or being actionable (or otherwise) under the 
Agreement on Subsidies and Countervailing Measures. The most recent subsidy notification, 
circulated in March 2018, covers fiscal years 2015 and 2016. Aside from agriculture, federal -level 
subsidies are primarily directed towards the energy sector (Table 3.16). The not ification also 
provides information on 671 subsidy programme s maintained at state level. Data on programme  
costs in this latest notification has been provided for a significantly higher number of programmes 
than previously, but not all programmes include an estimated cost.  
Table 3.16 Federal subsidy programmes (non -agriculture), 2015 -16 
(US$ million)  
Program mes Type of subsidy  Expenditure  
FY2015  FY2016  
Energy and fuels     
Advanced Research Projects  Annual  Congressional appropriations  76.5 56.9 
Cybersecurity for Energy Delivery Systems  Co-financing  0 24.6 
Smart Grid R&D  Co-financing  0 0.5 
Nuclear Energy: Small Modular Reactor Licensing 
Technical Support  Co-financing  57.4 57.1 
Nuclear Energy: Supercritical Transformational 
Electric Power  Co-financing  0.3 1.5 
Nuclear Energy: Fuel Cycle R&D  Co-financing  7.6 22.4 
Nuclear Energy Enabling Technologies – 
Crosscutting Technology Development  Co-financing  1.4 1.0 
Nuclear Energy: Reactor Concepts R&D  and 
Demonstration – Advanced Reactor Technologies  Co-financing  7.3 7.4 
Renewable Energy Resources  Co-financing  105.7  56.7 
Energy Conservation Programs – Transportation 
Sector  Co-financing  120.0  127.8  
Energy Conservation Programs – Building 
Technologies  Office  Co-financing  17.1 19.6 
Energy Conservation – Advanced Manufacturing  Co-financing  56.0 51.0 
                                                
186 Section 15(g) of the Small Business Ac t (PL 85 -536).  
187 The combined federal target is that 23% of the total contract dollars should be awarded to small 
businesses, including secondary -level goals for prime and subcontracts awarded to women -owned small 
businesses, small disadvantaged businesses , HUBZone small businesses, and service -disabled veteran -owned 
small businesses (see section 3.3.6.5).  
188 The final goals for FY2018 are available at: https://www.sba.gov/sites/default/files/2018 -
02/FY2018_Final_Agency_Goals_Spreadsheet_20171220.pdf . 
189 USDOC, Economic Development Administration online information. Viewed at: 
https://www.eda.gov/files/annual -reports/taaf/FY17 -TAAF-Annual -Report -to-Congress.pdf . WT/TPR/S/ 382 • United States  
 
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  Program mes Type of subsidy  Expenditure  
FY2015  FY2016  
Fossil Energy R&D  Cost-shared contracts  147.6  115.9  
Innovative Technology Loan Guarantee Program  Loan guarantees  17.0 17.0 
Advanced Technology Vehicles Manufacturing 
Loan Program (ATVM)  Direct loan s 4.0 6.0 
Other energy and fuels     
Expensing of Exploration and Development 
(E&D) Costs for Oil, Gas and other Fuels  Income tax concession  660.0  450.0  
Excess of Percentage over Cost Depletion for Oil, 
Gas and Other Fuels  Income tax concession  650.0  410.0  
Capital Gains Treatment of Royalties on Coal  Income tax concession  110.0  150.0  
Second Generation Biofuel Credit  Income tax concession  Not yet 
available  Not yet 
available  
Biodiesel and Renewable Diesel Credit  Income and excise tax concession and 
direct payments  1,940.0  2,680.0  
Alternative Fuel Mixture Credit  Excise tax concession  630.0  590.0  
Credits for Investment in Advanced Coal 
Facilities and Advanced Gasification Facilities  Income tax concession  40.0 160.0  
Advanced Energy Property Credit  Income tax concession  60.0 10.0 
Two-year Amortization of Geological and 
Geophysical Expenditures  Income tax concession  90.0 70.0 
Energy Production Credit  Income tax concession  1,550.0  1,400.0  
Energy Investment  Credit  Income tax concession  1,010.0  1,190.0  
Energy Grant in lieu of the Energy Production 
Credit or the Energy Investment Credit  Direct payment  2,009.0  94.0 
Credit for Holding New Clean Renewable Energy 
Bonds  Income tax concession  100.0  100.0  
Credit for Holding Qualified Energy Conservation 
Bonds  Income tax concession  70.0 70.0 
Fisheries     
Columbia River Fishery Development Program  Operating grants  13.7 16.2 
Fisheries Finance Program (FFP)  Collateralized loans  a a 
Sea Grant College Program  Direct grants  67.3 72.4 
Saltonstall -Kennedy Grant Program: Fisheries 
R&D Competitive grants  25.0 11.0 
Lumber and timber     
Capital Gains Treatment of Certain Timber 
Income  Income tax concession  110.0  150.0  
Expensing of Multi -period Timber Growing Costs  320.0  330.0  
Expensing and Seven -Year Amortization for 
Reforestation Expenditures  50.0 60.0 
Medical     
Office of Nuclear Physics, Isotope Development 
and Production for Research and Applications 
Program  Annual Congressional appropriations  19.9 21.6 
Orphan Drug Tax Credit  Income tax concession  1,460.0  1,720.0  
Non-fuel minerals, metals     
Excess of percentage over Cost Depletion for 
Non-fuel Minerals  Income tax concession  520.0  430.0  
Expensing of Exploration and Development Costs 
for Non -fuel Minerals  10.0 20.0 
Shipyards     
Assistance to Small Shipyards Grant Program  Grants  0 5.0 
Regional programs     
Empowerment Zones  Income tax concession  100.0  140.0  
New Markets Tax Credit  1,200.0  1,290.0  
a The amount of the loans and the general terms of the loans are provided but the subsidy benefit, if 
 any, is not estimated.  
Source:  WTO document G/SCM/N/315/USA, 14  March 2018.  
3.3.2   Standards and other technical requirements  
3.171.   The development of standards is dece ntralized and demand -driven. The private sector 
addresses the needs or concerns expressed by industry, Government, and consumers, through the 
development of voluntary consensus standards (VCSs). The actual work to develop these VCSs is 
undertaken by standa rds developing organizations (SDOs). A private, non -profit organization, the 
American National Standards Institute (ANSI), coordinates and administers the VCS system. ANSI 
is the sole U.S. member body to the International Organization for Standardization ( ISO) and, 
through the U.S. National Committee, to the International Ele ctrotechnical Commission (IEC).  WT/TPR/S/ 382 • United States  
 
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  3.172.   Some 240 ANSI-accredited standards developers (ASDs) prepare American National 
Standards (ANSs), a type of VCS.190 Currently, ASDs sponsor more than 11,000  ANSs. ASDs are 
obliged to adhere to due process requirements for the preparation, approval, revision, reaffirmation, 
or withdrawal of ANSs (the "ANSI Essential Requirements") to maintain their accreditation with 
ANSI.191 In essence, suitable media should be  used to facilitate broad participation; the process 
should be open to all those affected directly and materially by the activity; the ASD should balance 
the interests of stakeholders, and guard against the dominance by any single interest category, 
indivi dual, or organization; exercise coordination and harmonization to resolve potential conflicts; 
have a readily available procedural appeals mechanism; reach decisions by consensus; and comply 
with ANSI's patent policy. ANSs may relate to products, processes , services, systems, or personnel. 
The majority of the standards developed are voluntary consensus standards, but there are also a 
growing number of consortia standards being developed in the technology space, which may have 
more narrow participation and w ork on an accelerated development t ime frame to meet market 
needs.  
3.173.   The basic legal framework for the preparation and adoption of standards and technical 
regulations includes the Trade Agreements Act of 1979, the Administrative Procedure Act (APA) of 
1947, the National Technology Transfer and Advancement Act (NTTAA) of 1995 (PL 104 -113), U.S. 
Office of Management and Budget (OMB) Circular A -119, and Executive Orders 12866 (Regulatory 
Planning and Review), 13563 (Improving Regulation and Regulatory Review), 1 3609 (Promoting 
International Regulatory Cooperation), 13610 (Identifying and Reducing Regulatory Burdens), 
13771 (Reducing Regulation and Controlling Regulatory Costs) , and 13777 (Enforcing  the Regulatory 
Reform Agenda).  
3.174.   Federal law specifically prohibits  any government agency from engaging in any standards -
related activity that creates unnecessary obstacles to the foreign commerce of the United States .192 
Federal agencies are obliged to ensure that imported goods are treated no less favourably than like 
domestic products in the application of standards -related activities. The NTTAA directs federal 
agencies to rely on the output of voluntary consensus standards bodies to meet their objectives, 
and codifies guidance provided in Circular A -119 whereby federal a gencies are directed to rely on 
VCSs, rather than government unique standards in the elaboration of technical regulations or in their 
procurement, unless such an approach would be inconsistent with law or otherwise impractical.193 
Circular A -119 encourages f ederal regulatory agencies to participate in SDOs.194 
3.175.   In the elaboration of final rules, including those referencing or mandating standards, the 
APA, which generally provides for participation in agency rulemaking through a system of public 
notice and commen t, requires agencies to apply the notice -and-comment process for rulemakings 
and to address substantive comments received from the public, domestic as well as foreign. In 
addition, Executive Order 12866 directs most federal agencies to present draft regula tions that are 
significant to the Office of Information and Regulatory Affairs (OIRA) for review prior to publication. 
An assessment of the costs and benefits of the regulatory action must be presented, together with 
the draft regulation. For regulations d eemed economically significant by the OIRA or the agency 
                                                
190 A listing of ASDs as of 8 June 2018 is available at: 
https://share.ansi.org/Shared%20Documents/Standards%20Activities/American%20National%2 0Standards/A
NSI%20Accredited%20Standards%20Developers/JUNE2018ASD.pdf . 
191 The ANSI Essential Requirements embrace globally -accepted principles of standardization as they are 
implemented, inter alia , by the International Telecommunications Union, the ISO, an d the IEC. The 27 -page 
document setting out the Requirements is available online at: 
https://share.ansi.org/Shared%20Documents/Standards%20Activities/American%20National%20Standards/Pr
ocedures%2C%20Guides%2C%20and%20Forms/ANSI -Essential -Requirements -2018.pdf . 
192 19 USC 2532.  
193 25 federal agencies report annually on their use of government unique standards in lieu of voluntary 
consensus standards to the USDOC which, in turn, provides a summary to the OMB. The 20th Annual Report, 
summarizing developments in FY2016, is available at: 
https://nvlpubs.nist.gov/nistpubs/ir/2017/NIST.IR.8189.pdf . 
194 The OMB published a revision of Circular A -119 in January 2016. The revision took account of 
regulatory developments since 1998, including the increasingly easy a ccess to and online availability of 
information, and the timely updating of standards using a retrospective review mechanism (as set out in 
Executive Orders 13563 and 13610).  WT/TPR/S/ 382 • United States  
 
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  itself, the requirement includes in -depth cost -benefit analysis of alternative regulatory 
approaches.195 
3.176.   Part of the USDOC, the National Institute of Standards and Technology (NIST) is a non -
regulatory  federal agency promoting U.S. innovation and industrial competitiveness by advancing 
measurement science, standards, and technology in ways that enhance economic security and 
improve quality of life. The NTTAA directs the NIST to coordinate public and pri vate sector conformity 
assessment activities, to eliminate unnecessary duplication. Procedures for accreditation of 
conformity assessment bodies vary according to  the particular standard or technical regulation.  U.S. 
requirements generally follow the ISO C ouncil Committee on Conformity Assessment (CASCO) 
standards.  
3.177.   The Standards Coordination Office (SCO) of the NIST serves as the enquiry point and 
notification authority for the United States under the WTO Agreement on Technical Barriers to Trade 
(TBT Agreem ent). All notifications of other WTO Members are disseminated to domestic 
stakeholders, and they are provided opportunities to review and comment on proposed foreign 
technical regulations and conformity assessment procedures via Notify U.S., a free, web -based email 
registration service. Comments and queries received from other WTO Members on notified proposed 
U.S. measures are forwarded to the relevant domestic regulatory authority within three business 
days. The SCO received 60 information requests in 2017 , and a further 36 in the first seven months 
of 2018.  
3.178.   The United States  provided 442 TBT notifications concerning proposed and final measures 
to the WTO in 2016, and 295 in 2017. They cover federal measures as well as technical regulations 
and conformity a ssessment procedures proposed at the state level consistent with U.S. obligations 
under the TBT Agreement. The United States submitted 58 regular notifications (88 overall) 
concerning technical regulations of state -level authorities in 2016, and 9 regular (60 overall) 
notifications in 2017. In the first six months of 2018, the United States provided 31 notifications 
relating to the activities of state bodies (Article 3.2 of the TBT Agreement), 6 of whom related to 
proposed conformity assessment procedures ( Article 7.2). No dispute settlement proceedings were 
initiated against the United States with reference to the TBT Agreement during the period under 
review. A total of f our specific trade concerns relating to measures maintained by the United States 
were r aised in the TBT Committee during t he period under review. During the same period, t he 
United States used the TBT Committee to raise or support 67 new specific trade concerns regarding 
measures maintained by other Members , in areas such as: labelling, part icularly for consumer 
goods; restrictive conformity assessment practices; and requirements for information technology 
and cybersecurity p roducts. 
3.179.   The NIST also operates the U.S. inquiry point for NAFTA and provides technical background 
for the resolution of potential issues related to standards and conformity assessment between 
Canada,  Mexico, and the United States.  
3.180.   The Asia -Pacific Economic Cooperation (APEC)'s Sub -Committee on Standards and 
Conformance (SCSC) and numerous Specialist Regional Bodies (SRBs ) work closely with the 21 
member economies to promote APEC's agenda for the liberalization and facilitation of trade and 
investment, including the design of practical programmes to promote the development of technical 
infrastructure.196 Many bilateral FTAs concluded by the United States incorporate provisions 
reaffirming the adherence to obligations under the TBT Agreement as well as the Decision of the TBT 
Committee of 13 November 2000; acceptance of conformity assessment procedures; jo int work on 
standards, technical regulations, and conformity assessment proced ures; and information exchange.  
3.181.   The United States has concluded mutual recognition agreements (MRAs) with numerous 
foreign partners. In the area of telecommunications equipment, MRAs have been signed with 
                                                
195 Executive Order 12866 defines economically significant regulatory action as any  regulatory action 
likely to result in a rule that may " have an annual effect on the economy of US$100 million or more or  
adversely affect in a material way the economy, a sector of the economy,  productivity, competition, jobs, the 
environment, public heal th or safet y, or State, local, or tribal governments or communities ." Federal Register 
online information. Viewed at: http://www.archives.gov/federal -register/executive -orders/pdf/12866.pdf . 
196 These SRBs include the Asia -Pacific Laboratory Accreditation Cooperation (APLAC), the Asia -Pacific 
Legal Metrology Forum (APLMF), the Asia -Pacific Metrology Program (APMP), the Pacific Accreditation 
Cooperation (PAC), and the Pacif ic Area Standards Congress (PASC).  WT/TPR/S/ 382 • United States  
 
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  Australia; Canada; Chinese Taipei; Europe (EU/EFTA); Hong Kong, China; Israel; Japan; Korea, 
Republic of; Malaysia; Mexico; New Zealand; Singapore; and Viet Nam.  These telecom MRAs 
establish procedures enabling the Parties to rec ognize each other's competent conformity 
assessment bodies (CABs), and then to accept the conformity assessment results of those CABs for 
regulatory purposes. Foreign MRA partners designate their qualified accredited CABs (testing 
laboratories and/or certi fication bodies) to the Federal Communication Commission (FCC). In the 
United States, the NIST (through the MRA Program Office) designates qualified U.S. CABs (testing 
laboratories, certification bodies, and/or Notified Bodies in the case of the European U nion) to the 
relevant MRA partners for recognition.197 The United States has signed separate MRAs with the EU 
(2004) and EFTA States (200 6) for marine safety equipment.  
3.3.3   Sanitary and phytosanitary (SPS) requirements  
3.182.   The United States has numerous laws and reg ulations pertaining to food safety, animal 
health, and plant health. The promulgation of the Food and Drug Administration (FDA) Food Safety 
Modernization Act (FSMA) in 2011 (P.L. 111 -353) represented a major and long -awaited update in 
the oversight of food  safety.198 The FSMA was accompanied by the issuance of seven key 
implementing regulations during 2015 and 2016, as well as four supplementary regulations, 
following a period of extensive public comment and review. Other major long -standing pieces of SPS 
legislation include the Federal Food, Drug and Cosmetic Act (including the FSMA amendments), the 
Federal Meat Inspection Act, the Poultry Products Inspection Act, the Egg Products Inspection Act, 
the Plant Protection Act, the Animal Health Protection Act, and  the Federal Insecticide, Fungicide, 
and Rodenticide Act.  
3.183.   Responsibilities for SPS matters are allocated among several federal agencies depending on 
the nature of the product and the element of risk. Food is generally regulated by the FDA, except 
for meat,  poultry, Siluriformes  fish and fish products (catfish), and processed egg products, which 
fall under the responsibility of the U.S. Department of Agriculture (USDA) Food and Safety Inspection 
Service (FSIS). Other areas of FDA supervision and authority in clude food additives, dietary 
supplements, human and veterinary drugs, medical devices, human biologics, tobacco, and 
cosmetics. Within the USDA, the FSIS ensures that commercial supplies, including imports, of meat, 
Siluriformes  fish and fish products (ca tfish), poultry, and egg products are wholesome, safe, and 
properly labelled and packaged. Imported goods are required to be produced under conditions 
equivalent to the level of protection applicable in the United States. The Animal and Plant Health 
Inspec tion Service (APHIS) at the USDA promotes and defends agricultural health, including 
protection against plant and animal diseases and pests. While both APHIS and FSIS responsibilities 
apply to imported goods, the APHIS safeguards against animal and plant h ealth risks, whereas the 
FSIS ensures that food safety requirements are enforced. The Environmental Protection Agency 
(EPA) is responsible, inter alia , for the registration of pesticides (including herbicides and fungicides), 
and the establishment of toler ances, i.e. maximum residue limits, for pesticides in food. Other 
federal agencies involved in SPS issues include CBP, the Agricultural Marketing Service, the 
Agricultural Research Service, the National Institute of Food and Agriculture (USDA), the Centers  for 
Disease Control and Prevention (Department of Health and Human Services), the National Marine 
Fisheries Service (Department of Commerce), and the Alcohol and Tobacco Tax and Trade Bureau 
(Department of Treasury).  
3.184.   The International Regulations and Stan dards Division at the USDA Foreign Agricultural 
Service operates the national enquiry point and notification authority under the WTO SPS 
Agreement. The United States submitted 159 regular SPS notifications to the WTO in 2016; 88 in 
2017; and 41 in the firs t half of 2018 (including addenda or corrigenda to earlier regular 
notifications). During the period under review, a total of two  new specific trade concerns have been 
raised in the WTO Committee on Sanitary and Phytosanitary Measures  relating to measures 
maintained by the United States . During the same period, the United States used the SPS Committee 
to raise five new specific trade concerns regarding measures maintained by other Members , in areas 
such as hazard -based pesticide regulations; delays in prema rket approvals for the products of 
                                                
197 Further details regarding these agreements and arrangements are available at: 
https://www.nist.gov/standard sgov/requirements -nist-designation -us-conformity -assessment -bodies . 
198 Box III.1 in WTO document WT/TPR/S/275/Rev.1, 12 February 2013, provides an overview of the 
principal elements of the Act.  WT/TPR/S/ 382 • United States  
 
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  biotechnology; and, import bans on animals and animal products deemed inconsistent with OIE 
international standards . 
3.185.   Under the FSMA, the Foreign Supplier Verification Program (FSVP) Rule requires U.S. -based 
food importers  to establish FSVPs for the products (human or animal food) that they bring into the 
United States.199 An FSVP must be developed for each type of product and each foreign supplier, to 
confirm that the imported food is produced with the same level of health p rotection as that provided 
by the United States, which includes preventive controls and produce safety regulations, and that 
the goods have not been adulterated or misbranded. Risk -based supplier verification may be effected 
by various means, including ann ual on -site audits, sampling and testing, or verification of the 
supplier's food safety records. As of June 2018, the FSVP Importer List, maintained by the FDA, 
contained more than 46,000 entries. However, the inclusion of an establishment in the List does  not 
constitute approval or endorsement by the FDA of the listed importer.  
3.186.   The FDA published its final rule regarding the Accreditation of Third -Party Certification Bodies 
to Conduct Food Safety Audits and to Issue Certifications ("Accreditation Third -Party Certification 
Rule") in November 2015.200 A voluntary certification programme allows "accreditation bodies", 
which may be foreign government agencies or private entities, to seek recognition by the FDA to 
obtain the authority to accredit third -party "certi fication bodies", also known as third -party auditors. 
The certification bodies, in turn, conduct consultative and/or regulatory food safety audits, and issue 
certifications to eligible food producing entities. The FDA issued a guidance document describing the 
standards for the accreditation of third -party certification bodies ("Model Accreditation Standards") 
in December 2016.201 The FDA launched a website where organizations could apply for recognition 
as accreditation bodies on 21 June 2017.202 To date, the F DA has recognized three accreditation 
bodies: ANSI; the American National Accreditation Bureau (ANAB); and the National Bureau of 
Agricultural Commodity and Food Standard (ACFS).  
3.187.   U.S. importers may use facility certifications of foreign suppliers to make t hem eligible for 
participation in the Voluntary Qualified Importer Program (VQIP), an expedited review and entry 
programme for food.203 Although the FDA opened its VQIP application portal in January 2018, no 
applications were received  before the end of thi s year's application period (31  May), as the process 
to issue accreditations to third -party auditors (who could then begin the certification of facilities) 
was still ongoing.  
3.188.   On 9 March 2018, the FDA announced a proposal to recognize as equivalent the shellf ish 
control systems of Spain and the Netherlands, based on those countries' implementation of EU food 
safety controls for bivalve molluscan shellfish.204 The determinations would conclude that the control 
systems in Spain and the Netherlands achieve at least  the same level of public health protection 
provided by U.S. controls for bivalve molluscan shellfish, administered through the National Shellfish 
Sanitation Program. Following the FDA's announcement, it received 25 comments which will be taken 
into accoun t as the FDA prepares its final equivalence determination to be published in a second 
Federal Register notice.  
3.189.   The FDA is working with the food safety authorities of Mexico to ensure the safety of fresh 
and minimally processed produce. A progress report o n the USFDA -Mexico Produce Safety 
Partnership was released in June 2018.205 
                                                
199 FSVPs for Importers of Food for Humans and Animals, 80 FR 742 25. Notified to the WTO (document 
G/SPS/N/USA/2569/Add.3, 16 November 2015).  
200 80 FR 74569. The notification to the WTO was circulated in document G/SPS/N/USA/2570/Add.4, 
16 November 2015.  
201 81 FR 88099.  
202 Applications are received through the FDA Industry Systems. Viewed at: 
https://www.access.fda.gov/ . 
203 Importers need to meet certain eligibility criteria and pay a user fee to participate in the  program . 
The fee  is collected to cover the FDA's costs in administering the VQIP.  
204 83 FR 10487.  
205 FDA online information. Viewed at: 
https://www.fda.gov/F ood/InternationalInteragencyCoordination/InternationalCooperation/ucm610841.htm . WT/TPR/S/ 382 • United States  
 
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  3.3.4   Competition policy  
3.3.4.1   Competition policy framework  
3.190.   The competition policy framework has been well established in the United States for many 
years. The federal competition (antitrust) legislation consists of three core laws: the Sherman Act 
(1890), which limits agreements in restraint of trade, and bars abu se of monopoly ; the Clayton Act 
(1914), which prohibits mergers and acquisitions that lessen competition ; and the Federal Trade 
Commission Act (1914, FTC Act), which prohibit s mainly unfair methods of competition and unfair 
or deceptive acts in or affectin g commerce.206 In addition, under the Hart -Scott-Rodino Antitrust 
Improvements Act of 1976 (HSR) , parties to certain mergers and acquisitions must file pre -merger 
notifications and await government review before closing their deals. The HSR provides the fede ral 
agencies the opportunity to review the antitrust issues presented by certain acquisitions of assets, 
non-corporate interests or voting securities.207 
3.191.   Federal antitrust laws apply to foreign conduct that has a substantial and intended effect in 
the United  States. Title IV  of the Export Trading Company Act (1982), also known as the Foreign 
Trade Antitrust Improvement Act of 1982 or the FTAIA, clarifies the application of the Sherman Act 
and the FTC Act to conduct involving non -import foreign commerce . Under  the FTAIA, these  laws 
are not applicable to conduct involving foreign trade (other than import trade) unless such conduct 
has a direct, substantial, and reasonably foreseeable effect: (a) on trade , which is not with foreign 
nations ; (b) on import trade with foreign nations; or  (c) on export trade with foreign nations, of a 
person engaged in such trade or commerce in the United States; and such effect gives rise to a 
claim under the provisions of the Sherman Act or the FTC Act . 
3.192.   Government  institutions , including those engaging in  commercial activity, are exempted 
from federal antitrust legislation unless statute clearly provides otherwise .208 Limited immunity also 
applies , by way of example,  to specific aspects of agriculture, fisheries, shipping, and insurance. In 
relation to international trade, the Webb -Pomerene Export Trade Act may allow associations of 
otherwise competing businesses to engage in the collective exports of goods , provided there are no 
anti-competitive effects or injury to competitors within the United States. The Export Trading 
Company Act (1982) also creates a procedure whereby persons engaged in export may obtain, under 
certain circumstances, an export  trading certificate of review (ETCR) providing , inter alia , for limite d 
antitrust immunity.209 The Shipping Act  (1984) allows international ocean carriers to engage in 
pricing arrangements (liner conferences ) that are filed with the Federal Maritime Commission , unless 
these are contested by that Commission.  
3.193.   Enforcement of fede ral antitrust laws is entrusted to the Antitrust Division of the Department 
of Justice (DOJ) and Federal Trade Commission (FTC).210 Private parties,  typically acting on their 
own behalf or o n behalf of an affected group, can also bring actions by seeking dam ages for harms 
resulting from anti -competitive conduct (see below). Overall, public and private enforcement work 
                                                
206 Section 5 of the Federal Trade  Commission Act (1914) 15 USC. Viewed  at: 
https://www.law.cornell.edu/uscode/text /15/45 . 
207 Getting the Deal Through, United States: Merger Control  (2018). Viewed at: 
https://gettingthedealthrough.com/area/20/jurisdiction/23/merger -control -united -states/ . 
208 Additionally, the judicially -created "state action doctrine" exempts anti -competitive conduct by state 
bodies and municipalities authorized by a clearly articulated state policy or law, as well as private parties as 
long as they have legal authorization and are actively supervised by the State. For a recent case involving 
questi ons of foreign state action, see Supreme Court of the United States , Animal Science Products, Inc. et al, 
v. Hebei Welcome Pharmaceutical Co. Ltd., et al.  (2018) . Decided on 14 June 2018. Viewed at: 
https://www.supremecourt.gov/opinions/17pdf/16 -1220_3e04.pdf . 
209 Persons named in the ETCR obtain limited immunity from suit , under both federal and state antitrust 
laws, for activities that are specified in the certificate and that comply with the terms of the certificate. To 
obtain an ETCR, an applicant must show that p roposed export conduct will: (a) result in neither a substantial 
lessening of competition or restraint of trade within the United States , nor a substantial restraint of the export 
trade of an y competitor of the applicant; (b)  not unreasonably enhance, stabilize, or depress prices in the 
United States of the class of goods or servic es covered by the applicat ion; (c)  not constitute unfair methods of 
competition against competitors engaged in the export of the class of goods or services exported by th e 
applicant; and (d) not include any act that may reasonably be expected to result in the sale for consumption o r 
resale in the United States of such goods or services. As of September 2016 , 47 certificate groups we re 
reporting information to the USDOC . 
210 Federal Trade Commission  (FTC)  official webpage. Viewed at: https://www.ftc.gov/reports/annual -
highlights -2017/introduction . WT/TPR/S/ 382 • United States  
 
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  in a complementary manner.211 State antitrust enforcement is normally done under specific state 
statutes.  
3.194.   The DOJ prosecutes violations of the antitrust laws by: (i)  filing criminal  information or 
indictment  for per se  violations, such as price fixing, bid rigging, and market allocation, that can 
lead to large fines or jail sentences; and (ii) suing to  forbid future v iolations of the law and/or 
requiring steps to remedy the anti -competitive effects of past violations.212 The FTC has exclusive 
responsibility for pursuing anti-competitive conduct that violates Section 5 of the  FTC Act, and joint 
authority (with the Antitru st Division) over the enforcement of the Clayton Act and its amendment  
by the Robinson -Patman Act . While both agencies have jurisdiction to enforce antitrust laws in 
relation to merger control, only one will review a  particular transaction , and the choice of agency 
will depend on the basis of the agency's relative familiarity with the industry or companies 
involved.213 A well -established system of cooperation exists , where competencies ov erlap between 
the two agencies.  
3.195.   Private enforcement in the U nited States plays a bigger role than in other jurisdictions . 
Private plaintiffs can seek treble damages for violations of antitrust laws under Section 4 of the 
Clayton Act , which  create s an economic incentive for private parties to undertake antitrust 
litigation.214 Federal la w limits  standing to bring a private lawsuit to direct purchasers and rivals who 
suffer antitrust injury. Indirect purchasers may seek injunctive relief, but may not bring private 
antitrust suits for damages under federal law.  Though some state antitrust claims can be heard in 
state courts, they may be removed to a federal court if they supplement a federal claim.215 In recent 
years, private antitrust litigation in the U nited States has declined.216 
3.3.4.2   Enforcement developments during the review pe riod 
3.196.   According to the 2016 Annual Report of the Director of the Administrative Office of the U.S. 
Courts, 853 new civil antitrust actions - both government and private - were filed in the  federal 
district courts in FY2016 .217 In that same time period, t he Antitrus t Division charged 52 individuals, 
including 1 1 auto parts executives and 1 6 real estate investors, with criminal antitrust offenses. 
Twenty -two individuals were sentenced to serve time in jail for an average of 11 months. The 
Division also obtained more t han US$399 million in criminal fines and penalties.218 For additional 
informatio n on corporate fines, see Table 3.17 . 
3.197.   The Antitrust Division has also devoted substantial resources to individual prosecutions and 
sentencings in criminal antitrust proceedings, resulting in 30 individuals sentenced to prison terms  
in 2017 , the highest number of individual prison terms imposed since 2012. Many of the Division's 
individual convictions were the result of investigations into anti -competitive conduct at public real 
estate foreclosure auctions.219 Nine criminal cases went to trial, the largest number of criminal 
Antitrust Division trials in modern criminal antitrust enforcement.  
3.198.   With regard to merger review, in FY2017 , 2,052 transactions were reported under the Hart -
Scott-Rodino Act, representing about a 12.0% increase from the 1,832 transactions reported in 
                                                
211 OECD (2015), Working Party No. 3 on Co -operation and Enforcement, Relationship between public 
and private antitrust enforcement . Viewed  at https://www.ftc.gov/system/files/attachments/us -submissions -
oecd-other -international -competition -fora/publicprivate_united_state s.pdf. 
212 United States Department of Justice  (DOJ) , Antitrust Division: Mission. Viewed at: 
https://www.justice.gov/atr/mission . 
213 Getting the Deal T hrough, United States: Merger Control  (2018). Viewed at: 
https://gettingthedealthrough.com/area/20/jurisdiction/23/merger -control -united -states/ . 
214 Hawaii v. Standard Oil Co., 405 U.S. 251,  262 (1972).  
215 Getting the Deal T hrough, United States: Private Antitrust Litigation  (2018). Viewed  at: 
https://gettingthedealthrough.com/ area/27/jurisdiction/23/private -antitrust -litigation -united -states/ . 
216 Getting the Deal T hrough, United States: Private Antitrust Litigation  (2018). Viewed  at: 
https://gettingthedealthrough.com/area/27/jurisdiction/23/private -antitrust -litigation -united -states/ . 
217 United States Courts (2017), 2016 Annual Report of the Director of the Administrative Office of the 
U.S. Courts , Table C -2A. Viewed at: http://www.uscourts.gov/statistics/table/c -2a/judicial -business/ 
2016/09/30 .  
218 United States Courts (2017),  2016 Annual Report of the Director of the Administrative Office of the 
U.S. Courts, table C -2A. Viewed at: http://www.uscourts.gov/statistics/table/c -2a/judicial -business/ 
2016/09/30 . 
219 DOJ Antitrust Division, Division Update Spring 2018 , p. 17. Viewed at: 
https://www.justice.gov/file/1053036/download . WT/TPR/S/ 382 • United States  
 
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  FY2016.220 Moreover, the FTC's Premerger Notification Office (PNO) continued to respond to 
thousands of questions seeking information about the reportability of transact ions under the Hart -
Scott-Rodino Act, and the details involved in completing and filing the N otification and Report Form , 
a trend that follows from FY2016.221 
Table 3.17 Sherman Act violations yielding a corporate fine of US$10 million or more in 
FY2016, 2017 and 2018  
FY Defendant  Product  Fine 
(US$ million)  Country  
2016 Nishikawa Rubber Co., Ltd.  Automotive body sealing brake 
[fluid] hoses for automobiles  130 Japan  
2016 Wallenius Wilhelmsen 
Logistics AS  Ocean shipping roll on, roll off 
cargo – deep sea freight 
transportation  98.9 Norway  
2016 Corning International 
Kabushiki Kaisha  Ceramic substrates used in the 
emission control systems of 
automobiles  66.5 Japan  
2016 NGK Insulators, L td. Automobile parts 65.3 Japan  
2016 Kayaba Industry Co., Ltd, 
d/b/a KYB Corporation  Automobile parts - shock 
absorbers  62 Japan  
2016 NEC Tokin Corporation  Capacitors  13.8 Japan  
2017 Citicorp  Foreign currency exchange  925 United States 
2017 Barclays, PLC  Foreign currency exchange  650 United Kingdom  
2017 JP Morgan Chase and Co. Foreign currency exchange  550 United States  
2017 Royal Bank of Scotland  Foreign currency exchange  395 Scotland (U nited 
Kingdom ) 
2017 Hitachi Automotive Systems,  
Ltd. Automobile parts - shock 
absorbers  55.4 Japan  
2017 Bumble Bee Foods, LLC  Packaged seafood  25 United States  
2017 Rubycon Corporation  Capacitors  12 Japan  
2018 BNP Paribas USA, Inc.  Foreign currency exchange  90 United States  
2018 Nichicon Corporation  Capacitors  54.6 Japan  
2018 Hoegh Autoliners AS  Ocean shipping roll on, roll off 
cargo – deep sea freight 
transportation  21 Norway  
2018 Maruyasu Industries Co., 
Ltd. Automobile  parts – steel tubes 12 Japan  
Source:  Antitrust Division, Sherman Act Violations Yielding a Corporate Fine of US$10 Million or More. 
Viewed  at: https://www.justice.gov/atr/sherman -act-violations -yielding -corporat e-fine-10-million -
or-more. 
3.199.   During 2017, the FTC brought 21 merger enforcement challenges, including : 14 in which it 
accepted consent orders for public comment, all of which resulted in final orders; 6 in which the 
transaction was abandoned or restructured as a result of antitrust concerns raised during the 
investigation; and 1 in which the FTC initiated administrative or federal court litigation. In the same 
year, t he Antitrust Division challenged 18 merger transactions, including 11 cases in which it filed  
complaints in  U.S. District Court. In nine of these cases , the Division simultaneously filed a proposed 
settlement. In six of the challenges not subject to court proceedings, the parties abandoned the 
proposed transaction, and in one case, the parties res tructured the transaction to resolve the 
Division's concerns.222 
3.200.   DOJ public merger investigations and challenges during the review period include d, among 
others, the Anheuser -Busch InBev/SABMiller USm107 billion acquisition - the biggest beer merger 
                                                
220 FTC Bureau of Competition and DOJ Antitrust Divis ion (2018), Hart-Scott-Rodino Annual Report 
Fiscal Year 2017 . Viewed at: https://www.ftc.gov/system/files/documents/reports/federal -trade -commission -
bureau -competition -department -justice -antitrust -division -hart-scott-
rodino/p110014_fy_2017_hsr_report_final_april_2018.pdf . 
221 FTC Bureau of Competition and DOJ Antitrust Division (2018), Hart-Scott-Rodino Annual Report 
Fiscal Year 2017 . Viewed at: https://www.ftc.gov/system/files/documents/reports/federal -trade -commission -
bureau -competition -department -justice -antitrust -division -hart-scott-
rodino/p110014_fy_2017_hsr_report_ final_april_2018.pdf . 
222 FTC and DOJ Antitrust Division (2017),  Hart-Scott-Rodino Annual Report Fiscal Year 2016, p. 3. 
Viewed at: https://www.ftc.gov/system/files/documents/reports/federal -trade -commission -bureau -
competition -department -justice -antitrust -division -hart-scott-rodino/p110014_fy_ 2016_hsr_report_ 
final_october_2017.pdf . WT/TPR/S/ 382 • United States  
 
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  in histo ry - cleared in July 2016 following a settlement; and the DOW/DuPont merger, cleared in 
June 2017 after the parties reached an agreement to divest multiple crop protection assets and two 
petrochemical products.223 
3.201.   In November 2017, the DOJ filed a lawsuit challenging AT&T's acquisition of Time Warner , 
valued at US$106 billion , arguing that the proposed merger could have significant anti -competitive 
effects.224 In June 2018, the District Court allowed the merger without conditions .225 Although the 
Court accepted the Government 's proposed product and geographic markets, it held that the 
Government had not shown that the merger was reasonab ly likely to harm competition. The 
Government appealed this decision.  
3.202.   In May 2018 , the DOJ secured a negotiated merger divestiture in connection with  Bayer's 
Acquisition of Monsanto. Besides divestiture of certain businesses , the settlement also required the 
divestiture of certain IP and research capabilities, including "pipeline" R&D projects , in order to 
resolve horizontal and vertical competition concerns.226 
3.203.   In civil non -merger enforcement cases, in October 2016, the D OJ announced that , from that 
point forward, it intended to proceed criminally against naked no -poach and wage -fixing agreements 
between employers .227 In this regard, on 3 April 2018, the Antitrust Division filed a civil antitrust 
lawsuit, simultaneously with a civil settlemen t, against Knorr -Bremse AG and Westinghouse Air 
Brake Technologies Corp. The complaint alleges that these and a third company, Faiveley, reached 
naked no -poach agreements, in violation of Section 1 of the Sherman Act.228 The conduct in that 
matter was resolv ed by civil action because the companies withdrew from the no -poach agreements 
before October 2016.  
3.204.   In March 2017, the D OJ reached a settlement prohibiting D irecTV and its parent corporation, 
AT&T, from sharing confidential, forward -looking information wi th competitors.229 
3.205.   During the review period, t he U.S. Courts of Appeals heard and decided antitrust cases 
related to pharmaceutical reverse patent settlements. In 2016 , the First Circuit decided , in In re 
Loestrin 24 FE Antitrust Litigation , that non -monetar y reverse payments made by a patent owner to 
generic manufacturers to settle patent litigation are also subject to antitrust scrutiny.230 In In re 
                                                
223 "Justice Department Requires Divestiture of Certain Herbicides, Insecticides, and Plastics Businesses 
in Order to  Proceed with Dow -DuPont Merger" . DOJ News Release, 15 June 2017. Viewed at: 
https://www.justice.gov/opa/pr/justice -department -requires -divestiture -certain -herbicides -insecticides -and-
plastics . 
224 "Justice Department Challeng es AT&T/DirecTV 's Acquisition of Time Warner" . DOJ News R elease, 20 
November 2017. Viewed  at: https://www.justice.gov/opa/pr/justice -department -challenges -attdirectv -s-
acquisition -time-warner . 
225 U.S. District Court Judge Richard Leon Opinion, 12 June 2018. Viewed at : 
http://www.dcd.uscourts.gov/sites/dcd/files/17 -2511opinion.pdf . 
226 "Justice Department Secures Largest Negotiated Merger Divestiture Ever to Preserve Competition 
Threatened by Bayer's Acquisition of Monsanto" . DOJ News R elease , 29 May 2018. Viewed  at: 
https://www.justice.gov/opa/pr/justice -department -secures -largest -merger -divestiture -ever-preserve -
competition -threatened . 
227 A no-poach agreement involves an agreement with another company not to compete for each other's 
employees, such as by not soliciting or hiring them. A wage -fixing agreement involves an agreement with 
another company regarding employees' salaries or other te rms of compensation, either at a specific level or 
within a range. No -poach agreements are naked if they are not reasonably necessary to any separate, 
legitimate business collaboration between the employers. Naked no -poach and wage -fixing agreements are per 
se unlawful because they eliminate competition in the same way as agreements to fix product prices or allocate 
customers.  DOJ online information. Viewed at: https://www.justice.gov/atr/division -operations/division -
update -spring -2018/antitrust -division -continues -investigate -and-prosecute -no-poach -and-wage -fixing -
agreements . 
228 DOJ Antitrust Divisi on, Division Update Spring 2018 . Viewed at: 
https://www.justice.gov/file/1053036/download . 
229 OECD, Directorate for Financial and Enterprise Affairs Competition Committee  (2017), Annual Report 
on Competition Policy Developments in the United States , pp. 6-9. Viewed at: 
https: //www.ftc.gov/system/files/attachments/us -submissions -oecd-other -international -competition -
fora/annual_report_united_states.pdf . 
230 Thereby following the Supreme Court's decision in FTC v. Actavis, Inc ., 570 U.S. ___, 133  S. Ct. 
2223 (2013).  WT/TPR/S/ 382 • United States  
 
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  Nexium (Esomeprazole) Antitrust Litigation , the Court re -affirmed the decision that reverse 
payments may take t he form of non -monetary conveyances.231 
3.3.4.3   Policy developments  
3.206.   According to recent official statements, when the DOJ challenges a merger, it requires 
structural remedies, not behavioural remedies, to ensure the Federal Government does not have an 
inappropriate role in market place competition.232 The Antitrust Division's approach on  behavioural 
remedies will be to accept such commitments , particularly in merger cases , only when a high degree 
of confidence exists that the remedy itself does not usurp regulatory fun ctions for law enforcement, 
in addition to fully protecting U.S. consumers and the competitive process. This reflects a view that 
behavioural remedies should not s upplant competition with regulation.233 
3.207.   The interface of antitrust with IP will be a particular  focus of attention.234 With respect to  IP, 
the current approach to competition enforcement is shaped by , and places a particularly strong 
emphasis on , the dynamic power of innovation. The DOJ has pledged to seek a more symmetric 
balance between IP and compe tition law  by which, while  the application of competition laws to the 
exercise of IP rights is to be supported, enforcers should give particular attention and weight to the 
forces that drive innovation, including by allowing innovators to reap the full rewards of their 
investments in R&D.235 A new approach has been proposed  in relation to standard essential patents , 
the so -called "New Madison" approach . This appr oach aims at ensuring that: (i)  patent holders have 
adequate incentives to innovate and cr eate new technologies; and (ii)  licensees have the appropriate 
incentives to implement them. In addition, the Antitrust Division will adopt an evidence -based 
approach in applying antitrust law equally to both innovators who develop and implementers who 
use technological standards in innova tion industries.236 
3.208.   As part of a larger effort to streamline and improve the Antitrust Division's use of consent 
decrees, the Division has identified nearly 1,300 longstanding judgments still in effect. It has 
announced that it is currently reviewing these decrees, and addressing any that no longer serve the 
public interest and are appropriate for termination.237 
3.209.   The FTC and the DOJ have undertaken to promote international cooperation and 
convergence toward best practices in antitrust enforcement and policy. T his includes work in the 
multilateral fora (in coordination with the International Competition Network) as well as further 
efforts to develop strong bilateral relationships with other competition agencies, emphasizing 
                                                
231 OECD, Directo rate for Financial and Enterprise Affairs Competition Committee (2017), Annual Report 
on Competition Policy Developments in the United States , p. 9. Viewed at: 
https://www.ftc.gov/system/files/attachments/us -submissions -oecd-other -international -competition -
fora/annual _report_united_states.pdf , p. 9.  
232 "Assistant Attorney General Makan Delrahim Keynote Address at the American Bar Association's 
Antitrust Fall Forum, DOJ News Release, 16 November 2017. Viewed at: 
https://www.justice.gov/opa/speech/assistant -attorney -general -makan -delrahim -delivers -keynote -address -
american -bar. 
233 "Assistan t Attorney General Makan Delrahim Keynote Address at the American Bar Association's 
Antitrust Fall Forum ", DOJ News Release, 16 November 2017. Viewed at: 
https://www.justice.gov/opa/speech/assistant -attorney -general -makan -delrahim -delivers -keynote -address -
american -bar. 
234 Assistant Attorney General Makan Delrahim Keynote Address at Universi ty of Pennsylvania Law 
School, The "New Madison " Approach to  Antitrust and Intellectual Property Law, DOJ News Release, 16 March 
2018. Viewed at: https://www.justice.gov/opa/speech/assistant -attorney -general -makan -delrahim -delivers -
keynote -address -university . 
235 Assistant Attorney General Makan Delrahim  Delivers  Remarks at  the U.S. Embassy in Beijing, 
Competition, Intellectual Pr operty, and Economic Prosperity . DOJ News Release, 1 February 2018.  Viewed at: 
https://www.justice.gov/opa/speech/assistant -attorney -general -makan -delrahim -delivers -remarks -us-
embassy -beijing . 
236 Assistant Attorney General Makan Delrahim Delivers Keynote Address at Universi ty of Pennsylvania 
Law School, The "New Madison " Approach to  Antitrust and Intellectual Property Law, DOJ News Release, 16 
March 20 18. Viewed at: https://www.justice.gov/opa/speech/assistant -attorney -general -makan -delrahim -
delivers -keynote -address -university . 
237 "Assistant Attorney General Makan Delrahim Delivers Remarks at the Antitrust Division's Second 
Roundtable on Competition and Deregulation" , DOJ News Release, 26 April  2018. Viewed at: 
https://www.justice.gov/opa/speech/assistant -attorney -general -makan -delrahim -delivers -remarks -antitrust -
divisions -second . WT/TPR/S/ 382 • United States  
 
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  consumer welfare -based enforcement, go od policies and practices regarding the application of 
antitrust rules to IP, the territorial scope of remedies, and procedural fairness .238 
Box 3.1 The New Madison approach  
"The New Madison approach [...] has four basic premises that are aimed at ensuring that patent holders have 
adequate incentives to innovate and create new technologies, and that licensees have appropriate incentives 
to implement those technologies.  
First, the approach holds that antitrust la w should not be used as a tool to police FRAND commitments that 
patent -holders make to standard setting organizationsa. 
Second, standard setting organizations should not become vehicles for concerted actions by market 
participants to skew conditions for pa tented technologies' incorporation into a standard in favo ur of 
implementers because this can reduce incentives to innovate and encourage patent hold -out. 
Third, because a key feature of patent rights is the right to exclude, standard setting organizations  and courts 
should have a very high burden of proof before they adopt rules that severely restrict that right or  amount to 
a de facto  compulsory licensing scheme.  
Fourth, consistent with the fundamental right to exclude, from the perspective of the antitru st laws, a 
unilateral and unconditional refusal to license a patent should be considered per se  legal."  
a Fair, reasonable, and non -discriminatory (FRAND) commitments are voluntary licensing agreements 
between a standards organization and the owner of an IPR, usually a patent, that is, or may 
become, essential to practice a technical standard (standard -essential patents ). 
Source:  Assistant Attorney General Makan Delrahim Keynote Address at University of Pennsylvania Law 
School, The "New Madison" Approach t o Antitrust and Intellectual Property Law, DOJ News Release, 
16 March 2018. Viewed at: https://www.justice.gov/opa/speech/assis tant-attorney -general -makan -
delrahim -delivers -keynote -address -university . 
3.210.   In a further important development, recently, the U nited States, in partnership with leading 
antitrust agencies around the world, has put forward a new instrument  to promote procedural 
fairness and related values in competiti on law enforcement, namely the Multilateral Framework on 
Procedures in Competition Law Investigation and Enforcement (MFP) . The Framework (jointly 
sponsored by the DOJ  and the FTC)  includes pro cedural commitments that reflect fundamental due 
process rights and considerations. Specifically, it commits participating jurisdictions to important 
due process requirements relating to non -discrimination, transparency, timely resolution, 
confidentiality,  conflicts of interest, proper notice, opportunity to defend, access to counsel, and 
judicial review.239 
3.3.4.4   Legislative and institutional framework deve lopments  
3.211.   In October 2016 , antitrust guidance for human resource (HR) professionals  was issued for 
the first t ime.240 This guidance aims at alerting HR professionals, and others involved in hiring and/or 
compensation decisions , about potential violations of antitrust law,  e.g. in the implementation of 
"no-poaching"  agreements.  It also discusses how antitrust laws ap ply to firms' decisions to share 
sensitive information, such as compensation information, with competing employers, either directly 
or through third -party entities.241 
3.212.   In January 2017, the Antitrust Division, together with the FTC, released revised Antitrust  
Guidelines for International Enforcement and Cooperation . The se now include a new chapter 
                                                
238 Acting Chairman Maureen K. Ohlhausen, " Guidelines for Global Antitrust: The Three Cs – 
Cooperation, Comity, and Constrain ts", International Bar Association, 21st Annual Competition Conference, 
Florence, Italy, 8 September 2017. Viewed at: https://www.ftc.gov/system/files/documents/ 
public_statements/1252733/iba_keynote_address -international_guidelines_2017.pdf . 
239 "Assistant Attorney General Makan Delrahim Delivers Remarks on Global Antitrust Enforcement at 
the Council on Foreign Relatio ns", DOJ News Release, 1 June 2018. Viewed at: 
https://www.justice.gov/opa/speech/assistant -attorney -general -makan -delrahim -delivers -remarks -global -
antitrust -enforcement . 
240 DOJ Antitrust Division , FTC (2016), The Antitrust Guidance for Human Resource Professionals , 
October  2016. Viewed at: https://www.justice.gov/atr/file/903511/download . 
241 FTC and DOJ Release  Guidance for Human Resource Professionals on How Antitrust Law Applies to 
Employee Hiring and Compensation , (2016). Viewed  at: https://www.ftc.gov/news -events/press -
releases/2016/10/ftc -doj-release -guidance -human -resource -professionals -how. WT/TPR/S/ 382 • United States  
 
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  detailing the Agencies' policies and practices regarding case cooperation, investigative tools, 
confidentiality safeguards, and waivers of confidentiality.242 The Guidelines u pdate d the discussion 
of the application of U.S. antitrust law to conduct involving foreign commerce, the Foreign Trade 
Antitrust Improvements Act  (FTAIA) of 1982 , foreign sovereign immunity, foreign sovereign 
compulsion, the act of state doctrine and petitioning of sovereigns, in light of developments in both 
the law and the Agencies' practice.  In addition, the Guidelines stress that the Agencies have 
championed , and will continue to promote , policy engagement that focuses on substantive law, 
enforcement and due process standards that advance consumer welfare based on sound economics, 
procedural fairness, transparency, and non -discriminatory treatment of parties.  
3.213.   Another significant development during the review period was the 2017 update of the 
Antitrust Guidelines for the Licensing of Intellectual Property , issued jointly by the Antitrust Division 
and the FTC. This new version of the IP Guidelines  highlights the benefits of robust IP protection , 
and the impo rtance of innovation incentives.  The Guidelines deal with technology transfer and 
innovation -related issues that typically arise with respect to patents, copyrights, trade secrets, and 
know -how agreements ; they  do not cover the ant itrust treatment of trademarks, which is 
characterized primaril y by product -differentiation issues . The updated Guidelines support three 
principles: (i) that for the purpose of antitrust analysis, the Agencies apply the same analysis to 
conduct involving IP as to conduct involving other forms of property, taking into account the specific 
characteristics of a particular property right; (ii) the Agencies do not presume that IP creates market 
power in the antitrust context; and (iii) the Agencies recognize that IP licensing allows firms to 
combine complementary factors of  production , and is generally procompetitive.243 
3.214.   In January 2017, the Antitrust Division also is sued an updated version of the Frequently 
Asked Questions About the Antitrust Division's Leniency Program and Model Leniency Letters . This 
update , besides clarify ing some answers in light of previous experiences, describes leniency 
application  procedure ; the criteria for receiving leniency under both the corporate and individual 
policies; the potential revocation of the conditional leniency letter ; the issuance of the final 
unconditional leniency letter; and confidentiality  for the leniency applicant . A new feature is the 
description  of the Antitrust Division's approach to "Penalty Plus" , a situation where a company pleads 
guilty to an antitrust offense but fails to  report additional antitrust crimes it was also involved in.244 
3.215.   During the review period , the threshold for premerger notification was adjusted. On 
26 January 2017, the FTC published a notice to reflect adjustment of the reporting thresholds as 
required by the amendments to Section 7A of the Clayton Act  effected in 2000. The size of 
transaction threshold was raised from US$78.2 million to US$80.8 million , effective 27 February 
2017.245 
3.3.4.5   Sectoral coverage  
3.216.   Antitrust activities during the review period have covere d a number of sectors/industries. In 
the healthcare sector, the Antitrust Division, both individually and jointly in coordination with the 
FTC, has raised awareness , through competition advocacy, of the importance of antitrust 
enforcement in the industry, and encouraged federal, state and local governments to consider the 
competitive impact of various healthcare -related legislative and regulatory proposals.246 
Additionally, FTC actions have sought to  promote competition among health care providers , as well 
                                                
242 DOJ and FTC (2017), Antitrust Guidelines for International Enforceme nt and Cooperation , 13 
January. Viewed at: https://www.justice.gov/atr/guidelines -and-policy -statements -0/ant itrust-guidelines -
international -enforcement -and-cooperation -2017. 
243 DOJ and FTC (2017), Antitrust Guidelines for the Licensing of Intellectual Property , 12 January. 
Viewed at: https://www.ju stice.gov/atr/IPguidelines/download . 
244 DOJ (2017), Updated FAQs Provide Answers to the Antitrust  Division's  Leniency Program and Model 
Leniency Letters . Viewed at: https://www.justice.gov/archives/opa/blog/updated -faqs-provide -answers -
antitrust -division -s-leniency -program -and-model-leniency . 
245 FTC B ureau of Competition and DOJ A ntitrust Division (2018), Hart-Scott-Rodino Annual Report 
Fiscal Year 2017 , p. 8. Viewed at: https://www.ftc.gov/system/files/documents/reports/federal -trade -
commission -bureau -competition -department -justice -antitrust -division -hart-scott-
rodino/p 110014_fy_2017_hsr_report_final_april_2018.pdf . 
246 "Deputy Assistant Attorney General Barry Nigro Delivers Keynote Remarks at the American Bar 
Association's Antitrust in Healthcare Conference ", DOJ News Release, 17 Ma y 2018. Viewed at: 
https://www.justice.gov/opa/speech/deputy -assistant -attorney -general -barry -nigro-delivers -keynote -remarks -
american -bar. WT/TPR/S/ 382 • United States  
 
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  as encourage cost containment. The Antitrust Division was successful in blocking two proposed 
mergers that would have reduced the number of large health insurance providers  in the United 
States from five to three.247 In the first of these two cases , in April 2 017, the U .S. Court of Appeals 
affirmed the decision by the U .S. District Court for the District of Columbia to block health insurer 
Anthem, Inc.'s acquisition of Cigna Corp. Anthem abandoned its planned acquisition in May 2017. 
In the second case,  United States v. Aetna , et al ., the D.C. District Court enjoined the proposed 
merger of Aetna and Humana , after concluding that it would likely substantially lessen competition 
in the market for individual Medicare Advantage plans.248 
3.217.   In 2016, the FTC brought its first case challenging an agreement not to market an authorized 
generic against Endo Pharmaceuticals Inc. In 2017, Endo Pharmaceuticals agreed to abandon the 
pay-for-delay agreements249, and to settle the allegations  that it violated antitrust laws by using 
these agreements to block consumers' access to lower -cost generic versions of its top -selling 
branded drugs. In a related matter, the FTC refiled charges against Watson Laboratories, Inc. and 
its former parent, Allergan plc, for illegally blocking a lower -cost generic version of Lidoderm when 
it entered into a pay -for-delay agreement also with Endo.250 The FTC also filed an administrative 
complaint against Impax Laboratories, Inc. for engaging in similar conduct.251 
3.218.   With the aim of promoting competitive energy markets, the FTC required structural 
divestitu res to resolve charges that the proposed merger of energy infrastructure companies 
Enbridge, Inc. and Spectra Energy Corporation would likely reduce natural gas pipeline competition 
in three offshore natural ga s producing areas in the Gulf of Mexico, leading to higher prices for 
natural gas pipeline transportation from those areas.  A settlement was reached between the parties 
in 2017.252 
3.3.5   State trading, state -owned enterprises, and privatization  
3.219.   The incidence of go vernmental authorities owning or controlling enterprises that engage in 
commercial activities is fairly limited. At the federal level, a number of government corporations or 
government -sponsored enterprises generally fulfil public policy objectives or gove rnmental functions 
and their intended purpose is not to compete with private enterprises (Table 3.18). While U.S. states 
possess a general incorporation statute, the Federal Government does not have such powers, and 
each government corporation is chartered  through an act of Congress to perform a public purpose 
with a clear and transparent mandate. Government corporations have a separate legal personality, 
and may receive federal allocations, but they may also have their own sources of revenue.253 
                                                
247 DOJ Antitrust Division, Division Update Spring 2017 . Viewed  at: 
https://www.justice.gov/atr/division -operations/division -update -spring -2017/spot light-litigation . 
248 OECD, Directorate for Financial and Enterprise Affairs , Competition Committee (2017), Annual Report 
on Competition Policy Developments in the United States , pp. 6-9. Viewed at: 
https://www.ftc.gov/system/files/attachments/us -submissions -oecd-other -international -competition -
fora/annual_report_united_states.pdf . 
249 Pay-for-delay agreements are  arrangement to settle  patent infringement litigation, in which the 
company that has brought the suit (patentee ) for patent infringement agrees to pay the company it sued  (the 
alleged infringer ) to stop challenging the validity of the disputed patent.  
250 FTC (2018) , Annual Highlights 2017 , Enforcement . Viewed at: https://www.ftc.gov/reports/annual -
highlights -2017/enforcement . 
251 In May 2018, the Administrative Law Judge (ALJ) , after balancing the anti -competitive harm and 
procompetitive benefits posed by the agreement, dismissed the antitrust charges against Impax. The FTC filed 
an appeal. FTC online information. Viewed at: https://www.ftc.gov/news -events/press -
releases/2018/05/administrative -law-judge -dismisses -ftc-antitrust -complaint . 
252 FTC online information. Viewed at:  https://www.ftc.gov/enforcement/cases -proceedings/161 -
0215/enbridge -spectra -energy . 
253 Title 5 of the US Code (5 U.S.C. 103)  defines a government corporation as a corporation owned or 
controlled by the Government of the United States. The Government Corporation Control Act (31 U.S.C. 9101 -
10) distinguishes between mixed -ownership government corporations and wholly -owned governm ent 
corporations.  WT/TPR/S/ 382 • United States  
 
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  Table 3.18 Government corporations, 2018  
Government corporation  Legal reference  Area of operation  
Commodity Credit Corporation  15 U.S.C. 714  Commodity credit financing  
Community Development Financial Institutions 
Fund 12 U.S.C. 4701  Banking  
Corporation for National and Community 
Service  42 U.S.C. 12651  National and communit y services  
EXIM Bank 12 U.S.C. 635  Export financing  
Federal Crop Insurance Corporation  7 U.S.C. 1501  Agricultural insurance  
Federal Deposit Insurance Corporation  12 U.S.C. 1811  Bank resolution and deposit insurance  
Federal Financing Bank  12 U.S.C. 2281  Financing  
Federal Home Loan Banks  12 U.S.C. Ch. 11  Banking  
Federal Prison Industries (UNICOR)  18 U.S.C. 4121  Prison services  
Financing Corp orationa 12 U.S.C. 1441  Financing  
Government National Mortgage Association  12 U.S.C. 1717  Mortgages  
International Clean Energy Foundation  42 U.S.C. 17352  Foreign assistance for greenhouse gas 
reduction  
Millennium Challenge Corporation  22 U.S.C. 7703  Foreign assistance  
National Credit Union Administration Central 
Liquidity Facility  12 U.S.C. 1795b  Credit unions  
National Railroad Passenger Corporation 
(AMTRAK)  49 U.S.C. 241  Passenger rail services  
Overseas Private Investment Corporation  22 U.S.C. 2191 International investment and financing  
Pension Benefit Guaranty Corporation  29 U.S.C. 1301  Pensions  
Presidio Trust of San Francisco  16 U.S.C. 460bb  Parks and recreation  
Resolution Funding Corporation  12 U.S.C. 1441(b)  Financing and bonds for debt c reated by 
the former Resolution Trust Corporation  
St. Lawrence Seaway Development Corporation  33 U.S.C. 981  Marine transport  
Tennessee Valley Authority  16 U.S.C. 831  Navigation, flood control, electricity, 
certain manufacturing and economic 
development  
U.S. Postal Serviceb 39 U.S.C. 101  Mail services  
Valles Caldera Trust  16 U.S.C. 698 -v4 Historical preservation  
a No longer writing new business; current outstanding obligations expire by 2019.  
b Only partially a government corporation.  
Source:  Kosar, K. (2011), Federal Government Corporations: An Overview , Congressional Research Service  
 Publication RL30365, 8 June. Viewed at: http://www.fas.org/sgp/crs/misc/RL30365.pdf ; 
 Government Corporation Control Act, 31 U.S.C. 9101; and information provided by the authorities.  
3.220.   Government -sponsored enterprises (GSEs) operate exclusively in the financial sector. GSEs 
are quasi -governmental, private corporations structured and regulated  by the Government to 
enhance their ability to borrow money (Table 3.19). As GSEs are private companies, they are not 
included in the Federal Budget, and their debt is not fully backed by the Federal Government.  
3.221.   The United States provides notifications on its state trading enterprises (STEs) to the WTO 
on a regular basis  pursuant to Article  XVII:4(a) of the GATT 1994 and Paragraph 1 of the 
Understanding on the Interpretation of Article  XVII. As in previous years, the most recent notification 
(June 2018) cov ered the activities of the Commodity Credit Corporation, the Isotopes Production 
and Distribution Program within the Department of Energy, the marketing of electricity by certain 
power administrations, and the Strategic Petroleum Reserve.254 In September 201 7, the 
United  States also updated the information on its STEs provided in earlier notifications.255 
                                                
254 WTO documents G/STR/N/17/USA, 19 June 2018, and G/STR/N/ 17/USA/Corr.1, 2 July 2018.  
255 Revisions 1 to WTO documents G/STR/N/USA/11 (notification for 2006); G/STR/N/12/USA (2008); 
G/STR/N/13/USA (2010); G/STR/N/USA/14 (2012); G/STR/N/USA/ 15 (2014); and G/STR/N/USA/16/Rev.2 (for 
2016); all documents circulated on 11 October 2017.  WT/TPR/S/ 382 • United States  
 
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  Table 3.19 Government -sponsored enterprises  
(US$ million ) 
GSE Area of operation  Total assets  
(end 2017)  
Federal National Mortgage 
Association (Fannie Mae)a Residential and multi -family mortgages  3,345,529  
Federal Home Loan Mortgage 
Corporation (Freddie Mac)a Residential and multi -family mortgages  2,049,776  
Federal Agricultural Mortgage 
Corporation (Farmer Mac) Creates a secondary market for agricultural, rural 
housing, and rural utility loans  17,792  
Federal Home Loan Bank System  Provides funding to member banks so the y can provide 
community development credit  1,103,451  
Farm Credit Systemb Guarantees payments as to principal and interest on 
securities issue d by member banks  329,518  
a In conservatorship since 6 September 2008; the U.S. Department of the Treasury entered into a 
 Senior Preferred Stock Purchase Agreement (PSPA) to make investments in senior preferred stock to 
 maintain positive equity. Fannie Mae has not received funds from Treasury since the first quarter 
 of 2012.  
b The Farm Credit System banks are AgFirst Farm C redit Bank, AgriBank, CoBank, and Farm Credit 
 Bank of Texas.  
Source:  Financial Statements. Viewed at: http://www.fanniemae.com/resources/file/ir/pdf/ quarterly -annual -
results/2017/10k_2017.pdf ; http://www.freddiemac.com/investors/financials/pdf/10k_021518.pdf ; 
https://www.farmermac.com/wp -content/uploads/2018 -Q1-10-Q-Final.pdf ; http://www.fhlb -
of.com/ofweb_userWeb/resources/2017Q4CFR.pdf ; and 
https://www.farmcreditfunding.com/ffcb_live/financialInformation.html . 
3.3.6   Government procurement  
3.3.6.1   Institutional and legal framework  
3.222.   No major institutional or legal changes with respect to Governmen t procurement have taken 
place since the last Review in 2016. Procurement at the federal level is decentralized, and is carried 
out through the procurement systems of the various executive agencies'. Procurement at the sta te 
level is also decentralized.  
3.223.   Although decentralized, federal procurement follows general guidelines. Procurement at the 
federal level  is overseen and coordinated by the Office of Management and Budget (OMB) through 
the Office of Federal Procurement Policy (OFPP) ., which reviews propos ed regulations for compliance 
with policy guidance. The OFPP,  headed by an Administrator appointed by the President and 
confirmed by the Senate , provides overall direction for government -wide procurement policies and 
plays a central role in shaping the pol icies and practices used by federal agencies to acquire goods 
and services .256 The OFPP Administrator may prescribe Government -wide procurement policies and 
may issue policy letters stating principles that must be followed by the agencies; implementation 
takes place through the Federal Acquisition Regulation (FAR).257 
3.224.   Several federal a gencies , such as the National Aeronautics and Space Administration  
(NASA) , the Departmen t of Health and Human Services have been designated by the OFPP to 
manage government -wide a cquisition contracts that leverage federal buying of common goods and 
services.  
3.225.   The General Services Administration (GSA) develops evidence -based governmentwide 
regulations t o encourage federal agencies to use cost -effective management practices , and works 
with them in their procure ment processes .258 The GSA maintains a General Services Administration 
Acquisition Manual (GSAM) that provides procurement guidelines.259 The GSA also manages Federal 
Supply Schedules, also known as Multiple Award Schedules (MAS), or more commonly, as GSA 
Schedules, which are long -term governmentwide contracts with commercial firms. GSA Schedules 
                                                
256 OFPP online information. Viewed at: https://www.whitehouse.gov/omb/m anagement/office -federal -
procurement -policy/ . 
257 Government Publishing Office (GPO)  online information. Viewed at: 
https:/ /www.gpo.gov/fdsys/pkg/USCODE -2011-title41/pdf/USCODE -2011-title41 -subtitleI -divsnB -chap11 -
subchapI -sec1101.pdf . 
258 GSA online information. Viewed at: https://www.gsa.gov/policy -regulations . 
259 GSA online information. Viewed at: https://www.acquisition.gov/browsegsam . WT/TPR/S/ 382 • United States  
 
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  are organized by specific supply and service  types. Each Schedule is then divided into more specific 
supply and service subcategories called Special Item Numbers (SINs).260 The schedules include both 
national and foreign suppliers from parties to the GPA or other international agreements. Interested 
suppliers can apply for inclusion on the Schedules at any time. The list of Federal Supply Schedule 
contractors is available publicly on "GSA Advantage!".261 Only authorized users may purchase 
directly from the Federal Supply Schedules. Authorized users are o utlined in GSA Order 4800.2I.  
3.226.   The Department of Defense (DoD) has its own procurement regulations. The DoD's Defense 
Pricing and Contracting (DPC) is responsible for all pricing, contracting, and procurement policy 
matters. DPC executes policy through the update of the Defense Federal Acquisition Regulation 
Supplement (DFARS) and Procedures, Guidance, and Information (PGI).262 The Defense Acquisition 
Regulations System (DARS) creates and maintains develops and maintains DoD acquisition 
regulations. The DPC ut ilizes the DARS office to create and maintain the Federal Acquisition 
Regulation (FAR) (see below) and the Defense Federal Acquisition Regulation Supplement 
(DFARS).263 
3.227.   The United States is a party to the WTO Agreement on Government Procurement (GPA). 
Annex 1 of Appendix I of the GPA contains the list of central government agencies covered by  it, 
while Annexes 2 and 3 list the 37 states and other entities applying the GPA .264 The Protocol 
amending the Agreement on Government Procurement entered into force for t he United  States  on 
6 April 2014.  U.S. threshold values as expressed in Special Drawing Right s (SDR) are the same 
under the revised and the 1994 Agreements ; USTR revises GPA thresholds in U.S. dollars every two 
years.  The United States notified to the WTO its basic procurement legislation and GPA -implementing 
legislation in 1998.265 The GPA is implemented at the federal level primarily through the Trade 
Agreemen ts Act (TAA) of 1979, as amended; it is implemented at the s tate level through laws and 
regulations in each of the 37 states participating in it.  
3.228.   The Buy American Act ( BAA, 1933) and the TAA remain the main laws  regarding  government 
procurement. Other laws containing l egislation on procurement include the Federal P roperty and 
Administrative Services Act of 1949 (FPASA), the Competition in Contracting Act of 1984 (CICA), 
the Federal Acquisition Streamlining Act of 1994 (FASA), the Clinger -Cohen Act of  1996, the Small 
Business Act of 1985, and the Services Acquisition  Reform Act. The BAA requires the Federal 
Govern ment to purchase domestic goods, while  the TAA p rovides authority for the President to waive 
purchasing requirements , such as those contained in the BAA,  designate eligible countries, and bar 
procurement from  non-designated countries.  Federal agencies may waive domestic procurement 
requirements in U.S. law under certain conditions.266 
3.229.   The FAR, found at Chapter 1 of title 48 of the Code of Federal Regulations, regulates federal 
government agencies' acquisitions o f supplies and services with appropriated funds. The Department 
of Defense (DoD), the GSA, and NASA jointly issue the FAR for use by executive agencies in acquiring 
goods and services. The FAR system allows executive agencies and their sub -agencies to deve lop 
their own specific internal guidelines. It is updated regularly through  Federal Acquisition Circulars 
(FACs)  to reflect changes in procurement procedures, the effect of trade agreements, and other 
changes. Proposed regulations are published in the Federal Register , and are open to public 
comments, which are considered when drafting the final rules. The FAR regulates the procurement 
process in detail. Heads of  major purchasing entities , i.e. the Secretary of Defense, the Administrator 
of General Services, and the Administrator of NASA , have the authority to issue regulations in the 
context of the FAR, following approval by the OMB, specifically the Administrator of the OFPP and  
the Office of Information and Regulatory Affairs. In 2016, the D oD established an 18 -person panel, 
created in Section 809 of the FY2016 National Defense Authorization Act (NDAA) and amended by 
                                                
260 The available categories of supplies and services are: facilities and construction, human capital; 
industrial products and s ervices; information technology; medical; office management; professional services; 
security and protection; and  travel, transportatio n, and l ogistics . The full list of GSA schedules may be found 
at: http://www.gsaelibrary.gsa.gov/ElibMain/scheduleList.do . 
261 See GSA online information. Viewed at: www.gsa.gov/schedules . 
262 DoD online informa tion. Viewed at: https://www.acq.osd.mil/dpap/dars/dfarspgi/current/index.html . 
263 DoD online information. Viewed at: https://www.acq.osd.mil/dpap/dars/about.html . 
264 WTO document GPA/113, 2 April 2012.  
265 WTO document GPA/23, 15 July 1998.  
266 Presidential Executive Order on  Buy American and Hire American, Sec. 4.(c) Judicious Use of 
Waivers , 18 April 2017. Viewed at: https://www.whitehouse.gov/presidential -actions/presidential -executive -
order -buy-american -hire-american . WT/TPR/S/ 382 • United States  
 
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  Section 863(d) of the NDAA for FY2017 and Sections 803(c) and 883 of the  NDAA for FY2018, tasked 
with finding ways to streamline and improve the defense acquisition process.267 
3.230.   On 18 April 2017 , Executive Order No. 13788, Buy American and Hire American268, was 
issued in relation to the implementation of Buy American laws.269 The Ord er instructs federal 
agencies to prioritize procurement of domestically produced goods, specifically referencing U.S. iron 
and steel products.  The Order states that nothing in the Order shall be construed to impair or 
otherwise affect existing rights or obligations under international agreements which includes the 
GPA. In the course of the WTO Commi ttee on Government Procurement October 2017 formal 
meeting, a discussion was held on current developments concerning buy -national initiatives in the 
United States.270 
3.231.   On 16 June 2018 , new cybersecurity rules271 for defence contractors went into effect , 
requiri ng contractors to meet certain minimum standards , or have a plan in place to meet those 
standards.272 In December 2016, the FAR Council finalized a rule aimed at protecting small business 
subcontractors.273 Under the rule, contracting officers will be required to track contractors who make 
late or reduced payments to subcontractors. The FAR Council also recently finalized a rule requiring 
contractors to undergo training relating to privacy rules, with the ai m of protecting personally 
identifiable information to which they have access.274 
3.232.   In order to standardize procurement transactions across the Federal Government, the FAR 
Subpart 4.16 has been amended to implement a uniform award identification system , referr ed to as 
the Procurement Instrument Identifiers (PIID) - a unique identifier for each solicitation, contract, 
agreement, order or related procurement instrument. Beginning 1 October 2017, agencies are 
required to have in place a process that ensures that e ach PIID used to identify a solicitation or 
contract action is unique government -wide, and will remain so for at least 20 years fro m the date of 
contract award. The PIID will be used to identify all solicitation, contract, agreement, order or related 
procu rement instruments , and will also be used to identify solicitation and contract actions in 
designated support and reporting systems (e.g., the Federal Procurement Data System, the System 
for Award Management), in accordance with regulations, applicable aut horities, and agency policies 
and procedures.275 
3.233.   Rules and regulations  with respect to government procurement are also contained in agency 
supplements to the FAR. For example, as mentioned above, the General Services Acquisition Manual 
(GSAM) consolidates GS A agency acquisition rules and guidance . The GSAM incorporates the General 
Services Administration Acquisition Regulation (GSAAR) and the internal agency acquisition policy.  
3.234.   The publication of n otices of proposed procurement in Federal Business Opportuniti es 
(FedBizOpps ) is required for federal government agenc y contracts in excess of the simplified 
acquisition threshold (currently US$25,000 ), with some exceptions. These notices must be published 
at least 15  days before a request for bids , and p rospective suppliers have at least 30  days from that 
date to submit bids. Shorter timeframes and simplified procedures may be established for 
procurement valued at or below the s implified acquisition threshold . For procurement falling within 
the scope of t he GPA or a n FTA, a period of not less than 40 days must generally be granted. State s 
                                                
267 Section 809 online information. Viewed at:  https://section809panel.org/about/ . 
268 82 Fed. Reg. 18837 ( 21 April 2017).  
269 "Buy American Laws"  means all statutes, regulations, rules, and Executive Orders relating to federal 
procurement or federal grants , including those that refer to " Buy America" or "Buy American" that require, or 
provide a preference for, the purchase or acquisition of goods, products, or m aterials produced in the 
United  States, including iron, steel, and manufactured good s. See also the Presidential Executive Order on Buy 
American and Hire American , 18 April 2017. Viewed at:  https://www.whitehouse.gov/pr esidential -
actions/presidential -executive -order -buy-american -hire-american/ . 
270 For further detail, see GPA/145 of 16 November 2017.  
271 DFARS 252.204 -7008 and DFARS 252.204 -7012.  
272 International Comparative Legal Guides, "Public Procurement 2018 , USA". Viewe d at: 
https://iclg.com/practice -areas/public -procurement -laws-and-regulations/usa .  
273 Federal Register  Vol. 81, No. 244 , Tuesday, 20 December 2016 , Rules and Regulations . 
274 Federal Register Volume 81, Number 244, pp . 93476 -93481.  
275 Acquisition.gov, 'Subpart 4.16 —Unique Procurement Instrument Identifiers'. Viewed at: 
https://www.acquisition .gov/far/html/Subpart%204_16.html . WT/TPR/S/ 382 • United States  
 
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  covered by the GPA are required to publish invitations to tender in their own publications , and must 
conform to GPA deadlines.  
3.235.   As provided for under t he CI CA, procurement  must take place through full and open 
competitive procedures ; there are o nly a limited number of exceptions to this rule.276 The use sole -
source procurement is not allowed unless the written authorization of the Agency head is obtained 
and specific statutor y or regulatory authority exists for sole source or limited competition. Deviation s 
from the requirement for full and open competition must be documented in writing and authorized. 
The competitive procedures defined in the CICA are mainly "sealed bidding"  and "competitive 
proposals"  (see below) .277 Awards must be generally made on the basis of price, although there are 
some exceptions. The CICA provides for simplified procedures for small purchases.  
3.236.   The FASA establishes a threshold, the Simplified Acquisition  Threshold (SAT), which provides 
simplified procedures in cases of new acquisitions valued below the SAT. It also exempts purchases 
valued below the micro -purchase threshold, from Buy American Act requirements and allows them 
to be made without obtaining c ompetitive quotations if the contracting officer determines that the 
purchase price is reasonable.278 The National Defense Authorization Act (NDAA) for F Y2018 (P.L. 
115-91, 12  December 2017) (NDAA 2018), raises the micropurchase and simplified acquisition 
thresholds for federal acquisitions. Section 806 of NDAA 2018 increases the micro -purchase 
threshold , for products only , from US$3,500 to US$10,000. The micro -purchase threshold for 
services remains at US$2,500 (Service Contract Labor Standards —formerly the Service Contract Act 
of 1965), and at US$2,000 for construction services (Construction Wage Rate Requirements Statute  
— formerly the Davis -Bacon Act).279 On 16 February 2018, the Civilian Agency Acquisition Council 
(CAAC) issued CAAC Letter No. 2018 -02 to federal agencies , regarding a class deviation to the FAR 
to implement the new increased micro -purchase and SATs, raising them from US$150,000 to 
US$250,000. The Notice and co mment rulemaking are to follow.  
3.237.   Registration o nline in the System for Award Manageme nt (SAM), an official website of the 
Government, is required to  do busin ess with the Federal Government. Both domestic and foreign 
entities may register. A unique nine -digit identification number (D-U-N-S Number ) is required for 
each physical location of a business required to register with the Federal government for contracts 
or grants.280 The use of Commercial and Government Entity (CAGE) codes, including North Atlantic 
Treaty Organization (NATO) CAGE (NCAGE) codes is required for foreign entities, for awar ds valued 
at greater than the micro -purchase threshold.  Since June 2018, entities registering in SAM must 
submit a notarized letter appointing their authorized Entity Administrator.  
3.238.   Procurement at the sub -federal level is governed by state or other sub -federal government 
laws and procurement regulations. Where procurement  is funded with federal money, states must 
comply with certain federal statutory requirements. Local governments have their own procurement 
agencies, as well as their own procurement polici es. The Cooperative Purchasing Program allows 
state, local, and tribal governments to purchase IT, security, and law enforcement products and 
services offered through specific Schedule contracts. Cooperative Purchasing allows eligible entities 
to purchase from approved industry partners, at any time, for any reason, using any funds 
available.281 
                                                
276 Under the FAR, subpart 6.3, t he following statutory authorities permit contracting without providin g 
for full and open competition: (a) o nly one responsible source will satisfy agency requirements ; (b) u nusual 
and compe lling urgency ; (c) i ndustrial mobilization; engineering, developmental, or research  capability; or 
expert services; (d) international agreement; (e) a uthorized or required by statute ; (f) national security; and 
(g) public interest.  
277 Under the FAR, subpart  6.1, the competitive procedures available for use in fulfilling the requirement 
for full and open competition are as follows: (a) Sealed bids, (b) Competitive proposals, when sealed bids are 
not appropriate; (c) Combination of competitive procedures, such  as two -step sealed bidding); (d) Other 
competitive procedures.  
278 The threshold adjustment process is governed by statute 41 U.S.C. 1908, which requires mandatory 
review and adjustment of certain statutory acquisition -related thresholds for inflation usin g the Consumer Price 
Index (CPI).  
279 Centre Law and Consulting online information. Viewed at: 
http://www.centrelawgroup.com/increased -micropurchase -simplified -acquisition -thresholds -may-implemented -
sooner -later/ . 
280 SAM online information. Viewed at: https://sam.gov/portal/SAM/#1 . 
281 GSA online infor mation. Viewed at: https://www.gsa.gov/acquisition/purchasing -programs/gsa -
schedules/schedule -buyers/state -and-local-governments/cooperative -purchasing . WT/TPR/S/ 382 • United States  
 
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  3.239.   Efforts to increase transparency in U.S. federal procurement includes  the introduction of 
changes to ensure that the unique identifier used in federal procurement (th e Procurement 
Instrument Identifier (PIID)) is both unique and uniform across the Federal Government, capturing 
information on bidder affiliation, and requirements to make public expenditures under federal 
contracts in addition to existing obligations. The se requirements are being implemented through 
regulatory, process, and information technology changes , and will be completed by 2018.  
3.3.6.2   U.S. government procurement  market  
3.240.   USAspending.gov, a website which provides for the public dissemination of federal contr act, 
grant, loan, and financial assistance data , as required by the Federal Funding Accountability and 
Transparency Act of 2006, provides information on total federal government spending, principally in 
relation to federal contracts, grants, loans, and other financial assistance awards of more than 
US$25,000, and excluding tax credits and assistance for housing, rent, food, or personal expenses. 
For this purpose, federal agencies submit contract, grant, loan, direct payment, and other award 
data at least  twice a month , to be published on USAspending.gov.  Data is also pulled or derived 
from other government systems, e.g. from the  Federal Procurement Data System Next Generation 
(FPDS -NG).282 In FY2017, total federal spending was US$4.9 trillion. Contract spen ding accounted 
for US$507.9 billion, with the Department s of Defense, Energy, Veterans Affairs, Health and Human 
Services, and Homeland Security as the top five contracting agencies.283 In FY2018, total 
government spending was in excess of US$3.2 trillion as  at 31 March 2018.284 
3.241.   Statistics on the procurement activities of the main agencies at the federal level are 
contained in the United States' Federal Procurement Data System – Next Generation  (FPDS-NG), 
maintained by the GSA under the direction of the OFPP. T he GSA operates multiple e -procurement 
systems that support collection and dissemination of information on federal procurements , to include 
awards, contractor performance and integrity, and a single point -of-entry for contracting 
opportunities, known as Fe deral Business Opportunities (Geobios's).285 In November 2017, the 
United States notified certain statistics for FY2015 under Article XIV:4 of the revised GPA. For federal 
procurement, the notified values are broken down in open and limited procedures for go ods, 
services, and construction services; the partial total notified reached US$142.2 billion (Table 3.2 0). 
For sub -central entities, namely the 37 states implementing the GPA, the estimated procurement 
was US $510.95 billion; and for the other entities cov ered in Annex 3, the total expenditure amounted 
to US$14.94 billion.  
Table 3.20 Reported st atistics for open procedures, limited procedures, and small and 
minority owned enterprise set -asides at the federal government level, FY2015  
(Number and US$)  
Number of actions and values  Open procedures  Limited procedures  Small and minority 
owned enterprise 
set-asides  
Goods and services: number of contracts 
awarded below threshold  359,894  147,968  111,514  
Goods and services: number of contracts 
awarded equal to or above threshold  1,453,368  125,074  73,350  
Goods and services: total US$ obligated 
below threshold  3,514,520,173.82  2,546,913,713.01  1,999,896,467.19  
Goods and services: total US$ obligated 
equal to or above threshold  61,638,746,737.08  30,787,313,504.57  23,782,447,591.17  
Construction services: number of contracts 
awarded below threshold  5,969  3,011  16,216  
Construction services: number of contracts 
awarded equal to or above threshold  1,298  155 3,940  
                                                
282 "About Usaspending.gov" . Viewed at: https://www.usaspending.gov/#/about . 
283 USAspending.gov, DataLab . Viewed at: https://datalab.usaspending.gov/contract -
explorer.html?search=Contract%20spending%20in%20Fiscal%20Year%202017 . 
284 USAspending.gov, Spending Explorer: FY2018 . Viewed at: 
https://www.usaspending.gov/#/explorer/agency . 
285 FedBizOpps  website  is: https://www.fbo.gov/?s=main&mode=list&tab=list . WT/TPR/S/ 382 • United States  
 
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  Number of actions and values  Open procedures  Limited procedures  Small and minority 
owned enterprise 
set-asides  
Construction services: total US$ obligated 
below threshold  1,436,773,738.09  418,018,015.77  4,797,345,480.94  
Construction services: total US$ obligated 
equal to or above threshold  8,954,716,931.33  540,664,162.04  3,974,520,764.47  
Source:  WTO document GPA/137/Add.8, 28 November 2017, Annex I.  
3.3.6.3   Market access conditions  
3.242.   U.S. policy with respect to market access for government procurement continues to be based 
on reciprocity , and is governed by specific trade agreements, including the GPA. Domestic 
purchasing requirements are maintained for procurement not covered by the GPA, the WTO 
plurilateral Agreement on Trade in Civil Aircraft, or preferential trade agreements. The Trade  
Agreements Act of 1979 generally prohibits federal agencies from purchasing goods and services 
from countries that are not a party to the GPA or other trade agreements that cover government 
procurement (non -designated countries).  
3.243.   The United States Trade R epresentative is required by Execut ive Order 12260 to set the 
U.S. dollar thresholds for the WTO GPA and other FTAs.286 In December 2017 , the United States 
notified its latest threshold values, in the national currency, for the GPA (Table 3.2 1) and other 
procurement agreements (Table  3.22).287 The threshold levels provided apply to the period starting 
on 1 January 2018 and ending on 31  December 2019.288 
3.244.   Under the Buy American Act of 1933 (BAA), the purchase of supplies and construction 
materials by government agencies is limited to those defined as "domestic end -products", in 
accordance with a two -part test that must establish that the article is manufactured in the United 
States, and that the cost of domestic components exceeds 50% of the cost of all the compo nents. 
The BAA does not apply to services. As a way of monitoring enforcement of the BAA, the Independent 
Agencies Appropriations Act of 2006 (P.L. No. 109 -115) requires the head of each federal agency to 
submit a report to Congress relating to acquisition s of articles, materials, or supplies manufactured 
outside the United States. Federal domestic preference requirements are also sometimes included 
in annual appropriation and authorization bills.  
3.245.   Under the Trade Agreements Act of 1979, the President may gr ant waivers from the BAA 
and other procurement restrictions; this authority has been delegated to the USTR. The Act waives 
the application of the BAA to the end -products of designated countries, which include the parties to 
the GPA, bilateral agreements th at cover government procurement, CBERA beneficiaries, and LDCs. 
CBERA and LDCs face GPA thresholds. For the other trading partners that are beneficiaries of a 
preferential agreement, the thresholds are as shown in Table  3.22. Eligible products are granted 
non-discriminatory treatment. There are few other situations in which procurement may be exempt 
from BAA requirements. Exceptions to the BAA can be granted if it is determined that the domestic 
preference is inconsistent with the public interest, in case o f U.S. non -availability of a supply or 
material, or for reasonableness of cost. Public interest determinations may be made on individual 
procurements or as a blanket for a set of procurements. Non -availability may be determined 
following FAR 25.104, which contains a list of articles that have been determined to be non -available , 
which must go through public notice and comment every five years, or on an individual basis. The 
cost of the domestic offer is understood to be unreasonable if the cost of the forei gn (non -eligible) 
product, inclusive of import duty and a 6% added margin, is below the lowest domestic offer when 
this offer is from a large business concern. If the lowest domestic offer is from a small business 
concern, the added margin considered is  12%. For purchases by the DoD, the price difference must 
be at least 50%. The provisions of the BAA are also waived for civil aircraft and related articles that 
meet the substantial transformation test of the Act and originate in parties to the WTO Agreement  
on Trade in Civil Aircraft.  
                                                
286 U.S. obligations under these agreements apply to covered procurement valued at or above the 
specified U.S. dollar thresholds, whic h are adjusted every two years.  
287 WTO document, GPA/THR/USA/1, 20 December 2017.  
288 USTR online information. Viewed  at: https://ustr.gov/issue -areas/government -
procurement/thresholds . WT/TPR/S/ 382 • United States  
 
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  Table 3.21 U.S. thresholds in Appendix I of the GPA, expressed in SDR and in the national 
currency, 2018 -19 
Level of g overnment  Goods  Services  Construction  
SDR US$ SDR US$ SDR US$ 
Annex 1 – Central Government  130,000  180,000  130,000  180,000  5,000,000  6,932,000  
Annex 2 – Sub-central 
government  355,000  492,000  355,000  492,000  5,000,000  6,932,000  
Annex 3 – Other entities  400,000  555,000  400,000  555,000  5,000,000  6,932,000  
Source:  WTO document, GPA/THR/USA/1, 20 December 2017.  
Table 3.22 Central Government thresholds for the application of other trade agreements, 
in national currency, 2018 -19 
(US$)  
Trade agreement  Procurement of  
goods and services  Procurement of  
construction services  
U.S.-Bahrain FTA  180,000  10,441,216  
U.S.-Chile FTA  80,317  6,932,000  
U.S.-Colombia FTA  80,317  6,932,000  
Dominican Republic -Central 
America -U.S. FTA  80,317  6,932,000  
U.S.-Israel FTA 50,000 (goods only)  n.a. 
U.S.-Korea FTA  100,000  6,932,000  
U.S.-Morocco FTA  180,000  6,932,000  
NAFTA    
 Canada  25,000 (goods), 
80,137  (services)  10,441,216  
 Mexico  80,137  10,441,216  
U.S.-Oman FTA  180,000  10,441,216  
U.S.-Panama FTA  180,000  6,932,000  
U.S.-Peru FTA  180,000  6,932,000  
U.S.-Singapore FTA  80,137  6,932,000  
n.a. Not applicable . 
Source:  Federal Register, Vol. 82, No. 236 , Monday, 11 December 2017 , Notices. Viewed at: 
https://ustr.gov/issue -areas/government -procurement/thresholds . 
3.246.   The Balance of Payment s Program allows the DoD the application of provisions similar to 
those required under the BAA, to contracts over the SAT for end -products for use outside the 
United  States.289 The DoD waives the restrictions of the BAA/Balance of Payments Program  for 
eligible goods (i.e. those cov ered by the United Stat es under the WTO GPA or an FTA) . For other 
goods, the DoD waives the restrictions for equipment produced in a "qualifying country" (with which 
there is a reciprocal procurement agreement or MoU). 
3.247.   The FAR provides that i mported suppli es for use by government agencies may be exempted 
from customs duties in certain cases. Agencies must use these exemptions when the anticipated 
savings to appropriated funds will outweigh the administrative costs associated with processing 
required documen tation. Subchapters VIII and X of Chapter 98 of the HT SUS (19 U.S.C. 1202) list 
supplies for which exemptions from duty may be obtained when imported into the customs territory 
of the United States under a government contract. For certain of these supplies , the contracting 
agency must certify that they are for the purpose stated in the HTS US. Supplies (excluding 
equipment) for government -operated vessels or aircraft may be imported free of duties ; they are 
also free from internal revenue tax .290 
3.248.   Under Title I II of Public Law 111 -347, a federal excise tax of 2% is applied to government 
purchases of goods and services from foreign entities not party to an international procurement 
agreement, entered on or after 2  January  2011. Payments for purchases under the si mplified 
acquisition procedures that do not exceed the SAT, as are emergency acquisitions and certain foreign 
                                                
289 FAR Subpart 225.75. Viewed at: 
https://www.acq.osd.mil/dpap/dars/dfars/html/r20051114/225_75.htm . 
290 FAR Subpart 25.9. Viewed at: https://www.acquisition.gov/far/html/Subpart%2025_9.html . WT/TPR/S/ 382 • United States  
 
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  humanitarian assistance contracts are exempted from the tax . Final regulations implementing the 
Title were issued in August 2016 .291. 
3.3.6.4   Bidding procedures  
3.249.   Two commonly used types of bidding procedures are  sealed bidding and contracting by 
negotiation. Sealed bidding requires that the final decision by agencies be based only on price and 
the price -related factors included in the invitation. The con tract is awarded to the lowest bidder 
meeting all the contract requirements. A two -step sealed bidding process may be applied in cases 
where more information from suppliers is needed before the sealed bidding process is initiated. 
Contracting by negotiatio n is used when sealed bidding is not applicable, for instance, when 
consideration of evaluation factors other than price and price -related factors is required.  
3.250.   Government agencies are generally required to publish all contracts exceeding US$25,000 
in www.fedbizopps.gov  15 days before solicitations begin.292 They must allow for a 30 -day response 
time, or a 40 -day response time for procurements covered under an international trade agreement. 
Agencies must give considera tion first to "required sources" for their supplies and services' needs. 
The list of required sources is made up of various sources, including excess (left over) from other 
agencies , and supplies from the Federal Prison Industries , Inc. .293 Required sources take priority 
over all other sources, including the program mes authorized by the SBA.  
3.251.   A simplified acquisition procedure is used for purchases below the SAT, and there are 
normally set -asides for the small business categories when there is a reasonable exp ectation that a 
minimum of two small businesses are able to provide the product/service competitively in terms of 
market prices, quality, and delivery. Where there is a repetitive need for supplies or services, the 
FAR allows for blanket purchase agreement s (BPAs), which establish regular "charge accounts" with 
suppliers found after a competitive bidding process.  
3.3.6.5   Set-asides and preferences  
3.252.   U.S. procurement policy makes use of set -aside program mes to foster the participation of 
small businesses, veteran -owne d small businesses, small disadvantaged business (SDBs), 
Historically Underutilized Business Zone (HUBZone ) businesses, and women -owned small businesses 
in the procurement process.294 Relevant set -aside program mes are referenced in the U.S. schedules 
under the GPA.295 The Federal Government determines specified annual prime contracting goals for 
designated small businesses. Under the Small Business Act (PL 85 -536), as amended, government  
purchases with an anticipated value above the micro -purchase threshold of US$10,000, and up to 
the SAT of US$250,000 , are to be automatically and exclusively set  aside for small businesses, 
provided there are at least two or more (Rule of Two) small business concerns that are competitive 
in terms of market pric es, quality, and delivery. Contract opportunities above US$250,000 must also 
be set aside for small businesses if the Rule of Two is met. Contract opportunities over US$700,000 , 
or US$1.5 million for construction projects , awarded to Other -than-Small -Busin esses (OTSBs) must 
include small business subcontracting plans to the extent there are subcontracting opportunities.  
3.253.   The Small Business Administration (SBA) is responsible for defining the specific size 
standards for each industry , to determine which busin esses qualify as small.  This information is 
contained in a table published by the SBA, and most recently updated in 2016. Size may be defined 
                                                
291 Federal Register 81  FR 55133. Viewed at: https://www.gpo.gov/fdsys/pkg/FR -2016-08-18/pdf/2016 -
19452.pdf . 
292 FAR 5.202 identifies 15 exceptions to this posting requirement. See: 
https://www.acquisition.gov/far/html/Subpart%205_2.html . 
293 In accordance with FAR Part 8 , agencies shall satisfy requirements for supplies and services from or 
through the following sources and publications , in descending order of priority: (1) supplies : (i) inventories of 
the requiring agency; (ii) excess from other agencies; (iii) Federal Prison Industries, Inc.; (iv) supplies which 
are on the Procurement List maintained by the Committee for Purchase from Peop le Who Are Blind or Severely 
Disabled; and (v) wholesale supply sources, such as stock programme s of the GSA; and (2) services : services 
that are on the Procurement List maintained by the Committee for Purchase From People Who Are Blind or 
Severely Disable d. 
294 SBA online information. Viewed at: https://www.sba.gov/contracting/government -contracting -
programs/what -small-business -set-aside. 
295 See https://www.wto.org/english/tratop_e/gproc_e/rev_usa7e.doc . WT/TPR/S/ 382 • United States  
 
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  in U.S. dollars or according to the number of employees.296 SBA program mes seek to promote the 
ability of small busi nesses to compete for federal procurement contracts. The y are: the Women -
Owned Small Business (WOSB) Federal Contract program mes; the 8(a) Busin ess Development 
Program ; the Historically Underutilized Business Zones (HUBZone) Program; and the Service -
Disabled Veteran -Owned Small  Business  Concerns (SDVOSBC) Program.297 
3.254.   There is a  government -wide procurement goal that stipulates that at least 23% of all federal 
government contracting dollars should be awarded to small businesses. As part of this general goal, 
there are  targeted sub -goals for the following small business categories: WOSB : 5%; small 
disadvantaged business: 5%; SDVOSBC : 3%; and HUBZone: 3% . These sub -goals are not in 
addition to the 23% but are counted as part of the overall goals. The goals set were met, overall in 
FY2017, with the exception of women -owned and HUBZone, which were  below the desired 
percentage.  
Table 3.23 Government -wide procurement goal s and results , FY2017  
Goal catego ry Goal %  Actual %  
Small business  23% 23.9%  
8(a) Business Development Program  (SDBs) 5% 9.1%  
WOSB  5% 4.72%  
SDVOSBC  3% 4.03%  
Certified HUBZone small business  3% 1.65%  
Source:  Small Business Dashboard, Small Business Goaling Report, FY2017 and FY2018 . Viewed at: 
https://smallbusiness.data.gov/exp lore?carryfilters=on&fromfiscal=yes&tab=By+Performance+Goal
&fiscal_year=2018&tab=By+Performance+Goal&fiscal_year=2017&fromfiscal=yes&carryfilters=on&
Submit=Go . 
3.255.   Some contracting rules and limitations apply to set -asides. Under t he non -manufacturer rule, 
a small business prime contractor that does not itself manufacture the products or materials provided 
to the Government under a set -aside contract for supplies , must supply the product of a small 
business, unless the SBA has grant ed a waiver , or the contract is a small business set -aside under 
the SAT. Waivers to the non -manufacturer rule may be granted by the SBA if it is determined that 
there are an insufficient number of small businesses with the required manufacturing capabilit ies. 
Some s ubcontracting limitations also apply  when a contract amount exceeds the SAT and for all 
other set -aside or sole -source contracts under the  8(a), HUBZone, SDVOSB or WOSB program mes. 
In these cases,  under set -aside award conditions, small business es are required to limit the amounts 
they spend on subcontractors that are not similarly situated: (a) in the case of s ervice contracts, 
the small business prime contractor may not pay subcontractors more than 50 % of the amount paid 
to the prime under the contract ; (b) for supply contracts, the prime contractor may not pay 
subcontractors more than 50 % of the amount, less the cost of materials, paid to the prime under 
the contract ; and (c) the small business prime contractor may not pay more than 85% of the amount 
paid to it by the Government to subcontractors, not including the cost of materials, for general 
construction contracts, and may not pay more than 75% of the amount paid by the Government to 
it to subcontractors, not including the cost of materials,  for specialty constructio n contracts.  
3.256.   Benefits are subject to eligibility conditions that vary according to the program me. In the 
case of the HUBZone Program, where benefits include a 10% price evaluation preference in full and 
open contract competitions,  as well as subcontracting opportunities, for eligibility the business must 
be: (a) a small business by SBA standards; (b) at least 51% owned and controlled by U.S. citizens, 
or a Community Development Corporation, an agricultural cooperative, or an Native  American tribe; 
(c) at least 35% of its employees must reside in a HUBZone;  and (d) its principal office must be 
located within a HUBZone . 
3.257.   The WOSB Program (P.L. 106 -554) allows Contracting Officers (COs) to set aside contracts 
for WOSBs under certain con ditions, and to grant them contracts under sole -source authority in 
                                                
296 SBA online information. Viewed at: 
http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf . 
297 SBA online information. Viewed at: https://www.sba.gov/contracting/govern ment-contracting -
programs/what -small-business -set-aside. WT/TPR/S/ 382 • United States  
 
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  specific circumstances.298 To be eligible for the WOSB Program, a business must: (a) be a small 
business; (b) be at least 51% owned and controlled by women who are U.S. citizens; and ( c) have 
women manage day -to-day operations and make long -term decisions. Additionally, to qualify as an 
economically disadvantaged business within the WOSB Program, the business must meet all the 
requirements of the WOSB Contracting Program, and be owned a nd controlled by one or more 
women, each with a personal net worth less than US$750,000, adjusted gross income averaged 
over the previous three years of US$350,000 or less, and with personal assets of US$6 million or 
less. The qualifying North American Ind ustry Classification System ( NAICS ) codes for the WOSB 
Contracting Program were last revised in October 2017 .299 
3.258.   To benefit from t he 8( a) Business Development Program and be considered  small 
disadvantaged businesses  (SDBs), businesses must be at least 51% ow ned and controlled by socially 
and economically disadvantaged individuals ; they must be owned by someone whose personal net 
worth is US$250,000 or less, and have an average adjusted gross income for three years of 
US$250,000 or less and assets of US$4 mill ion or less. Participation in this program by an SDB is 
limited to nine years. Sole-source contracts  can be granted for  up to a ceiling of US$4 million for 
goods and services and US$6.5 million for ma nufacturing, with a cumulative limit by recipient of 
US$100 million per recipient while in the program.  
3.259.   The SDVOSBC Program is a procurement program me that allows federal contracting officers , 
certain criteria are met , to restrict competition to SDVOSBCs and award a sole -source or set -aside 
contract. To qualify for the program, a business must be small, at least 51% owned and controlled 
by one or more service -disabled veterans, and have one or more service -disabled veterans manage 
day-to-day operations and make long -term decisions. Sole-source contract s may be awarded only 
if the CO does not have a reasonable expectation that at least two responsible SDVOSBCs will submit 
offers, the anticipated award price of the contract is not expected to exceed US$4 million for 
manufa cturing requirements and US$6.5  million for all other requirements, and the award can be 
made at a fair market price. If the requirement is at or below the SAT, the CO may set aside the 
requirement for consideration among SDVOSBCs using simplified acquisition procedures, or may 
award a so le-source contract to a SDVOSBC. These sole -source benefits mirror those in the WOSB 
and HUBZone programmes, except HUBZone programme thresholds for manufacturing requirements 
are capped at US$7 million as outlined in FAR 19.1306.  
3.3.6.6   Enforcement  
3.260.   Bid protests (before awards) are governed by federal statutes , including the Competition in 
Contracting Act of 1984 and the Federal Courts Improvement Act of 1982. They may be taken to 
the Government Accountability Office (GAO) or the U.S. Court of Federal Claims (COFC ). A party 
dissatisfied with a decision by the GAO may file a new protest with the COFC, whose decisions may 
be appealed to the U.S.  Court of A ppeals for the Federal Circuit.  
3.261.   According to statistics maintai ned by the U.S. General Accountability  Office  (GAO ), during 
FY2016, 2,789 total cases were filed at the GAO, including 2,621 protests, 80 cost claims, and 88 
requests for reconsideration. This reflects a 6% increase , year-to-year. The GAO reported further 
that, while more than 22% of those cases filed wer e sustained, 46% of the cases filed resulted in 
some form of relief being obtained by the protestor, referred to as an overall "effectiveness rate ".300 
In FY2017, 2,596 bid protest cases were filed with the GAO, and 39 bid protests were filed with the 
COFC. Contract disputes on actions and events that occur after a contract is awarded  are dealt with 
under the Contract Disputes Act of 1978. The parties may file contract dispute claims to either an 
agency board  of contract appeals or the COFC, whose decisions may be appealed to the Court of 
Appeals for the Federal Circuit. In FY2017, 89 contract dispute cases were filed with the COFC , and 
26 were appealed to the U.S. Court of A ppeals for the Federal Circuit.  
                                                
298 SBA online information. Viewed at: http://www.sba.gov/f ederal -contracting/contracting -assistance -
programs/women -owned -small-business -federal -contracting -program . 
299 SBA online information. Viewed at: https://www.sba.gov/ sites/default/files/2018 -02/FY17 -EDWOSB -
NAICS -Codes.pdf . 
300 Getting the Deal Through, Public Procurement US (2017).  Viewed at:  
https://gettingthedealthrough.com/area/33/jurisdiction/23/public -procurement -united -states/ . WT/TPR/S/ 382 • United States  
 
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  3.3.7   Intelle ctual property rights  
3.3.7.1   Overview  
3.262.   The United States is one of main producers and exporters of goods and services that embody 
intellectual property (IP). IP  is present in some 60% of U.S. goods exports and IP -intensive 
industries account for over one third of U.S. GDP (see below).301 In 2016, the United States 
accounted for 31% of global commercial knowledge and technology intensive services, i.e., business, 
financial and information: in that year, U.S. exports of information and communications technology  
ICT)-enabled services exports (excluding digital goods) reached US$404 billion.302 The United States 
has also been the largest global producer of high -technology manufactures with a global share of 
31%, over the last decade.303 During the period under review, the Uni ted States has continued to 
post its traditional balance -of-payments surplus in IP -related payments, as measured by the 
category "charges for the use of IP". In 2017, net receipts were US$79.5 billion, with receipts 
totalling US$127.9 billion and payments reaching US$48.4 billion.304 
3.263.   In 2016, the USDOC designated 81 industries , out of a total of 313 (25.9% of the total) , as 
IP-intensive, which , in 2014 , collectively accounted for US$6.6 trillion in value added, or 38.2% of 
2014 GDP.305 In 2014, IP -intensive industries directly accounted for 27.9 million jobs , and indirectly 
supported an additional 17.6 million, representing almost one in three jobs. Also in 2014, IP workers 
in IP-intensive industries earned 46% higher weekly wages than other workers. More particularly, 
trademark -intensive industries accounted for 23.7 million jobs in 2014; copyright -intensive 
industries accounted for 5.6 million; and patent -intensive industries accounted for 3.9 million.306 
3.264.   Regulations with respect to inno vation, including in IP issues and funding of research and 
development (R&D), are contained in the Bayh -Dole and Stevenson Wydler Acts .307 The Bayh -Dole 
Act allows universities, non -profit institutions, and small businesses to obtain rights to patents 
arisin g from research funded by the Federal Government. The Stevenson -Wydler Act requires the 
establishment of an Office of Research and Technology Applications within each federal laboratory 
and agency. These offices work to transfer technology, including throu gh the licensing  of IP 
developed by the U.S. Government at its laboratories. The federal technology transfer policy is 
currently under review: IP issues, including the licensing of technology developed using federal 
funds , are an important factor in the re view. The National Institute for Standards and Technology 
(NIST) is currently working with stakeholders on prioritizing technology transfer issues and 
improv ing the process to enhance innovation, technology commercialization and partnerships. 
Innovative pa rtnership models involving state and local governments, the private sector, academia 
and international partners are seen as vehicles to maximize the utilization of underused facilities 
and share the costs of new R&D facilities.308 
3.265.   Government  expenditures on R&D reached US$139.7 billion in 2016 across all federal R&D 
program mes. The Department of Defense receives some 49% of the funding. Other important 
recipients are the National Institutes of Health (22%), the National Aeronautics and Space 
                                                
301 Economic and Statistics Administration (ESA) and U.S. Patent and Trademark Office ( USPTO ) (2016), 
Intellectual Property and the U.S. Economy: 2016 Update . Viewed  at: 
https://www.uspto.gov/sites/default/files/documents/IPandtheUSEconomySept2016.pdf . 
302 Bureau of Economic Analysis (BEA)  online information. Viewed at: 
https://www.bea.gov/iTable/iTable.cfm?ReqID=62&step=1#reqid=62&step=9&isuri=1&6210=4 . 
303 National Science Foundation, Science and Engineering Indicators 2 018. Viewed at: 
https://www.nsf.gov/statistics/2018/nsb20181/report/sections/industry -technology -and-the-global -
marketpla ce/highlights . 
304 BEA online information. Viewed at: 
http://www.bea.gov/iTable/iTable.cfm?ReqID=62&step=1#reqid=62&step=6&isuri=1&6210=1&6200=2 . 
305 United States Intellectual Property Enforcement Coordinator  (2018) , Annual Intellectual Property 
Report to Congress, March 2018 . Viewed at: https://www.whitehouse.gov/wp -content/uploads/2017/11/2018 
Annual_IPEC_Report_to_Congress.pdf . 
306 Economic and Statistics Administration (ESA) and USPTO (2016), Intellectual Property and the U.S. 
Economy: 2016 Update . Viewed at: https://www.uspto.gov/sites/default/files/documents/IPandtheUSEconomy 
Sept2016.pdf . 
307 The Patent and Trademark Law Amendments Act  (Bayh-Dole Act, PL 96 -517) and the Stevenson -
Wydler Tec hnology Innovation Act of 1980  (PL 96 –480).  
308 Executive Office of the President, Memorandum for the Heads of Executive Departments and 
Agencies, 31 July 2018, FY2020 Administration Research and Development Budget Priorities . Viewed at: 
https://www.whitehouse.gov/wp -content/uploads/2018/07/M -18-22.pdf . WT/TPR/S/ 382 • United States  
 
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  Administration (8 .2%), and the National Science Foundation (4.3%).309 Government expenditure on 
R&D is estimated to have reached US$145 billion in 2017.310 
3.266.   Digital trade has raised new challenges for the U.S. Administration, such as how to best 
address new and emerging trade b arriers created by other countries. According to a study by the 
USITC, the most cited policy measure impeding digital trade cited by industry representatives was 
data localization, while the U.S. content industry reported that ineffective enforcement proce dures 
of IP affected them the most.311 
3.267.   The adequate and effective protection and enforcement of IP rights  (IPRs)  has remained a 
top trade policy priority for the U.S. Administration, as reflected in the 2017 and 2018 Special 301 
Reports. The stated objective s are to encourage and maintain enabling environments for innovation, 
including effective IP protection and enforcement, in markets worldwide, which would benefit U.S. 
exporters and domestic IP -intensive industries in those markets as well.312 IP is consider ed critical 
for economic growth and high -quality jobs for the United States. As noted in the 2018 Special 301 
Report of the USTR, a top trade priority for the Administration is to use all possible sources of 
leverage to encourage other countries to provide  adequate and effective protection and enforcement 
of U.S. IP Rs.313 Also, as stated in the 2018 National Trade Estimate Report, the Administration is 
maintaining a focus on the removal of barriers to digital trade, including restrictions to cross -border 
data flows, digital products, Internet -enabled services and other res trictive technology 
requirements.314 
3.3.7.2   General regulatory framework  
3.268.   As a member of the World Intellectual Property Organization (WIPO), the United States 
participates in a large number of international conventions and treaties related to IPRs, including 19 
instruments administered by the WIPO.315 On 17  December 2005, the United States accepted the 
Protocol Amending the TRIPS Agreement adopted by the General Council on 6 December 2005 
(WT/L/641).  
3.269.   The United States has systematically notified to the WTO its laws an d regulations on trade -
related aspects of IPRs, including amendments to legislation or regulations. The most recent updates 
were made in 2016. Recent amendments to legislation notified to the WTO include: the Consolidated 
Patent Laws, which en tered into fo rce on 1 August 2012316; the Patent Law Treaty, which entered 
into force with res pect to the United  States on 18 December  2013317; the Act to implement the 
provisions of the Geneva Act of the Hague Agreement Concerning the International Registration of 
Industr ial Designs, which entered into force for the United States on 13 May 2015; and the Defend 
Trade Secrets Act of 2016, which entered into force on 5 November 2016, and amended the 
Economic  Espionage Act , to create a private civil cause of action for trade s ecret misappropriation .318 
3.270.   The United States addresses IP protection and enforcement issues with its trading partners 
through several mechanisms at the bilateral, plurilateral or multilateral levels. In addition to securing 
binding IPR -related commitments as  part of bilateral and plurilateral FTAs, the United States has 
addressed IPR issues through bilateral agreements and MOUs , bilateral investment treaties, and 
trade and investment framework agreements. The United States has also actively pursued enhanced 
                                                
309 National Science Foundation online information. Viewed at: 
https://ncsesdata.nsf.gov/fedfunds/2014/html/FFS2014_DST_003.html . 
310 National Science Foundation online information. Viewed at: 
https://ncsesdata.nsf.gov/fedfunds/2015/html/FFS2015_DST_001.html . 
311 USITC (2017), Global Digital Trade 1: Market Opportunities and Key Foreign Trade Restrictions , 
August 2017. Viewed at: 
https://www.usitc.gov/publications/industry_econ_analysis_332/2017/global_digital_trade_1_market_opportu
nities_and.htm .  
312 USTR online information. Viewed at: https://ustr.gov/issue -areas/intellectual -property/Special -301. 
313 USTR (2018) , 2018 Special 301 Report. Viewed at: 
https://ustr.gov/sites/default/files/files/Press/Reports/2018%20Special%20301.pdf .  
314 USTR  online information. V iewed at: https://ustr.gov/about -us/policy -offices/press -office/fact -
sheets/2018/march/ustr -releases -2018-national -trade . 
315 The full list may  be found at WIPO's website, at: http://www.wipo.org . 
316 WTO documents IP/N/1/USA/D/6, IP/N/1/USA/P/11, 6 May 2013.  
317 WTO documents IP/N/1/USA/D/8, IP/N/1/USA/P/13,  6 May 2013.  
318 WTO documents IP/N/1/USA/7 and IP/N/1/ USA/U/3, 7 December 2016.  WT/TPR/S/ 382 • United States  
 
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  standards of IP protection through its engagement with countries seeking accession to the WTO. 
Other instruments used by the United States for IPR protection and enforcement include: the annual 
"Special 301" review and report (see below) and IP dialogues wi th trading partners; multilateral 
engagement on IP issues  through the WTO, the WIPO, the Asia -Pacific Economic Cooperation 
(APEC),  and other organizations; implementation of trade policy in support of U.S. innovations; and 
providing interagency trade polic y leadership.319 
3.271.   The Under Secretary of Commerce for I ntellectual Property  and Director of the United States 
Patent and Trademark Office (USPTO ), among other duties, advises the President, through the 
Secretary of Commerce, on national and certain international IP policy issues ; advises federal 
departments and agencies on matters of IP policy in the United States and IP protection in other 
countries ; provides guidance, as appropriate, with respect to proposals by agencies to assist foreign 
governmen ts and international intergovernmental organizations on matters of IP protection ; and 
conducts program mes, studies, or exchanges of items or services regarding domestic and 
international IP law and the effectiveness of IP protection domestically and throug hout the world.320 
3.272.   The USPTO Office of Policy and International Affairs (OPIA) leads agency efforts to formulate 
and execute U.S. domestic and international policy regarding protection and enforcement of IPRs, 
including the promotion of the development of IP  systems, nationally and internationally, and 
advocating improved and more effective means of obtaining and enforcing the IPRs of U.S. nationals, 
domestically and internationally. Recent cooperative projects to improve the efficiency and quality 
of patent examination include technical training through the USPTO 's Global IP Academy, exchanging 
best practices with counterpart offices, the Patent Prosecution Highway work sharing framework, 
the Cooperative Patent Classification system, and the Global Dossier In itiative. The OPIA coordinates 
its work with the USPTO 's Patent Operations, including the Office of International Patent 
Cooperation, in implementing these and other cooperative projects.  
3.273.   Table 3.2 4 provides  a snapshot of IPR protection in the United State s as of mid -2018.  
Table 3.24 Summary of IP protection, June 2018  
Form  Main legislation  Coverage  Duration  
Copyright and 
related rights  Copyright Act  of the 
United States (1976), as 
amended, and as 
incorporated in Title 17 of 
the U.S. Code Authors' economic rights in the 
artistic, literary and scientific 
domains. The Act also provides rights 
of attribution and integrity for 
authors of works of visual a rt. Other 
federal and state laws address 
protection for the attribution and 
integrity of other works and authors.  
 
To benefit from copyright protection , 
a work must be an original creation.  
Registration is not required for 
protection.  Life of author plus 7 0 years for 
works created on or after 1  January 
1978. Anonymous and 
pseudonymous works and works 
made for hire are protected for 
95 years after publication or 120 
years after creation, whichever is 
the shorter  
Patents  Patent Law  of the United 
States, as incorporated in 
Title 35 of the U.S. Code 
 
Leahy -Smith America 
Invents Act (AIA) of 
2011. Patent Law 
Treaties Implementation 
Act of 2012  Inventions that are new, useful, and 
non-obvious are patentable.  
 
Patents may be granted for a 
process, machine, manufacture or 
composition of matter, or 
improvements there of. 20 years from filing date  
Industrial 
designs  Patent Law  of the United 
States, as incorporated in 
Title 35 of the U.S. Code  
 
Patent Law Treaties 
Implementation Act of 
2012 Any new, original and ornamental 
design for an article of manufacture  For applications filed before 13 May 
2015, 14 years from the date of 
grant; for applications filed on or 
after 13 May 2015, 15  years from 
the date of grant  
Trademarks  The Lanham Act  of 1946, 
as amended (15 U.S.C. 
1051 et seq.) and state 
laws Any sign used to identify and 
distinguish goods or services of one 
enterprise from those of another 
enterprise  10 years from registration date; 
renewable indefinitely as long as 
the trademark is in use in 
commerce that is lawfully regulated 
by Congress  
                                                
319 USTR online information. Viewed at: https://ustr.gov/issue -areas/intellectual -property . 
320 35 USC Sections 2(b)(8) -(13); and 35 USC Section 3.  WT/TPR/S/ 382 • United States  
 
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  Form  Main legislation  Coverage  Duration  
Geographical 
indications  The Lanham Act  of 1946, 
as amended (15 U.S.C. 
105 et seq.) and state 
laws, and supplemented 
with the Federal Alcohol 
Administration Act of 
1935 Geographic signs and names of 
viticultural significance  10 years from registration date ; 
renewable indefinitely as long as 
the trademark is in use in 
commerce that is lawfully regulated 
by Congress  
New plant 
varieties  Plant Variety Protection 
Act Amendments of 1994 
(7 U.S.C. 2321 et seq.)  Protection is granted to new plant 
varieties  reproduced by seed or 
tuber -propagated , not previously sold 
in the United States for purposes of 
exploitation of the variety, more than 
1 year prior to the date of filing; or in 
any area outside of the United States 
more than 4 years prior to the filing 
date, or, in the case of a tree or vine, 
over 6 years prior to the filing date  20 years from date of issue of the 
certificate in the United States  
Layout 
designs of 
integrated 
circuits  Semiconductor Chip  
Protection  Act of 1984 
(17. U.S.C. 901 et seq.)  Topography of microelectronic 
semiconductor products , provided it 
is original (the result of its creator's 
own intellectual effort) and is not 
staple, commonplace or familiar in 
the industry at the time of its 
creation  10 years from filing date (or, if 
earlier, from first use)  
Trade secrets  Economic Espionage Act  
of 1996 and state laws. 
Defend Trade Secrets 
Act, Public Law No.  114-
153, 2016 amended the 
Economic Espionage Act.   Any information, not generally known 
to the relevant portion of the public , 
that provides an economic benefit to 
its holder, a nd is the subject of 
reasonable efforts to maintain its 
secrecy  Indefinite  
Source:  WIPO; USDOC ; and notifications to the WTO.  
3.3.7.3   Patents  
3.274.   Patents are protected by the Patent Law of the United States, as incorporated in Title 35 of 
the U.S. Code. The Leahy -Smith America Invents Act (AIA), passed  in 2011321, significantly reformed 
U.S. patent law. In particular: (a) it transitioned  the United States to a first -inventor -to-file system; 
(b) it provided an enhanced grace period for inventors to safeguard pat ent rights against disclosures 
made by inventors made one year or less before the effective filing date; (c) it modified the definition 
of prior art to include non -printed disclosures, including oral disclosures, made available to the public 
anywhere in th e world; (d) it provided prior art effect to U.S. patent applications as of their foreign 
priority dates; (e) it eliminated the requirement for inventors to set forth the best mode to carry out 
the invention as a defense in infringement actions or in post grant review; and (f) it provided a 75% 
discount for patent fees to all applicants that qualify as micro entities.322 No major changes to patent 
law have been introduced since then.  
3.275.   Inventions that are new, useful, and non -obvious are patentable.323 Patents may be granted 
for a process, machine, manufacture or composition of matter, or improvements thereof. The term 
of protection is 20 years from the filing date.  
3.276.   The United States Patent and Trademark Office (USPTO), an agency of the USDOC , is in 
charge of granting patents and registering trademarks. The USPTO is responsible for examining 
applications , and granting patents on inventions when applicants are entitled to them; and it 
publishes and disseminates patent information, records assignments of p atents, maintains search 
databases of U.S. and foreign patents, and keeps a search room for public use in examining issued 
patents and records. The USPTO administers the patent laws as they relate to the granting of patents 
for inventions, and performs oth er duties relating to patents. The USPTO has no jurisdiction over 
questions of infringement and enforcement of patents.  
3.277.   Applications for patents are examined by the USPTO to determine if the applicants are 
entitled to patents under the law, and patents are  granted when applicants are so entitled. The filing 
                                                
321 P.L. No. 112 -29. Viewed at: http://www.gpo.gov/fdsys/pkg/PLAW -112publ29/content -detail.html . 
322 USPTO online information " Global Impacts of the AIA" . Viewed at: 
http://www.uspto.gov/patent/laws -and-regulations/america -invents -act-aia/global -impacts -aia. 
323 The term "useful"  refers to the condition that the subject matter has a u seful purpose , and also 
includes operativeness.  WT/TPR/S/ 382 • United States  
 
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  date of an application for patent is the date on which a specification , and any drawings necessary to 
understand the subject matter sought to be patented , are received in the USPTO; or the date on 
which the last part completing the application is received , in the case of a previously incomplete or 
defective application. The application for a patent is not forwarded for examination until all required 
parts, complying with the rules related thereto, are rec eived. The USPTO publishes issued patents 
and most patent applications 18 months from the earliest effective application filing date, and makes 
various other publications concerning patents. The USPTO also records assignments of patents. 
Similar functions are performed with respect to the registration of trademarks.324 
3.278.   U.S. law provides for the possibility of submitting a provisional application for a patent.325 
The purpose is to provide a lower -cost first patent filing in the United States,  and to give U.S. 
applicants parity with foreign applicants. A provisional application provides the means to establish 
an early effective filing date in a patent application , and permits the term "Patent Pending" to be 
applied in connection with the invention.326 The applicant would then have up to 12 months to file a 
non-provisional application for patent. A provisional application is not examined on its merits. The 
12-month pendency for a provisional application is not counted toward the 20 -year term of a patent 
granted on a s ubsequently filed non -provisional application. Provisional applications may not be filed 
for design inventions.  
3.279.   In accordance with the American Inventors Protection Act (AIPA) of 1999, publication of 
patent applications is required for most plant and utili ty patent applications f iled on or after 
29 November 2000. A patent applicant may request that the application not be published, but only 
if the invention has not been , and will not be , the subject of an application filed in a foreign country 
that requires  publication 18 months after filing (or earlier claimed priority date) or under the Patent 
Cooperation Treaty.327 Under U.S. law, a person who is not the owner of a patent may challenge the 
validity of an issued patent by filing a petition to institute an inter partes  review of the patent before 
the Patent Trial and Appeal Board (PTAB), an administrative court of the USPTO. Two options for 
challenging validity before the PTAB may be Post -Grant Reviews (limited to within nine months of 
issuance), or inter partes reviews (any  time after nine months of issuance, or the conclusion of a 
post-grant proceeding). The petitioner may request to cancel as unpatentable one or more claims 
of a patent, on certain grounds. A petition for inter partes review must be filed aft er the later of 
either the date that is nine months after the grant of a patent, or the issuance of a reissue of a 
patent. The Patent Trial and Appeal Board  (PTAB)  is in charge of conducting inter partes review s, 
which can be appealed.  
3.280.   As reported in the previous Review, the USPTO's Strategic Plan for 2014 -18 continues to 
include the main elements with respect to current IP policy. The Plan set s out three goals for the 
2014-18 period: optimizing patent quality and timeliness; optimizing trademark quality and 
timeliness; and providing domestic and global leadership to improve IP policy, protection, and 
enforcement.328 In its overall Strategic Plan for 2018 -22, the USDOC identified a role for the USPTO 
in accelerating U.S. leadership in the s trengthening of IP protection , both in the United States and 
abroad , so as to strengthen U.S. economic and national security.329 
3.281.   The USPTO received 647,388 patent applications in FY2017, slightly down from the 650,411 
received in FY2016 (Table 3.26).330 During  the review period, the USPTO has continued to make 
progress towards addressing some of the concerns identified in previous years, with respect to the 
pendency period for patent applications and the need to improve the quality of patent applications. 
                                                
324 USPTO online information. Viewed at: https://www.uspto.gov/patents -getting -started/general -
information -concerning -patents#heading -1. 
325 In a non -provisional patent application, t he specification must conclude with a claim or claims , 
particularly pointing out and distinctly claiming the subject matter that the applicant regards as the invention.  
This is not required in the case of a provisional application.  
326 The filing date of a provisional application is the date on which a written description of the invention, 
and drawings if necessary, are received in the USPTO.  
327 USPTO online information. Vie wed at: https://www.uspto.gov/patents -getting -started/general -
information -concerning -patents#heading -1. 
328 USPTO (2014), Strategic Plan 2014-2018. Viewed at: http://www.uspto.gov/about/stratplan/ . 
329 USDOC  (2018), Helping the American Economy Grow, Strategic Plan for Fiscal Years 2018 2022 . 
Viewed at: https://www.commerce.gov/news/blog/2018/02/helping -american -economy -grow-2018-2022-
strategic -plan. 
330 USPTO online information. Viewed at: 
http://www.uspto.gov/web/offices/ac/ido/oeip/taf/us_stat.htm . WT/TPR/S/ 382 • United States  
 
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  In this respect, it has made Optimizing Patent Quality and Timeliness its Strategic Goal I within its 
Strategic Performance Framework, aimed at reducing the average time from filing until an 
examiner's initial determination on patentability to 10 months , and av erage total pendency (average 
time from filing until the application is issued as a patent or abandoned) to 20 months. During the 
period under review , the pendency time has continued to decrease. In FY2017 , total pendency time 
was 24.2 months, down from 25 .2 months in FY2016 and 26.6 months in FY2015.331 The 
unexamined patent application backlog fell from 537,655 at the end of FY2016 to 526,579 at the 
end of FY2017. Also in FY2017, average first action pendency was 16.3 months.332 
Table 3.25 Number of patent and trademark filings and pendencies, FY2013 -17 
Filings and pendencies  FY2013  FY2014  FY2015  FY2016  FY2017  
Patent filings  601,464  618,457  618,062  650,411  647,388  
% change in patent filings  6.3 2.8 -0.1 5.2 -0.5 
Patent first action pendency (months)  18.2 18.4 17.3 16.2 16.3 
% change in patent first action pendency  -16.9 1.1 -6.0 -6.4 0.6 
Total patent pendency (months)  29.1 27.4 26.6 25.3 24.2 
% change in total patent pendency  -10.2 -5.8 -2.9 -4.9 -4.3 
Trademark filings  433,654  455,017  503,889  530,270  594,107  
% change in trademark filings  4.5 4.9 10.7 5.2 12.0 
Trademark first action pendency (months)  3.1 3.0 2.9 3.1 2.7 
% change in trademark first action pendency  -3.1 -3.2 -3.3 6.9 -12.9 
Total trademark average pendency (months)  10.0 9.8 10.1 9.8 9.5 
% change in total trademark average pendency  -2.0 -2.0 3.1 -3.0 -3.1 
Source:  USPTO.  
3.282.   During the period under review, the number of patents granted by the UPSTO increased. In 
FY2017, it granted a total of 315,367 utility patents, up from 304,568 in FY2016 . The number of 
industrial  design patents also rose, from 27,830 in FY2016, to 30,637 in FY2017. The number of 
plant patents remained stable between FY2016 and FY2017, but increased with  respect to previous 
years. The number of patent reissues continued to decline (Table 3.2 6). 
Table 3.26 Patents issued FY2010 -FY2017  
Year Utility  Design  Plant  Re-issue  Total  
FY2010  207,915  23,373  978 861 233,127  
FY2011  221,350  21,295  816 969 244,430  
FY2012  246,464  21,953  920 921 270,258  
FY2013  265,979  22,453  842 809 290,083  
FY2014  303,930  24,008  1,013  661 329,612  
FY2015  295,460  25,438  1,020  531 322,448  
FY2016  304,568  27,830  1,250  459 334,107  
FY2017  315,367  30,637  1,246  392 347,243  
Source:  USPTO . 
3.283.   The share of patents of foreign origin issued by the USPTO during the review period 
continued to be larger than the share of patents of domestic origin. Patents issued by the United 
States to residents of foreign countries represented almost 52% of total patents issued in FY2017.333 
Among foreign countries, the largest share was held by Japan (28.7% of patents issued to foreign 
residents), followed by the Republic of Korea (12.6%), Ger many (10.0%), and China (7.8%)  
(Table  3.27). 
                                                
331 USPTO (2018 ), United States Patent and Trademark Office Performance and Accountability Report for 
FY201 7. Viewed at: http://www.uspto.gov/sites/default/files/documents/USPTOFY17PAR.pdf . 
332 First action pendency measures the time from when an application is filed until it receives an initial 
determination of patentability by th e patent examiner. Total pendency measures the time from filing until an 
application is either issued as a patent or abandoned.  
333 USPTO online information. Viewed at: 
http://www.u spto.gov/web/offices/ac/ido/oeip/taf/us_stat.htm . WT/TPR/S/ 382 • United States  
 
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  Table 3.27 Patents issued by the United States to residents of foreign countries and 
territories (FY2013 –17) 
Residence  FY2013  FY2014  FY2015  FY2016  FY2017  
Total  150,014  167,937  168,050  173,650  180,275  
Australia  1,878  2,062  1,937  1,888  1,964  
Austria  1,065  1,296  1,248  1,416 1,613  
Belgium  1,111 1,267  1,234  1,315  1,359  
Canada  6,915  7,922  7,487  7,258  7,532  
China  6,181 7,715  8,598  10,988  14,147  
Denmark  1,009  1,309  1,186  1,221  1,248  
Finland  1,205  1,499  1,437  1,604  1,727  
France  6,245  7,144  7,034  6,907  7,365  
Germany  15,798  17,926  17,485  17,568  17,998  
India 2,222  2,937  3,328  3,685  4,206  
Israel  2,948  3,561  3,839  3,820  4,306  
Italy 2,834  3,043  3,060  3,158  3,212  
Japan  53,359  56,639  54,487  53,046  51,743  
Korea, Republic of  15,058  17,815  19,615  21,865  22,687  
Netherlands  2,391  2,883  2,732  2,941  3,133  
Sweden  2,309  2,905  2,828  3,044  3,328  
Switzerland  2,278  2,660  2,745  2,905  3,022  
Chinese Taipei  12,168  12,271  12,317  12,738  12,540  
United Kingdom  6,292  7,232  7,143  7,289  7,633  
Source:  USPTO.  
3.284.   As indicated above, t he PTAB oversees validity challenges, which include post-grant review 
and inter partes reviews . It also oversees appeals during the course of patent examination ( ex partes  
appeals ), and implements  the patent dispute resolution portions of the AIA.  In FY2018 , it decided 
14,118 ex partes  appeals. Also, in FY2018 , it had a total of 66 post -grant r eview cases, and 3,303 
inter partes review cases.  Statistics with respect to appeals show that 11,650 appeal cases  were 
filed, and 14,118 cases were decided , during FY2017. At the end of FY2017, there were 12,998 
appeal cases pending, compared to 15,449 at the end of FY2016.334 
3.3.7.4   Industrial designs  
3.285.   Industria l designs, understood as any new, original and ornamental design for an article of 
manufacture, are protected in the United States by the Patent Law, as incorporated in Title 35 of 
the U.S. Code. The specific legal instruments for protecting industrial des igns are known as "design 
patents ". The Patent Law Treaties Implementation Act of 2012 introduced modifications to this law, 
and established the legal basis to implement the Geneva Act of The Hague Agreement Concerning 
the International Registration of Ind ustrial Designs (the Hague Agreement), which entered into force 
with respect to the United States on 13 May 2015. This also enabled the United States to join the 
WIPO -administered system.  
3.286.   As a result of the implementation of the Patent Law Treaties Impleme ntation Act of 2012, 
U.S. applicants  can file international design applications through the USPTO as an office of indirect 
filing, and applicants  filing international  design  applications  can designate  the United  States  for 
design  protection . The term of pr otection for applications filed on or after 13 May 2015 is 15 years 
from the date of grant; applications filed before 13 May 2015 have a term of protection of 14 years 
from the date of grant.  
3.287.   The number of patents granted for industrial designs has followe d an upward trend since 
FY2013. Specifically , the USPTO issued 30,270 design patents in FY2017, up from 27,830 granted 
in FY2016.335 
                                                
334 USPTO (2018), United States Patent and Trademark Office Performance and Accountability Report for 
FY2017 . Viewed at: http://www.uspto.gov/sites/default/files/documents/USPTOFY17PAR.pdf . 
335 USPTO (2018), United States Patent and Trademark Office Performance and Accountability Report for 
FY2017. Viewed at: http://www.uspto.gov/sites/default/files/documents/USPTOFY17PAR.pdf . WT/TPR/S/ 382 • United States  
 
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  3.3.7.5   Trademarks  
3.288.   Trademarks  are governed by the Lanham Act of 1946 (Trademark Act), as amended (15 
U.S.C. 1051 et seq.), the Trademark Rules (37 CFR Part 2), the Trademark Manual of Examining 
Procedures, and state laws. Trademark protection arises from federal registration with the USPTO, 
from the actual use of the mark in commerce , and from federal unfair competition laws. Federal 
registration of a mark is not a requisite to establish rights to it, nor is it required in order to use it. 
However, federal registration grants the holde r additional rights, such as the legal presumption of 
ownership, validity, and the entitlement to use the mark in connection with the goods or services 
identified in the registration. Trademark protection has a renewable term of 10 years, for as a long 
as the mark is in use. The protection granted to a mark may be cancelled if an affidavit of use is not 
provided between the fifth and sixth year of use.  
3.289.   Applications for federal trademark  registration are filed with the USPTO. They can be based 
on use of the mark in the ordinary course of U.S. trade; a bona fide intention to use the mark in the 
ordinary course of U.S. trade; the Paris Convention or the Madrid Protocol. The first to use the mark 
in commerce can prevent registration of a mark with a later filing  date or later use in commerce. 
The USPTO determines the right to register , but not the right to use a mark, which must be 
determined by a court. In the case of applications filed by U.S. applicants, the trademark must be 
used in U.S. commerce before feder al registration is issued. Applications filed by foreign applicants 
under the Paris Convention or the Madrid Protocol do not require use of the mark in U.S. commerce 
before registration, but must include a declaration of bona fide intention to use the mark  in 
commerce. Pursuant to the Madrid Protocol, a trademark owner with an application filed with, or a 
registration issued by, the USPTO and who is a national of, has domicile in, or has an industrial or 
commercial establishment in , the United States may al so file an international application with the 
USPTO. Holders of international registrations based on U.S. applications or registrations may request 
extensions of protection in other Madrid Protocol member states.  
3.290.   For applications filed pursuant to the Pari s Convention and the Madrid Protocol, use is not 
required for registration , but is required to maintain the registration.336 Use of a mark in promotion 
or advertising before the product or service is actually provided under the mark does not qualify as 
use in commerce. Notices of marks entitled to registration are published in the USPTO's Official 
Gazette. A trademark registration can be cancelled at any time if there is evidence of non -use or if 
it has been discontinued. Registration with the USPTO provides protection for the mark only in the 
United States and its territories. Foreigners registering a mark with the USPTO, if not represented 
by an attorney in the United States, must designate a U.S. representative under Section 1(e) of the 
Trademark Act of 194 6. 
3.291.   The United States has legislation to deal with dilution of a mark. Under the Trademark 
Dilution Revision Act of 2006 (P.L. 109 -312), which revised and clarified the Federal Trademark 
Dilution Act, enacted in 1996, an owner of a famous mark is entitled to obta in an injunction against 
the use of a mark or trade name in a manner that is likely to cause dilution by blurring or 
tarnishment, as well as to oppose applications or cancel registrations that are likely to cause dilution 
with the famous mark. Marks are al so protected against dilution at the state level.  
3.292.   Disputes regarding trademark registrability may be settled in the USPTO's Trademark Trial 
and Appeal Board  (TTAB) through an opposition or cancellation proceeding, or may be taken to 
court. Opposition to a mark's registration may be filed up to 30 days after publication; this period 
may be extended for up to six months. In cases of conflict between two marks, the USPTO 
determines the likelihood of confusion as a result of the use of the marks at issue by bot h parties. 
The main factors considered in determining the likelihood of confusion are the similarity of the marks 
and the commercial relationship between the goods and services identified by the marks. The 
likelihood of confusion is generally presumed if t he marks are identical and the goods or services 
are identical. Fame of a mark is also taken into account when determining likelihood of confusion. 
However, there are no lists of famous marks. The TTAB's amended Rules of Practice in Trademark 
Cases became effective in January 2017. This is the first amendment to the rules since 2007, and 
aims at streamlining trial proceedings by promoting the efficient and cost -effective use of resources 
                                                
336 This benefit, which originally applied only to non -U.S. individuals or firms from countries that are 
parties to the Paris Convention, was extended to U.S. citizens and f irms by the Trademark Law Revision Act of 
1988 which, since November 1989, has allowed the filing of applications based on the bona fide intention to 
use the mark commercially, and not necessarily on the basis of actual use.  WT/TPR/S/ 382 • United States  
 
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  of both the Board and the parties to the proceedings. The USPTO has al so issued several orders that 
clarify and interpret certain aspects of the rules. 
3.293.   Trademark application filings increased by 12% in FY2017, to 594,107, continuing a trend 
that began in FY2013. Trade mark registrations totalled 327,314 in FY2017, of which 2 42,709 were 
new registrations , and 84,727 were renewals of existing trademarks (Table 3. 28). The average 
pendency time for processing a new trademark application FY2017 was 9.5 months.337 The 
trademark renewal rate was 31.5% in FY2017, somewhat below the 32. 1% rate posted in FY2016. 
Earned revenue for trademark filings increased from US$146.1 million in FY2016 to US$159.1 million 
in FY2017.338 
Table 3.28 Trademarks registered, renewed, and published (FY2010 –17) 
Fiscal year  Certificates of registration issued  Renewed  Registrations (incl. classes)  
2010 164,330  46,734  221,090  
2011 177,661  44,873  237,586  
2012 182,761  59,871  243,459  
2013 193,121  63,709  259,681  
2014 206,555  56,166  279,282  
2015 208,660  58,284  282,091  
2016 227,407  62,604  309,188  
2017 242,709  84,727  327,314  
Source:  USPTO.  
3.294.   There were 65,636 trademarks registered to residents of foreign countries in FY2017, up 
28.7% from F Y2016 (Table 3.29 ), and accounting for 20.1% of all trademark  registrations in FY2017. 
Residents of China accounted for 36.4% of the registrations, followed by residents from Canada 
(7.2%), the United Kingdom (6.9%), Germany (6.1%), Japan (4.2%), and France (3.7%).  
Table 3.29 Trademarks issued by the United States to residents of foreign countries and 
territories (FY2013 –17) 
Residence  FY2013  FY2014  FY2015  FY2016  FY2017  
Total  36,916  38,498  40,864  50,980  65,636  
Australia  1,385  1,564  1,445  1,940  2,016  
Austria  361 369 305 406 467 
Belgium  362 408 161 372 398 
British Virgin Islands  396 295 445 286 426 
Canada  3,944  4,010  6,420  4,288  4,739  
China  2,444  2,901  4,016  10,582  23,893  
Denmark  377 393 275 472 442 
France  2,390  2,338  1,488  2,358  2,455  
Germany  3,641  3,702  2,478  3,875  3,978  
Hong Kong, China  775 883 1,472  1,268  1,504  
India 294 249 364 315 386 
Israel  462 443 470 596 574 
Italy 1,821  1,843  730 1,994  1,928  
Japan  2,568  2,770  2,433  2,982  2,763  
Korea, Republic of  1,153  1,272  1,997  1,724  2,316  
Luxembourg  271 312 343 375 388 
Mexico  1,040  921 1,123  1,005  982 
Netherlands  810 891 582 1,017  951 
Singapore  324 277 311  385 431 
Spain  965 914 786 1,151 1,086  
Sweden  661 636 604 744 749 
Switzerland  1,623  1,735  1,268  2,060  1,775  
Chinese Taipei  957 926 1,172  902 921 
United Kingdom  3,092  3,607  4,836  4,299  4,552  
Source:  USPTO (2018).  
                                                
337 USPTO (2018 ), Performance and  Accountability Report FY201 7. Viewed at: 
http://www.uspto.gov/sites/default/files/documents/USPTOFY17PAR.pdf . 
338 USPTO (2018), Performance and Accountability Report FY2017 . Viewed at: 
http://www.uspto.gov/sites/default/files/documents/USPTOFY17PAR.pdf . WT/TPR/S/ 382 • United States  
 
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  3.295.   As part of its mission to optimize trademark quality and timeliness, the USPTO continued to 
encourage electronic filing through the Trademark Electronic Application System (TEAS) and 
discourage paper filing during the review period. Following the introduction of the TEA S Reduced Fee 
(TEAS RF) application option in January 2015, the USPTO implemented additional fee changes  
communicated in the Federal  Register , 81 Fed. Reg. 72694 in October 2016, to raise fees for paper 
filings. The fees were adjusted to be better aligned with the full cost of relevant products and 
services , and to encourage the use of electronic filing options, which reduce the USPTO's examination 
costs. First and final action compliance rates, which measure trademark quality, exceeded 97% and 
98%, respect ively in FY2017. The number of trademark applications processed completely 
electronically increased to 86.5% in FY2017, and the number of paper application filings declined to 
425 from 1,189 in FY2016.339 
3.3.7.6   Geographical indications  
3.296.   The United States provides p rotection to foreign and domestic geographical indications (GIs) 
through its trademark system for all classes of goods and services, usually as certification marks 
and collective marks with indications of regional origin.340 The U.S. system provides that an 
interested party  may assert grounds (such as those described below) to oppose an application to 
register, or to cancel a registered mark, if that party believes that it will be damaged by the 
registration or continued existence of the registration. The USP TO examines applications for 
trademarks, including certification marks and collective marks  with indications of regional origin . 
Protection is not granted to geographic terms or signs that are generic for goods or services. Under 
the system , the owner of a  mark has the exclusive right to prevent its use by unauthorized parties 
when such use would likely cause consumer confusion, mistake or deception as to the source of the 
goods/services. A prior right holder has priority and exclusivity over any later user s of the same or 
similar sign on the same, similar, related, or in some cases unrelated goods/services where 
consumers would likely be confused by the two uses. Complementary protection is provided under 
the Federal Alcohol Administration Act and its imple menting regulations for wine and distilled spirits 
of both domestic and foreign origin.  
3.297.   The Trademark Act differentiates certification marks with indications of regional origin from 
trademarks by two characteristics: (a) a certification mark is not used by  its owner; and (b) a 
certification mark does not indicate the commercial source nor distinguish the goods or services of 
one person from those of another person. Any entity, which meets the certifying standards, is 
entitled to use the certification mark. Certification marks identify the nature and quality of the goods , 
and affirm that these goods have met certain defined standards.  
3.298.   Geographic names or signs may also be registered as collective marks or as trademarks. 
However, the geographic term must not b e deceptive; and the applicant must either show acquired 
distinctiveness  in the geographic term, or disclaim exclusive right to use the geographic term. 
Although registration is preferable because of notice to the public and other benefits,  GIs may also 
be protected through common law without being registered by the USPTO if they are a valid common 
law regional certification or collective mark (not a generic term).341 
3.3.7.7   Trade secret protection  
3.299.   The main legislation with respect to the protection of trade secrets  in the United States is 
contained in the Economic Espionage Act (EEA) of 1996 (as amended by the Theft of Trade Secrets 
Clarification Act of 2012) and the Defend Trade Secrets Act (DTSA) of 2016, P.L. No. 114 -153, 2016, 
as well as state laws. The EEA defi nes as trade secret tangible or intangible information in all forms 
and types regarding a number of areas (financial, business, scientific, technical, economic, or 
engineering) whether it is stored, compiled, or memorialized physically, electronically, gra phically, 
photographically, or in writing, provided: (a) the owner thereof has taken reasonable measures to 
keep such information secret; and (b) the information derives independent economic value, actual 
or potential, from not being generally known to, an d not being readily ascertainable through proper 
                                                
339 USPTO (201 8), Performance and Accountability Report FY201 7. Viewed at: 
http://www.uspto.gov/sites/default/files/documents/USPTOFY17PAR.pdf .  
340 USPTO, Geographical Indication Protection in the United States . Viewed at: 
http://www.uspto.gov/sites/default/files/web/offices/dcom/olia/globalip/pdf/gi_system.pdf . 
341 USPTO, Geographical Indication Protection in the United Sta tes. Viewed at: 
http://www.uspto.gov/sites/default/files/web/offices/dcom/olia/globalip/pdf/gi_system.pdf . WT/TPR/S/ 382 • United States  
 
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  means by, the public. Until 2016 , U.S. federal trade secret protection legislation was focused on  
criminal acts , while civil enforcement of trade secret protection was addressed through state law; 
however, t he passage of the DTSA added a federal civil cause of action for  trade secret 
misappropriation.  
3.300.   The Theft of Trade  Secrets Clarification Act of 2012 expanded the scope of the EEA , so that 
it now applies  to products or services that are used , or intended fo r use, in interstate or foreign 
commerce. The provisions  of the EEA do not apply to lawful activity by government entities. The 
EEA has extraterritorial jurisdiction in cases where the offender is a U.S. citizen or permanent 
resident, or if the offender is  an organization organized under the laws of the United States or any 
U.S. state, or if the offense was committed in the United States.  
3.301.   The DTSA , signed into P.L. No. 114 -153 in May 2016, created federal civil cause of action  
by amending the Federal Crimin al Code to establish a private civil cause of action for trade secret 
misappropriation. The DTSA authorizes a trade secret owner to file a civil action in a district court 
seeking relief for trade secret misappropriation related to a product or service in interstate or foreign 
commerce. The Act provides for private civil remedies, including ex parte  orders for the seizure of 
property necessary to prevent the propagation or dissemination of the trade secret that is the subject 
of the action. The DTSA also gi ves the choice to parties between localized disputes under state laws 
or disputes under federal law, heard in federal courts. State laws differ somewhat, but there is 
similarity among them because almost all states have adopted the Uniform Trade Secrets Ac t 
(UTSA),  with modifications.342 The DTSA also provides for whistle -blower protection for an individual 
who makes a confidential disclosure to a government official in cases of a suspected violation of the 
law, or files a sealed document to the court with respect to an anti -retaliation l awsuit. It establishes 
injunctive and damages remedies. Under the Act, a trade secret owner may apply for, and a court 
may grant, a seizure order to prevent dissemination of the trade secret if the court makes specific 
findings, including that an immediate  and irreparable injury will occur if seizure is not ordered. The 
court must take custody of the seized materials , and hold a seizure hearing within seven days.343 
3.302.   Under the EEA, economic espionage for a foreign power , and the theft or misappropriation 
of a trade secret , are federal crime s. For economic espionage, the EEA sets fines of up to US$500,000 
per offense and imprisonment of up to 15 years for individuals, and fines of up to US$10 million for 
organizations. In the case of theft of trade secrets, penalties for violation are imprisonment for up 
to 10 years for individuals (no fines) and fines of up to US$5 million for organizations. The amount 
of these fines was extended in 2013, in the case of individuals, from U S$500,000 to US$5 million, 
and in the case of organizations, from US$10 million to the greater of US$10 million or three times 
the value of the stolen trade secret to the affected organization. Amendments to maximum fines 
were also introduced in 2016 with the passage of the DTSA. This Act amended the EEA , to provide 
for criminal fines for individuals to be the greater of US$5 million or three times the trade secret's 
value (including any reproduction costs that the holder of the trade secret has avoided).  
3.303.   Section 1637 of the National Defense Authorization Act (ND AA) of 2015 ( 50 U.S.C. 1708),  
Actions to Address Economic  or Industrial Espionage in Cyberspace , directs the President to submit 
to Congress, n ot later than 180 days after 19 December 2014, and annua lly thereafter through 
2020, a report on foreign economic and industrial espionage in cyberspace during the 12 -month 
period preceding the submission of the report, that identifies: (a) foreign countries that engage in 
economic or industrial espionage in cy berspace with respect to trade secrets or proprietary 
information owned by U.S. persons; (b) foreign countries identified under clause (a) that the 
President determines engage in the most egregious economic or industrial espionage in cyberspace 
with respec t to such trade secrets or proprietary information (to be known as "priority foreign 
countries"); and (c) categories of technologies or proprietary information developed by U.S. persons 
that are targeted for economic or industrial espionage in cyberspace a nd, to the extent practicable, 
have been appropriated through such espionage. The report must also identify the actions taken by 
                                                
342 The UTSA, passed in 1979 and amended in 1 985, is a model civil trade secrets law drafted by the 
National Conference of Commissioners on Uniform State Laws , with the  goal of making  the state laws 
governing trade secrets uniform . The U TSA does not pre -empt state trade secrets law , and its adoption by 
states is not mandatory, and , when and if adopted , it can be modified by the state adopting it. The UTSA has 
been adopted by 47 states (the exceptions are Massachusetts, New York and North Carolina), the District of 
Columbia, Puerto Rico and the U.S. Vi rgin Islands . States that have not adopted a version of the UTSA protect 
trade secrets by statute, common law, or a combination.  
343 DTSA  2016. Viewed at: https://www.congress.gov/bill/114th -congress/senate -
bill/1890?q=%7B%22search%22%3A%5B%22trade+secret%22%5D%7D&resultIndex=1 . WT/TPR/S/ 382 • United States  
 
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  the President to "decrease the prevalence of economic or industrial espionage in cyberspace." The 
NDAA also authorizes the Pres ident to prohibit all transactions in property of any (foreign) person 
who the President determines knowingly engages in economic or industrial espionage in cyberspace. 
This authority is an expansion of the long -standing International Emergency Economic Po wers Act 
(IEEPA) , and does not include the authority to impose sanctio ns on the importation of goods.  
3.3.7.8   Copyright  
3.304.   In accordance with the Constitution, the Federal Government has jurisdiction over copyright 
protection. Copyright  is protected under the Copyrig ht Act of 1976, as amended, which took effect 
on 1 January  1978. The Act, embodied in Title 17 of the U.S. Code (17 U.S.C.), pre -empts any state 
law that provides equivalent rights in copyrightable subject  matter. Since its enactment in 1976, the 
Copyright  Act has been amended on several occasions (Table 3.3 0). 
Table 3.30 Main Amendments to the Copyright Act since 1995  
Act Coverage  
Digital Performance Right in Sound 
Recordings Act of 1995  Amended the Copyrigh t Act to provide an exclusive public 
performance right for sound recordings that extends to 
digital performances.  
Legislative Branch Appropriations Act of 
1997 (Public Law 104 -197) Introduced amendments concerning the exception for 
reproducing literary works in specialized format for the blind 
and disabled.  
Digital Millennium Copyright Act of 1998 
(Public Law 105 –304)  Amended U.S. copyright law to comply with the WIPO 
Copyright Treaty  and the WIPO Performances and 
Phonograms Treaty , including the introduction of anti -
circumvention provisions. Also established a legal framework 
limiting online infringement liability for Internet service 
providers.  
Sonny Bono Copyright Term Extension (P.L. 
105-298) Extended by 20  years the overall term of copyright protection.  
Digital Theft Deterrence and Copyright 
Damages Improvement Act of 1999 (P.L. 
106-160) Increased the possible civil penalties for copyright 
infringement . 
Copyright Royalty and Distribution Reform 
Act of 2004 (P.L. 108.419, 118 Stat. 2341)  Amended copyright law to replace copyright arbitration 
royalty panels with Copyright Royalty Judges.  
Family Entertainment and Copyright Act of 
2005 (P.L. 109 -119 Stat. 218)  Increased penalties for copyright infringement, and 
introduced penalties against unauthorized camcording.  
Copyright Royalty Judges Program Technical 
Corrections Act (2006) (P.L. 109 -303)  Makes technical corrections relating to copyright royalty 
judges.  
Copyright Cleanup, Clarification, and 
Corrections Act of 2010 (P.L. 111 -295)  Makes some technical corrections to the Copyright Act.  
STELA Reauthorization Act of 2014 (P.L. 
113-200)  Amended Title 17, to extend, until 31 December 2019, the 
statutory license under which satellite carriers retransmit 
distant television broadcast stations to viewers who are 
unable to receive signals for such stations in their local 
market.  
Unlocking Con sumer Choice and Wireless 
Competition Act of 2014 (Public Law 113 -
144) Re-establishes a limited exemption to prohibitions on 
circumvention of certain technological protection measures 
for the purposes of "unlocking" wireless telephone handsets 
to allow cel l phone owners to connect to different wireless 
network providers.  
Source:  WIPO ; Government Publishing Office (GPO) , viewed  at: https://www.gpo.gov/ ; and U.S. Copyright 
Office, Preface to Circular 92 , viewed  at: https://www.copyright.gov/title17/preface.pdf . 
3.305.   The United States is a party to the Berne Convention for the Protection of Literary and Artistic 
Works (1989), the WIPO Copyright Treaty (2002), the WIPO Performances and Phonograms Treaty  
(2002), the Brussels Convention Relating to the Distribution of Program -Carrying Signals  
Transmitted by Satellite (1985), and the Convention for the Protection of Producers of Phonograms 
Against Unauthorized Duplicat ion of their Phonograms (1974). The United States is not a party to 
the Rome Convention.344 
                                                
344 U.S. Copyright Office, Circular 38A, International Copyright Relations of the United States,  June 
2018. Viewed at https://www.copyright.gov/circs/circ38a.pdf . WT/TPR/S/ 382 • United States  
 
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  3.306.   The United States grants automatic protection to copyrighted works, including computer 
programs, from all WTO Members and Berne Convention signatories. To be eligible  for copyright 
protection, a work must be an original creation. Copyright protection covers an author's economic 
rights in artistic, literary and scientific works. The period of protection is the lifetime of the author , 
plus 70 years for works created on or after 1 January 1978. Anonymous and pseudonymous works 
and works made for hire , are protected for 95 years after publication or 120 years after creation, 
whichever is shorter. Copyright owners who have registered thei r copyright with the Copyright Office 
may also choose to record their registration with CBP for protection against the importation of 
infringing copies.  
3.307.   The U.S. Copyright Office administers the Copyright Act, and the duties of the Office and the 
Register of Copyrights are prescribed in, and governed by, the Copyright Act and the related chapter 
of Title 17 of the U.S. Code.345 The Office: examines and registers copyright claims  and administers 
deposit requirements; records transfers, assignments, licenses an d other transactions; and 
administers regulations, practices and program mes that explain the provisions of the law. 
Registration is not required for protection, although , in addition to establishing a public record of the 
copyright claim, there are additio nal benefits that accrue with timely registration, including the 
availability of statutory damages.346 The Copyright Office advises Congress , the judiciary and 
executive branch agencies on national and international issues relating to copyright . The Copyrigh t 
office  may also undertake studies on U.S. copyright law at the request of Congress , and also under 
its own initiative.347 Recent reports have included: (a) a report on Section 1201 (exemption to non -
circumvention rules)  (June 2017)348; (b) a software -enabled  consumer products study (December 
2016)349; (c) a Proposed Schedule and Analysis of Copyright Recordation Fee to go into  Effect on or 
about 18  December 2017 (submitted to Congress on 18 August 2017)350; and (d) a discussion 
document on revising the Section 10 8 exceptions for libraries and archives.351 
3.308.   The Copyright Office registered 452,122 claims to copyright in FY2017.352 In September 
2017, it released an updated version of the Third Edition  of its Compendium of U.S. Copyright Office 
Practices, a technical manual on registration practices that serves as a guidebook for authors, 
copyright licensees, practitioners, scholars, the courts, and members of the general public.353 This 
update was effective as of 29 September 2017, and it is the governing administrative  manual for 
registrations and recordations issued by the Copyright Office on or after that date.354 
3.309.   In U.S. copyright legislation, the approach is based on copyright and authors ' rights; there 
is no concept of neighbouring rights (certain elements of the rig hts of performers, producers of 
sound recordings and broadcasters) separate from copyright. Those parties may receive protection 
under copyright , via contract law, including collective bargaining rights, and under 
telecommunications law. The United States is a party to the Geneva Phonograms Convention , which 
is used to provide a point of attachment for U.S. sound recordings in foreign countries, as does the 
                                                
345 See 17 U.S.C. Secs 701 and 702.  
346 See U.S. Copyright Office, Circular 1, Copyright Basics 5 (2017) at: 
https://www.copyright.gov/circs/circ01.pdf . Such benefits include the following. Registration establishes prima 
facie evidence of the validity of the copyright, and of the facts stated in the certificate when registratio n is 
made before or within five years of publication. When registration is made prior to infringement, or within three 
months after publication of a work, the copyright owner is eligible for statutory damages, attorneys' fees, and 
costs. Before an infringe ment suit may be filed in court, registration (or refusal) is necessary for works of U.S. 
origin (this is not required for works of foreign origin).  
347 17 U.S.C. Sec. 701(b).  
348 U.S. Copyright Office (2017 ), Section 1201 of Title 17 . Viewed at: 
http://www.copyright.gov/policy/1201/section -1201-full-report.pdf . 
349 U.S. Copyright Office (2016 ), Software -Enabled Consumer Products . Viewed at: 
http://www.copyright.gov/policy/software/software -full-report.pdf . 
350 U.S. Copyright Office (201 7), Proposed Schedule and Analysis of  Copyright Recordation Fee to go 
into Effect on or about December 18, 2017 . Viewed at: http://www.copyright.gov/policy/feestudy2017/fee -
study -2017.pdf . 
351 U.S. Copyright Office (2017), Section 108 of Title 17: A Discussion Document of the Register of 
Copyrights . Viewed at: https://www.copyright.gov/policy/section108/discussion -document.pdf . 
352 U.S. Copyright Office (2018 ), Fiscal 2017  Annual Report . Viewed at: 
http://www.copyright.gov/reports/annual/2016/ar2016.pdf and 
http://www.copyright.gov/reports/annual/2017/ar2017.pdf . 
353 U.S. Copyright Office, Compendium of U.S. Copyright Office Practices, Third  Edition . Viewed at: 
http://www.copyright.gov/comp3/docs/introduction.pdf . 
354 See U.S. Copyright Office, Compendium of U.S. Copyright Office Practices . Viewed at: 
https://www.copyright.gov/comp3/ . WT/TPR/S/ 382 • United States  
 
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  WTO TRIPS  Agreement . Sound recordings are considered works of authorship under the Copyright 
Act, but have a more limited scope of rights than other categories of works. Federal law provides 
protection against unauthorized recordings of live musical performances.355 The Audio Home 
Recording Act of 1992 requires that manufacturers and importers of digital au dio recorders and 
digital recording media pay fees that are distributed to recording artists and copyright owners on a 
national treatment basis. The Copyright Royalty and Distribution Reform Act of 2004 and the 
amendments contained in the Copyright Royalty  Judges Program Technical Corrections Act of 2006 
replaced the Copyright Arbitration Royalty Panels with Copyright Royalty Judges (CRJs), who serve 
on the Copyright Royalty Board which is part of the Library of Congress.  
3.310.   U.S. copyright law does not grant r etransmission rights for broadcast organizations, but U.S. 
telecommunications law provides protections for broadcast signals and technical measures used in 
connection with the signals.356 Additionally, U.S. copyright law protects the copyrighted content 
contained within broadcast signals.357 Computer programs and compilations of data that constitute 
original works of authorship are protected as literary works. Owners of copyrighted works enjoy an 
exclusive right to create derivative works based on the copyright ed works.  
3.311.   Statutory licences consistent with the Berne Convention may be applied for certain types of 
copyrighted products, for example for secondary transmissions by cable and satellite, and for the 
use of certain  works in connection with non -commercial broadcasting. In this respect, t he Copyright 
Act provides for several types of statutory licences. Generally, interested parties are given the 
opportunity to negotiate the terms of the licence; a rate is set by the authorities only if they fail to 
agree. Statutory licensing provisions in the Copyright Act govern the retransmission of distant and 
local television broadcast signals by cable operators and satellite carriers to those who cannot receive 
broadcast signals.  The STELA Reauthorization Act of 2014 ( P.L. 113 -200), signed into law on 
4 December 2014, amended Title 17, to extend , until 31 December 2019, the statutory license under 
which satellite carriers retransmit distant television broadcast stations to viewers  who are unable to 
receive signals for such stations in their local market.358 
3.312.   U.S. copyright law has anti -circumvention rules as those contained in the Digital Millennium 
Copyright Act (DMCA). The DMCA also allows possible temporary exemptions to the DMCA's  
prohibition against circumvention of technological measures that control access to , or unauthorized 
use of , copyrighted works. Under Section 1201 of Title 17 of the U.S. Code, the Copyright Office 
conducts  a public rulemaking every three years, so it can advise the Librarian of Congress on any 
proposed exemptions to the prohibition on circumventing technological protection measures.359 
Petitioners submit evidence and arguments for the Copyright Office to consider when evaluating 
whether to recommend an exemp tion to the Librarian. The rulemaking has several phases: the 
petition phase, the public comment phase, which has multiple rounds, and the public hearings phase. 
After these phases are completed, the Register, after consulting with the National 
Telecommuni cations and Information Administration at the USDOC , presents his or her 
recommendation to the Librarian. The primary responsibility of the Register and the Librarian of 
Congress in the rulemaking proceeding is to assess whether the implementation of techn ological 
protection measures impairs the ability of individuals to make non -infringing use of copyrighted 
works within the meaning of Section 1201(a)(1). The Librarian will review the recommendation 
before issuing any exemptions.360  
3.313.   The U.S. Copyright Offic e initiated its seventh triennial rulemaking proceeding under the 
DMCA in 2017.361 In this proceeding, the Copyright Office established a streamlined procedure for 
the renewal of exemptions that were granted during the sixth triennial rulemaking and consider ed 
petitions for new exemptions to engage in activities not permitted by existing exemptions. In June 
2017, the Copyright  Office published a Notice of Inquiry requesting petitions to renew existing 
                                                
355 17 U.S.C. Section 1101 . 
356 47 U.S.C. Sections 325, 553, 605; see also 18 U.S.C. Section 2511 . 
357 17 U.S.C. 106; 18 U.S.C. Section 2511; and 47 U.S.C. Sections 553 and 605 . 
358 U.S. Copyright Office information online. Viewed at: http://www.copyright.gov/title17/ . 
359 Section 1201 of Title 17 is the part of the DMCA that encourages copyright owners to provide greater 
access to their digital works, by providing them with legal protections against unauthorized access to their 
works.  
360 U.S. Copyright Office, Section 1201 of Title 17. The Triennial Rulemaking Process . Viewed at: 
https://www.copyright.gov/1201/1201_rulemaking_slides.pdf . 
361 Federal Register , Vol. 82, No. 206 , Thursday, 26 October 2017 , Proposed Rules . 
https://www.gpo.gov/fdsys/pkg/FR -2017-10-26/pdf/2017 -23038.pdf . WT/TPR/S/ 382 • United States  
 
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  exemptions and comments in response to those petitions, as  well as petitions for new exemptions 
to engage in activities  not currently permitted by existing exemptions. Subsequently, i n 
October  2017, the Copyright Office issued a Notice of Proposed Rulemaking , in which it stated its 
intention to recommend each of the existing exemptions for re -adoption, and through which it 
initiated three rounds of public comment on the newly -proposed exemptions.362 Final rules will be 
issued in the fall of 2018.  
3.314.   Also with respe ct to exemptions to anti -circumvention policies, the Unlocking Consumer 
Choice and Wireless  Competition Act of 2014 re -established a limited exemption to prohibitions on 
circumvention of certain technological protection measures for the purposes of "unlock ing" wireless 
telephone handsets to allow cell phone owners to connect to different wireless network providers.  
3.315.   The USDOC's Internet Policy Task Force (IPTF or Task Force), created in 2010, is responsible 
for identifying leading public policy and operation al issues impacting the private sector's ability to 
realize the potential for economic growth and job creation through the Internet. The IPTF draws 
expertise from several bureaus, including those responsible for domestic and international ICT 
policy, inter national trade, cyber security standards and best practices, IP, business advocacy , and 
export control.363 The Task Force issued a comprehensive  Green Paper on "Copyright Policy, 
Creativity, and Innovation in the Digital Economy " in 2013364, and a follow -on Wh ite Paper on 
"Remixes, First Sale, and Statutory Damages " in 2016.365 
3.3.7.9   Enforcement  
3.3.7.9.1   Main provisions, institutions and actions  
3.316.   All main IP laws contain provisions with respect to enforcement. The Stop Counterfeiting in 
Manufactured Goods Act of 2006 (P.L. 109 -181) prohibits the trafficking in counterfeit goods and 
services , including trafficking  in labels or similar packaging of any type or nature bearing a 
counterfeit mark and that are intended to be used on , or in connection with , the goods or services 
for whi ch the genuine mark is registered.  
3.317.   There are several agencies involved in the enforcement of IPRs, including the Departments 
of Commerce, Justice , Treasury, Homeland Security, State, Agriculture, Health and Human Services, 
the Copyright Office, and the Off ice of the U.S. Intellectual Property Enforcement  Coordinator (IPEC).  
3.318.   The IPEC, like other Executive Branch agencies and departments, engages with stakeholders 
and international  partners to address IP issues, impacting infringement, market access, competit ion, 
digital trade, cybersecurity, and rule of law concerns around the world. The IPEC also works to 
expand IP law enforcement cooperation. Under Section  304 of the PRO IP Act of 2008 (15 U.S.C. § 
8114), the IPEC must present an annual report focusing on t he IP enforcement activities of the 
Federal Government. The FY2017 Section 304 Report noted that the current Administration's efforts 
have focused on coordinating and developing overall IP enforcement policy and strategy, to promote 
innovation and creativi ty, and to ensure effective IP protection and enforcement, domestically and 
abroad. The IPEC's IP strategy calls for the coordinated participation of a broad range of Executive 
Branch agencies and departments. Its strategic approach has four parts: (a) engagement with U.S. 
trading partners; (b) effective use of all U.S. legal authorities, including trade tools; (c) expanded 
law enforcement action and cooperation ; and (d) engagement and partnership with the private 
sector and other stakeholders.366 
3.319.   With a v iew to foster ing greater intra -agency coordination, the IPEC established the White 
House Intellectual Property Strategy Group, that brings together the National Economic Council 
                                                
362 Federal Register , Vol. 82, No. 206 , Thursday, 26 October 2017 , Proposed Rules. 
https://www.gpo.gov/fdsys/pkg/FR -2017-10-26/pdf/2017 -23038.pdf . 
363 USPTO online information. Viewed at  https://www.uspto.gov/learning -and-resources/ip -
policy/copyright/internet -policy-task-force. 
364 The Green Paper is available at: https://www.uspto.gov/learning -and-resources/ip -
policy/copyright/green -paper -copyright -policy -creativity -and-innovation . 
365 The White Paper is available at: https://www.uspto.gov/learning -and-resources/ip -
policy/copyright/white -paper -remixes -first-sale-and-statutory -damages . 
366 Office of the U.S. Intellectual Proper ty Enforcement Coordinator (IPEC) (2018 ), Annual Report for 
Fiscal Year  2017. Viewed at: https://www.whitehouse.gov/wp -
content/uploads/2017/11/2018Annual_IPEC_Report_ to_Congress.pdf . WT/TPR/S/ 382 • United States  
 
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  (NEC), the National Security Council (NSC), the Office of Science and Technolo gy Policy (OSTP), the 
Council of Economic Advisors (CEA), the Office of the Vice President (OVP), USTR, other relevant 
White House offices, and departments and agencies. Additionally, the IPEC chairs: (i) a Senior IP 
Enforcement Advisory Committee ; and (ii ) an IP Enforcement Advisory Committee in connection 
with the formation of the Joint Strategic Plan.  
3.320.   The IPEC and the interagency IP Enforcement Advisory Committee issued the new three -
year Joint Strategic Plan on IP Enforcement for 2017 -19, in December 20 16. The objectives of the 
Plan, are summarized as follows:  
• Reduce counterfeit and infringing goods in domestic and international supply chains;  
• Identify unjustified impediments to effective enforcement action against the financing, 
production, trafficking,  or sale of counterfeit or infringing goods;  
• Support the sharing of information to curb illicit trade;  
• Disrupt domestic and international counterfeiting and infringement networks;  
• Strengthen the capacity of other countries to protect and enforce IPRs;  
• Establish with other governments international standards and policies for effective IPR 
protection and enforcement; and  
• Protect IPRs overseas by enhancing international collaboration and public -private 
partnerships.367 
3.321.   The Department of Justice (DOJ) plays a  key role in the enforcement of IPRs , both at the 
criminal and civil levels. It is in charge of investigating and prosecuting a wide range of IP crimes, 
including those involving copyright piracy, trademark counterfeiting, and trade secret theft. Primary 
investigative and prosecutorial responsibility within the DOJ rests with the Federal Bureau of 
Investigation ( FBI), the United States Attorneys ' Offices, the Computer Crime and Intellectual 
Property Section (CCIPS) in the Criminal Division, the Counterintel ligence and Export Control Section 
(CES) in the National Security Division, and the Consumer Protection Branch of the Civil Division 
with regard to offenses arising under the Food, Drug, and Cosmetic Act. The DOJ also maintains a 
Computer Hacking and Intel lectual Property (CHIP) Network, which consists of prosecutors who are 
specially trained in the investigation and prosecution of IP and computer crimes. IP enforcement is 
also an integral part of the mission of three sections of the DOJ's Civil Division: t he IP Section, which 
brings affirmative cases when U.S. IP is infringed; the National Courts Section, which initiates civil 
actions to recover various penalties or customs duties arising from negligent or fraudulent import 
transactions , and defends CBP enf orcement of the USITC's exclusion orders  under Section 337  of 
the Tariff Act of 1930, as amended (19 U .S.C. 1337) ; and the Consumer Protection Branch, which 
conducts civil and criminal litigation under the Food, Drug, and Cosmetic Act.  
3.322.   The U.S. Immigration  and Customs Enforcement (ICE)  - Homeland Security Investigations 
(HSI) -led National Intellectual Property Rights Coordination Center (IPR Center), officially recognized 
by the TFTEA  of 2015 (P.L. 144 -125) Sec. 305, plays an important role in the Governmen t's response 
to global IP theft and enforcement of international trade laws.368 The IPR Center, headed by an ICE -
HSI Director , with Deputy Directors from the FBI and CBP, has as its mission to stop predatory and 
unfair trade practices that threaten the globa l economy. To accomplish this goal, the Center brings 
together 19 key federal agencies, and four international entities: Interpol, Europol and the 
Governments of Canada and Mexico,  in a task -force setting. The Center combats IP theft through a 
three -pronge d approach, comprising of: (a) investigation: identifying, disrupting, prosecuting and 
dismantling criminal organizations involved in the manufacture and distribution of counterfeit 
products; (b) interdiction: using focused targeting and inspections to kee p counterfeit and pirated 
goods out of U.S. supply chains, markets and streets; and (c) outreach and training: providing 
training for domestic and international law enforcement, and stakeholders to build stronger 
enforcement capabilities worldwide. The IPR  Center's Outreach and Training Section engages in 
partnerships with the public and private sectors to combat IP theft through its Operation Joint 
                                                
367 IPEC (2016), U.S. Joint Strategic Plan on Intelle ctual Property Enforcement  FY2017 – 2019. Viewed 
at: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/IPEC/2016jointstrategicplan.pdf . 
368 IPR Center online information. Viewed at: https://www.iprcenter.gov/about -us. WT/TPR/S/ 382 • United States  
 
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  Venture initiative , designed to increase information sharing with public and private sectors to combat 
the illegal importation and distribution of counterfeit, substandard and tainted goods.  
3.323.   Estimates of the annual cost of IP theft to the economy in counterfeit goods, pirated 
software, and theft of trade secrets, including cyber -enabled trad e secrets, range between 
US$225  billion and US$600 billion. The estimated cost of trade secret theft alone to U.S. firms is 
between US$180 billion, or 1% of U.S. GDP, and US$540 billion, 3% of GDP.369 The Council of 
Economic Advisers has estimate d that malicious cyber activi ty cost the economy between 
US$57  billion and US$109 billion in 2016.370 
3.324.   CBP reported seizing US$1.38 billion of counterfeit goods in FY2016 (valued at suggested 
retail price had they been genuine). In FY2017, the number of IPR seizures increased 8% to 34,14 3, 
from 31,560 in FY2016; however, the total estimated value of the seized goods decreased to 
US$1.21 billion.371 In partnership with the Express Association of America and its members, CBP 
continued in FY2017 the Voluntary Abandonment Pilot Program, which r esulted in 5,588 voluntary 
abandonments of detained goods. Also , in FY2017, CBP completed 115 exclusion order enforcement 
actions (shipments seized and shipments excluded). CBP seized 297 shipments of circumvention 
devices for violations of the DMCA, a 324 % increase from FY2016. Among the products seized in 
FY2017, 15% were apparel and accessories, 15% watches and jewellery, 13% consumer electronics, 
12% footwear, 11% consumer products, 10% handbags and wallets, 8% pharmaceuticals and 
personal care products , 3% optical media, 2% computers and accessories, 2% labels and tags, 1% 
toys, and the remaining 15% other products.372 The combined total number of all IPR border 
enforcement actions in FY2017 increased 12% over FY2016.  
3.325.   CBP also conducted 12 national level IPR-mitigating trade operations in FY2017, which 
targeted high -risk shipments at seaports, airports, international mail facilities , and express carrier 
hubs across the United States, and resulted in 1,845 seizures of IPR -infringing goods with an 
estimated (if genuine) value of US$44 million. CBP also seized 123 shipments of semiconductor 
devices affixed with counterfeit trademarks in FY2017. In total, 49 trademarks were discovered to 
be counterfeits in these seizures.  
3.326.   In FY2017, ICE/HSI initiated 713 IP inv estigations, arrested 457 individuals, obtained 288 
indictments, and received 240 convictions related to IP crimes. At the end of FY2017, the FBI had 
228 pending IPR investigations. The largest number of investigations dealt with the theft of trade 
secrets  (79), copyright infringement (79), and trademark infringement (64). During FY2017, the FBI 
initiated 44 new investigations, made 31 arrests and got 23 convictions. In FY2017, the IPR Center 
examined 27,856 investigative leads; of these 16,030 were referre d to law enforcement partners.373 
3.327.   The DOJ continues to prioritize IP investigations and prosecutions that involve health and 
safety issues, trade secret theft or economic espionage, and large -scale commercial counterfeiting 
and online piracy. The DOJ has als o increased focus on IP crimes that are committed or facilitated 
by use of the Internet , or perpetrated by organized criminal networks.374 
                                                
369 Commission on the Theft of American Intellectual Property (IP Commission  (2017), The Theft of 
American Intellectual Property: Reassessments of the Challenge and United States Policy . 2017 . Update to the 
IP Commission Report. Viewed at: http://ipcommission.org/report/IP_Commission_Report_Update_201 7.pdf. 
370 Council of Economic Advisers (2018), The Cost of Malicious Cyber Activity to the U.S. Economy , 
February. Viewed at: https://www.whitehouse.gov/wp -content/uploads/2018/03/The -Cost-of-Malicious -Cyber -
Activity -to-the-U.S.-Economy.pdf . 
371 CBP (2018), Intellectual Property Rights Seizure Statistics. Fiscal Year 2017 . Viewed at: 
https://www.cbp.gov/sites/default/files/assets/documents/2018 -Apr/ipr -seizure -stats-fy2017.pdf.  
372 CBP (2018), Intellectual Property Rights Seizure Statistics. Fiscal Year 2017 . Viewed at:  
https://www.cbp.gov/sites/default/files/assets/documents/2018 -Apr/ipr -seizure -stats-fy2017.pdf.  
373 IPEC, Annual Intellectual Property Report to Co ngress , March 2018. Viewed at: 
https://www.whitehouse.gov/wp -content/uploads/2017/11/2018Annual_ IPEC_Report_to_Congress.pdf . 
374 IPEC, Annual Int ellectual Property Report to Congress , March 2018. Viewed at: 
https://www.whitehouse.gov/wp -content/uploads/2017/11/2018Annual_ IPEC_Report_to_C ongress.pdf . WT/TPR/S/ 382 • United States  
 
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  3.3.7.9.2   Special 301  
3.328.   Under "Special 301" provisions ( Section 182 of the Trade Act of 1974, as amended) , USTR 
conducts annual rev iews of the state of IPR protection and enforcement in U.S. trad ing partners 
around the world.  
3.329.   In the Special 301 Annual Review, a trading partner may be identified as a "Priority Foreign 
Country" (PFC) if it is found that it has the most onerous or egregi ous acts, policies, or practices 
that deny adequate and effective IPRs, or deny fair and equitable market access to U.S. persons 
that rely on IP protection, whose acts, policies, or practices have the greatest adverse impact (actual 
or potential) on the re levant U.S. products , and is not "entering into good faith negotiations or 
making significant progress in bilateral or multilateral negotiations." Trading partners may also be 
identified on a Priority Watch List, if they meet some, but not all , of the crit eria for designation as a 
PFC, or on a "Watch List", in the case of trading partners with which the United States has significant 
IPR concerns.  For certain countries identified in USTR's Priority Watch List, the USTR is required to 
develop an action plan c ontaining benchmarks designed to assist the foreign country to achieve 
adequate  and effective IPR protection and fair and equitable market access for U.S. persons that 
reply upon IPR protection.375 
3.330.   PFC is a statutory category. In cases where a trading partne r has been identified as a PFC, 
the USTR is required to initiate a Section 301 investigation within 30 days of when the country was 
identified, unless the USTR determines that the initiation of such an investigation would be 
detrimental to U.S. economic in terests , or where the act, policy, or practice identified as the basis 
for the PFC identification is the subject of any other investigation or action under Section 301. If the 
case involves the TRIPS Agreement or another trade agreement, a determination mu st be made 
within 18 months of initiating the investigation. In other cases, the USTR must make a determination 
of unfairness and decide what action to take, if any, within six months of the initiation of the 
investigation, or nine months under certain spe cific conditions.376 
3.331.   In its 2018 Special 301 report, released on 30 April 2018, the USTR identified 36 trading 
partners as failing to provide adequate and effective IP protection , and fair and equitable market 
access to persons that rely on such protection.377 No trading partner was identified as a PFC as a 
result of the review. Twelve trading partners were placed on the Priority Watch List. In addition to 
identifying 36 countries on the Priority Watch List and the Watch List, the report also mentioned 
areas of  concern in several countries. The Report also identified a wide range of cross -cutting IP 
concerns with regard to adequate and effective IP protection and enforcement worldwide, including: 
(a) concerns related to IP protection and enforcement and market a ccess barriers with respect to 
pharmaceuticals and medical devices; (b) lack of adequate or effective border enforcement against 
counterfeit and pirated goods , and lack of authority to take ex officio  action to seize and destroy 
such goods at the border or  to take such action for goods in  transit; (c)  failure to address the 
continuing and emerging challenges of copyright piracy; (d) online piracy; (e) restrictive 
patentability criteria and lack of adequate and effective protection for regulatory test or oth er data 
submitted by pharmaceutical and agricultural chemical producers; and (f) inadequate protection for 
trade secrets in a number of countries.378 
3.332.   USTR also conducts Out-of-Cycle Review s that focus on identified IP challenges in specific 
trading partner m arkets, and can lead to a positive change in a trading partner's Special 301 status 
outside of the annual review. In 2017, USTR closed four such reviews . 
3.333.   The Notorious Markets List identifies selected  markets, including those on the Internet, that 
engage  in and facilitat e copyright piracy and trademark counterfeiting. The List includes markets 
where owners, operators, and governments have failed to address concerns . The List is not an 
                                                
375 The report is prepared pursuant to Section 182 of the Trade Act of 1974, as amended by the 
Omnibus Trade and Competitiveness Act of 1988, the Uruguay Round Agreements Act, and the TFTEA of 2015 
(19 U.S.C. §2242).  
376 This period may be extende d to nine months if : the issues involved are complex; the foreign country 
is making substantial progress in drafting or implementing legislation or administrative measures that will 
provide adequate and effective IPR protection ; or it is undertaking enforc ement measures to this end.  
377 USTR , 2018 Special 301 Report . Viewed at: 
https://ustr.gov/sites/default/files/files/Press/Reports/2018%20Special%20301.pdf . 
378 USTR , 2018 Special 301 Report. Viewed at: 
https://ustr.gov/sites/default/files/files/Press/Reports/2018%20Special%20301.pdf . WT/TPR/S/ 382 • United States  
 
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  exhaustive account of all physical and online markets worldwide in whic h IP infringement may take 
place. The List does not make findings of legal violations, nor does it reflect the U.S. Government's 
analysis of the general IP protection and enforcement climate in the countries connected with the 
listed markets.379 The 2017 Out -of-Cycle Review of Notorious Markets , published in December 2017, 
highlighted 25 online markets based in 13 trading partners , and 18 physical markets in 12 trading 
partners , around the world that are reported to be engaging in and facilitating substantial  copyright 
piracy and trademark counterfeiting. USTR plans to conduct its next Out -of-Cycle Review of 
Notorious Markets in the fall of 2018.  
3.3.7.9.3   Section 337 investigations  
3.334.   Section 337 of the Tariff Act of 1930 ( 19 U.S.C. Section 1337)  declares unlawful "unfair  
methods of competition and unfair acts in the importation and sale" of articles subject to satisfaction 
of a domestic  industry test. For some unfair acts, depending on the type of unfair  method of 
competition or act at issue, a showing of injury or threat  of injury must also be made.  
3.335.   Upon receipt of a complaint alleging a violation of Section 337, the USITC determines 
whether the complaint satisfies the requirements of its rules , and if an investigation should be 
instituted. The USITC is required to concl ude its investigation at the earliest practicable time, and 
must, within 45 days after an investigation is instituted, establish a target date for issuing its final 
determination.380 If, at the completion of the investigation , the USITC determines that Secti on 337 
has been violated, the USITC may issue orders excluding the articles from entry into the United 
States (exclusion orders) and/or directing the violating parties to cease and desist from certain 
actions. USITC orders are effective when issued, althou gh imports are often allowed to continue 
subject to a bonding requirement ; they become final 60 days after issuance unless disapproved for 
policy reasons by the USTR within that 60 -day period.  
3.336.   Exclusion orders direct CBP either to bar entry into the United  States of infringing goods 
from whatever source (general exclusion orders) or to bar entry to imports from specifically identified 
entities (limited exclusion orders) . The USITC may issue a general exclusion order applicable to 
imports from all countries if a violation of Section 337 is established by substantial, reliable, and 
probative evidence and either a general exclusion order is necessary to prevent circumvention of an 
exclusion order limited to products of named persons , or there is a pattern of vi olation of Section 
337 and it is difficult to identify the source of infringing products.381 Instead of , or in addition to , 
exclusion orders, the USITC may issue cease and desist orders against named importers and other 
persons engaged in unfair acts that violate Section 337.382 Also, the USITC  may refuse to issue an 
exclusion or cease and desist order after taking into account statutory public interest factors. In this 
respect, the USITC must consider the effects of a remedial order on: public health and welfare;  
competitive conditions in the U.S. e conomy; the production of like or directly competitive articles in 
the United Sta tes; and U.S. consumers.383 
3.337.   Between 1 January 2016 and 23 May 2018, 182  new Section 337 complaints were received 
by the USITC , and 137 investigations were instituted.384 The majority of the cases (87% in 2017) 
dealt with patent infringement; a few cases dealt with copyright, trade secrets and trademarks or 
with several IPRs combined. Investigations covered products from 37 trading partners and from the 
United States. In the same period, the USITC issued 27  exclusion orders, of which 20 were limited 
                                                
379 USTR  (2018), 2017 Out -of-Cycle  Review of Notorious Market s. Viewed at: 
https://ustr.gov/sites/default/files/files/Press/Reports/2017%20Notorious%20Markets%20List%201 .11.18.pdf . 
380 USITC online information. Viewed at: 
https://www.usitc.gov/intellectual_property/about_section_337.htm . 
381 USITC, Summary of Statutory Provisions Related to Impo rt Relief, Investigations of Unfair Practices 
in Import Trade, Including Infringement of Patents, Trademarks, Copyrights, Mask Works, or Boat Hull 
Designs . USITC Publication 4468 , August 2014 . Viewed at: 
https://www.usitc.gov/oig/documents/pub4468_2014.pdf . 
382 USITC online information. Viewed at: 
https://www.usitc.gov/intellectual_property/about_section_337.htm . 
383 USITC, Summary of Statutory Provisions Related to Import Relief, Investigations of Unfair Practices 
in Import Trade, Including Infringement of Patents, Trademarks, Copyrights, Mask Works,  or Boat Hull 
Designs . USITC Publication 4468, August 2014. Viewed at: 
https://www.usitc.gov/oig/documents/pub4468_2014.pdf . 
384 USITC online information. Viewed at: https://pubapps2.usitc.gov/337external/ . WT/TPR/S/ 382 • United States  
 
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  exclusion or ders, and 7 were general exclusions, together with 33 cease and desist orders.385 Almost 
two thirds of the investigations ended in a settlement, or consent order, or the complaint was 
withdrawn. As of 31 December 2017, 109 active  exclusion orders were in effect, of which 20 were 
general exclusion orders affecting imports of a range of products, including 
automotive/manufacturing/transportation products; chemical compositions; computer and 
telecommunications products; consumer electronics products; integrated circuits; LCD/TV; lighting 
products; memory chips and related products; pharmaceuticals and medical devices; printing 
products; and other consumer items . 
3.338.   CBP is in charge of the enforcement of Section 337 exclusion orders that affect trading 
partners. The DOJ is responsible for defending CBP actions linked to these orders in the case of a 
dispute.  
3.3.7.9.4   IP and technology transfer  
3.339.   In September 2017, t he United States updated the TRIPS Council on its implementation of 
Article  66.2 of the TRIPS Agreement , noting tha t it is committed to continually enhancing its 
activities pursuant to it, and reporting those activities.386 The report noted that much of the 
Government's research conducted by federally operated laboratories and federally funded R&D 
centres results in inve ntions or findings that contribute to the development of new technologies and 
processes. Commercialization of these outputs can yield economic and social benefits that increase 
returns on the investment in federal R&D.387 The report noted that the United Sta tes continues to 
believe that the effective functioning of Article 66.2 of the TRIPS Agreement requires a robust 
dialogue between developed country and LDC Members, in order to target incentives in a way that 
is most responsive to the self -identified techn ology transfer inte rests and needs of LDC Members.  
3.340.   The Bayh -Dole Act of 1980 directs that inventions that result from federally funded research 
be used to promote commercialization and public access through practical application. To this end, 
the United St ates conducts a number of technology transfer program mes, incentives, and 
partnerships. The National Science and Technology Council (NSTC) Workgroup on Lab to Market 
coordinates federal initiatives on technology transfer , and federal agencies implement the se 
initiatives. The Federal Laboratory Consortium for Technology Transfer (FLC), a national network of 
approximately 300 U.S. federal laboratories and cent res, plays a key role in providing information 
about technologies that are available for licensing , and the availability of laboratories for 
collaboration and partnership. The FLC encourages technology transfer and, through its member 
laboratories, s eeks partners around the world.  
3.341.   The United States Government also conducts a number of technology transfer program mes 
through , or with the support of , USAID. The Partnerships for Enhanced Engagement in Research 
(PEER) program me supports scientists in developing countries through institutional research awards 
ranging up to US$300,000. It aims to build capacity a mong local scientists and research institutions, 
strengthen research partnerships world -wide, and better translate data and evidence into policy. 
Under this program me, U.S. scientific agencies , as well as universities and research institutes around 
the wor ld, have partnered with scientists in developing countries through PEER awards. Since its 
launch in 2011, PEER has supported more than 250 projects in 50 countries.388 The Research and 
Innovation Fellowship Program connects early -career U.S. researchers and scientists to hosting 
organizations in the developing world , to conduct collaborative research projects of up to a year, 
funded by USAID and its partners. Other initiatives include the Global Innovation Exchange platform, 
a network that connects innovators , donors, academia, and the private sector to innovative devices, 
data, technologies, approaches, processes and funding opportunities. Under this initiative, USAID 
both provide s funds and facilitates. Under the Development Innovation Ventures (DIV) program me, 
a year -round grant competition , open to nearly any individual or organization for any sector in any 
                                                
385 Viewed at: 
https://www.usitc.gov/intellectual_property/337_statistic s_remedial_orders_issued_leo_v_geo.htm . 
386 In accordance with the TRIPS Council's Decision of 20 February 2003, contained in WTO document 
IP/C/28, developed country members shall provide yearly reports to LDC Members on actions taken or planned 
in the pursu ance of the commitments of developed countries under Article 66.2 to provide incentives to 
enterprises and institutions in their territories for the purpose of promoting and encouraging technology 
transfer to LDC members, in order to enable them to create a sound and viable technological base.  
387 WTO document IP/C/W/631/Add.2 , 28 Sep tember 2017.  
388 WTO document IP/C/W/631/Add.2, 28 September 2017 . WT/TPR/S/ 382 • United States  
 
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  country where USAID operates, grants are awarded based on cost -effectiveness, evidence of impact, 
and the potential to scale.  
3.342.   The United States also utilizes science and technology (S&T) agreements as frameworks for 
increased international collaboration , by facilitating cooperation between U.S. technical agencies and 
foreign counterparts , on topics including public health, watershed management, agricul ture, 
environment and biodiversity protection, biotechnology, earth sciences, marine sc ience, and 
alternative energy . WT/TPR/S/ 382 • United States  
 
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  4  TRADE POLICIES BY SE CTOR  
4.1  Agriculture  
4.1.1   Main features  
4.1.  The U.S. agricultural sector is among the largest in the world , even  though agriculture and 
other primary activities (forestry, fisheries and hunting) account for less than 1% of GDP (Chart  1.1) 
and about 1.5% of employment. Agricultural activities are very important to the local economy in 
certain parts of the United Stat es. Significant differences in landscape and climate within the United 
States provide opportunities not only for large -scale agriculture but also for highly diversified 
agricultural output. The United States is a major world exporter of many agricultural c ommodities 
and a net exporter of food.  
4.2.  The slightly more than 2 million farms generated a combined value of agricultural production 
of US$372.7 billion in 2017 (Table 4.1).1 The decline of US$50 billion in the production value since 
2014 was primarily due to lower prices for key commodities. Measured by value, agricultural 
production is split roughly equally between crops and livestock, the principal crops being maize, 
soybeans, hay (including alfalfa), and wheat. Cattle (beef and dairy), milk, poultry, and  eggs 
dominate in animal production. The United States is the world's largest producer of soybeans, maize, 
beef, chicken, and turkey, and ranks third in the world in the production of pig meat and cotton. 
Market developments in the United States therefore have a considerable influence on the world 
market prices for many commodities.  
Table 4.1 Value of production, 2010 -17 
(US$ billion and %)  
 2010  2011  2012  2013  2014  2015  2016  2017  % of 
totala 
Total  334.9  379.5  396.6  394.3  406.4  376.2  355.5  372.7  100.0  
Maize for grain  64.5 76.7 74.2 61.9 53.0 49.3 51.3 48.5 13.0 
Soybeans for 
beans  37.6 38.5 43.7 43.6 39.5 35.2 40.7 41.0 11.0 
Hay 14.6 18.1 18.6 19.8 19.1 16.5 15.6 16.2 4.4 
Wheat  12.6 14.3 17.4 14.6 11.9 10.0 9.2 8.1 2.2 
Cotton  7.3 7.0 6.3 5.2 5.1 4.0 5.8 7.2 1.9 
Milk 31.5 39.7 37.2 40.5 49.6 35.9 34.7 38.1 10.2 
Cattle and calves  36.9 45.1 48.1 48.5 59.9 59.8 48.6 50.2 13.5 
Poultry and eggs  34.7 35.3 38.2 44.4 48.4 48.1 38.7 42.7 11.5 
Hogs 16.0 20.0 20.3 21.7 24.2 18.9 17.4 19.2 5.2 
Crops total 
(excl. 
horticulture)  191.1  211.4  223.9  210.2  194.8  179.2  185.7  185.2  49.7 
a  Percentage of total for the year 2016.  
Source:  USDA National Agricultural Statistics Service online. Viewed at: https://quickstats.nass.usda.gov/ ; 
 USDA National Agricultural Statistics Service online information, "Poultry Production and Value", 
 different bulletins, viewed at:  
 http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1130 ; and OECD 
 Stats, Agriculture Policy Indicators, 2017 Monitoring and Evaluation: Reference Tables.  
4.3.  Despite a sizable domestic  market, much of agriculture is highly export oriented, particularly 
in the production of soybeans, maize, wheat, cotton, and chicken. The United States is the world's 
leading exporter of most of these commodities. However, for maize and wheat, and to some  extent 
for poultry, U.S. shares in world trade have been declining over the years, as other countries have 
been expanding their production faster than the United States (Table 4.2). In beef, the United States 
is both a major exporter and major importer of  bovine meat (Table 4.3).  
                                                
1 Crop farms have been getting larger over the last 30 years, the midpoint size increasing from 
589 acres in 1982  to more than 1,200 acres in 2012.  WT/TPR/S/ 382 • United States  
 
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  Table 4.2 U.S. and world production and trade of selected commodities, 2010 -19 
('000 tonnes, unless otherwise indicated)   
Marketing year  2010/  
11 2011/  
12 2012/  
13 2013/  
14 2014/  
15 2015/  
16 2016/  
17 2017/  
18 2018/  
19 
Maize            
Production  United States  315,618  312,789  273,192  351,272  361,091  345,506  384,778  370,960  370,514    
% of world  37.8 35.1 31.3 35.3 35.3 35.5 35.7 35.9 34.9 
Exports  United States  46,508  39,096  18,545  48,790  47,421  48,229  58,270  60,963  59,693    
% of world  50.8 33.4 19.4 37.1 33.3 40.3 36.4 41.3 37.4 
Wheat            
Production  United States  58,868  54,244  61,298  58,105  55,147  56,117  62,833  47,371  51,078    
% of world  9.1 7.8 9.3 8.1 7.6 7.6 8.4 6.2 7.0 
Exports  United States  35,147  28,606  27,544  32,012  23,523  21,168  28,602  24,524  27,896    
% of world  26.4 18.1 19.9 19.3 14.3 12.2 15.6 13.4 15.2 
Cotton (thousand 480 lb. bales)          
Production  United States  18,102  15,573  17,314  12,909  16,319  12,888  17,170  20,923  19,235    
% of world  15.4 12.2 14.0 10.7 13.7 13.4 16.1 16.9 16.0 
Exports  United States  14,376  11,714  13,026  10,530  11,246  9,153  14,917  15,847  15,500    
% of world  41.2 25.5 28.0 25.8 31.7 26.2 39.6 38.8 37.0 
Soybean, oilseed           
Production  United States  90,663  84,291  82,791  91,389  106,878  106,857  116,920  119,518  124,808    
% of world  34.3 35.1 30.8 32.3 33.4 33.9 33.6 35.5 34.0 
Exports  United States  40,959  37,186  36,129  44,594  50,136  52,870  58,960  57,425  56,064    
% of world  44.7 40.5 36.0 39.6 39.7 39.9 40.0 37.4 35.5  
Calendar year  2010  2011  2012  2013  2014  2015  2016  2017  2018  
Beef and veal            
Production  United States  12,034  11,978  11,845  11,751  11,075  10,817  11,507  11,938  12,601   
 % of world  20.3 20.3 19.9 19.4 18.2 18.1 19.0 19.4 20.0 
Exports  United States  1,043  1,263  1,112  1,174  1,167  1,028  1,159  1,298  1,372   
 % of world  13.4 15.7 13.6 12.7 11.7 10.7 12.3 13.0 13.1 
Poultry meat            
Production  United States  16,563  16,694  16,621  16,976  17,306  17,971  18,262  18,696  19,004  
  % of world  21.2 20.6 19.9 20.1 19.9 20.2 20.5 20.6 20.6 
Exports  United States  3,067  3,165  3,299  3,332  3,310  2,867  3,014  3,075  3,152   
% of world  34.4 33.0 32.7 32.4 31.6 27.9 28.2 27.9 28.0 
Source:  USDA Foreign Agricultural Service, Production, Supply and Distribution database. Viewed at: 
 https://apps.fas.usda.gov/psdonline/app/index.html#/app/advQuery . 
4.4.  Except in 2 005 and 2006, when imports almost matched exports, the United States has been 
a significant net exporter of agricultural products since 2000, although the trade surplus has declined 
since the peak period 2012 -14 (Chart 4.1).  
Table 4.3 Exports and imports of selected products, 2012 -18a 
   
2012  2013  2014  2015  2016  2017  July 2018  
Total exports  US$ million  145,933  148,499  154,554  137,229  138,909  142,905  85,925  
1201 Soybeans  US$ million  24,804  21,605  23,917  18,909  22,885  21,518  9,715    
'000 tonnes  43,655  39,400  49,622  48,203  57,848  55,324  25,117  
1005 Maize  US$ million  9,686  6,839  11,102  8,664  10,260  9,555  8,043    
'000 tonnes  31,477  24,065  49,706  44,703  55,893  53,044  43,746  
0802 Other nuts, fresh or 
dried US$ million  6,011  7,043  7,464  7,622  7,312  7,907  4,102  
  
'000 tonnes  1,116  1,118  1,053  1,048  1,252  1,334  615 
0201 
+ 
0202a Meat of bovine 
animals fresh and 
frozen  US$ million  4,628  5,216  6,015  5,159  5,237  6,171  4,134  
  
'000 tonnes  773 814 812 716 814 913 579 
1001 Wheat and meslin  US$ million  8,169  10,445  7,715  5,632  5,366  6,082  2,986    
'000 tonnes  25,767  32,882  25,449  21,266  23,956  27,243  12,366  
5201 Cotton  US$ million  6,225  5,592  4,396  3,889  3,959  5,828  4,995    
'000 tonnes  2,752  2,790  2,167  2,396  2,469  3,253  2,756  
2106 Food preparations 
not elsewhere 
specified  US$ million  4,763  5,406  5,568  5,372  5,703  5,468  3,264  
  
'000 tonnes  791 850 842 815 827 764 424 
0203 Meat of swine  US$ million  4,836  4,426  4,966  4,030  4,199  4,558  2,738    
'000 tonnes  1,645  1,488  1,545  1,526  1,601  1,722  1,068  
0207 Meat and edible 
offal poultry  US$ million  5,015  4,977  4,924  3,466  3,309  3,629  2,116  
  
'000 tonnes  3,926  3,859  3,855  3,179  3,334  3,429  1,983  
2304 Oil-cake and solid 
residues, from 
extraction of 
soybean oil  US$ million  3,474  4,002  4,229  3,886  3,297  3,122  2,573  
  
'000 tonnes  6,747  7,539  7,843  9,306  8,607  8,618  6,752  WT/TPR/S/ 382 • United States  
 
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2012  2013  2014  2015  2016  2017  July 2018  
2309 Preparations of a 
kind used in animal 
feeding.  US$ million  2,703  2,911  2,811  2,658  2,819  2,943  1,770  
  
'000 tonnes  2,016  2,032  1,858  1,826  2,061  2,091  1,190  
2303 Residues of starch 
manufacture and 
similar residues, 
beet-pulp, bagasse 
and other waste of 
sugar manufacture  US$ million  3,005  4,009  3,989  3,796  2,889  2,614  1,826  
  
'000 tonnes  9,750  12,089  18,862  14,750  13,641  13,480  8,060  
Total  imports  US$ million  109,640  111,979  119,629  122,021  123,324  129.976  82,497  
2208 Spirits, liqueurs and 
other spirituous 
beverages  US$ million  6,509  6,918  7,076  7,232  7,642  7,831  4,619  
  
'000 tonnes  686 698 666 670 705 720 419 
0901 Coffee  US$ million  6,534  5,324  5,889  5,903  5,621  6,182  3,381    
'000 tonnes  1,446  1,493  1,525  1,539  1,604  1,624  941 
2204 Wine of fresh 
grapes  US$ million  5,059  5,245  5,370  5,380  5,541  5,913  3,608  
  
'000 tonnes  1,168  1,097  1,077  1,104  1,114  1,209  681 
2203 Beer made from 
malt US$ million  3,706  3,709  4,154  4,550  4,869  5,087  3,255  
  
'000 tonnes  3,252  3,231  3,462  3,675  3,914  4,038  2,546  
1905 Bread, pastry, 
cakes, biscuits and 
other bakers' wares  US$ million  3,232  3,397  3,566  3,961  4,511  4,955  2,895  
  
'000 tonnes  980 1,019  1,059  1,203  1,420  1,564  937 
0201 
+ 
0202a Meat of bovine 
animals fresh and 
frozen  US$ million  3,372  3,434  5,296  6,251  4,850  4,912  3,173  
  
'000 tonnes  715 717 957 1,078  957 973 590 
0804 Dates, figs, 
pineapples, 
avocados, guavas, 
mangoes and 
mangosteens, fresh 
or dried  US$ million  1,799  2,135  2,654  2,796  3,156  3,960  2,245  
  
'000 tonnes  1,833  2,017  2,206  2,342  2,441  2,593  1,560  
2202 Waters, including 
mineral waters and 
aerated waters, 
containing added 
sugar or other 
sweetening matter 
or flavoured, and 
other non -alcoholic 
beverages, not 
including fruit or 
vegetable juices of 
heading 20.09  US$ million  2,024  2,208  2,363  2,694  2,901  3,185  1,855  
  
'000 tonnes  1,535  1,570  1,636  1,853  2,052  2,204  1,239  
0709 Other vegetables, 
fresh or chilled  US$ million  2,195  2,566  2,586  2,626  3,033  2,984  1,927  
  
'000 tonnes  1,842  1,903  2,044  2,031  2,305  2,371  1,516  
2008 Fruit, nuts and 
other edible parts of 
plants, otherwise 
prepared or 
preserved  US$ million  2,250  2,341  2,394  2,666  2,706  2,888  1,816  
  
'000 tonnes  1,298  1,399  1,352  1,477  1,487  1,518  927 
a HS headings 0201 (meat of bovine animals, fresh and chilled) and 0202 (meat of bovine animals, 
frozen) have been added together so that trade in meat of bovine animals is comparable to HS 
headings 0203 (meat of swine) and 0207 (meat and edible offal of poultry), which both include 
fresh, chilled, and frozen meat under the same HS heading.  
Source:  UNSD Comtrade database.  
 WT/TPR/S/ 382 • United States  
 
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  Chart 4.1 Exports and imports of agricultural products, 2000 -17 
(US$ billion)  
 
Source:  UNSD Comtrade database.  
4.1.2   Major support programmes  
4.1.2.1   General legal framework  
4.5.  Support to agriculture is primarily authorized by the so -called "farm bills", i.e. multi -year 
omnibus legislation covering a wide array of agricultural and food programmes. While some of the 
programmes have permanent authorization (e.g. crop insurance), others are authorized only for the 
life of the farm bill, and their authorization will lapse unless they are continued in a subsequent farm 
bill. While the first versions of farm legislation (in the 1930s) focused on support to producers of 
staple commodities (maize, soybeans, wheat, cotton, sugar, rice, and dairy), modern farm bills are 
much wider in scope, and address a range of issues such a s revenue and price support, crop 
insurance, credit, disaster relief, conservation, research, bioenergy, horticulture and organic 
farming, rural development, nutrition, food aid, and trade. The farm bills are renewed approximately 
every five years.  
4.6.  Authori zation for most programmes under the Agricultural Act of 2014 (PL 113 -79), signed into 
law on 7 February 2014, will expire on 30 September 2018. The 2014 Farm Bill introduced numerous 
changes in the system of support to agriculture. A system of direct paym ents to crop producers, in 
place since 1996, was discontinued. Countercyclical payments on historical base were replaced by 
the option to enrol in one of two programmes tied to historical base, either a price -based 
countercyclical income support programme – the Price Loss Coverage (PLC) – or a revenue -based 
countercyclical income support programme – the Agricultural Risk Coverage (ARC).2 Market price 
support for dairy products was replaced by a margin protection programme for dairy farmers. 
Disaster aid pro grammes for livestock producers were modified and reauthorized. Federal crop 
insurance programmes were expanded. A new programme, the Supplemental Coverage Option 
(SCO), which requires producers to have an underlying insurance policy, allowed them to add a n 
area-based plan on top of individual farm coverage. Producers with historical upland cotton base 
were not eligible to elect PLC or ARC for cotton, but cotton producers were offered a supplemental 
crop insurance programme: the Stacked Income Protection Pl an (STAX). The Farm Bill also sought 
to rationalize various conservation programmes.  
                                                
2 The 2014 Farm Bill eliminated the Counter -Cyclical Payments (CCP) Programme and the Average Crop 
Revenue Election (ACRE) Programme.  
020406080100120140160180
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Exports
ImportsChart 4.1
Exports and imports of agricultural products, 2000 -17
Source:  UNSD Comtrade database..(US$ billion)WT/TPR/S/ 382 • United States  
 
- 145 - 
 
  4.7.  Based on expected and actual outlays, the 2014 Farm Bill has been dominated by the 
Supplemental Nutrition Assistance Program (SNAP), providing food assistance to low -incom e 
households. Nearly 80% of the projected expenditure concerned the funding of SNAP. At the time 
of enactment, the estimated cost of the 2014 Farm Bill was US$489 billion for its entire duration, of 
which SNAP accounted for US$391 billion, and three other main titles in the bill (crop insurance, 
conservation, and commodities and disaster) a further US$93 billion. Revised projections released 
by the Congressional Budget Office of the United States in January 2017, based on actual 
expenditures on SNAP and the  other major programmes during FY2014 through FY2016, indicated 
a reduced level of spending of some US$28 billion, including nearly US$26 billion less spent on SNAP. 
At the same  time, while lower commodity prices had boosted the cost of countercyclical far m support 
programmes relative to the initial projections, these higher costs had been almost fully balanced by 
the lower insured crop value, and hence reduced costs, for federal crop insurance.3 
4.8.  The 2014 Farm Bill  was amended in early 2018, through the pas sage of  the Bipartisan Budget 
Act of 2018 (PL 115 -123). As part of the revision, "seed cotton" has now become a covered 
commodity under the PLC and ARC programmes from the 2018 crop year. Changes were also made 
to the Margin Protection Program for dairy fa rmers, to make it more attractive for small and average -
sized farms. In addition, an indemnity programme was created to help offset losses due to hurricanes 
and wildfires in 2017, and changes were made in some of the existing disaster relief programmes.  
4.9.  In July 2018, the Department of Agriculture announced its intention to provide a short -term 
aid package designed to assist agricultural producers with market disruptions caused by retaliatory 
tariffs.4 
4.10.   Preparations for a new farm bill began in 2016. A number  of hearings were held in 2017, and 
the legislative process has been underway throughout the reporting period in 2018.  
4.1.2.2   Price Loss Coverage (PLC)  
4.11.   PLC covers historical base (i.e. historical area and yield) of maize, soybeans, wheat, other 
feed grains, other  oilseeds, peanuts, pulses, rice, and - from the 2018 crop year - seed cotton. When 
the current average market year price falls below the reference price set in the 2014 Farm Bill, PLC 
payments are made on 85% of the historical base for each covered commod ity on a farm. Farmers 
were obliged to make a one -time choice (for the duration of the 2014 Farm Bill) whether to elect 
PLC for historical base of each covered commodity on the farm. PLC is decoupled from current 
production as it relies on historical base without any requirement to produce5, but it is triggered by 
current prices.  
4.12.   The payment the farmer receives, no earlier than 1 October after the end of the applicable 
marketing year for the covered commodity, equals the difference between the higher of the  national 
average market price or loan rate and the reference price multiplied by the eligible base. According 
to the USDA Farm Service Agency, PLC payments for the 2016 crop year  totalled nearly 
US$3.25  billion, primarily for historical base acres of wheat (US$1,273 million), long grain rice 
(US$736 million), peanuts (US$528  million), sorghum (US$342 million), and maize 
(US$208  million).  
4.1.2.3   Agricultural Risk Coverage (ARC)  
4.13.   Farmers ha ve had the choice to enrol their historical base in PLC or ARC for the covered 
commodities. ARC is a revenue -based income support programme tied to county -level benchmark 
revenue guarantees. Although the ARC revenue guarantee may also be determined at the farm level 
(individual ARC or ARC -IC), most farmers opting for ARC have chosen the version that establishes 
the revenue guarantee on a commodity -by-commodity basis at the county level (ARC -CO). This 
solution has allowed producers to select the ARC -CO reven ue guarantee for some crops and PLC for 
                                                
3 Congressional Research Service, Previewing a 2018 Farm Bill , Washington D.C., 15 Marc h 2017.  
4 For more information, see https://www.usda.gov/media/press -releases/2018/09/04/usda -launches -
trade -mitigation -programs . 
5 Land owners had a one -time option to reallocate, but not to increase, their base acres using average 
planted acreage during 2009 -12. They could also choose to retain the payment yield under the previous CCP 
programme or update it to 90% of the average com modity yield for the crop years 2008 -12. WT/TPR/S/ 382 • United States  
 
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  others.6 However, once a choice has been made, no switching back and forth between the two 
programmes is permitted.  
4.14.   ARC-CO establishes benchmark revenue for each covered commodity corresponding to 86% 
of the five -year (Olympic) average national market price multiplied by the five -year (Olympic) 
average county yield. When the actual county revenue (based on current prices and current county 
yields) falls below the county benchmark, farmers with a historical base of tho se commodities may 
be paid up to 10% of the difference.7 Payments are limited to 85% of the enrolled historical base. 
Like for PLC, landowners have been allowed to reallocate, but not increase, their ARC base acres 
according to planted acres in 2009 -12. 
4.15.   Data from the USDA Farm Service Agency (FSA) indicates that payments under ARC -CO 
amounted to US$3.76 billion for the 2016 crop year , mainly for historical base acres of maize 
(US$2.8 billion), wheat (US$651  million), and soybeans (US$201 million).  The selec tion of PLC or 
ARC has varied by region and by crop. Overall, about 76% of the historical base acres were enrolled 
in ARC -CO and 23% in PLC in 2014. The preference for ARC may have been influenced by favourable 
price and revenue data over 2011 -13 - particu larly for maize, soybeans, and wheat – and 
correspondingly attractive benchmark revenue for the 2014 -16 crop years.8 
4.1.2.4   Marketing Loan Programme  
4.16.   The USDA Commodity Credit Corporation (CCC) provides interim financing to eligible 
producers of 28 commodities (Ta ble A4.1).9 Marketing loans are fully coupled to current prices and 
current production. Support is provided only for harvested commodity; no benefits are provided 
under this programme in the event of a crop loss.  
4.17.   The interim financing allows farmers to del ay sales from normal harvest time until market 
conditions are favourable. At the end of the loan term (typically nine months), or at any time before 
that, the producer is expected to repay the loan. Alternatively, when market prices fall below the 
statutor ily fixed loan rates, the farmer has four options, either (i) to repay the loan at a rate 
determined by county market conditions and keep the difference between the repayment rate and 
the original loan rate (marketing loan gain (MLG)), while retaining owne rship of the commodity for 
later sale; (ii)  instead of taking a loan, to request a loan deficiency payment (LDP) when the posted 
county price is below the fixed marketing loan rate; (iii) to purchase commodity certificates at the 
lower market price and exc hange for the crop provided as collateral to the CCC; or (iv) to forfeit the 
crop provided as collateral to the CCC and keep the difference between the value of the loan and 
the value of the commodity forfeited. As with all commodity and crop insurance pro grammes, 
producers must comply with conservation and wetland protection requirements and report all crop 
acreage planted to be eligible for LDP or marketing loans; gross income and payment limitations 
also apply.10 
4.18.   The 2014 Farm Bill fixed the statutory marketing loan rates for crop years 2014 -18.11 The 
rates, which are below the PLC reference prices, observed market prices, and actual production 
costs, in recent years, are designed to provide income support at times of low commodity prices. 
Marketing loan  benefits have been modest in recent years. In the agriculture support notifications 
                                                
6 The revenue guarantee under ARC -IC automatically requires enrolment of all covered commodities on 
the farm, and may therefore not be used in combination with PLC.  
7 ARC payments are capped at 10% of the benchmark revenue.  
8 Congressional Research Service (2018), U.S. Farm Commodity Support: An Overview of Selected 
Programs , 17 April.  
9 The interest rate is set at the CCC cost of borrowing from the Treasury, plus one percentage point, at 
the time the loan is made.  
10 Persons or legal entities are not eligible for MLGs or LDPs if their average adjusted gross income 
exceeds US$900,000, but remain eligible for marketing loans repaid at principal plus interest. Accumulated 
payments for PLC, ARC, MLGs, and LDPs may not exc eed US$125,000 per person or legal entity per year. A 
separate and additional US$125,000 annual payment limit applies to programme benefits for peanuts.  
11 The loan rates were generally the same as in crop years 2010 -13. WT/TPR/S/ 382 • United States  
 
- 147 - 
 
  for marketing years 2014 and 2015, benefits reported under the marketing loan programme 
amounted to US$444 million and US$357 million, respectively.12 
4.1.2.5   Crop insurance  
4.19.   Federa l multi -peril insurance was introduced in 1938 (for wheat), but the policies sold by the 
Federal Crop Insurance Corporation (FCIC) remained limited in both geographical scope and covered 
crops, for many years. The 1980 Crop Insurance Act expanded federal c rop insurance to new crops 
and regions, and introduced subsidized insurance premiums to encourage farmer participation.13 
Subsequent legislation in 1994 and 2000 increased subsidy rates, and expanded the role of the 
private sector in programme delivery.  
4.20.   At present, the insurance products on offer include revenue or yield -based plans as well as 
whole -farm policies. Some 130 crops are covered, including specialty crops (fruit, vegetables, 
nursery crops, and tree nuts), although four major crops – maize, soybea ns, wheat, and cotton – 
dominate in terms of area enrolled (75%) and claims paid (80%). The USDA Risk Management 
Agency (RMA) sets the premium rates and other contract provisions, and the policies are sold to 
farmers by private insurance companies and priv ate insurance agents.14 Under a Standard 
Reinsurance Agreement (SRA) that is renegotiated periodically, private insurers are reimbursed for 
their administrative and operating expenses related to the policies, and they share the risks (i.e. 
losses or gains) with the Federal Government through reinsurance.  
4.21.   Farmers may generally choose between the minimum "catastrophic" coverage  and additional 
("buy -up") coverage.15 The Federal Government pays the entire premium for catastrophic coverage, 
while participants pay an annual US$300 administrative fee for each crop insured in each county. 
Buy-up plans are also subsidized, although levels vary according to the type of plan and coverage 
selected. The 2014 Farm Bill introduced an additional area -based policy – the Supple mental 
Coverage Option (SCO)16 – that allows participants to purchase area -based policies on top of their 
individual farm coverage to a level of 86% of expected yield or revenue. The first 14% of the loss 
(actual versus expected revenue) is always borne by the participant. The premium subsidy for the 
SCO is 65%. Producers who have elected ARC for historical base of covered commodities may not 
purchase SCO policies for current production of those same commodities.17 
4.22.   The growth in crop insurance has been signif icant since the 1990s. In 2018, crops on more 
than 300 million acres were insured, and nearly 95% of the policies provided coverage beyond the 
minimum "catastrophic" level.18 Boosted by higher commodity prices, particularly from 2006 to 
2012, the insured li abilities have also risen sharply. Federal Government costs for crop insurance, 
which averaged US$3 billion annually between 1997 and 2006, reached US$7 billion per year on 
average in the most recent 10 -year period. Although the federal crop insurance prog ramme may be 
the largest agricultural insurance programme in the world, the U.S. experience has also shown that 
farmers have been reluctant to take on such insurance without the strong support of the 
Government. On average, 62% of insurance premiums were p aid by the Federal Government over 
                                                
12 The United States reports MLGs, LD Ps, and certificate exchange gains under non -exempt direct 
payments in supporting table DS:6, and commodity loan interest subsidies and forfeiture benefits under other 
product -specific support in supporting table DS:7.  
13 The aim was to reduce the reliance on federal disaster relief programmes.  
14 In practice, the RMA or third parties propose the premium rates and other conditions, which are then 
reviewed by independent experts on behalf of the FCIC board. The FCIC board approves or rejects the 
proposed rates . The RMA manages the FCIC.  
15 Catastrophic coverage insures 50% of the normal yield and 55% of the estimated market price of the 
crop. A buy -up plan may increase the coverage to 50% -85% of normal yield and 100% of the estimated 
market price.  
16 The SCO take s on the characteristics of the underlying policy, i.e. if it is a yield policy, the SCO will 
generate a guarantee for yields, or a guarantee for revenue for underlying revenue policies. As the SCO is 
area-based, a producer may experience an individual los s that does not give rise to compensation if his/her 
revenue or yield is poorly correlated with the outcome at the county level.  
17 CBO, Options to Reduce the Budgetary Costs of the Federal Crop Insurance Program , 
Washington  D.C., December 2017.  
18 Land allo cated to crops is reported every five years. The most recent report from 2012 indicated 
340 million acres of cropland in the United States. Principal crop acreage, reported annually, has been 
relatively stable at 319 -326 million acres between 2012 and 2018 . WT/TPR/S/ 382 • United States  
 
- 148 - 
 
  the period 2012 -17.19 Total premiums (from farmers and the Government combined) need to exceed 
claim payments over time, to maintain the viability and actuarial soundness of the insurance 
programmes. On average, the crop i nsurance programme has paid out around US$0.85 in 
indemnities per dollar of total premium over the last 20 years. The federal premium subsidies reduce 
the share of total premium paid by producers so that, in aggregate, total indemnities will exceed 
total p roducer -paid share of premiums. Since 2008, the federal crop insurance programme has been 
required to operate the programme to achieve a loss ratio of 1.0, which means that producer 
premium subsidies represent the full subsidy provided  by the programme to producers.  
4.23.   The federal crop insurance system has been subject to numerous studies, evaluating its 
effectiveness and possible options to reduce its costs to the Government. A recent study by the 
Congressional Budget Office (CBO)20 suggested that modification  of loss -calculation provisions could 
offer the highest potential savings. At present, most farmers purchase flexible revenue policies that 
calculate losses either against the projected commodity price at the time of purchase or the actual 
price at harvest , whichever is higher.21 Removin g the harvest price option  according to the CBO, 
would reduce projected outlays by US$19.2 billion over the period 2018 -27. Other major savings 
could be attained by dropping the reimbursement of administrative and operational  costs of the 
private insurers (US$10.2 billion), or a 15 -percentage point cut in average premium subsidies 
(US$8.1 billion). The expected budgetary effects of other measures, such as changes in the terms 
of the SRA, caps on premium subsidies, or reduced a bility for producers to adjust their actual 
production history, would be less pronounced.  
4.1.2.6   Cotton  
4.24.   According to the 2012 Census, there were 18,155 cotton farms, down from more than 
1 million farms in the 1940s. Nevertheless, the United States is the world's third largest producer, 
and the number one exporter, of cotton. Cotton has always been an important export crop, and 
exports have continued to rise with the decline in textile production in the United States.  
4.25.   The 2014 Farm Bill did not include upland cotto n as a covered commodity under the PLC or 
ARC programmes, but introduced a subsidized Stacked Income Protection Plan (STAX), a cotton -
specific supplemental crop insurance programme. STAX, which provides coverage for losses of up to 
20% of the expected coun ty revenue, could be bought on its own or in conjunction with an underlying 
(companion) policy.22 STAX, which triggers indemnities when area revenue declines below 90% of 
the expected level, could cover a maximum 30% of the expected revenue or the differenc e between 
90% and the loss level under the companion policy. The grower also chooses the effective coverage 
under STAX by electing a multiplier (protection factor), ranging from 80% to 120%. However, even 
with most of the premium (80%) paid by the Federal Government, cotton farmers were reluctant to 
sign up to STAX, particularly in the southern plains. Nationwide, only 30% of the eligible acreage 
was enrolled in STAX the first year the plan was offered and, though there were differing regional 
trends, overa ll participation rates declined further to 26% in 2016 and 23.9% in 2017.23 
4.26.   While upland cotton was not included as a covered commodity under the PLC and ARC 
programmes, former upland cotton base became "generic acres", and farmers with generic acres 
could qualify for PLC and ARC payments by planting those lands with crops eligible for ARC or the 
PLC. Payments would accordingly be based on current planting decisions, and not on historical 
production, for the crops planted on generic acres. Of the 17.6 millio n generic acres in total, some 
8.66 million acres were planted with ARC - and PLC -eligible crops in the 2016 crop year,  resulting in 
payments amounting to US$505 million.  The most commonly planted crops were peanuts enrolled 
                                                
19 CBO, Options to Reduce the Budgetary Costs of the Federal Crop Insurance Program , 
Washington  D.C., December 2017.  
20 CBO, Options to Reduce the Budgetary Costs of the Federal Crop Insurance Program , 
Washington  D.C., December 2017.  
21 Policies with this b uilt-in flexibility accounted for 98% of the revenue policies sold in 2016.  
22 Examples of such policies are Yield Protection, Revenue Protection, Revenue Protection with the 
Harvest Price Exclusion, and any Area Risk Protection.  
23 Glauber,  Joseph, W. Unrav eling Reform? Cotton in the 2018 Farm Bill , American Enterprise Institute, 
January 2018. The author bases his calculations on data from the USDA Risk Management Agency.  WT/TPR/S/ 382 • United States  
 
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  in PLC, planted on 1 million acr es, with US$186 million paid, and maize enrolled in ARC -CO, planted 
on 2 million acres, with US$114 million paid.24 
4.27.   The Bipartisan Budget Act of 2018 revised the ARC and PLC support programmes, with the 
introduction of seed cotton, defined as unginned uplan d cotton including both lint and seed, as a 
covered commodity under ARC and PLC for the 2018 crop year. Producers with generic base acres 
have the option to allocate those base acres to seed cotton or other covered commodities, based on 
2009-12 plantings. Generic acres without the required 2009 -12 plantings of either cotton or other 
covered commodities become unassigned base acres.25 Either ARC or PLC may be selected for the 
seed cotton acres, with a one -time opportunity to update the PLC yield for seed cott on. The reference 
price (PLC) is set at US$0.367 per pound, and the marketing loan rate for seed cotton at US$0.25  per 
pound (for use only in the PLC programme; marketing assistance loans are not authorized for seed 
cotton). Farmers who choose to enrol his torical seed cotton base acres in ARC or PLC will not be 
eligible to enrol in STAX for current cotton production as from the 2019 crop year.  
4.28.   As a temporary measure to support cotton producers, the U.S. Department of Agriculture 
(USDA) announced a second Co tton Ginning Cost Share (CGCS) programme in March 2018. 
Producers were invited to sign up by 31 May 2018 to receive a one -time payment equal to 20% of 
the average ginning costs, based on their cotton planted acres reported to the FSA for 2016.26 The 
cost-sharing payment is limited to US$40,000 per person or legal entity.27 
4.1.2.7   Sugar  
4.29.   The United States ranks fourth in the world for sugar consumption, and is the world's sixth 
largest sugar producer, producing both beet and cane sugar. The CCC of the USDA offers non -
recourse marketing loans to the processors of domestically grown sugarcane and sugar beet, and 
the processors, in turn, pay the growers at a rate proportional to the loan. At the end of the loan 
term (maximum nine months), or any time before, borrowers may  sell the sugar on the domestic 
market and repay the loans in full or, should prices be too low, forfeit the sugar collateral to the 
USDA and thus redeem the loans. However, the second option rarely occurs, as U.S. sugar prices 
have exceeded world market l evels since the early 1980s.  
4.30.   The marketing loans are administered in combination with a market allotment mechanism, 
designed to manage supplies in such a way that the price of sugar does not fall to levels that would 
trigger forfeitures.28 The allotments ar e based on production history, and established at state level 
(sugarcane) or processor level (beet sugar). Overall, the sugar allotments equal at least 85% of the 
estimated domestic demand for human consumption. Excess sugar may not be sold on the market 
for human consumption, and remains in storage at the owner's expense. Depending on market 
conditions, the USDA may permit more sugar to be released into the market by adjusting the 
allotments upwards in the course of the marketing year. Furthermore, the Fee dstock Flexibility 
Program (FFP) may be mobilized to divert sugar from human consumption towards the production 
of ethanol, in excess supply situations.  
4.31.   Since 2000, imports of raw and refined sugar (raw value) have averaged 1.48 million short 
tons per year.29 Nearly all imports of raw cane sugar, refined sugars (certain sugars, syrups and 
molasses), and sugar -containing products take place under a system of tariff rate quotas (TRQs). 
                                                
24 USDA FSA online information. Viewed at: https://www.fsa.usda.gov/Assets/USDA -FSA-
Public/usdafiles/arc -plc/pdf/2016%20ARC%20PLC%20payments%20April%202018.pdf . 
25 Unassigned base acres are not eligible for payme nts. A farm owner that did not plant any covered 
commodities (including seed cotton) on the generic base acres during the 2009 -16 crop years would now have 
an unassigned crop base.  
26 The ginning costs are averaged for four production regions, and range fro m US$19.65 in the 
Southwest (Kansas, Oklahoma and Texas) to US$48.02 in the West (Arizona, California and New Mexico). 
USDA FSA online information. Viewed at: https://www.fsa.usda.gov/Assets/USDA -FSA-Public/usdafiles/ cotton -
ginning -cost-share/cgcs_program_fact_sheet_march_2018.pdf . 
27 Conditions also apply, i.e. compliance with conservation measures, active engagement  in farming, 
and that the producer's average adjusted gross income (in the preceding three tax years) must not exceed 
US$900,000.  
28 The 2014 Farm Bill set the marketing loan rates at 18.75 cents per pound for raw sugar and 
24.09  cents per pound for refined beet sugar. These rates are national average rates.  
29 USDA online information. Viewed at: https://www.ers.usda.gov/topics/crops/sugar -sweeteners/trade  
.aspx . WT/TPR/S/ 382 • United States  
 
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  Above -quota imports are normally neither practical nor economical, due to relatively high MFN 
tariffs. The annual WTO quota amounts to 1,117,200 metric tons of raw sugar and 22,000 metric 
tons of refined sugar. The USDA determines the overall TRQ quantities for each fiscal year, w hile 
USTR allocates the volumes .30 The TRQ for raw cane sugar is allocated among 40 countries, based 
on patterns observed at a time when trade was relatively unrestricted (1975 -81), resulting in the 
largest portions being allocated to the Dominican Republic (17%), Brazil (14%), and the Philippines 
(13% ).31 The Dominican Republic -Central American Free Trade Agreement (DR -CAFTA) and certain 
other FTAs (Chile, Colombia, Morocco, Panama, and Peru) provide additional TRQs for sugar and 
syrup goods and sugar -containing products, as long as  these countries  have a trade surplus in these 
goods based on the most recent data available.  The NAFTA made U.S. imports of sugar from Mexico 
duty-free and quota -free from 1 January 2008. However, following the initiation of anti -dumping 
and countervailing duty proceedings by  the United States in 2014, sugar exports from Mexico have 
been limited under a suspension agreement since 2015. Agreed amendments to this Agr eement 
entered into force on 30  June 2017.32 
4.32.   Outside of the TRQ system, two re -export programs help sugar refiners and manufacturers of 
sugar -containing products compete in global markets. The Refined Sugar Re -Export Program allows 
refiners to import sugar at world market prices, refine it for export, or sell the refined sugar to 
licensed manufacturers of sugar -contain ing products. Under the Sugar -Containing Products Re -
Export Program, U.S. participants may buy sugar from any refiner participant and use it in products 
for export. In addition, the Polyhydric Alcohol Program ensures that participating manufacturers may 
obtain sugar at world market prices from licensed refiners or their agents for the production of 
polyhydric alcohols, except for polyhydric alcohols used as sugar substitutes in human food 
consumption. Imports under these three programs average approximately  400,000 short tons (raw 
value) annually.  
4.1.2.8   Dairy sector  
4.33.   The 2014 Farm Bill eliminated market price support, deficiency payments for dairy producers, 
and dairy export subsidies.33 It introduced the Margin Protection Program for Dairy (MPP -Dairy), 
which is a v oluntary risk management programme for dairy producers, and the Dairy Product 
Donation Program (DPDP). The DPDP allows the CCC to purchase dairy products at prevailing market 
prices when milk margins are depressed, and subsequently distribute the products among low 
income households.  
4.34.   MPP-Dairy insures milk farmers against falling margins, calculated as the difference between 
the national "all -milk" price and average feed costs.34 The production margin was calculated 
bi-monthly, until amendments to the progra mme under the Bipartisan Budget Act in 2018 required 
it be calculated monthly. Enrolled dairy producers receive a monthly payment when the margin stays 
below their chosen insured levels (US$4 -US$8 per hundredweight) for the percentage of eligible 
productio n they have selected for coverage. For each dairy farm, historical (i.e. eligible) production 
is determined according to the average annual milk sales during calendar years 2011, 2012, and 
2013.35 The USDA has the possibility to adjust individual historical  production levels to reflect 
increases in overall national milk production in future years. Otherwise, no change in production 
history is allowed. Producers were not required to enrol in MPP -Dairy immediately upon its 
establishment in 2014 but, once they signed up, they have been required to stay in it until the expiry 
of the 2014 Farm Bill.  
4.35.   MPP-Dairy guarantees all participating producers a US$4 margin (per hundredweight (cwt) of 
milk) for 90% of the historical production volume at no cost, other than an annual US$100 
                                                
30 The total amounts for FY2018 were published in the Federal Register on 30 June 2017 (82 FR 29822).  
31 For 10 small suppliers, each allocation is limited to 7,258 metric tons, which corresponds to a 
minimum boatload of sugar.  
32 The amendments were published in full in the Federal Register on 11 July 2017 (82 FR 31945).  
33 The programmes that were terminated were the Dairy Product Price Support Progra m, the Milk 
Income Loss Contract (MILC) Program, and the Dairy Export Incentive Program.  
34 The National Agricultural Statistics Service reports the average price of milk marketed in the United 
States. The average feed cost for the production of 1 cwt of mi lk is derived from the sum of (i) 1.0728 times 
the price of maize (per bushel); (ii) 0.00735 times the price of soybean meal (per ton); and (iii) 0.0137 times 
the price of alfalfa hay (per ton).  
35 Separate provisions govern intergenerational transfers and new dairy operations.  WT/TPR/S/ 382 • United States  
 
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  administrative fee paid to the USDA Farm Service Agency.36 Additional coverage up to a US$8 margin 
is available with the payment of premiums. MPP -Dairy was revised in early 2018, with retroactive 
coverage applicable from 1 January 2018, to mak e it more attractive for small and average -sized 
dairy producers (Tier 1 farms). The lower premiums already applicable to these producers under the 
original programme were cut further (by up to 80%), and the production ceiling applicable to these 
lower rat es was raised from 4 million pounds of annual historical production to 5 million pounds. For 
larger dairy producers, i.e. Tier 2 farms with historical production exceeding 5 million pounds per 
year, there were no changes in the offered conditions.  
4.36.   The chan ges made in MPP Dairy for 2018 imply that the participants are guaranteed 
catastrophic coverage for 90% of the established production history, should the margin fall below 
US$4 for Tier 2 producers and US$5 for Tier 1 farmers. Milk producers may continue t o opt for higher 
margin protection against the payment of an annual premium (Table 4.4). At the same time, they 
must also choose the coverage level (25% -90% of historical production) for the higher margin.37 
MPP-Dairy does not cap compensation payments or l imit eligibility according to farm size. Payments 
may nonetheless be subject to sequestration pursuant to the Balanced Budget and Emergency Deficit 
Control Act of 1985. At the outset, the CBO estimated the annual cost of MPP -Dairy to be in the 
order of US$ 30-190 million per year. The premiums collected from producers in 2015 and 2016 were 
higher than the compensation paid in both years.38 No payments were made in 2017.  
Table 4.4 MPP-Dairy, premium payments in 20 18 
(US$)  
Coverage level (margin)  
per cwt.  Tier 1 – premium for 2018  Tier 2 – premium for 2018  
Covered production history  
< 5 million lbs.  Covered production history  
> 5 million lbs.  
4.00 None None 
4.50 None 0.020  
5.00 None 0.040  
5.50 0.009  0.100  
6.00 0.016  0.155  
6.50 0.040  0.290  
7.00 0.063  0.830  
7.50 0.087  1.060  
8.00 0.142  1.360  
Source:  USDA FSA (2018), Margin Protection Program for Dairy (MPP -Dairy) Fact Sheet , April. Viewed at: 
  https://www.fsa.usda.gov/Assets/USDA -FSA-Public/usdafiles/FactSheets/ 2018/mpp_dairy  
  program_april_ 2018.pdf . 
4.37.   The DPDP has been set up to use CCC funds to purchase dairy products during periods of low 
production margins, for donation to public and private non -profit organizations that provide nutrition 
assistance to low -income households.39 The DPDP is administered by the F SA and the Food and 
Nutrition Service (FNS). DPDP purchases would be triggered should the FSA determine that the 
national production margin had fallen below US$4 (per  cwt) for two consecutive months.40 The DPDP 
is authorized until the end of 2018, but no pu rchases have been made so far, as the production 
margin has stayed consistently above the trigger level.  
4.38.   Federal Milk Marketing Orders provide  classified pricing and price pooling. The 2014 Farm Bill 
maintained this  system without change , and also extend ed the Dairy Forward Pricing Program, the 
Dairy Indemnity Program, and the Dairy Promotion and Research Program through 2018. The latter  
                                                
36 Beginning farmers, socially disadvantaged farmers and ranchers, and farmers with limited resources 
may apply to be exempted from the fee.  
37 For example, a producer s electing a US$7 margin for 50% of his historical production ( 3 mill ion 
lbs=30,000 cwt)  would pay a p remium of US$0. 063x30,000x0.5=US$ 945 for one year. Should the a ctual 
margin be US$6 during one of these month s, he would receive an indemnity of US$(7 -6)x30,000x0.5 /12= 
US$1,250 for that month . 
38 Payments to producers under MPP -Dairy amounted to US$0.5 million in 2015 and US$11 million  in 
2016 (WTO document G/SCM/N/315/USA, 14 March 2018).  
39 Products are purchased for immediate distribution, and may not be stored or resold in commercial 
markets.  
40 The DPDP production margin is calculated in the same manner as the margin under MPP -Dairy.  WT/TPR/S/ 382 • United States  
 
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  authorizes the collection of a levy equal to US$0. 15 per cwt o n domestically -produced milk and 
US$0.075 per cwt (milk equ ivalent)  on imported  dairy products.41 
4.1.2.9   Other programmes  
4.39.   About 80% of the projected outlays under the 2014 Farm Bill concerned the Supplemental 
Nutrition Assistance Program (SNAP), a programme that offers assistance to eligible, low -income 
individuals and families. Although the average monthly benefit has remained roughly stable, at 
US$125 per person and US$255 per household, in recent years, expenditures on SNAP have been 
declining due to a lower number of participants. In April 2018, just under 40 million  persons received 
payments under SNAP, down from nearly 46 million in FY2015.42 While changes in the benefit 
calculations may account for some of this reduction, the main contribution appears to be a firmer 
job market that has improved earni ngs for the low -income segment.  
4.40.   The 2014 Farm Bill retained the three main conservation programmes, maintained some 
smaller programmes in the Agricultural Conservation Easement Program, and created a new 
Regional Conservation Partnership Program (Title II). The Biomass Cr op Assistance Program and the 
Rural Energy for America Program were continued (Title IX), and US$30 million per year was  
earmarked for the Farmers Market and Local Food Promotion Program. The 2014 Farm Bill also 
reauthorized the Non-insured Crop Disaster A ssistance Program (NAP), which compensates for 
natural disaster damage to crops where crop insurance is not available, and allowed producers 
eligible for NAP to pay a premium to increase coverage.  
4.41.   The Bipartisan Budget Act introduced new disaster relief me asures in response to losses 
stemming from natural disasters in 2017. The 2017 Wildfires and Hurricanes Indemnity Program 
(2017 WHIP) covered crop, tree vine, and bush losses in area hit by wildfires and hurricanes, 
compensating producers for their individ ual losses up to 95% (for those with crop insurance) or 65% 
(for non -insured farmers), retroactively from 1 January 2017.  In return, the beneficiaries are obliged 
to purchase insurance for the next two available crop years. The expenditure cap for the Emer gency 
Assistance for Livestock, Honeybees and Farm -Raised Fish Program (ELAP), which compensates for 
losses due to disease or certain adverse weather conditions as determined by the Secretary of 
Agriculture, was lifted. Changes were also made in the Livest ock Indemnity Program (LIP) and the 
Tree Assistance Program (TAP) to make them more flexible, including the elimination of an annual 
cap (US$125,000) on individual indemnities. Finally, the Act authorized US$400 million to fund the 
Emergency Conservation P rogram, a programme providing assistance for repairs due to natural 
disasters or water conservation measures in response to severe drought.  
4.1.3   Trade measures  
4.1.3.1   Imports  
4.42.   Agricultural import duties are low compared with many other countries, and are applied on a 
reduced base (f.o.b.  value) relative to imports elsewhere (c.i.f. value). With no change in the 
underlying tariff policy, the slight increase in the average applied MFN tariff on agricultural products 
(WTO definition) from 2016 to 2018, 9.1% compared with 9 .4%, is entirely due to the effect that 
easing commodity prices have for the (higher) AVEs of specific and compound duties.  Over the last 
two years, the estimated average MFN duties have increased for dairy products and sugars and 
confectionary, whereas th e estimated average rates are unchanged or slightly lower for other 
agricultural product categories. The highest average applied MFN rates are found in dairy (30.1%) 
and beverages, spirits, and tobacco (22.6%).  
4.43.   The tariff quota regime covers 54 bound TRQs,  corresponding to approximately 200 tariff lines 
at present. It mainly affects imports of beef, cheese and other dairy products, sugar and sugar -
containing products, tobacco, and cotton. Fill rates vary considerably among the commodities 
subject to TRQs. A s outlined in Section 4.1.2.7, the sugar TRQs are country -specific and linked to a 
domestic market allocation mechanism, which means that quotas may be adjusted in the light of 
developments in the U.S. sugar market. The United States notifies the Committee  on Agriculture 
                                                
41 Farmers and importers may receive a credit against the levy if they contribute to quality programmes, 
authorized by federal or state laws, conducting dairy produc t promotion, research, or nutrition education.  
42 USDA FNS online information. Viewed at: 
http://www.fns.usda.gov/sites/default/files/pd/34SNAPmonthly.pdf . WT/TPR/S/ 382 • United States  
 
- 153 - 
 
  regarding the administration of its WTO tariff quota commitments on a regular basis. The most 
recent notification, circulated in April 2018, covered imports under tariff quotas during the calendar 
year 2015.43 Arrangements applicable to TRQ imports of sugar and sugar -containing products for 
FY2018 were notified in September 2017.44 
4.44.   The United States has reserved the right to apply the Special Agricultural Safeguard (SSG) 
on imports from other WTO Members on 189 tariff lines, mainly dairy, suga r/sugar -containing 
products, and cotton. SSGs may be based on price or volume, but the United States has generally 
opted to apply price -based SSGs. Such measures were applied on 44 tariff lines in 2014, and on 60 
tariff lines in 2015. As price -based SSGs a re applied on a shipment -by-shipment basis, and triggered 
automatically when the declared price for an item is below a pre -established price range, some of 
the SSGs may affect very small quantities of trade. In October 2015, the United States switched 
from a price -based SSG on butter to a volume -based action, the first such SSG since 2003.45 
4.1.3.2   Exports  
4.45.   The Foreign Agricultural Service (FAS) of the USDA administers the Export Credit Guarantee 
Program (GSM -102) on behalf of the CCC. For exports of agricultural co mmodities financed through 
normal commercial channels or by the exporters themselves, the programme offers guarantees to 
approved U.S. exporters for sales to eligible countries, principally developing countries. The 
guarantees, issued by the CCC, insure pa yments under U.S. dollar denominated irrevocable letters 
of credit, and typically cover 98% of the principal and a portion of the interest payments. The 
maximum credit term is 18 months, but the limit may vary according to the obligor country. The 
CCC dete rmines the product coverage of GSM -102 based on the market potential of the commodities 
and applicable legislative and regulatory requirements. Although most guarantees are issued for 
bulk commodities, intermediate goods (such as wood chips and pulp) and h igh-value processed 
consumer goods may also be covered. In FY2017, registered guarantees totalled US$1.58 billion in 
value, principally for exports of yellow maize (US$541 million), soybeans (US$421 million), wheat 
(US$243 million), soybean meal (US$228 mi llion), rice (US$48 m illion), and soybean oil 
(US$11  million).46 About one third of the guarantees available in FY2018 (US$4.9 billion) had been 
used by 10 August 2018.47 
4.46.   Four export promotion programmes, among which the Market Access Program (MAP) is the 
most important, were reauthorized in the 2014 Farm Bill.48 MAP provides co -funding for the overseas 
marketing and promotional activities of agricultural trade associations, cooperatives, state regional 
trade groups, and small businesses. Participants must put  up a minimum of 10% of the funding for 
generic marketing and promotion, while 50/50 cost -sharing is required for the promotion of branded 
products. Applicants for export promotion and market development funding managed by the FAS 
access the programmes thr ough a single portal - the Unified Export Strategy (UES).  
4.1.3.3   Food aid  
4.47.   The United States has been providing international food assistance for more than 60 years, 
principally in the form of agricultural commodities procured by the USDA and made available to 
developing countries in response to emergency or chronic food shortages. USDA data indicate that 
the Government shipped 8,140,420 metric tonnes of food aid commodities between 2012 and 2017. 
The 2014 Farm Bill reauthorized the programmes that govern U.S. inte rnational food assistance, 
including the Food for Peace Act (PL 480), the Food for Progress Act of 1985; the McGovern -Dole 
International Food for Education and Child Nutrition Program; and the Bill Emerson Humanitarian 
Trust. The new Emergency Food Securit y Program (EFSP) was codified through the 2016 Global Food 
Security Act (PL 114 -195), with no change in the programmes authorized under the Farm B ill. 
                                                
43 WTO document G/AG/ N/USA/120, 24 April 2018.  
44 WTO document G/AG/N/USA/117, 4 October 2017.  
45 WTO document G/AG/N/USA/111, 2 March 2017.  
46 USDA online information. Viewed at: https://www.fas.usda .gov/sites/default/files/2016 -
10/2016_5.pdf . 
47 USDA online information. Viewed at: https://www.fas.usda.gov/programs/export -credit -guarantee -
progr am-gsm-102/gsm -102-allocations . 
48 The other programmes are the Foreign Market Development Program, the Emerging Markets 
Program, and the Technical Assistance for Specialty Crops Program. The Federal Budget for FY2018 allocated 
US$173.8 million for MAP, and  US$26.5 million for the Foreign Market Development Program.  WT/TPR/S/ 382 • United States  
 
- 154 - 
 
  4.48.   Food for Peace Title II (Emergency and Private Assistance Programs), which is the dominant 
programme with  annual expenditures averaging around US$1.8 billion, is administered by USAID. 
It regulates U.S. donations of agricultural commodities to international organizations (such as the 
World Food Programme) and non -governmental organizations. U.S.  laws subject in-kind food aid to 
numerous conditions, notably that the food donations must be sourced in the United States and 
shipped on U.S. -flag vessels (at least 50%). Moreover, 20% -30% of the aid funded under Food for 
Peace (minimum US$350 million per year) should  be non -emergency food aid, of which a minimum 
of 75% should be processed, fortified, or bagged. At least 50% of bagged food transfers should be 
whole -grain commodities bagged in the United States. Non -governmental recipients are also 
required to subject a t least 15% of U.S. non -emergency food donations to monetization, i.e. the 
sale of donated food in recipient -country markets to generate cash for development programmes. 
The FAS administers the other international food assistance programmes authorized unde r the Farm 
Bill. Expenditures under these programmes averaged nearly US$400 million during FY2006 to 
FY2015.49 
4.49.   The international food assistance programmes have been subject to extensive debate in 
Congress over the years, and the discussions are continuing.  Among the issues that resurface are 
whether to change requirements on where commodities are purchased, how food aid is transported, 
and the pros and cons of monetization. Although the EFSP operates without restrictions on sourcing 
or shipping, and cash -based food assistance is increasing through programmes such as the EFSP 
and the Local and Regional Procurement Projects programme, most U.S. international food aid is 
still provided in kind.  
4.1.4   Levels of support  
4.50.   The OECD notes that the United States has reduced  its producer support and border protection 
substantially since 1986 -88, and support levels to agricultural producers have remained consistently 
below the OECD average. The share of the potentially most distorting support is also lower than the 
OECD averag e. Market price support has declined in importance over the years relative to budgetary 
support that requires production. As many of the present programmes are counter -cyclical by design, 
the levels of budgetary support move inversely with developments in market prices. The OECD's 
Producer Support Estimate (PSE) for the United States is currently around US$40 billion per year, 
or close to 10% of gross farm receipts (Table 4.5).  
4.51.   With few exceptions, producer prices are largely aligned with border prices. Amo ng the main 
commodities tracked by the OECD, the highest single commodity transfers (as a percentage of gross 
farm receipts) occur to sugar, milk, and cotton. The OECD essentially sees the U.S. emphasis on 
insurance and risk management as a good approach t o farm support policy. Noting that the 
programmes remain commodity -specific, the OECD advocates all farm revenue as an alternative 
approach, pointing to opportunities to exploit differences in price and yield variability, the elimination 
of distortions acr oss commodity sectors, and lower costs to the Government. The OECD also 
recommends that the risk management instruments should be reviewed, to ensure that risks that 
should be borne by farmers do not end up in the public budget.  
Table 4.5 Total PSE and single commodity transfer values for selected commodities, 
2008 -17 
(US$ million or % of gross farm receipts for respective products)   
2008  2009  2010  2011  2012  2013  2014  2015  2016  2017a 
Producer support estimate            
US$ million  29,954  31,535  30,774  32,684  36,040  29,056  40,517  38,225  36,485  39,606  
PSE as % gross farm receipts  8.6 10.1 8.6 8.0 8.5 6.9 9.3 9.5 9.6 9.9 
Single commodity transfers            
Wheat            
 
US$ million  940 1,610  802 1,140  1,117  1,318  920 813 905 632  
SCT as % gross farm receipts  5.2 13.0 6.1 7.3 6.0 8.2 7.0 7.5 9.1 7.3 
Maize            
 
US$ million  2,147  2,167  1,771  2,894  2,846  2,998  2,203  2,258  2,213  2,160   
SCT as % gross farm receipts  4.2 4.5 2.7 3.6 3.7 4.6 4.0 4.4 4.2 4.3 
Soybeans            
 
US$ million  1,483  1,198  1,076  1,597  1,536  1,540  1,396  1,313  1,168  1,618   
SCT as % gross farm receipts  4.8 3.6 2.8 4.0 3.4 3.4 3.4 3.6 2.8 3.8 
                                                
49 Congressional Research Service, Previewing a 2018 Farm Bill , Washington, D.C., March 2017.  WT/TPR/S/ 382 • United States  
 
- 155 - 
 
   
2008  2009  2010  2011  2012  2013  2014  2015  2016  2017a 
Cotton            
 
US$ million  1,313  252 339 813 591 529 889 852 518 712  
SCT as % gross farm receipts  30.1 6.2 4.4 10.4 8.6 9.4 14.9 17.9 8.2 9.6 
Milk           
 
US$ million  8 2,947  4,581  2,637  5,125  2,296  6,646  6,557  6,902  7,497   
SCT as % gross farm receipts  0.0 11.9 14.5 6.7 13.7 5.7 13.5 18.4 19.9 19.7 
Beef and veal            
 
US$ million  0 0 0 0 0 230 1 1 1 1  
SCT as % gross farm receipts  0.0 0.0 0.0 0.0 0.0 0.4 0.0 0.0 0.0 0.0 
Refined sugar            
 
US$ million  718 557 1,157  990 656 193 1,576  1,918  1,545  1,676   
SCT as % gross farm receipts  33.6 21.3 35.0 29.0 17.6 7.6 46.1 55.2 50.6 56.1 
a  Preliminary data.  
Source:  OECD Stats.  
4.52.   At the WTO, the United States provides information on support to agriculture to the 
Committee on Subsidies and Countervailing Measures as well as to the Committee on Agriculture. 
The most recent  subsidy notification to the SCM Committee covers FY2015 and FY2016, and reports 
payments under the new ARC and PLC programmes of US$4.5 billion and US$779 million, 
respectively (Table 4.6). Disaster payments for livestock forage were particularly importan t in 
FY2015. This notification includes programmes that are not in the DS:1 notification to the Committee 
on Agriculture.  
Table 4.6 Federal subsidy programmes for agriculture, 2015 -16 
(US$ million)  
Programmes  Expenditure  
FY2015 FY2016 
Agriculture Income Support and Marketing Assistance for Covered 
Commodities    
Direct payments  24.0 0.3 
Average Crop Revenue Election (ACRE)  279.0  0.8 
MILC 1.8 0 
PLC 0 779.0  
ARC 0 4,500.0  
Cotton Transition Assistance Payment (CTAP)  484.0  2.9 
MPP-Dairy  0 0 
DPDP  0 0 
Non-recourse Marketing Assistance Loans and Loan Deficiency Payments  361.0  400.0  
Price support    
Sugar  0 0 
Extra -long staple (ELS) cotton  0 0 
Upland cotton  49.0 47.0 
Tobacco  35.0 0 
Disaster and risk management assistance    
Livestock indemnity payments  45.0 41.0 
Livestock Forage Disaster Program  2,500.0  452.0  
ELAP 49.0 24.0 
TAP 11.0 13.0 
NAP 125.0  137.0  
Crop insurance  6,000.0  5,900.0  
Other programmes    
Grazing livestock on federal land  47.0 43.0 
Reimbursement of transportation costs  2.0 2.0 
Biorefinery, renewable chemical, and biobased product manufacturing 
assistance  0 0 
Repowering Assistance Program  4.0 0 
Other agricultural programmes    
Expensing of Multi -period Livestock and Crop Production Costs  350.0  370.0  
Treatment of Loans Forgiven Solvent Farmers as if Insolvent  40.0 40.0 
Capital Gains Treatment of Certain Agricultural Income  1,150.0  1,470.0  
Source:  WTO document G/SCM/N/315/USA, 14 March 2018.  WT/TPR/S/ 382 • United States  
 
- 156 - 
 
  4.53.   The U.S. notifications to the Committee on Agriculture classify support according to the 
definitions of the Agreement on Agriculture. Green Box expenditures dominate (Charts 4.2 and 4.3) 
due to the importance of SNAP and child nutrition programmes. Overall , Green Box support declined 
from US$124.5 billion in 2014 to US$121.5 billion in 2015, reflecting the elimination of direct 
payments to producers and landowners, and increased spending on child nutrition programmes. As 
for Amber Box support, the United St ates notified product and non -product specific support totalling 
US$13.6 billion (including de minimis  subsidies) for the marketing year 2014 and US$17.2 billion for 
2015. Excluding de minimis  support, the current total AMS reported was US$3.8 billion in b oth 2014 
and 2015.  
Chart 4.2 Green Box support, 2001 -15 
(US$ million)  
 
Source:  WTO notifications.  
020,00040,00060,00080,000100,000120,000140,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Environmental programs
Structural adjustment
Payments for relief from natural disasters
Decoupled income support
Domestic food aid
General servicesChart 4.2
Green Box support in the United States, 2001 -15
Source: WTO notifications.(US$ million)WT/TPR/S/ 382 • United States  
 
- 157 - 
 
  Chart 4.3 Amber Box support, 2001 -15 
(US$ million)  
 
Source:  WTO notifications.  
4.2  Energy  
4.2.1   General  
4.54.   Primary energy consumption amounted to nearly 98 quadrillion British thermal units (Btu) in 
2017 (Chart 4.4). About 80% of the demand was covered by the combustion of fossil fuels, while 
20% was met by renewable energy or nuclear electric power. Domestic energy production could 
have covered approximately 90% of the energy consumption. However, as some of this production 
was exported, approximately 71% of consumption was derived from domestically -produced energy 
in 2017. Fos sil fuels have dominated the energy mix for more than 100 years. Among such fuels, 
the most significant trends over the last 50 years have been a steady rise in the production of natural 
gas and, from 2008, a decline in the consumption of coal. Primary ene rgy consumption peaked in 
2007,  and then fell as a result of the economic downturn. However, the subsequent economic 
recovery has not led to a similar rebound in energy demand, as the economy has become ever more 
energy efficient. The energy intensity of t he economy declined by 2% per year on average between 
1980 and 2010.50 
4.55.   About 38% of the primary energy resources consumed are used for the production of 
electricity (Chart 4.5). The demand from transportation, the second most important primary energy 
consum ption sector, is predominantly (92%) met by petroleum products. U.S. industries use a wider 
variety of energy sources, whereas households and commercial establishments primarily consume 
electricity, natural gas, or natural gas liquids (such as propane) for  space heating and cooking.  
                                                
50 International Energy Agency, Energy Policies of IEA Countries, the United States , Paris, 2014.  
05,00010,00015,00020,00025,00030,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Other
Rice
Maize
Cotton
Livestock and livestock products
Soybeans
Wheat
Sugar
Dairy
Non-product specificChart 4.3
Amber Box support in the United States, 2001 -15
Source:   WTO notifications.(US$ million)WT/TPR/S/ 382 • United States  
 
- 158 - 
 
  Chart 4.4 Primary energy consumption by major sources, 1950 -2017  
(Quadrillion Btu)  
 
Note:  Petroleum products exclude biofuels; biofuels are included in renewables.  
Source:  U.S. Energy Information Administration, Monthly Energy Review , Table 1.3.  
Chart 4.5 Primary energy consumption by source and sector, 2017  
(Total=97.7 quadrillion British thermal units ) 
 
a  Does not include biofuels that have been blended with petroleum – biofuels are included in  
  "renewable energy".  
b  Excludes supplemental gaseous fuels.  
0102030405060708090100110Chart 4.4
U.S. primary energy consumption by major sources, 1950 -2017
Renewables
Nuclear
Petroleum
Natural Gas
Coal
Note: Petroleum products exclude biofuels; biofuels are included in renewables.
Source: U.S. Energy Information Administration, Monthly Energy Review , Table 1.3.(Quadrillion British thermal units)
petroleuma
36.2
(37%)
natural gasb
28.0
(29%)
coalc
13.9
(14%)
renewable energyd
11.0
(11%)
nuclear electric power
8.4
(9%)72
23
5
1
16
76
<1
838
45
5
1292
3
5
9
<1
913
35
28
34
13
23
7
571
26
34
17
23
100transportation
28.1
(29%)
industriale
21.9
(22%)
residential and 
commercialf
10.4 (11%)
electric powerg
37.2
(38%)Sector Source
percent of sources percent of sectorsWT/TPR/S/ 382 • United States  
 
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  c  Includes -0.03 quadrillion Btu of coal coke net imports.  
d  Conventional hydroelectric power, geothermal, solar, wind , and biomass.  
e  Includes industrial combined -heat-and-power (CHP) and industrial electricity -only plants.  
f  Includes commercial CHP and commercial electricity -only plants.  
g  Electricity -only and CHP plants whose primary business is to sell electricity,  or electricity and heat, 
  to the public. Includes 0.17 quadrillion Btu of electricity net imports not shown under "source".  
Note:   Primary energy is energy in the form that it is accounted for in statistical energy balance, before any 
  transformation to secondary or tertiary forms of energy occurs (for example, coal is used to  
  generate electricity).  
  The source total may not equal the sector total because of differences in the heat contents of total, 
  end-use, and electric power sec tor consumption of natural gas.  
  Data are preliminary.  
  Values are derived from source data prior to rounding.  
  Sum of components may not equal total, due to independent rounding.  
Source:  U.S. Energy Information Administration, Monthly Energy Review (Ap ril 2018), Tables 1.3, 1.4a, 1.4b, 
  and 2.1 -2.6. 
4.56.   Energy is relatively lightly taxed in the United States compared with other industrialized 
countries, even though taxes may be levied at federal and state levels, and the taxes are 
cumulative.51 The main rev enue earner is the federal tax on petrol and diesel, which brings in more 
than US$10 billion per year for the Highway Trust Fund (Table 3.4). In addition, all states collect 
taxes on petrol and diesel, but these taxes are also modest compared with the leve ls of taxation in 
other members of the International Energy Agency (IEA).  
4.57.   The Federal Government receives royalties, rents, and other income from the sales of federal 
leases of oil, natural gas and coal.  
4.58.   Federal and state agencies manage a range of incenti ves, notably tax credits, to encourage 
investment in renewable energy. Tax credits have also been available for purchases of energy -
efficient appliances and for energy efficiency upgrades of residential buildings since 1978.  
4.2.2   Crude oil  
4.59.   The United States is the world's third largest producer of crude oil (after the Russian 
Federation and Saudi Arabia), though it has been a net importer since the 1950s. As domestic 
demand consistently outstrips domestic supply, the United States accounts for a major portion of  
world oil trade, and current and projected changes in net U.S. demand may have a significant impact 
on the price outlook for crude oil. Although the anticipated impact of the 2009 recession in the United 
States may have been exaggerated, and thus short li ved, the decline in world market prices for 
crude oil from mid -2014 came in direct response to a significant increase in U.S. production of light 
tight (shale) oil. As prices have recovered, shale production - negligible as late as 2005 - has 
continued to expand. In July 2018, overall U.S. production of crude oil reached 11  million barrels 
per day for the first time in history.52 
4.60.   About one fifth of the world's refining capacity is located in the United States. The many 
modern and sophisticated facilities pro duce a full range of refined output, including high value light 
products, and the United States is currently the world's second largest exporter of petroleum 
products. It is now a net exporter, having been a net importer for decades prior to 2011. The surg e 
in domestic refining was partly a response to the surge in shale oil production at a time when crude 
oil exports were effectively banned under the Energy Policy and Conservation Act of 1975 and other 
statutes. However, these export restrictions were lift ed in December 2015.  
4.61.   Much of oil production takes place in Texas and in and around the Gulf of Mexico, which is 
close to major refineries, or in Alaska or North Dakota, from where crude oil is shipped to refineries 
elsewhere. A network of oil pipelines lin ks inland refineries with the Gulf of Mexico. Four major 
pipelines also ship oil from Canada to the northern United States. Shale oil produced in areas outside 
of (or constrained by the capacity of) the existing pipeline network has so far been transported  by 
                                                
51 IEA, Energy Policies of IEA Countries, the United States , Paris, 2014.  
52 U.S. Energy Information Administration online information. Viewed at: 
https://www.eia.gov/dnav/pet/PET_SUM_SNDW_A_EPC0_FPF_MBBLPD_W.htm . WT/TPR/S/ 382 • United States  
 
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  railroad or truck . Further expansion of shale oil production may require major investments in new 
pipeline or local refining capacity.53 
4.2.3   Natural gas  
4.62.   The United States is the world's largest consumer and producer of natural gas. Technological 
breakthroug hs in the exploitation of shale gas, which made it a relatively inexpensive energy 
resource, sparked a 500% increase in shale gas production between 2007 and 2013, and it currently 
represents about 67% of the domestic gas supply. Weaker prices have slowed the growth in the 
production of natural gas, including shale gas. About three quarters of the currently produced shale 
gas is extracted from four plays (Marcellus, Barnett, Fayetteville, and Haynesville). The electric 
power industry has been a major driver  of domestic demand for natural gas, as it has been retiring 
coal-fired generation capacity.  
4.63.   The United States is now a net exporter of natural gas. It principally imports gas from Canada 
to areas that are either impossible or uneconomical to serve with do mestic gas. Net imports 
represent about 5% of the total gas supply. Exports of gas to Canada and Mexico occur for similar 
economic reasons in those countries. Exportation of LNG is an attractive option, and export volumes 
are on the rise. As detailed in Section 3.2.3, all imports or exports of natural gas require 
authorization from the Department of Energy.  
4.2.4   Coal 
4.64.   The United States holds the world's largest estimated recoverable reserves of coal. Coal is 
mined in 25 states, although about 70% of it takes pl ace in only five of them (Wyoming, West 
Virginia, Pennsylvania, Illinois, and  Kentucky). Steam coal represents more than 90% of the output, 
followed by coking coal. About 93% of the domestic demand for coal comes from power generation. 
Competition from che ap natural gas has weakened this demand considerably, and the coal industry 
also experienced a significant fall in domestic demand from the 2009 economic downturn. By 
contrast, exports of hard coal have grown steadily, and accounted for 25% of the coal ind ustry's 
total earnings in 2012.54 
4.65.   The amount of CO₂ emitted from the burning of coal is significantly higher than for other fossil 
fuels.55 Federal and state funds continue to be allocated to projects to develop cleaner coal 
technologies, including for the c apture and sequestration of CO₂ emi ssions from industrial sources.  
4.2.5   Renewable energy  
4.66.   Hydropower and solid biomass generate the majority of renewable power. However, biofuels, 
wind, and solar energy have become important additional resources. Consumption of biofuels and 
other renewable energy resources (other than hydropower) more than doubled between 2000 and 
2017, mainly in response to federal and state requirements or incentives. The surge in production 
was particularly sharp for wind power, and to some ex tent also for solar power. As the reliance on 
renewable energy forms an essential part of efforts to reduce greenhouse gas emissions, further 
expansion of the renewable energy supply is expected in coming years.  
4.67.   Renewable energy resources accounted for ap proximately 17% of the electricity generated in 
2017. The United States does not have a national target for renewable energy or an explicit federal 
support mechanism.56 However, various federal programmes support research and development 
projects related to  renewable energies, and regulations encourage their use, for example by 
requiring transportation fuel to include a minimum level of renewab le fuel. At the state level, 
29 states and the District of Columbia have "renewable portfolio standards" or similar binding targets 
                                                
53 The Green River Formation, which stretches across Colorado, Utah and Wyoming, is by far the largest 
currently known shale oil deposit in the world. However, further technological advance is needed to make the 
extraction of this resource commercially viable.  
54 IEA, Energy Policies of IEA Countries, the United States , Paris, 2014.  
55 Energy Information Administration online information. Viewed at: 
https://www.eia.gov/tools/faqs/faq.php?id=73&t=11 . 
56 Among the federal tax incentives, the Federal Renewable Energy Production Tax Credit (PTC) was 
introduced in 1992 and subsequently reauthorized and expanded. However, except for win d facilities, the PTC 
is no longer available for projects commenced after 1 January 2018.  WT/TPR/S/ 382 • United States  
 
- 161 - 
 
  for renewable energy, and eight states and one territory have set non -binding targets. States apply 
numerous measures, including tax credit schemes, energy metering, and certification programmes, 
to promote the development and use of renewa ble energy sources.57 
4.2.6   Nuclear energy  
4.68.   The United States pioneered the development of nuclear power technology, and its nuclear 
power industry is the largest in the world. Nuclear electricity is currently produced in 30 states at 
61 nuclear power plants, comp rising 99 reactors. Two new reactors are expected to come online in 
2021 or 2022. The share of nuclear power in electricity production has been consistently around 
20% since the early 1990s. The relatively high capital costs for nuclear reactors make inves tment 
decisions vulnerable to low gas prices and, consequently, low wholesale electricity rates.  
4.69.   The Nuclear Regulatory Commission issues 40 -year licences for nuclear power plants. The 
licences may be extended for additional 20 -year periods. At present, th e average age of the nuclear 
power reactors is 37 years. In all, 12 plants were retired in the 1980s and 1990s, primarily for 
economic reasons. A further six reactors have been shut down since 2013, but high capacity 
utilization and power plant uprates hav e kept the overall electricity output stable. The United States 
is highly reliant on imported mined uranium concentrates, and converted or enriched uranium, for 
the nuclear fuel supply. Many services and other inputs are also imported. The fuel fabrication  
requirements are largely met by domestic suppliers.  
4.70.   The management of used fuel, including the disposal of high -level waste, is the responsibility 
of the Federal Government. A charge has been levied on sales of electricity generated by nuclear 
power since  1982. The proceeds have been accumulated in the Nuclear Waste Fund, which was set 
up to finance the permanent and safe disposal of highly radioactive waste. The Fund was valued at 
US$44.5 billion at the end of September 2017. At present, public utilities store their waste on -site, 
in specially designed pools or in steel and concrete casks, while agreement on a long -term storage 
site remains pending.  
4.2.7   Electricity  
4.71.   In 2017, electricity end -use consumption amounted to approximately 3.82 trillion kWh, 96% 
of whi ch was sold by retail and 4% consumed directly by end -users. Electricity use rose 13 -fold 
between 1950 and 2005, but the economic downturn in 2009 and subsequent energy economies 
have led to a levelling off of electricity consumption. Energy -efficiency sta ndards and other 
improvements should slow future growth. The residential sector and the commercial sector are the 
largest users of electricity as a percent of retail sales, each with a share of around 37%, followed by 
industries (26%). The use of electrici ty in transportation is still modest (less than 0.3%), and 
primarily concerns the running of some public transit systems. Air conditioning/cooling, water 
heating, lighting, refrigeration, and space heating were estimated to be slightly more than 50% of 
residential uses, while computers and office equipment (15.3%), refrigeration (14%), ventilation 
(11.2%), lighting (10.6%), and space cooling (10.6%) were the most important uses in the 
commercial sector in 2017.  
4.72.   The use of natural gas in steam turbines was t he principal source of electricity generation in 
2017, accounting for 32% of the supply. Coal -fired power plants, which historically have been the 
dominant source (Chart 4.6), delivered 30% of the electricity produced, followed by nuclear energy 
(20%), and  renewable energy sources (17%). Petroleum, which, depending on the type of product, 
may be used as fuel in gas turbines, steam turbines, or diesel -engine generators, was the source of 
less than 1% of the electricity generated in 2017. Electricity trade wi th other countries, in practice 
Canada and to a minor extent Mexico, is marginal, and normally accounts for no more than 2% of 
the domestic demand. The United States is a net importer of electricity.  
                                                
57 According to the North Carolina Clean Energy Technology Center, its DSIRE database is the most 
comprehensive source available on state incentives and policies that support renewables and energy efficiency 
in the United States. Viewed at: http://www.dsireusa.org/ . WT/TPR/S/ 382 • United States  
 
- 162 - 
 
  Chart 4.6 Electricity net generation by major sources, 1950 -2017  
(Billion kWh)  
 
Source:  Energy Information Administration, Monthly Energy Review, Table 7.2a.  
4.73.   Among the renewables, the hydroelectric capacity expanded rapidly until the 1970s. Since 
then, production has varied substantially in line with fluctuations in annual rainfall. Among other 
types of renewable energy, wind power currently dominates. Biomass, solar energy, and geothermal 
power plants still account for no more than 4% of the electricity supply. Ev en though the construction 
costs for solar and wind energy production capacity have fallen in recent years, the average 
construction cost of new wind power capacity was still 80% higher than for new natural gas 
generators in 2016.58 
4.74.   The electricity industry  is, with few exceptions, subject to regulatory regimes at municipal, 
state, and federal levels. It is diverse, and comprises more than 3,000 public, private, and co -
operative utilities, including almost 2,600 independent power producers (as of May 2018). The 
Energy Policy Act of 2005 built on the Energy Policy Act of 1992 to enhance competition in the 
wholesale electricity market. Among its provisions, it allows the Federal Energy Regulatory 
Commission (FERC) to order utilities to make transmission service s available to requesting wholesale 
generators. State Public Utility Commissions deal with regulatory issues that fall outside the legal 
jurisdiction of the FERC, including the regulation of retail sales to customers, the approval of 
generation facilities,  and distinct reliability issues.  
4.3  Manufacturing  
4.75.   The manufacturing sector's contribution to GDP has declined in the past few years. It 
represented 11.6% of GDP in 2017, down from 12.2% in 2013.59 Durable goods accounted for 6.3% 
of GDP in 2017, down from 6. 5% in 2013, while non -durable goods represented 5.3% of GDP, down 
from 5.7%. Considering individual subsectors, the largest contribution to GDP came from chemical 
products, which represented 2% of GDP in 2017 (2.1% in 2013), followed by the computer and 
electronic goods subsector, which accounted for 1.5% of GDP in 2017 (1.6% in 2013), motor vehicles 
and parts (0.9% of GDP in 2017), machinery, fabricated metal products, and petroleum and coal 
products (0.8% of GDP each in 2017) (Table 4.7).  
                                                
58 Energy Information Administration online information. Viewed at: 
https://www.eia.gov/todayinenergy/detail.php?id=36813 .  
59 BEA (2018), Gross Domestic Product by Industry: First Quarter 2018 . Viewed at: 
https://www.bea.gov/syst em/files/2018 -07/gdpind118_3.pdf . 
050010001500200025003000350040004500Chart 4.6
U.S. electricity net generation by major sources, 1950 -2017
Petroleum
Renewables
Nuclear
Natural gas
Coal
Source: U.S. Energy Information Administration, Monthly Energy Review , Table 7.2a.(Billion kilowatthours)WT/TPR/S/ 382 • United States  
 
- 163 - 
 
  Table 4.7 Value added by the manufacturing sector as a percentage of GDP  
 
2013  2014  2015  2016  2017  2018a 
Manufacturing sector (US$ billion)  2,035.2  2,111.5  2,185.0  2,183.0  2,244.3  2,330.2  
  (% of GDP)  
Manufacturing sector  12.2 12.1 12.1 11.7 11.6 11.7 
  Durable goods  6.5 6.5 6.5 6.3 6.3 6.3 
    Wood products  0.2 0.2 0.2 0.2 0.2 0.2 
    Non-metallic mineral products  0.3 0.3 0.3 0.3 0.3 0.3 
    Primary metals  0.3 0.3 0.3 0.3 0.3 0.3 
    Fabricated metal products  0.8 0.8 0.8 0.8 0.8 0.8 
    Machinery  0.9 0.9 0.8 0.8 0.8 0.8 
  Computer and electronic products  1.6 1.5 1.5 1.5 1.5 1.5 
    Electrical equipment, appliances, and  
components  0.3 0.3 0.3 0.3 0.3 0.3 
    Motor vehicles, bodies and trailers, and  
parts 0.8 0.8 0.9 0.9 0.9 0.9 
   Other transportation equipment  0.7 0.7 0.7 0.7 0.7 0.7 
    Furniture and related products  0.1 0.2 0.2 0.2 0.2 0.2 
      Miscellaneous manufacturing  0.5 0.5 0.5 0.4 0.4 0.4 
  Non-durable goods  5.7 5.6 5.6 5.4 5.3 5.4 
    Food and beverage and tobacco 
products  1.4 1.4 1.5 1.5 1.5 1.4 
    Textile mills and textile product mills  0.1 0.1 0.1 0.1 0.1 0.1 
    Apparel and leather and allied products  0.1 0.1 0.1 0.1 0.0 0.1 
    Paper products  0.3 0.3 0.3 0.3 0.3 0.3 
    Printing and related support activities  0.2 0.2 0.2 0.2 0.2 0.2 
    Petroleum and coal products  1.0 1.0 0.9 0.7 0.7 0.8 
    Chemical products  2.1 2.1 2.1 2.1 2.0 2.0 
    Plastics and rubber products  0.4 0.4 0.4 0.4 0.4 0.4 
a  The first quarter of 2018 at seasonally adjusted annual rates.  
Source:  U.S. Bureau of Economic Analysis.  
4.76.   Manufacturing is the fourth largest employer in the United States. In July of 2018, according 
to Bureau of Labor Statistics data, manufacturing employed 12.75 million peopl e.60 Durable -goods 
industries employed 7.98 million people, and non -durable goods industries 4.77 million. The 
manufacturing industries that employed more people were t ransportation equipment , with 1.68 
million, of which 972,000 were employed in the automob ile and auto parts industry; food 
manufacturing, with 1.64 million employees; fabricated metal products, 1.49 million; machinery, 
1.13 million; and computers and electronic equipment, 1.08 million.61 
4.77.   Despite having lost market share in recent years, the Uni ted States remains a large producer 
of many manufacturing products.  For example, it  is the world's second largest producer of motor 
vehicles, with a production of some 11.8 million vehicles in 2017. Also in 2017, it was the fourth 
largest producer of steel  and the second largest exporter of pharmaceutical products. Foreign 
investment plays an important role in U.S. manufacturing. Foreign affiliates' production represented 
slightly over 20% of total manufacturing production in 2015. In the same year, affilia tes in 
manufacturing accounted for 45.8% of affiliate value added. Within manufacturing, chemicals, which 
include pharmaceuticals, accounted for the largest share of affiliate value added, followed by 
transportation equipment.62 In 2015, manufacturing accou nted for the largest share of affiliate 
employment by industry of sales (30.4%), of which motor vehicles, bodies and trailers, and parts 
accounted for 5.9%, chemicals for 4.0% (half of which was in pharmaceuticals), and food products 
for 3.7%.  
4.78.   The United S tates does not have policies specifically targeted to manufacturing, at the federal 
level. Its main policy thrust is to create the framework for market forces to act in a fair and 
competitive environment. However, at the state level , there are program mes to attract investment 
                                                
60 Department of Labor, Bureau of Labor Statistics, The Employment Situation - July 2018. News 
Release, 3 August 2018. Viewed at: https://www.bls .gov/news.release/archives/empsit_08032018.pdf . 
61 Department of Labor, Bureau of Labor Statistics, The Employment Situation - July 2018. News 
Release , 3 August  2018. Viewed at: https://www.bls.gov/news.release/archives/empsit_08032018.pdf . 
62 BEA (2017, August), Activities of U.S. Affiliates of Foreign Multinational Enterprises in 2015 . Viewed 
at: https://www.bea.gov/scb/pdf/2017/08 -August/0817 -activities -of-us-affiliates -of-foreign -multinational -
enterprises.pdf . WT/TPR/S/ 382 • United States  
 
- 164 - 
 
  in manufacturing.63 There is also a policy of encouraging small businesses , including those in 
manufacturing,  through government procurement set -asides and preferences ( Section 3 .3.6). In 
addition, the USDOC  provides a  national advanced  manufacturing portal and information 
clearinghouse, found at https://www.manufacturing.gov/  to provide general information on federal 
policy regarding advanced manufacturing. Formally authorized by Congress  in 2014,  Manufacturing 
USA brings together industry, academia and federal partners within a growing network of advanced 
manufacturing institutes , for collaborative research in innovations in manufacturing technology of 
benefit to broad industrial sectors,  with the overall goal of increas ing manufacturing 
competitiveness , and promot ing a robust and sustainable national manufacturing R&D 
infrastructure.  
4.79.    USTR's Office of Small Business, Market Access, and Industrial Competitiveness (SBMAIC) is 
responsible fo r manufactured goods trade policy, and for addressing market access, 
competitiveness, and small business issues facing exports of manufactured goods. The SBMAIC office 
acts as a focal point for dealing with key tariff and non -tariff barriers for, and devel oping creative 
approaches to, minimizing future barriers and divergences through regulatory cooperation. The 
SBMAIC office also leads USTR's trade policy efforts to address the challenges facing smaller 
exporters and promote the global export opportunities  that these businesses need to create jobs.64 
4.80.   Through its trade policy, the Administration aims to advance and defend the interests of 
manufacturers and their workers, by expanding export opportunities and strengthening enforcement 
of trade rules. USTR work s to level the playing field for U.S. manufacturers by: (a)  eliminating tariff 
and non -tariff barriers; (b) negotiating WTO rules to benefit U.S. manufacturers; (c) countering 
foreign trade distorting practices; and d) enforcing trade agreements.65 In this respect, the 
President's Trade Policy Agenda stresses that U.S. trade remedy laws and other trade laws must be 
vigorously enforced to ensure fair trade for U.S. manufacturers and their workers.66 
4.4  Services  
4.4.1   Financial s ervices  
4.4.1.1   Overview  
4.81.   The U nited States has one of the most evolved and deepest financial systems in th e world. In 
addition to being a substantial contributor to  the U .S. economy, the U .S. financial system has 
considerable bearing on the global financial system and architecture.  There are eight U.S. banks 
which are considered global systemically -important  banks . The United States is the largest insurance 
market in the world, being responsible for nearly 30% of the gross insurance premiums worldwide, 
which amounted to US$5.02 trillion in 2016 . The combined market capitalization of the U .S. stock 
market , based on the  Russell 3000 index, crossed US$ 30 trillion threshold in January 2018.  
4.82.   In 2017 , the share of financial services in GDP was 7.5%, the same as in 2016 . Banking 
services generated 2. 9% of GDP, insurance and related services 3.1%, securities, commod ity 
contracts and investment 1.3 %, and funds trusts a nd other financial vehicles 0.3 %.67 The U nited 
States continues to run a significant surplus in trade in financial services (Box 4.1). In 2016, exports 
of financial services exclud ing insurance services were US$98  billion, a decline from 2015 and 2014 
levels, while imports amounted to US$ 25.6 billion. Exports  of insurance services were US$ 16.3 billi on 
compared with imports of US$ 48.1 billion in 20 16.68 
                                                
63 These  programmes may be consulted in t he Council for Community and Economic Research 's (C2ER) 
State Business Incentives Database , at: http://selectusa.stateincentives.org/Programs/?State . 
64 USTR online information. Viewed at: https://ustr.gov/issue -areas/industry -manufacturing . 
65 USTR online information. Viewed at: https://ustr.gov/issue -areas/industry -manufacturing/industrial -
competitiveness . 
66 USTR (2018), 2018 Trade Policy Agenda and 2017 Annual Report of the President of the United States 
on the Trade Agreements Program . Viewed at:  
https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20FINAL.PDF . 
67 BEA online statistics. Viewed at: 
https://www.bea.gov/iTable/iTable.cfm?ReqID=51&step=1#reqid=51&step=51&isuri=1&5114=a&5102=5 . 
68 BEA online statistics. Viewed  at: www.bea.gov/scb/pdf/2017/10 -October/1017 -international -services -
tables.pdf . WT/TPR/S/ 382 • United States  
 
- 165 - 
 
  4.83.   As a respons e to the financial crisis, the G overnment put in place the Troubled Asset Relief 
Program (TARP). As part of the TARP, the Treasury put in place the Capital Purchase Program (CPP), 
a preferred stock  and subordinated debenture  purchase progr amme. As of 30 June 2018, only four 
banks remained under the TARP.69 Out of the 707 institutions that received funds, 264  banks had 
fully repaid their entire principal with interest, 137 institutions resorted to Small Business Lending 
Fund ( SBLF) repayments, 28 to Community Development Capital Initiative ( CDCI) conversions, 
47 sold investments, 190 auctioned investments, 33 were in bankruptcy or receivership , and 4 had 
merged .70 As at 30  June 2018, the Treasury had recovered US$226.8  billion from t he CPP through 
repayments, dividends, interest, and other income, compared to the US$204.9 billion initially 
invested under the program me.71 The Federal National Mortgage Association (Fannie Mae) and 
Federal Home Loan Mortgage Corp (Freddie Mac) continue to  be under conservatorship . 
4.84.   At the end of March 2018, there were 1,812 "large" commercial banks in the United  States, 
each with consolidated assets of US$300 million or more. At the same date, total banking system 
assets were US$16.7 trillion.72 
4.4.1.2   Legislation and regulation  
4.85.   The main legislation regulating the financial sector , that was promulgated in the aftermath of 
the 2008 global financial crisis , is the Dodd -Frank Wall Street Reform and Consumer Protection Act 
of 2010 (DFA).  The objective of the DFA is to p romote the financial stability of the U nited States by: 
improving accountability and transparency in the financial system, end ing "too big to fail"  practices;  
protect ing the U.S. taxpayer by ending bailouts; and protect ing consumers from abusive financial 
services practices , among other considerations . In pursuit of the above, the DFA established a new 
and comprehensive regulatory framework, which included bring ing previously unregulated markets, 
entities , and activities under the regulatory sphere. Additionally, the DFA also established a 
framework for the orderly resolution of large, complex and systemically important financial 
institution s. The largest bank holding companies (BHC) and the designated non -bank financial 
companies are required to submit resolution plans to the Federal Reserve and the Federal Deposit 
Insurance Corporation ( FDIC). 
4.86.   Under the  DFA, the Office of Thrift Sup ervision was abolished, and its  responsibilities were 
reassigned to the Fed eral Reserve, the FDIC, and the Office of the Comptroller of Currency  (OCC) . 
The Act created the Financial Stability Oversight Council (FSOC) and the Consumer Financial 
Protection Bureau (CFPB). The r esponsibilities of the FSOC include: (i) identify ing risks to the 
financial stability of the United States that could arise from material financial distress, failure or 
ongoing activities of large, interconnected bank holding companies or non -bank f inancial companies; 
(ii) promoting  market discipline; and (iii)  respond ing to emerging threats to the stability of the 
financial system. The CFPB (an independent bureau of the Federal Reserve System) is mandated to 
regulate the offering and provision of consumer financial products and services under federal 
consumer f inancial protection laws. The CFPB supervises insured depository institutions and credit 
unions with assets greater than US$10 billion , and non-bank mortgage originators and servicers, 
payday lenders, and private student lenders of all sizes , to ensure com pliance with federal consumer 
financial protection laws and regulations, and may take appropriate enforcement action to address 
violations ( see Table 4. 10 in previous report ).73 
4.87.   The DFA also established the Treasury's Federal Insurance Office (FIO). The FIO , among other 
things,  advises the Secretary of the Treasury on major domestic and prudential international 
                                                
69 Department of the Treasury (2018), Troubled Asset Relief Program, Monthly Report t o Congress, June 
2018, issued on 10 July. Viewed at: https://www.treasury.gov/initiatives/financial -
stability/r eports/Documents/2018.06%20June%20Monthly%20Report%20to%20Congress.pdf . 
70 SBLF r epayments  refer to investments refinanced under the Small Business Lending Fund (SBLF), a 
program me created by Congress outside of the TARP under which certain CPP institutions  were allowed to 
repay TARP funds by borrowing under that program me. CDCI conversions refer to exchanges of CPP 
investments into the Community Development Capital Initiative (CDCI), as permitted under the terms of that 
program me. Auctions  refer to  net proc eeds from all auctions of CPP preferred and note securities where cash 
has settled with the Treasury Department's Office of Financial Stability ( OFS) as of 30 June 2018.  
71 Department of Treasury online information. Viewed at: https://www.treasury.gov/initiatives/financial -
stability/TARP -Programs/bank -investment -programs/cap/Pages/payments.aspx . 
72 Federal Reserve online inf ormation. Viewed at: 
https://www.federalreserve.gov/releases/h8/current/default.htm . 
73 WTO document WT/TPR/S/350/Rev.1.  WT/TPR/S/ 382 • United States  
 
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  insurance policy issues, and its Director serves as a non -voting member of the FSOC. In addition, 
the FIO assists the Secretary in the administration  of the Terrorism Risk Insurance Program (TRIP). 
It also monitors all aspects of the insurance sector , and represents the U nited States on prudential 
aspects pertaining to international insurance matters.  The DFA also granted the SEC and the CFTC 
authority  to regulat e over -the-counter derivatives.  
4.88.   Section 113 of the DFA authorizes the FSOC to determine whether a non -bank financial 
company shall be supervised by the Board of Governors of the Federal Reserve System , and be 
subject to enhanced prudential stand ards if material financial distress at the company, or the nature, 
scope, size, scale, concentration, interconnectedness, or mix of the activities of the company , could 
pose a threat to the financial stability of the United States.74 The FSOC issued a rule and interpretive 
guidance regarding its determinations authority, and later also adopted supplemental procedures 
related to non -bank financial company determinations. The FSOC established a three -stage process 
for identifying and an alyzing companies for a determination. In the first stage of the process, the 
FSOC applies six quantitative thresholds to a broad group of non -bank financial companies , to 
identify a set of companies that merit further evaluation; these are: US$50 billion in total 
consolidated assets75; U$30 billion in gross notional credit default swaps (CDS s) outstanding for 
which a non -bank financial company is the reference entity; US$3.5 billion of derivative liabilities; 
US$20 billion in total debt outstanding; a 15 to 1 leverage ratio (ratio of total consolidated assets to 
total equity ); and a 10% short-term debt ratio (ratio of total debt outstanding with a maturity of 
less than 12 months to total consolidated assets ).76 
4.89.   The DFA also autho rized the FSOC  to designate a Financial Market Utility (FMU) as systemically 
important  if it determines that the failure of , or a disruption to the functioning of , the FMU could 
threaten the stability of the U.S. financial system. Designated FMUs are subject to heightened 
prudential an d supervisory provisions , must provid e advance notice and review of changes to their 
rules, procedures, and operations, and are  subject to relevant examination and enforcement 
provisions.  In July 2012, the FSOC designate d eight FMUs as systemically importa nt under the DFA .77 
4.90.   One of the most significant changes brought about by the DFA was the introduction of the 
"Volcker Rule", which came into force in July 2015. The objective of the Rule is to reduce the amount 
of speculative i nvestments i n insured banks an d any company affiliated with an insured bank . To 
achieve this, the Volcker Rule prohibits banking entities from proprietary trading of any securit ies, 
derivatives or certain other financial instruments for a banking entity's own account. There are 
certain  exemptions to the definition s of proprietary trading and permitted activity exemptions.78 
Banking entities are also prohibited from acquiring or retaining any equity, partnership or other 
ownership interest in , or from sponsoring , a hedge fund or private equity fund (covered fund), under 
the Rule. However, these are also subject to exceptions and exemptions , depending on the definition 
of covered funds and certain permitted activities.79 
                                                
74 More information can be found at: 
https://www.treasury.gov/initiatives/fsoc/designations/Pages/nonbank -faq.aspx . 
75 For a U.S. non -bank financial company, the global assets of the company and its consolidated 
subsidiaries are included in the calculation of this threshold. For a foreign non -bank financial company, only the 
U.S. assets of the company and its consolidated subsidiaries are included.  
76 FSOC (2015), Staff Guidance. Methodologies Relating to Stage 1 T hresholds , 8 June. Viewed at: 
https://www.treasury.gov/initiatives/fsoc/designations/Documents/FSOC%20Staff%20Guidance %20-
%20Stage%201%20Thresholds.pdf . 
77 These are: t he Clearing House Payments Company L.L.C. on the basis of its role as operator of the 
Clearing House Interbank Payments System; CLS Bank International; Chicago Mercantile Exchange, Inc.; the 
Depository Trust  Company; Fixed Income Clearing Corporation; ICE Clear Credit LLC; National Securities 
Clearing Corporation; and the Options Clearing Corporatio n. Department of the Treasury online information. 
Viewed at: https://www.treasury.gov/initiatives/fsoc/designations/Pages/default.aspx . 
78 The definition of "banking entities" includes insured depository institutions, bank holding companies, 
and their subsidiaries or affiliates.  It also includes foreign banks that maintain branches or agencies in the 
United States or that own U.S. banks or commercial lending companies in the United States. The exemptions 
to the ban on proprietary trading include trading transactions in government  securities; and transactions in 
connection with underwriting or market -making, on behalf of customers by an insurance company solely for 
the general account of the company. Additionally, certain risk -mitigating hedging is allowed under the Act, as 
well as  proprietary trading occurring solely outside of the United States and conducted by a banking entity not 
directly or indirectly controlled by a banking entity organized under U.S. federal or state laws.  
79 Despite the general prohibition, a banking entity m ay make a de minimis  investment in a fund it 
advises, to provide the fund sufficient initial equity to attract unaffiliated investors. This investment may not WT/TPR/S/ 382 • United States  
 
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  4.91.   With a view to promoting the short-term resil ience of internationally active banking 
organizations, and in line with the liquidity coverage ratio (LCR) stipulated under Basel III standards , 
the U .S. banking regulators issued a final rule to implement the LCR in the United States in 
September 2014.80 The LCR is the ratio of high -quality, liquid assets (central bank reserves and 
government and corporate debt that can be converted quickly and easily into cash) to a banking 
organization's projected net cash outflows over a 30 -day period. The rule requires that companies 
have a n LCR of 100% or more. Implementation of the rule started in 2015 , and companies were 
expected to be fully compliant by 2017. Banking organizations with less than US$50 billion in assets  
are generally exempt from the final rule, while minimum liquidity requirements for FSOC -designated 
systemically important, non -bank financial companies were to be established at a later date.81 
4.92.   In July 2013, the Federal Reserve issued a final rule to implement Basel III capital rules in 
the United States . The rule was designed to help ensure that banks maintain strong capital positions 
that will enable them to continue lending to creditworthy households and businesses , even after 
unforeseen losses and during severe economic downturns.82 The rule stipulates  a minimum ratio of 
common equity tier 1 capital to risk -weighted assets of 4.5% , and a common equity Tier 1 capital 
conservation buffer of 2.5% of risk -weighted assets that will apply to all banking organizations . 
Under the rule, the minimum ratio of Tier 1 capital to risk -weighted assets was raised from 4% to 
6%, and included a minimum leverage ratio of 4% for all banking organizations, as well as a ratio 
of total capital to risk -weighted assets (total capital ratio) of 8%. Furthermore, in September 2016 , 
the Federal Reserve Board issued a final policy statement , allowing implementation of a counter -
cyclical capital buffer, to range from 0% to 2.5% of risk -weighted assets, when authorities determine 
credit growth is resulting in unacceptable systemic risk.  This capital buffer, currently set at 0% of 
risk-weighted assets, is  to be phased in  by 2019.  
4.93.   In response to Executive Order 13772, the U.S. Department of the Treasury issued a series 
of reports, in 2017, on Banking and Credit Unions, Capital Markets, and  Asset Management and 
Insurance. On 24 May 2018, the President signed into law the Economic Growth, Regulatory Relief 
and Consumer Protection Act, which included several recommendations that were contained in the 
Treasury reports.  The legislation contains several provisions encompassing : consumer access to 
mortga ge credit; regulatory relief;  protection for student borrowers, vete rans, consumers and home 
owners; and regulations for bank holding companies and for enc ouraging capital formation 
(Box 4.1).  
Box 4.1 Main provisions of the Economic Growth, Regulatory Relief and Consumer 
Protection Act, Public Law 115 -174, of 24 May 2018  
Title II - Regulatory relief and protecting consumer access  to credit  
• Federal banking agencies must develop a specified Community Bank Leverage Ratio (the ratio of a 
 bank's equity capital to its consolidated assets) for banks with assets of less than US$10 billion. Banks 
 that exceed this ratio shall be deemed to be in compliance with all other capital and leverage 
 requirements.  
• Amends the Federal Deposit Insurance Act to exclude reciprocal deposits (deposits that banks make with 
 each other in equal amounts) of an insure d depository institution from certain limitations on prohibited 
 broker deposits, if the total reciprocal deposits of the institution do not exceed the lesser of US$5 billion 
 or 20% of its total liabilities.  
• Amends the Bank Holding Company Act of 1956, to exempt from the Volcker Rule banks with:  total 
 (1) assets valued at less than US$10 billion; and (2) trading assets and liabilities comprising not 
 more than 5% of total assets (Table 4. 8). 
• Volcker Rule restrictions on entity name sharing are eased, i n specified circumstances.  
                                                
exceed 3% of the total ownership interest of the fund within one year of the date of its establis hment , and the 
aggregate of all of the interests of the banking entity in all such funds may not exceed 3% of its Tier 1 capital.  
80 The final rule applies to internationally active banking organizations, generally those with 
US$250  billion or more in total  consolidated assets or US$10 billion or more in on -balance -sheet foreign 
exposure . Less stringent, modified LCR requirement s for bank holding companies and savings and loan holding 
companies without significant insurance , or commercial operations that, in  each case, have US$50 billion or 
more in total consolidated assets but are not internationally active , were adopted . 
81 Federal Reserve online information. Viewed at: 
http://www.federalreserve.gov/newsevents/press/bcreg/20131024a.htm . 
82 Board of Governors of the Federal Reserve System online information. Viewed at: 
http://www.federalreserve.gov/ bankinforeg/basel/default.htm . WT/TPR/S/ 382 • United States  
 
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  • Amends the Federal Deposit Insurance Act, to require federal banking agencies to issue regulations 
 allowing certain small depository institutions to satisfy reporting requirements with a reduced Report of 
 Condition and Income.  
• Amends the Home Owners' Loan Act, to permit certain federal savings associations to elect to operate, 
 subject to supervision by the OCC, with the same rights and duties as national banks.  
• The Federal Reserve Board (FRB) must increase, from US$1 billion  to US$3 billion, the consolidated asset 
 threshold (i.e. permissible debt level) for a bank holding company (BHC) or savings and loan holding 
 company that: (1) is not engaged in significant non -banking activities; (2) does not conduct significant 
 off-balance-sheet activities; and (3) does not have a material amount of debt or equity securities, other 
 than trust -preferred securities, outstanding (Table 4. 8). 
• Amends the Federal Deposit Insurance Act, to increase the asset limit below which certain deposi tory 
 institutions are eligible for an 18 -month, instead of a 12 -month, examination cycle.  
• Creates the Insurance Policy Advisory Committee on International Capital Standards and Other 
 Insurance Is sues at the FRB.  
• Amends the Federal Deposit Insurance Act , to specify that a federal banking agency may not subject a 
 depository institution to higher capital standards with respect to a high -volatility commercial real -estate 
 (HVCRE) exposure, unless the exposure is a HVCRE acquisition, development, or constru ction (ADC) 
 loan. 
• Amends the Federal Reserve Act, to lower the maximum allowable amount of surplus funds of the 
 Federal Reserve banks.  
Title IV - Tailoring regulations for certain bank holding companies  
• Amends the Financial Stability Act of 2010, with respect to non -bank financial companies supervised by 
 the FRB and certain bank holding companies, to (a) increase the asset threshold at which certain 
 enhanced prudential standards shall apply, from US$50 billion to US$250 billion, while allowing the FRB 
 discretion in determining whether a financial institution with assets equal to or greater than US$100 
 billion must be subject to such standards; (b) increase the asset threshold at which company -run stres s 
 tests are required, from US$10 billion to US$250 billion; and (c) increase the asset threshold for 
 mandatory risk committees, from US$10 billion to US$50 billion (Table 4. 8). 
• Requires federal banking agencies to exclude, for the purposes of calculatin g a custodial bank's 
 supplementary leverage ratio, funds of a custodial bank that are deposited with a central bank.  
• Amends the Federal Deposit Insurance Act, to require certain municipal obligations to be treated as level 
 2B liquid assets if they are investment grade, liquid, and readily marketable.  
Title V - Encouraging capital formation  
• Amends the Securities Act of 1933, to exempt from state registration securities qualified for national 
 trading by the SEC and authorized to be listed on a nationa l securities exchange.  
• Amends the Investment Company Act of 1940, to exempt from the definition of an "investment 
 company", for purposes of specified limitations applicable to such a company under the Act, a qualifying 
 venture capital fund that has no m ore than 250 investors.  
• Amends the Investment Company Act of 1940, to apply the Act to investment companies created under 
 the laws of Puerto Rico, the U.S. Virgin Islands, or any other U.S. possession.  
• Requires the SEC to increase, from US$5 million to US$10 million, the 12 -month sales threshold beyond 
 which an issuer is required to provide investors with additional disclosures related to compensatory 
 benefit plans.  
• Expands the applicability to issuer s of "Regulation A+" (which exempts certain smaller offerings from 
 securities registration requirements).  
• Directs the SEC to revise registration rules to allow a closed -end company (publicly traded investment 
 management company that sells a limited number of shares to investors in an initial public offering) to 
 use offering and proxy rules currently available to other issuers of securities.  
Source:  https://www.congress.gov/bill/115th -congress/senate -bill/2155 . 
4.94.   The most noteworthy changes include: allowing banks with between US$50 billion and 
US$250 billion in assets to be run with less regulatory oversight; exemp t banks with less tha n 
US$10  billion from the Volcker Rule; requiring the Federal Reserve to tailor regulations with respect 
to bank size rather than "one size fits all" , and enabling large foreign banks to avoid regulations by 
allowing them to tally their U.S. assets in certa in way s that keeps them below the US$ 250 billion 
threshold  (Table 4. 8). WT/TPR/S/ 382 • United States  
 
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  Table 4.8 Asset size and other thresholds in P.L. 115 -174 
P.L. 115 -
174 
section 
number  New size  
threshold  Former size 
threshold  Provision description  
 Asset size threshold   
207 US$3 billion  US$1 billion  BHCs below this threshold, subject to other requirements, are not 
subject to the same capital requirement as depository subsidiaries, 
and are permitted to take on more debt to acquire other banks.  
210 US$3 billion  US$1 billion  Banks below this threshold, subject to other requirements, are 
eligible for less frequent examination.  
205 US$5 billion  None Banks below this threshold are eligible for reduced reporting 
requirements to federal regulators.  
101 US$10 billion  US$2 billion  Mortgages originated and retained by banks or credit unions below 
this threshold, subject to other requirements, are considered 
"qualified mortgages" for the purposes of the Ability -to-Repay 
Rule. 
109 US$10 billion  US$2 billion  Banks or credit unions below this threshold, subject to other 
requirements, are exempt from certain escrow requirements.  
201 US$10 billion  None Banks below this threshold, possibly subject to other regulatory 
requirements, are considered as meeting all capital and leverage 
requirements if they maintain at least a minimum Community Bank 
Leverage Ratio.  
203 US$10 billion  None Banking organizations below this threshold are exempt from the 
Volcker Rule, provided their trading assets and liabilities are less 
than 5% of total assets.  
206 US$20 billion  None Federal savings associations below this threshold, subject to other 
requirements, can opt in to the national bank charter regulatory 
regime.  
401 US$50 billion  US$10 billion  Publicly traded BHCs below this threshold are exempt from certain 
risk committee requirements.  
401 US$100 billion  US$50 billion  BHCs below this threshold are exempt from Dodd -Frank enhanced 
prudential regulation (except for the risk committee requirement).  
401 US$100 billion 
- US$250 
billion  US$50 billion  Regulatory discretion to apply Dodd -Frank enhanced prudential 
regulation to  BHCs in this range, except supervisory stress testing 
requirements to which these BHCs would still be subject.  
401 US$250 billion 
or G-SIB US$10 billion 
for company -
run stress 
tests; US$50 
billion for 
others  BHCs above this threshold would be automatically subject to Dodd -
Frank enhanced prudential standards.  
209 550-unit public 
housing agency  None An agency of small size is subject to less frequent inspection, 
provided it predominately operates in a rural area.  
504 US$10 million 
in invested 
capital and 250 
beneficial 
owners  100 beneficial 
owners  The new threshold applies to when a qualifying venture capital fund 
must register with the SEC as an investment company.  
507 US$10 million 
in aggregate 
sales of 
company 
securities to 
employees  US$5 million in 
aggregate sales 
of company 
securities to 
employees.  Certain companies that are exempt from registering their securities 
with the SEC are subject to a higher threshold before they would 
be required to give employee -investors additional investor 
disclosures.  
 Product/activity limitations   
202 Lesser of 
US$5  billion or 
20% of total 
liabilities  None Reciprocal deposits below this threshold are not considered 
brokered deposits for the purposes of prohibitions from accepting 
brokered deposits facing  banks that are not well capitalized.  
103 US$400,000 
mortgage  US$250,000 
mortgage  Loans below this threshold, subject to other requirements, do not 
require an appraisal of the property in rural areas.  
Note:  BHC = bank holding company. Some existing thresholds are statutory, whereas others are applied  
 through regulation.  
Source:  Congressional Research Service.  
4.4.1.3   Consolidated financial sector regulation  
4.95.   There has been no change in legislation governing financial sector consolidation. The Gramm -
Leach -Bliley Act (Financial Services Modernization Act) of  1999 (GLBA) allows domestic and foreign 
banks to affiliate with entities that engage in financial activities or provide services that are WT/TPR/S/ 382 • United States  
 
- 170 - 
 
  incidental, or complementary to, a financial activity, provided cert ain capital and managerial 
standards are met. The Act allowed commercial banks, investment banks, securities firms and 
insurance companies to consolidate and create a financial holding company (FHC). In July 2018, 
there were 534 FHCs, which included 42 for eign banks. As at 31 March 2018, there were 130 large 
FHCs, with assets of above US$10 billion each.83 
4.96.   Overall regulation and supervision of large consolidated banking institutions, including FHCs, 
is the responsibility of the Federal Reserve, while the FSO C monitors the risks to financial stability 
posed by such institutions or by non -bank financial companies. The FSOC is empowered to determine 
that certain financial companies should be subject to supervision by the Federal Reserve, and to 
make recommendati ons concerning prudential standards that should apply to those companies. 
Furthermore, the activities of subsidiaries of FHCs are regulated by the appropriate regulator: the 
OCC in the case of national banks; a state banking agency and the Federal Reserve or the FDIC in 
the case of state -chartered banks; the SEC in the case of securities firms; and a state insurance 
commission in the case of insurance companies.  
4.4.1.4   Banking services  
4.97.   Due to the fragmented nature of the sector, a number of federal and state regulators are 
responsible for the supervision of the banking sector. The Federal Reserve is responsible for 
supervising bank holding companies (BHCs), saving and loans holding compa nies, domestic and 
foreign financial holding companies, foreign banks operating in the United States, state member 
banks, foreign branches, Edge Act and agreement corporations84, and designated financial market 
utilities.85 
4.98.   The OCC charters, regulates, and s upervises all national banks and federally -chartered 
savings associations, and supervises the federal branches and agencies of foreign banks, as well as 
the international activities of U.S. national banks. The FDIC insures deposits, and is the primary 
federal regulator for state -chartered institutions that are not members of the Federal Reserve 
System. State regulators are organized in the Conference of State Bank Supervisors (CSBS).86 The 
federal banking regulators are members of the FSOC, as are other fina ncial service regulators and 
representatives.  
4.99.   The United States provides national treatment with respect to all banking services, except 
that branches of foreign banks are not allowed to accept FDIC insured deposits unless grandfathered, 
and agencies of fo reign banks are not permitted to accept deposits from U.S. citizens and residents.  
4.100.   The United States made GATS commitments in market access and national treatment for all 
subsectors included in the Annex on Financial Services, and in line with the Understanding on 
Commitments in Financial Services.87 Although geographic and other limitations are applied to 
foreign banks and foreign -owned bank subsidiaries generally on a national treatment basis, the U.S. 
GATS Schedule has reserved against national tr eatment for some measures. For example, foreign 
banks cannot be members of the Federal Reserve System, although foreign -owned U.S.  bank 
subsidiaries are not subject to this limitation. Also, foreign ownership of Edge corporations is limited 
to foreign bank s and U.S. subsidiaries of foreign banks, while domestic non -bank firms may own 
such corporations.  
4.101.   The FDIC provides a maximum deposit insurance amount of US$250,000 per depositor, per 
insured bank, for each account ownership category.88 Foreign banks in th e United States can be 
insured by the FDIC.  
                                                
83 Federal Financial Institutions Examination Council , National Information Center (NIC) online 
information. Viewed at: https://www.ffiec.gov/npw/Institution/To pHoldings . 
84 Edge Act and agreement corporations are subsidiaries of banks or bank holding companies, organized 
to allow international banking and financial business.  
85 Financial market utilities are multilateral systems that provide the essential infrastr ucture for 
transferring, clearing and settling payments, securities and other financial transactions among financial 
institutions.  
86 CSBS online information. Viewed at: https://www.csbs.org . 
87 WTO document GATS/EL/90/Su ppl.3, 26 February 1998.  
88 FDIC online information. Viewed at: https://www.fdic.gov/deposit/deposits/ . WT/TPR/S/ 382 • United States  
 
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  4.102.   Under the International Banking Act of 1978, foreign banks can establish a commercial 
presence in the United States by setting up federal or state licensed branches and agencies, 
representative offices, or throug h the acquisition of a national or state subsidiary bank. These are 
accorded national treatment. If a foreign bank that poses a threat to the stability of the U.S. financial 
system applies to set up an office in the United States, the DFA requires that the  Federal Reserve 
consider whether the home country of the foreign bank has adopted, or is in the process of adopting, 
regulation that would minimize such risk. In the absence of such criteria, the DFA gives the Federal 
Reserve powers to shut down the offic es of foreign banks.  
4.103.   Under U.S. law, interstate banking is allowed; this can be done either through a merger or 
through the establishment of new branches, subject to certain restrictions. With regard to mergers, 
size limitations apply on a non -discriminato ry basis, whereby the merged bank cannot control more 
than 10% of the total deposits of insured depository institutions in the United States. Additionally, 
limits on the total deposits of the merged bank within a state apply as well.  
4.104.   A foreign person is pe rmitted to establish or acquire a nationally chartered bank subsidiary 
in all states, subject to commercial presence requirements. Initial entry or expansion by a foreign 
person through the acquisition or establishment of a state -chartered commercial bank subsidiary is 
prohibited or limited in 22 states; other limitations also apply at the state level.89 
4.4.1.5   Insurance services  
4.4.1.5.1   Structure and performance  
4.105.   The insurance sector in the United States is divided into three segments: life and health 
(L&H) insurers, prope rty and casualty (P&C) insurers, and health insurers. Companies in the L&H 
sector offer life insurance and annuities, and accident and health (A&H) products. At the end of 
2016, there were 780 L&H firms. The 2,655 P&C insurers offer personal lines, which p rotect 
individuals and families against the risk of financial loss associated with damage to property or 
exposure to liability. They also provide commercial lines, which protect against the risk of financial 
loss for businesses. There are 1,095 companies l icensed solely as health insurers or Health 
Maintenance Organizations. There has been considerable consolidation in the insurance industry in 
recent years. There were 91 merger and acquisition (M&A) deals worth US$21.6 billion in 2016, and 
77 deals worth U S$143 billion in 2015.  
4.106.   In 2016, net premiums for approximately US$600 billion were written for the L&H sector, 
accounting for 34% of total net premiums, while, for the P&C segment, net premiums written were 
around US$534 billion (30% of total net written premiums). Net premiums written for the health 
sector were US$631 billion, or 36% of the combined total for the three sectors. In terms of total 
assets, the L&H sector dominates, with US$6.6 trillion at the end of 2016, followed by the P&C 
sector, with around US$1.9 trillion, and  US$377 billion by health insurance companies. The L&H 
sector continues to be noticeably concentrated in the United States. In 2016, the top 10 firms in the 
life and annuities subsector were responsible for nearly 53% of the direct premiums written, a slig ht 
decline from nearly 55% in 2015. The A&H subsector is even mor e concentrated, with the top 
10 firms being responsible for over 74% of the direct premiums written in 2016, an increase from 
around 72% in 2015 (Table A4.2). 
4.107.   The P&C insurance sector is less  concentrated than the other two: the top 10 companies 
were responsible for 46.5% of direct premiums written in 2016, a small increase from 2015 
(Tables  A4.2). Within P&C, the commercial lines segment is even les s concentrated, with the top 
10 firms being responsible for 38.2% of direct premi ums written in 2016. The top 10  firms in the 
health insurance sector wrote 52% of the direct premiums in 2016.  
4.108.   The U.S. insurance industry continues to be in a sound financial state; however, in 2016, 
the sector reporte d a mixed financial performance. In 2016, the aggregate net premiums written in 
the L&H sector declined to US$600 billion, compared with US$638 billion in 2015, contributing to a 
                                                
89 Branch licences for  foreign banks are not permitted  in Georgia, Louisiana, Missouri, and Oklahom a. 
Representative offices of foreign banks are not permitted in 12 states, and are subject to limitations in 
Oklahoma, while some states require the incorporation of representative offices. Some states also place 
limitations on the acquisition by a foreign  person of savings banks or loan associations (Tennessee and 
Washington).  WT/TPR/S/ 382 • United States  
 
- 172 - 
 
  decline in net income to US$39 billion in 2016, from US$40 billion a year ear lier. Net income primarily 
raised capital and surplus of the L&H sector to a record level of US$380.7 billion at the end of 2016. 
In contrast, net written premiums rose by 2.5% in 2016 for the P&C sector, to reach US$534 billion; 
however, net income declin ed to US$44 billion in 2016, less than the US$58  billion posted in 2015, 
and US$65 billion in 2014. Underwriting losses of US$2 billion in 2016 compared to gains of 
US$11  billion in 2015 was the main reason for the decline in income. Positive earnings in 2 016 
largely resulted in policyholder surplus for the sector, rising to US$712.3 billion at the end of the 
year. 
4.4.1.5.1.1   Legislation and regulation  
4.109.   During the period under review, there has been no change to the regulation of the insurance 
sector. Under the McCarra n-Ferguson Act of 1945 and the GLBA, the insurance sector is regulated 
mainly at the state level. The Treasury's Federal Insurance Office (FIO) monitors the insurance 
sector, and represents the United States on prudential aspects of international insurance  matters; 
however, the FIO wields no regulatory  powers. Additionally, the FSOC has general oversight 
responsibilities.  
4.110.   To be able to offer insurance services, insurance companies, agents and brokers need to be 
licensed in the state where they plan to provi de services. Licensing requirements vary across states. 
Furthermore, insurance premium rates for many types of coverage need to be approved by the state 
regulators.  
4.111.   With respect to foreign participation in the insurance sector, foreign firms can access the  
direct insurance market by acquiring a licensed insurance company, or through a subsidiary or a 
branch office. Furthermore, the majority of states prohibit the conduct of business by government -
controlled or government -owned insurance companies. A foreign  company operating as a branch is 
only permitted to write premiums based on the capital it has deposited in the state where it is 
conducting business. However, this condition is usually waived, particularly if the company has a 
deposit in another state. Fo reign companies in the sector are liable for the full amount of their assets 
in the United States. In certain cases, such as large industrial placements, marine, aviation, or 
transport (MAT) insurance or "surplus lines" insurance, exemptions from the state  residency 
requirements exist; these vary across states.  
4.112.   Foreign reinsurers that are permitted to conduct cross -border business with U.S. companies, 
even when not licensed in a particular state, are required to post collateral for some or all of their 
liabilities to the U.S. ceding insurer.  
4.113.   Insurance premiums covering U.S. risks paid to companies  not incorporated in the 
United  States, or in countries with which the United States has a double taxation treaty, are subject 
to a federal tax of 1% on life insura nce and reinsurance, and 4% on non -life insurance premiums. 
This was listed as a national treatment exemption in the U.S. GATS schedule.  
4.114.   With a view to reinforcing state coordination, state officials participate in the National 
Conference of State Insuranc e Legislators (NCOIL) and the National Association of Insurance 
Commissioners (NAIC). The NCOIL is composed of state legislators, whose purpose is "to help 
legislators make informed decisions on insurance issues  that affect their constituents and to declar e 
opposition to federal encroachment of state authority to oversee the business of insurance, as 
authorized under the McCarran -Ferguson Act of 1945".  The NAIC is composed of the chief insurance 
regulators from the 50 states, the District of Columbia and fi ve U.S. territories. It provides a forum 
for policy coordination, establishing standards and best practices, conducting peer reviews and 
coordinating regulatory oversight.90 
4.115.   On 12 January 2015, the Terrorism Risk Insurance Program Reauthorization Act of 201 5 
(Reauthorization Act) was enacted. The Act, inter alia, extends the Terrorism Risk Insurance Program 
(TRIP) to 31 December 2020. Under the TRIP, the U.S. Government currently pays 82% of the 
insured losses of an insurer resulting from acts of terrorism91, subject to prior payment of a 
                                                
90 For further details of the NAIC's role, see WTO document WT/TPR/S/350/Rev.1., 28 March 2017.  
91 The Government's contribution would decrease by 1% per year, until it is 80% by 2020.  WT/TPR/S/ 382 • United States  
 
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  deductible by each participating insurer.92 All payments by participating insurers that have satisfied 
their deductibles and by the Government, combined, are capped at an annual aggregate maximum 
of US$100 billion. Also, the G overnment does not share in any losses if industry -wide insured losses 
do not first exceed US$160  million (increasing to US$200 million by 2020).93 
4.116.   On 22 September 2017, the United States and the European Union signed a covered 
agreement, which addresses im portant areas of regulatory cooperation between the two as regards 
the insurance business, including: group supervision, reinsurance (including collateral and local 
presence requirements), and exchange of information between the respective regulatory autho rities. 
The agreement entered into force on 4 April 2018. According to the FIO, t he covered agreement 
allows U.S. insurers with EU operations to avoid burdensome worldwide group capital, governance, 
and reporting requirements under the European Union's "So lvency II" prudential regulatory system 
for insurers, as well as EU local presence and collateral requirements for U.S. reinsurers . The FIO 
also reports that the covered agreement builds on NAIC initiatives underway at the state level, by 
committing the Un ited States to eliminating state -based reinsurance collateral requirements as 
applied to cessions to EU reinsurers that meet the consumer protection standards specified in the 
agreement.94 
4.117.   As mentioned in the previous TPR report, in the aftermath of the fin ancial crisis, the Financial 
Stability Board (FSB) and the International Association of Insurance Supervisors (IAIS) developed a 
process to assess insurers' systemic risk, and recommend policy measures that would prevent 
failures in the sector. Following o n from this, in January 2017, the IAIS established the Systemic 
Risk Assessment Task Force (SRATF), with responsibility to assess and measure systemically -risky 
activities, improve cross -sectoral consistency in systemic risk management, and make 
improvemen ts to the Global Systemically Important Banks and Global Systemically Important 
Insurers (G -SII) assessment methodology. Unlike an entity -based approach to assessing systemic 
risk, which focuses  on the extent to which any single insurance company poses a t hreat to the 
broader financial system, the SRATF will explore an activity -based approach that examines risk 
across insurers to assess vulnerabilities that may be relevant to financial stability.  
4.118.   Additionally, in conjunction with the Basel Committee on Banking Supervision, the IAIS 
established a Task Force on Systemically Important Banks and Insurers (TFBI) in 2017. The purpose 
of the TFBI is to address inconsistencies between the Globally Systemic ally Important Banks' (G -SIB) 
framewo rk and the Globally Systemically Important Insurers' ( G-SII) assessment methodology.  The 
FSB, in consultation with the IAIS and national authorities, decided not to publish a new list for 
2017. The FSB also welcomed and  encouraged the work being done by the IAIS to develop an 
activities -based approach to systemic risk in the insurance sector.95 
4.4.1.6   Securities market regulation  
4.119.   During the period under review, there has been very little change to the legislation governing 
the securities market in the United States. Under the provisions of the Securities Act of 1933, a full 
disclosure of securities being offered for sale is required, and such securities need to be registered 
if offered for sale in the United States.96 
                                                
92 The deductible for each insurer is 20% of its prior year's earned premiums in commercial lines  of 
insurance subject to the TRIP.  
93 For further details concerning the TRIP and its operation, see FIO (2018), Report on the Effectiveness 
of the Terrorism Risk Insurance Program . Completed pursuant to the Terrorism Risk Insurance Program 
Reauthorization Act of 2015. Viewed at:  https://www .treasury.gov/initiatives/fio/reports -and-
notices/Documents/2018_TRIP_Effectiveness_Report.pdf . 
94 FIO (2017), U.S. Department of the Treasury, Annual Report on the Insurance Industry . Completed 
pursuant to Title V of the Dodd -Frank Wall Street Reform and Consumer Protection Act, September 2017. 
Viewed at: https://www.tr easury.gov/initiatives/fio/reports -and-notices/Documents/2017_FIO_Annual_ 
Report.pdf . 
95 FSB online information. Viewed at: http://www.fsb.org/wp -content/uploads/P211117 -2.pdf. 
96 Private of ferings to a limited number of persons or institutions; offerings of limited size; intrastate 
offerings; and securities of municipal, state, and federal governments  are exempt from registration 
requirements . Furthermore, f oreign issuers can opt to use diff erent registration and periodic reporting forms 
than those used by domestic users.  WT/TPR/S/ 382 • United States  
 
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  4.120.   The Securiti es and Exchange Commission (SEC), set up under the Securities Exchange Act 
of 1934 (SEA), is the principal regulator of the securities sector in the United States.97 The Act 
provides the SEC with disciplinary powers; furthermore, companies with more than US $10 million in 
assets, and whose securities are held by more than 500 owners, are required to file annual and other 
periodic reports. An amendment to the SEA, by the enactment of the Financial Services Regulatory 
Relief Act of 2006, exempted savings associ ations from the investment adviser and broker -dealer 
registration requirements  in place for banks. The DFA also introduced amendments to the SEA.  
4.121.   Debt securities, such as bonds, debentures and notes, need to be registered under the 
Securities Act of 1933. However, if such securities are offered for public sale, a formal agreement 
between the bond issuer and the bond holder known as a "trust indenture" is needed. The trust 
indenture needs to conform to the provisions of the Trust Indenture Act of 1939.  
4.122.   Compa nies which engage in investing, reinvesting, and trading in securities, and whose own 
securities are offered to investors, are regulated under the Investment Company Act of 1940 (ICA). 
Under the provisions of the Act, companies are required to disclose the ir financial condition and 
investment policies to investors, when the stock is initially offered for sale, and subsequently on a 
regular basis. However, the Act does not permit the SEC to supervise the companies' investment 
decisions or policies.  
4.123.   Investmen t advisors, which are firms or individuals engaged in advising others about 
securities investment for compensation, are regulated under the Investment Advisors Act of 1940 
(IAA). Under the provisions of the Act and its amendments, advisors who manage US$10 0 million 
or more, or advise a registered investment company, need to register with the SEC. As per the 
national treatment exemption undertaken by the United States in GATS, domestic banks involved in 
securities advisory and investment management services are exempt from registration under the 
IAA, while foreign banks are required to register. The registration requirement involves maintenance 
of records, inspections, submission of reports and the payment of a fee.  
4.124.   The Sarbanes -Oxley Act of 2002 (SOA), the D odd Frank Wall Street Reform and Consumer 
Protection Act of 2010 (DFA), the Jumpstart Our Business Start -ups (JOBS) Act of 2012, and the 
Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 introduced further 
changes and reforms to the re gulation of the securities sector. The SOA increased corporate 
responsibility, enhanced financial disclosures and improved combating corporate and accounting 
fraud. The SOA also created the Public Company Accounting Oversight Board to oversee auditing 
activities.  
4.125.   The DFA of 2010 amended the SEA Act of 1934, whereby the SEC, when considering the 
application of a foreign person, or an affiliate of a foreign person, to register in the United States as 
a broker or a dealer, has to take into account whether the applicant poses a risk to the stability of 
the U.S. financial system, and whether the applicant's home country has legislation in place that 
would mitigate such risk. Furthermore, the SEC is authorized to revoke the authorization of foreign 
brokers and dea lers if their home country has not taken appropriate steps to mitigate risk. The DFA 
also amended the SEA Act to require that each nationally recognized statistical rating organization 
set up, enforce and document an effective internal control structure, t o determine policies, 
procedures and framework for assigning credit ratings. The DFA also amended the IAA, by abolishing 
the private advisor exemption.98 Advisors subject to registration requirements were required to 
register by end -March 2012. Registration requires significant regulatory and compliance 
undertakings. Additionally, the DFA established a comprehensive regulatory framework for swaps 
and secur ity-based swaps. Swap dealers and major swap participants are required to register with 
the CFTC, while security -based swap dealers and major security -based swap participants need to 
register with the SEC. Certain swaps and security -based swap transactions  need to take place in an 
exchange and be cleared through a central counterparty, so as to reduce systemic risk. In addition, 
                                                
97 This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and 
clearing agencies , as well as securities self -regulatory organizations (SR Os). 
98 Exemptions from the Advisers A ct registration requirements apply, inter alia , to: (i) advisers solely to 
venture capital funds; (ii) advisers solely to private funds with less than US$150 million in assets under 
management in the United  States; and (iii) certain foreign advisers without a place of business in the 
United  States, hav ing less than 15 clients and investors in the United States in pr ivate funds, and less than 
US$25  million in aggregate assets under management attributable to clients . WT/TPR/S/ 382 • United States  
 
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  companies that use swaps are now subject to new regulatory, business, and operational 
requirements.  
4.126.   The JOBS Act was passed in 201 2, with a goal of enabling businesses to raise funds in public 
capital markets, by easing regulatory requirements. It is designed to facilitate capital formation, and 
help innovative, emerging growth companies access the capital they need to grow and creat e jobs. 
It also allows for an exemption for up to five years from the SOA Section 404 requirement to obtain 
an annual verification report from a registered public accounting firm.  
4.127.   Section 501 of the Economic Growth, Regulatory Relief and Consumer Protectio n Act signed 
into law on 24  May 2018, amended the Securities Act of 1933, exempting from the obligation of 
state registration securities approved by the SEC for national trading and authorized to be listed on 
a national securities exchange. It also directs  the SEC to report on the risks and benefits of 
algorithmic trading in capital markets. Section 504 of the Act creates a new subset of venture capital 
funds, called qualifying venture capital funds (QVCFs), that cannot be defined as an investment 
company a s stipulated in the ICA. Being exempt from the ICA definition reduces the QVCF's 
registration and disclosure requirements. To qualify as a QVCF, a venture capital fund needs to have 
less than 250 beneficial investors and less than US$10 million in invested  capital.  
4.128.   Section 506 of the Economic Growth, Regulatory Relief and Consumer Protection Act now 
requires mutual funds organized in domestic territories, such as Puerto Rico, the U.S. Virgin Islands 
and Guam, to be compliant with the provisions of the ICA, such as SEC enforcement and regulatory 
oversight, and disclosure requirements. The Act also increased the threshold amount of stock that 
a company can sell to its corporate employees in a year, without being subject to additional 
disclosure requirements, f rom US$5 million to US$10 million. The Act requires that the SEC offset 
future fees and assessments, which are due from a national securities exchange or association that 
has previously overpaid such fees and assessments, and informs the SEC of the overpay ment within 
10 years.  
4.129.   The Act increases the coverage of Regulation A+, which allows certain "fully reporting" 
companies to be eligible for certain exemptions from disclosure requirements. Section 509 of the 
Act allows closed -end funds to use certain stream lined reporting procedures, which are available 
through the well -known seasoned issuer status. This would include self -registration, communications 
with potential investors before and during the offering period, and being allowed to deliver electronic 
prospectuses.  
4.4.2   Telecommunications  
4.130.   The United States has the largest telecommunications market in the world in terms of 
revenue (US$601.8 billion in 2015).99 It ranked 16th out of 176 economies in 2017 in the ICT 
Development Index compiled by the International Te lecommunications Union (ITU).100 In 2017, the 
United States recorded a trade surplus in telecommunications, computer, and information services 
of US$6.5  billion, with exports totalling US$36.5 billion, and imports reaching US$29.0 billion.101 
4.131.   The number of mob ile phone subscriptions in the United States reached 396  million in 2016, 
with a penetration rate of 122.9%. Fixed telephone subscriptions decreased until 2016, to 122 million 
subscriptions, or 37.7 subscriptions per 100  inhabitants. Fixed -broadband subscr iptions per 
100 inhabitants increased from 32.0 in 2015 to 33.0 in 2016, and wireless -broadband subscriptions 
per 100 inhabitants reached 127 in 2016. In 2016, 76.2% of individ uals had Internet access 
(Table  4.9). 
                                                
99 OECD (2018), Digital Economy Outlook 2017 . Viewed at: http://www.oecd.org/sti/oecd -digital -
economy -outlook -2017-9789264232440 -en.htm . 
100 The ICT Development Index comprises 11 indicators covering ICT access, use, and skills. ITU online 
information.  Viewed at: https://read.itu -ilibrary.org/science -and-technology/measuring -the-information -
society -report -2017_pu b/80f52533 -en#page44 ; and https://www.itu.int/net4/ITU -D/idi/2017/index.html . 
101 BEA online information, International Transactions , International Services, and International 
Investment Posi tion Tables . Viewed at: 
https://www.bea.gov/iTable/iTable.cfm?ReqID=62&step=1#reqid=62&step=9&isuri=1&6210=4 . WT/TPR/S/ 382 • United States  
 
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  Table 4.9 Selected telecommunications indicators, 2011 –16 
 2011  2012  2013  2014  2015  2016  
Fixed telephone subscriptions (million)  143 139 133 128 125 122 
Fixed telephone subscriptions per 100 inhabitants  46.1 44.2 42.2 340.4  39.0 37.7 
Mobile -cellular telephone subscriptions (million)  297 305 311 356 382 396 
Mobile -cellular telephone s per 100 inhabitants  95.6 97.3 98.5 111.9  119.5  122.9  
Internet users (%)  69.7 74.7 71.4 73.0 74.6 76.2 
Fixed -broadband subscriptions (million)  88 93 96 98 102 106 
Fixed -broadband subscriptions per 100 inhabitants  28.4 29.5 30.4 30.8 32.0 33.0 
Wireless -broadband total subscriptions (million)  242.6  282.9  313.7  331.4  375.5  409.2  
Wireless -broadband total subscriptions per 100 
inhabitants  78.0 90.3 99.4 104.3  117.4  127.0  
Source:  ITU World Telecommunication/ICT Database (WTID), June 2018 Edition. Viewed at:   
 https://www.itu.int/en/ITU -D/Statistics/Pages/publications/wti d.aspx . 
4.132.   In its latest (2017) report , "Measuring the Information Society", the ITU noted the high level 
of penetration and competitive tariffs of the U.S. telecommunications market. The ITU also 
highlighted that operators are engaged in upgrading technology , and that the 5G service is expected 
to be available beginning in 2019. The report also notes that fixed broadband is an affordable and 
fast service, but that challenges remain with respect to the provision of high -speed broadband to 
rural areas. The repo rt recognizes the role played by the Federal Communications Commission (FCC) 
in the development of the sector.102 
4.133.   The Communications Act of 1934, as amended, continues to be the main law governing the 
sector. The FCC, an independent government agency whose five members are appointed by the 
President subject to confirmation by the Senate, is the federal agency responsible for implementing 
and enforcing communications law and regulations. It regulates interstate telecommunications 
carrie rs and others transmitting by wire or radio, including wireline103 and wireless companies, radio 
and TV broadcasters, cable providers, and satellite companies. The FCC regulatory oversight covers 
interstate and international communications in all 50 states, the District of Columbia and U.S. 
territories.104 The FCC has rulemaking authority , and may initiate a rulemaking proceeding when, 
for example, Congress specifically requires it to do so; when the FCC itself identifies an issue that is 
within its authority t o address; or when a petition for rulemaking concerning an area within the FCC 's 
authority is filed by a member of the public.105 The National Telecommunications and Information 
Administration (NTIA) , under the USDOC,  is the principal advisor to the President on 
telecommunications and information policy issues. The International Communication and 
Information Policy (CIP) Office under the Department of State, and the USTR play an active role in 
developing and coordinati ng telecommunications policy in international fora, including in the 
negotiation of bilateral and multilateral agreements.  
4.134.   The FCC is in c harge of assigning licences and authorizations under the Communications Act, 
including broadcast radio and television licences, licen ces used by wireless companies, satellite 
authorizations, and authorizations to provide landline telephone service. The FCC must also approve 
the transfer of those licen ces or authorizations, or when control of the company holding that licen ce 
or authorization is transferred.106 The FCC reviews most mergers involving a telecommunications 
company.  
4.135.   Before granting an application for a new licen ce/authorization or for approval of a transfer, 
the FCC must determine whether the public interest, conv enience, and necessity would be served 
by granting the application. The FCC may assess the competitive impact of granting the 
                                                
102 ITU (2018), Measuring the Information Society Report 2017 . Viewed at: https://read.itu -
ilibrary.org/science -and-technology/measuring -the-information -society-report -2017_pub/80f52533 -en#page1 . 
103 Intrastate wireline telecommunications providers are primarily regulated by a public utility 
commission (PUC) in each state, and some PUCs also lightly regul ate wireless companies and/or interconnected 
Voice over Internet Protocol (VoIP) providers. Cable operators are licensed by cable franchising authorities at 
the local or state level , and regulatory power over these operators is shared by such local/state a uthorities and 
the FCC . 
104 FCC online information. Viewed at: https://www.fcc.gov/about/overview . 
105 FCC online information. Viewed at: https: //www.fcc.gov/about -fcc/rulemaking -process . 
106 FCC online information. Viewed at: https://www.fcc.gov/reports -research/guides/review -of-
significant -transactions . WT/TPR/S/ 382 • United States  
 
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  licence/authoriz ation or transfer, analys ing not only whether competition would be harmed by 
approving the licen ce or its transfer , but also if it would be enhanced. Depending on the type of 
licence/authorization involved, the FCC may also examine the possible effects of the transfer on the 
private sector deployment of advanced services, the diversity of licen ce holders, and the dive rsity 
of information sources and services available to the public. The FCC will typically review the evidence 
and hear the views of the public before it issues its decision: it may approve the application 
unconditionally, or with conditions designed to ens ure that the public interest is served or that any 
potential harms identified by the FCC are eliminated or mitigated. If the evidence in the record 
presents a substantial and material question of fact or if the FCC for any reason is unable to make 
an affir mative finding that the public interest will be served by approving a transaction involving 
wireless or broadcast licenses, the FCC must designate  the application for a hearing.  (If there are 
no such questions in dispute, the FCC will deny the application. ) The FCC endeavo urs to complete 
its review of all transactions and issue an order within 180 days of accepting the application for 
filing.107 
4.136.   The FCC is responsible for managing and licensing the electromagnetic spectrum for 
commercial users and for non -commercial users , including state, county and local governments. This 
includes public safety, commercial and non -commercial fixed and mobile wireless services, broadcast 
television and radio, satellite , and other services. To obtain a licence it is necessary to register with 
the FCC's Commission Registration System (CORES).108 The FCC has several licensing systems. The 
Universal Licensing System (ULS) allows electronic filing of terrestrial wireless licen ce applications , 
and provides the ability to search for ap plications by providing information such as a file number, 
applicant name or application purpose , or to search for licen ces by providing information such as a 
call sign, licensee name or radio service. The Broadcast Radio and Television Electronic Filing S ystem 
(CDBS) permits electronic filing of broadcast radio and television application s with the FCC. Public 
Internet access to these electronic filings, as well as station, application, and authorization 
information is available. The Cable Operations and Li censing System (COALS) permits electronic 
filing of Cable Operator and Multichannel Video Programming Distributor (MVPD) forms with the FCC. 
Filers can obtain COALS system log -ins, submit cable community registrations, and make operator 
information changes . The International Bureau Electronic Filing System (MyIBFS) allows for 
electronic filing of the following types of applications, requests and notifications: space station, earth 
station, Section 214, cable landing licen ce, Section 310(b) foreign ownership  petitions, recognized 
operating agency, international signaling  point code (ISPC), data network identification code (DNIC), 
foreign carrier affiliation notification filin gs, and milestone/bond filings.  
4.137.   In general, common carriers, which are subject to Title II of the Communications Act, have 
a duty to interconnect with each other , either directly or through other common carriers' facilities.109 
Interconnection agreements may be regulated at both the state and federal levels.110 The FCC has 
the authority to address interconnection issues for such common carriers.111 
4.138.   The FCC maintains regulatory safeguards to deter conduct by a foreign carrier that could 
result in harm to competition in the U.S. telecommunications market. These safeguards include the 
"no special  concessions" rule, the benchmark settlement rates policy, and dominant carrier 
requirements. Under the no special concessions rule , U.S. international carriers are prohibited from 
agreeing to enter into exclusive arrangements with foreign carriers that ha ve sufficient market power 
to affect competition adversely in the U.S. market. The Foreign Participation Order adopted a 
presumption that carriers with less than a 50% market share in the foreign market lack such market 
power.  
4.139.   The provision of a number of services is not subject to any foreign ownership limitation. This 
is the case , for example, of  the provision of wireline broadband Internet access service. In other 
cases, there are foreign ownership limitations only under certain circumstances. For exampl e, 
wireline  based carriers , as well as submarine cable landing licensees, are not generally subject to 
                                                
107 FCC online information. Viewed at: https://www.fcc.gov/reports -research/guides/review -of-
significant -transactions . 
108 FCC online information. Viewed at: https://www.fcc.gov/licensing -databases/licensing . 
109 47 U.S.C. 251. Viewed at: https://www.law.cornell.edu/uscode/text/47/251 . See als o the definition 
of "telecommunications carrier" and "telecommunications service" in 47 U.S.C. 153 for the requirement that 
the service must be offered to the public. Viewed at: https://www.law .cornell.edu/uscode/text/47/153 . 
110 47 U.S.C. 252. Viewed at: https://www.law.cornell.edu.uscode/text/47/252 . 
111 47 U.S.C. 201 et seq. Viewed at: https://www.law.cornell.edu/uscode/text/47/chapter -5/subchapter -
II. WT/TPR/S/ 382 • United States  
 
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  any foreign ownership restrictions beyond the FCC's general obligations and qualifications for 
ownership  of such entities . Some other telecom services, h owever, are subject to restrictions. Under 
Section 310 of the Communications Act of 1934, common carrier wireless licen ces cannot be granted 
to, or held by , non-U.S. citizens, corporations not organized under the laws of the United States, or 
foreign gover nments, nor can they be granted to U.S. corporations of which more than 20% of the 
capital stock is owned of record or voted by any of these entities without prior FCC approval.112 
Licences may be granted to companies set up in the United States that are con trolled by holding 
companies set up in the United States and in which foreign individuals, corporations, or governments 
own of record or vote more than 25% of the capital stock, unless the FCC finds that such ownership 
is inconsistent with the public inter est. Under the Communications Act, the FCC must conduct a 
public interest analysis when evaluating applications to receive authorization to exceed the 25% 
foreign -ownership benchmark.113 Since the inception of the WTO, no foreign applicant has ever been 
denied a common carrier wireless licence under the FCC's public interest analysis of foreign 
ownership. During the review period, in 2016, the FCC revisited its prior policies with respect to 
broadcast applicants and licensees involving more than 25% foreign o wnership , and incorporated 
them into the existing streamlined rules and procedures that apply to common carrier applicants 
and licensees, with certain modifications.114 
4.140.   A major regulatory change that occurred during the review period was the FCC's decision t o 
end public -utility style regulation of the Internet, which had been introduced by the Title II Order  in 
2015, and to return to the light-touch regulatory framework that had been in place for nearly 
20 years.  
4.141.   Under the new Open Internet Order, now commonl y referred to as the Title II Order , adopte d 
by the FCC on 26 February 2015 , and effective on 12 June 2015115, fixed and mobile broadband 
Internet access service  were reclassified  as a telecommunication service under Title II of the 
Communication Act (hence the name Title II Order ).116 As a result, providers of broadband Internet 
access service were made subject to some of the same statutory provisions that apply to common 
carriers, including a prohibition on unjust or unreasonable practices or unreasonable 
discrimination.117 The provisions applied to both fixed and mobile broadband service. The Title II 
Order  prohibited the blocking  of lawful content, applications, services, or non -harmful devices ; 
throttling  (impairing or degrading lawful Internet traffic on the basis of Internet content, application, 
service, or use of a non -harmful device);  and paid prioritization  (management of a broadband 
provider's network to directly or indirectl y favour some traffic over other traffic, in exchange for 
consideration (monetary or otherwise) from a third party, or to benefit an affiliated entity) .118 
Additionally, the Title II Order  established a general  no unreasonable interference/disadvantage 
Internet conduct standard for conduct falling outside of the blocking, throttling, and paid 
prioritization prohibitions above.119 The Title II Order also added additional reporting requirements 
to the FCC's transparency rule for broadband Internet access service.120 It did not apply to enterprise 
services, virtual private network services, hosting, or data storage services. The Order was 
challenged by several groups, including the United States Telecom Association. In 2016, a D.C. 
                                                
112 Non-common carrier wireless licensees, including most satellite licensees, are not subject to foreign 
ownership restrictions.  
113 The public interest analysis conducted to review an application by a supplier from a WTO Member 
relies on an "open entry" standard, whereby the FCC starts from a presumption (subject to rebuttal) that 
foreign entry does not threaten competition in the U.S. telecommunications market. It also involves a 
consideration of policy concerns raised by federal government agencies in relation to national security, law 
enforcement, foreign policy, or trade policy issues.  
114 FCC (2016), Review of Foreign Ownership Policies for Broadcast, Common Carrier and Aeronautical 
Radio Licensees under Section 310(b)(4) of the Communications Act of 1934, as Amended , FCC 16 -128. 
Adopted on 29 September 2016.  Viewed at: https://docs.fcc.gov/public/attachments/FCC -16-128A1.pdf . 
115 FCC (2015), Report and Order on Remand, Declaratory Ruling , and Order in the Matter of Protecting 
and Promoting the Open Internet , GN Docket No. 14 -28. Adopted on 26  February 2015; released on 12 March 
2015. Viewed at: https://apps.fcc.gov/edocs_public/attachmatch/FCC -15-24A1.pdf  (Title II Order ). 
116 FCC (2015), Title II Order , paras. 41 -50. 
117 FCC (2015), Title II Order , paras. 283 -284. 
118 FCC (2015), Title II Order , paras. 14-19. 
119 FCC (2015),  Title II Order , paras . 20-22. Under this standard, a broadband Internet access service 
provider was not allowed to unreasonably interfere with , or unrea sonably disadvantage , end users ' ability to 
select, access, and use broadband Internet access service or the lawful Internet content, applications, services, 
or devices of their choice.  
120 FCC (2015), Title II Order , paras. 23 -24. WT/TPR/S/ 382 • United States  
 
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  Circuit Court upheld the Title II O rder in United States Telecom Association v. FCC , concluding that 
the FCC's classification of broadband Internet access service was permissible.121 
4.142.   The FCC started work in 2017 to review the Title II Order . In May 2017, it adopted a Notice 
of Proposed Rulema king (Internet Freedom NPRM) , in which it proposed to reinstate the classification 
of broadband Internet access service as an information service under Title I of the Communications 
Act.122 The Internet Freedom NPRM  also proposed to reinstate the determination that mobile 
broadband Internet access service is not a commercial mobile service, and to re -evaluate the FCC's 
rules and enforcement regime to analy se whether ex ante  regulatory intervention in the market was 
necessary. In this respect, the Internet Freedom NPRM  proposed to eliminate the Internet conduct 
standard and the non -exhaustive list of factors intended to guide application of that rule.123 It also 
sought comment on whether to keep, modify, or eliminate the  blocking, throttling, and paid 
prioritization prohibitions , and the transparency rule.124 
4.143.   In December 2017, the FCC issued a new Order reverting to the practices in place before 
the Title II Order  was implemented. The 2017 Restoring Internet Freedom  Order  reversed the FCC's 
shift in 2015 to heavier regulation of broadband Internet access service , and returned to the lighter -
touch framework that had been in place during almost two decades of rapid Internet growth.125 The 
main points of the Restoring Internet Fr eedom Order  may be summarized as follows:  
• Ending utility -style regulation of the Internet in favour of market -based policies ; 
• Reversing the 2015 Title II Order that had reclassified broadband Internet access 
service as a telecommunications service subject to several regulatory obligations under 
Title II of the Communications Act of 1934, as amended, and restoring broadband 
Internet access service to its Title I information service classification ; 
• Reinstating the private mobile service classification of mobi le broadband Internet access 
service , and returning to the FCC's definition of interconnected service that existed prior 
to 2015 ; 
• Restoring the authority of the Federal Trade Commission  (FTC)  to police the privacy 
practices of Internet Service Providers (I SPs); 
• Requiring ISPs to be transparent , through the disclosure of network management 
practices, performance, and commercial terms of service , so as to help consumers' 
choice. This is a return to the transparency rule the FCC adopted in 2010 , with certain 
limited modifications to promote additional transparency ; 
• Eliminating certain reporting requirements adopted in the Title II Order found to be 
unnecessary and unduly burdensome ; and  
• Eliminating the FCC's conduct rules, considered a costly burden on innovati on and 
investment , and unnecessary because of the transparency requirement adopted, 
together with antitrust and consumer protection laws.  
4.144.   The FCC expects, through these actions, to promote broadband deployment in rural areas 
and infrastructure investment t hroughout the country , and to move closer to the goal of e liminating 
the digital divide.  
4.145.   During the review period , following the submission of public comments responding to the 
Internet Freedom NPRM , the FCC released its 2018 Broadband Deployment Report126, prepared 
                                                
121 United States Telecom As s'n v. FCC , 825 F.3d 674 (D.C. Cir. 2016).  Viewed at: 
https://www.cadc.uscourts.gov/internet/opinions.nsf/3F95E49183E6F8AF85257FD200505A3A/$file/15 -1063-
1619173.pdf . 
122 FCC (2017), Notice of Proposed Rulemaking in the Matter of  Restoring Internet Freedom , WC Docket 
No. 17 -108. Adopted on 18 May 2017; released on 23 May 2017. Viewed at: 
https://docs.fcc.gov/public/attachments/FCC -17-60A1.pdf  (Internet Freedom NPRM ). 
123 FCC (2017), Internet Freedom NP RM, para. 73.  
124 FCC (2017), Interne t Freedom NPRM , para. 76.  
125 FCC (2017), Declaratory Ruling, Report and Order, and Order in the Matter of Restoring Internet 
Freedom , WC Docket No. 17 -108. Adopted on 14 December 2017; released on 4 January 2018. Viewed at: 
https://docs.fcc.gov/public/attachments/FCC -17-166A1.pdf  (Restoring Internet Freedom Order ). 
126 FCC (2018), 2018 Broadband Deployment Report . Adopted on 2 February 2018. Viewed at: 
https://docs.fcc.gov/public/attachments/FCC -18-10A1.pdf . See also https://www.fcc.gov/reports -
research/reports/broadband -progress -reports/2018 -broadband -deployment -report . WT/TPR/S/ 382 • United States  
 
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  under Section 706 of the Telecommunications Act of 1996127, which requires the FCC to report 
annually on whether advanced telecommunications capability "is being deployed to all Americans in 
a reasonable and timely fashion" , and to take "immediate action" if it is not. The FCC found that 
there are both fixed and mobile services capable of meeting the statutory definition of advanced 
telecommunications capability , but that mobile services are not currently full substitutes for fixed 
services.128 The Report also found that, in the wake of the 2015  Title II Order, the deployment of 
advanced telecommunications capability had slowed dramatically, with new deployments falling by 
55%. Further, although the number of people without access to both fixed terrest rial broadband and 
mobile broadband had continued to fall, it had done so at a pace three times slower after the adoption 
of the 2015 Title II Order. The Report also noted that, as of end 2016, 92.3% of the population had 
access to fixed terrestrial broadb and at speeds of 25 Mbps/3 Mbps, up from 89.4% in 2014 and 
81.2% in 2012; however , over 24 million people still lack fixed terrestrial broadband at these speeds. 
While approximately 92% (85.3%) of the population had access to both fixed terrestrial service s at 
25 Mbps/3 Mbps and mobile LTE at speeds of 5 Mbps/1 Mbps (10 Mbps/3 Mbps), in rural areas only 
68.6% (61%) of the people had access to both services, as opposed to 97.9% (89.8%) in urban 
areas. Also, the United States ranked 10th out of 28 countries f or download speed.  Closing the digital 
divide and furthering the deployment of advanced telecommunications capabilities remains the top 
priorit ies for the FCC , and the  Report  concludes there is much work still to be done.129 
4.146.   To respond to the slowdown in deployment (both actual and predicted) in the wake of the 
2015 Title II Order , the FCC has taken action, beginning in 2017, including by removing barriers to 
infrastructure investment, promoting competition in the telecommunications market, and by 
restorin g the previous light -touch regulatory framework for broadband Internet access services.  
4.147.   In this respect, the FCC's Strategic Plan, as revised for FY2018 to 2022, set a number of 
priorities in order to "bring the benefits of the digital age to all Americans ". These include:  
• Closing the digital divide, by bringing down the cost of deploying broadband and 
creating incentives for providers to connect consumers in hard -to-serve areas ; 
• Promoting innovation, by ensuring that the FCC 's actions and regulations reflect the 
realities of the current marketplace, promote entrepreneurship, expand economic 
opportunity, and remove barriers to entry and investment ; 
• Protecting consumers and public safety, by combatting unwanted and unlawful 
robocalls130, which intrude into  consumers' lives; making communications accessible for 
people with disabilities; and taking steps to assist and safeguard the communications 
of law enforcement officers and first responders ; and  
• Reforming the FCC's processes, to make the work of the FCC m ore transparent, open, 
and accountable , by modernizing and streamlining the FCC's operations and 
program mes to improve decision -making, build consensus, reduce regulatory burdens, 
and simplify the public's interactions with the Commission.131 
4.148.   The United Stat es has made commitments on basic telecommunications under the GATS , 
and made an MFN exemption to allow for "differential treatment of countries due to application of 
reciprocity measures or through international agreements guaranteeing market access or nat ional 
treatment" for direct -to-home (DTH) service s, direct broadcast satellite (DBS) television services, 
and digital audio services (DARS).132 The United States has also made both regulatory and market 
access commitments on telecommunications in its FTAs. I n the telecommunications chapters of its 
                                                
127 Section 706 is codified in 47 U.S.C. § 1302. Section 706(d)(1) defines advanced telecommunications 
capability "without regard to any transmission medi a or technology, as high -speed, switched, broadband 
telecommunications capability that enables users to originate and receive high -quality voice, data, graphics, 
and video telecommunications using any technology. " Viewed at: 
https://www.law.cornell.edu/uscode/text/47/1302 . 
128 FCC (2018). 2018 Broadband Deployment Report , paras. 14 -19. The FCC found that, beyond the 
most obvious distinction that mobile services permit their users mobility, there are clear variations in consumer 
preferences and demands for fixed and mobile services.  
129 FCC (2018), 2018 Broadband Deployment Report . Viewed at: 
https://docs.fcc.gov/public/attachmen ts/FCC -18-10A1.pdf . 
130 Robocalls are calls made with an autodialer or that contain a message made with a pre -recorded or 
artificial voice. See https://www.fcc.gov/consumers/guides/stop -unwanted -robocalls -and-texts. 
131 FCC (2018), Strategic Plan 2018 -2022. Viewed at: https://docs.fcc.gov/public/attachments/DOC -
349143A1.pdf . 
132 WTO document WT/TPR/S/307/Rev.1, 13 March 2015.  WT/TPR/S/ 382 • United States  
 
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  FTAs, rules have been agreed with regard to access to telecommunication networks, the provision 
of enhanced or value -added services, and the adoption of telecommunications standards.  
4.4.3   Postal and courier services  
4.4.3.1   Postal services  market overview  
4.149.   Postal and courier services are competitive activities , except for the services reserved for 
the United States Postal Service (USPS), the designated operator for universal service (see below).  
The USPS is an independent agen cy of the executive branch of the Federal Government. Private 
carriers may accept and deliver any item which does not fall within  the reserved category , including 
items not considered letters, such as merchandise, newspapers, and periodicals.133 However, und er 
"the mailbox rule" (see below), delivery must be made by means that do not involve access to 
mailboxes or post office boxes in USPS retail units, unless postage is affixed to the privately carried 
matter.  
4.150.   The USPS delivered 149 billion pieces of mail in  FY2017, serving 157 million delivery points 
via 31,3 77 post offices, stations and branches and 3,628 additional contracted partners.134 In 
FY2017, th e USPS recorded total revenue of US$69.7 billion, and total expenses of US$72.4 billion; 
both revenue and  expenses were lower than in FY 2016, and the  net loss was halved, to 
US$2.7  billion .135 The USPS has a statutory borrowing ceiling of US$15 billion from the Treasury. As 
the USPS reached this ceiling at the end of FY2012,136 it has limited its expenditures on cap ital 
investments , and has cut operational costs. For the past three fiscal years (FY2017, FY2016, and 
FY2015), the USPS  has generated net cash from operations of US$3.8 billion, US$2.7 billion, and 
US$2.9 billion, respectively. Revenue from First -Class Mail products amounted to US$25.6 billion; 
revenue from USPS Marketing Mail to US$16.6 billion; revenue from shipping and packaging to 
US$19.5 billion; revenue from international mail to US$2.7 billion; revenue from Periodicals to 
US$1.4 billion ; and the r est corresponded to revenue from other sources.137 Some 62.6% of revenue 
stems from market -dominant products (see  below). According to Title 39 of the U .S.C., the USPS 
"shall be operated as a basic and fundamental service."138 
4.151.   USPS rates and fees are establish ed by its 11-seat Board of Governors , and are subject to a 
review process by the Postal Regulatory Commission (PRC).  The USPS offers two categories of 
products: market -dominant products , and competitive products. Market -dominant products include: 
First-Class Mail, USPS Marketing Mail, and Periodicals. Price increases for these products are subject 
to a cap based on the Consumer Price Index ( CPI). The P ostal Accountability and Enhancement Act 
of 2006 (PAEA) requires the USPS to provide notice of proposed rat e adjustments for market -
dominant products at least 45 days before the proposed effective date .139 These proposed prices 
must be reviewed and approved by the Commission before they go into effect. Competitive products 
include Priority Mail, Priority Mail Express, First-Class Package Service, Parcel Select, Parcel Return 
Service , and some types of international mail . Competitive products  are subject to greater price 
flexibility, but prices are also set by the Board of Governors , and reviewed  by the PRC for legal 
compliance. The P AEA requires the USPS to provide notice of proposed rate adjustments of general 
applicability  for competitive products  at least 30 days before the proposed effective date .140 Prices 
for these products must cover direct and indirect costs, may not be subsidized by market -dominant 
products, and must  contribute an appropriate share of the USPS'  institutional costs . This amount is 
currently 5.5%. 
                                                
133 See 39 U.S.C. §§ 601 -606 and 18 U.S.C. §§ 1693 -1699.  
134 Including Contract Postal Units, Village Post Offices, and Community Post Offices.  
135 United States Postal Regulatory Commission (2018), FY 2017 Report on Form 10 -K. Viewed at: 
https://about.usps.com/who -we-are/financials/10k -reports/fy2017.pdf . 
136 United States Postal Regulatory Commission (2018), FY 2017 Report on Form 10 -K. Viewed at: 
https://about.usps.com/who -we-are/financials/10k -reports/fy2017.pdf . 
137 USPS  (2018), FY 2017 Annual Report to Congress . Viewed at : http://about.usps.com/who -we-
are/financials/annual -reports/fy2017.pdf . 
138 See 39 U.S.C. § 101( a). 
139 See 39 U.S.C. § 3622(d)(1)(C).  
140 See 39 U.S.C. § 3632(b)(2).  WT/TPR/S/ 382 • United States  
 
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  4.152.   The volume and value of USPS activities have been affected by competition from electronic 
transmission means and private competition. However, the growth of the parcels activity has 
partially offset the decline of the letters and printed matter activities.  
4.153.   The "Postal Service" subsector (491) in the North American Industry Classifica tion System 
(NAICS ) comprises establishments primarily engaged in providing mail services under a universal 
service obligation, and includes the activities of the National Post Office and its subcontractors 
operating under a universal service obligation  to provide mail services, and using the infrastructure 
required to fulfil that obligation. These services include delivering letters and small parcels . Although  
not explicitly defined, the USPS's universal service obligation (USO) is broadly outlined in mult iple 
statutes. In its 2008 Report on the Universal Postal Service and Value of the Postal Monopoly, the 
PRC identified seven aspects of universal service: geographic scope, range of products, access to 
services and facilities, delivery frequency, affordabl e and uniform pricing, service quality, and 
security of the mail.141 The Postal Service is the only carrier obligated to provide all aspects of 
universal service. Some USPS activities are classified under NAICS 492 "courier and messenger 
services" (see below). Publicly available U.S. official statistics do not isolate the value added of postal 
services , nor do they provide figures for FDI or Foreign Affiliate Trade Statistics (FATS) for the 
subsector . 
4.154.   Postal and courier activities combined employed 547,5 00 persons in 2017142, of which, 
503,103 were USPS "career employees" . The USPS also  employed at that date 141,021 "non -career 
employees" . The United  States has posted a surplus in cross -border trade of postal  services since 
2015, as shown in Chart 4. 7. Before 2015, the trade balance in post services was in deficit . The 
trade surplus increased s ubstantially in 2016, to US$207  million, compared to US$65 million the 
previous year. This was due to a strong increase in receipts (exports) and  decline in payments 
(imports).  
Chart 4.7 Postal services trade, 2009 -16 
(US$ million)  
 
Source:  Bureau of Economic Analysis.  
4.4.3.2   Courier and express services market overview  
4.155.   Courier and express services firms have developed alongside the postal service. The sector 
can be divided in to five sub -segments: standard courier services, overnight courier services, same -
                                                
141 United States Postal Regulatory Commission (2008), Report on Universal Postal Service and the 
Postal Monopoly , 19 December. Viewed at: https://www.prc.gov/docs/61/61628/USO%20Report.pdf . 
142 Bureau of Labor Statistics online information. Viewed at: https://www.bls.gov/iag/ tgs/iag491.htm . 
224
230
389
346
351
464
517
551453
361
442
519
525
478
452
344-229
-131
-53
-173
-174
-14
65
207
-300-200-1000100200300400500600
2009 2010 2011 2012 2013 2014 2015 2016Chart 4.7
Postal services trade, 2009 -16
Exports Imports Trade balance
Source:  Bureau of Economic Analysis.(US$ million)WT/TPR/S/ 382 • United States  
 
- 183 - 
 
  day express services, international courier service s, and pallet courier services. The industry is 
composed essentially of two  types of actors: very large express companies, such as Fedex, UPS, 
DHL and TNT, collecting and dispatching courier nationally and internationally through vans, tr ucks 
and planes via hub systems  and hand courier, messengers and local delivery firms using v ans, 
trucks , bicycles, or other means to deliver documents and parcels within a given metropolitan area 
(e.g. A1Express, Courier Express, LaserShip and Last Mile Logistics Group). Hauliers, air cargo 
carriers and freight forwarders are also present to vari ous degrees in the sector. With the growing 
importance of e –commerce, the competitive landscape is rapidly changing. Regional carriers , such 
as OnTrac and Eastern Connection in the Western and North -Eastern states , are emerging, while 
start-ups, such as Sh yp, PostMates,  and Uber, and prominent companies , such as Amazon and 
Google , are trying to make a mark in this industry . Delivery by drone is now  being tried by some 
companies.  
4.156.   "Couriers and messengers" are classified as a subsector within the category of transportation 
services under the NAICS. In accordance with the NAICS definition,  industries in the couriers and 
messengers' subsector provide intercity and/or local delivery of parcels and documents (including 
express delivery services) without operating under a universal service obligation  (USO) . Under the 
NAICS classification, the restriction to small parcels partly distinguishes courier and messenger 
establishments from those in the transportation industries. The complete network of courier services 
establishments also distinguishes these transportation services from local messenger and delivery 
establishments in this subsector. This includes the establishments that perform intercity 
transportation as well as establishments that, under contract, perform local pick -up and delivery.  
4.157.   According to the  Bureau of Labor Statistics , the courier and messenger subsector employed 
719,000 persons in the first quarter of 2018, and there were 17,405 establishments in the first 
quarter of 2017 (Table 4. 10).143 
Table 4.10 Employment and number of establishments in courier and messenger 
services, 2010 -18Q1  
NAICS 
code   2010  2011  2012  2013  2014  2015  2016  2017  2018a 
492 Number of 
employees  
('000)  528 531 534 544 574 611 643 683 719 
492 Establish -
ments  16,428  17,911  17,969  17,722  17,765  17,886  17,659  17,405b .. 
..  Not available.  
a  Data for the first quarter of 2018.  
b Data for the first quarter of 2017.  
Source:  WTO Secretariat calculations , based on data from the Bureau of  Labour Statistics.  
4.158.   According to private observers' information, the revenues of the courier and messenger 
industry was US$93 billion in 2017; according to the same source, the subsector posted an annual 
average growth rate of 3.2% during the 2012-17 period.144 Regarding value added, official statistics 
do no t isolate courier and messenger  services ; they are included in the category "other 
transportation and support activities" . The value added of this type of services reached 
US$130  billion in 2017, accounti ng for some 0.7% of GDP (Table 4.1 1). 
Table 4.11 Value added in other transportation and support activities, 2010 -17 
(US$ billion and % of total GDP)   
2010  2011  2012  2013  2014  2015  2016  2017  
Value (US$ billion)  96 102 105 108 110 117 122 130 
Share of total GDP (%)  0.6 0.7 0.6 0.6 0.6 0.6 0.7 0.7 
Source:  Bureau of Economic Analysis . 
                                                
143 Bureau of Labor Statistics online information. Viewed at:  https://www.bls.gov/iag/tgs/iag492.htm . 
144 IBIS World online information. Viewed at: https://www.ibisworld.com/industry -trends/market -
research -reports/transportation -warehousing/couriers -messengers/couriers -local-delivery -services.html . WT/TPR/S/ 382 • United States  
 
- 184 - 
 
  4.159.   Cross-border trade data pertaining exclusively to express delivery is lacking. However, 
following on the methodology used by the USITC for its 2004 enquiry on the subsector , one can 
approximate these flows by measuring air freight transport data , which include express delivery air 
freight.145 The United States has traditionally run a trade surplus in air freight trade services,  
including courier and messenger services  (Chart 4. 8). This surp lus peaked in 2013, at 
US$7,996  million, and has decreased since. However, at US$5,52 2 million in 2016, it remains 
substantial. A considerable share of this surplus is generated by carriers su ch as UPS, FedEx and the 
USPS. The United States is home to three of the four largest courier carriers in the world. UPS, the 
largest company, had revenue of US$66 billion in 2017 , and employed 454,000  people  worldwide, 
of which 374,000 were in the United States.146 FedEx had revenues of US$60.3  billion in FY2017 
(including TNT operations).147 
Chart 4.8 Air freight services trade, 2009 -16 
(US$ million)  
 
Note:   Courier services are included in "Air transport, freight" but are not separately identifiable.  
Source:  Bureau of Economic Analysis . 
4.160.   In 2016, the U nited States ran a large trade surplus in air freight services with most of its 
main trading partners , except China , with whom it exhibits a small deficit ( Chart 4.9). 
4.161.   The last available figures, for 2015, indicate that there were seven U.S. majority owned 
affiliates of  foreign multinational enterprises of courier  and messenger  services with assets, sales or 
net income over US$20 million. The amount of total assets is not disclosed due to confidentiality 
issues; they had between 25,000 and 49,999 employees in 2015 . 
                                                
145 USITC (2004), Express Delivery Services: Competitive Conditions Facing U.S. -based Firms in Foreign 
Markets . Investigation No. 332-456, USITC publication 3678,  April. V iewed at: 
https://www.usitc.gov/publications/332/pub3678.pdf . 
146 UPS Fact Sheet. Viewed at: 
https://pressroom.ups.com/pressroom/Conte ntDetailsViewer.page?ConceptType=FactSheets&id=1426321563
187-193. 
147 FedEx Annual Report 2017 . Viewed at: 
http://s1.q4cdn.co m/714383399/files/oar/2017/AnnualReport2017/AnnualReport2017flat/docs/FedEx_2017_A
nnual_Report.pdf . 
10,941
12,280
13,482
13,871
14,321
14,261
12,906
12,4734,688
6,435
6,613
6,177
6,325
7,197
7,895
6,9516,253
5,845
6,869
7,694
7,996
7,064
5,011
5,522
02,0004,0006,0008,00010,00012,00014,00016,000
2009 2010 2011 2012 2013 2014 2015 2016Chart 4.8
Air freight services trade, 2009 -16
Exports Imports Trade balance
Source:  Bureau of Economic Analysis.(US$ million)
Note: Courier services are included in "Air transport, freight" but are not separately identifiable.WT/TPR/S/ 382 • United States  
 
- 185 - 
 
  Chart 4.9 Air freight services: cross -border exports, imports, and trade balance, by 
major trading p artners, 2016  
(US$ million)  
 
Source:  Bureau of Economic Analysis.  
4.4.3.3   Regulatory regime  
4.162.   The USPS is regulated by the Postal Regulatory  Commission (PRC), established under the 
Postal Accountability and Enhancement Act (PAEA) of 2006 (P.L. 109 -435), and which replaced the 
Postal Rate Commission. The PRC does not regulate the postal services activities of the private 
sector. The PRC' s responsibilities include, inter alia:  developi ng a rate setting system; consulting 
with the USPS on service standards  quality, targets and measurement; hearing complaints on rate 
and service issues; providing an annual report to the U.S. Congress on its activities; analys ing the 
USPS' annual financial  and operational results and their consistency with postal laws , in order to 
issue an annual compliance determination; issuing advisory opinions on nationwide service changes; 
approving  new rates and classifications; approving  market tests; and engaging in  international 
postal policy to support the U.S. Department of State.  The USPS enjoys immunity from antitrust 
laws for products covered by the postal monopoly; products that are not covered by the postal 
monopoly are subject to antitrust laws ( 39 U.S.C. § 409(e)).  
4.163.   The main U.S. provisions with respect to postal services are included in Title 39 of the U.S.C. 
The Postal Reorganization Act  of 1970 (P.L. 91 -375) created the USPS as a basic and fundamental 
service.148 The provisions specifying  the USPS'  reserved area are contained in  the Private Express 
Statutes (PES) (18 U.S.C. §§ 1693 –1699; 39 U.S.C. §§ 601 –606), which make it unlawful for any 
entity other than the USPS to send or carry letters over post routes for compensation , unless 
applicable postage has bee n paid and the letter has been prepared according to certain 
requirements, or the carriage qualifies as an exception. Exceptions under the Statutes include 
carriage prior , or subsequent , to mailing, letters of the carrier, letters accompanying and relating to 
cargo, carriage without compensation, and carriage of fewer than 2 5 letters by special messenger.  
4.164.   The 2007 PAEA  added two new exceptions to the reserved -area provisions, which became  
effective on 10 December 2007. Under these exceptions, a letter may be carried privately if the 
amount paid for the private carriage of the letter is six times the rate currently charged for the first 
ounce (28.25 g) of a single -piece first class letter, or the letter weighs at least 12½ ounces 
                                                
148 For a detailed description of the status and structure of the USPS, see the Universal Postal Union's 
profile of the USPS , on a questionnaire filled by the U.S. authorities. Viewed at: 
http://www.upu.int/fileadmin/documentsFiles/theUpu/statusOfPostalEntities/usaEn.pdf . 
1,335
1,016
996
786
716351
548
492
892
18984
468
504
-106
698
-20002004006008001,0001,2001,4001,600
    United Kingdom     Japan     Germany     China       Brazil
Exports Imports Trade balanceChart 4.9
Air freight services: cross -border exports, imports, and trade balance, by major trading partners, 2016
Source:  Bureau of Economic Analysis.(US$ million)WT/TPR/S/ 382 • United States  
 
- 186 - 
 
  (354 grams).149 The PAEA also codified as exceptions those circumstances in which, under previous 
statutory authority, the USPS s uspended enforcement of the PES  as of 1 Ju ly 2005. These 
suspensions cover data processi ng materials, letters of bona fide college and university organizations 
carried within a campus mail system, international ocean carrier -related documents, extremely 
urgent letters, advertisements accompanying parcels or periodicals, and international rema iling. The 
USPS no longer has the authority to promulgate new suspensions to allow for private carriage. The 
PAEA also removed provisions empowering the USPS to provide non -postal services, except those 
delivered prior to 1 January 2006, subject to specifi ed review  by the PR C. In accordance with the 
PAEA,  the PRC is also in charge of determining whether a service should be considered market -
dominant  or competitive .150 The Act also requires the PRC to establish a system of regulated rates , 
and to promulgate re gulations forbidding the subsidization of competitive produ cts by market -
dominant products; the PRC must also  ensure that each competitive product covers costs and its 
share of USPS institutional costs (as described above). The PAEA also directs the USPS t o establish 
in the Treasury a revolving Postal Service Competitive Products Fund , to be devoted to meeting the 
cost of competitive products.  The PAEA introduced greater transparency and accountability into the 
U.S. postal system.  
4.165.   The mailbox rule (18 U.S.C . § 1725) prohibits private carriers from delivering mailable 
matter to most types of mail receptacles installed at residences and businesses, unless postage is 
paid. The mailbox rule applies regardless of content. Private carriers can hang mailable matter  on 
doorknobs, place articles under doors, leave articles in doorways, use receptacles designated for 
receipt of newspapers or circulars, arrange to have the recipient retrieve articles at a designated 
location, or deliver in person to the recipient. Posta l regulations also limit access to post off ice boxes 
in USPS retail units.  
4.4.3.4   GATS and bilateral commitments  
4.166.   The classification used by the United States for its GATS commitments follows the structure 
of document MTN/GNS/W/120, which distinguishes postal serv ices from courier services by the 
ownership nature of the entity providing those identical services: public for postal services, private 
for courier services. The United States did not schedule any commitments regarding postal services 
under the GATS , but made a full commitment for the first three modes regarding market access , 
and for all four modes for national treatment for land -based courier services (with the exception of 
courier services involving any prior or subsequent movement by air). The Mode 4 c ommitment for 
market access cross -refers to the horizontal section of the (GATS) Schedule. The commitments are 
the same in the United States -Jordan FTA, which has a positive listing structure.  
4.167.   In its other FTAs, the United States maintains its GATS -level m arket access commitment 
through cross -reference, except for Korea, where it was improved; there are no sector -specific 
limitations listed for the other obligations, taken on a negative -list basis.  
4.4.4   Distribution services  
4.4.4.1   Wholesale trade  market overview  
4.168.   In 2017, there were 611,036 establishments devoted to wholesale activities; over 40% of 
them were dedicated to the wholesale of durable goods. Some 5.96 million people were employed 
in wholesale activities , more than half of which were in the area of durab le goods (Table 4.1 2). The 
value added of wholesale services reached US$1.15 trillion in 2017, and the share of GDP was 5.9% 
in the same year.  
                                                
149 Parcels  weighing over 354 grams fall outside the scope of the reserved area.  
150 The Act provides that, when reviewing every non -postal ser vice, the PRC must take into account : 
(a) the public need for the service ; and (b) the ability of the private sector to meet t he public need for the 
service.  WT/TPR/S/ 382 • United States  
 
- 187 - 
 
  Table 4.12 Employment, number of establishments and value added in  wholesale trade, 
2010 -18Q1  
 
2010  2011  2012  2013  2014  2015  2016  2017  2018a 
NAICS code/  
description  Number of employees ( '000) 
42 Wholesale trade  5,476  5,605  5,704  5,763  5,844  5,851  5,874  5,942  5,955  
423 Durable goods  2,725  2,802  2,852  2,871  2,924  2,930  2,940  2,995  3,004  
424 Non -durable 
goods  1,929  1,949  1,978  1,998  2,017  2,031  2,043  2,055  2,052  
425 Electronic 
markets and agents 
and brokers  823 855 874 893 903 890 892 892 899 
 
Number of establishmentsb 
42 Wholesale trade  613,944  613,907  615,897  619,209  620,944  619,446  615,605  611,036  .. 
423 Durable goods  249,366  248,221  248,883  250,248  251,433  252,188  253,194  254,293  .. 
424 Non -durable 
goods  136,284  135,385  135,670  136,538  138,168  138,376  138,849  139,925  .. 
425 Electronic 
markets and agents 
and brokers  228,293  230,303  231,345  232,423  231,342  228,884  223,563  216,818  .. 
 Value added in wholesale trade  
Value (US$ billion ) 868 907 963 1,002  1,055  1,098  1,103  1,154  .. 
Share of GDP  5.8 5.8 6.0 6.0 6.1 6.1 5.9 5.9 .. 
.. Not available . 
a Data for  the first quarter on 2018.  
b Data for the first quarter on 2017.  
Source:  WTO Secretariat calculations , based on data from the Bureau of Labour Statistics  and the Bureau of 
  Economic Analysis . 
4.169.   FDI in wholesale services has increased steadily in the past few years. As a result, the FDI 
stock in wholesale services reached US$425.4 billion in 2017, up from US$282.2 billion in 2011 
(Table 4. 13). 
Table 4.13 FDI position, 2010 -17 
(US$ million)   
2010  2011  2012  2013  2014  2015  2016  2017  
Wholesale trade  255,045  282,221  293,406  324,284  332,424  369,535  374,110  425,403  
  Motor vehicles and 
motor vehicle parts and 
supplies  44,244  49,308  50,589  57,620  59,790  63,227  50,296  45,313  
  Electrical goods  32,126  39,079  45,758  50,598  46,468  57,254  59,015  72,299  
  Petroleum and 
petroleum products  34,087  51,178  57,365  58,455  56,604  65,882  65,479  99,176  
  Other  144,588  142,657  139,693  157,611  169,562  183,171  199,321  208,616  
    Other durable goods  79,462  77,698  74,551  77,899  82,655  81,770  86,869  94,171  
      Furniture and home 
furnishings  865 658 917 2,478  2,210  2,199  2,102  1,601  
      Lumber and other 
construction materials  1,060  711 642 757 931 997 979 1,031  
      Professional and 
commercial equipment 
and supplies  28,404  29,084  26,201  25,520  29,139  28,562  30,576  33,006  
      Metals and minerals 
(except petroleum)  10,565  12,239  12,491  11,280  11,686  9,868  9,850  10,382  
      Hardware, and 
plumbing and heating 
equipment and supplies  6,956  7,810  8,474  7,670  5,797  7,268  8,418  9,195  
      Machinery, 
equipment, and supplies 
merchant wholesalers  20,161  17,051  16,430  20,809  22,631  22,852  24,034  26,903  
      Miscellaneous 
durable goods  11,452  10,143  9,394  9,385  10,261  10,024  10,908  12,054  
    Other non -durable 
goods  (D) 63,922  64,451  79,023  (D) (D) (D) (D) 
      Paper and paper 
products  2,378  2,256  2,682  2,714  2,756  1,979  2,810  2,879  
      Drugs and druggists' 
sundries  31,573  28,262  27,774  30,484  36,588  52,546  44,677  38,964  WT/TPR/S/ 382 • United States  
 
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2010  2011  2012  2013  2014  2015  2016  2017  
      Apparel, piece 
goods, and notions  10,089  13,721  14,532  16,327  16,080  13,722  13,209  12,694  
      Groceries and 
related products  4,839  4,068  4,713  6,654  8,040  6,660  7,716  8,589  
      Farm product raw 
materials  918 -647 -2,406  3,999  5,241  7,542  7,344  7,224  
      Chemical and allied 
products  6,883  7,999  8,583  9,943  7,162  7,249  23,493  27,298  
      Beer, wine, and 
distilled alcoholic 
beverages  2,719  (D) (D) (D) (D) 4,910  5,619  5,865  
      Miscellaneous non -
durable goods  (D) (D) (D) (D) 4,545  (D) (D) (D) 
    Wholesale electronic 
markets and agents and 
brokers  (D) 1,037  692 690 (D) (D) (D) (D) 
(D) Suppressed to avoid disclosure of data of individual companies.  
Source:  Bureau of Economic Analysis . 
4.170.   Most FDI in wholesale services in 2017 originated in trading  partners in Asia, which 
represented 43.9% of the total; of particular importance is investment originating in Japan, which 
represented 28.1% of total investment in wholesale services in 2017. FDI from Europe represented 
35.0% of the total (Chart 4.10).  
Chart 4.10 Foreign Direct Investment  in wholesale trade in the United States, by country 
of ultimate beneficiary owner, 2017  
 
Source:  WTO Secretariat calculations, based on data from the Bureau of Economic Anal ysis. 
4.171.   While the number of majority -owned U.S. affiliates of foreign multinational  enterprises  
operating in the sector of wholesale trade with assets, sales or net income greater than 
US$20  million has remained largely stable, both the total assets and the employment by majority -
owned U.S. affiliates of foreign multinational  enterprises  operating in the sector of wholesale trade 
have increased  during the same period (Table 4.14). 
Chart 4.10  Foreign direct investment in wholesale trade in the United States, by 
country of ultimate beneficiary owner, 2017
Total: US$425,403 million
Source:   WTO Secretariat calculations, based on data from the Bureau of Economic Analysis.Others
3.2%
Canada
14.4%
Other Americas
2.4%
Japan
28.1%Americas
18.0%Other 
Asia
6.8%
Other Europe
7.6%Germany
9.9%United States
1.2%Korea, Rep. of
9.0%
Europe
35.0%Asia
43.9%
United Kingdom
3.5%
Other EU(28)
10.0%France
3.9%WT/TPR/S/ 382 • United States  
 
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  Table 4.14 Selected data for maj ority -owned U.S. affiliates of foreign multinational 
enterprises, 2010, 2012 and 2015  
 Number of affiliates with 
assets, sales, or net income 
(+/-) greater than 
$20 million  Total assets (US$ million)  Number of employees 
('000)  
 
2010a 2012 2015 2010 2012 2015 2010 2012 2015 
Wholesale trade  1,049  988 1,010  590,975  685,794  830,211  542 561 632 
Motor vehicles 
and motor vehicle 
parts and supplies  75 73 66 201,742  239,399  308,644  81 90 103 
Electrical goods  133 130 136 56,569  73,334  78,673  81 93 102 
Petroleum  and 
petroleum 
products  37 33 33 83,851  10,6862  118,816  18 17 17 
Other  804 752 775 248,813  26,6199  324,077  363 362 410 
 Other durable 
goods  514 479 486 136,398  135,270  150,051  245 234 262 
   Furniture and 
home furnishings  27 23 24 1,783  1,636  6,378  5 4 7 
   Lumber and 
other construction 
materials  24 18 18 1,687  1,469  3,028  7 7 11 
   Professional and 
commercial 
equipment and 
supplies  106 100 95 48,326  44,172  45,234  106 100 106 
   Metals and 
minerals (except 
petroleum)  59 54 54 23,193  26,329  23,538  22 25 28 
   Hardware, and 
plumbing and 
heating 
equipment and 
supplies  28 24 27 11,472  14,006  10,862  26 27 32 
   Machinery, 
equipment, and 
supplies  181 175 172 33,170  31,652  41,808  52 43 48 
   Miscellaneous 
durable goods  89 85 96 16,766  16,006  19,203  27 27 31 
Other non -durable 
goods  285 267 283 111,575  13,0142  173,098  117 M 148 
   Paper and paper 
products  17 15 16 3,426  4,123  4,778  6 7 10 
   Drugs and 
druggists' 
sundries  42 37 39 40,324  43,280  68,347  33 34 41 
   Apparel, piece 
goods, and 
notions  42 40 42 14,893  19,747  22,129  20 24 24 
   Grocery and 
related products  72 62 63 6,745  8,272  13,748  14 15 14 
   Farm product 
raw materials  15 17 23 11,274  13,930  22,887  7 7 11 
   Chemical and 
allied products  43 39 41 12,312  10,448  10,869  15 9 10 
   Beer, wine, and 
distilled alcoholic 
beverages  13 16 19 11,543  16,415  15,875  H H 5 
   Miscellaneous 
non-durable 
goods  41 41 40 11,059  13,928  14,464  J K 33 
Wholesale 
electronic markets 
and agents and 
brokers  5 6 6 840 787 928 0 A 1 
a For the year 2010,  affiliates with assets, sales, or net income (+/ -) greater than US$15 million.  
Note:  Letters in the employment cells correspond to the following ranges of employees: A -1 to 499; F -500 
 to 999; G -1,000 to 2,499; H -2,500 to 4,999; I -5,000 to 9,999; J -10,000 to 24,999; K -25,000 to 
 49,999; L -50,000 to 99,999; and M-100,000 or more.  
Source:  Bureau of Economic Analysis . WT/TPR/S/ 382 • United States  
 
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  4.172.   Wholesale trade services supplied to U.S. persons  by multi-national enterprises (MNEs) 
through their majority -owned U .S. affiliates (MOUSA s) increased between 2010 and 2015 , 
particularly in the areas of motor vehicles and parts, and electrical and electronic goods (Table  4.15). 
Table 4.15 Wholesale trade services supplied to U.S. persons by foreign MNEs through 
their MOUSAs, 2010 -15 
(US$ million)   
2010  2011  2012  2013  2014  2015  
Wholesale trade  119,409  133,989  141,586  147,282  168,300  172,618  
Motor vehicles and motor vehicle parts and supplies  25,402  30,334  31,355  34,358  34,701  36,403  
Professional and commercial equipment and supplies  16,482  16,471  17,153  16,811  19,619  19,419  
Electrical and electronic goods  15,135  18,382  18,330  20,732  29,899  32,871  
Petroleum and petroleum products  7,652  11,693  13,103  12,937 20,983  20,988  
Drugs and druggists' sundries  .. .. .. .. 12,767  13,094  
Other wholesale trade  .. .. .. .. 50,330  49,843  
As a s hare of total wholesale trade services supplied 
to U.S. persons supplied by  MOUSAsa 17.1 18.1 18.0 18.1 19.9 20.0 
.. Not available.  
a Calculated by dividing the total supply of services by U.S. affiliates  of foreign MNEs by the total 
services products used, as derived from input/output tables. The supply of services by U.S. affiliates 
is given for each industry (the industry of each affiliate's primary industry), covering the total supply 
of services from primary or secondary activities. On the other hand, uses in input -output tables 
cover the total services corresponding to a particula r activity (services produced as secondary 
activities are reallocated to their respective service activity). Although both sets of data are not 
entirely comparable, this methodology allows an approximation of the share of the supply of services 
via mode 3 in total services consumed in the United States.  
  
 MNEs: Multinational enterprises; MOUSAs: Majority -owned U.S. affiliates.  
Source:  Bureau of Economic Analysis . 
4.173.   Chart  4.11 shows services supplied by MOUSAs of the United States' main trading partners , 
and their respective shares , in 2015 : Japan, with 35.0% of the total, had the largest share, followed 
by the Republic of Korea (13.1%), Germany (8.4%), the United Kingdom (5.1%), and Canada 
(4.6%).  
Chart 4.11 Wholesale services supplied to U.S. persons by foreign MNEs through their 
MOUSAs, by country, 2015  
 
a  Contains data for U.S. affiliates that have a foreign parent but whose ultimate beneficial owner is a 
  U.S. person.  
Source : WTO Secretariat calculatio ns, based on data from the Bureau of Economic Analysis . 
Chart 4.11  Wholesale services supplied to U.S. persons by foreign MNEs through          
their MOUSAs, by country, 2015
Total: US$172,618 million
Source:   WTO Secretariat calculations, based on the Bureau of Economic Analysis.United Statesa
1.0%Others
1.4%Canada
4.6%
Other Americas
2.1%
Japan
35.0%Americas
11.1%Other Asia
4.5%
Other 
Europe
13.5%Germany
8.4%Bermuda
3.5%
Korea, Rep. of
13.1%
Europe
34.9%Asia
52.5%United Kingdom
5.1%
France
3.7%Netherlands
4.3%
a   Contains data for U.S. affiliates that have a foreign parent but whose ultimate beneficial owner is a U.S. person.WT/TPR/S/ 382 • United States  
 
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  4.4.4.2   Retail  trade market overview  
4.174.   The value added of retail trade reached US$1.14 trillion in 2017, representing 5.9% of GDP. 
Although the value of trade has risen in nominal terms in recent years, its con tribution to GDP has 
remained relatively stable. Retail trade in motor vehicles, and food and beverages represents, 
combining  both categories, one third of the total (Table 4. 16). 
Table 4.16 Value added in retail trade, 2010 -17 
(US$ billion and % of total GDP)   
2010  2011  2012  2013  2014  2015  2016  2017  
Value (US$ billion)          
  Retail trade  869 892 933 969 1,003  1,058  1,097  1,137  
    Motor vehicle and parts dealers  148 155 167 177 185 197 205 212 
    Food and beverage stores  137 138 143 145 149 158 163 167 
    General merchandise stores  133 137 138 143 147 153 156 161 
    Other retail  451 462 485 504 521 550 573 597 
Share of total GDP (%)          
  Retail trade  5.8 5.7 5.8 5.8 5.8 5.8 5.9 5.9 
    Motor vehicle and parts dealers  1.0 1.0 1.0 1.1 1.1 1.1 1.1 1.1 
    Food and beverage stores  0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 
    General merchandise stores  0.9 0.9 0.9 0.9 0.8 0.8 0.8 0.8 
    Other retail  3.0 3.0 3.0 3.0 3.0 3.0 3.1 3.1 
Source:  Bureau of Economic Analysis . 
4.175.   Some 15.9 million people were employed in retail trade activities in 2017; there were 
1.04 million establishments  at the same date. Some 15% of establishments were food and beverage 
retailers, while 12% dealt with motor vehicles and parts (Table 4. 17). 
Table 4.17 Employment and number of establishments in retail trade, 2 010-18Q1  
NAICS code/ description  2010  2011  2012  2013  2014  2015  2016  2017  2018a 
 Number of employees ( '000) 
44-45 Retail trade  14,445  14,670  14,838  15,071  15,357  15,607  15,832  15,864  15,906  
  441 Motor vehicle and parts 
dealers  1,630  1,691  1,737  1,793  1,862  1,929  1,980  2,008  2,024  
  442 Furniture and home 
furnishings stores  438 439 439 445 456 467 472 476 482 
  443 Electronics and appliance 
stores  522 528 507 496 497 522 522 505 497 
  444 Building material and 
garden supply stores  1,132  1,146  1,174  1,208  1,228  1,234  1,267  1,277  1,312  
  445 Food and beverage stores  2,809  2,823  2,861  2,930  3,004  3,063  3,090  3,090  3,096  
  446 Health and personal care 
stores  980 981 998 1,016  1,022  1,033  1,054  1,065  1,059  
  447 Gasoline stations  819 831 844 867 882 905 923 931 937 
  448 Clothing and clothing 
accessories stores  1,355  1,362  1,390  1,388  1,370  1,355  1,362  1,375  1,365  
  451 Sporting goods, hobby, 
book, and music stores  579 578 582 602 619 623 621 604 593 
  452 General merchandise stores  2,998  3,085  3,066  3,057  3,102  3,133  3,172  3,135  3,127  
  453 Miscellaneous store 
retailers  761 772 794 803 818 827 832 827 826 
  454 Non -store retailers  421 434 447 467 497 515 539 571 588 
 Number of establishmentsb 
44-45 Retail trade  1,028,260  1,025,424  1,029,979  1,037,013  1,041,710  1,042,470  1,044,935  1,043,133  .. 
  441 Motor vehicle and parts 
dealers  114,495  113,932  114,542  115,303  116,105  116,067  116,569  117,024  .. 
  442 Furniture and home 
furnishings stores  52,739  51,020  49,947  49,040  48,332  47,752  47,448  47,058  .. 
  443 Electronics and appliance 
stores  49,818  53,332  52,729  50,398  48,819  48,099  47,599  46,839  .. 
  444 Building material and 
garden supply stores  74,326  73,029  71,717  71,049  70,463  69,979  69,906  69,054  .. 
  445 Food and beverage stores  141,982  143,027  144,468  145,831  146,758  146,907  146,990  147,047  .. 
  446 Health and personal care 
stores  96,999  97,687  100,428  105,691  107,514  108,254  109,764  109,710  .. 
  447 Gasoline stations  103,858  104,099  104,929  104,946  104,781  105,057  104,984  105,581  .. 
  448 Clothing and clothing 
accessories stores  130,127  128,734  129,510  129,653  129,147  127,591  126,874  126,585  .. 
  451 Sporting goods, hobby, 
book, and music stores  58,033  53,937  53,177  53,010  53,042  52,793  52,078  51,044  .. 
  452 General merchandise stores  52,752  54,792  56,083  58,027  60,052  61,250  62,352  62,156  .. 
  453 Miscellaneous store 
retailers  114,968  112,738  111,816  111,815  112,896  113,199  113,142  112,479  .. 
  454 Non -store retailers  38,069  39,097  40,634  42,252  43,802  45,523  47,227  48,555  .. WT/TPR/S/ 382 • United States  
 
- 192 - 
 
  .. Not available.  
a Data for the first quarter of 2018.  
b Data for the first quarter of 2017.  
Source:  WTO Secretariat calculation s, based on data from the Bureau of Labour Statistics.  
4.176.   Table 4.18 shows that FDI stocks in the retail sector almost doubled over the 2010 -17 period , 
when they reached US$88.6 billion. Some 39.4% of the FDI stock in retail trade that year was in 
the food and beverage stores area, and 18.5% in clothing and clothing accessories stores.  
Table 4.18 FDI position in retail trade, 2010 -17 
(US$ million)   
2010  2011  2012  2013  2014  2015  2016  2017  
Retail trade  44,770  46,540  48,965  52,634  58,911  64,610  75,554  88,640  
  Food and beverage stores  21,405  21,682  22,690  24,631  27,433  28,497  31,071  34,888  
  Other  23,365  24,858  26,275  28,003  31,479  36,113  44,483  53,752  
    Motor vehicle and parts dealers  478 511 388 422 466 569 577 648 
    Furniture and home furnishings 
stores  2,027  (D) 1,936  1,820  1,700  1,032  4,715  4,713  
    Electronics and appliance stores  84 24 41 86 129 133 155 185 
    Building material and garden 
equipment and supplies dealers  (D) (D) (D) (D) (D) (D) (D) (D) 
    Health and personal care stores  2,784  3,004  3,244  (D) 6,487  7,913  10,250  10,404  
    Gasoline stations  (D) (D) (D) (D) (D) (D) (D) (D) 
    Clothing and clothing accessories 
stores  8,972  9,567  9,065  8,982  10,288  13,922  15,731  17,002  
    Sporting goods, hobby, book, and 
music stores  17 16 12 -16 -85 (D) -116 -119 
    General merchandise stores  2 (D) (D) (D) (D) (D) (D) (D) 
    Miscellaneous store retailers  5,416  (D) (D) (D) (D) (D) 6,668  9,046  
    Non-store retailers  1,161  1,488  1,232  835 1,522  1,228  1,003  642 
(D) Suppressed to avoid disclosure of data of individual companies.  
Source:  Bureau of Economic Analysis . 
4.177.   Chart  4.12 describes the respective shares  in 2017 of trading partners ' FDI stock in retail 
services in the U nited States. Europe accounts for some two thirds of this stock, with Germany, the 
Netherlands, the United Kingdom, and France being the main investors. Another important investor 
is Canada, with 23.5% of the total.  
Chart 4.12 FDI in retail trade in the United States, by country of ultimate beneficiary 
owner, 2017  
 
Source:  WTO Secretariat calculations, based on data from the Bureau of Economic Analysis . 
Chart 4.12   Foreign direct investment in retail trade in the United States, by country 
of ultimate beneficiary owner, 2017
Total: US$88,640 million
Source:   WTO Secretariat calculations, based on Bureau of Economic Analysis.Other EU(28)
11.4%United States
0.9%Canada
23.5%
Other Americas
0.5%Americas
25.0%Others
0.7%
Other Europe
6.2%
Germany
17.6%Europe
63.7%Asia
10.7%
United Kingdom
10.5%France
6.2%
Netherlands
11.7%WT/TPR/S/ 382 • United States  
 
- 193 - 
 
  4.178.   While the number of majority -owned U.S. affiliates of foreign multinational enterprises  
operating in the sector of retail trade with assets, sales or net income greater than US$20  million  
has remained largely stable, both the total assets and the employment by majority -owned U.S. 
affiliates of foreign multinational e nterprises  operating in the sector of retail trade have increased 
during the same period (Table 4. 19). 
Table 4.19 Selected data for majority -owned U.S. affiliates of foreign multinational 
enterprises, 2010, 2012 and 2015  
 Number of affiliates 
with assets, sales, or 
net income (+/ -) 
greater than US$20 
million  Total assets (US$ million)  Number of employees 
('000)  
 
2010a 2012 2015 2010 2012 2015 2010 2012 2015 
Retail trade  104 101 113 81,841  90,101  115,816  485 527 614 
Food and beverage 
stores  16 17 16 35,405  39,315  41,243  280 302 305 
Other  88 84 97 46,436  50,787  74,573  206 225 309 
Motor vehicle and 
parts dealers  7 7 9 1,343  1,482  1,659  4 4 3 
Furniture and home 
furnishings stores  3 3 5 (D) 4,009  4,777  J 24 29 
Electronics and 
appliance stores  4 3 4 191 196 832 1 1 2 
Building material and 
garden equipment 
and supplies dealers  3 2 2 (D) (D) (D) 1 1 1 
Health and personal 
care stores  4 5 6 (D) (D) (D) K K K 
Gasoline stations  4 5 4 4,235  4,035  (D) K K K 
Clothing and clothing 
accessories stores  39 31 37 19,556  20,448  30,751  77 87 142 
Sporting goods, 
hobby, book, and 
music stores  2 2 2 53 360 364 0 1 2 
General merchandise 
stores  3 1 2 52 (D) (D) 0 I J 
Miscellaneous store 
retailers  7 6 7 8,067  (D) 11,594  16 16 20 
Non-store retailers  12 19 19 1,935  1,934  1,576  10 7 5 
a For 2010, number of affiliates with assets, sales, or net income (+ /-) greater than US$15 million.  
(D) Suppressed to avoid the disclosure o f data of individual companies.  
Note:  Letters in the employment cells correspond to the following ranges of employees: A -1 to 499; F -500 
 to 999; G -1,000 to 2,499; H -2,500 to 4,999; I -5,000 to 9,999; J -10,000 to 24,999; K -25,000 to 
 49,999; L -50,000 to 99,999; and M-100,000 or more.  
Source : Bureau of Economic Analysis . 
4.179.   Table 4.2 0 provides detailed data on retail trade services supplied  to U.S. persons  by MNEs 
through  their MOUSA s between 2010 and 2015 , and shows a regular and considerable  increase of 
the value of services provided, which  reached US$55.3 billion in 2015, the last year for which 
information is available.  
4.180.   Chart 4.13 describ es the respective shares in 2015  of trading partners that are the home 
countries of MNEs providing retail services in the United States through their MOUSAs . Europe 
accounts for some  62% of the total , with the Netherlands, Germany, the United  Kingdom, and France 
being the main investors. Other important investors a re Canada and Japan, with some 2 1% and 
11% of the total , respectively.  WT/TPR/S/ 382 • United States  
 
- 194 - 
 
  Table 4.20 Retail trade services supplied to U.S. persons by foreign MNEs through their 
MOUSAs, 2010 -15 
(US$ million)   
2010  2011  2012  2013  2014  2015  
Retail trade 37,432  41,040  44,535  46,427  52,055  55,266  
General merchandise stores  .. .. .. .. 1,593  1,645  
Clothing and clothing accessories stores  .. .. .. .. 11,702  12,981  
Food and beverage stores  19,296  20,382  21,241  22,050  24,034  25,087  
Non-store retailers  .. .. .. .. 1,128  990 
Other retail trade  .. .. .. .. 13,599  14,563  
As a s hare of the total of retail trade services 
supplied to U.S. persons by MOUSAsa 7.5 8.1 8.4 8.5 9.6 9.7 
.. Not available.  
a See note "a" in Table 4.22.  
 MNEs: Multinational enterprises; MOUSAs: Majority -owned U.S. affiliates.  
Source:  Bureau of Economic Analysis . 
Chart 4.13 Retail services supplied to U.S. persons by foreign MNEs through their 
MOUSAs, by country, 2015  
 
a  Contains data for U.S. affiliates that have a foreign parent but whose ultimate beneficial owner is a 
  U.S. person.  
Source:  WTO Secretariat calculations, based on data from the Bureau of Economic Analysis . 
4.4.4.3   Regulatory regime  
4.181.   Save for some sub -federal and local non -discriminatory limitations on the sales of alcohol 
and firearms, the applied regime for distribution services does not contain any market access or 
national treatment limitations.  
4.4.4.4   GATS and bilateral commitments  
4.182.   The U.S. GATS commitments on distri bution services are very extensive and liberal. They 
cover all the subsectors of the MTN/GNS/W120 nomenclature (namely 4.A commission agents' 
services, 4.B wholesale trade services, 4.C retailing, and 4.D franchising) except for the undefined 
4.E "other" c ategory. There are full market access commitments for modes 1, 2 and 3, and full 
national treatment commitments for all four modes for commission agents' services and for 
franchising services, as well as for wholesale and retail trade services except whole sale trade of 
alcoholic beverages, firearms and military equipment. The wholesale trade of alcoholic beverages is 
unbound for the three first modes for market access but is fully bound for national treatment. Mode 
4 commitments for the four subsectors for market access make a cross -reference to the horizontal 
Chart 4.13  Services supplied to U.S. persons by foreign MNEs through their 
MOUSAs, by country, 2015
Total: US$55,266 million
Source:   WTO Secretariat calculations, based on data from the Bureau of Economic Analysis.United Statesa
1.9%Others
1.6%
Canada
20.8%
Other Americas
1.1%Japan
11.4%
Americas
23.8%Other Asia
1.2%
Other 
Europe
15.6%
Germany
14.0%Europe
62.0%Asia
12.7%
United 
Kingdom
9.2%France
5.8%Netherlands
17.3%
a   Contains data for U.S. affiliates that have a foreign parent but whose ultimate beneficial owner is a U.S. person.WT/TPR/S/ 382 • United States  
 
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  commitment limitations on the temporary entry and stay of natural persons. There are no sector -
specific MFN exemptions regarding distribution services.  
4.183.   The commitments are the same in the United States -Jordan FTA, which has a positive listing 
structure. In its other FTAs the United States maintains its GATS market access commitments 
through cross -reference; there are no sector -specific limitations listed for the other obligations, 
taken on a negative -list basis.  
4.184.   Restrictions at the sub -federal and local levels, if any, are covered by standard provisions 
that appeared first in the NAFTA. The most significant of these is, with respect to five obligations 
(market access, national treatment, local presence, performances requirements and senior 
management and composition of the board), applying a standstill and ratchet to all existing 
restrictions by the states, the District of Columbia and Puerto Rico through an Annex I reservation.  
4.4.4.5   Franchising  
4.4.4.5.1   Market overvie w 
4.185.   Franchising is an important activity in the United States. The USDOC estimates that it 
accounts for 50% of all retail sales across 75 industries, and that it is responsible for one in seven 
jobs in the United States.151 The International Franchise Association estimates that there were over 
745,000 franchise businesses directly employing almost 7.9 million people in 2017. The Association's 
report also notes that franchise establishments are set to grow by 1.9% to 759,000 locations in 
2018, while employment is expected to increase by 3.7% to 8.1 million. The sector's GDP is expected 
to reach US$451 billion, up 6.1% from 2017, representing approximately 3% of nominal GDP.152 
The United States is a major net exporter of franchi sing services. The surplus in franchise fees 
reached US$5.2 billion in 2017, resulting from exports totaling US$5, 268 million and imports of 
US$62 million (Chart 4.14). There is no publicly available official information on the share of FDI 
and the partici pation of foreign affiliates in these franchised activities.  
Chart 4.14 Franchise services trade, 2009 -16 
(US$ million)  
Source:  Bureau of Economic Analysis.  
                                                
151 USDOC, International Trade Administration, 2016 Top Markets Report Franchising . 
https://www.trade.gov/topmarkets/pdf/Franchising_Executive_Summary.pdf . 
152 International Franchise Association (2018), Franchise Business Economic Outlook for 2018, January 
Forecast . Prepared by IHS Markit for the International Franchise Association , and th e Franchise Education and 
Research Foundation . Viewed at: 
https://www.franchise.org/sites/default/files/Franchise_Business_Outlook_Jan_2018.pdf . 
4,294
4,790
5,733
5,913
6,094
5,784
5,252
5,268132
111
156
167
189
174
76
624,162
4,679
5,577
5,746
5,905
5,610
5,176
5,206
01,0002,0003,0004,0005,0006,0007,000
2009 2010 2011 2012 2013 2014 2015 2016Chart 4.14  Franchise services trade, 2009 -16
Exports Imports Trade balance
Source:  Bureau of Economic Analysis.(US$ million)WT/TPR/S/ 382 • United States  
 
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  4.4.4.5.2   Regulatory regime  
4.186.   There is no federal law governing franchising; however, there are both federal  regulations 
and state laws regulating  it. State laws are not uniform; they vary from state to state  (see below) . 
Franchising is regulated by the Federal Trade Commission (FTC) and by various state agencies. The 
pre-sale disclosure requirements of the  FTC Franchise Rule appl y everywhere , in the United States 
and overrule  any state law or regulation that does not provi de greater protection to prospective 
franchisees . In general terms , a state's franchise disclosure  laws apply only if:  (a) the offer or sale 
of a franchise is made in the state , regardless of where the franchise will be located ; (b) the business 
to be franchised  will be located in the state ; or (c) the person benefitting from the franchise ( the 
franchisee ) is a resident of the state.  The original Franchise Rule went into effect on  
21 October  1979.153 The FTC approved  amendments to the Franchise Rule on 22 January 2007.154 
Since 1  July 2008, franchisors must comply with the FTC' s disclosure requirements , by using the 
Franchise Disclosure Document (FDD) , a disclosure format specified by the  Franchise Rule . 
4.187.   Under the Franchise Rule, a commercial business arrangemen t is defined as a "franchise" if 
it satisfies three elements: (a) the franchisor must promise to provide a trademark or other 
commercial symbol; (b) the franchisor must promise to exercise significant control or provide 
significant assistance in the operation of the business; and (c) the franchisor requires a minimum 
payment of at least US$500 , adjusted every four years (US$570 effective 1 July 2016 ), during the 
first six months of operations. The Rule covers only the offer or sale of franchises to be  located in 
the United States and its territories.  
4.188.   Concerning the trademark element, a  franchise must grant the right to operate a business 
that is iden tified or associated with the franchisor 's trademark, or to offer, sell, or distribute goods, 
services, or commodities that are identified or associated with the franchisor 's trademark. With 
respect to the significant control and assistance elements, the f ranchisor 's control or assistance must 
relate to the franchisee's overall method of operation. Significant types of control include: (a) site 
approval for new businesses; (b) site design or appearance requirements; (c) hours of operation; 
(d) production te chniques; (e) accounting practices; (f) personnel policies; (g) promotional 
campaigns requiring franchisee participation or financial contribution; (h) restrictions on customers; 
and (i) locale or area of operation.155 Significant types of assistance include : (a) formal sales, repair, 
or business training program mes; (b) establishing accounting systems; (c) furnishing management, 
marketing, or personnel advice; (d) selecting site locations; (e) furnishing system wide networks 
and websites; and (f) furnishing a detailed operating manual.156 Regarding the minimum payment 
requirement, it may include: (a) the initial franchise fee; (b) rent; (c) advertising assistance; 
(d) equipment and supplies; (e) training; (f) security deposits; (g) escrow deposits; (h) non -
refundable bookkeeping charges; (i) promotional literature; (j) equipment rental; and (k) continuing 
royalties on sales.157 
4.189.   There are a number of exemptions to the scope of the Franchise Rule.158 The fractional 
franchise exemption  applies when , at the start of the  relationship: i) the franchisee, or its directors 
or officers, has more than two years of experience in the same type of business; and ii) the parties 
anticipate that the sales arising from the relationship will not exceed 20% of the franchisee's total 
sales during the first year of operation. The Rule also exempts from its coverage leased department 
arrangements , in which an independent retailer sells its own goods and services from premises 
leased from a larger retailer in that retailer' s store. The amen ded Rule expressly exempts petroleum 
marketers and resellers covered by the Petroleum Marketing Practices Act (PMPA). The Rule exempts 
franchise offers and sales where the initial investment is at least US$1 million, to be updated every 
                                                
153 FTC (20 08), Franchise Rule 16 C.F.R. Part 436 Compliance Guide , May 2008. Viewed  at: 
https://www.ftc.gov/system/files/documents/plain -language/bus70 -franchise -rule-compliance -guide.pdf . 
154 Franchise Rule ( 16 CFR Part 436  and 437, Federal Register , Vol. 72, No. 61 , Friday, 30 March 2007 , 
Rules and Regulations ) may be viewed at: 
https://www.ftc.gov/sites/default/files/070330franchiserulefrnotice.pdf . 
155 FTC (2008), Franchise Rule 16 C.F.R. Part 436 Compliance Guide , May 2008 . Viewed at: 
https://www.ftc.gov/system/files/documents/plain -language/bus70 -franchise -rule-compliance -guide.pdf . 
156 FTC (2008),  Franchise Rule 16 C.F.R. Part 436 Compliance G uide, May 2008. Viewed at:  
https://www.ftc.gov/system/files/documents/plain -language/bus70 -franchise -rule-compliance -guide.pdf . 
157 FTC (2008), Franchise Rule 16 C.F.R. Part 436 Compliance Guide , May 2008. Viewed at: 
https://www.ftc.gov/system/files/documents/plain -language/bus70 -franchise -rule-compliance -guide.pdf . 
158 These exemptions from federal Franchise  Rule coverage may not be available in state franchise 
disclosure laws, which also may have their own exemptions with no counterpart in the Franchise Rule.  WT/TPR/S/ 382 • United States  
 
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  four years (US$1,14 3,100 effective 1 July 2016), excluding the cost of unimproved land and any 
franchisor (or affiliate) financing. Additionally, the Franchise Rule exempts franchise offers and sales 
to large entities that have been in business for at least five years and ha ve a net worth of at least 
US$5 million, also to be updated every four years (US $5,715,500 effective 1 July 2016). The 2007 
amended Rule added a new exemption for franchise sales to the officers, directors, general partners, 
managers, and owners of a franc hisor. There are also exclusions to the Rule that apply to employer -
employee relationships, general partner relationships, cooperative associations, and certification and 
testing services. The Rule also excludes trademark licensing arrangements in which a single licensee 
is granted the right to use the trademark.  
4.190.   Under the Rule, franchisors are responsible for preparing disclosure documents , and 
furnishing them to prospective franchisees at least 14 calendar days before a buyer signs a binding 
agreement, or  makes any payment to the franchisor in connection with a proposed franchise sale . 
The disclosure document must contain information on a number of legal and financial issues. It must 
also provide information on each of the franchisor's principal trademarks  and their registration with 
the U SPTO, as well as on ownership rights or licen ces in other types of intellectual property  (IP), 
and on any legal proceedings, settlements, and restrictions  that may impact the franchisee' s ability 
to use such IP .159 
4.191.   There is no federal registration of franchises, as the Franchise Rule does not provide for any 
registration of a franchise with the F TC.160 However, several  states require that franchises register 
before operating in the state ; registrations are generally valid  for one  year.161 In several of these 
states, registration involves a review of th e FDD by a franchise regulator. Some states require that 
all advertising for the sale of franchises must be filed with the state before they are published.162 
The transfer of a f ranchise is allowed in all states; in some states it is even i llegal for a franchisor to 
refuse to allow a transfer of the franchise without good cause.163 
4.4.5   Construction services  
4.4.5.1   Market overview  
4.192.   The construction sector (NAICS 23) includes establishments prima rily engaged in the 
construction of buildings or engineering projects (highways and utility systems). It also comprises 
establishments primarily engaged in the preparation of sites for new construction, and 
establishments primarily engaged in subdividing l and for sale as building sites. The share of GDP 
represented by construction and related services has been increasing in recent years. Construction  
services accounted for 4.3% of GDP in 2017, up from 3.6% in 2010 (Table 4. 21). Construction 
activities , espe cially residential construction, were severely affected in the aftermath of the subprime 
crisis, but have resumed growing since, as the economy recovered and employment increased. This 
progression also benefitted from the quantitative easing policy and the  consequent low interest rates 
in the aftermath of the crisis.  
                                                
159 The details of the requirements to be included in a disclosure document are found in: FTC (2008), 
Franchise Rule 16 C.F.R. Part 436 Compliance Guide , May 2008. Viewed at: 
https://www.ftc.gov/system/files/documents/plain -language/bus70 -franchise -rule-compliance -guide.pdf . 
160 Vinson Franchise Law online information. Viewed at: 
http://franchiselaw.net/startups/usfranchiselawbasics.html . 
161 California, Hawaii, Illinois, I ndiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode 
Island, South Dakota, Virginia, Washington and Wisconsin.  
162 These states include: California, Indiana, Maryland, Minnesota, New York, North Dakota, Rhode 
Island, South Dakota and Washingt on. 
163 Arkansas, California, Hawaii, Indiana, Iowa, Michigan, Minnesota, Nebraska, New Jersey and 
Washington . The substantive franchise relationship laws in these states also require good cause for termination 
and non -renewal of a franchise.  See: Vinson  Franchise Law online information , viewed at: 
http://franchiselaw.net/startups/usfranchiselawbasics.html . WT/TPR/S/ 382 • United States  
 
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  Table 4.21 Value added in construction, 2010 -17 
(US$ billion and % of total GDP)   
2010  2011  2012  2013  2014  2015  2016  2017  
Value (US$ billion)  542 547 584 621 674 740 793 826 
Share of total GDP (%)  3.6 3.5 3.6 3.7 3.9 4.1 4.3 4.3 
Source:  Bureau of Economic Analysis . 
4.193.   Construction is an important employer. In the first quarter of 2018, it employed an estimated 
7.14 million people, 64% of which were specialty ( construction ) trade contractors (Table 4.2 2).164 
The number of construction companies declined in the wake of the subprime crisis, and reached a 
minimum in 2013; however, it has been increasing ever since. The sector is constituted by a large 
number of medium and small enterprises , alongside very large companies.  Table 4.22 describes, for 
various subsectors of construction services, the evolution of employment and of the number of 
establ ishments between 2010 and 2018.  
Table 4.22 Employment and number of establishments in construction, 2010 -18Q1  
 
2010  2011  2012  2013  2014  2015  2016  2017  2018a 
NAICS 
code/description  Number of employees ('000)  
23 Construction  5,518  5,530  5,646  5,857  6,149  6,459  6,726  6,954  7,141  
236 Construction of 
buildings  1,229  1,221  1,240  1,287  1,359  1,424  1,492  1,538  1,578  
 237 Heavy and 
civil engineering 
construction  825 836 868 885 911 937 952 988 1,003  
238 Specialty trade 
contractors  3,464  3,473  3,537  3,685  3,878  4,097  4,281  4,429  4,561  
 
Number of establishmentsb 
23 Construction  798,962  769,450  753,279  749,728  757,846  768,112  780,970  787,840  .. 
236 Construction of 
buildings  235,888  225,167  220,049  219,747  223,464  228,044  233,368  236,657  .. 
237 Heavy and civil 
engineering 
construction  58,997  57,610  56,847  56,673  56,681  56,486  56,591  56,293  .. 
238 Specialty trade 
contractors  504,077  486,674  476,383  473,309  477,702  483,582  491,011  494,890  .. 
.. Not available.  
a Data for the first quarter of 2018.  
b Data for the first quarter of 2017. 
Source:  WTO Secretariat calculations , based on data from the Bureau of Labour Statistics.  
4.194.   The United States ran a surplus in construction services from 2009 to 2011 ; the balance 
turned into a deficit in the 2012-2016 period, with the lowest point in 2013 , but the gap between 
exports and imports has been closing since then, and in 2016 the deficit shrank to US$148  million 
(Chart 4.15). This has been accompanied, however, by a substantial decline in trade flows.  
                                                
164 Special trade contractors undertake activities that are specialized eithe r to building construction, 
including work on mobile homes, or to both building and non -building projects. These activities include painting 
(including bridge painting and traffic lane painting), electrical work (including work on bridges, power lines, and  
power plants), carpentry work, plumbing, heating, air -conditioning, roofing, and sheet metal work . WT/TPR/S/ 382 • United States  
 
- 199 - 
 
  Chart 4.15 Construction services trade, 2009 -16 
(US$ million)  
 
Source:  Bureau of Economic Analysis.  
4.195.   Despite running an overall trade deficit in construction services, the United States runs a 
surplus with some  of its major trading partners, as shown in Chart 4.16.  
Chart 4.16 Construction: cross -border exports, imports, and trade balance, by major 
trading partners, 2016  
(US$ million)  
 
Note:  In the case of Argentina, U.S. imports are between zero and US$500,000.  
Source:  Bureau of Economic Analysis . 
4.196.   The FDI  position in the U.S. construction sector more than doubled between 2010 and 2017 , 
when it reached US$23,290 million; about half of the investment was in the construction of buildings 
(Table 4. 23). 
4,031
2,804
3,099
3,182
2,104
1,882
2,525
1,4043,578
2,510
2,927
3,264
2,532
2,219
2,915
1,552453
294
172
-82
-428
-337
-390
-148
-1,000-50005001,0001,5002,0002,5003,0003,5004,0004,500
2009 2010 2011 2012 2013 2014 2015 2016Chart 4.15
Construction services trade, 2009 -16
Exports Imports Trade balance
Source:  Bureau of Economic Analysis.(US$ million)
205
148
119
102
60115
11
127
5
090
137
-8
97
60
-50050100150200250
Canada Germany United Kingdom Japan Argentina
Exports Imports Trade balanceChart 4.16
Construction: cross -border exports, imports, and trade balance, by major trading partners, 2016
Source:  Bureau of Economic Analysis.(US$ million)
Note:   In the case of Argentina, U.S. imports are between zero and US$500,000.WT/TPR/S/ 382 • United States  
 
- 200 - 
 
  Table 4.23 Foreign Direct Investment position in construction in the United States, 
2010 -17 
(US$ million)   
2010  2011  2012  2013  2014  2015  2016  2017  
Construction  10,359  10,015  12,320  18,032  20,970  23,178  24,299  23,290  
  Construction of buildings  4,360  3,750  5,100  8,249  9,444  10,527  12,094  12,798  
  Heavy and civil engineering  
  construction  5,250  5,299  6,365  8,809  10,260  11,509  10,854  9,079  
  Special trade contractors  750 965 855 974 1,265  1,142  1,350  1,414  
Source:  Bureau of Economic Analysis . 
4.197.   While the number of majority -owned U.S. affiliates of foreign multinational enterprises  with 
assets, sales or net income greater than  US$20 million in the construction sector has declined 
between 2010 and 2015, both the total assets and the total employment of majority -owned U.S. 
affiliates of foreign multinational enterprises  have increased  (Table 4. 24). 
Table 4.24 Selected data for MOUSAs of foreign MNEs in construction, 2010, 2012 and 
2015  
 No. of affiliates with 
assets, sales, or net 
income (+/ -) greater 
than US$20 million  Total assets (US$ million)  Number of employees 
('000)  
 
2010a 2012 2015 2010 2012 2015 2010 2012 2015 
Construction  104 88 94 32,117  35,853  60,282  70 68 92 
Construction of buildings  47 40 45 18,153  22,255  29,382  37 37 41 
Heavy and civil 
engineering construction  40 34 35 11,883  12,062  29,014  26 24 42 
Special trade contractors  17 14 14 2,081  1,535  1,886  8 7 9 
a For 2010, affiliates with assets, sales, or net income (+/ -) greater than US$15 million.  
Source:  Bureau of Economic Analysis.  
4.198.   The supply of construction services by MNEs through their MOUSA s has being increasing in 
recent years. Table 4.25 provides detailed data on construction services supplied between 2010 and 
2015.  
Table 4.25 Construction services supplied to U.S. persons by foreign MNEs through their 
MOUSAs, 2010 -15 
(US$ million  and % )  
2010  2011  2012  2013  2014  2015  
Construction servicesa 1,969  2,058  2,122  3,338  5,012  5,365  
As a s hare of total services supplied to U.S. 
persons in the construction sector  by foreign 
MNEsb 0.2 0.2 0.2 0.3 0.5 0.5 
a  Because sales resulting from construction activities are recorded as sales of goods rather than sales 
  of services, the sales of services through MOUSAs in construction represent sales in secondary, 
  non-construction industries.  
b  See note "a" in Table 4.22. 
  MNEs: Multinational enterprises; MOUSAs: Majority -owned U.S. affiliates.  
Source:  Bureau of Economic Analysis . 
4.4.5.2   Regulatory  regime  
4.199.   The construction industry in the United States is regulated by a number of public agencies; 
however, there is no central  body that oversees this regulation.  There is no federal construction 
licensing in the United States. Contractors are licensed in most, but not all, states. The licensing 
requirement in most states concentrates on the business entity undertaking the constr uction work. 
In some states, however, workers conducting certain specific tasks where there can be safety 
concerns are subject to regulation, and hence licensing requirements. Contractor licensing varies 
from state to state. In several states, not abiding by licensing requirements may result in a civil or WT/TPR/S/ 382 • United States  
 
- 201 - 
 
  even penal action. Also, not abiding by licensing laws may result in unlicensed contractors not being 
able to sue in court for payments they are owed.  
4.200.   Although construction per se  is not federally regulate d, safety issues are. Safety regulations 
concerning  the construction industry are enforced by the Occupational Safety and Health 
Administration  at the federal level, or by equivalent state agencies. All states require contractors to 
have workers' compensat ion insurance. There are also a number of environment -related laws that 
must be followed, including those related to asbestos, lead, and industrial waste.165 
4.201.   The construction industry has few economic barriers to entry, and there are no restrictions 
on the r epatriation of capital or profits. Market access conditions vary somewhat, depending on 
whether the project is public or private. Private construction activities are open to foreigners with 
few limitations, while public construction activities are subject to Buy American provisions and to 
the provisions of the GPA and FTAs (Section 3).  
4.202.   Private construction projects are market -driven. Construction services are priced freely, 
usually following a cost-plus scheme, where the contractor is paid for all of its co sts plus an additional 
percentage for overhead and profit. An alternative pricing method is the cost -plus Gmax, where the 
price may not exceed a guaranteed maximum price.  Larger infrastructure projects are often 
undertaken by joint ventures of major contractors, in order to diversify risk.  
4.4.5.3   GATS and bilateral commitments  
4.203.   The United States made full commitments  for modes 2 (consumption abroad) and 3 
(commercial presence), for both market access and national treatment, for construction and related 
engine ering services,  except marine dredging. Mode 1 is scheduled as technically unfeasible, and 
hence unbound. The mode 4 market access commitments refer to the horizontal section of the 
schedule, and include a reservation for an in -state office requireme nt for  contractors in Michigan.  
4.204.   The commitments are the same in the United States-Jordan FTA which has a positive listing 
structure. In its other FTAs, the United States maintains its  GATS -level market access commitments  
through cross reference; there are no sec tor-specific limitations listed for other obligations, taken 
on a negative -list basis.  
4.4.6   Transport  
4.4.6.1   Air transport and airports  
4.4.6.1.1   Air transport  
4.205.   Air transport policy formulation is the responsibility of t he Office of the Assistant Secretary 
for Aviation and Inte rnational Affairs under the United States Department of Transportation 
(USDOT) . The Department of State conducts the negotiation of international air transport 
agreements, in consultation with the Departments of Transportation and Commerce. The Federal 
Aviation Administration (FAA) is responsible for safety issues, regulating U.S. commercial space 
aviation, and monitoring U.S. and foreign air carriers operating in U.S. territory. The Air Traffic 
Organization (ATO) , under the FAA , provides air navigation services in the airspace of the United 
States and large portions of the Atlantic and Pacific Oceans and the Gulf of Mexico.166 The 
Department of Homeland Security Transportation Security Administration is responsible for the 
regulati on and oversight of air transport security in the United States, at U.S. airports , and for all 
aircraft  operations to, from, and within the United  States.  
4.206.   Aviation accounted for 10 .6 million jobs , with earnings of US$446.8 billion, contribute d 
US$1.6 trill ion annually to the U.S. economy , and was responsible for 5.1% of GDP in 2014.167 The 
FAA guides approximately 26 million flights every year, consisting of 15.6 million instrument flight 
                                                
165 Environmental Protection Agency (EPA) online information. Viewed at: 
https://www.epa.gov/regulatory -information -sector/construction -sector -naics-23. 
166 FAA online information, Air Traffic Organization . Viewed at: 
http://www.faa.gov/about/ office_org/headquarters_offices/ato/ . 
167 FAA (2017) , Performance and Accountability Report. Viewed at:  
https://www.faa.gov/about/plans_reports/media/2017_FAA_PAR.pdf . WT/TPR/S/ 382 • United States  
 
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  rule flights (radar assisted) and 10.4 million visual flight rul e fligh ts (low flying planes). It  manages 
517 control towers and 24 air route traffic control cent res, with 14,050 air traffic controllers. After a 
number of mergers in the industry, American Airlines, Delta Air Lines, Southwest Airlines, and 
United  Airlines are the four largest passenger carriers in the domestic market. Scheduled U.S. 
passenger airlines reported an after -tax net profit of US$15.5 billion in 2017, up from US$14  billion 
in 2016 .168 
4.207.   Air freight is generally used for perishable and/or high value goods.  Although air freight 
accounted for less than 0.1%  of total freight in terms of volume, it represented 6.2% of total freight  
value  in 2015. In 2015, total freight transported by air reached US$1.18 trillion in value terms, with 
international trade via air freight account ing for 88%  of that figure  (at US$1.03 trillion ). The share 
of exports and imports carried via air was 26.9% (US$459  billion) and 23.4% (US$573 billion), 
respectively. The Bureau of Transportation Statistics estimate s that the total value of  air freight may 
reach US$5.09  trillion in 204 5.169 UPS and FedEx are the world's two largest air cargo carriers  
(see Section 4.4.3) . 
4.208.   Regulations concerning air transport have not been substantially modified since the last 
Review; they are contained  in Title 14 of the Code of Federal Regulations.170 Statutory requirements, 
like c abotage , remain in place so that domestic air services can be provided only by U.S. carriers, 
which are required to be owned and controlled by U.S. citizens. Non -U.S. citizens are allowed to  hold 
up to 25% of the voting interest of any airline providing domestic services. A ddition ally, there are 
nationality requirements for the management: the airline's president and at least two thirds of the 
Board of Directors and other managi ng officers must be U.S. citizens. Over time, USDOT precedent 
has allowed for up to 49% equity, or non -voting stock, if an Open Skies air services agreement is in 
effect between the United States and the foreign investor's country of origin. Crews engaged in 
domestic air passenger and freight service must be U. S. nationals or U.S.  residents.  
4.209.   Two separate authorizations from the USDOT are required to provide air transport services 
as a U.S. air carrier . The first one is an economic authorization  from the Off ice of the Secretary of 
Transportation, and the second one is a safety authorization  from the FAA.  Any authorization  granted 
by the Secretary of Transportation is conditional on the operator satisfying safety and security 
requirements.  
4.210.   Government -financed transportat ion of passengers or cargo must be  provided by U.S. air 
carriers or a U.S. carrier code-share on a foreign airline, as mandated by  the Fly America Act 
(49 U.S.C. 40118). This restriction may be waived when the United States has entered into bila teral 
or multilateral agreements that allow the provision of such services by foreign air carriers. Currently, 
five bilateral agreements (outside code -shares), those with Australia, the European Union, Japan, 
Saudi Arabia (cargo only) and Switzerland, allo w federally funded transportation services for travel 
and cargo movements to use foreign carriers under certain circumstances.171 Government -financed 
transportation is permitted on foreign carriers operating without a U.S. carrier code when no U.S. 
carrier i s serving the market. For the last 25 years, the U.S. has adopted the policy to engage with 
international aviation partners to achieve Open Skies Agreements (OSAs).172 The United States 
currently ha s OSAs, as defined by the USDOT173, with 125 trading partners.174 These OSAs cover, 
among other issues, market access, pricing, and commercial opportunities (i.e. including code -
sharing, self -handling, user charges, fair competition, and intermodal rights).  
                                                
168 Bureau of Transportation Statistics online information, " Airline Financial Data ". Viewed at: 
https://www.bts.gov/event/behind -numbers -airline -financial -data. 
169 Bureau of Trans portation Statistics (2018), Freight Facts and Figures 201 7. Viewed at: 
https://www.bts.gov/newsroom/freight -facts-and-figures -2017. 
170 Title 14 of the CFR may be viewed at: http://www.ecfr.gov/cgi -bin/text -idx?c=ecfr&tpl=/ecfrbrowse/ 
Title14/14tab_02.tpl . 
171 The rights granted to foreign airlines concerning U.S. government procured tra nsportation under 
Open Skies Agreements (OSAs) do not apply to transportation obtained or funded by the Secretary of Defense 
or the Secretary of a military department.  
172 Department of Transportation, " Statement of United States Internation al Air Transporta tion Policy". 
60 Federal Register 21841 ( 3 May 1995) . 
173 An OSA is defined by USDOT Order 92 -8-13. 
174 The full list and status of all the OSAs signed by the United States may be viewed at: 
http://www.state.gov/e/eb/rls/othr/ata/270724.htm . WT/TPR/S/ 382 • United States  
 
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  4.211.   In order to ensure the provision of air transport services to areas of the country where it 
would not otherwise be profitable to do so, t he USDOT implements one subsid y programme and one 
grant programme: the Essential Air Service (EAS) Program and the Small Community Air Service 
Development Program (SCASDP) , respecti vely. The EAS, codified at 49 U.S.C.  §§ 41731 –41748 , is 
a program me that aims at guaranteeing a minimum level of scheduled air services to a limited 
universe of eligible small communities that were generally served by certificated air carriers before 
deregulation in 1978.175 This generally entails subs idizing two round -trips a day with 50 -seat aircraft , 
or additional frequencies with aircraft with nine or fewer seats, usually to large or medium -hub 
airport s in the 48 contiguous states, Hawaii, and Puerto Rico,  and varying service levels , from on ce 
per m onth to daily service s, within Alaska. As of May 2 018, there were 11 1 subsidized E AS 
communities in the 48 contiguous states, Hawaii, and Puerto Rico,  with annual contract subsidy rates 
totalling US$28 8.526 million .176 The Department of Transportation provid es the subsidy directly to 
air carriers on a per -flight-completed basis.  
4.212.   To remain eligible  for EASs, communities must meet various eligibility criteria, including 
subsidy caps and other requirements. Under t he Department of Transportation and Related Agencies 
Appropriations Act of 2000, the USDOT may not provide an EAS subsidy  that exceed s US$200  per 
passenger to communities located within the 48 contiguous states, unless the se communities are 
located more th an 210 miles from the neares t large - or medium -hub airport.  A Final Notice of 
Enforcement Policy on the US$200 cap was issued in October 2014, whereby all communities 
receiving subsidized EAS s had until 30 September 2015 to en sure compliance with the 
US$20 0 subsidy cap or possibly face termination of subsidy eligibility.177 The FAA Modernization and 
Reform Act of 2012 amended 49 U.S.C. § 41731(a)(1)(B) , to change the definition of eligible place 
for the purpose of receiving an EAS. According to the amendment,  to be eligible, a community must 
maintain an average of 10 enplanements or more per service day, as determined by the Secretary  
of Transportation , during the most recent fiscal year beginning after 30 September 2012.178 The Act 
exempts locations in Alaska a nd Hawaii , and communities that are more than 175 driving miles from 
the nearest large - or medium -hub airport.179 The Secretary of Transportation also has the authority 
to waive the 10 -enplanement standard, on an annual basis, if the community can demonstrat e that 
the reason the location averages fewer than 10 enplanements per day is due to a temporary decline 
in enplanements.  
4.213.   The Alternat e Essential Air Service Program (AEAS) provides  more flexibility to communities 
to craft their own air service , typically with public charter operators, through a grant of specified 
funds, for a defined period of time .180 
4.214.   The SCASDP , a grant program me designed to help small communities address air service 
and airfare issues, has a broader eligibility scope than  the EAS. In part icular,  applicants for SCASDP 
grants  self-identify  their air service deficiencies , and p ropose appropriate solutions.  In general, an 
applicant cannot be larger than a small -hub airport. Assistance under the SCASDP is provided in the 
form of a reimbursable grant to the benefiting community. The programme  can involve, among other  
things , revenue guarantees, financial assistance for marketing program mes, start -up costs and 
studies.  The SCASDP  program is limited to a maximum of 40 grant awards, wi th no more tha n 4 
grants per s tate, in each year the program me is funded. There are no limits on the amounts of 
individual awards:  the amounts awarded vary according to the merits of the proposals selected.  In 
past years, the USDOT's  individual grant sizes have ranged f rom US$20,000 to nearly 
                                                
175 The Airline Deregulation Act (ADA), passed in 1978, gave air carriers almost total freedom to 
determine which markets to serve domestically , and what fares to charge for that service.  
176 USDOT (2018), Subsidized EAS report for Non-Alaska communities  - May 2018. Viewed at:  
https://cms.dot.gov/office -policy/aviation -policy/subsidized -eas-report -non-alaska -communities -may-2018-
pdf. 
177 USDOT online information. Viewed at: https://www.transportation.gov/policy/avia tion-policy/small -
community -rural-air-service/essential -air-service . 
178 Among other things, 49 U.S.C. § 41731 states that , to be eligible, a community must have had an 
average subsidy per passenger of less than US$1,000 during the most recent fiscal year, a s determined by the 
Secretary of Transportation , or face termination of subsidy eligibility, regardless of distance to a hub airport . 
179 USDOT online information. Viewed at: https://www.transportation.gov/policy/aviation -policy/small -
community -rural-air-service/essential -air-service . 
180 USDOT online information, Alternate Essential Air Service . Viewed at:  https://cms.dot.gov/office -
policy/aviation -policy/alternate -essential -air-service . WT/TPR/S/ 382 • United States  
 
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  US$1.6 million.181 In FY2017 , the SCASDP offered a total of US$10  million in grants to  16 local 
communities.  
4.4.6.1.2   Airports  
4.215.   There were 19,576 airports in the United States in 2016; of these, 5,116 were public airports 
and 14,168 were privat e, generally smaller, airports; the rest were mostly military airports.182 Most 
public -use airports with commercial services are publicly owned, either by state or local 
governments, or local authorities. There were 9.44 million scheduled flights in 2016, an d 41.4 billion 
pounds (18.8 billion kilograms) of freight was transported.  
4.216.   Airport ownership in the United States may be private or public. However, general legal 
complexities at the federal, state, and local levels, plus restrictions on the use of revenue s, have 
meant that there has been little i ncentive for the private sector  to own an airport.183 The 
United  States offers grants for the planning and development of public -use airports included in the 
National Plan of Integrated Airport System s (NPIAS)184 throu gh the Airport Improvement Program 
(AIP).185 The share of costs covered by grants from the AIP depend s on the type of work and the 
size of the airport: it can be up to 93.75% of eligible costs186 for small primary and gene ral aviation 
airports. In FY2017, a to tal of US$3.7 5 billion was authorized for the AIP in the Federal Aviation 
Administration Reauthorization Act of 2016.187 
4.217.   Airport infrastructure projects that are funded under the AIP remain  subject to Buy American 
provisions.188 (49 U.S.C. § 50101 ) which  require that all steel and manufactured goods used in AIP -
funded projects be produced in the United States. However, under 49 U.S.C. 50101, the FAA may 
grant a discretionary waiver when : 60% domestic content is reached  and final assembly of the 
facility o r equipment has occurred in the United States; the steel and goods produced in the United 
States are not produced in a sufficient and reasonably available amount or are not of a satisfactory 
quality; or when using domestic products increases the cost of th e overall project by more than 
25%.189 
4.218.   Although policies to promote airport privatization have been in place for years, the results 
so far have been modest. In 1997, Congress established the Airport Privatization Pilot Program 
(APPP) through the Federal Avia tion Reauthorization Act of 1996 (49 U.S.C. 47134, P .L. 104-264), 
to increa se private participation in airport operations and development. The APPP allows private 
companies to own, manage, lease and develop public airports. The APPP also permits airport 
sponsors to be exempted from certain federal requirements , such as repayment of federal grants, 
return of property acquired with federal assistance, and the use of proceeds from airport's sale or 
lease to be used exclusively for airport purposes.  
4.219.   The FAA Mod ernization and Reform Act of 2012 (P.L. 112 -95) increased the number of 
airports participating in the APPP from 5 to 10 in 2012; of these, only 1 large-hub commercial airport 
may participate in the program me, and that airport may only be leased but not sol d. Also,  one of 
                                                
181 USDOT online information. Viewed at: https://cms.dot.gov/policy/aviation -policy/small -community -
rural-air-service/SCASDP . 
182 FAA (2018), Administrator's Fact Book, September 2018 . Viewed at: 
https://www.faa.gov/news/media/2018_Administrators_Fact_Book.pdf.  
183 For example, a federally -funded airport may not use proceeds from the sale of the airport for non -
airport purpo ses, i.e. the airport revenue must be used for the capital and operating costs of the airport.  
184 There are nearly 3,400 airports covered in the National Plan of Integrated Airport System (NPIAS) . 
Viewed at: http://www.faa.gov/airports/planning_capacity/npias/ . 
185 The Airport Improvement Program (AIP) was established by the Airport and Airway Improvement Act 
of 1982  (49 U.S.C. 471). The AIP is funded  through taxes on passenger  ticket s ales and on aviation fuel . 
186 In limited cases, 95% of eligible costs may be covered by the AIP.  
187 U.S. Senate Committee on Commerce, Science, and Transportation (2016), Federal Aviation 
Administration Reauthorization Section -by-Section Analysis . Viewed at: 
http://www.commerce.senate.gov/public/_cache/files/ae9d5486 -e1fa-4456-97f4-
c993b7997742/E C864F25A5CC519BA632299E860F6D29.faa -section -by-section -handout.pdf . 
188 Department of Transportation online information, Buy America Provisions . Viewed at: 
https://www.transportation.gov/highlights/buyamerica . See also FAA online information, AIP Buy American 
Preference Requirements . Viewed at: http://www.faa.gov/airports/aip/buy_american/ . 
189 When procuring a facility or equipment , the cost of components and subcomponents produced in the 
United States must be  more than 60% of the cost of all components , and final assembly must be in the 
United  States.  WT/TPR/S/ 382 • United States  
 
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  the participating airports must be a general aviation airport.190 The APPP has had very limited 
success in increasing the number of privately -run airports.191 As of April 2017, among 
10 participating airports, 4 had been privatized (as compared  to 2 in July 2016) , namely: the Luis 
Muñoz Marin International Airport (San Juan, Puerto Rico), for which the privatization had been 
approved; and the Hendry County Airglades Airport (Clewiston, FL), St. Louis Lambert International 
Airport  (St. Louis, MO) and Westchester County Airport (White Plains, NY), for all of which a 
preliminary application had been accepted.192 
4.220.   The operation and management of airports may be f ully carried out by the airport s' owners , 
or partly or wholly by a third party through outsourcing and management contracts  including for 
specific facilities.  
4.221.   The United States has GATS commitments with respect to aircraft repairs and maintenance, 
and has scheduled MFN exemptions with regard to the sale and marketing of air transport services 
and the operation and regulation of  Computer Reservation  System (CRS) services.  
4.222.   The United States is a contracting party t o the WTO Plurilateral Agreement on Civil Aircraft. 
Thus, national treatment is  granted to the acquisition of civil aircraft and related articles originating 
from other parties of the Agreement.  
4.4.6.2   Maritime transport, port services, and shipbuilding  
4.4.6.2.1   Maritime transport  
4.223.   Waterborne trade in  the United States amounted to 2.08  billion  metric  tons in 2016  (up from 
1,75 billion in 2015) . Internation al waterborne trade totalled 1.28  billion metric  tons, while domestic 
waterborne t rade was 800 million metric  tons, incl uding  intraport and intra-territory traffic.193 The 
size of the U.S.  flag privately -owned fleet of self -propelled, cargo -carrying vessels of 1,000 gross 
tons and above has slightly increased : as of early June 2018, there were a total of 181 privately -
owned vessels (as compared to 171 in 2016) with a capacity of 8.2  million deadweight tons  (as 
compared to 7.9 in 2016) .194 Some 72% of the volume and 44% of the value of goods that the 
United States imports and exports move by water transportat ion.195 
4.224.   The Maritime Administration (MARAD) , under the Department of Transportation , is the 
agency responsible for developing commercial maritime regulations and program mes that ensure 
the viability of the U.S. Merchant Marin e, and  promote the use of waterborne transportation and its 
integration with other segments of the transportation system . MARAD is charged with carrying out 
the national policies established by the Merchant Marine Act of 1936 (see below). MARAD's mission 
is to improve, strengthen and promote the maritime transportation system to meet economic, 
environmental, and security needs. MARAD also advocates for the maritime industry; manages 
assets in support of the Department of Defense ( USDOD), including maintaini ng a fleet of 
government -owned cargo vessels; administers , in partnership with USDOD, the Voluntary 
Intermodal Sealift Agreement (VISA) emergency preparedness programme; administers and funds 
the Maritime Security Program (MSP); operates the U.S. Merchant Marine Academy (USMMA); 
provides training ships, funding and other support for the six State Maritime Academies (SMA s) 
                                                
190 Only general aviation airports can be sold und er the Airport Privatization Pilot Program (APPP).  
191 Tang, R., Y. (2017), Airport Privatization: Issues and Options for Congress , Congressional Research 
Service Report. Viewed at: https://www.fas. org/sgp/crs/misc/R43545.pdf . 
192 FAA online information. Viewed at: https://www.faa.gov/airports/airport_compliance/privatization/ . 
193 Institute for Water Resources (2017),  Final Waterborne Commerce Statistics  for Calendar Year 2016 . 
Viewed at: http://cwbi -ndc-nav.s3 -website -us-east-1.amazonaws.com/files/wcsc/pdf/2016 -Final.pdf . 
194 MARAD online information, "MARAD Open Data Portal". Viewed at: 
http://www.marad.dot.gov/resources/data -statistics/ . All the numbers referring to vessels in this section only 
reflect ocean -going, self -propelled, cargo -carrying vessels of 1,000 gross tons and above.  
195 MARAD (2017), Maritime Administration Strategic Plan , Navigating the Future, 2017 -2021. Viewed 
at: https://www.marad.dot.gov/wp -content/uploads/pdf/MARAD -Strategic -Plan-2017-2021-20170119 -Final-
signed.pdf . WT/TPR/S/ 382 • United States  
 
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  (Maine, Massachusetts, New York, Texas, California and Michigan); and administers the Federal Ship 
Financing Program (Title XI).196 
4.225.   The Federal Maritime Commission (FMC) is responsible for regulating  ocean -borne liner 
transport, including ocean transportation intermediaries, and for supervising  the collective activities 
of shipping line s that are not subject to U.S. anti-trust laws for both U .S. and foreign operators of 
liner shipping services with fixed schedules. The U.S. Coast Guard  (USCG),  under the Department 
of Homeland Security , is in charge of regulating maritime transport , including vessel safety and 
security, and environmental protec tion, and of licensing mariners.  
4.226.   The Merchant Marine Act of 1936 , as amended, is one of the principal laws governing 
maritime transport. The Act provides for the U.S. government's support of the U.S. Merchant Marine.  
It defines maritime transport policy by  declaring it necessary for the national defense and the 
development of the domestic and foreign commerce of the United States to have a merchant marine:  
• Sufficient to carry the waterborne domestic commerce and a substantial part of the 
waterborne export and import foreign commerce of the United States, and to provide a 
shipping service essential for maintaining the flow of the waterborne domestic and foreign 
commerce at all times;  
• Capable of serving as a naval and military auxiliary in time of war or nati onal emergency;  
• Owned and operated as vessels of the United States by citizens of the United States;  
• Composed of the best -equipped, safest, and most suitable types of vessels constructed in the 
United States, and manned with a trained and efficient citizen  personnel; and  
• Supplemented by efficient facilities for building and repairing vessels.  
4.227.   Restrictions to cabotage services of both goods and passengers remain in place , under the 
coastwise trade laws . Section 27 of the Merchant Marine Act of 1920, commonly  referred to as the 
Jones Act ( 46 U.S.C.  § 55102 ), reserves cargo service between two points in the United States 
(including most of its territories and possessions)197, either directly or via a foreign port, for ships 
that are registered and built (or repai red) in the United States, and that are at least 75% owned by 
a U.S. corporation , and on which 100% of the officers and 75% of the crew are U.S. citizens.198 In 
general, the same requirements apply to the domestic passenger service under the Passenger Vessel  
Service Act of 1886  (46 U.S.C. § 55103 ). As of 1 June  2018, 99  ocean -going, self -propelled, cargo -
carrying and privately -owned vessels of 1,000 gross tons and above , with a dead weight of 4.9  billion 
deadweight tons (DWT), qualified as coastwise -eligible Jones Act vessels.199 Although the Jones Act 
places limitations on cargo services, it does not prevent foreign companies from establishing shipping 
companies in the United States,  as long as they meet the Act's requirements regarding citizenship, 
crew and op eration of domestic -built vessels.200 Foreign -owned U.S. companies may also own and 
operate ships flying the U.S.  flag in international service.  
4.228.   Cargo carried on routes covered by the Jones Act, including  coastwise, intercoastal, 
Great  Lakes, and inland ship ping, reached 795 metric tons in 2016. Coastwise trade accounted for 
                                                
196 MARAD (2017), Maritime Administration Strategic Plan , Navigating the Future, 2017 -2021. Viewed 
at: https://www.marad.dot.gov/wp -content/uploads/pdf/MARAD -Strategic -Plan-2017-2021-20170119 -Final-
signed.pdf . 
197 The U.S. Virgin Islands are exempt from the Jones Act, and certain Pacific islands (Guam, etc.) are 
dual-status ports.  
198 Under 46 U.S.C. 8103(b)(B) , not more than 25 % of the total number of unlicensed seamen on the 
vessel may be aliens lawfully admitted to the United States for perma nent residence.  
199 MARAD online information, "MARAD Open Data Portal". Viewed at: https://www.marad.dot.gov/wp -
content/uploads/pdf/Consolidated_Summary_2 0180601 -June.pdf . 
200 46 U.S.C. § 50501 requires 75% U.S. citizen voting and stock control.  WT/TPR/S/ 382 • United States  
 
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  19.2% of the Jones Act trade on a tonnage basis in 2016; 93% of coastwise trade was petroleum.201 
Some 119 million passengers were also transported on domestic routes in 2016.202 
4.229.   Requests for  waivers of the provisions of the coastwise laws are made to the Commissioner 
of the U.S. Customs and Border Protection (CBP). With the exception of waivers requested by the 
Secretary of Defense, CBP is required to consult with MARAD and, as a matter of pr actice, also 
consults with other interested agencies before a waiver is granted or denied. Waivers of the Jones 
Act are granted by the Secretary of Homeland Security only "in the interest of national defence", 
and, consequently, only in "extremely rare" ca ses. One such waiver was granted in the wake of 
Hurricane Sandy. Under the Defense Authorization Act of 2013, MARAD is required to publish Jones 
Act vessel availability determinations not later than 48 hours a fter the determination is made.  
4.230.   MARAD has respo nsibility for the Small Passenger Vessels Waiver Program, under which  it 
grants approximately 75  waivers of the U.S. build requirement each year  to foreign vessels , or 
vessels of unknown build , to operate in the United States as commercial passenger vessel s.203 To 
qualify for  the Program, the vessel  must be at least three years old, and must carry  no more than  
12 passengers. Activities such as carriage of cargo, commercial fishing, towing, dredging and 
salvage do not qualify for this Program. The vessel must be owned by a U.S. citizen.  The intended 
use of the vessel must be published in the Federal Register; after the publication, MARAD will 
determine if the issuance of the waiver will cause an "undue adverse effect" on existing operators 
and shipbuilders. If that is not the case, the waiver is approved. Most waiver requests are 
approved.204 Once obtained, the waiver stays with the vessel , even  if it is sold. The waiver does not 
apply to any vessel documentation, vessel manning or vessel inspection requirements. Once a waiver 
is received, the applicant should file for a Coastwise Trade Endorsement for the passenger trade 
with the U.S. Coast Guard (USCG). MARAD no l onger issues waivers for a ll coasts of the United 
States : the waiver request must list all states of intended operation.  
4.231.   U.S. law (46 U.S.C. § 55108) allows MARAD to make determinations permitting the use of 
foreign -built launch barges under specific circumstances (i.e. when the launch of an exceptionally 
large oil rig or offshore platform requires the us e of a foreign -built launch barge), and after an 
application and review process. This is done under the Launch Barge Program. Regulations require 
that the platform owner or operator notify MARAD at least 21 months prior to the contemplated use 
of a foreign -built launch barge.205 MARAD is also authorized to make determinations under P.L. 111 -
281 allowing the use of foreign anchor handling vessels (used to position mobile offshore drilling 
units) if no U.S. -flag vessels are available, and if the companies want ing to use foreign vessels have 
contracts in place to bring in replacement U.S. -flag vessels. This applies to operations in the Beaufort 
Sea and the Chukchi Sea adjacent to Alaska. Since the provision was passed in 2006, MARAD has 
issued decision letters al lowing three foreign -flag vessels into service for a limited length of time.206 
4.232.   Preferences are accorded to U.S. -flag vessels  under certain acts  to provide a revenue base 
that will retain and encourage a privately owned and operated U.S. -flag merchant marine .207 Public 
Resolution No. 17 of 1934 requires that exports of goods that benefit from export loans or credit 
guarantees from EXIM Bank be carried in U.S -flag vessels, although the vessels of a recipient country 
may be granted access to 50% of those cargoes,  where there is no discriminatory treatment against 
U.S.-flag carriers. Waivers may be granted, subject to reciprocal treatment for U.S -flag vessels by 
the recipient country.  In practice, a sizeable number of foreign -owned vessels have been allowed to 
                                                
201 Institute for Water Resources, Navigation and Civil Works Decision Support Center, U.S. Army Corps 
of Engineers, Waterborne Commerce Statistics Center (2017),  Final Waterborne Commerce Statistics for 
Calendar Year 2016, Waterborne Commerce National Totals and Selected Inland Waterways for Multiple Years . 
Viewed at: https://u sace.contentdm.oclc.org/utils/getfile/collection/p16021coll2/id/1655 . 
202 Department of Transportation, Bureau of Transportation Statistics, 2016 Highlights of Ferry 
Operators in the United States . Viewed at: https://www.bts.gov/sites/bts.dot.gov/files/docs/browse -statistical -
products -and-data/surveys/national -census -ferry-operators -ncfo/210441/ferry -operators -highlights -2016.pdf . 
203 MARAD online information, " Small Passenger Vessel Waiver Program ". Viewed at: 
http://www.marad.dot.gov/ships -and-shipping/domestic -shipping/ . 
204 MARAD online information, Small Vessel Waiver Program . Viewed at: 
https://www.marad.dot.gov/ships -and-shipping/domestic -shipping/small -vessel -waiver -program/ . 
205 MARAD online information. Viewed at: https://www.marad.dot.gov/ships -and-shipping/domestic -
shipping/launch -barge -program/ . 
206 MARAD online information. Viewed at:   
https://www.marad.dot.gov/ships -and-shipping/domestic -shipping/ . 
207 MARAD online information, Cargo Preference . Viewed at: http://www.marad.dot.gov/ships -and-
shipping/cargo -prefer ence/ . WT/TPR/S/ 382 • United States  
 
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  transport government -generated cargo  in the past few years.208 Under the Military Cargo Preference 
Act of 1904 , 100% of military cargo must be transported in U.S.-flag carriers  at rates that are not 
exces sive or otherwise unreasonable; and c argo preference applies not only to the end product but 
also to component parts.209 The Cargo Preference Act of 1954 requires that at least 50% of the gross 
tonnage of all government -generated cargo be transported on privately  owned, domestically  flagged 
commercial vessels , to the extent that such vessels are available at fair and reasonable rates. The 
Act also requires that shipments from or to the Strategic Petroleum Reserve use domestically flagged 
tankers for at least 50% of oil transport.  
4.233.   The United States  also administ ers two maritime transport program mes related to national 
defense: The Maritime Security Program (MSP) and the Voluntary Intermodal Se alift Agreement 
(VISA) program.  
4.234.   The Maritime Security Program (MSP), created by the Maritime Security Act of 1996 to 
replace the operating -differential subsidy (ODS), supports the U.S. -flag merchant marine by 
providing fixed payment s to U.S. -flag vessel operators.210 The Program was originally established to 
run from  FY1996 through FY2005, and provide funding of up to US$100 mi llion annually for up to 
47 vessels. The stated purpose of the MSP is assuring that a limited number of militarily useful 
vessels from the international commercial fleet are available to meet the nation's sealift 
requirements in time of war or national eme rgencies. The National Defense Authorization Act 
(NDAA), which contained the Maritime Security Act of 2003 , reauthoriz ed the MSP for FY2006 
through FY 2015, and increas ed the size of the Maritime Security Fleet receiving stipend payments 
to 60 vessels. In J anuary 2013, the President signed the NDAA of 2013 (P.L. 112 -239), extendin g 
the MSP to the period from FY2016 through FY 2025.211 Section 3504 of the National Defense 
Authorization Act for FY2016 (P.L. 114 -92) and Division O, Title 1, Section 101(e) of the C onsolidated 
Appropriations Act 2016 (P.L. 114 -113) revised the annual MSP payment schedule for FY2016 
through FY2021. The authorized funding for FY 2017 was just short of US$300  million, while that for 
FY2018-20 is US$300  million  per FY . All MSP dry cargo ships are enrolled in the Voluntary Intermodal 
Sealift Agreement  (VISA) , while  MSP tankers are enrolled in the Voluntary Tanker Agreement .212 
4.235.   The Voluntary Intermodal Sealift Agreement (VISA)  program, introduced in January  1997 
and sponsored by MARAD, is a p artnership between the U.S. Government and the maritime industry 
to provide the Department of Defense (DOD) with "assured access" to commercial sealift , and 
intermodal capacity to support the emergency deployment and sustainment of U.S. military forces. 
The VISA program is authorized under the Defense Production Act of 1950, and the Maritime Security 
Act of 2003. The VISA program provides for a time -phased activation of state -of-the-art commercial 
intermodal equipment to coincide with the DOD requirements , while minimizing disruption to U.S. 
commercial operations.213 The VISA program can be activated in three stages , as determined by the 
DOD, with each stage representing a higher level of capacity commitment. By Stage III , participants 
must commit at least 50%  of their capacity, with the exception of participants in the MSP, who must 
commit 100%. Enrollment in the VISA programme is conducted on a year -round basis.214 VISA 
participants get priority preference when bidding on USDOD peacetime cargo.  
                                                
208 A complete list of eligible foreign -owned vessels, as of 12 April 2018, may be viewed at: 
https://www.marad.dot.gov/wp -content/upload s/pdf/180412 -MAR730_Foreign -Flag-Vessel -List-NEW-2.pdf. 
209 MARAD online information. Viewed at: https://www.marad.dot.gov/ships -and-shipping/cargo -
preference /laws -and-regulations/ . 
210 The ODS, granted on a 20 -year contract basis, was provided for U.S. -flag vessels operating on 
international trade routes, in order to compensate for cost differences between U.S. and foreign operators. 
WTO document S/NGMTS/W/2/Add .11, 31 January 1995.  
211 MARAD online information, "Maritime Security Program". Viewed at: 
http://www.marad.dot.gov/search/maritime+security+program/ . 
212 As at 1 June 2018, there were  the following MSP operators and vessels: American International 
Shipping, LLC (1), APL Marine Services, Ltd. (8), APL Maritime, Ltd. (1), Argent Marine Operations, Inc. (1), 
Central Gulf Lines, Inc. (4), Farrell Lines Incorporated (5), Fidelio Limited Par tnership (8), Hapag -Lloyd USA, 
LLC (5), Liberty Global Logistics, LLC (3), Mykonos Tanker Corporation (1), Maersk Line, Ltd. (18), Santorini 
Tanker Corporation (1), Patriot Shipping, LLC (2), and Waterman Steamship Corporation (2). See: The 
Maritime Securi ty Program , at https://www.marad.dot.gov/wp -content/uploads/pdf/MSP -Brochure -7-1-
2017.pdf . 
213 MARAD online information , "VISA Program" . Viewed at: 
http://www.marad.dot.gov/search/VISA+program/ . 
214 See Voluntary Intermodal Sealift Agreement , Changes to the Open Season Enrolment Period, 83 Fed. 
Reg. 4552 ( 31 January 2018).  WT/TPR/S/ 382 • United States  
 
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  4.236.   As of 1 June 201 8, there were 100  ocean -going, self -propelled, cargo -carrying vessels of 
1,000 gross tons and above in the VISA program me, with 3,706,884  DWT. MSP participants' vess el 
capacity made up 7 2.6% of the VISA capacity  at the same date .215 
4.237.   U.S. and foreign operators of liner shipping services and marine terminal operators in the 
United States are exempt  from certain  antitrust laws, including the Sherman and Clayton Acts, with 
respect to their operations in U.S. -foreign ocean -borne trade. Und er the Shipping Act of 1984, as 
amended by the Ocean Shipping Reform Act (OSRA) of 1998, agreements among liner operators 
and marine terminal operators (MTOs) to discuss, fix, or regulate transportation rates, and other 
conditions of service, or cooperate on operational matters , must be filed with , and examined by , the 
FMC. Also under t he Shipping Act of 1984 , ocean carriers must publish tariff rates and charges for 
carriage for trade with foreign countries. The se rates are reviewed by the FMC, which also r eviews 
the rates of government -controlled ocean carriers , to ensure that their rates and cont racts are not 
unreasonably low.  
4.238.   Under the American Fisheries Act (AFA) of 1998, incorporated in the Omnibus Consolidated 
and Emergency Supplemental Appropriations Act, 1999 (P.L. 105 -277), MARAD was designated as 
the agency responsible for ensuring compliance with the U.S. citizen ownership and control 
requirements for U.S. -flag fishing industry vessels of 100 feet and greater in registered length. Under 
the AFA, fo reign investment in the fisheries of the United States is limited: in order to document a 
vessel with a fishery endorsement, the AFA and its implementing regulations (46  C.F.R. Part 356) 
require that 75% of the ownership and control of the vessel be vested  in U.S. citizens, at each tier 
and in the aggregate. MARAD is charged with determining whether vessels of 100 feet or greater in 
length are owned and controlled by U.S. citizens and eligible for documentation with a fishery 
endorsement. In addition, MARAD  must determine whether lenders are qualified to hold a preferred 
mortgage on fishing industry vessels; if that is not the case, the lender must utilize an approved 
mortgage trustee to hold the preferred mortgage for its benefit, and MARAD must review the 
transaction to determine whether it results in an impermissible transfer of control to a non -citizen.216 
4.239.   Under the Foreign Shipping Practices Act (FSPA , 46 U.S. Code § 42302 ) of 1988 , the FMC is 
required to investigate , and take action in response to , condit ions arising from foreign government 
measures or  business practices in the U.S. -foreign shipping trades that adversely affect U.S. carriers 
but do not apply to foreign carriers in the United States. Section 19 of the Merchant Marine Act of 
1920 authorizes the FMC to investigate , and take action to address , "unfavourable shipping 
conditions in U.S. foreign commerce and may impose penalties". No action was taken during the 
period under review.  
4.240.   In response to challenges identified by MARAD, a medium -run strate gy was launched, in 
particular to meet the challenge posed by ageing ships and infrastructure, and to face foreign 
competition.  The FMC is also engaged in a regulatory reform to evaluate existing FMC regulations 
and in making recommendations regarding thei r repeal, replacement, or modification.217 
4.241.   The United States has no maritime transport commitments under the GATS. It maintains an 
MFN exemption under the GATS covering restrictions on performance of longshore work by crews of 
foreign vessels owned and flagg ed in countries that similarly restrict U .S. crews on U .S.-flag vessels 
from longshore work.  
4.242.   The United States has bilateral agreements with Brazil;  China ; Japan; Korea , the Republic 
of; the Philippine s; the Russian Federation ; and Viet Nam.218 
                                                
215 Based on tonnage, s ee: MARAD (2018), Consolidated Fleet Summary and Change List  
United States Flag Privately -Owned Merchant Fleet , 1 June 2018 . Viewed at: 
https://www.mara d.dot.gov/wp -content/uploads/pdf/Consolidated_Summary_20180601 -June.pdf . 
216 MARAD online information. Viewed at: https://www.marad.dot.gov/ships -and-shipping/american -
fisheries-act/. 
217 FMC online information. Viewed at:  https://www.fmc.gov/regulatory_reform.aspx . 
218 MARAD online information, International Agreements . Viewed at: http://www.marad.dot.gov/about -
us/international -activities/international -agreements/ . WT/TPR/S/ 382 • United States  
 
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  4.4.6.2.2   Port services  
4.243.   The United States has over 300 ports; they  may be operated by a state, a county, a 
municipality, a private corporation, or a combination  of these . The top 50 ports account for roughly 
85% of total waterborne cargo tonnage. Port congestion, particularly in  the west coast ports , 
continues to be a challenge, requiring an improvement in infrastructure.  
4.244.   MARAD , through its Strong -Ports program me, provides expertise on port finance and 
infrastructure, and has assisted major ports in their recent redevelopment pla ns. MARAD's Office of 
Port Infrastructure Development and Congestion Mitigation is responsible for assisting with port, 
terminal, waterway, and transportation network development issues, including: coordinating and 
managing port infrastructure projects for  a variety of entities, including state, local, and territorial 
authorities; promoting the use of waterways and ports; and c oordinating and directing studies  for 
recommending improvements in port operation and facilities.219 
4.245.   The United States does not grant domestic preferential treatment with respect to the use of 
port and harbour facilities. The United  States maintains an MFN exemption covering restrictions on 
performance of longshore work by crews of foreign vessels owned and flagged in countries that 
similarly restrict U.S. crews on U.S. -flag vessels from longshore work. The Immigration and 
Nationality Act of 1952, as amended, prohibits non -U.S.-national crewmembers from performing 
longshore work in the United States, but provides a reciprocity exception.  
4.246.   Under Title I of the Maritime Transportation Security Act of 2002 (P.L. 107 -295), commercial 
vessels arriving in the United States from a foreign port are required to transmit electronically, in 
advance, information  on passengers, crew, and cargo. The Mari time Transportation Security Act of 
2004 amended federal shipping law to grant U.S. district courts jurisdiction to restrain violations of 
certain port security requirements, and authorized the Secretary of Transportation to refuse or 
revoke port clearance  to any owner, agent, master, officer, or person in charge of a vessel that is 
liable for a penalty or fine for violation of such requirements.  
4.247.   The Deepwater Port Act of 1974, as amended (DWPA)  (P.L. 93 –627, 33 U.S.C. 1501 et seq .), 
and its regulations (68  FR 36496) establish a licensing system for ownership, construction, operation 
and decommissioning of deepwater port structures located beyond U.S. territorial waters, for the 
import and export of oil and natural gas. The Act sets out conditions that appli cants must meet and 
detailed procedures for the issuance of licences by the Secretary of Transportation, and prohibits 
the issuance of a licence without the approval of the Governors of the adjacent coastal states. MARAD 
is responsible for determining the financial capability of potential licensees, the citizenship of the 
applicant, and for issuing or denying the deepwater port licence. The DWPA establishes a specific 
timeframe of 330 days from the date of publication in the Federal Register for approval or  denial of 
the deepwater port licence.220 
4.4.6.2.3   Shipbuilding and ship repairs  
4.248.   Under  U.S. law , only U.S. -built ships qualify for domestic service; the United  States was 
granted an exemption from GATT rules for measures prohibiting the use, sale, or lease of foreign -
built or foreign -reconstructed vessels in commercial applications between points in national waters 
or the waters of an exclusive economic zone. There are no restrictions on foreign investment in U.S. 
shipyards or ship -repair facilities, but floati ng dry -docks are eligible for loan guarantees under the 
Federal Ship Financing Program only if owned by U.S. citizens.221 
4.249.   MARAD provides financial assistance to ship -owners and U.S. shipyards  through t he Federal 
Ship Financing Program (Title XI), established  pursuant to Title XI of the Mercha nt Marine Act of 
1936, as amended . The aim of the Title XI Program is to promote the growth and modernization of 
the U.S. merchant marine and U.S. shipyards. The Program, authorized pursuant to 46 U.S.C. 
Chapter 537, prov ides U.S.  Government -guaranteed debt issued by: (a) U.S. or foreign ship -owners 
for the purpose of financing or refinancing either U.S. -flag vessels or eligible export vessels 
                                                
219 MARAD online information. Viewed at: https://www.marad.dot.gov/ports/office -of-port-
infrastructure -development -and-congestion -mitigation/ . 
220 MARAD online information. Viewed at: https://www.marad.dot.gov/ports/office -of-deepwater -ports-
and-offshore -activities/about -the-deepwater -port-act/. 
221 See 46 U.S.C. 5 3701 and 46 U.S.C. 53706.  WT/TPR/S/ 382 • United States  
 
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  constructed, reconstructed or reconditioned in U.S. shipyards; and (b) U.S. ship yards for the purpose 
of financing advanced shipbuilding technology and modern shipbuilding technology of a privately -
owned, general shipyard facility located in the United States.222 Under the Federal Credit Reform Act 
of 1990, appropriations to cover the e stimated costs of a project must be obtained prior to the 
issuance of any letter of commitment for debt guarantees.  
4.250.   Title XI encourages U.S. ship-owner s to obtain new vessels from U. S. shipyards  by offering 
long-term debt repayment guarantees ; the Program also allows vessels to be built in U.S. shipyards 
for foreign ship -owners.  It also assists U.S. shipyards with modernizing their facilities for building 
and repairing vessels. Since the obligations are guaranteed by the U.S. Government, the repayment 
term allowed is longer , and the interest rates lower , than those available from the commercial 
lending market.223 The guarantee is based on the "actual cost" of the vessels or the technology used 
in shipbuilding, which generally includes the cost of construction,  reconstruction, or reconditioning 
of the vessel, together with construction -period interest and the guarantee fee. The guarantees are 
up to 87.5% of the value of the project, for up to 25 years , depending on the type of project. 
Amortization in equal payments of principal is usually required. However, other amortization 
methods , such as level debt (equal payments of principal and interest) , may be approved if sufficient 
security is offered.  In FY2016, one new application for a pro ject totalling US$451 million was 
approved, representing US$394 million in guarantees; no guarantees were issued in FY2017 or , up 
to this point , in FY2018. As of the end-June 2018, Title XI guarantees totalling US$1.34 billion were 
outstanding.224 
4.251.   The Capita l Construction Fund (CCF) and the Construction Reserve Fund (CRF) allow 
U.S. citizens owning or leasing vessels to obtain tax benefits for the construction, reconstruction, or 
acquisition of vessels. CCF vessels must be U.S.-built and documented under U.S. laws for operation 
in the nation's foreign, Great Lakes, short-sea shipping , or non -contiguous domestic trade or its 
fisheries. Parti cipants must meet U.S. citizenship requirements.  The CCF provides tax -deferral 
benefits to vessel operators in the foreign  or domestic trade of the United States and U.S. fisheries. 
The CCF aims to make up for the competitive disadvantage operators of U.S. -flag vessels face in the 
construction and replacement of their vessels , relative to foreign -flag operators whose vessels are 
registered in countries that do not tax shipping income. The CRF is a financial assistance scheme 
that provides tax -deferral benefits to U.S. -flag, operators with respect to gains attributable to the 
sale or loss of a vessel, provided the proceeds are used to expand or modernize the U.S. merchant 
fleet. 
4.252.   The Manufacturing Extension Program, Section 8062 of P.L. No. 108 -87 makes naval 
shipyards eligible to participate in any manufacturing extension programme financed by  funds 
appropriated by any Act.  
4.253.   As of mid-2018, there were 124 shipyards and ship -repair facilities in the United States. The 
order book was estimated at US$1.6 billion . U.S. -flag vessels repaired in most foreign countries face 
a 50% ad valorem  duty225, assessed on the cost of equipment and no n-emergency repairs in foreign 
countries, although exemptions apply under certain circumstances. U.S. -owned foreign -flag vessels 
are not subject to any duty.  
4.4.7   Tourism services  
4.4.7.1   Market overview  
4.4.7.1.1   General  
4.254.   Tourism services are divided , in the MTN/GNS/W120 nomenclature used for U .S. GATS 
commitments , into four categories , namely : 9.A hotels and restaurants  (including catering) ; 9.B 
                                                
222 MARAD online information. Viewed at: https://www.marad.dot.gov/ships -and-shipping/federal -ship-
financing -title-xi-program-homepage/ . 
223 MARAD online information, Federal Ship Financing Program (Title XI) . Viewed at: 
http://www.marad.dot.gov/ships -and-shipping/fede ral-ship-financing -title-xi-program -homepage/ . 
224 MARAD online information. Viewed at: https://www.marad.dot.gov/ships -and-shipping/federal -ship-
financing -title-xi-program -homepage/outstanding -guarantees/ . 
225 Exemptions are applied to certain countries in accordance with the bilateral agreements between the 
United States and the countries.  WT/TPR/S/ 382 • United States  
 
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  travel agencies and tour operators ; 9.C tour guide services ; and the undefined 9. D "other" category.  
There  are no available official figures on cross -border exchanges of tourism services according to 
this classification, because, by construction, balance of payments statistics for tourism are based on 
types of consumer rather than on types of services purchased . Table 4.26, which describes the 
exchanges of travel and tourism services between 2011 and 2017 , illustrates that point , while 
Chart 4.17 describes the evolution of the balan ce of trade for the same years.  
Table 4.26 Trade balance in the tourism sector, 2011 -17 
(US$ million, seasonally adjusted)   
2011  2012  2013  2014  2015  2016  2017  
Exports ( receipts)         
Total travel and tourism -related exports  187,630  200,996  218,497  235,989  249,183  246,173  251,360  
Travel receipts (for all purposes , 
including education)  150,867  161,632  177,484  191,918  206,936  206,902  210,747  
   Travel spending  118,645  126,745  139,453  149,754  159,942  155,606  155,807  
   Medical/education/workers ' spending  32,222  34,887  38,031  42,164  46,994  51,296  54,940  
Passenger fare receipts  36,763  39,364  41,013  44,071  42,247  39,271  40,613  
Imports ( payments)         
Total travel and tourism -related imports  116,447  129,903  130,149  140,558  150,042  160,936  173,921  
Travel receipts (for all purposes , 
including education)  89,700  100,338  98,120  105,668  114,548  123,569  135,024  
   Travel spending  81,663  91,789  88,980  95,831  104,254  112,500  123,067  
   Medical/ education/ workers ' spending  8,037  8,549  9,140  9,837  10,294  11,069  11,957  
Passenger fare receipts  26,747  29,565  32,029  34,890  35,494  37,367  38,897  
Balance of trade ( surplus/ deficit)  71,183  71,093  88,348  95,431  99,141  85,237  77,439  
Source:  Bureau of Economic Analysis and the National Travel and Tourism Office.  
4.255.   Both the previous table and the chart below show that the United States is running a 
substantial surplus in tourism services, which reached US$77.4 billion in 2017.  
Chart 4.17 Tourism services trade, 2011 -17 
(US$ million)  
 
Source:  Burea u of Economic Analysis , and National Travel and Tourism Office.  
4.256.   The United States runs a structurally large surplus  in tourism services, a  considerable part 
of it is linked to transport activities and not to tourism activities per se , and it is not currently possible 
to distinguish the contribution of each tourism activit y in these results.  
187,630
200,996
218,497
235,989
249,183
246,173
251,360116,447
129,903
130,149
140,558
150,042
160,936
173,92171,183
71,093
88,348
95,431
99,141
85,237
77,439
050,000100,000150,000200,000250,000300,000
2011 2012 2013 2014 2015 2016 2017Chart 4.17 Tourism services trade, 2011 -17
Exports Imports Trade balance
Source:  Bureau of Economic Analysis, and National Travel and Tourism Office.(US$ million)WT/TPR/S/ 382 • United States  
 
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  4.257.   Table 4.27 describes the evolution of employment and of the number of establishment in 
accommodation, food services and drinking places between  2011 and 2018.  It shows a constant 
growth of these two parameters in the two subsectors during the period under review.  
Table 4.27 Accommodation and food services, number of employees and establishments, 
2011 -18Q1  
('000 and numbers)   
2010  2011  2012  2013  2014  2015  2016  2017  2018a 
NAICS 
code/description  Number of employees ( '000)   
721 Accommodation  1,760  1,801  1,825  1,865  1,894  1,923  1,960  2,003  2,019  
722 Food services 
and drinking places  9,373  9,633  9,976  10,361  10,696  11,066  11,444  11,726  11,877  
 
Number of establishmentsb   
721 Accommodation  65,122  65,534  65,976  66,650  67,301  67,953  68,832  69,729b .. 
722 Food services 
and drinking places  556,524  566,471  578,095  585,642  594,103  603,061  613,784  626,599b .. 
.. Not available.  
a Data for the first quarter of  2018.  
b Data for the first quarter o f 2017.  
Source:  WTO Secretariat calculations , based on data from the Bureau of Labour Statistics.  
4.258.   Table 4.28 shows an upward trend over the 2011 -17 period with respect to value added in 
accommodation and food services,  not only in absolute terms but also in terms of relative share of 
total GDP.  It also shows an increase in the sector's foreign investment position in the United States, 
which reached US$19.3 billion in 2016, of which 44.5% was in accommodation, and 55.5% in food 
services and drinking places.  There are no detailed statistics available on individual trade partners' 
FDI in the industry . 
Table 4.28 Value added and Foreign Direct Investment in accommodation and food 
services, 2010 -17 
(US$ billion and % of total GDP)   
2010  2011  2012  2013  2014  2015  2016  2017  
Value added (US$ billion)          
  Accommodation and food services  396 414 440 463 491 530 559 583 
    Accommodation  111 120 126 134 141 152 159 164 
    Food services and drinking places  286 294 314 329 351 377 401 419 
Share of total GDP (%)          
  Accommodation and food services  2.6 2.7 2.7 2.8 2.8 2.9 3.0 3.0 
    Accommodation  0.7 0.8 0.8 0.8 0.8 0.8 0.9 0.8 
    Food services and drinking places  1.9 1.9 1.9 2.0 2.0 2.1 2.2 2.2 
Foreign Direct Investment position in the United States (US$ million)  
  Accommodation and food services  14,550  17,656  15,463  14,811  15,059  17,766  19,774  31,389  
   Accommodation  6,710  6,728  4,919  5,398  6,213  7,886  8,546  9,272  
   Food services and drinking places  7,840  10,928  10,545  9,413  8,846  9,880  11,229  22,117  
Source:  Bureau of Economic Analysis . 
4.259.   While the number of majority -owned U.S. affiliates of foreign multinational enterprises  with 
assets, sales or net income greater than  US$20 million in the food and accommodation  sector has 
declined between 2010 and 2015, both the total assets and the total employment of majority -owned  
U.S. affiliates of foreign multinational enterprises  have increased (Table 4. 29). 
4.260.   Table 4.30 provides detailed data on food and accommodation services supplied  by MNEs 
through their MOUSA s between 2010 and 2015 , in terms of value and as percentage of the total 
supply of services provided by the retail sector . The value of the services supplied totaled US$33.9 
billion in 2015, representing 4.3% of the total services supplied in the accommodation and food 
services sector . Accommodation and food services supp lied by foreign MNEs through their MOUSAs  
represented 3.5% of the value added of the industry, and accounted for 9.6% of the employment . 
In 2015, some 81% of MNEs in the sector were European, 10.2% from Asia, and the rest from other 
regions.  WT/TPR/S/ 382 • United States  
 
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  Table 4.29 Selected data for majority -owned U.S. affiliates of foreign multinational 
enterprises, 2010, 2012 and 2015  
 Number of affiliates with 
assets, sales,  or net 
income (+/-) greater than 
US$20  milliona Total assets  (US$ million)  Number of employees  
('000) 
 
2010a 2012 2015 2010 2012 2015 2010 2012 2015 
Accommodation 
and food services  127 107 113 30,821  37,377  38,453  377 419 489 
Accommodation  108 86 92 15,765 14,539 17,670 51 41 47 
Food services and 
drinking places  19 21 21 15,056 22,838  20,783 326 378 442 
a  For 2010,  affiliates with assets, sales, or net i ncome (+/ -) greater  than US$15 million . 
Source:  Bureau of Economic Analysis . 
Table 4.30 Accommodation and food services supplied by foreign MNEs through their 
MOUSAs, 2010 -15 
(US$ million and %)   
2010  2011  2012  20103  2014  2015  
    US$ million  
Accommodation and food services  25,429 27,130  29,743  30,215  33,586  33,865  
Accommodation  5,537  5,673  5,208  5,545  5,992  6,025  
Food services and drinking places  19,893  21,457  24,535  24,670  27,594  27,840  
As a share of total services supplied  to U.S. persons  in the accommodation and food services sectora 
Accommodation and food services  4.0 4.2 4.4 4.3 4.5 4.3 
Accommodation  5.9 5.6 4.8 4.9 4.9 4.7 
Food services and drinking places  3.9 4.0 4.3 4.2 4.4 4.2 
a  See note "a" in Table 4.22.  
Source:  Bureau of Economic Analysis.  
4.4.7.1.2   Travel agencies and tour operators  
4.261.   According to information by the BEA, based on travel and tourism satellite accounts, the 
direct output of travel arrangements and reservation services reached US$51.1 billion in 2016. Total 
tourism -related output, including indirect output (a statistical c oncept corresponding to the supply 
of services) totalled US$78.0 billion in 2016, resulting from a commodity output multiplier of 1.53. 
Direct employment in the industry reached 193,000 in the same year, and total tourism -related 
employment was 260,000, wi th a total industry multiplier of 1.35.  
4.262.   In 2015, there were 19 majority -owned U.S. affiliates  of foreign multinational enterprises 
with assets, sales , or net income greater than US$20 million, in the sector of travel arrangements 
and reservation services. The total assets of majority -owned U.S. affiliates of foreign multinational 
enterprises in the sector were US$4,484  million, and total employment  was 23,000 persons.  
4.4.7.2   Regulatory regime  
4.263.   The National Travel and Tourism Office (NTTO), part of the USDOC International Trade  
Administration, coordinates travel and tourism policies and programmes across federal agencies 
through the Tourism Policy Council. The Office works to enhance the international competitiveness 
of the travel and tourism industry and increase its exports, t hrough: (a) the development and 
management of the tourism policy, strategy and advocacy; (b) the design and administration of 
export expansion activities; (c) the management of the travel and tourism statistical system for 
assessing the economic contributi on of the industry; and (d) technical assistance for expanding 
international tourism.226 The NTTO serves as the liaison with Brand USA, the destination marketing 
organization for the United States. The USDOC appoints the Brand USA Board of Directors, approve s 
Brand USA's annual objectives, and approves matching funds of up to US$100 million for the 
international promotion of the United S tates as a travel destination.  
4.264.   The United States Travel and Tourism Advisory Board (Board) is the principal private sector 
advisory body to the Secretary of Commerce on matters relating to the travel and tourism industry. 
                                                
226 USDOC online information. Viewed at:  https://www.commerce.gov/tags/travel -and-tourism . WT/TPR/S/ 382 • United States  
 
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  The Board advises the Secretary on government policies and programmes that affect the travel and 
tourism industry, offers counsel on current and emerging issu es, and provides a forum for discussing 
and proposing solutions to industry -related problems. Advice may be given on a range of policies 
and issues, including travel facilitation, visa policy, infrastructure, aviation security, research, and 
economic susta inability. The Board is comprised of up to 32 members, representing companies and 
organizations in the travel and tourism industry; they are appointed by the Secretary of Commerce. 
Members are appointed for a two -year term. The Deputy Assistant Secretary f or Travel and Tourism 
serves as the Board's Executive Director. The National Travel and Tourism Office (NTTO) serves as 
the Executive Secretariat for the Board.227 
4.265.   The NTTO plays an active role in domestic and international policy issues related to the U.S. 
travel and tourism industry. The NTTO fosters the development of policies that encourage the growth 
of travel and tourism to the United States by: (a) promoting the growth of U.S. travel exports 
through bilateral agreements with countries of strategic impo rtance, including, for instance, the MoU 
with China to allow packaged leisure travel from China to the United States; (b)  representing U.S. 
tourism interests in intergovernmental organizations, to lead the global efforts for travel and tourism 
policy conce rns and issues, including the Tourism Committee for the OECD and the APEC Tourism 
Working Group; (c) serving as the Secretariat for the interagency Tourism Policy Counc il; and 
(d) serving as the official U.S. Government observer and participant on committe es and activities of 
the United Nations World Tourism Organization.  
4.266.   The NTTO offers export assistance services to U.S. travel and tourism industry suppliers. For 
instance, the NTTO provides research reports and analysis, as well as market intelligence, to the 
U.S. travel and tourism industry, to help identify international markets where their goods and 
services would be well received. The Corporation for Travel Promotion (doing business as Brand 
USA) has a multi -language website ( https://www.visittheusa.com/ ), whose primary purpose is to 
provide international travellers with a "one -stop shop" for travel information about the United States. 
This website covers all 50 states, the District of Columbia, the five U.S. territories and hundreds of 
U.S. destinations.  
4.267.   The National Travel and Tourism Strategy, launched in 2012, aims at attracting 100 million 
international visitors, with an estimated expenditure of US$250 billion annually, by the end of 2021. 
A new goal is un der development as the United States has achieved its financial target. The five 
strategies of the Strategy are (a) promoting the United States; (b) enabling and enhancing travel 
and tourism to, and within, the United States; (c) providing world -class cust omer service; 
(d) coordinating across government; and e) conducting research and measuring results.228 
4.4.7.3   GATS and bilateral commitments  
4.268.   The U.S. GATS commitments on tourism services are very extensive and liberal. They cover 
all the subsectors of the MTN/GNS/W120 nomenclature, namely 9.A Hotels and Restaurants  
(including Catering); 9.B Travel agencies and Tour operators; 9.C Tour guide services; and the 
undefined 9.D "Other" category.  
4.269.   There are full ("none") market access commitments for modes 1, 2 and  3, and full national 
treatment commitments for all four modes for all four sectors. The only exceptions are a restriction 
in mode 3 for market access for travel agencies and tour operators, that states that "official tourism 
offices with diplomatic or off icial status are not permitted to operate on a commercial basis in the 
United States or to act as agents or principals in commercial transactions", and another restriction 
for modes 2 and 3 for market access for tour guide services that states that "the nu mber of 
concessions available for commercial operations in federal, state and local facilities is limited". Mode 
4 market access commitments for the four subsectors make cross -reference to the horizontal 
commitment limitations, which concern limitations on  the temporary entry and stay of natural 
persons. There are no sector -specific MFN exemptions regarding tourism services.  
4.270.   The commitments are the same in the United States-Jordan FTA which has a positive listing 
structure. In its other FTAs, the United Sta tes maintains its  GATS -level market access commitments  
                                                
227 ITA online information. Viewed at: https://www.trade.gov/ttab/ . 
228 National Travel and Tourism Strategy  - Task Force on Travel and Competitiveness (2012) . Viewed at: 
https://travel.trade.gov/pdf/national -travel -and-tourism -strategy.pdf . WT/TPR/S/ 382 • United States  
 
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  through cross reference; there are no sector -specific limitations listed for other obligations, taken 
on a negative -list basis.  
4.5  E-commerce  
4.271.   The United States does not have a general e -commerce law; howe ver, e -commerce is 
subject to a number of federal and state measures that address various aspects of e -commerce. 
Current U.S. laws, regulations and orders affecting e -commerce address, among other things, the 
use of personal information, advertising, IP, c ybercrime, taxation, and online speech (Table 4.3 1). 
Table 4.31 Selected measures affecting e -commerce  
Act Main provisions  
Federal Trade Commission Act of 1914 
(FTCA), 15 U.S.C. §§ 41 -58, as 
amended  Applies to advertising on the Internet. Prevents unfair methods of 
competition and unfair or deceptive acts or practices affecting interstate 
commerce.  
Electronic Communications Privacy Act 
(ECPA) of 1986, P.L. 99 -508 Regulates the interception of electronic comm unications, and provides 
for federal criminal penalties for anyone who improperly accesses, uses, 
intercepts or discloses electronic communications that affect interstate or 
foreign commerce.  
Health Insurance Portability and 
Accountability Act (HIPAA) of 1996, P.L. 
104-191 Applies to healthcare providers, data processors, pharmacies, and other 
entities that handle medical information, and sets out standards that 
apply to the electronic transmission of medical data.  
Section 230 of the Communications 
Decenc y Act of 1996 (Title V of the 
Telecommunications Act of 1996), 47 
U.S.C. § 230  Section 230(c)(1) provides immunity from non -IP, civil liability for 
providers and users of an "interactive computer service" who publish 
information provided by third -party use rs. It specifies that no provider or 
user of an interactive computer service shall be treated as the publisher 
or speaker of any information provided by another information content 
provider.  
Online Copyright Infringement Liability 
Limitation Act of the Di gital Millennium 
Copyright Act of 1998 (DMCA), P.L. 
105-304 Contains provisions and procedural requirements that, in certain 
circumstances, insulate internet service providers (ISPs) from copyright 
infringement claims based on actions by users of their services.  
Gramm -Leach -Bliley Act of 1999 
(GLBA), P.L. 106 –102  Regulates the collection, use, protection and disclosure of non -public 
personal information by financial institutions. Requires financial 
institutions to explain their information -sharing prac tices to their 
customers.  
Anticybersquatting Consumer 
Protection Act of 1999 (ACPA), 15 
U.S.C. § 1125(d)  Established a civil cause of action for owners of trademarks and service 
marks against a person who (i) registers, traffics in or uses a domain 
name that is identical or confusingly similar to the mark; or (ii) in the 
case of a famous mark, dilutes the mark and has a bad faith intent to 
profit from the use of the mark.  
Controlling the Assault of Non -Solicited 
Pornography and Marketing Act of 2003 
(the CAN-SPAM Act), P.L. 108 -187 Governs unsolicited email communications, and prohibits false or 
misleading email header information and deceptive subject lines.  
Computer Fraud and Abuse Act (CFAA), 
18 U.S.C. § 1030  Governs computer hacking, and makes unlawful certain computer -
related activities involving the unauthorized access of a computer. The 
CFAA criminalizes the following general conduct:  
•Knowingly accessing a computer without authorization, or by exceeding 
authorized access, and obtaining prote cted information;  
•Knowingly, and with intent to defraud, accessing a protected computer 
without authorization, or by exceeding authorized access, and obtaining 
anything with a value of more than US$5,000 in a one -year period;  
•Knowingly causing the transm ission of a program, information, code, or 
command, and thereby intentionally causing unauthorized damage to a 
protected computer;  
•Intentionally accessing a protected computer without authorization and 
recklessly causing damage;  
•Knowingly, and with inte nt to defraud, trafficking in passwords or 
access information; and  
•Extortion involving computers.  
Federal law provides for potential imprisonment of up to 10 years for a 
violation of the CFAA, and up to 20 years for a second offense.  
Electronic Signature s in Global and 
National Commerce Act of 2000 (the 
ESIGN Act)  Main law regarding the enforceability of contracts formed over the 
Internet, and the enforceability of electronic signatures  
Restore Online Shoppers' Confidence 
Act (ROSCA), P.L. 111 -345 Places restrictions on third -party data passing from initial merchant. 
Under ROSCA, a third -party seller is prohibited from charging a 
consumer for any goods or services sold on the Internet, unless it has 
disclosed clearly all material terms of the transa ction, and has obtained 
the consumer's express informed consent to the charge. Initial 
merchants are prohibited from disclosing to third -party sellers any billing WT/TPR/S/ 382 • United States  
 
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  Act Main provisions  
information used to charge consumers post -transaction, except for 
subsidiaries, corporate aff iliates or successors to the initial merchant.  
Unlawful Internet Gambling 
Enforcement Act of 2006 (UIGEA), P.L. 
109-347 Regulates online gambling. Prohibits any person, including gambling 
businesses, from knowingly accepting payments in connection with th e 
participation of another person in a bet or wager that involves the use of 
the Internet and that is unlawful under any federal or state law.  
Broadband Data Improvement Act of 
2008 (BDIA), P.L. 110 -385 Geared at improving the quality of data regarding the availability and 
quality of broadband services to promote the availability of broadband 
Internet  
Prioritizing Resources and Organization 
for Intellectual Property Act of 2008 
(PRO IP), P.L. 110 -403 Increased both civil and criminal penalties for trade mark and copyright 
infringement, including online infringement.  
Internet Tax Freedom Act, P.L. 105 -277 Forbids federal, state and local governments from taxing Internet access 
and from imposing discriminatory Internet -only taxes. It also prohibits 
multipl e taxes on electronic commerce.  
Source:  Kirkland & Ellis International LLP  online information. Viewed at:      
  https://gettingthedealthrough.com/area/11/e -commerce/ , and information provided by the  
  authorities.  
4.272.   Two federal agencies oversee different aspects of e -commerce: the Federal Trade 
Commission (FTC) and the Federal Communications Commission (F CC). The FTC's authority over 
unfair and deceptive practices in commerce extends to various aspects of e-commerce, including 
online advertising , mobile and in -app payments, online medical claims,  and consumer privacy. The 
FTC has enforcement authority : up to  July 2018, it had brought some 60 enforcement actions for 
alleged unfair or deceptive data security practices. I n 2017, the FTC announced nine privacy and 
three data security cases. The FTC’s authority also extends to when broadband providers engage in 
anti-competitive, unfair, or deceptive acts or practices.  To date, no enforcement actions have been 
taken under thi s authority.  
4.273.   The Federal Communications Commission (FCC) regulates interstate and international 
communications by radio, television, wire, satellite and cable. The FCC’s authority is discussed in 
the Telecommunications section of this report (4.4.2).  
4.274.   Electronic c ontracts are governed  by the Electronic Signatures in Global and National 
Commerce Act of 2000 (the ESIGN Act), as well as by state laws  that meet the requirements in the 
ESIGN Act. Most state laws are based upon  a model law , the Uniform Electronic Transactions Act 
(UETA) , which  has been adopted  by 47 states, the District of Columbia, Puerto Rico and the U .S. 
Virgin Islands.229 
4.275.   The United States has  no overarching federal cybersecurity law. Protection of cybersecurity 
is regulated mainly by state laws and federal regulations, which provide industry -specific mandates 
with respe ct to data security. The Federal Government has, however, through its National Institute 
of Standards and Technology, developed a Cybersecurity Framework, which seeks to support th e 
development of better cybersecurity practices by both governmental and non -governmental actors.  
4.276.   Although not as popular as generic top -level domains such as .com and .org, the United 
States has a country code top -level domain (ccTLD), ".us". To be grante d the ccTLD  ".us", the 
registrant must be a U.S. citizen, a U.S. permanent resident or have its primary domicile in the 
United States  (if a natural person) ; or be incorporated in the United  States or have a bona fide 
presence in the country  (if an entity o r organization) . 
4.277.   Advertising on the Internet is subject to the same measures  as conventional advertising. In 
addition, t he CAN -SPAM Act contains restrictions on senders of commercial email messages that, if 
violated , may lead to civil or penal action. Misl eading online advertisements are subject to the same 
FTC regulations, enforcement procedures and penalties as conventional advertisements. There are 
no regulations prohibiting the advertisement  of spec ific goods and services online.  
4.278.   Providers of interactive computer services  are generally not liable for content  provided by 
third-party users . Section 230 of the Communications Decency Act of 1996 provides immunity from 
                                                
229 Kirchhoefer , Gregg ; Bond, P., Daniel ; Eisenberg , Ashley ; and Mitrani , Adine , e-commerce: 
United  States , August 2018. Kirkland & Ellis International LLP  online information. Viewed at: 
https://gettingthedealthrough.com/area/11/jurisdiction/23/e -commerce -2018-united -states/%20 -%20link -32. WT/TPR/S/ 382 • United States  
 
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  civil liability to providers and users of any interactive computer service that p ublish es information 
provided by third parties. If the interactive service provider has had  a substantive role in the creation 
or modification of content, it may be held liable  for civil infractions arising from the content . This Act 
does not address liabi lity arising from IP infringement.  
4.279.   Rules on taxation on sales online were recently changed by a Supreme Court ruling . Under 
rules applied since 1992, in general terms, if an online retailer maintained a physical presence in , or 
had a nexus (personnel, etc .) with in, a state that charges a sales tax on most purchases, then that 
online retailer was obliged to charge sales tax on any items sold to customers within the home state. 
In practice , that meant that most small businesses , which generally do  not have a  presence in 
several states , were not obliged to charge sales tax on sales to customers located in states other 
than their  own. In the South Dakota v. Wayfair Inc. case, the Supreme Court ruled that states may 
compel online retailers to charge sales tax re gardless of whether the retailer has a physical presence 
in the state .230 
                                                
230 Supreme Court of the United States, Syllabus , South Dakota v. Wayfair, Inc., Et Al. , Certiorari to the 
Supreme Court of South Dako ta, No. 17 –494. Argued 17 April 2018, decided 21 June 2018. Viewed at: 
https://www.supremecourt.gov/opinions/17pdf/17 -494_j4el.pdf . WT/TPR/S/ 382 • United States  
 
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  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports by HS sections and main chapters, 2012 -17 
(US$ million and %)  
Description  2012  2013  2014  2015  2016  2017  
Total exports  1,544,932  1,577,587  1,619,743  1,501,846  1,450,457  1,545,609    
(% of total exports)  
1 - Live animals; animal products  1.8 1.9 1.9 1.7 1.7 1.8  
02. Meat and edible meat offal  1.0 1.0 1.1 1.0 1.0 1.1  
03. Fish and crustaceans, molluscs and 
other aquatic invertebrates  0.3 0.3 0.3 0.3 0.3 0.3 
 
04. Dairy produce; birds' eggs; natural 
honey; edible products of animal origin  0.3 0.4 0.4 0.3 0.3 0.3 
2 - Vegetable products  4.6 4.4 4.6 4.3 4.7 4.4  
12. Oil seeds and oleaginous fruits; 
miscellaneous grains, seeds and fruit  1.9 1.7 1.8 1.6 1.9 1.7 
 
10. Cereals  1.3 1.3 1.4 1.3 1.3 1.2  
08. Edible fruit and nuts; peel of citrus 
fruit or melons  0.9 0.9 0.9 1.0 1.0 1.0 
3 - Animal or vegetable fats and oils; 
prepared edible fats  0.3 0.2 0.2 0.2 0.2 0.2 
4 - Prepared foodstuffs; beverages, spirits 
and vinegar; tobacco  2.6 2.8 2.8 3.0 3.0 2.8 
 
23. Residues and waste from the food 
industries  0.6 0.7 0.7 0.7 0.7 0.6 
 
21. Miscellaneous edible preparations  0.5 0.5 0.5 0.5 0.6 0.6  
22. Beverages, spirits and vinegar  0.4 0.4 0.5 0.5 0.5 0.5 
5 - Mineral products  9.5 10.1 10.3 7.6 7.0 9.6  
27. Mineral fuels, mineral oils and 
products of their distillation  8.9 9.4 9.6 6.9 6.5 9.0 
6 - Products of the chemical or allied 
industries  10.5 10.4 10.2 10.8 10.6 10.3 
 
30. Pharmaceutical products  2.6 2.5 2.7 3.1 3.2 2.9  
29. Organic chemicals  3.0 3.0 2.6 2.6 2.3 2.3  
38. Miscellaneous chemical products  1.6 1.7 1.7 1.7 1.7 1.8  
33. Essential oils and resinoids; 
perfumery, cosmetic or toilet 
preparations  0.7 0.7 0.7 0.8 0.8 0.8 
 
28. Inorganic chemicals; organic or 
inorganic compounds of precious 
metals  0.9 0.8 0.8 0.8 0.8 0.8 
7 - Plastics and articles thereof; rubber and 
articles thereof  4.8 4.8 4.8 4.9 4.9 4.9 
 
39. Plastics and articles thereof  3.8 3.9 3.9 4.0 4.0 4.0 
8 - Raw hides and skins, leather, furskins 
and articles thereof; travel goods, 
handbags; articles of animal gut  0.3 0.4 0.4 0.4 0.3 0.3 
9 - Wood and articles of wood; wood 
charcoal; cork and articles of cork  0.5 0.6 0.6 0.6 0.6 0.6 
10 - Pulp of wood or of other fibrous 
cellulosic material; paper and paperboard 
and articles thereof  2.0 2.0 1.9 1.9 1.9 1.9 
 
48. Paper and paperboard; articles of 
paper pulp, of paper or of paperboard  1.0 1.0 1.0 1.0 1.0 1.0 
 
47. Pulp of wood or of other fibrous 
cellulosic material; recovered paper  0.6 0.6 0.6 0.6 0.6 0.6 
11 - Textiles and textile articles  1.7 1.7 1.6 1.7 1.6 1.7  
52. Cotton  0.5 0.5 0.4 0.4 0.4 0.5  
61. Articles of apparel and clothing 
accessories, knitted or crocheted  0.2 0.2 0.2 0.2 0.2 0.2 
 
56. Wadding, felt and non -woven; 
special yarns  0.1 0.2 0.2 0.2 0.2 0.2 
12 - Footwear, headgear, umbrellas; 
prepared feathers and articles; artificial 
flowers  0.1 0.1 0.1 0.1 0.1 0.1 
13 - Articles of stone, plaster, cement, 
etc.; ceramic products; glass and 
glassware  0.7 0.7 0.7 0.8 0.8 0.8 
14 - Natural or cultured pearls, precious or 
semi-precious stones, precious metals  4.7 4.5 4.0 3.9 3.9 3.9 
15 - Base metals and articles of base metal  5.3 5.0 4.9 4.6 4.4 4.4  
73. Articles of iron or steel  1.4 1.4 1.4 1.3 1.2 1.2  
72. Iron and steel  1.5 1.2 1.1 1.0 0.9 1.0  
76. Aluminium and articles thereof  0.8 0.8 0.8 0.8 0.8 0.7  
74. Copper and articles thereof  0.6 0.6 0.5 0.5 0.4 0.5 WT/TPR/S/ 382 • United States  
 
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  Description  2012  2013  2014  2015  2016  2017  
16 - Machinery and mechanical appliances; 
electrical equipment; television image and 
sound recorders  24.4 24.0 24.2 25.0 24.7 24.4 
 
84. Nuclear reactors, boilers, machinery 
and mechanical appliances  13.9 13.5 13.6 13.7 13.1 13.1 
 
85. Electrical machinery and 
equipment; sound recorders and 
reproducers  10.5 10.5 10.6 11.3 11.5 11.3 
17 - Vehicles, aircraft, vessels and 
associated transport equipment  15,9 16.2 16.6 17.7 18.3 17.3 
 
87. Vehicles other than railway or 
tramway rolling -stock, parts and 
accessories  8.6 8.5 8.4 8.5 8.6 8.4 
 
88. Aircraft, spacecraft, and parts 
thereof  6.8 7.3 7.7 8.8 9.3 8.5 
18 - Optical, photographic, precision, 
medical or surgical instruments; clocks and 
watched; musical instruments  5.5 5.5 5.4 5.7 5.8 5.5 
 
90. Optical, photographic, 
cinematographic, measuring, precision, 
medical or surgical instruments and 
apparatus  5.4 5.3 5.2 5.6 5.7 5.4 
19 - Arms and ammunition  0.3 0.3 0.3 0.3 0.4 0.3 
20 - Miscellaneous manufactured articles  1.3 1.3 1.3 1.3 1.4 1.3  
94. Furniture; bedding, mattresses, 
mattress supports, cushions and similar 
stuffed furnishings  0.7 0.7 0.7 0.8 0.8 0.7 
21 - Works of art, collectors' pieces and 
antiques  0.5 0.5 0.6 0.7 0.8 0.8 
Other  2.6 2.7 2.7 2.8 2.8 2.7 
Source:  UNSD, Comtrade database.  WT/TPR/S/ 382 • United States  
 
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  Table A1. 2 Merchandise imports by HS sections and main HS chapters, 2012 –17 
(US$ million and %)  
Description  2012  2013  2014  2015  2016  2017  
Total 2,334,678  2,326,590  2,410,855  2,313,425  2,248,209  2,407,390    
(% of total imports)  
1 - Live animals; animal products  1.1 1.1 1.3 1.4 1.4 1.4  
03. Fish and crustaceans, molluscs and 
other aquatic invertebrates  0.6 0.6 0.7 0.7 0.7 0.7 
 
02. Meat and edible meat offal  0.2 0.3 0.3 0.4 0.4 0.3 
2 - Vegetable products  1.8 1.8 1.8 1.9 2.0 2.0  
08. Edible fruit and nuts; peel of citrus 
fruit or melons  0.5 0.5 0.6 0.7 0.7 0.8 
 
07. Edible vegetables and certain roots 
and tubers  0.3 0.4 0.4 0.4 0.5 0.4 
 
09. Coffee, tea, maté and spices  0.4 0.3 0.3 0.4 0.4 0.4 
3 - Animal or vegetable fats and oils; 
prepared edible fats  0.3 0.3 0.3 0.3 0.3 0.3 
4 - Prepared foodstuffs; beverages, spirits 
and vinegar; tobacco  2.4 2.4 2.4 2.6 2.8 2.7 
 
22. Beverages, spirits and vinegar  0.9 0.9 0.9 1.0 1.0 1.0  
20. Preparations of vegetables, fruit, 
nuts or other parts of plants  0.3 0.3 0.3 0.3 0.4 0.4 
5 - Mineral products  18.9 17.0 15.2 9.0 7.5 8.7  
27. Mineral fuels, mineral oils and 
products of their distillation  18.5 16.7 14.9 8.7 7.3 8.5 
6 - Products of the chemical or allied 
industries  7.6 7.6 7.8 8.5 8.8 8.3 
 
30. Pharmaceutical products  2.8 2.7 3.0 3.7 4.1 4.0  
29. Organic chemicals  2.3 2.3 2.3 2.2 2.2 1.9  
38. Miscellaneous chemical products  0.5 0.5 0.5 0.6 0.6 0.6  
33. Essential oils and resinoids; 
perfumery, cosmetic or toilet 
preparations  0.4 0.5 0.5 0.5 0.6 0.6 
 
28. Inorganic chemicals; organic or 
inorganic compounds of precious 
metals  0.7 0.7 0.6 0.6 0.5 0.5 
7 - Plastics and articles thereof; rubber 
and articles thereof  3.2 3.2 3.3 3.4 3.4 3.4 
 
39. Plastics and articles thereof  1.9 2.0 2.1 2.2 2.2 2.3  
40. Rubber and articles thereof  1.3 1.2 1.2 1.2 1.2 1.2 
8 - Raw hides and skins, leather, furskins 
and articles thereof; travel goods, 
handbags; articles of animal gut  0.6 0.6 0.6 0.7 0.6 0.6 
 
42. Articles of leather; travel goods, 
handbags; articles of animal gut  0.5 0.6 0.6 0.6 0.6 0.6 
9 - Wood and articles of wood; wood 
charcoal; cork and articles of cork  0.6 0.7 0.8 0.8 0.9 0.9 
10 - Pulp of wood or of other fibrous 
cellulosic material; paper and paperboard 
and articles thereof  1.0 1.1 1.0 1.1 1.1 1.0 
 
48. Paper and paperboard; articles of 
paper pulp, of paper or of paperboard  0.7 0.7 0.7 0.7 0.7 0.7 
11 - Textiles and textile articles  4.6 4.8 4.8 5.2 5.1 4.7  
61. Articles of apparel and clothing 
accessories, knitted or crocheted  1.8 1.9 1.9 2.1 2.0 1.9 
 
62. Articles of apparel and clothing 
accessories, not knitted or crocheted  1.6 1.7 1.6 1.8 1.7 1.6 
 
63. Other made up textile articles  0.5 0.6 0.6 0.6 0.7 0.6 
12 - Footwear, headgear, umbrellas; 
prepared feathers and articles; artificial 
flowers  1.3 1.3 1.3 1.5 1.4 1.3 
 
64. Footwear, gaiters and the like; 
parts of such articles  1.1 1.1 1.1 1.2 1.2 1.1 
13 - Articles of stone, plaster, cement, 
etc.; ceramic products; glass and 
glassware  0.8 0.8 0.9 1.0 1.0 1.0 
 
68. Articles of stone, plaster, cement, 
asbestos, mica or similar materials  0.3 0.3 0.3 0.3 0.3 0.3 
 
70. Glass and glassware  0.3 0.3 0.3 0.3 0.3 0.3  
69. Ceramic products  0.2 0.3 0.3 0.3 0.3 0.3 
14 - Natural or cultured pearls, precious or 
semi-precious stones, precious metals  2.7 2.8 2.7 2.5 2.9 2.4 
15 - Base metals and articles of base 
metal  5.3 5.1 5.5 5.3 4.9 5.5 
 
73. Articles of iron or steel  1.7 1.6 1.6 1.7 1.5 1.6  
72. Iron and steel  1.3 1.1 1.5 1.2 1.0 1.2  
76. Aluminium and articles thereof  0.7 0.7 0.7 0.8 0.8 1.0  
83. Miscellaneous articles of base metal  0.4 0.4 0.4 0.5 0.5 0.5 WT/TPR/S/ 382 • United States  
 
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  Description  2012  2013  2014  2015  2016  2017  
16 - Machinery and mechanical 
appliances; electrical equipment; 
television image and sound recorders  26.2 26.4 27.0 28.7 29.0 29.3 
 
85. Electrical machinery and 
equipment; sound recorders and 
reproducers  12.7 13.0 13.3 14.4 14.9 14.8 
 
84. Nuclear reactors, boilers, 
machinery and mechanical appliances  13.5 13.4 13.7 14.3 14.0 14.5 
17 - Vehicles, aircraft, vessels and 
associated transport equipment  11.7 12.3 12.6 14.0 14.2 13.7 
 
87. Vehicles other than railway or 
tramway rolling -stock, parts and 
accessories  10.5 10.9 11.0 12.3 12.7 12.2 
 
88. Aircraft, spacecraft, and parts 
thereof  1.0 1.3 1.4 1.5 1.4 1.3 
18 - Optical, photographic, precision, 
medical or surgical  instruments; clocks 
and watched; musical instruments  3.3 3.4 3.4 3.7 3.9 3.8 
 
90. Optical, photographic, 
cinematographic, measuring, precision, 
medical or surgical instruments and 
apparatus  3.0 3.1 3.2 3.4 3.6 3.6 
19 - Arms and ammunition  0.1 0.2 0.1 0.1 0.2 0.1 
20 - Miscellaneous manufactured articles  3.5 3.6 3.8 4.3 4.5 4.4  
94. Furniture; bedding, mattresses, 
mattress supports, cushions and 
similar stuffed furnishings  2.0 2.2 2.3 2.6 2.8 2.8 
 
95. Toys, games and sports requisites; 
parts and accessories thereof  1.2 1.2 1.2 1.4 1.4 1.4 
21 - Works of art, collectors' pieces and 
antiques  0.3 0.4 0.4 0.5 0.4 0.4 
Other  2.9 3.0 3.1 3.7 3.8 3.8 
Source:  UNSD, Comtrade database.  WT/TPR/S/ 382 • United States  
 
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  Table A1. 3 Merchandise exports by trading partner, 2012 -17 
(US$ million and %)  
Description  2012  2013  2014  2015  2016  2017  
Total exports  1,544,932  1,577,587  1,619,743  1,501,846  1,450,457  1,545,609   
(% of exports)  
Americas  44.7 45.0 45.4 44.4 43.5 43.7 
    Canada  18.9 19.1 19.3 18.7 18.4 18.3 
    Mexico  14.0 14.3 14.8 15.7 15.8 15.7 
    Brazil  2.8 2.8 2.6 2.1 2.1 2.4 
    Chile 1.2 1.1 1.0 1.0 0.9 0.9 
    Colombia  1.1 1.2 1.2 1.1 0.9 0.9 
    Argentina  0.7 0.7 0.7 0.6 0.6 0.6 
    Peru 0.6 0.6 0.6 0.6 0.5 0.6 
    Dominican Republic  0.5 0.5 0.5 0.5 0.5 0.5 
    Guatemala  0.4 0.4 0.4 0.4 0.4 0.4 
    Panama  0.6 0.7 0.6 0.5 0.4 0.4 
    Costa Rica  0.5 0.5 0.4 0.4 0.4 0.4 
Europe  20.3 19.7 19.6 20.7 21.3 20.8 
  EU-28 17.6 16.9 17.2 18.3 18.8 18.4 
    United Kingdom  3.6 3.0 3.3 3.7 3.8 3.6 
    Germany  3.1 3.0 3.0 3.3 3.4 3.5 
    Netherlands  2.6 2.7 2.7 2.7 2.7 2.7 
    France  2.1 2.1 2.0 2.1 2.2 2.2 
    Belgium  1.9 2.0 2.1 2.3 2.2 1.9 
  EFTA 2.0 2.0 1.7 1.7 1.9 1.8 
    Switzerland  1.7 1.7 1.4 1.5 1.6 1.4 
    Norway  0.2 0.3 0.3 0.2 0.3 0.4 
  Other Europe  0.8 0.8 0.7 0.6 0.7 0.6 
    Turkey  0.8 0.8 0.7 0.6 0.6 0.6 
Commonwealth of 
Independent States (CIS)  1.0 1.0 1.0 0.6 0.7 0.7 
    Russian Federation  0.7 0.7 0.7 0.5 0.4 0.5 
    Ukraine  0.1 0.1 0.1 0.1 0.1 0.1 
Africa  2.1 2.2 2.3 1.8 1.5 1.4 
    South Africa  0.5 0.5 0.4 0.4 0.3 0.3 
    Egypt  0.4 0.3 0.4 0.3 0.2 0.3 
    Nigeria  0.3 0.4 0.4 0.2 0.1 0.1 
Middle East  4.5 4.6 4.6 4.8 4.7 4.2 
    United Arab Emirates  1.5 1.5 1.4 1.5 1.5 1.3 
    Saudi Arabia, Kingdom of  1.2 1.2 1.2 1.3 1.2 1.1 
    Israel  0.9 0.9 0.9 0.9 0.9 0.8 
Asia 27.3 27.4 27.1 27.6 28.2 29.2 
  China  7.2 7.7 7.6 7.7 8.0 8.4 
  Japan  4.5 4.1 4.1 4.2 4.4 4.4 
  Other Asia  15.6 15.5 15.3 15.7 15.9 16.4 
    Korea, Republic of  2.7 2.6 2.7 2.9 2.9 3.1 
    Hong Kong, China  2.4 2.7 2.5 2.5 2.4 2.6 
    Singapore  2.0 1.9 1.9 1.9 1.8 1.9 
    Chinese Taipei  1.6 1.6 1.6 1.7 1.8 1.7 
    India 1.4 1.4 1.3 1.4 1.5 1.7 
    Australia  2.0 1.7 1.6 1.7 1.5 1.6 
    Malaysia  0.8 0.8 0.8 0.8 0.8 0.8 
    Thailand  0.7 0.7 0.7 0.7 0.7 0.7 
Other  0.0 0.0 0.0 0.0 0.0 0.0 
Source:  UNSD, Comtrade database.  WT/TPR/S/ 382 • United States  
 
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  Table A1. 4 Merchandise imports by trading partner, 2012 –17 
(US$ million and %)  
Description  2012  2013  2014  2015  2016  2017  
Total imports  2,334,678  2,326,590  2,410,855  2,313,425  2,248,209  2,407,390   
(% of imports)  
Americas  33.6 33.7 33.5 31.2 30.8 30.9 
    Mexico  12.0 12.2 12.3 12.9 13.2 13.2 
    Canada  14.0 14.5 14.7 13.1 12.6 12.7 
    Brazil  1.4 1.2 1.3 1.2 1.2 1.3 
    Colombia  1.1 1.0 0.8 0.6 0.6 0.6 
    Venezuela, Bolivarian  
    Republic of  1.7 1.4 1.3 0.7 0.5 0.5 
    Chile 0.4 0.5 0.4 0.4 0.4 0.5 
    Peru 0.3 0.4 0.3 0.2 0.3 0.3 
    Ecuador  0.4 0.5 0.5 0.3 0.3 0.3 
    Argentina  0.2 0.2 0.2 0.2 0.2 0.2 
    Dominican Republic  0.2 0.2 0.2 0.2 0.2 0.2 
    Costa Rica  0.5 0.5 0.4 0.2 0.2 0.2 
    Honduras  0.2 0.2 0.2 0.2 0.2 0.2 
    Guatemala  0.2 0.2 0.2 0.2 0.2 0.2 
Europe  18.5 18.8 19.6 20.9 21.2 20.7 
  EU-28 16.7 17.0 17.7 18.9 18.9 18.5 
    Germany  4.8 5.0 5.2 5.5 5.2 5.0 
    United Kingdom  2.4 2.3 2.3 2.5 2.5 2.2 
    Italy 1.6 1.7 1.8 2.0 2.1 2.1 
    France  1.8 2.0 2.0 2.1 2.1 2.1 
    Ireland  1.4 1.4 1.4 1.7 2.0 2.0 
  EFTA 1.4 1.5 1.6 1.6 1.9 1.8 
    Switzerland  1.1 1.2 1.3 1.4 1.6 1.5 
    Norway  0.3 0.2 0.2 0.2 0.2 0.2 
  Other Europe  0.3 0.3 0.4 0.4 0.4 0.4 
    Turkey  0.3 0.3 0.3 0.4 0.4 0.4 
Commonwealth of 
Independent States (CIS)  1.5 1.4 1.2 0.9 0.8 0.8 
    Russian Federation  1.3 1.2 1.0 0.7 0.7 0.7 
Africa  2.9 2.2 1.5 1.1 1.2 1.4 
  South Africa  0.4 0.4 0.4 0.3 0.3 0.3 
  Nigeria  0.8 0.5 0.2 0.1 0.2 0.3 
  Algeria  0.4 0.2 0.2 0.2 0.2 0.2 
Middle East  5.1 4.7 4.4 2.8 2.6 2.7 
  Israel  1.0 1.0 1.0 1.1 1.0 0.9 
  Saudi Arabia, Kingdom of  2.5 2.3 2.0 1.0 0.8 0.8 
  Iraq 0.8 0.6 0.6 0.2 0.3 0.5 
  United Arab Emirates  0.1 0.1 0.1 0.1 0.2 0.2 
Asia 38.4 39.2 39.8 43.0 43.4 43.4 
  China  19.0 19.7 20.2 21.8 21.4 21.9 
  Japan  6.4 6.1 5.7 5.8 6.0 5.8 
Other Asia  12.9 13.3 14.0 15.4 15.9 15.7 
    Korea, Republic of  2.6 2.8 3.0 3.2 3.2 3.1 
    India 1.8 1.9 1.9 2.0 2.1 2.1 
    Viet Nam  0.9 1.1 1.3 1.7 1.9 2.0 
    Chinese Taipei  1.7 1.7 1.7 1.8 1.8 1.8 
    Malaysia  1.1 1.2 1.3 1.5 1.7 1.6 
    Thailand  1.2 1.2 1.2 1.3 1.4 1.3 
    Indonesia  0.8 0.8 0.8 0.9 0.9 0.9 
    Singapore  0.9 0.8 0.7 0.8 0.8 0.8 
    Philippines  0.4 0.4 0.4 0.5 0.5 0.5 
Other  0.0 0.0 0.0 0.0 0.0 0.0 
Source:  UNSD, Comtrade database.  WT/TPR/S/ 382 • United States  
 
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  Table A2. 1 Selected U.S. notifications to the WTO, August 2016 -July 2018  
WTO Agreement  Description  Document symbol  Date  
Agreement on Agriculture  
Articles 10 and 18.2 
(ES:1 and ES:2)  Export subsidies 
commitments: budgetary 
outlays and quantity 
reduction commitments; 
and notification of total 
exports  G/AG/N/USA/118  
G/AG/N/USA/112  
 29/11/2017  
30/03/2017  
Article 16.2 NF:1 (1) -(4) Net-Food Importing 
Developing Country 
(NFIDC) Decision: food 
and other assistance; and 
other specific actions  G/AG/N/USA/119  
G/AG/N/USA/116  
G/AG/N/USA/113  
 25/01/2018  
04/10/2017  
30/03/2017  
Article 18.2 (DS:1)  Domestic support  G/AG/N/USA/121  
G/AG/N/USA/80/Rev.2/Corr.1  
G/AG/N/USA/109  
G/AG/N/USA/108/Rev.1  
G/AG/N/USA/100/Rev.1  
G/AG/N/USA/93/Rev.1  
G/AG/N/USA/89/Rev.2  
G/AG/N/USA/80/Rev.2  
G/AG/N/USA/77/Rev.2  01/05/2018  
06/03/2017  
19/01/2017  
03/02/2017  
03/02/2017  
31/01/2017  
31/01/2017  
27/01/2017  
12/01/2017  
Article 18.3 (DS:2)  Domestic support  G/AG/N/USA/110  19/01/2017  
Article 18.2 (MA:1)  Administration of tariff and 
other quota commitments  G/AG/N/USA/114/Add.1  
G/AG/N/USA/117  04/09/2017  
04/10/2017  
Articles 5.7 and 18.2 
(MA:4)  Special safeguard 
provisions  G/AG/N/USA/111  02/03/2017  
Article 18.2 (MA:5)  Tariff rate quotas  G/AG/N/USA/120  
G/AG/N/USA/115  
G/AG/N/USA/102/Corr.1  24/04/2018  
30/03/2017  
30/03/2017  
Agreement on the Implementation of Article VI of the GATT 1994 (Anti -dumping Agreement)  
Article 16.4 – semi 
annual  Anti-dumping actions 
(taken within the 
preceding six months)  G/ADP/N/286/USA  
G/ADP/N/294/USA  
G/ADP/N/300/USA  
G/ADP/N/308/USA  07/09/2016  
09/03/2017  
06/09/2017  
21/03/2018  
Article 16.4 – ad hoc Anti-dumping actions 
(preliminary and final)  G/ADP/N/315  
G/ADP/N/313  
G/ADP/N/312  
G/ADP/N/311  
G/ADP/N/310  
G/ADP/N/309  
G/ADP/N/307  
G/ADP/N/306  
G/ADP/N/305  
G/ADP/N/304  
G/ADP/N/303  
G/ADP/N/302  
G/ADP/N/301  
G/ADP/N/299  
G/ADP/N/298  
G/ADP/N/297  
G/ADP/N/296  
G/ADP/N/295  
G/ADP/N/293  
G/ADP/N/292  
G/ADP/N/291  
G/ADP/N/290  29/06/2018  
30/05/2018  
12/04/2018  
26/03/2018  
22/02/2018  
24/01/2018  
20/12/2017  
14/12/2017  
19/10/2017  
20/09/2017  
30/08/2017  
18/07/2017  
28/06/2017  
31/05/2017  
20/04/2017  
23/03/2017  
24/02/2017  
30/01/2017  
13/12/2016  
29/11/2016  
18/10/2016  
22/09/2016  
Article 18.5  Laws and regulations, and 
changes thereto, including 
changes in the 
administration of such 
laws  G/ADP/N/1/USA/1/Suppl.25/corr.1  
G/ADP/N/1/USA/1/Suppl.24/corr.1  
G/ADP/N/1/USA/1/Suppl.25  
G/ADP/N/1/USA/1/Suppl.24  13/09/2016  
 
13/09/2016  
 
26/08/2016  
26/08/2016  WT/TPR/S/ 382 • United States  
 
- 226 - 
 
  WTO Agreement  Description  Document symbol  Date  
GATT 1994  
Article XVII:4(a) and 
Paragraph 1 of the 
Understanding on the 
Interpretation of 
Article  XVII State -trading activities  G/STR/N/17/USA/Corr.1  
G/STR/N/17/USA  
G/STR/N/16/USA/Rev.2  
G/STR/N/15/USA/Rev.1  
G/STR/N/14/USA/Rev.1  
G/STR/N/13/USA/Rev.1  
G/STR/N/12/USA/Rev.1  
G/STR/N/11/USA/Rev.1  
G/STR/N/16/USA/Rev.1  02/07/2018  
19/06/2018  
11/10/2017  
11/10/2017  
11/10/2017  
11/10/2017  
11/10/2017  
11/10/2017  
13/04/2017  
Paragraph 3(c)  Notification and statistical 
data WT/L/1020  
WT/L/948  14/11/2017  
05/01/2017  
Agreement on Government Procurement  
Appendix I  Procurement thresholds  GPA/THR/USA/1  20/12/2017  
Article XIX:5  Statistical submissions  GPA/108/Add.9  
GPA/114/Add.8  
GPA/137/Add.8  13/09/2016  
21/11/2017  
28/11/2017  
Agreement on Import Licensing  
Article 1.4(a)  Licensing procedures  G/LIC/N/1/USA/7  
 20/03/2018  
 
Article 7.3  Replies to the 
questionnaire  G/LIC/N/3/USA/13  
G/LIC/N/3/USA/14  
 08/11/2016  
22/01/2018  
Article 8.2(b)  Changes in 
Laws/regulations and 
administrative 
arrangements  G/LIC/N/1/USA/7  20/03/2017  
 
Decision on Notification Procedures for Quantitative Restrictions  
G/L/59/Rev.1  Notification of QRs  G/MA/QR/N/USA/3  07/10/2016  
Agreement on Rules of Origin  
Paragraph 4 of Annex II  Preferential rules of origin  G/RO/LDC/N/USA/1  
G/RO/LDC/N/USA/2  
G/RO/LDC/N/USA/3  11/07/2017  
11/07/2017  
11/07/2017  
Agreement on Subsidies and Countervailing Measures  
Article 25.1 and GATT 
1994 Article  XVI:1  Subsidies  G/SCM/N/315/USA  14/03/2018  
Article 25.11 – ad hoc  Countervailing duty 
actions (preliminary and 
final)  G/SCM/N/336  
G/SCM/N/335  
G/SCM/N/333  
G/SCM/N/332  
G/SCM/N/331  
G/SCM/N/330  
G/SCM/N/329/rev.1  
G/SCM/N/327  
G/SCM/N/326  
G/SCM/N/325  
G/SCM/N/324  
G/SCM/N/323  
G/SCM/N/322  
G/SCM/N/320  
G/SCM/N/319  
G/SCM/N/318  
G/SCM/N/317  
G/SCM/N/316  
G/SCM/N/314  
G/SCM/N/312  
G/SCM/N/311  
G/SCM/N/310  
G/SCM/N/309  
G/SCM/N/308  24/07/2018  
19/06/2018  
25/05/2018  
12/04/2018  
16/03/2018  
22/02/2018  
05/02/2018  
15/12/2017  
09/11/2017  
12/10/2017  
14/09/2017  
04/08/2017  
13/07/2017  
13/06/2017  
12/05/2017  
13/04/2017  
14/03/2017  
21/02/2017  
12/01/2017  
13/12/2016  
11/11/2016  
12/10/2016  
27/09/2016  
25/08/2016  
Article 25.11 – 
semi-annual  Countervailing duty 
actions (taken within the 
preceding six months)  G/SCM/N/328/USA  
G/SCM/N/305/USA/corr.1  
G/SCM/N/321/USA  
G/SCM/N/313/USA  
G/SCM/N/305/USA  22/02/2018  
10/11/2017  
03/10/2017  
14/03/2018  
26/09/2016  WT/TPR/S/ 382 • United States  
 
- 227 - 
 
  WTO Agreement  Description  Document symbol  Date  
Article 32.6  Laws/regulations and 
changes thereto, including 
changes in administration 
of such laws  G/SCM/N/1/USA/1/Suppl.24/Corr1  
G/SCM/N/1/USA/1/Suppl.24  13/09/2016  
 
26/08/2016  
Agreement on Sanitary and Phytosanitary Measures  
Article 7 Annex  B Sanitary and 
phytosanitary regulations  Some 200 notifications (series G/SPS/N/USA/)  138 
new notifications G/SPS/N/USA/2876 -
G/SPS/N/USA/3014  
Agreement on Technical Barriers to Trade  
Article 2.9  Technical regulations  Several notifications (series G/TBT/N/USA/)  
Articles 2.9 and 5.6  Technical regulations and 
conformity assessment 
procedures  G/TBT/N/USA/1143/Add.2  
G/TBT/N/USA/1209  
G/TBT/N/USA/1267  
G/TBT/N/USA/1273  
G/TBT/N/USA/1273/Add.1  
G/TBT/N/USA/1143/Add.3  
G/TBT/N/USA/1316  
G/TBT/N/USA/1205/Rev.1  
G/TBT/N/USA/1326  
G/TBT/N/USA/1337  
G/TBT/N/USA/1273/Add.3  
G/TBT/N/USA/1364  
G/TBT/N/USA/1364/Add.1  
G/TBT/N/USA/1364/Corr.1  
G/TBT/N/USA/1367  
G/TBT/N/USA/1367/Add.1  
G/TBT/N/USA/1369  
G/TBT/N/USA/1375  
G/TBT/N/USA/1379  11/08/2016  
26/10/2016  
31/01/2017  
06/02/2017  
13/11/2017  
26/09/2017  
10/11/2017  
10/01/2018  
09/01/2018  
05/02/2018  
12/02/2018  
07/05/2018  
28/05/2018  
26/06/2018  
17/05/2018  
10/07/2018  
23/05/2018  
27/06/2018  
16/07/2018  
Article 3.2  Technical regulations 
(local government)  Many notifications received, see: 
http://tbtims.wto.org/  
Source:  WTO Secretariat.  WT/TPR/S/ 382 • United States  
 
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  Table A2. 2 United States as a complainant in  WTO  disputes 2016 -July 20 18 
 
Subject  DS No./WTO  
document  series  Respondent  Request  
date  Status (as at 
26 July 2018)  
Turkey  - Additional  Duties  
on Certain  Products  from 
the United  States  561 
WT/DS561/  Turkey  16 July 2018  Consultations  
Mexico  - Additional  Duties  
on Certain  Products  from 
the United  States  560 
WT/DS560/  Mexico  16 July 2018  Consultations  
European  Union  - 
Additional  Duties  on 
Certain  Products  from the 
United  States  559 
WT/DS559/  European Union  16 July 2018  Consultations  
China  - Additional  Duties  
on Certain  Products  from 
the United  States  558 
WT/DS558/  China  16 July 2018  Consultations  
Canada  - Additional  Duties  
on Certain  Products  from 
the United  States  557 
WT/DS557/  Canada  16 July 2018  Consultations  
China  - Certain  Measures  
Concerning  the Protection  
of Intellectual  Property  
Rights  542 
WT/DS542/  China  23 March 
2018 Consultations  
India - Export  Related  
Measures  541 
WT/DS541/  India 14 March 
2018 Panel composed 
on 23 July 2018  
(WT/DS541/5)  
Canada  - Measures  
Governing  the Sale of Wine 
in Grocery  Stores  (Second  
Complaint)  531 
WT/DS531/  Canada  28 September 
2017 Panel 
established, but 
not yet 
composed  
Canada  - Measures  
Governing  the Sale of Wine 
in Grocery  Stores  520 
WT/DS520/  Canada  18 January 
2017 Consultations  
China  - Subsidies  to 
Producers  of Primary  
Aluminum  519 
WT/DS519/  China  12 January 
2017 Consultations  
China  - Tariff Rate Quotas  
for Certain  Agricultural  
Products  517 
WT/DS517/  China  15 December 
2016 Panel composed 
on 12 February 
2018 
China  - Domestic  Support  
for Agricultural  Producers  511 
WT/DS511/  China  13 September 
2016 Panel composed 
on 24 June 2017  
China  - Export  Duties  on 
Certain  Raw Materials  508 
WT/DS508/  China  13 July 2016  Panel 
established, but 
not yet 
composed  
Source:  WTO Secretariat.  WT/TPR/S/ 382 • United States  
 
- 229 - 
 
  Table A2. 3 United States as a respondent in WTO  disputes 2016 -July 2018  
Subject  DS No. WTO  
document  series  Complainant(s)  Request  date  Status (as at 
26 July 2018)  
United  States  - Certain  Measures  
on Steel and Aluminium  Products  556 
WT/DS556/  Switzerland  9 July 2018  Consultations  
United  States  - Certain  Measures  
on Steel and Aluminium  Products  554 
WT/DS554/  Russia  29 June 2018  Consultations  
United  States  - Certain  Measures  
on Steel and Aluminium  Products  552 
WT/DS552/  Norway  12 June 2018  Consultations  
United  States  - Certain  Measures  
on Steel and Aluminium  Products  551 
WT/DS551/  Mexico  5 June 2018  Consultations  
United  States  - Certain  Measures  
on Steel and Aluminium  Products  550 
WT/DS550/  Canada  1 June 2018  Consultations  
United  States  - Certain  Measures  
on Steel and Aluminium  Products  548 
WT/DS548/  European Union  1 June 2018  Consultations  
United  States  - Certain  Measures  
on Steel and Aluminium  Products  547 
WT/DS547/  India 18 May 2018  Consultations  
United  States  - Safeguard  
Measure  on Imports  of Large  
Residential  Washers  546 
WT/DS546/  Korea  14 May 2018  Consultations  
United  States  - Safeguard  
Measure  on Imports  of Crystalline  
Silicon  Photovoltaic  Products  545 
WT/DS545/6  Korea  14 May 2018  Consultations  
United  States  - Certain  Measures  
on Steel and Aluminium  Products  544 
WT/DS544/  China  5 April 2018  Consultations  
United  States  - Tariff Measures  
on Certain  Goods  from China  543 
WT/DS543/  China  4 April 2018  Consultations  
United  States  - Certain  Measures  
Concerning  Pangasius  Seafood  
Products  from Viet Nam 540 
WT/DS540/  Viet Nam  22 February 
2018 Consultations  
United  States  - Anti-Dumping  and 
Countervailing  Duties  on Certain  
Products  and the Use of Facts 
Available  539 
WT/DS539/  Korea  14 February 
2018 Panel 
established, but 
not yet 
composed  
United  States  - Anti-Dumping  
Measures  on Fish Fillets  from Viet 
Nam 536 
WT/DS536/  Viet Nam  8 January 
2018 Panel 
established, but 
not yet 
composed  
United  States  - Certain  Systemic  
Trade  Remedies  Measures  535 
WT/DS535/  Canada  20 December 
2017 Consultations  
United  States  - Anti-Dumping  
Measures  Applying  Differential  
Pricing  Methodology  to Softwood  
Lumber  from Canada  534 
WT/DS534/  Canada  28 November 
2017 Panel composed 
on 22 May 2018  
United  States  - Countervailing  
Measures  on Softwood  Lumber  
from Canada  533 
WT/DS533/  Canada  28 November 
2017 Panel composed 
on 6 July 2018  
United  States  - Countervailing  
Measures  on Certain  Pipe and 
Tube Products  from Turkey  523 
WT/DS523/  Turkey  8 March 2017  Panel composed 
on 14 
September 
2017 
United  States  - Measures  Related  
to Price Comparison  
Methodologies  515 
WT/DS515/  China  12 December 
2016 Consultations  
United  States  - Countervailing  
Measures  on Cold- and Hot-Rolled  
Steel Flat Products  from Brazil  514 
WT/DS514/  Brazil  11 November 
2016 Consultations  
United  States  - Certain  Measures  
Relating  to the Renewable  Energy  
Sector  510 
WT/DS510/  India 9 September 
2016 Panel composed 
on 24 April 2018  
Source:  WTO Secretariat.  WT/TPR/S/ 382 • United States  
 
- 230 - 
 
  Table A3. 1 Analysis of United States MFN tariff, 2018  
Description  No. of 
lines  Average  
(%) Range  
(%) Coefficient 
of 
variation  
(CV) Final 
bound  
averagea 
(%) 
Total  10,878  4.8 0 - 439.9  2.8 4.8 
HS 01 -24 1,928  8.4 0 - 439.9  3.5 8.6 
HS 25 -97 8,950  4.1 0 - 57.1 1.3 4.0 
By WTO category       
WTO Agriculture  1,707  9.4 0 - 439.9  3.3 9.4 
 - Animals and products thereof  162 3.0 0 - 26.4 1.8 3.0 
 - Dairy products  167 30.1 0 - 354.8  1.5 30.1 
 - Fruit, vegetables and plants  532 5.4 0 - 131.8  2.1 5.5 
 - Coffee and tea  82 8.0 0 - 27.9 0.8 8.0 
 - Cereals and preparations  190 9.5 0 - 246.6  2.3 9.4 
 - Oil seeds, fats and oils and their Products  107 7.0 0 - 163.8  3.4 7.0 
 - Sugars and confectionary  53 9.4 0 - 30 0.9 9.4 
 - Beverages, spirits and tobacco  152 22.6 0 - 439.9  3.6 23.0 
 - Cotton  16 5.9 0 - 34.8 1.6 4.7 
 - Other agricultural products n.e.s.  246 1.6 0 - 41.2 2.5 1.7 
WTO Non -agriculture (incl. petroleum)  9,171  4.0 0 - 57.1 1.4 3.9 
 - WTO Non -agriculture (excl. petroleum)  9,139  4.0 0 - 57.1 1.4 3.9 
 - - Fish and fishery products  369 1.4 0 - 35 2.5 1.5 
 - - Minerals and metals  1,567  2.5 0 - 38 1.6 2.5 
 - - Chemicals and photographic supplies  1,941  3.7 0 - 6.5 0.7 3.7 
 - - Wood, pulp, paper and furniture  579 1.1 0 - 16 2.4 1.0 
 - - Textiles  1,098  7.9 0 - 38.9 0.7 7.8 
 - - Clothing  647 11.3 0 - 32 0.7 11.5 
 - - Leather, rubber, footwear and travel 
goods  421 7.5 0 - 57.1 1.5 7.3 
 - - Non-electric machinery  820 1.3 0 - 9.9 1.4 1.3 
 - - Electric machinery  543 1.8 0 - 15 1.2 1.8 
 - - Transport equipment  261 2.4 0 - 25 1.9 2.5 
 - - Non-agriculture articles n.e.s.  893 2.8 0 - 42.7 1.3 2.8 
 - Petroleum  32 2.0 0.03 - 10.5 1.5 2.1 
By ISIC sectorb      
Agriculture and fisheries  598 5.8 0 - 439.9  6.1 5.9 
Mining  115 0.4 0 - 10.5 3.1 0.4 
Manufacturing  10,164  4.8 0 - 354.8  2.3 4.8 
By HS section       
  01 Live animals & products  605 9.4 0 - 354.8  2.9 9.9 
  02 Vegetable products  563 3.9 0 - 163.8  2.9 3.9 
  03 Fats & oils  69 3.8 0 - 19.5 1.3 3.8 
  04 Prepared food etc.  691 11.7 0 - 439.9  3.5 11.7 
  05 Minerals  204 0.6 0 - 13.7 2.8 0.6 
  06 Chemical & products  1,804  3.5 0 - 15.8 0.8 3.5 
  07 Plastics & rubber  376 3.7 0 - 14 0.7 3.7 
  08 Hides & skins  231 4.9 0 - 20 1.1 4.3 
  09 Wood & articles  273 2.4 0 - 18 1.4 2.4 
  10 Pulp, paper etc.  275 0.0 0 - 0 n.a. 0.0 
  11 Textile & articles  1,674  9.0 0 - 34.8 0.8 9.0 
  12 Footwear, headgear  197 13.4 0 - 57.1 1.1 13.3 
  13 Articles of stone  317 5.5 0 - 38 1.1 5.2 
  14 Precious stones, etc.  105 3.0 0 - 13.5 1.1 3.1 
  15 Base metals & products  988 1.9 0 - 20.5 1.4 1.9 
  16 Machinery  1,383  1.5 0 - 15 1.4 1.5 
  17 Transport equipment  272 2.3 0 - 25 1.9 2.4 
  18 Precision equipment  518 2.5 0 - 27.7 1.3 2.5 
  19 Arms and ammunition  33 2.0 0 - 13.6 1.4 2.0 
  20 Miscellaneous manufactures  293 3.6 0 - 42.7 1.3 3.6 
  21 Works of art, etc.  7 0.0 0 - 0 n.a. 0.0 
By stage of processing       
First stage of processing  1,122  3.9 0 - 439.9  6.7 4.0 
Semi-processed products  3,536  4.2 0 - 27.5 1.0 4.2 
Fully-processed products  6,220  5.4 0 - 354.8  2.5 5.3 
n.a. Not applicable.  
a Bound rates are provided in HS2012 classification and applied rates in HS2017; therefore , there is a 
difference between the number of lines included in the calculation. In some circumstances, a higher 
applied MFN tariff average than the bound average is due to the change in nomenclature.  
b ISIC (Rev.2) classification, excluding electricity (1 line). 
Source:  WTO Secretariat estimates, based on data provided by the authorities.  WT/TPR/S/ 382 • United States  
 
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  Table A3. 2 Prohibitions, restrictions or other special requirements  
Product  Prohibition, restriction, or requirement  
Art materials  Conform to the provisions of the Labeling of Hazardous Art Materials Act  
Bicycles and bicycle helmets  Bicycles to meet regulations issued under the Federal Hazardous Substances Act and 
helmets must meet CPSC's Safety Standard  
Biological drugs  Domestic as  well as foreign manufacturers of such products must obtain a U.S. licence 
for both the manufacturing establishment and for the product intended to be produced 
or imported  
Biological materials and vectors  Prohibited unless they have been propagated or prepared at an establishment with a 
U.S. licence for such manufacturing issued by the Secretary of the Department of Health 
and Human Services  
Cheese, milk, and dairy products  Subject to requirements of the Food and Drug Administration and the Department of 
Agriculture  
Cigarette lighters and multi -
purpose lighters  Compliance with the child-resistant safety standard  
Commercial and industrial 
equipment  Energy performance standards to be met  
Counterfeit articles  Articles bearing facsimiles or replicas of coins or securities of the United States or of 
any foreign country cannot be imported  
Dog or cat fur  The importation, exportation, transportation, distribution or sale of any product that 
consists of any dog fur, cat fur, or both, is prohibited  
Fireworks  Labelling requirements and technical specifications to be met  
Flammable fabrics  Conform to applicable flammability standard under the Flammable Fabrics Act  
Foods, cosmetics, etc.  Prohibits the importation of articles that are adulterated or misbranded and products 
that are defective, unsafe, filthy, or produced under unsanitary conditions  
Foods, drugs, cosmetics, and 
medical devices  Subject to the requirements of the Public Health Security and Bio -Terrorism 
Preparedness and Response Act of 2002  
Fruits, vegetables, and nuts  Import requirements relating to grade, size, quality, and maturity  
Fur Must be tagged, labelled, or otherwise clearly marked with specific information  
Gold and silver  Articles made of gold or alloys thereof are prohibited from importation into the United 
States if the gold content is one half carat divergence below the indicated fineness  
Hazardous substances  Substances must be shipped to the United States in packages suitable for household 
use 
Household appliances  Energy standards to be met, and labelled to indicate expected energy consumption or 
efficiency  
Insects in a live state that are 
injurious to cultivated crops , and 
the eggs, pupae, or larvae of 
such insects  Prohibited from importation, except for scientific purpo ses, under regulations prescribed 
by the Secretary of Agriculture  
Lead in paint  Banned if they contain more than 0.06% lead by weight of the dried plant film  
Livestock and animals  Inspection and quarantine requirements of the Animal and Plant Health Inspection 
Service (APHIS)  
Matches, fireworks, knives  Certain matches, fireworks, and knives are prohibited  
Meat, poultry, egg products, and 
(since 1 March 2016) 
Siluriformes  fish and fish 
products  Subject to USDA regulations and must be inspected by the Food Safety and Inspection 
Service (FSIS)  
Monetary instruments  If a person receives more than US$10,000 at one time from or through a place outside 
the United States, a report of the transportation (form FINCEN 105) must be filed with 
CBP 
Obscene, immoral, or seditious 
matter and lottery tickets  Certain books, writings, advertisements, circulars, or pictures containing these are 
prohibited  
Pesticides  The regulations require importers to submit to CBP an EPA Notice of Arrival that the EPA 
has reviewed and approved before the importation arrives in the United States  
Products of convict or forced 
labour  Merchandise produced, mined, or manufactured, wholly or in part , by means of the use 
of convict labour, forced labour, or indentured labour under penal sanctions is prohibited 
from importation  
Radiation - and sonic 
radiation -producing products  Compliance with a radiation performance standard  
Radio frequency devices  Subject to radiation performance standards  
Refrigerants  The EPA regulates the importation of ozone -depleting substances  
Seeds  Provisions of the Federal Seed Act of 1939 and regulations of the Agricultural Marketing 
Service govern the importation into the  United States  
Textile products  Must be stamped, tagged, labelled, or otherwise marked with the specific information  
Toxic substances  Imports will not be released from CBP custody unless proper certification is presented 
to CBP indicating that the import  "complies with" or "is not subject to" TSCA 
requirements  
Toys and children's articles  Compliance with applicable regulations issued under the Federal Hazardous Substances 
Act 
Wood packing materials  Import regulations require wood packing material to be treated and marked  
Wool Must be tagged, labelled, or otherwise clearly marked with specific information  
Source:  WTO document WT/TPR/S/307/Rev.1, 13 March 2015, summarizing CBP online information. 
Viewed  at: 
https://www.cbp.gov/sites/default/files/documents/Importing%20into%20the%20U.S.pdf  
(document last revised in 2006).  WT/TPR/S/ 382 • United States  
 
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  Table A3. 3 Products subject to import licensing  
Category  Products  Agency  Purpose  Legal 
reference  Other information  
Animals and 
animal 
products  Certain animal 
and animal 
products  Department of 
Agriculture  To protect 
domestic 
agriculture from 
the introduction 
or entry of animal 
diseases or 
disease vectors  Title 9 CFR, 
Parts 92, 94.7, 
94.16, 95.4, 
95.18, 95.19, 
95.20 through 
98, 104 and 
122; and: 
21 U.S.C  102 to 
105, 111, 134, 
135, 151 -159 
and 19  U.S.C -
1306 All persons, firms and 
institutions in the 
United  States m ay apply 
for permits  
Controlled 
substances 
and listed 
chemicals  Controlled 
substances and 
listed chemicals  Department of 
Justice, Drug 
Enforcement 
Administration  To restrict the 
quantity of 
imports of 
controlled 
substances and 
listed chemicals 
(not moneta ry 
value) and to 
maintain a 
monitoring 
system  Title 21, CFR, 
Part 1310, 1312, 
1313, 21 U.S.C. 
Sections 822, 
823, 826, 953, 
957 and 958  Importation only by 
approved, registered 
importers  
Dairy 
products  Certain dairy 
products  Department of 
Agriculture  An administrative 
tool that governs 
importations of 
certain dairy 
products subject 
to TRQs resulting 
from the Uruguay 
Round Agreement  CFR 6.20 -6.37 Importers or 
manufacturers of dairy 
products may apply for 
import licences if they 
meet the Import 
Regulation performance 
criteria on the quantity of 
imports entered in a 
previous 12 -month 
period, and for 
manufacturers the 
specified level of dairy 
production in a previous 
12-month period. 
Manufacturers must be 
listed in USDA's Dairy 
Plants Surveyed  
Distilled 
spirits 
(beverages), 
wine, and 
malt 
beverages  Distilled spirits 
(beverages), 
wine, and malt 
beverages  Department of 
the Treasury, 
Alcohol and 
Tobacco Tax and 
Trade Bureau  To provide an 
enforcement 
mechanism to 
ensure that 
importers comply 
with all 
requirem ents of 
federal law 
relating to alcohol  Federal Alcohol 
Administration 
Act Any person, firm or 
institution may apply for 
a licence  
Distilled 
spirits or 
alcohol for 
industrial use  Distilled spirits 
or alcohol for 
industrial use, 
including 
denatured 
spirits  Department of 
the Treasury, 
Alcohol and 
Tobacco Tax and 
Trade Bureau  To prevent tax 
fraud  26 U.S.C. 5001, 
26 U.S.C. 
5002(a), 26 
U.S.C. 5171, 
26 U.S.C. 5181, 
27 CFR Part  19 Any person, firm or 
institution may apply for 
a licence  
Explosives  Explosives, 
blasting agents 
and detonators  Department of 
Justice, Bureau 
of Alcohol, 
Tobacco, 
Firearms and 
Explosives  To protect against 
the misuse and 
unsafe storage of 
explosive 
materials  18 U.S.C. 
Chapter  40; 
27 CFR Part 555  All persons, firms, and 
institutions may  apply for 
a licence  
Firearms and 
ammunition  Firearms and 
ammunition  Department of 
Justice, Bureau 
of Alcohol, 
Tobacco, 
Firearms and 
Explosives  To administer 
licensing 
provisions under 
three statutes  18 U.S.C., 
Chapter 44 and 
27 CFR Part 478  All persons, firms, and 
institutions may apply for 
a licence  
Firearms, 
ammunition, 
and defence 
articles  Defence 
articles on the 
U.S. munitions 
list Department of 
Justice, Bureau 
of Alcohol, 
Tobacco, 
Firearms and 
Explosives  To regulate 
international 
trafficking in 
arms, consistent 
with U.S. national 
security and 
foreign policy 
interests  18 U.S.C. 
Chapter 44, 
22 U.S.C. 2778, 
26 U.S.C. 
Chapter 53  All persons, firms, and 
institutions may apply for 
a licence  WT/TPR/S/ 382 • United States  
 
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  Category  Products  Agency  Purpose  Legal 
reference  Other information  
Fish and 
wildlife  Fish and 
wildlife 
including 
endangered 
species  Department of 
the Interior, U.S. 
Fish and Wildlife 
Service  To: identify 
commercial 
importers and 
exporters of 
wildlife; and 
require records 
that fully and 
correctly disclose 
each importation 
or exportation of 
wildlife and the 
subsequent 
disposition  of the 
wildlife by the 
importer or 
exporter  50 CFR Part 14  All persons, firms, and 
institutions may apply for 
a licence  
Natural gas  Natural gas, 
including LNG 
and CNG  Department of 
Energy  To fulfil the 
requirements of 
the Natural Gas 
Act requiring 
authorization to 
import  15 U.S.C. 717b  All persons, firms, and 
institutions may import 
natural gas  
Nuclear 
facilities and 
materials  Production  and 
utilization 
facilities, 
special nuclear 
materials, 
source 
materials, and 
by-product 
materials, 
including when 
such materials 
are contained 
in radioactive 
waste  Nuclear 
Regulatory 
Commission  To protect public 
health and safety 
and the 
environment, and 
maintain the 
common defense 
and security of 
the United States, 
by exercising 
prudent controls 
over the 
possession, use, 
distribution, and 
transport of such 
items  Atomic Energy 
Act, 10 CFR 
Part 110 All persons, firms and 
institutions must have a 
permanent ( physical) 
address within the United 
States  
Plant and 
plant products  Certain plant 
and plant 
products  Department of 
Agriculture  To protect against 
the entry of plant 
pests and 
diseases, and to 
protect 
endangered plant 
species  Section 412 of 
the Plant 
Protection Act, 
7 U.S.C. 7712, 
the Endangered 
Species Act, and 
Title 7 CFR 
Parts 300-399 Persons, firms, and 
institutions resident in 
the United States may 
apply for a permit  
Steel All basic steel 
mill products  Department of 
Commerce, 
International 
Trade 
Administration  To provide fast 
and reliable 
statistical 
information on 
steel imports to 
the Government 
and the public  78 FR 11090 and 
82 FR 1183  Only registered users 
may file steel licences; 
registration is available 
to all and is free  
Sugar  Raw and 
refined sugar  Department of 
Agriculture  To administer the 
sugar TRQ and 
the sugar re -
export 
progra mme 15 CFR 2011, 
Sub-part A, 
15 CFR 2011, 
Sub-part B.7 
CFR 1530 All importers are eligible 
to apply for certificates 
for specialty sugars. Only 
U.S refiners m ay apply 
for licences to import 
quota -exempt sugar  
Tobacco 
products  Tobacco 
products, 
processed 
tobacco, and 
proprietors of 
export 
warehouses  Department of 
the Treasury, 
Alcohol and 
Tobacco Tax and 
Trade Bureau  Primary  purpose 
is to ensure 
proper collection 
of federal excise 
tax revenue on 
tobacco products  Title 26 U.S.C. 
Chapter 52  Any person, firm or 
institution may apply for 
a licence  
Source:  WTO document WT/TPR/S/307/Rev.1, 13 March 2015, based on WTO document G/LIC/N/3/USA/10, 
24 September 2013, and WTO document G/LIC/N/3/USA/14, 22 January 2018.  WT/TPR/S/ 382 • United States  
 
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  Table A3. 4 Changes in U.S. export controls, July 2016 -June 2018  
Date  Title Citation  Purpose  
6/6/2018  Revisions to the Unverified List (UVL)  83 FR 26204  Minor corrections  
4/6/2018  Implementation of the February 2017 
Australia Group (AG) Intersessional 
Decisions and the June 2017 AG Plenary 
Understandings; Addition of India to the 
AG; Co rrection  83 FR 25559  Technical corrections to Supplement No. 7 to 
part 748, identifying eligible ECCN 1C350 
items for three PRC validated end -users  
    
5/4/2018  Reclassification of Targets for the 
Production of Tritium and Related 
Development and Production Technology 
Initially Classified Under the 0Y521 Series  83 FR 14580  Implementing new classifications agreed at 
the Nuclear Suppliers Group in June 2017  
2/4/2018  Implementation of the February 2017 
Australia Group (AG)  Intersessional 
Decisions and the June 2017 AG Plenary 
Understandings; Addition of India to the 
AG  83 FR 13849  ECCNs amended to reflect changes to the AG 
common control lists. EAR amended to reflect 
India as new participating country in the AG  
22/3/2018  Addition of Certain Persons to the Entity 
List and Removal of Certain Persons from 
the Entity List; Correction of Licenc e 
Requirements  83 FR 12475  23 persons  added to the Entity List 
(destination Pakistan, Singapore, and South 
Sudan). Two persons removed from list. 
Licence requirement corrected for 12 entities 
(Russian Federation)  
16/2/2018  Russian Sanctions: Addition of Certain 
Entities to the Entity List (final rule)  83 FR 6949  21 entities added, destination Crimea region.  
26/1/2018  Addition of Certain Entities; Removal of 
Certain Entities; and Revisions of Entries 
on the Entity List (RIN 0694 -AH43)  83 FR 3577  21 persons added (destination Bulgaria, 
China, Kazakhstan, Russian Federation, Syria, 
and the UAE ). Three entities removed, t wo 
entries modified  
8/1/2018  Revisions, Clarifications, and Technical 
Corrections to the Export Administration 
Regulations; Correction  83 FR 709  Textual err or corrected  
27/12/2017  Revisions, Clarifications, and Technical 
Corrections to the Export Administration  
Regulations  82 FR 61153  Editorial corrections  
20/12/2017  Addition of Certain Entities to the Entity 
List (RIN 0694 -AG29)  82 FR 60304  Two entities added (destination Russian 
Federation)  
9/11/17  Amendments to Implement United States 
Policy Toward Cuba (RIN 0694 -AH47)  82 FR 51983  Published in conjuncti on with OFAC 
amendments to Cuban Assets Control 
Regulations (31 CFR Part 515) and 
Department of State notice setting  forth the 
Cuba Restricted List  
1/11/17  Clarifications to the Export Administration 
Regulations for the Use of Licen ce 
Exceptions (RIN 0694 -AG80)  82 FR 50511  Guidance on existing agency interpretative 
practice regarding licence exception 
governments, international organizations, 
international inspections under the Chemical 
Weapons Convention, and the International 
Space Station; and five notes added to the 
Licence Exception Strategic Trade 
Authorization (STA)  
23/10/17  Amendments to Existing Validated End -
User Authorization in the People's 
Republic of China: Lam Research Service 
Co., Ltd. (RIN 0694 -AH40)  82 FR 48925  Updating the list of eligible destinations 
(facilities) and items in Supplement No. 7 to 
part 748 for Lam  Research Service Co. Ltd.  
3/10/17  Updated Statements of Legal Authority for 
the Export Administration Regulations  82 FR 45959  Keeping the authority citation paragraphs in 
the Code of Federal Regulations current  
25/9/17  Removal of Certain Entities from the 
Entity List; and Revisions of Entries on the 
Entity List (RIN 0694 -AH41 )  82 FR 44514  Three entities removed. Five entries modified 
to provide additional or modified addresses  
15/8/17  Wassenaar Arrangement 2016 Plenary 
Agreements Implementation  82 FR 38764  Implementing changes to the Wassena ar 
Arrangement List of Dual -Use Goods and 
Technologies (WA List)  
7/7/17  Revisions to the Export Administration 
Regulations Based on the 2016 Missile 
Technology Control Regime Plenary 
Agreements (RIN 0694 -AH33)  82 FR 31442  Reflecting changes to the Missile Technology 
Control Regime Annex agreed by member 
countries during 2016  
22/6/17  Russian Sanctions: Addition of Certain 
Entities to the Entity List  82 FR 28405  Ten entities adde d (destination Crimea 
region)  
14/6/17  Wassenaar Arrangement 2015 Plenary 
Agreements Implementation, Removal of 
Foreign National Review Requirements, 
and Information Security Updates; 
Corrections  82 FR 27108  Correcting errors and omissions in "WA15 
rule" published on 20 September 2016  
26/5/17  Addition of Certain Persons and Revisions 
to Entries on the Entity List  82 FR 24242  16 persons added to the  Entity List 
(destinations Pakistan, Turkey, and the UAE); 
modifying two existing entries  
18/4/17  Revision to Entry on the Entity List  82 FR 18217  Modifying one existing entry  WT/TPR/S/ 382 • United States  
 
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  Date  Title Citation  Purpose  
6/4/17  Revisions to the Unverified List (UVL)  82 FR 16730  Sixteen persons added to the UVL, three 
addresses revised, one alternate name added  
29/3/17  Removal of Certain Persons from the 
Entity List (RIN 0694 -AH28)  82 FR 15461  Seven persons removed from the Entity List  
29/3/17  Removal of Certain Persons from the 
Entity List; Addition of a Person to the 
Entity List; and EAR Conforming Change 
(RIN 0694 -AH30)  82 FR 15458  Two persons removed from the Entity List 
(settlement of administrative and criminal 
enforcement actions against  ZTE Corporation 
and ZTE Kangxun). One person added to the 
list (destination China)  
24/2/17  Temporary General Licens e: Extension of 
Validity  82 FR 11505  Temporary general licence extended until 29 
March (for ZTE Corporation and ZTE Kangxun)  
1/2/17  Commerce Control List: Removal of 
Certain Nuclear Nonproliferation (NP) 
Column 2 Controls – Additional Delay in 
Implementation of ECCN 3D991 Controls 
on Certain Software  82 FR 8893  Continuation of "software" classified and 
licensed by BIS as EAR99. From 22 March 
2017, "software" to be classified  and licensed 
under ECCN 3D991  
19/1/17  Amendments to the Export Administration 
Regulations Implementing an Additional 
Phase of India -U.S. Export Con trol 
Cooperation  82 FR 6218  Implementing joint statement of 7 June 2016  
19/1/17  Support Document Requirements with 
Respect to Hong Kong  82 FR 6216  Import licence to be obtained from the 
authorities of Hong Kong, China (and export 
licence for subsequent re -exports), or 
statement that no licence is required  
17/1/17  Revisions to Sudan Licensing Policy  82 FR 4781  Applications to be reviewed under general 
policy of approval f or use in Sudanese civil 
aviation or railroads.  
13/1/17  Increase of Controls: Infrared Detection 
Items  81 FR 4287  Notice of inquiry requesting comments from 
the public  
10/1/17  Addition of Certain Persons and Revisions 
to Entries on the Entity  List; and Removal 
of a Person f rom the Entity List  81 FR 2883  Five persons added to the Entity List 
(destination Turkey). One entity removed, 
and five existing entries in the list revised  
10/1/17  Revisions to the Export Administration 
Regulations (EAR): Control of Spacecraft 
Systems and Related Items the  President 
Determines No Longer Warrant Control 
under the United States Munitions List 
(USML)  81 FR 2875  Part of the President's Export Control Reform 
Initiative, moving certain spacecraft and 
related items from USML Category XV to the 
CCL 
4/1/17  Addition of Certain Entities to the Entity 
List 81 FR 722  Five entities added to the Entities List in 
conjunct ion with amended Executive Order 
No. 13694 (significant malicious cyber -
enabled activities)  
27/12/2016  Commerce Control List: Updates Based on 
the 2015 and 2016 Nuclear Suppliers 
Group (NSG) Plenary Meetings; 
Conforming Changes and Corrections to 
Certain Nuclear Nonproliferation (NP) 
Controls.  81 FR 94971  Addressing nuclear nonproliferation controls 
applica ble to certain centrifugal multiplane 
balancing machines and certain linear 
displacement measuring systems  
27/12/2016  Russian Sanctions: Addition of Certain 
Entities to the Entity List, and Clarification 
of License Review Policy  81 FR 94963  23 entities added to the Entities List. U.S. 
national security interests to be taken into 
account in the review of licence applications 
for exports, re -exports, and in -country 
transfers to the Russian Federation  
27/12/2016  Burma: Amendment of the Export 
Administration Regulations Consistent 
with an Executive Order that Terminated 
U.S. Government' s Sanctions  81 FR 94962  Terminating sanctions consistent with 
Executive Order No. 13742 of 7 October 2016  
16/12/2016  Implementation of the February 2016 
Australia Group (AG) Intersessional 
Decisions and the June 2016 AG Plenar y 
Understandings  81 FR 90983  Reflecting AG updates  
15/12/2016  Addition of Certain Persons to the Entity 
List  81 FR 90712  Seven persons added to the Entity List 
(destination Pakistan)  
5/12/2016  Amendment to the Export Administration 
Regulations: Removal of Special Iraq 
Reconstruction License  81 FR 874 24 Streamlining regulations and reducing 
unnecessary regulatory burdens on the public  
5/12/2016  Amendment to the Export Administration 
Regulations: Removal of Semiconductor 
Manufacturing International Corporation 
from the List of Validated End -Users in 
the Peop le's Republic of China  81 FR 87246  Change made at company's request, and not 
in response to activities of concern  
1/12/2016  Temporary Exports to Mexico Under 
License Exception TMP  81 FR 86571  Licence exception amended to align with time 
constraints in Mexican program me  
25/11/2016  Commerce Control  List: Removal of 
Certain Nuclear Nonproliferation (NP) 
Column 2 Controls  81 FR 85138  Revision of EAR controls to make them more 
consistent with export controls of other 
participating countries in the Nuclear 
Suppliers Group  WT/TPR/S/ 382 • United States  
 
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  Date  Title Citation  Purpose  
21/11/2016  Clarifications and Revisions to Military 
Aircraft, Gas Turbine Engines and Related 
Items License Requirements  81 FR 83114  Published simultaneously with related changes 
to the USML  
18/11/2016  Temporary General Licen ce: Extension of 
Validity  81 FR 81663  Expiration date extended until 27 February 
2017 for ZTE Corporation and ZTE Kangxun  
4/11/2016  Amendments to the Export Administration 
Regulations: Update of Arms Embargoes 
on Cote d'Ivoire, Liberia, Sri Lanka and 
Viet Nam, and Recognition of India as 
Member of the Missile Technology Control 
Regime  81 FR 76859  Changes in controls on arms and related 
materiel  
17/10/2016  Cuba: Revisions to Licen ce Exceptions  81 FR 71365  Authorizing License Exception SCP for items 
sold directly t o individuals in Cuba (personal 
use) and Licen ce Exception AVS (cargo 
transiting in Cuba). Published simultaneously 
with OFAC rule amending the Cuban Assets 
Control Regulations  
14/10/2016  Amendments to the Export Administration 
Regulations: Reporting Requirements 
Optional Electronic Filing of Rep orts of 
Requests for Restrictive Trade Practice or 
Boycott  81 FR 70933  Authorizing reports from U.S. persons 
regarding requests received to take certain 
actions in furtherance or support of 
unsanctioned foreign boycott to be submitted 
in electronic form  
12/10/2016  Commerce Cat XII bookend final rule  81 FR 70320  Transfer of articles from the USML (Category 
XII) to the CCL. Expansion of controls on 
certain software and technology employed in 
certain dual -use infrared detection items  
20/9/2016  Revisions to the Entity List  81 FR 64694  Licence requirement to apply to all EAR items 
for 12 Chinese entities. Linked to 2015 
Wassenaar Implementation rule  
20/9/2016  Wassenaar Arrangement 2015 Plenary 
Agreements Implementation, Removal of 
Foreign National Review Requirements, 
and Information Security Updates  81 FR 64657  Amending the CCL. Raising the Adjusted Peak 
Performance for high performance computers 
and related technology and software, 
updating licence requirements and policies 
associated with Category 5 – Part 2, and 
removing Foreign National Review  for deemed 
exports under Licenc e Exceptions APP and CIV  
7/9/2016  Russian Sanctions: Addition of Certain 
Entities to the Entity List  81 FR 61595  81 entities added to the Enti ty List.  
6/9/2016  Amendments to Existing Validated End -
User Authorization in the People's 
Republic of China: Boeing Tianjin 
Composites Co. Ltd.  81 FR 61104  Updating the list of eligible destinations 
(facilities)  
1/9/2016  Updated Statements of Legal Authority for 
the Export Administration Regulations  81 FR 60254  Keeping the autho rity citation paragraphs in 
the Code of Federal Regulations current  
23/8/2016  Addition of Certain Persons to the Entity 
List  81 FR 57451  Ten persons added to the Entity List 
(destinations Iraq, the Philippines, Syria, and 
Turkey)  
23/8/2016  Temporary Exports to Mexico Under 
License Exception TMP  81 FR 57505  Proposed rule to align licence exception with 
time constraints in Mexican program me 
19/8/2016  Temporary General Licen ce: Extension of 
Validity  81 FR 55372  Extending temporary general licence for ZTE 
Corporation and ZTE Kangxun until 28 
November 2016  
17/8/2016  Revisions to the Export Administration 
Regulations (EAR):  Harmonization of the 
Destination Control Statements  81 FR 54721  Harmonizing statement for EAR items with 
statement required for International Traffic in 
Arms Regulations (ITAR) items. Part of 
President's Export Control Reform Initiative  
8/8/2016  Amendment to the Export Administration 
Regulations to Add Targets for the 
Production of Tritium and Related 
Development and Production Technology 
to the List of 0Y521 Series  81 FR 52326  Interim Final Rule making certain items 
subject to the EAR and imposing a licence 
requirement to all destinations, except 
Canada  
28/7/2016  Commerce Control List: Addition of Items 
Determined to No Longer Warrant Control 
under United States Munition s List 
Category XIV (Toxicological Agents) or 
Category XVIII (Directed Energy 
Weapons)  81 FR 49517  Items transferred from the USML to the CCL  
11/7/2016  Updated Statements of Legal Authority for 
the Export Administration Regulations  81 FR 44770  Keeping the autho rity citation paragraphs in 
the Code of Federal Regulations current  
Source:  WTO Secretariat, based on Bureau of Industry and Security online information. Viewed at:  
 https://www.bis.doc.gov/index.php/federal -register -notices . WT/TPR/S/ 382 • United States  
 
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  Table A4. 1 Commodity Loan Rates and Price Loss Coverage Reference Prices, 
Agricultural Act of 2014 (as amended)  
Covered commodities  Marketing loan programme  
Commodity loan rates  Price loss coverage  
Reference prices  
  Converted into 
US$/tonne   Converted into 
US$/tonne  
Wheat (bu.)  2.94 108.0  5.5 202.1  
Maize (bu.)  1.95 76.8 3.7 145.7  
Grain sorghum (bu.)  1.95 76.8 3.95 155.5  
Barley (bu.)  1.95 89.6 4.95 227.3  
Oats (bu.) 1.39 95.8 2.4 165.3  
Rice long -grain (cwt.)  6.50 143.3  14 308.6  
Rice medium -grain (cwt.)  6.50 143.3  14 308.6  
Peanuts (ton)  355 391.3  535 589.7  
Soybeans (bu.)  5.00 183.7  8.4 308.6  
Other oilseeds (cwt)  10.09  222.4  20.15  444.2  
Dry peas (cwt.)  5.40 119.0  11 242.5  
Lentils (cwt.)  11.28  248.7  19.97  440.3  
Small chickpeas (cwt.)  7.43 163.8  19.04  419.8  
Large chickpeas (cwt.)  11.28  248.7  21.54  474.9  
Graded wool (lb.)  1.15 2535.3  n.a. n.a. 
Non-graded wool (lb.)  0.40 881.8  n.a. n.a. 
Mohair (lb.)  4.20 9259.3  n.a. n.a. 
Honey (lb.)  0.69 1521.2  n.a. n.a. 
Sugar beet, refined (lb.)  0.2409  531.1  n.a. n.a. 
Sugar cane, raw (lb.)  0.1875  413.4  n.a. n.a. 
Extra -long staple cotton (lb.)  0.7977  1758.6  n.a. n.a. 
Seed cotton (lb.)  0.25a 551.2a 0.367  809.1  
Upland cotton  Simple average of the adjusted 
prevailing world price for the two 
immediately preceding MYs, but not 
less than US$0.45/lb. or more than 
US$0.52/lb. The loan rate for the 
2017 crop year was US$0.4949/lb.  n.a. n.a. 
n.a. Not applicable (i.e. not a covered commodity).  
a The loan rate is set only for the purposes of determining the effective prices for seed cotton under 
the Price Loss Coverage programme. Seed cotton is not a covered commodity under the marketing 
assistance loan programme.  
Note:  For th e conversion factors, see U.S. TPR (2010), Table AIV.1.  
Source:  The Agricultural Act of 2014, as amended, and information provided by the authorities.  
  WT/TPR/S/ 382 • United States  
 
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  Table A4. 2 Insurance: direct premiums written  
L&H insurance groups by 2016;  U.S. life and annuities subsector direct premiums 
written  
2015 
rank  2016 
rank  Insurance group  2015 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 2016 direct 
premiums written 
(US$'000)  Share of 
total (%)  
1 1 MetLife Inc.  102,487,074  16.42  95,110,811  15.22  
2 2 Prudential Financial Inc.  43,134,670  6.91 45,902,327  7.34 
3 3 New York Life Insurance Group  29,647,519  4.75 30,922,462  4.95 
7 4 Principal Financial Group Inc.  23,416,059  3.75 28,186,098  4.51 
8 5 Massachusetts Mutual Life 
Insurance Co. 23,117,904  3.70 23,458,883  3.75 
6 6 American International Group  24,976,781  4.00 22,463,202  3.59 
4 7 Jackson National Life Group  27,457,195  4.40 22,132,278  3.54 
10 8 AXA SA  19,478,236  3.12 21,920,627  3.51 
5 9 AEGON NV  24,983,201  4.00 21,068,180  3.37 
9 10 Lincoln National Corp.  22,676,916  3.63 19,441,555  3.11   
Combined top 10  341,375,555  54.68  330,606,423  52.89    
Combined top 25  497,410,941  79.70  492,133,340  78.74    
Combined top 100  615,636,993  98.62  616,338,749  98.63    
Total U.S. life insurance lines  624,175,403   
624,950,037   
L&H insurance groups by 2016; U.S. A&H lines direct premiums written  
2015 
rank  2016 
rank  Insurance group  2015 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 2016 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 
1 1 UnitedHealth Group Inc.  43,817,056  25.79  46,669,151  26.44  
2 2 Aetna Inc.  24,962,250  14.69  28,358,852  16.07  
3 3 Cigna Corp.  14,795,932  8.71 15,505,890  8.78 
4 4 Aflac Inc.  13,643,143  8.03 14,872,435  8.43 
5 5 MetLife Inc.  6,979,479  4.11 7,407,695  4.20 
6 6 Unum Group  5,528,316  3.25 5,739,627  3.25 
7 7 Mutual of Omaha Insurance Co.  3,473,325  2.04 3,740,570  2.12 
8 8 Guardian Life Insurance Co. of 
America  3,413,472  2.01 3,629,131  2.06 
10 9 Genworth Financial Inc.  2,637,316  1.55 2,676,522  1.52 
11 10 AEGON NV  2,150,211  1.27 2,079,926  1.18   
Combined top 10  122,308,095  71.98  130,679,799  74.05    
Combined top 25  145,756,216  85.79  153,742,118  87.13    
Combined top 100  164,856,966  97.00  173,688,976  98.41    
Total U.S. A&H lines  169,895,327   
176,522,262   
L&H insurance groups by 2016, combined lines direct premiums written  
2015 
rank  2016 
rank  Insurance group  2015 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 2016 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 
1 1 State Farm Mutual Automobile 
Insurance  59,361,685  10.03  62,189,311  10.19  
3 2 Berkshire Hathaway Inc.  29,967,354  5.06 33,300,439  5.46 
4 3 Liberty Mutual Group  29,848,412  5.04 31,077,066  5.09 
2 4 Allstate Corp.  30,180,756  5.10 30,875,771  5.06 
6 5 Progressive Corp.  21,383,662  3.61 23,951,690  3.93 
5 6 Travelers Companies Inc.  23,200,304  3.92 23,918,048  3.92 
7 7 Chubb Ltd a 20,671,147  3.49 20,728,330  3.40 
8 8 Nationwide Mutual Group  19,577,849  3.31 19,756,093  3.24 
9 9 Farmers Insurance Group of Cos.  19,050,733  3.22 19,677,601  3.22 
11 10 USAA Insurance Group  16,744,764  2.83 18,273,675  2.99   
Combined top 10  271,249,081  45.82  283,748,024  46.50  WT/TPR/S/ 382 • United States  
 
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  2015 
rank  2016 
rank  Insurance group  2015 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 2016 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 
  
Combined top 25  383,385,662  64.76  397,042,076  65.08    
Combined top 100  506,847,957  85.61  524,967,972  86.04    
Total U.S.  P&C sector  591,757,790   
610,166,276   
a  2015 data for The Chubb Corp. is provided on a combined basis with ACE Ltd. In January 2016, ACE 
  Ltd. acquired The Chubb Corp. and changed the name of the combined insurer to Chubb Ltd. See 
  "ACE Limited acquires Chubb Corporation", SNL Financial.  
P&C insurance groups by 2016, commercial lines direct premiums written  
2015 
rank  2016 
rank  Insurance group  2015 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 2016 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 
1 1 Chubb Ltd.  16,675,155  5.71 16,482,259  5.61 
2 2 Travelers Companies Inc.  16,347,492  5.60 16,463,566  5.60 
4 3 Liberty Mutual Group  13,801,267  4.73 14,049,356  4.78 
3 4 American International Group  15,921,080  5.45 13,080,949  4.45 
5 5 Zurich  Insurance Group  13,403,445  4.59 12,554,597  4.27 
6 6 CNA Financial Corp.  9,203,419  3.15 9,763,122  3.32 
7 7 Nationwide Mutual Group  8,401,984  2.88 8,335,275  2.83 
8 8 Hartford Financial Services Group Inc.  7,635,701  2.61 7,679,737  2.61 
9 9 Berkshire Hathaway Inc.  7,056,856  2.42 7,650,236  2.60 
10 10 Tokio Marine Group  5,956,554  2.04 6,248,195  2.13   
Combined top 10  114,402,953  39.18  112,307,292  38.20    
Combined top 25  174,171,894  60.62  174,555,327  59.37    
Combined top 100  249,529,480  85.40  252,269,401  85.81    
Total U.S. P&C commercial lines  291,999,817   
294,021,050   
P&C insurance groups by 2016, personal lines direct premiums written  
2015 
rank  2016 
rank  Insurance group  2015 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 2016 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 
1 1 State Farm Mutual Automobile 
Insurance  54,340,977  18.53  57,083,833  18.43  
2 2 Allstate Corp.  27,963,957  9.54 28,717,388  9.27 
3 3 Berkshire Hathaway Inc.  22,828,453  7.78 25,553,714  8.25 
4 4 Progressive Corp.  18,463,485  6.30 20,559,851  6.64 
6 5 USAA Insurance Group  15,562,507  5.31 17,032,072  5.50 
5 6 Liberty Mutual Group  16,039,932  5.47 17,026,207  5.50 
7 7 Farmers Insurance Group of Cos.  15,270,479  5.21 15,819,900  5.11 
8 8 Nationwide Mutual Group  11,163,343  3.81 11,414,637  3.68 
9 9 Travelers Companies Inc.  6,852,414  2.34 7,454,481  2.41 
10 10 American Family Insurance Group  6,420,260  2.19 6,980,730  2.25   
Combined top 10  194,905,807  66.48  207,642,813  67.04    
Combined top 25  233,942,544  79.78  249,171,554  80.46    
Combined top 100  273,734,365  93.34  290,588,723  93.79    
Total U.S. P&C personal lines  293,257,615   
309,778,137   
P&C health insurance groups by 2016, health lines direct premiums written  
2015 
rank  2016 
rank  Insurance group  2015 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 2016 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 
1 1 UnitedHealth Group Inc.  68,041,707  11.69  79,473,071  12.46  
2 2 Anthem Inc.  54,715,501  9.40 58,748,993  9.21 
3 3 Humana Inc.  51,405,175  8.83 53,601,025  8.40 
4 4 HealthCare Services Corp. a Mutual  32,644,621  5.61 32,157,585  5.04 
5 5 Aetna Inc.  24,417,307  4.19 24,414,237  3.83 
6 6 Centene Corp.  20,261,187  3.48 24,070,523  3.77 
8 7 Independence Health Group Inc.  13,869,064  2.38 17,013,754  2.67 WT/TPR/S/ 382 • United States  
 
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  2015 
rank  2016 
rank  Insurance group  2015 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 2016 direct 
premiums 
written 
(US$'000)  Share 
of total 
(%) 
7 8 Kaiser Foundation Health Plan Inc.  15,155,609  2.60 16,166,834  2.53 
10 9 Molina Healthcare Inc.  11,918,163  2.05 15,317,439  2.40 
9 10 WellCare Health Plans Inc.  13,072,554  2.25 13,451,891  2.11   
Combined top 10  305,500,887  52.48  334,415,351  52.42    
Combined top 25  421,926,055  72.48  459,615,681  72.05    
Combined top 100  554,167,344  95.20  607,899,577  95.30    
Total U.S. health insurance lines  582,097,176   
637,902,483   
Source:  Annual Report on the Insurance Industry (September 2017), Federal Insurance Office, Department 
 of the Treasury.  
__________