WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 30 
  
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures 
1. U.S. Customs and Border Protection (CBP), an  agency of the Department of Homeland 
Security is responsible for matters  relating to customs and importation,  and enforcement of U.S. trade 
laws.  Since 1993, with the implementation of the Customs Modernization Act, there has been an 
increased sharing of responsibility for compliance wi th customs rules between CBP and the importing 
community.1  Pursuant to this "informed compliance" a pproach, i.e. the shared responsibility between 
CBP and the import community, importers are expect ed to apply "reasonable care" in their importing 
operations.  They are expected to exercise reasonable care to classify, value, and determine origin of 
goods so that CBP can apply the necessary import rules,  assess duty rates, and collect statistics.  CBP 
also makes available a significant amount of in formation to importers, through its informed 
compliance publications and through various rulings. 
2. Beyond the basic importing topics of classification, valuation, and origin and marking, CBP is 
responsible for a number of initiatives to facilitat e trade, better secure U.S. borders, and enforce 
U.S. laws and regulations.  These include: 
C-TPAT , is a voluntary public-private partnership oper ated in conjunction with over 10,000 partners 
in order to develop and adopt measures to improve security while at the same time not hindering trade.  In addition to importers, the programme co vers carriers, brokers, consolidators, and certain 
manufacturers who agree to work to help protect the supply chain and implement security measures 
and best practices.  C-TPAT is working toward s signing mutual recognition arrangements with a 
number of foreign governments in order to link inte rnational industry partnerships together globally.
2  
Through the C-TPAT partnership more than 50% of  U.S. imports are covered by C-TPAT partnership 
trade.3 
Automated Commercial Environment (ACE) , the electronic commercial trade processing system 
being developed to facilitate tr ade while strengthening border security.  ACE will provide a single 
centralized portal and access point for the trade commun ity to interact with CBP.  Currently, ACE is 
being implemented in phases and already includ es provisions for individual account management, 
periodic payment capabilities, e-manife sts, entry summary filing, and tr ade data sharing.  More than 
17,000 ACE accounts were in operation in 2011.4 
Container Security Initiative (CSI) , launched in the aftermath of the 9/11 terrorist attacks in order to 
address the threat to border security posed by the use of maritime container shipments.  As more than 
11 million cargo containers arrive at U.S. ports every year, CBP has developed a pre-screening process to assess risk and, if necessary, containers are inspected abroad before being shipped to the 
                                                      
1 Public Law 103-182.   
2 Mutual recognition arrangements (non-binding) have been completed with New Zealand, Canada, 
Republic of Korea, Japan, Jordan, and the European Union. 
3 CBP online information, "C-TPAT:  Program Ov erview".  Viewed at:  http://www.cbp.gov/ 
linkhandler/cgov/trade/cargo_security/c tpat/ctpat_program_information/what _is_ctpat/ctpat_overview.ctt/ctpat_
overview.pdf.   
4 CBP online information, "ACE at a Glance Fact  Sheet".  Viewed at http://www.cbp.gov/xp/ 
cgov/newsroom/fact_sh eets/trade/ace_factsheets/ace_glance_sheet.xml. United States WT /TPR/S/275/Rev.1 
 Page 31 
 
 
United States.  CSI is now in operation in 58 port s world-wide and pre-screens over 80% of maritime 
container cargo destined for the United States.5 
Secure Freight Initiative (SFI) , initiated in response to the Secu rity and Accountability for Every 
(SAFE) Port Act to evaluate the feasibility of requiring 100% scanning of ma ritime cargo containers. 6  
The SAFE Port Act, as amended, requires 100% scanni ng of all maritime containers shipped to the 
United States by 1 July 2012.  On 2 May 2012, in accordance with the statute, DHS Secretary 
submitted to Congress her intent to extend the deadli ne by two years.  New proposed legislation to 
extend or eliminate the statutory dead line has not been passed into law.7   Complimentary rules and 
procedures for ensuring security of air cargo on passenger aircraft were enacted (Implementing 
Recommendations of the 9/11 Commission Act) and the law is under the purview of the 
Transportation Security Administration (TSA), a nother agency of the Department of Homeland 
Security.  The law required 100% cargo scanning on inte rnational U.S. inbound flights, originally by 
31 December 2011.  However, the TSA postponed th is deadline and instituted a new deadline of 
3 December 2012 for implementation.8 
3. CBP is also responsible for supervision or oversight of certain import processes or provisions.  
For example, CBP regulations allow for the "i n-bond process", which provides that imported goods 
may be transported in-bond to a nother port of entry and entered th ere under the same conditions as at 
the port of arrival.  CBP recently proposed new rules or procedures for the in-bond process, but final rules have not yet been issued.
9  CBP also oversees "Foreign Trade Zones" (FTZs) which are located 
at or near CBP ports of entry and allow merchandi se to enter and be further processed before entering 
the customs territory of the United States or bei ng re-exported.  Although CBP oversees the FTZs, the 
establishment of FTZs, and their rules and regulatio ns are under the purview of the Foreign-Trade 
Zones Board.  The FTZ Board recently revised the re gulations pursuant to the Foreign-Trade Zones 
Act in order to improve flexibility and enhance clarity for U.S.-based operations, address compliance 
for uniform treatment in a zone, and simplify the pr ocedures to gain authority to undertake an activity 
in a FTZ.10 
4. In addition, CBP is responsible for the ru les pertaining to customs brokers, through its 
regulations.11  While there are no specific rules or restri ctions on importing by an owner or purchaser 
of imported goods, U.S. laws only allow licensed cu stoms brokers to transact customs business on 
behalf of others (i.e. importers, purchasers).12  There are approximately 11,000 licensed customs 
brokers in the United States.  CBP regulations prescr ibe eligibility requirements (age, citizenship, etc.) 
and qualifications (licence exam, fees, and approval  by CBP) to become a licensed customs broker.  
In 2010, CBP adopted new eligibility requirements, wh ich slightly modified the rules for taking the 
licence exam.13  CBP is also working on another important initiative with respect to customs brokers.  
The Role of the Broker Initiative will examine with  a view to redesigning and modernizing broker 
                                                      
5 CBP online information, "CSI In Brief", view ed at:  http://www.cbp.gov/xp/cgov/trade/cargo_ 
security/csi/csi_in_brief.xml. 
6 Public Law 109-347. 
7 S.832. 
8 TSA Press Release, "TSA Sets Cargo Screenin g Deadline for International Inbound Passenger 
Aircraft", 16 May 2012.  Viewed at:  http://www.tsa.gov/press/releases/2012/0516.shtm. 
9 77 FR 10622. 
10 77 FR 12112. 
11 19 CFR part 111. 
12 19 U.S.C. 1641. 
13 9 CFR part 111. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 32 
  
regulations and clarifying broke rs' responsibilities, as well as encouraging brokers to be force 
multipliers for CBP trade facilitation efforts.14  
(ii) Customs valuation 
5. Since 1980 when the United States implemented the Tokyo Round Customs Valuation 
Agreement, the primary method of determining the value of imported merchandise has been the 
"transaction value".15  There have been no legislative changes to the basic valuation method, as 
prescribed by the GATT/WTO Customs Valuation Agreemen t, since its establishment by title II of the 
Trade Agreements Act of 1979.16  In 1996, the United States notified that its legislation previously 
notified remained valid, and no further notif ications have been made since that time.17  T h e  
United States assesses customs duties on an f.o.b. basis. 
6. In 2008, the U.S. Department of Homeland Security, Bureau of Customs and Border 
Protection, proposed a new interpretation of the phr ase "sold for exportation to the United States" for 
the purposes of applying the transaction value method in a series-of-sales importation scenario.  This 
proposal reflected the conclusions of the WCO Technical Committee on Customs Valuation, as set 
out in Commentary 22.1, in which the majority of  WTO Members already used the price paid in the 
last sale occurring prior to import.18  Thereafter, Congress enacted the Food, Conservation, and 
Energy Act, in 2008, and Section 15422 created  a one-year importer-declaration requirement to 
collect data and information on the valuation of certa in goods in a multiple sale  scenario situation.  
This provision was included in order to help Congress better understand the impact of the proposed 
new interpretation, which would have reversed  a long-standing judicial and administrative 
interpretation of the expression "sold for exportation to the United States".19  The legislation also 
indicated that Customs and Border Protection should not implement a change of interpretation of the 
expression before 1 January 2011.20  On 29 September 2010, Customs and Border Protection 
officially withdrew its proposal, thus retaining its long-standing position of using the "first (or earlier) 
sale" interpretation.21   
(iii) Rules of origin 
(a) Non-preferential rules of origin 
7. In July 2008, the CBP proposed new uniform ru les of origin, based on the NAFTA tariff-shift 
methodology, that would apply to a ll imports (non-preferential trade) .  Based on the experience with 
the NAFTA origin rules, the CBP stated that th e proposed rules "have proven to be more objective 
and transparent and provide greater predictability in  determining the country of origin of imported 
merchandise than the system of case-by-case adjudica tion they would replace. The proposed change 
also will aid an importer's exercise of reasonable care."22  However, after receiving comments, many 
of which opposed the new rules, the CBP officially withdrew the proposal on 2 September 2011.23  
                                                      
14 Customs and Border Protection online information, "CBP Begins Public Outreach to Update Broker 
Regulations".  Viewed at:  http://www.cbp.gov/xp/ cgov/trade/trade_transformation/brokerregs.xml.   
15 19 U.S.C. 1401a. 
16 43 FR 45135. 
17 WTO document G/VAL/N/1/USA/1, 1 April 1996.   
18 73 FR 4254. 
19 Committee on Ways and Means, U.S. House of Representatives (2010), p. 71. 
20 Committee on Ways and Means, U.S. House of Representatives (2010), p. 71. 
21 75 FR 60134. 
22 73 FR 43385. 
23 76 FR 54691. United States WT /TPR/S/275/Rev.1 
 Page 33 
 
 
Thus, the non-preferential rules of origin remain unchanged (Chart III.1).  CBP continues to 
determine origin on a case-by-case basis, often rely ing on a number of court decisions, regulations, 
and agency interpretations to confer origin.24  For example, according to  the CBP's Customs Rulings 
Online Search System (CROSS), there were approxi mately 100 country of origin and/or marking 
rulings in 2011 (nearly 200 in 2010).25 
Chart III.1
Overview of non-preferential rules of origin
"Wholly obtained" criteria
Source : U.S. CBP (2004), What Every Member of the Trade Community Should Know About: U.S. Rules of Origin, 
Preferential and Non-Pref erential Rules of Origin , An Informed Compliance Publication, May.  Viewed at: 
http://www.cbp.gov /linkhandler/cgov/trade/legal/informed_com pliance_pubs/icp026.ctt/icp026.pdf.textiles and clothing
products
wholly the growth, 
product, or manufacture
of one particular 
countryall other products"Substantial transformation" 
criteriaNon-preferential rules of 
origin
case-by-case basis, 
which is based on a 
change in name, 
character, or use 
methodtariff-shift 
method
 
(b) Preferential rules of origin 
8. The increasing number of FTAs the United States has entered into with trading partners has 
had an impact on the growth of U.S. preferential or igin regimes.  Each agreement has unique rules of 
origin, specifically negotiated between the trading pa rtners, and results in more pages of differing 
rules.  The preferential rules used for non-recipro cal trade preference programmes rely largely on the 
"wholly obtained" criteria, or undergo a substantia l transformation, determined by using a required 
minimum local value content of an appraised value.  In contrast, U.S. FTA rules of origin have been 
modelled after the NAFTA rules, which principall y utilize product-specific rules, largely based on a 
tariff-shift methodology and/or regional value content formula.  Product-specific rules are based on the HS nomenclature and can be extensive since ther e are specific rules for each  HS Chapter, heading, 
or subheading.  NAFTA, CAFTA-DR, Australia , Chile, Peru, and Singapore FTAs mostly use 
changes in tariff classification to  determine the origin of a good with components from more than 
once country (Table III.1).  Furthermore, within the same FTA there are often significant differences 
in the origin rules applied across HS chapters or acr oss industries.  The case of textiles and clothing is 
one important example, with its "yarn forward"  rule for many products, which essentially requires 
three levels or steps of origin-confirming processes fo r the yarn, fabric, and clot hing in order to confer 
origin or allow for regional value content calculati on.  Other industry sectors often require a simple 
one-step change in tariff heading or subheading to c onfer origin.  The role of U.S. industry has been 
                                                      
24 Jones and Martin (2012). 
25 CBP CROSS database.  Viewed at:  http://rulings.cbp.gov/index.asp.   WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 34 
  
noted as having a very influential impact on the varying product-by-product outcome of preferential 
rules of origin negotiations.  This proliferation of differing rules of origin, their complexity, and lack 
of transparency continues to be of concern for some.26    
Table III.1 
Overview of preferential rules of origin criteria, 2012  
Preferential 
programme Citationa Brief overview of origin rulesb 
AGOA GN 16;  19 U.S.C. 3701;  
19 CFR 10.178a, 10.211 Imported directly from a bene ficiary country and the sum of  the cost or value of the 
materials produced in one or more designated be neficiary countries, plus the direct costs of 
processing operations is at least 35% of the appr aised value of the article .  Up to 15% of the 
35% local value content requirement may be attr ibutable to the cost or value of materials 
produced in the United States 
ATPA/ 
ATPDEA GN 11;  19 U.S.C. 3201;  
19 CFR 10.201, 10.241, 
251 Imported directly from a bene ficiary country and the sum of  the cost or value of the 
materials produced in one or more Andean bene ficiary countries or one or more Caribbean 
Basin beneficiary countries, plus the direct cost s of processing operations is at least 35% of 
the appraised value of the article.  Up to 15%  of the 35% local value content requirement 
may be attributable to the cost or value of materials produced in the United States 
CBERA GN;  19 CFR 10.191;  
19 U.S.C. 2701 Imported directly from a bene ficiary country and the sum of  the cost or value of the 
materials produced in one or more designated be neficiary countries, plus the direct costs of 
processing operations is at least 35% of the appr aised value of the article .  Up to 15% of the 
35% local value content requirement may be attr ibutable to the cost or value of materials 
produced in the United States 
CBTPA GN 17;  19 U.S.C. 2701;  
19 CFR 10.221, 10.231 Imported directly from a be neficiary country and meets the NAFTA rules of origin 
GSP GN 4;  19 CFR 10.171;  
19 U.S.C. 2461 Imported directly from a bene ficiary country and the sum of  the cost or value of the 
materials produced in a designated beneficiary country or in one or more members treated 
as an association of countries, plus the direct  costs of processing operations is at least 35% 
of the appraised value of the article 
NAFTA Article 401 of NAFTA;  
GN 12;  19 CFR Part 181;  19 U.S.C. 3332 The rules of origin for goods that are not wholly obtained from the NAFTA region are 
based on a tariff shift method and/ or regional value content method 
Chile GN 26;  19 U.S.C. 3805 The rules of origin for goods that  are not wholly obtained from the United States or Chile 
are based on a tariff shift method a nd/or regional value content method 
Israel GNs 3(a)(v) and 8;  19 
U.S.C. 2112 Imported directly from Israel, West Bank, G aza Strip, or a Qualifying Industrial Zone and 
the sum of the cost or value of materials pr oduced in Israel, West Bank, Gaza Strip, or a 
Qualifying Industrial Zone, plus the direct cost s of processing operations, is at least 35% of 
the appraised value of the article.  Up to 15%  of the 35% local value content requirement 
may be attributable to the cost or value of materials produced in the United States 
Jordan GN 18;  19 U.S.C. 2112 Imported directly from Jordan  and that is wholly the growth, product or manufacture of 
Jordan or a new or different article of co mmerce that has been grown, produced or 
manufactured in Jordan and the sum of the co st or value of the materials produced in 
Jordan, plus the direct costs of processing ope rations is not less than 35% of the appraised 
value of such article.  Up to 15% of the 35% local value content requirement may be 
attributable to the cost or value of materials produced in the United States 
Singapore GN 25;  19 U.S.C. 3805 The rules of origin for goods that are not wholly obtained from the United States or 
Singapore are based on a tariff-shift met hod and/or regional value-content method 
Australia GN 28, P.L 108-286 The rules of origin for goods th at are not wholly obtained from the United States or 
Australia are based on a tariff-shift met hod and/or regional value-content method 
Morocco GN 27, P.L 108-302 The rules of origin for goods th at are not wholly obtained from the United States or 
Morocco are based on a tariff-shift method or  the sum of the valu e of each material 
produced in the territory of Morocco or of the United States, or both, and the direct costs of 
processing operations performed in the territory  of Morocco or of the United States, or 
both, is not less than 35% of the appraised value of the good 
CAFTA-DR GN 29, P.L 109-53 The rules of origin for goods that  are not wholly obtained from the United States or the 
CAFTA-DR region are based on a tariff-shift method and/or regional value-content method 
Bahrain GN 30, P.L 109-169 The rules of origin for goods th at are not wholly obtained from the United States or 
Bahrain are based on a tariff- shift method or the sum of the value of each material 
produced in the territory of Bahrain or of the United States, or both, and the direct costs of 
processing operations performed in the territory of Bahrain or of the United States, or both, 
is not less than 35% of the appraised value of the good 
Table III.1 (cont'd) 
                                                      
26 Jones and Martin (2012). United States WT /TPR/S/275/Rev.1 
 Page 35 
 
 
Preferential 
programme Citationa Brief overview of origin rulesb 
Oman GN 31, P.L 109-283 The rules of origin for goods that are not wholly obtained from the United States or Oman 
are based on a tariff-shift method or the sum of  the value of each mate rial produced in the 
territory of Oman or of the United States, or both, and the direct costs of processing 
operations performed in the territory of Oman or of the United States, or both, is not less 
than 35% of the appraised value of the good 
Peru GN 32, P.L 110-138 The rules of origin for goods that are not wholly obtained from the United States or Peru 
are based on a tariff-shift method a nd/or regional value content method 
Korea, Rep. 
of GN 32, P.L 110-138 The rules of origin for goods that are not wholly obtained from the United States or Korea, 
Rep. of, are based on a tariff-shift method and/or regional value content method 
Colombia GN 34, P.L. 112-42 The rules of origin for goods that are not wholly obtained from the United States or 
Colombia  are based on a tariff-shift me thod and/or regional value content method 
a "GN" refers to General Note of the HTSUS. 
b For non-textile items.  For textile items, different rules apply. 
Source:    U.S. Customs and Border Protection (2004), What Every Member of the Trade Community Should Know About:  
U.S. Rules of Origin:  Preferential  and Non-Preferential Rules of Origin , May.  Viewed a t:  http://www.cbp.gov/ 
linkhandler/cgov/trade/legal/informed_compliance _pubs/icp026.ctt/icp026.pdf;  and Committee on Ways and 
Means, U.S. House of Representatives (2010), Overview and Compilation of U.S. Trade Statutes , December.  
Viewed at:  http://www.gpo.gov/fdsys/pkg/ CPRT-111WPRT63130/pdf/CPRT-111WPRT63130.pdf.  
9. The U.S. preferential rules of origin have not  been notified to the WTO Committee on Rules 
of Origin since 1997.27  The preferential rules are contained in the HTSUS, mainly in the General 
Notes, accounting for approximately 670 pages of text.28  Additional preferential origin criteria, 
outside the General Notes, are in Chapter 98 and 99 provisions.  An importer w ould need to determine 
which preferential rules might apply to the product co ncerned, and then find the appropriate section of 
the HTSUS to determine the applicable origin criteri a.  Furthermore, the nomenclature-specific tariff 
shift information has not been updated to reflec t HS2012 changes introduced in the tariff, which 
would have to be negotiated between  trading partners for FTAs.   
(c) Country-of-origin marking 
10. U.S. legislation dating back to 1890 requires that articles of foreign manufacture contain a 
mark or label indicating the country where the good originated.29  The law has been amended 
numerous times but, as originally enacted, covered "all articles of foreign manufacture".30  Different 
rules apply for domestic products, for example in orde r to be labelled as "Made in the U.S.A.".  The 
principle legislation for imported products is in section 304 of the Tariff Act of 1930 and is 
administered by CBP at the border.  Pursuant to ma rking legislation and its j udicial interpretation over 
many years, goods are considered to originate from the country in which they were grown, produced 
or manufactured.  The rules of "substantial transf ormation" may be applied to determine the last 
country in which the article was transforme d by having a new name, character, or use.31 
                                                      
27 At the last TPR of the United States, certain Me mbers requested information on preferential rules of 
origin, and the United States indicated that it intended to submit an updated notification within months (WTO 
document, WT/TPR/M/235/Add.1, 1 November 2010, p. 194).  To date, no notification has been received by the 
Secretariat.  The last notification concerning preferen tial rules of origin was in WTO document G/RO/N/18, 
3 November 1997, concerning the Israel FTA. 
28 The HTSUS 2012 (Supplement 1) contains approximately 3,400 pages and includes the General 
Notes in addition to the sections outlining the specific tariff rates. 
29 Tariff Act of 1890 and Tariff Act of 1930, 19 U.S.C. 1304. 
30 USITC (1996). 
31 Legislation and implementing regulations governing rules of origin in U.S. non-preferential schemes 
may be found as follows: Government Procurement (19 U.S.C. § 2511 et seq. (Specifically § 2518(4)(B)) and 19 CFR §177.21); Marking Rules of Origin (19 U.S.C. §1304 for marking requirement, 19 CFR Part 134, and WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 36 
  
11. Other product-specific marking/labelling requirement s, at the federal or state level, follow 
other rules or regulations.  Specific labelling re quirements, outside of section 304, include the 
American Automobile Labeling Act, the Fur Products Labelling Act, the Omnibus Trade and 
Competitiveness Act for Native American style jeweller y, and various other Acts  or Codes relating to 
agricultural products such as meat, eggs, mushrooms, etc.32  In addition to product-specific marking 
requirements, different marking requirements exist,  outside section 304, for products subject to FTAs 
such as NAFTA.33   
12. Section 304 of the Tariff Act of 1930, as amende d, provides that all imported articles, unless 
exempted (Table III.2), must be marked at the ti me of importation so that the "ultimate purchaser" 
knows where the imported article was manufactured.  If imported articles are not marked or if they are 
inadequately marked, penalties or fines may be applied, and the products may be retained by 
Customs.34  Provisions of certain FTAs allow exemptions  from the fines and penalties for beneficiary 
countries under certain conditions.   
13. The U.S. marking rules regime may be considered  as one of the more detailed, compared with 
other countries.  Specific rules for U.S. importe d products, differ from those applied to domestic 
products, which differ from FTA preferential origin rules, and these are likely to differ for 
U.S. products exported (subject to foreign countries marking or origin requirements).35  For example, 
under some preference programmes, such as GSP, an imported article must be substantially 
transformed in the beneficiary country and must incl ude at least 35% local value content.  Failure to 
meet the 35% local value content makes the article  ineligible for GSP treatment even if it is 
substantially transformed.  However, for ma rking and other purposes, the article would be 
"originating" in that beneficiary country because of  the substantial transformation.  Furthermore, as 
U.S. domestic product marking rules follow a different  set of rules and jurisprudence of the Federal 
Trade Commission, the product would have to be made  solely of domestic content and of U.S. labour 
in order to be marked as "Made in the U.S.A."; the concept of substantial transformation does not 
apply.  Thus, the same or similar products could ha ve different origin dete rminations depending on 
which rules were being applied for which purpose. 
                                                                                                                                                                     
19 CFR §102.0); Most-Favored-Nation or Normal-Trade-R elations Duty Assessment(General Note 3 to the 
HTSUS (19 U.S.C. §1202)); Textile an d Textile Products (7 U.S.C. §1854, 19 U.S.C. § 3592, and 19 CFR 
§§ 12.130, 102.21); Other Marking Stat utes (15 U.S.C. 69, 49 U.S.C. 32304). 
32 Legislation and implementing regulations governing rules of origin in U.S. non-preferential schemes 
may be found as follows: Government Procurement (19 U.S.C. § 2511 et seq. (Specifically § 2518(4)(B)) and 
19 CFR §177.21); Marking Rules of Origin (19 U.S.C. §1304 for marking requirement, 19 CFR Part 134, and 
19 CFR §102.0); Most-Favored-Nation or Normal-Trade-R elations Duty Assessment(General Note 3 to the 
HTSUS (19 U.S.C. §1202)); Textile an d Textile Products (7 U.S.C. §1854, 19 U.S.C. § 3592, and 19 CFR 
§§ 12.130, 102.21); Other Marking Stat utes (15 U.S.C. 69, 49 U.S.C. 32304). 
33 Paragraph 1 of Annex 311 of the NAFTA provides that the NAFTA parties shall establish "Marking 
Rules" to determine when a good is a good of a NAFTA country. The Marking Rules established by the United 
States are set out in 19 CFR Part 102, and are used to determine the country of origin. The Marking Rules are distinct from the rules of origin that are used to determine whether a good is originating under Article 401 of the 
Agreement. 
34 Imported goods that are not properly marked may be subject to a 10% ad valorem  marking duty 
penalty, and persons involved in intentional alternation or removal of country-of-origin markings may also be 
subject to fines of US$100,000 or one-year prison term for the first offence and US$250,000 for subsequent 
offences (Committee on Ways and Means, U.S. House of Representatives, 2010). 
35 USITC (1996). United States WT /TPR/S/275/Rev.1 
 Page 37 
 
 
Table III.2 
Exemptions to the section 304 marking requirement 
Article is incapable of being marked 
Article cannot be marked without injury to the item 
Article cannot be marked prior to shipment to the United States, except at an expense economically prohibitive of its importati on 
Marking of the container of the article will reasonably indicate the origin of the article 
The article is a crude substance 
Such article is imported for use by the importer and not intended for sale in its imported or any other form 
Such article is to be processed in the United States by the importer or for his account otherwise than for the purpose of conce aling the origin of 
such article and in such a manner that any mark contemplated by this section would necessarily be obliterated, destroyed, or pe rmanently 
concealed 
An ultimate purchaser, by reason of the character of such article or by reasons of the circumstances of its importation, must n ecessarily know the 
country of origin of such article even though it is not marked 
Such article was produced more than 20 years prior to its importation 
U.S. Treasury J-List of exempted products 
Such article cannot be marked after importation except at an expense which is economically prohibitive, and the failure to mark  the article before 
importation was not due to any purpose of the importer, producer, seller, or shipper to avoid compliance with marking 
Products of American fisheries 
Products of U.S. possessions 
Products of U.S. origin that have been exported and returned 
Articles entered for immediate transhipment and exportation 
Articles entering duty-free valued at US$1 or less 
Bona fide gifts valued at less than US$10  
Certain teas, coffees, and spices 
Source:    USITC (1996), Country-of-Origin Marking:  Review  of Laws, Regulations, and Practices , Investigation 
No. 332-366, Publication 2975, July.  Viewed at:  http://www.usitc.gov/publications/332/pub2975.pdf;  and 
Committee on Ways and Means, U.S. House of Representatives (2010), Overview and Compilation of U.S. Trade 
Statutes , December.  Viewed at:  http://www.gpo.gov/fdsys/pkg/CP RT-111WPRT63130/pdf/CPRT-111WPRT 
63130.pdf. 
(d) Changes to U.S. origin and marking rules 
14. The United States continues to make changes to its  rules of origin regimes (Table III.3).  It 
appears that the majority of the ch anges were a result of aligning the or igin rules to the intent of the 
agreements, a result of legal jurisprudence, a nd to harmonize certain provisions among the various 
FTAs. 
Table III.3 
Changes or developments in U.S. preferenti al rules of origin, January 2010-June 2012 
ROO Effective datea Citation Issue/subject  
NAFTA FTA 3 October 2009 Presidential 
proclamation 8536 Technical corrections for certain chemicals and brake linings 
Singapore FTA 8 February 2009 Presidential 
proclamation 8536 Technical corrections for certain machinery 
Chile FTA 8 February 2009 Presidential 
proclamation 8536 Technical corrections for certain machinery 
Truth in Fur 
Labeling Act 18 March 2011 P.L. 111-113 Made changes to the Fur Products Labelling Act to require labelling of all 
fur products regardless of value 
ROO for textiles and apparel 
products 17 March 2011 76 FR 14575 Final rule to revise, update, and consolidate the CBP regulations relating 
to the country of origin of textile and apparel products.  The primary 
regulatory change consists of the elimination of the requirement that a 
textile declaration be submitted for all importations of textile and apparel products. In addition, to improve the quality of reporting of the identity of the manufacturer of imported textile and apparel products, it adopts as a 
final rule an amendment requiring importers to identify the manufacturer 
of such products through a manufacturer identification code ("MID'') 
NAFTA FTA 3 October 2011 76 FR 54691 Pipe fittings and flanges, greeting cards, glass optical fiber, rice 
preparations, and certain textile and apparel products 
Chile FTA 1 November 2011 Presidential 
proclamation 8742 Chemicals, certain dried vegetables, coffee, spices, cocoa, rubber 
products, certain machines of ch. 84, lamps, and certain instruments and apparatus 
Table III.3 (cont'd) WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 38 
  
ROO Effective datea Citation Issue/subject  
Singapore FTA 7 February 2008 / 
24 May 2011 Presidential 
proclamation 8682 Certain instruments and apparatus, and certain clothing and apparel items 
Peru FTA 1 January 2011 Presidential 
proclamation 8682 Certain amendments to chapter 99 
NAFTA FTA 2 October 2009 Presidential 
proclamation 8682 Chemicals 
a Changes were sometimes issued with retr oactive effect, thus the effective date ma y precede the date of the legislation or 
proclamation. 
Source:  WTO Secretariat.  
(iv) Tariffs 
15. The Harmonized Tariff Schedule of the United States (HTSUS) provides tariff levels, 
classification, general rules for importation, and ru les of origin information for imported products 
entering the United States.  While it is cited in  the Code of Federal Regulations, it remains a 
publication of the USITC so that it can be kept cu rrent and updated regularly.  The USITC maintains a 
custodial role over the HTSUS as key elements ar e legislated by Congress, proclaimed by the 
President through limited authority and oversight, a nd/or directly through the provisions of the 
international nomenclature.  The HTSUS may be update d frequently to reflect new provisions in rates, 
nomenclature or other trade rules.  For example,  the HTSUS has been updated four times in 2012 to 
incorporate changes to implement WCO changes, the FTAs with Korea and Colombia, and changes 
related to the U.S. Generalized System of Preferences. 
(a) Tariff nomenclature 
16. The United States' tariff nomenclature is publis hed as the Harmonized Tariff Schedule of the 
United States, which is based upon the in ternationally adopted Harmonized System. 36  In addition to 
adopting the international nomenclature to the six- digit level, the United States further delineates the 
nomenclature to the eight-digit tariff-rate legal level, and to the ten-digit statistical reporting level.  
Thus, for importers reporting purposes, the ten-digit le vel is recorded for entries.  The United States 
also expands the nomenclature with the use of ch apters 98 and 99 of the tariff, which are unique 
national provisions.  Chapter 98 pertains to speci al classification provisions, and chapter 99 to 
temporary legislation, temporary modifications, and additional import restrictions.  The use of 
chapter 99 has increased significantly in recent year s as it is typically used to implement certain 
temporary provisions, especially as pertains to FTA tariff reductions. 
17. By presidential proclamation, the United States implemented the HS2012 nomenclature 
changes to its tariff schedule in early 2012.37  The changes implemented comprise 219 of the 220 sets 
of changes as prescribed by the WCO Harmonised System Convention in order to keep the HS 
updated and current to reflect cha nges in technology and patterns in international trade.  The United 
States did not implement one set of changes affecting three six-digit tariff codes of certain photographic films of chapter 37.
38  The United States has been in cluded in the WTO waiver decision 
of 30 November 2011, "Introduction of Harmonized System Changes into WTO Schedules of Tariff Concessions", to waive certain WTO obligations in  order to implement the nomenclature changes.
39  
                                                      
36 The Harmonised Commodity Description and Coding System. 
37 Proclamation 8771, 29 December 2011, 77 FR 413. 
38 The change concerns the deletion of subheadings 3702.91 to 3702.95, and the insertion of new 
subheadings 3702.96, 3702.97, and 3702.98 (World Customs Organization, 2011b). 
39 WTO document WT/L/834, 8 November 2007. United States WT /TPR/S/275/Rev.1 
 Page 39 
 
 
To date (noting the deadline of 30 September 2012), the United States had not yet submitted its 
documentation to the WTO in order to make th e necessary changes to its WTO tariff schedule.40 
18. During the period under review, the United St ates implemented other nomenclature changes 
to its tariff schedule (HTSUS) by presidential procla mation.  There were 11 se ts of changes involving 
the footwear sector (i.e. footwear with textile outersoles). 41  The United States has not notified these 
changes as a rectification or modification to its tariff schedule, thus the nomenclature of the HTSUS and the U.S. WTO schedule differ for these 11 sets of footwear changes. 
(b) MFN applied tariffs 
19. The HTSUS contains seven columns of informati on and two of these pertain to rates of duty.  
Column 1, subdivided into "General" and "Speci al", is for those countries having normal trade 
relations (NTR), i.e. MFN status; and column 2 for those countries that do not have NTR.  Currently only two countries are designated as column 2 countri es, Cuba and North Korea.  Column 1 "General" 
is the normal duty rate applied, while "Special" is used to designate special duty provisions or 
programmes such as FTA rates, preferential rates, and special programmes that cover trade in civil 
aircraft or pharmaceuticals for example.  Thus, even if a WTO commitment is recorded on an MFN 
basis, the United States may apply this through the "General" or "Special" columns.  The 
United States generally uses ad valorem , specific, or compound duty rates. 
20. The 2012 HTSUS contains 10,711 tariff lines at th e eight-digit tariff level.  According to the 
HTSUS, the United States maintains TRQs on 2 00 tariff lines of agricultural products, which 
correspond to 199 out-of-quota tariff lines.  These include beef, dairy, sugar, cotton, tobacco, and peanuts (see also Chapter IV(1)(iii)(a)).  The fo llowing analysis excludes the in-quota lines, and is 
based on 10,511 tariff lines (Table III.4). 
Table III.4 
Structure of the tariff schedule, selected yearsa 
(%) 
  2002 2004 2007 2009 2012 
1. Total number of tariff lines 10,297 10,304 10,253 10,253 10,511 
2. Bound tariff lines (% of all tariff lines)b 100.0 100.0 100.0 100.0 100.0 
3. Duty free tariff lines (% of all tariff lines) 31.2 37.7 36.5 36.3 37.0 
4. Simple average tariff (%) 5.1 4.9 4.8 4.8 4.7 
5. WTO agriculture 9.8 9.7 8.9 8.9 8.5 
6. WTO non-agriculture (including petroleum) 4.2 4.0 4.0 4.0 4.0 
7. Agriculture, hunting, forestry, and fishing (ISIC 1) 5.6 5.7 5.5 5.7 5.6 
8. Mining and quarrying (ISIC 2) 0.4 0.4 0.3 0.4 0.4 
9. Manufacturing (ISIC 3) 5.1 4.9 4.8 4.8 4.7 
10. First stage of processing 3.8 3.7 3.7 3.7 3.7 
11. Semi-processed products 4.7 4.3 4.2 4.2 4.2 
12. Fully processed products 5.5 5.4 5.3 5.3 5.2 
13. Dutiable lines tariff average rate (%) 7.4 7.8 7.6 7.6 7.5 
14. Non- ad valorem  tariffs (% of all tariff lines) 12.2 10.6 10.7 10.7 10.9 
15. Non- ad valorem  with no AVEs (% of all tariff lines) 0.0 0.0 0.0 0.0 0.0 
16. Lines subject to tariff quotas (% of all tariff lines) 1.9 1.9 1.9 1.9 1.9 
17. Domestic tariff "peaks" (% of all tariff lines)c 5.6 7.1 6.9 6.7 6.7 
18. International tariff "peaks" (% of all tariff lines)d 6.6 5.5 5.2 5.3 5.0 
19. Overall standard deviation 12.3 12.6 11.9 11.8 11.9 
a The tariff is provided at the eight-digit level.  Averages  exclude in-quota rates and lines.  Calculations include ad valorem 
equivalents (AVEs) for non- ad valorem  duties that were calculated by the U. S. authorities using import price data. 
b Two lines applying to crude petroleum are not bound. c Domestic tariff peaks are defined as those exceed ing three times the overall average applied rate. 
d International tariff peaks are defined as those exceeding 15%. 
Source:    WTO Secretariat calculations, based on data provided by the U. S. authorities and notifications. 
                                                      
40 Presidential Proclamation 8771. 
41 Presidential Proclamation 8742. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 40 
  
21. U.S. tariff rates have remained relatively unch anged for several years.  The United States 
assesses duties on an f.o.b. basis (not c.i.f. like mo st other countries) which may have a bearing on 
tariff rates.  The 2012 simple average tariff level re mains relatively low, at 4.7%, however the tariff 
structure is quite dispersed.  A significant proportion (37%) of tariff lines are duty free, while 
approximately 7% of tariff lines are considered to have peaks, some as high as 350% (tobacco) 
(Chart III.2)  The vast majority of peaks (around 50%) are in the textile and apparel sector, followed 
by agricultural products (35%), and footwear (7%).  Commodities that are subj ect to TRQs generally 
have peak tariffs in the out-of-quota tariff line and many tariffs that are non- ad valorem  are also peak 
tariffs.  Duty-free tariffs are highly concentrated in  the machinery and electronics sector, mainly due 
to the products covered by the ITA, and in the ch emicals, steel, and paper subsectors, due to the 
U.S. participation in the Uruguay Round zer o-for-zero sectoral initiatives (Table AIII.1). 
Chart III.2
MFN tariff distribution, 2012
(Share of total tariff lines)
Source: WTO Secretariat calculations, based on the HTSUS (2012).Tariff rate 0.1 to 5%:
31.2%Duty free:
37.0%Tariff rate 5.1 to 14.1%:
25.1%Domestic peak:
(tariffs above 14.1%)
6.7%
Note: Non- ad valorem duties are included in calculations, based on corresponding AVEs provided by the 
U.S. authorities.
 
22. The United States made a few changes to its  MFN applied rates during the period under 
review.  The U.S. Manufacturing Enhancement Ac t of 2010 was passed by Congress and signed into 
law by the President in August 2010.42  This legislation grouped several hundreds of tariff duty 
suspensions and reductions into one law, thereby pr oviding new or extended temporary duty relief for 
certain products until 31 December 2012.  According to a statement released by the Office of the 
President, the legislation would reduce or eliminate some tariffs, which in turn would significantly 
lower costs for American manufacturing companies, including cars, chemicals, medical devices, and 
sporting goods.43  These specific duty reductions are not accounted for in the analysis above as they 
are implemented through special Ch apter 99 temporary tariff reductions. 
23. On 1 January 2011, the United States impl emented additional duty-free concessions on 
pharmaceutical products pursuant to its particip ation in the WTO initiative on pharmaceutical 
                                                      
42 H.R. 4380 (111th Congress), enacted after signature by  the President on 11 August 2010. 
43 The White House Blog online information, "Another Step for American Manufacturing".  Viewed at 
http://www.whitehouse.gov/blog/2010/08/11 /another-step-american-manufacturing. United States WT /TPR/S/275/Rev.1 
 Page 41 
 
 
products.44  A total of 718 new pharmaceutical products were added in the 4th review cycle in order to 
receive duty-free treatment.45  To date, the United States were notified these changes to its WTO 
schedule of concessions; the notification of the thir d review of pharmaceutical products also remains 
outstanding. 
(c) WTO bindings 
24. The United States' WTO tariff schedule (Schedul e XX) contains concessions mainly from the 
Uruguay Round, although subsequent rectifications  or modifications reflect the HS nomenclature 
changes from 1996 and 2002, and certain other trade liberalizing initiatives such as the ITA, distilled 
spirits, certain pharmaceutical products, etc.  The WTO tariff bindings do not yet reflect HS changes 
from 2007 and 2012, as is the case with most Members, or some other changes that the United States 
has made domestically but has not yet notified.46  Moreover, while the HS96 and HS02 nomenclature 
changes have been implemented for the tariff lin es concerned, the Chapter notes have not been 
updated, and they remain as implemented at the time of the Uruguay Round.  One Uruguay Round 
concession remains conditional, i.e. subject to obtaini ng adequate coverage in the area of Government 
Procurement, and therefore remains outstanding.47  Furthermore, the legal change to amend certain 
tobacco tariffs, pursuant to Article XXVIII renego tiations, has not been implemented at the WTO, 
while it appears the United States proceeded  domestically with these changes long ago.48 
25. U.S. Schedule XX statistically results in 100% binding coverage, however two lines remain 
unbound, those pertaining to crude petroleum.49  A comparison of the bound and applied rates was 
performed using the bound tariff schedule that cu rrently exists in the HS2002 nomenclature and no 
discrepancies were found.   
26. The United States bound most "other duties and charges" at zero during the Uruguay Round.  
However, seven tariff lines have "other duties and ch arges" bound at higher levels, i.e. US¢ 5.99 or 
US¢ 14.27 per litre for fuel mixtures containing ethyl alcohol and for ETBE. 
(d) Preferential tariffs and duty-free initiatives 
27. Tariff commitments under the FTA with Kor ea entered into force on 15 March 2012 
(Table AIII.2).  As of 30 June 2012, the simple average tariff for Korean products entering the 
United States is 1.7%, compared with 4.7% for MFN countries.  Tariffs were reduced to zero for 
petroleum, minerals, and pulp and paper immediat ely upon implementation.  Significant tariff 
reductions, i.e. greater than a 2% reduction, occurre d in the fruit and vegetable, textiles, leather and 
footwear, chemicals and photographic supplies, and electric machinery. 
28. Upon implementation of the Colombia FTA on 15 May 2012, tariff reductions went into 
effect giving a simple average tariff of 0.8% for all products (Table AIII.2).  Over half of all imports 
from Colombia already benefited from duty-free acc ess due to preferences or MFN-duty free rates 
(Chapter II(3)(i)(a)).  Most sectors were liber alized immediately upon implementation; the 
HS sections in which tariffs remain and are bein g staged more gradually are in agriculture and 
footwear. 
                                                      
44 Presidential Proclamation 8618. 
45 WTO document G/MA/W/102, 2 August 2010. 
46 These have been noted above or in other parts of this Report. 
47 Additional Note 12 to Chapter 85, pertaining to ex 8518.90.10. 
48 G/SECRET/2, 8 March 1995 has not been approved or certified.  Tobacco changes implemented by 
Presidential Proclamation 6821. 
49 HTSUS 2709.00.10 and 2709.00.20. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 42 
  
29. Pursuant to preferential trade relations unde r FTAs, the United States maintains tariff-rate 
quotas on some imports from certain FTA partners .  A number of products across sectors are 
involved, but in particular to textiles and appare l, where Tariff Preference Levels (TPLs) are created 
in which duty-free treatment is provided to non-orig inating goods up to agreed quantity restrictions.50  
This allows products to enter under the preferential rates when the item does not meet the preferential 
rule of origin.  For textiles and apparel, the ite m is converted to "square  meter equivalents", and 
thereafter measured against the quota category to de termine the available quota or quota fill rate.    
30. Certain watches, watch movements, and jewe llery enter the United States duty free from 
U.S. insular possessions through special annual import allocations.  Watch producers in the 
U.S. insular possessions may ship watches and watch movements, up to their exemption limits, free of 
duty into the customs territory of the United States.   In addition, producers of watches and jewellery 
in the U.S. insular possessions receive a duty refu nd certificate, based on the amount of wages and 
fringe benefits (health insurance, life insurance, a nd pension benefits) they paid their workers during 
the previous calendar year, entitling them to ref unds of duties paid on goods imported into the 
United States.51   
31. The United States applied certain other special programmes that provide duty-free or 
preferential rates for certain products.  Under the Florence Agreement programme, certain scientific instruments apparatus qualify for duty-free entry if the Department of Commerce determines that an 
equivalent instrument is not being manufactured in  the United States.  The United States also adheres 
to the Nairobi Protocol, which allows for duty-free treatment of articles for physically handicapped 
persons. 
(v) Other charges affecting imports 
(a) Customs user fees 
Merchandise Processing Fee 
32. Since 1985 the United States has imposed fees for the processing of commercial merchandise.  
Several revisions to the law or new laws that ha ve modified the fees, changed how they are assessed, 
and created exemptions.  The Merchandise Process ing Fee (MPF) was created in 1986, and since 
1990 has been applied differently depending on whether the import is an informal or formal entry.  
For informal entries, the MPFs are:  US$2 for automated entries, US$6 for manual entries not prepared by CBP, and US$9 for manual entries prepar ed by CBP.  For formal entries there is an ad 
valorem  fee with caps for minimum (U S$25) and maximum (US$485) rates.  Currently, the informal 
entry limit for merchandise is US$2,000, but there is a proposed rule by the Department of Homeland 
Security and the Department of Treasury to raise the limit to US$2,500.
52  The final rule is expected to 
be issued in the second half of 2012.53 
33. Following the enactment of the NAFTA, the merc handise processing fee has not been applied 
to imports from Canada since 1 January 1994 and from Mexico since 30 June 1999.  Successive FTAs 
                                                      
50 Customs and Border Protection (2012). 
51 Import Administration online information, "The Insular Possessions Watch and Jewellery Program".  
Viewed at:  http://ia.ita.doc .gov/sips/sipswap.html.   
52 76 FR 66875. 
53 The proposed rule would also remove the requirement for certain products, i.e. textiles and apparel, 
to be imported as a formal entry.  The CBP notes that requirement of formal entry is no longer necessary as 
these products are no longer subject to quota under the ATC, which has expired (see 76 FR 66875). United States WT /TPR/S/275/Rev.1 
 Page 43 
 
 
have exempted most from this fee, with the exception of Morocco and Jordan.  Certain other 
preference programme recipients are also exempt (Table III.5). 
Table III.5 
MPF exemptions, 2012 
MPF exemption  Citation  Notes 
Australia  Article 2.12 of the AFTA TPL goodsa are not exempt 
Bahrain   19 CFR 24.23(c)(8) TPL goods are not exempt 
Chile  19 CFR 24.23(c)(7) TPL goods are not exempt 
CAFTA-DR  19 CFR 24.23(c) TPL goods are not exempt 
Colombia 19 USC 58c(b)(20)  
Israel  19 CFR 24.23(c)(5) Products of Israel are exempt irrespective of whether ILFTA is claimed 
Korea, Rep. of  Sec. 203  
NAFTA 19 CFR 24.23(c)(3) TPL goods are not exempt. E criterion goods (Annex 308.1) are not exempt unless 
eligible to be marked as products of Canada or Mexico 
Oman  19 CFR 24.23(c)  
Panama  Sec. 204  
Peru  19 CFR 24.23(c)  
Singapore 19 CFR 24.23(c)(6) Integrated Sourcing Initiative (ISI) goods also or iginate, so also exempt.  TPL 
goods are not exempt 
AGOA 19 CFR 24.23(c)(1)(iv) 
19 CFR 24.23(c)(1)(i) Exempt only when products of an LDBDC or when entered under HTS 9819  
ATPDEA 19 CFR 24.23(c)(1)(i) Exempt only when HTS 9821  is claimed 
CBERA 19 CFR 24.23(c)(1)(iii) Exempt irresp ective of whether CBERA is claimed  
CBTPA 19 CFR 24.23(c)(1)(iii) Exempt ir respective of whether CBTPA is clai med because they are a subset of 
CBERA  
DCMAO (DCASR)b 19 CFR 24.23(c)(1)(i)  
GSP 19 CFR 24.23(c)(1)(iv) Although products of a GSP country are not exempt, products of an LDBDC (a 
subset) are exempt, irrespective of whether GSP is claimed 
Insular possessionsc 19 CFR 24.23(c)(1)(ii) Products of insular possessions are exempt irrespective of whether preference is 
claimed 
a TPL = Tariff Preference Level goods.  These goods are restricted  by quantity and are administered like a quota by CBP.  They 
concern textile and apparel products.  See section (vii)(a) for more details on TPL. 
b Defense Contract Management Area Office (Defense  Contract Administration Service Representative. 
c U.S. Virgin Islands, Guam, American Samoa, and Northern Mariana Islands. 
Source:  U.S. Customs and Border Protection online information, "Trade:  Trade Programs:  Trade Agreements:  MPF and 
Duty Preference Programs".  Viewed at:  http:// www.cbp.gov/xp/cgov/trade/trade _programs/international_ 
agreements/merchandise_fee/;  and United States-Korea Free Trade Agreement Implementation Act, Public 
Law 112–41, 21 October 2011. 
34. New legislation raised the MPF ad valorem  rate for formal entries from 0.21% to 0.3464% as 
of 1 October 2011; however the minimum and maximum rates remained unchanged at US$25 and US$485, respectively.
54  The rates for informal entries remain unchanged. 
COBRA fees 
35. The United States charges fees to recover pro cessing costs in ensuring carriers, passengers, 
and their personal effects entering the U.S. are compli ant with customs laws.  The law, established in 
1985 as the Consolidated Omnibus Budget Reconciliati on Act (COBRA), has been modified over the 
years and is essentially a flat-rate fee system fo r inspection services on a per arrival basis for 
commercial vessels, trucks, railroad cars, private ai rcraft and boats, and certain passengers arriving on 
commercial vessels or aircraft (Table III.6). 
                                                      
54 19 USC 58c note, Public Law 112-40. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 44 
  
Table III.6 
Consolidated Omnibus Budg et Reconciliation Act fees  
Fee Citation Fee rate/annual 
decal/cap/user fee  Notes  
Commercial vessel  19 CFR 24.22( b)(1) US$437/ US$5,955 (cap)  
Commercial vehicle 19 CFR 24.22(c) US$5.50/US$100 (annual 
cap)  
Rail cars 19 CFR 24.22(d) US$8.25/ US$100 (prepay)  
Private aircraft/vessel 19 CFR 24.22(e) US$27.50 (annual decal)  
Air/sea passenger 19 CFR 24.22(g) US$5.50 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$1.93  
Dutiable mail  19 CFR 24.22(f) US$5.50  
Customs broker  19 CFR 24.22(c)  US$138 (annual fee)  
Barge/bulk carriers from Canada  and Mexico  19 CFR 24.22(b)(2)(i) US$110/US$1,500 (cap)   
Source:  CBP (undated), User Fees FAQs .  Viewed at:  http://www.cbp.gov/linkha ndler/cgov/travel/inspections_carriers_ 
facilities/advisory_committee/user_f ees_faqs.ctt/user_fees_faqs.doc. 
(b) Harbor Maintenance Tax 
36. Since 1986, the United States has charged a fee on certain merchandise arriving by vessel in 
order to maintain the navigation channels.55  T h e  ad valorem  fee of 0.125% is assessed on the 
declared value for commercial cargo entering the United States.56  The fee is remitted by CBP to the 
Harbor Maintenance Trust Fund, and the U.S. Congr ess makes appropriations for harbour dredging or 
other purposes.  The fund has maintained a signifi cant surplus for many years.  Data from 2005 
suggests that most of the expenditures from the f und in recent years have been concentrated in 
Louisiana, while the highest revenue ports are locat ed elsewhere.  In essence, the tax generates a pool 
of funds and is distributed without regard to which ports collected the tax.57  A number of changes to 
the Harbor Maintenance Tax, including the tax ra te and how to spend th e revenues, have been 
proposed in recent year in Congress, ho wever none has been passed into law.58 
(c) Agriculture fees 
37. Fees charged by Customs at the border for the inspection and/or quarantine of agricultural 
goods, often known as "AQI", are jointly administer ed by APHIS and the Department of Homeland 
Security's Customs and Border Protection.  The fees vary by type of carrier (Table III.7).  The Food, 
Agriculture, Conservation and Trade (FACT) Act of 1990 authorised these fees, which have been 
adjusted and amended by subsequent legislation.59  For fiscal year 2011, AQI fees collected amounted 
to US$534.7 million.60 
                                                      
55 Water Resources Development Act of 1986, P.L. 99-662.  A Supreme Court case in 1998 challenged 
its assessment on exports, and the fee has been applied only to imports since then. 
56 The fee is also assessed on passengers based on the price of their ticket (Government Accountability 
Office, 2008).  
57 "While the top ten ports account for nearly 70% of the total value of foreign goods shipped through 
U.S. ports, these ports have received about 16% of tota l HMTF expenditures over th e last decade" (Frittelli, 
2011). 
58 Frittelli (2011). 
59 21 U.S.C. 136a/Pub. L. No. 101-624, as amended by Pub. L. No. 101-508, Pub. L. No. 102-237, Pub. 
L. No. 104-127, and Pub. L. No. 107-171. 
60 Department of Agriculture online information, "Agr icultural Quarantine and Inspection:  User Fees".  
Viewed at:  http://www.aphis.usda .gov/userfees/aqi_rates.shtml. United States WT /TPR/S/275/Rev.1 
 Page 45 
 
 
Table III.7 
Agriculture fees, 2012 
Fee Citation Fee rate/annual decal/cap/prepay 
Air passenger 7 CFR 354.3(f) US$5 
Commercial aircraft clearance 7 CFR 354.3(e) US$70.75 
Commercial truck 7 CFR 354.3(c) US$5.25/US$105 (annual decal) 
Commercial vessel 7 CFR 354.3(b) US$496/7,410 (cap) 
Commercial railroad car 7 CFR 354.3(d) US$7.75/155 (prepay) 
Source:    CBP (undated), User Fees FAQs .  Viewed at:  http://www.cbp.gov/linkha ndler/cgov/travel/inspections_carriers_ 
facilities/advisory_committee/user_fees_f aqs.ctt/user_fees_faqs.doc;  and U.S. Department of Agriculture online 
information, "Agricultural Quarantine and Inspection:  User Fees".  Viewed at:  http://www.aphis.usda.gov/ 
userfees/aqi_rates.shtml. 
(d) Excise taxes 
38. The United States maintains over 100 excise taxes at the federal level on various products and 
services.61  A number of these have been discussed in previous TPRs of the United States.62  The 
Internal Revenue Code establishes the excise tax es, which are assessed and collected on different 
bases and exist in two basic forms:  general fund an d trust fund excise taxes.  The trust funds have 
been established by the federal government, often fo r many social reasons, and are financed with 
dedicated excise receipts;  other, general fund, excise taxes are used for general purpose expenditures.    
39. For fiscal year 2010, the United States collected US $74.7 billion in federal excise taxes.  Over 
one third (US$25.1 billion) was on gasoline motor fuels, followed by tobacco products 
(US$15.5 billion), diesel motor fuel (US$8.6 billion), beverage alcohol (US$7.6 billion), and 
transportation of persons by air (US$7.6 billion) (Chart III.3).63 
40. Federal excise taxes are collected and reported by:  the Internal Revenue Service for retail, 
manufacturers, service, environmental, transportatio n, and insurance activities;  or by the CBP (for 
imports), and the Alcohol and Tobacco Tax and Tr ade Bureau (TTB) (for domestic products), for 
spirits, wine, beer, tobacco products;  and by the Bureau of Alcohol, Tobacco, Firearms and 
Explosives for firearms.  As reported in previous TPRs, there are differences regarding the collection 
of excise taxes for some categories of beer and wine.   
41. In addition to federal excise taxes, the 50 st ates and local governments charge excise taxes.  
Products affected by state and local excise taxes in clude fuels, tobacco products, cigarettes, spirits, 
wine, and beer. 
 
                                                      
61 For a full detailed description of the taxes and their details, see Joint Committee on Taxation (2011). 
62 See WTO documents WT/TPR/M/200/Add.1, 9 September 2008;  and WT/TPR/S/235/Rev.1, 
29 October 2010. 
63 Internal Revenue Service online information, "IRS online information, "SOI Bulletin Historical 
Table 20:  Federal Excise Taxes Reported to or Coll ected By the Internal Reve nue Service, Alcohol and 
Tobacco Tax and Trade Bureau , and Customs Service, By Type of Ex cise Tax, Fiscal Years 1999–2010".  
Viewed at:  http://www.irs.gov/taxstats/ar ticle/0,,id=175900,00.html. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 46 
  
Chart III.3
Federal excise taxes reported and collected, fiscal year 2010
Source: U.S. Department of the Treasu ry; Alcohol and Tobacco Tax and Trade Bureau; Internal Revenue 
Service; and Office of Finance .Other
1.6%
Alcohol, tobacco & 
firearms
34.6%
Manufacturers (e.g. fuels, 
sport equipment)
45.7%Retail (e.g. trucks)
2.4%
Facilities & services 
(e.g. telephone & 
transport)
14.5%Environmental
0.7%Policies issued by foreign 
insurers
0.6%
 
(vi) Contingency measures 
(a) Anti-dumping and countervailing measures 
42. Anti-dumping (AD) and countervailing duty (CVD) le gislation is contained in title 19 of the 
U.S. Code (sections 1671-77).  Regulations ar e included in title 19 of the Code of Federal 
Regulations.   The U.S. Department of Comme rce and the U.S. International Trade Commission 
(USITC) are responsible for the administration of AD and CVD legislation. 
43. The initiation of anti-dumping investigations in creased in 2011 after only a few initiations in 
2010.  In 2008-10, over 90% of the AD investiga tions initiated resulted in final AD measures being 
imposed, but this percentage dropped in 2011, with half of the initia ted investigations resulting in the 
imposition of final AD measures through June 2012 (T able III.8).  From 2008 to June 2012, AD 
investigations were initiated on 0.15% of total imports.  
44. The majority of AD investigations in recent years were on imports from Asia, and in 
particular, China.  Over the past five years, As ia has accounted for 83% of the AD investigations 
initiated, with the Americas accounting for 10% , and the Middle East for 5% (Chart III.4). 
 United States WT /TPR/S/275/Rev.1 
 Page 47 
 
 
Table III.8 
Anti-dumping investigations, 2008-12 
 2008 2009 2010 2011 2012a 
Investigation initiati ons 16 20 3 15 9 
Of the investigations initiated, the fo llowing determinations have been madeb      
Preliminary injury determinations, negative n.a. 2 n.a. .. .. 
Final injury determinations, affirmative 15 17 3 4 .. 
Final injury determinations, negative 1 1 n.a. 5 .. 
Final dumping determinations, affirmative 15 18 3 9 .. 
Final dumping determinations, nega tive n.a. n.a. n.a. .. .. 
Termination, suspension or withdrawal 1 n.a. 1 .. .. 
By per cent      
Final dumping determinations, a ffirmative  94 90 100 .. .. 
Final dumping determinations, nega tive  n.a. n.a. n.a. .. .. 
Imports subject to investigation initiations (US$ million)c 984 5,614 753 5,659 1,555 
As a % of total imports 0.05 0.27 0.05 0.30 0.07 
n.a. Not applicable. 
.. Not available. 
a Up to June 2012.  
b Data based on calendar year  when relevant investigation wa s initiated, regardless of when a given action actually occurred. 
c Import value data based on calenda r year prior to initiation date. 
Note:   All figures refer to calendar year. 
Source:  WTO Secretariat, based on Import Administration onlin e information, "Antidumping and Countervailing Duty 
Investigations Initiated After January 01, 2000".  View ed at:  http://ia.ita.doc.gov/stats/inv-initiations-2000-
current.html;  USITC (2010), Import Injury Investigations Case Statistics (FY 1980-2008) , February.  Viewed at:  
http://www.usitc.gov/trade_remedy/doc uments/historical_case_ stats.pdf;  and USITC online information, "  Trade 
Remedy Investigations:  Completed Investigations".  Viewed at:  h ttp://www.usitc.gov/trade_remedy/731_ad_ 
701_cvd/investigations/c ompleted/index.htm. 
1418
31071
112
2
13
0510152025
2008 2009 2010 2011 2012Asia Middle East Europe Africa AmericasChart III.4
Anti-dumping investigations initiated, by region, 2008-12a
Number of measures
Source: WTO Secretariat, based on Import Administration online inform ation.  Viewed at: http://ia.ita.doc.gov/stats/inv-initiations-
2000-cu rrent.html; USITC ( 2010), Import Injury Investigations Case Statistics (FY 1980-2008) , February; and USITC online 
information. Viewed at: http://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations/completed/index.htm.a  Data until 30 June 2012.
 WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 48 
  
45. In terms of sectors affected by AD investiga tions, the metals industry accounted for 41% of 
all investigations, followed by chemicals and plastics with 21%, and machinery and electrical 
equipment with 13% (Chart III.5). 
48
29
354 2
2322
124
251
2
0510152025
2008 2009 2010 2011 2012Chart III.5
Anti-dumping investigations initiated, by product, 2008-12 a
Number of measures
Source: WTO Secretariat, based on Import Administration online inform ation.  Viewed at: http://ia.ita.doc.gov/stats/inv-initiations-
2000-cu rrent.html; USITC ( 2010), Import Injury Investigations Case Statistics (FY 1980-2008) , February; and USITC online 
information. Viewed at: http://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations/completed/index.htm.a Data until 30 June 2012.Metals
Misc. manufacturesChemicals & plastics Textiles Stones, ceramic, etc.
Wood & paper Machinery & electrical equipt.
 
46. At the end of 2011, the United States had 237 AD measures in force;  the number remained 
relatively stable during 2008-11 with an average of 241 measures.  In 2011, China was the subject of the most AD orders with 38%, followed by the EU  countries with 10%, and Chinese Taipei, 7%.  The 
number of AD orders relating to imports from Chin a has increased steadily, in line with increased 
imports from China;  while the number relating to imports from EU member States has fallen.  The 
other six countries/customs territories (Chinese Taipei , India, Japan, the Republic of Korea, Brazil, 
and Mexico) accounting for the next highest numbers of AD orders imposed have generally seen their 
number of orders remain stable over the past f our years (Table III.9).  Many of these developing 
countries are also generally the ones that have be come larger users of AD measures themselves in 
recent years. 
47. Pursuant to commitments undertaken in the Uruguay Round, the United States began 
reviewing outstanding AD orders in force starting in July 1998.  The two agencies involved – the 
Department of Commerce and the USITC – ha d conducted 738 reviews at end 2011 under the 
"sunset" review procedure.  The sunset review pr ocess has resulted in about 58% of orders being 
maintained (i.e. not revoked), and 37% of orders being revoked (Table III.10). 
48. The United States abandoned the use of zeroing  when calculating margins in original 
investigations based on weighted average to weight ed average comparisons in 2006.  However, in 
February 2012, after publishing a proposed modifi cation, receiving public comments, and consulting 
with Congress, the U.S. Department of Commerce modified its methodology to address the issue of United States WT /TPR/S/275/Rev.1 
 Page 49 
 
 
zeroing in administrative, new shipper, expedited, and sunset reviews.64  In administrative reviews, 
"except where the Department dete rmines that application of a different comparison method is more 
appropriate, the Department will compare monthl y weighted average export prices with monthly 
weighted average normal values, and will grant an offset" where the export price exceeds the normal 
value.65  Further, in sunset reviews "it will not rely  on weighted average dumping margins that were 
calculated using the methodology determined by the Appellate Body to be WTO-inconsistent."66  The 
new rules apply to all reviews pending before th e Department for which preliminary results were 
issued after 16 April 2012.  
Table III.9 
Anti-dumping measures, by country, 2008-11  
 2008 2009 2010 2011 
Trading partner/region     
China 72 82 88 91 
EU countries (27) 32 32 31 23 
Chinese Taipei 16 16 16 16 
India 14 16 16 15 
Japan 20 20 16 14 
Korea, Rep. of  14 15 13 11 
Brazil 11 11 11 10 
Mexico 7 6 8 6 
Other America 6 6 6 6 
Other Asia (including Australia) 22 22 25 25 
Other Europe  17 17 17 17 
Africa 3 3 3 3 
Total  234 246 250 237 
Source:    WTO Secretariat, based on USITC (2011), Antidumping and Countervailing Duty Orders in place as of 
11 October 2011 ;  USITC (2010), Import Injury Investigations Case Statistics (FY 1980-2008) , February.  Viewed 
at:  http://www.usitc.gov/trade_remedy/ documents/historical_case _stats.pdf;  and Depa rtment of Commerce, 
Import Administration online information. 
Table III.10 
Overview of five-year sunset investigations initiated, as of year-end 2011 
 Number of cases Distribution of cases (%) 
Cases instituted 738  
Final disposition – order revoked 271 36.7 
Final disposition – order not revoked 427 57.9 
Terminated 2 0.3 
Suspended 3 0.4 
Pending 35 4.7 
Source: WTO Secretariat, based on USITC (2010), Import Injury Investigations Case Statistics (FY 1980-2008) , February.  
Viewed at:  http://www.usit c.gov/trade_remedy/documen ts/historical_case_stats.pdf ;  USITC Sunset Review 
online database.  Viewed at:  http:// pubapps2.usitc.gov/sunset/cas eProf/list?sort=caseTitle&order=asc;  and USITC 
online information, "Trade Remedy In vestigations:  Active Inve stigations".  Viewed at   http://www.usitc.gov/ 
trade_remedy/731_ad_701_cvd/investigat ions/active/index.htm#reviews.  
                                                      
64 Federal Register , "Antidumping Proceedings: Calculation of the Weighted Average Dumping 
Margin and Assessment Rate in Ce rtain Anti-Dumping Proceedings: Fina l Modification", Vol. 77, No. 30, 
p. 8101, 14 February 2012.  Viewed at:  http://www.g po.gov/fdsys/pkg/FR-2012-02-14/html/2012-3290.htm.   
65 Federal Register , "Antidumping Proceedings: Calculation of the Weighted Average Dumping 
Margin and Assessment Rate in Ce rtain Anti-Dumping Proceedings: Fina l Modification", Vol. 77, No. 30, 
p. 8102, 14 February 2012.  Viewed at:  http://www .gpo.gov/fdsys/pkg/FR-2012-02-14/html/2012-3290.htm. 
66 Federal Register , "Antidumping Proceedings: Calculation of the Weighted Average Dumping 
Margin and Assessment Rate in Ce rtain Anti-Dumping Proceedings: Fina l Modification", Vol. 77, No. 30, 
p. 8103, 14 February 2012.  Viewed at:  http://www .gpo.gov/fdsys/pkg/FR-2012-02-14/html/2012-3290.htm. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 50 
  
49. As of August 2011, the Department of Commerc e implemented changes in its regulations 
governing the submission of information in AD and CVD proceedings. These amendments 
incorporated changes resulting from the first pha se of the Department’s implementation of an 
electronic filing system, known as IA ACCESS (Import Administration Antidumping and 
Countervailing Duty Centralized Electronic Service System).  When the remaining two phases are 
fully implemented (2012-13), all public doc uments will be available in IA ACCESS.67 
50. During the review period, the United States has adopted or proposed several modifications to 
its methodology for the calculation of dumping marg ins for non-market economies.  In June 2012, 
after receiving public comments, the U.S. Depa rtment of Commerce announced a methodological 
change under which it will now reduce the export pr ice or constructed export price by the amount of 
any export tax, duty or other charge in proceedi ngs involving China and Viet Nam.  Although this 
reduction is standard in transactions involving mark et economies, the U.S. Department of Commerce 
previously considered that such reductions were not appropriate in the case of non-market economies.  
51. More recently, the U.S. Department of Co mmerce proposed to modify its regulations 
concerning the use of market economy input pri ces in non-market economy proceedings.  Under the 
proposed modification, where a non-market economy producer purchases an input from a market 
economy supplier, the U.S. Department of Commer ce would treat the price paid to the market 
economy supplier as the price for all of the input used only if "substantially all" of the input (greater 
than 85%) was purchased from the market economy supplie r.  In other cases, it would use a surrogate 
price for the portion of the input not purchased from a market economy supplier.  Currently, it 
presumptively uses the price paid to the market econom y supplier as the price for all of the input used 
where the share of the input purchased from ma rket economy suppliers exceeds 33% of the total 
volume of the input purchased.  This proposed modi fication was opened for public comments, to be 
received by 30 July 2012. 
52. From 2008 to 2010, 91% of CVD investiga tions resulted in final affirmative CVD 
determinations.  From 2008 to J une 2012, CVD investigations we re initiated on 0.10% of total 
imports (Table III.11). 
53. The majority of CVD investigations initiated dur ing the past five years involved imports from 
Asian countries (92%) (Chart III.6), in particular Chin a.  This reflects a decision of the Department of 
Commerce, noted in the Secretariat's previous review Report68, to apply CVD measures to non-market 
economy countries (NMEs).  This decision, and c onsequent decisions regarding the simultaneous 
application of CVD measures alongside AD measu res based upon dumping margins calculated using 
an NME methodology, have resulted in litigation both at the WTO69, and in domestic courts.  While 
the U.S. Court of Appeals for the Federal Circu it held in December 2011 that under U.S. law CVD 
measures cannot be applied to NMEs70, Congress in March 2012 enacted legislation effectively 
reversing that ruling retroactively.71  The new legislation, which also  contains provisions intended to 
address WTO rulings by preventing "double counting", is currently facing challenges on 
Constitutional grounds.72 
                                                      
67 International Trade Administra tion online information.  Viewed  at:  http://i aaccess.trade.gov. 
68 WTO document WT/TPR/S/235/Rev.1/, 29 October 2010, p. 32. 
69 WTO document WT/DS379/AB/R, United States - Definitive Anti-Dumping and Countervailing 
Duties on Certain Pr oducts from China. 
70 GPX International Tire Corp. v. United States , 666 F3d 732 (Fed. Cir. 2011) . 
71 Application of Countervailing Duty Provisions to Nonmarket Economy Countries , Pub. L. 
No. 112-99, 126 Stat. 265 (2012)(to be codified at 19 U.S.C. Secs. 1671, 1677f-1). 
72 GPX International Tire Corp. v. United States , 2011-1107, -1108, -1109, 9 May 2012 (Fed. Cir. 
2012). United States WT /TPR/S/275/Rev.1 
 Page 51 
 
 
Table III.11 
Countervailing duty investi gations initiated, 2008-12 
 2008 2009 2010 2011 2012a 
Investigation initiations 6 14 3 9 4 
Of the investigations initiated, the fo llowing determinations have been madeb      
Preliminary determinations, negative n.a. 1 n.a.   
Final injury determinations, affirmative 6 10 3 1 .. 
Final injury determinations, negative n.a. 3 n.a. .. .. 
Final CVD determinations, affirmative 6 12 3 .. .. 
Final CVD determinations, negative n.a. 1 n.a. .. .. 
Termination, suspension or withdrawal    ..  
By per cent      
Final CVD determinations, affirmative 100 86 100 .. .. 
Final CVD determinations, negative n.a. 7 n.a. .. .. 
Imports subject to investigation initiations (US$ million)c 511 4,475 752 2,713 941 
As a of total imports 0.03 0.21 0.05 0.14 0.04 
n.a. Not applicable. 
.. Not available. 
a Data as of June 2012. 
b Data based on calendar year  when relevant investigation wa s initiated, regardless of when a given action actually occurred. 
c Import value data based on calenda r year prior to initiation date. 
Note:   All figures refer to calendar year. 
Source:  WTO Secretariat, based on Import Administration onlin e information, "Antidumping and Countervailing Duty 
Investigations Initiated After January 01, 2000".  View ed at:  http://ia.ita.doc.gov/stats/inv-initiations-2000-
current.html;  USITC (2010), Import Injury Investigations Case Statistics (FY 1980-2008) , February.  Viewed at:  
http://www.usitc.gov/trade_remedy/doc uments/historical_case_ stats.pdf;  and USITC online information, "  Trade 
Remedy Investigations:  Completed Investigations".  Viewed at:  h ttp://www.usitc.gov/trade_remedy/731_ad_ 
701_cvd/investigations/c ompleted/index.htm. 
613
37
41
2
05101520
2008 2009 2010 2011 2012
Asia Middle East Europe Africa AmericasChart III.6
Countervailing measures init iated, by region, 2008-12a
Number of measures
Source: WTO Secretariat, based on Import Administration online inform ation.  Viewed at: http://ia.ita.doc.gov/stats/inv-initiations-
2000-cu rrent.html; USITC ( 2010), Import Injury Investigations Case Statistics (FY 1980-2008) , February; and USITC online 
information. Viewed at: http://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations/completed/index.htm.a  Data until 30 June 2012.
 WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 52 
  
54. CVD measures have been concentrated in the metals sector since 2008 with 20 cases 
(Chart III.7). 
25
27
222112
12
2
121
1
05101520
2008 2009 2010 2011 2012Chart III.7
Countervailing measures init iated, by product, 2008-12a
Number of measures
Source: WTO Secretariat, based on Import Administration online informat ion.  Viewed at: http://ia.ita .doc.gov/stats/inv-initiations-
2000-cu rrent.html; USITC ( 2010), Import Injury Investigations Case Statistics (FY 1980-2008) , February;  and USITC online 
information.  Viewed at: http://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations/completed/index.htm.a Data until 30 June 2012.Metals
Misc. manufacturesChemicals & plastics Textiles Stones, ceramic, etc.
Wood & paper Machinery & electrical equipt.
 
55. Under the "Sunset" review procedures initiated to date, approximately half (48%) of the 
125 cases have resulted in the final CVD duty being lifted (revoked) and the ot her half (49%) being 
maintained (not revoked) (Table III.12). 
Table III.12 
Overview of five-year sunset reviews initiated, as of year-end 2011  
 Number of cases Distribution of cases (%) 
Cases instituted 125 100.0 
Final disposition – order revoked 60 48.0 
Final disposition – order not revoked 61 48.8 
Terminated 0 0.0 
Suspended 0 0.0 
Pending 4 3.2 
Source: WTO Secretariat, based on USITC (2010), Import Injury Investigations Case Statistics (FY 1980-2008) , February.  
Viewed at:  http://www.usit c.gov/trade_remedy/documen ts/historical_case_stats.pdf ;  USITC Sunset Review 
online database.  Viewed at:  http:// pubapps2.usitc.gov/sunset/cas eProf/list?sort=caseTitle&order=asc;  and USITC 
online information, "Trade Remedy In vestigations:  Active Inve stigations".  Viewed at   http://www.usitc.gov/ 
trade_remedy/731_ad_701_cvd/investigat ions/active/index.htm#reviews.  
(b) Safeguards 
56. The U.S. has several statutes in place relating to  safeguards.  The globa l safeguard provisions, 
19 U.S.C. 2251-2254, are generally referred to as Sections 201-204 of the Trade Act of 1974, as 
amended.  There is also safeguard legislati on specific to communist countries under 19 U.S.C. 2436 United States WT /TPR/S/275/Rev.1 
 Page 53 
 
 
(Section 406), and to China under 19 U.S.C. 2451- 2451b (Sections 421-423), as well as safeguard 
provisions in many of the U.S. FTAs (Table III.13). 
Table III.13 
U.S. FTA safeguard implementation legislation, as of 2012 
Agreement Section of the Act U.S.C. reference  
United States-Australia Free Trade Agreemen t Implementation Act 311(b) 19 U.S.C. 3805 note 
United States-Bahrain Free Trade Agreement Implementation Act 311(b) 19 U.S.C. 3805 note 
United States-Chile Free Trade Agreement Implementation Act 311(b) 19 U.S.C. 3805 note 
United States-Colombia Trade Promotion Agreem ent Implementation Act 311(b) 19 U.S.C. 3805 note 
Dominican Republic-Central America- United States Free Trade Agreement 
Implementation Act 311(b) 19 U.S.C. 4061(b) 
United States-Jordan Free Trade Area Implementation Act 211(b) 19 U.S.C. 2112 note 
United States-Korea Free Trade Agreement Implementation Act 311(b) 19 U.S.C. 3805 note 
United States-Morocco Free Trade Agreement Implementation Act 311(b) 19 U.S.C. 3805 note 
NAFTA Implementation Act 302(b) 19 U.S.C. 3352(b) 
United States-Oman Free Trade Agreement Implementation Act  311(b) 19 U.S.C. 3805 note 
United States-Panama Trade Promotion Agreemen t Implementation Act 311(b) 19 U.S.C. 3805 note 
United States-Peru Trade Promotion Agreemen t Implementation Act 311(b) 19 U.S.C. 3805 note 
United States-Singapore Free Trade Agreement Implementation Act 311(b) 19 U.S.C. 3805 note 
Source:   77 FR 3922. 
57. There were no changes to U.S. safeguard la ws during the period under review.  However, 
there were two changes with respect to practice and procedure.  The first involved a rule of general 
application regarding procedural changes at the USITC with respect to the electronic filing of 
documents, which became effective on 7 November 2011.73  On 26 January 2012, the USITC 
published notice of an interim rule as part of its Rules of Practice and Procedure to amend its rules 
relating to the conduct of investigations under legi slation implementing safeguard provisions in free 
trade agreements.  In essence, these rules expand upon the current rules for bilateral safeguard 
investigations under the NAFTA and make them applicable to othe r FTAs with similar procedures.74  
On 25 June 2012, the interim rule was adopted as a final rule.75 
58. The U.S. last applied a safeguard measure in 2009, with respect to China, under the 
provisions of Section 421.  This  measure, "Certain Passenger Vehicle and Light Truck Tires From 
China," was challenged by China under the DSU.   China brought a complaint and subsequently 
requested establishment of a panel to review the matter;  it appealed the Panel's findings to the 
Appellate Body.76  The findings upheld the safeguard measure.   The other U.S. safeguard laws have 
been little utilized in recent times.  A case under Se ctions 201-202 was last in itiated in 2001 with a 
review of that case (Sections 203-204) in 2005,  and Section 406 was last utilized in 1993.77  
Special safeguard provisions under Ar ticle 5 of the Agreement on Agriculture 
59. The United States has certain scheduled rights in its WTO tariff schedule relating to the 
possible invocation of the agriculture special  safeguard (SSG) (see Chapter IV(1)).   
                                                      
73 76 FR 39750 and 76 FR 61937. 
74 77 FR 3922. 
75 77 FR 37804. 
76 For details, see WTO documents WT/DS/399/ R, 13 December 2010, and WT/DS/399/AB/R, 
5 September 2011. 
77 USITC (2010);  and USITC online information, "Trade Remedy Investigations:  Completed 
Investigations".  Viewed at:  h ttp://www.usitc.gov/trade_re medy/731_ad_701_cvd/investigations/completed/ 
index.htm.   WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 54 
  
(vii) Quantitative trade measures, restrictions, controls, and licensing 
(a) Quantitative restrictions, including prohibitions 
60. The United States has various laws or provision s that allow for quantitative restrictions or 
prohibitions on imported products.  These are often main tained to protect the security or economy of 
the United States, or safeguard the health or well-be ing of plant or animal life.  For example, the 
Marine Mammal Protection Act, Endangered Species Act, the Fishermen's Protective Act, the Lacey 
Act, and the Tariff Act of 1930 Section 305 for ob scene materials, and Section 308 pertaining to dog 
and cat fur products all have provisions to prohibit imports of certain products .  CBP has enforcement 
authority and may restrict goods (on behalf of other agencies) that do not conform to U.S. laws or 
regulations such as standards or c onsumer protection regulations.   
61. The United States also maintains quotas or quantita tive restrictions on products outside of the 
agriculture TRQs.  For industrial products, there are TRQs on certain tariff lines of tuna fish and for 
broomcorn brooms.78  Quotas on textile and appa rel products were eliminated in line with the expiry 
of the ATC in 2005.   
62. The United States last notified quantitative restri ctions in 1999, and cross-referenced three 
notifications in the areas of safegua rds, import licensing, and textiles.79  According to the authorities, 
a new notification is under preparation. 
(b) Import licensing 
63. The United States requires an import licence,  either automatic or non-automatic for 
15 categories of products (Table III.14).80  The licensing requirements are required by six different 
U.S. executive Departments, under various statutes,  and for various purposes .  Generally, it is 
necessary to contact the focal point at the Departme nt or Agency concerned in order to obtain the 
necessary licence, which is subsequen tly enforced at the border by CBP.81  In general, all persons, 
firms, and institutions are eligible to apply for li cences.  For certain products additional criteria may 
apply, i.e. being a resident in the United States, a registered user, a manufacturer or refiner, etc. 
Table III.14 
Products subject to U.S. impo rt licensing procedures, 2011 
Product / Legal reference Stated purpose Procedure 
Animals and animal products   
Title 9 C.F.R., Parts 92, 94.7, 
94.16, 95.4, 95.18, 95.19, 95.20 
through 98, 104 and 122;  and in 
the following laws as codified:  21 U.S.C–102 to 105, 111, 134, 135, 151-159 and 19 U.S.C–1306 Not used to restrict the quantity or value of imports, 
but only to protect domestic agriculture from the 
introduction or entry of animal diseases or disease 
vectors The amount of time in advance of importation 
within which a permit must be applied for is not 
specified in the regulations.  A permit cannot be 
granted immediately upon request.  Prior review of the application is required.  There are no limitations as to the period of the year during 
which permit applications may be made.  Permit 
applications are processed and effected by one office 
Table III.14 (cont'd) 
                                                      
78 Quantity for certain tuna is limited to 4.8% of apparent U.S. consumption for a lower duty rate of 
6%.  Quantity limit for whiskbrooms of 61,655 dozen per year, and other brooms of 121,478 dozen per year for brooms valued at less than US$0.96 may enter at duty rate of 8% (HTSUS 2012). 
79 WTO document G/MA/NTM/QR/1/Add.6, 20 September 1999.  
80 WTO document G/LIC/N/3/ USA/8, 10 October 2011.  
81 Customs and Border Protection (2006). United States WT /TPR/S/275/Rev.1 
 Page 55 
 
 
Product / Legal reference Stated purpose Procedure 
Certain dairy products    
The licensing system is not a 
statutory requirement.  The 
authority to make such allocations was delegated to the Secretary of Agriculture by 
Presidential Proclamation 3019 of 
8 June 1953 Administrative tool that governs the importation of 
certain dairy products subject to TRQs resulting from 
entry into force of the Uruguay Round Agreement.  Dairy articles subject to licensing cannot enter at the in-quota rate unless accompanied by a licence The procedures for submitting licence 
applications, eligibility criteria, licence use 
requirements, and other provisions of the regulation are codified in 7 CFR 6.20-6.37 
Controlled substances and listed chemicals    
Title 21, Code of Federal 
Regulations, Section 1312.13 poses additional limitations on 
the imports of narcotic raw 
materials To restrict the quantity of imports of controlled 
substances and listed chemicals and maintain a monitoring system Annual notice of publication of aggregate 
production quotas for total U.S. needs (through domestic manufacture or importation) for all 
Schedule I and II controlled substances and the 
listed chemicals ephedrine, pseudoephedrine, and phenylpropanolamine, are published in the Federal Register on or about 1 July of the year 
prior to that to which the quota applies.  
Additional notice of regulations is published in Title 21, Code of Federal Regulations, Part 1300 to End 
Defence articles    
Arms Export Control Act of 
1976;  22 U.S.C. 2778; 27 CFR Part 447;  and Executive Order 
11958 (42 FR 4311), as amended 
by Executive Order 13284 (68 FR 4075) In part, to regulate the permanent importation of 
certain defence articles under the Arms Export Control Act Bureau of Alcohol, Tobacco, Firearms and 
Explosives (ATF) administers the permanent importation provisions of the Arms Export 
Control Act with respect to defence articles.  ATF 
is guided by the Department of State on matters affecting world peace and the external security and foreign policy of the United States 
Distilled spirits or alcohol for industrial use (incl. alcohol for fuel use)    
26 U.S.C. 5171 and 27 CFR Part 
19 To prevent tax fraud An importer of distilled spirits or alcohol for 
industrial use (including alcohol for fuel use) secures a permit from the Alcohol and Tobacco Tax and Trade Bureau 
Distilled spirits (beverages); wine, and malt beverages    
Federal Alcohol Administration 
Act (FAA Act), 27 U.S.C. 201 et 
seq. To provide an enforcement mechanism to ensure that 
importers comply with all requirements of Federal law 
relating to alcohol An importer of alcohol beverages secures a permit 
from the Alcohol and T obacco Tax and Trade 
Bureau 
Explosives    
18 U.S.C. Chapter 40 and 
27 CFR Part 555 To protect commerce against interference and 
interruption by reducing the hazard to persons and 
property arising from misuse and unsafe or insecure 
storage of explosive materials Consideration of licence applications is effected 
by a single administrative organ (ATF) 
Firearms and ammunition    
18 U.S.C., Chapter 44 and 27 
CFR Part 478 
26 U.S.C., Chapter 53 and 27 CFR Part 479 To provide support to Federal, State, and local law 
enforcement officials in their fight against crime and 
violence without placing any undue or unnecessary Federal restrictions or burdens on law-abiding citizens 
with respect to the acquisition, possession, or use of 
firearms appropriate to the purpose of hunting, trapshooting, target shooting, personal protection, or any other lawful activity .  In part, generally to prevent 
statutorily prohibited persons in the United States from 
shipping, transporting, possessing, or receiving any firearm or ammunition. Certain firearms, including non-sporting firearms, machine guns, and destructive 
devices, are generally not importable into the United 
States except as provided in the statutes.  Firearms under the National Firearms Act are generally subject to registration and taxation Only a licensed importer may import firearms or 
ammunition.  A Federal Firearms Licence is 
issued within 60 days after receipt of a properly completed application.  Any person who wishes to 
permanently import a firearm, firearm barrel, or 
ammunition into the United States must first file with the Bureau  of Alcohol, Tobacco, Firearms 
and Explosives (ATF) and obtain an approved 
ATF Form 6 – Application and Permit for 
Importation of Firearms, Ammunition and Implements of War 
Table III.14 (cont'd) WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 56 
  
Product / Legal reference Stated purpose Procedure 
Fish and wildlife (incl. 
endangered species)    
50 CFR 14.91 93.  Exceptions to 
the licence requirement are found at 50 CFR 14.92 To identify commercial importers and exporters of 
wildlife, require records which fully and correctly disclose each importation or exportation of wildlife and the subsequent disposition of the wildlife by the 
importer or exporter.  To allow the Service to inspect 
records required to be kept and inventories of imported wildlife or wildlife to be exported.  To remove repeat wildlife law violators from commercial wildlife trade.  
To improve communications between the Service and 
commercial wildlife importers and exporters.  To assist the Service in its effort to conserve endangered and 
threatened species and identify species which may be 
threatened or endangered No time limit is set for receiving an application in 
advance of importation, however the Service has 60 days to process a licence application, which must be issued prior to an importation or 
exportation.  Applications are submitted to and 
processed by Service law enforcement regional offices.  The Special Agent in Charge, Office of Law Enforcement, of each office has been 
delegated authority to issue licences 
Natural gas    
Section 3 of the Natural Gas Act 
(NGA) (15 U.S.C. 717b) Not intended to restrict the quantity or value of natural 
gas imports DOE regulations (10 C.F.R. Part 590) specify that 
an applicant for a natural gas import authorization 
should apply 90 days prior to the anticipated date for start up of the import.  Licensing applications are considered by a single administrative organ, 
the Office of Fossil Energy, U.S. Department of 
Energy 
Nuclear facilities and materials   
10 CFR Part 110 pursuant to the 
Atomic Energy Act of 1954, as 
amended, and the Energy Reorganization Act of 1974, as amended Not to restrict quantities or values of items imported; it 
is to protect public health and safety and the 
environment, and maintain the common defence and security of the United States, by exercising prudent controls over the possession, use, distribution, and 
transport of such items For imports under NRC’s import authority that are 
not authorized by the general licence in 10 CFR 
110.27, an application must be submitted for review and a licence must be issued before the importation occurs 
Plants and plant products    
Section 412 of the Plant 
Protection Act, 7 U.S.C. 7712 To protect against the entry of plant pests and diseases, 
and to protect endangered plant species Permit applications are effected by one office, 
U.S. Department of Agriculture, Permit Section.  
Most applications are not passed on to other offices for visas, note or approval.  The exceptions to this are permit applications for soil and for 
plants required to be grown in post-entry 
quarantine 
Steel    
The final rule extending the 
system until 21 March 2013 was 
published on 18 March 2009, in the Federal Register (74 FR 11474); it is possible to renew 
and extend the program pending 
Administrative review and approval Not intended to restrict the quantity or value of 
imports.  It is designed to provide fast and reliable 
statistical information on steel imports to both the government and the public Steel import licences may be applied for up to 
60 days prior to the expected date of importation 
and until the date of filing of the entry summary documents, or in the case of FTZ entries, the filing of Customs and Border Protection (CBP) 
Form 214.  The licence is valid for 75 days 
Sugar    
15 CFR 2011, Sub part A.  
Certificates for specialty sugar are issued pursuant to 15 CFR 
2011, Sub part B.  The 
regulations governing licenses for the importation of sugar exempt from quota are under 7 CFR 
1530.  Authority exists to suspend 
each of these systems whenever it is determined that such action is appropriate.  Notice of such 
suspension shall be published in 
the Federal Register To provide exporters access to the U.S. domestic 
market at the low tier tariff.  The purpose of the certificate for specialty sugar is to allow entry of 
certain refined sugars not widely available in the 
United States.  These refined sugars fulfil demand in niche markets, such as the ethnic, organic and gourmet markets.  Licenses for quota exempt sugar are intended 
to increase the utilization of excess domestic refining 
capacity and improve employment in refining and related industries The U.S. Department of Agriculture administers 
the licensing and certificate systems 
Tobacco products    
26 U.S.C. 5713 and 26 U.S.C. 
5702 Does not restrict the quantity or value of imported 
tobacco products. To provide an enforcement 
mechanism to ensure that importers comply with all requirements of the Internal Revenue Code relating to tobacco The Alcohol and Tobacco Tax and Trade Bureau 
has sole authority to issue the permit required 
under 26 U.S.C. 5713 
Source:  WTO document G/LIC/N/3/USA/8, 10 October 2011;  and information provided by the U.S. authorities. United States WT /TPR/S/275/Rev.1 
 Page 57 
 
 
(c) Sanctions, controls, or special procedures 
64. The United States imposes sanctions against a number of countries, some of which restrict 
imports and/or exports to/from the United States.  In  addition to restraints on trade in goods, many of 
the sanctions involve controls on financial services, restrictions on monetary flows or remittances, and 
transfer of property.  Full or partial trade sanctions are in place with respect to two WTO Members, 
Cuba and Myanmar, and a number of non-WTO Members, i.e. Syria, Iran, North Korea, and Sudan.82 
65. The Clean Diamond Trade Act of 2003 implements the Kimberley Process Certification 
Scheme, an international initiative aimed at  curbing the trade in conflict diamonds.83  The importation 
and exportation of rough diamonds into and out of the United States requires a Kimberley Process 
Certificate and a tamper-resistant container.  The United States is currently covered under a WTO 
waiver for the Kimberley process.84 
66. Under the Currency and Foreign Transactions Re porting Act persons tr ansporting monetary 
instruments (e.g. coins, currency, checks, money orde rs, securities or stocks in bearer form, etc.) in 
excess of US$10,000 across U.S. borders are required to  file and report this movement of monetary 
instruments to the CBP.85  According to the authorities, this reporting requirement has no impact on 
legitimate trade. 
(d) New legislation or rules enacted during the review period 
67. The Asian Carp Prevention and Control Act of 2010 amends the Lacey Act to add the bighead 
carp of the species Hypophthalmichthys nobilis  to the list of injurious species that are prohibited from 
being shipped or imported to the United States.86   
68. A new law pertaining to conflict minerals was contained in the Dodd–Frank Wall Street 
Reform and Consumer Protection Act87, which entered into effect on 21 July 2010.  The law foresees 
reporting and disclosing the source of four minerals, some of which are mainly used in the electronic 
industry.  Reporting would be required by companies listed in the U.S. stock exchanges or those that 
raise capital in the United States.  Draft rules and re gulations implementing the law were issued by the 
SEC in 2010 for comment, and final rules were exp ected in 2011, but have so far not been issued 
(1 July 2012).88  Thus, the actual reporting requirements and their impact are not known at this time.  
The State of California has adopted a similar la w pertaining to conflict minerals, which will be 
implemented when the Dodd-Frank rules are finalized.89  Maryland has also enacted a law on conflict 
minerals.   
69. A new rule by the Agricultural Department ame nds the historical licence-reduction provisions 
of the Dairy TRQ licensing programme, by suspending the provisions on the reduction of historical 
licences based on surrenders of unused quantities until 2016.90 
                                                      
82 Department of Treasury, "Sanctions Programs and Country Information".  Viewed at:  
http://www.treasury.gov/resour ce-center/sanctions/Programs/ Pages/Programs.aspx.   
83 Public Law 108-19. 
84 WTO document WT/L/676, 19 December 2006. 
85 31 U.S.C. 5311. 
86 Public Law 111-307  
87 Public Law 111-203.  
88 75 FR 80948. 
89 Bill SB 861 was approved by both California assemb ly and senate and subsequently approved by the 
Governor in October 2011. 
90 75 FR 762530. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 58 
  
(viii) Technical regulations and standards 
70. Title IV of the Trade Agreements Act of 1979, as amended, is the legal basis for 
implementing the TBT Agreement in the United States.91  The Trade Agreements Act designates the 
Office of the USTR as the lead agency within  the federal Government for coordinating and 
developing international trade policy on standa rds-related activities and in discussions and 
negotiations with foreign countries on standards-related matters.  Th e Trade Agreements Act requires 
the USTR to inform and consult with federal agen cies with expertise in the matters under discussion 
and negotiation.92  The United States submitted a notification on the implementation and 
administration of the TBT Agreement in February 1996.93  The enquiry point and notification 
authority under the Agreement is the National Ins titute of Standards and Technology (NIST) of the 
Department of Commerce. 
71. Between 1 January 2010 and 30 June 2012, the United States made 520 notifications to the 
WTO Committee on Technical Barriers to Trade of which, 337 were addenda  or corrigenda.  The 
notifications were made on behalf of a number of government agencies for a variety of reasons, 
including:  the Environmental Protection Agency for environmental protection;  the Consumer 
Product Safety Commission on product safety;  and the Food and Drug Administration for human 
health and food safety standards.  Over the period,  the U.S. authorities recognized the need to make 
improvements in their internal procedures for s ub-federal notifications, and initiated a temporary 
hiatus in notifications in order to make corrections.  Therefore, in contrast with the last review period, 
when 83 sub-federal measures were notified, 16 no tifications on sub-federal measures have been 
made since 1 January 2010, 15 of which have been notified since August 2012. 
72. WTO Members have used the TBT Committee to raise a number of concerns about TBT 
measures taken by the United States, and three dis pute settlement proceedings in the WTO were taken 
against the United States under the TBT Agreement during the period under review.94  T h e  
United States has also used the TBT Committee to raise concerns on TBT measures taken or proposed 
by other Members95 and, since 2010, has published an a nnual report on measures considered to 
represent barriers to trade in other countries in the form of standards, conformity assessment, and 
technical regulations.96 
73. The United States is a member of the Interna tional Organization for Standardization (ISO) 
and the International Electrotechnical Commission, where it is represented by the American National 
Standards Institute (ANSI), a private sector body.  It is also a member of the International 
Telecommunication Union (where it is represented by the Department of State, the Department of 
Commerce, and the Federal Communications Commi ssion), and the Codex Alimentarius Commission 
(where it is represented by the U.S. Codex Offi ce, the Food and Drug Administration, and the 
Department of Agriculture).  In addition, the Unite d States is a member of the International Maritime 
Organization (IMO), and the International Civil Av iation Organization (ICAO), participating in the 
respective standards-development activities of these organizations.   
                                                      
91 19 USC, Section 2531 et seq . 
92 WTO document G/TBT/2/Add.2, 19 February 1996. 
93 WTO document G/TBT/2/Add.2, 19 February 1996. 
94 US-Clove Cigarettes (DS406), US-Country of Origin Labelling (COOL) (DS386 and DS384), and 
US-Tuna II (DS381). 
95 WTO TBT Information Management System.  Viewed at:  http://tbtims.wto.org/Default.aspx? 
Lang=0 [May 2012]. 
96 USTR (2012c). United States WT /TPR/S/275/Rev.1 
 Page 59 
 
 
74. The United States is also a member of several regional organizations, such as the Pacific Area 
Standards Congress (PASC), the Pan American Standards Commission (COPANT), and the Council for Harmonization of Electrotechnical Standards of the Nations in the Americas (CANENA).  PASC 
and COPANT coordinate regional input for international standa rdization organizations while 
CANENA is a forum for regional harmonization of standards in North America. 
75. With a few exceptions, such as Executive Order 13563 of 18 January 2011 on improving 
regulation and regulatory review and Execu tive Order 13609 of 1 May 2011 on promoting 
international regulatory cooperation (see below), the procedures for developing technical regulations 
and conformity assessment procedures have not changed over the past few years
97 and they are set out 
in a number of laws, regulati ons, and guidelines (Table III.15). 
Table III.15 
Laws, regulations and guidelines on developing techni cal regulations and conformi ty assessment procedures 
Law/Regulation/Guideline Description 
Administrative Procedures Act of 1946 Covers the notice and co mment process for rule making, including the development of 
technical regulations, and gene rally requires that members of the public be given the 
opportunity to comment on regulatory proposals before new rules can be issued or existing ones changed.  Proposed and fina l technical regulations or conformity 
assessment procedures must be published in the Federal Register  
Regulatory Flexibility Act Requires Government agencies to publish biennial agenda, which included proposed new 
rules that are likely to have significant economic impact 
Consumer Product Safety Act as amended 
(including the Consumer Products Safety 
Improvement Act (CPSIA) in 2008) and associated regulations,  Established the Consumer Product Safety Comm ission with the power to develop safety 
standards and pursue product recalls (see be low).  The CPSIA was again amended in 
2011, with provisions intended to reduce the cost  of third-party testing requirements with 
a proposed rule published in November of that year
a 
National Technology Transfer and Advancement Act Requires government agencies to use volunt ary consensus standards developed by 
private-sector standards development organi zations except where inconsistent with law 
or otherwise impractical 
Executive Order 12866 on Regulatory Planning and Review States that government agencies should only pr omulgate regulations as required by law, 
necessary to interpret the la w, or as required by compelling public need.  Agencies 
proposing regulations, including technical regul ations or sanitary or phytosanitary 
measures at the federal level, must identify the nature and significance of the problem to 
be addressed through regulation, identify and a ssess the costs and benefits of alternatives, 
and ensure that the benefits of  regulations justify their costs 
Circular OMB A-119 of 10 February 1998 
on Federal participation in the development and use of voluntary consensus standards 
and in conformity assessment activities Requires federal agencies to us e "voluntary consensus standards"
b in procurement and 
regulatory activities, and for federal empl oyees to participate in the standard 
development activities 
Circular OMB A-4 of 17 September 2003 on regulatory analysis Encourages  the use of voluntary standard s over technical regulations for goods and 
services; and a focus on performance rather than design standards (that is the outcome 
rather than the me ans to achieve it) 
Executive Order 13563 on Improving 
Regulation and Regulat ory Review which 
reaffirmed Executive Order 12866, Stresses the importance of public participati on in the rulemaking process, and seeks to 
improve rulemaking by requiring the use of the Internet and a period of 60 days to enable 
public comment on regulatory proposals 
Executive Order 13609 on Promoting 
International Regulatory Co-operation Provides a framework for promoting effo rts to eliminate unnecessary regulatory 
differences and related costs, burdens and delays associated with U.S. regulatory 
approaches.  The Order also re quires agencies to provide the public with a summary, in 
advance, of their international regulator y cooperation activities that are reasonably 
anticipated to lead to significant regulations 
a Federal Register, "Application of Third Party Testing Requireme nts; Reducing Third Party Testi ng Burdens", 11 August 2011.  
Viewed at:  https://www.federalregiste r.gov/articles/2011/11/08/2011-2767 6/application-of-third-party-testing-requirements-
reducing-third-party-testing-burdens [May 2012]. 
b "Voluntary consensus standards" are defined as standards de veloped or adopted by "voluntar y consensus standards bodies" 
which are defined as domestic or international organizations whic h plan, develop, establish, or coordinate voluntary consensus 
standards using agreed-upon procedures. 
Source:  WTO Secretariat. 
                                                      
97 WTO document WT/TPR/S/235/Rev.1, 29 October 2010, pp. 34-40. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 60 
  
76. Institutional responsibility for implementing tec hnical regulations has not changed over the 
past few years.  The Office of Management a nd Budget (OMB) in the Executive Office of the 
President is responsible for over seeing and coordinating regulatory po licy in the federal government.  
New regulations, including those that incorporat e technical regulations and conformity assessment 
procedures, must be published in the Federal Register  in both proposed and final form and must be 
cleared by the OMB before publication if they have a significant effect.98  The Regulatory Information 
Service Center, a component of the U.S. Genera l Services Administration, compiles the semi-annual 
Unified Agenda of Federal Regulat ory and Deregulatory Actions with  the Office of Management and 
Budget's Office of Information and Regulatory Affairs and the 60 Cabinet, Executive, and 
independent agencies, government wide.  Each ed ition of the Unified Agenda includes regulatory 
agendas from all federal entities that currently ha ve regulations under de velopment or review.99  
77. The agency or agencies responsible for deve loping technical regulations depend on the 
product in question and include:  the National Highw ay Traffic Safety Administration for on-road 
vehicles and tyres;  the U.S. Coast Guard for boa ts; the Alcohol and Tobacco, Tax and Trade Bureau 
for alcohol and tobacco;  the Food and Drug Admini stration for food, drugs, cosmetics, and medical 
devices; the Food Safety Inspection Service (FSIS) of the Department of Agriculture for meat, 
poultry, and egg products;  the Environmental Prot ection Agency (EPA);  and the Consumer Product 
Safety Commission (CPSC) for consumer products not under other agencies' jurisdictions.  The 
National Institute for Standards and Technology (N IST) is the federal agency that coordinates 
standards activities among federal government agenci es with private sector standards-development 
organizations.   
78. The CPSC is an independent agency set up in 1972 under the Consumer Product Safety Act 
with general responsibility for en suring consumer product safety by encouraging the development of 
effective standards, developing technical regulati ons where needed, and enforcing compliance with 
product safety laws and regulations, including the overarching requirement that no product may 
present an unreasonable risk of injury or death.  Although the official preference is to rely on 
industry's use of voluntary standards, the CPSC a nd other agencies with responsibility for product and 
service regulations may develop technical regulati ons when voluntary standards are not considered 
adequate or when compliance with voluntary standa rds is considered unlikely.  The government 
agencies may also be required by law to develop or adopt technical regulations, for example, the 
Consumer Products Safety Improvement Act required the CPSC to  develop technical regulations for 
toys and all-terrain vehicles.  About 200 products are currently subject to technical regulations 
developed by the CPSC.100 
79. The American National Standards Institute ( ANSI) coordinates and administers the private 
sector voluntary standards system in the United States.  There are about 225 ANSI accredited standards developing organizations (SDOs) in th e United States, 20 of which (e.g. Underwriters 
Laboratories Inc. (UL), ASTM International, and the American Society of Mechanical Engineers 
(ASME)) develop approximately 80% of the sta ndards produced by ANSI-accredited SDOs.     
80. Although compliance with voluntary consumer product safety standards is not a legal 
obligation, non-compliance may indicate the existe nce of a hazard.  The CSPC and other agencies 
may take corrective action if their analysis shows th at the product could pose a substantial hazard, in 
which case it will take action to withdraw the produc t from the market.  The number of product recalls 
                                                      
98 Economically significant regulations are those that have an effect on the economy of US$100 million 
or more in any one year.   
99 For the Annual Unified Agenda and Regulatory Plan, see the Office of Information and Regulatory 
Affairs online information.  Viewed at:  http://www.reginfo.gov/public/do/eAgendaMain. 
100 Government Accountability Office (2012a), p. 4.   United States WT /TPR/S/275/Rev.1 
 Page 61 
 
 
has fallen over the past few years, from over 628 in 2008 to 413 in 2011 (Table III.16).  According to 
the GAO, the CPSC focused much of its surve illance and compliance work on imported products 
which represented about 80% of recalls for 2008-11.101 
Table III.16 
Recalls by the Consumer Product Safety Commission, FY 2007-11 
Year Number of recalls of regulated products  Number of recalls of unregulated products 
2007 92 385 
2008 169 449 
2009 46 452 
2010 60 416 
2011 30 383 
Note:   These recalls were tabulated from CPSC data for regula ted and unregulated products. Unre gulated products may include th ose 
covered by voluntary standard s. According to CPSC officials, recalls of unregulated products ar e not necessarily associated wit h 
violations of voluntary standards; on some occasions the recall c ould be associated with issues in manufacturing or assembly of  
the product. 
Source:    CPSC as quoted by GAO (2012), Consumer Product Safety Commission, A More Active Role in Voluntary 
Standards Development Should Be Considered , GAO-12-582, p. 22, May.  Viewed  at:  http://gao.gov/assets/ 
600/590990.pdf.  
(ix) Sanitary and phytosanitary measures  
81. At the federal level, instituti onal responsibility for SPS matters continues to be shared among 
several government agencies depending on the product a nd type of risk, while at the state level the 
authorities may develop their own measures, subject to federal laws and regulations.102  At the federal 
level, numerous statues, along with their implem enting regulations, impose SPS requirements in the 
U.S. market.  These statutes include:  the Federal Food, Drug, and Cosmetic Act103,  the Federal Meat 
Inspection Act104;  the Plant Protection Act105;  and the Federal Insecticide, Fungicide, and 
Rodenticide Act.106  In addition, the Food and Drug Administration (FDA) Food Safety 
Modernization Act (which amende d the Federal Food, Drug, and Cosmetic Act) became law on 
4 January 2010 (Box III.1).  In general, many SPS measures are subject to the same administrative 
rulemaking procedures as technical regulations (see above).  However, according to the GAO, "[t]he 
safety and quality of the U.S. food supply is gove rned by a highly complex system stemming from at 
least 30 laws related to food safety that ar e collectively administered by 15 agencies."107 
82. The United States is a member of the Codex Alimentarius Commission and the 
World Organization for Animal Health (OIE), and a contracting party to the International Plant 
Protection Convention (IPPC).  The contact points are in the Food Safety and Inspection Service of USDA for Codex, and the Animal and Plant Health  Inspection Services of the USDA for both the OIE 
and the IPPC. 
                                                      
101 Government Accountability Office (2012a), p. 22. 
102 WTO document WT/TPR/S/235/Rev.1, 29 October 2010, pp. 40-46. 
103 21 USC, Section 301 et seq.  
104 21 USC Chapter 12, Section 601-624, 641-645, 661, 671-680, 691-695. 
105 7 USC Section 7701 et seq.  
106 7 USC Section 136 et seq.  
107 Government Accountability Office (2011), p. 3. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 62 
  
Box III.1:  The FDA Food Safety Modernization Act (FSMA)
The FDA Food Safety Modernization Act, be came law in January 2011.  It is a majo r reform of legislation on food safety 
under the responsibility of the FDA, and applies to all FDA -regulated food (i.e. it does not apply to meat poultry, and 
processed egg products to the extent that they are under the jurisdiction of the FSIS in the Department of Agriculture). 
Registration:   Under Section 102 of the FSMA, food facilities are required to rene w their registration with the FDA 
(required under Section 415 of the Federa l Food,  Drug, and Cosmetic Act (F D&C Act)) every two years.  "Food 
facilities" include places  that manufacture, process, pack, or hold food for consumption in the United States, including 
foreign facilities.  This biennial registration renewal re quirement which must be submitted between 1 October and 31 
December, begins in 2012.  The FDA may suspend registration if there is reasonable probability that food manufactured, 
processed, packed, received, or held by the facility could have serious adverse effect on human or animal health.  Food 
from a facility that must register, but that does not have a valid registration must not be brought into the United States. 
Preventive Controls:  Under Section 418 of the FD&C Act, a registered fa cility is required to evaluate the hazards that 
could affect the food it manufactures, processes, packs or holds .  The facility is required to prepare a written plan that 
includes:  the identification of potential hazards; and the prev entive controls to minimize or prevent these hazards (which 
could include a recall plan and/or verifi cation of supplier activities related to food safety).  The effectiveness of these 
controls must be monitored and procedures established for corrective actions for circumstances where they are not 
properly implemented or are ineffective. Each facility is requir ed to keep records, for at least two years, documenting the 
monitoring of the preventive controls, instances of non-conformance, test resu lts, verification, and corrective actions 
taken.  The food safety plan must be re-analysed at least once every three years. 
Some food facilities are exempt in  whole or in part from the requi rements of Section 418, including: 
 facilities that comply with the FDA's existing seafood or juice hazard analysis and critical control point 
(HACCP) regulations; 
 facilities that comply with the FDA's existing low- acid canned food regulations (only for microbiological 
hazards, addressed by those regulations; for other hazards facilities must comply with the FSMA); 
 qualified facilities (defined as very small business or a small business with  total annual food sales of less than 
US$500,000, at least half of which was sold directly to th e final consumers, to restaurants, or to retail food 
establishments in the same State or within 275 miles) .  These qualified facilitie s must provide documentation 
including: showing potential hazards have  been identified, and preventive controls are being implemented and 
monitored; or showing the facility is complying with all State, local, or ot her applicable non-federal food safety 
laws. (Proposed rules not yet issued.) 
Produce Safety Standards:   Under Section 419 of the FD&C Act, the FDA is required to establish science-based 
minimum standards for the safe production and harvesting of fruits and vegetables that are raw agricultural commodities 
for which the FDA determines that such standards minimize the ri sk of serious adverse health consequences or death.  The 
FDA has the discretion to decide whether to include sm all and very small businesses that produce low-risk raw 
agricultural commodities in this rulemaking and, when incl uded, smaller businesses have extended compliance dates. 
(Proposed rule not yet issued.) 
Safety of imported food:   Section 301 of the FD&C Act now provides that U. S. importers are to be required to verify that 
imported food is produced in compliance with processes and pr ocedures that provide the sa me level of public health 
protection as Section 418 (preventive controls ) or Section 419 (produce safety standards) and to verify that the food is not 
adulterated and is not misbranded with re gard to food allergen labelling requirements. (Proposed rules not yet issued.)  
The Voluntary Qualified Importer Program is intended to expedi te the review and imports by importers that meet certain 
requirements, including that the facility must  have been certified by an accredited third-party auditor. (Programme not yet 
established.) 
Intentional Adulteration:  Section 420 of the FD&C Act requires the F DA, in coordination with the DHS and in 
consultation with USDA, to issu e regulations to protect against the intentiona l adulteration of food.  The regulations will 
be limited to food for which there is a high risk of intenti onal contamination and are to specify how a person is to assess 
whether mitigation measures are required and to specify appropr iate science-based mitigation measures or strategies.  In 
addition, In consultation with DHS and USDA, the FDA is directed to issue guidance documents on protection against 
intentional adulteration.  (Proposed rule and guidance to industry not yet issued.) 
Box III.1 (cont'd) United States WT /TPR/S/275/Rev.1 
 Page 63 
 
 
Fees:   The FSMA provides the FDA with the authority to collect certain fees related to food safety.  Section 743 of the 
FD&C Act now provides for the collection of fees from domestic  facilities and the U.S. agents of foreign facilities to 
cover costs related to reinspections (i .e., costs incurred for inspections conducte d after an earlier inspection uncovered 
instances of non-compliance related to a food safety requi rement of the FD&C Act), for non-compliance with recall 
orders, from each importer subject to a re inspection, to cover reinspection-related costs, and from impor ters participating 
in the voluntary qualified importer program  (see below).  A Fee No tice was issued in August 2011 and a Guidance to 
Industry was issued in September 2011.  In addition, Secti on 808 of the FD&C Act provides FDA with the authority to 
collect fees to cover the costs of establishing and administering the third party accreditation system (see below). 
Inspections:  The FSMA sets out inspection frequencies for high risk food facilities of once in the first five years after the 
FSMA was enacted and every three years thereafter.  For non-high-risk facilities, FSMA mandates a minimum inspection 
frequency of once in the first seven years followi ng enactment and once every five years thereafter.   Under the statute, at 
least 600 foreign facilities are to be inspec ted in the first year of enactment and FDA is directed to double the number of 
foreign facilities inspected each year thereafter for five years.   Under section 807 of the FD&C Act, if a foreign factory, 
warehouse, or other establishment refuses an inspection (def ined as not permitting an inspection within 24 hours of a 
request or such other time period as agreed upon) food from th e establishment is subject to refusal of admission into the 
United States. 
Laboratory and Third-Party Accreditation:  Section 422 of the FD&C Act requires the FDA to implement a 
programme for the accreditation of laboratories (including foreign laboratories) and to work with accreditation bodies to 
increase the number of accredited laboratories.  Under Section 307 of the FD&C Act, the FDA is also required to establish 
a programme for the recognition of accreditation bodies that, in turn, may accredit third-party auditors to certify eligible 
foreign facilities and food shipments as meeting F DA requirements.  (Proposed  rules not yet issued.) 
Traceability, records:   Section 204 of the FSMA directs the Secretary of Health and Human Services to develop a 
product tracing system to improve the ability of FDA to track a nd trace food in the United States  or offered for import into 
the United States.  Section 204 also requires the FDA to deve lop regulations for records that  must be kept by facilities 
involved with high-risk foods.  The FSMA updates requirement s for responsible parties fo r food facilities to report 
additional consumer-orientated information to the FDA in  instances where food it has dealt with has a reasonable 
probability of causing adverse health c onsequences to humans or animals (a "rep ortable food") for subsequent notification 
to grocery and retail stores.  (A traceab ility pilot project is in progress, record-keeping requirements for high-risk foods 
proposed rule not yet issued, reportable f ood Registry improveme nts not yet issued.) 
Mandatory recall authority:   Under Section 206 of the FSMA, if the F DA determines that there is a reasonable 
probability that an article of food is adulterated or misbranded and that it will ca use serious adverse he alth consequences 
or death for humans or animals, the FDA may order a party to cease distribution and recall th e food, after first giving the 
party an opportunity to do so voluntar ily.  (Authority in effect.) 
Source : The FDA Food Modernization Act, 21 USC 2201 note.  Viewed at:  http://www.fda.gov/food/
foodsafety/fsma/default.htm [May 2012]. 
83. The U.S. enquiry point and national notifica tion authority under the SPS Agreement is the 
International Regulations and Sta ndards Division in the Foreign Agricultural Service of the USDA.108  
The United States has continued to make notifica tions of SPS measures it proposes to take or has 
taken to the WTO Committee on Sanitary and Phyto sanitary Measures (Table III.17) and to use the 
Committee to raise concerns about measures other Members have taken.   
Table III.17 
Notifications by the United States, 1 January 2010 to 30 June 2012 
Objective/rationale Total Addenda /corrigenda Emergency Regular 
Food safety 398 31 0 367 
Zoonoses 6 2 1 3 
Plant protection 114 51 11 52 
Animal health 29 15 2 12 
Territory protection 16 2 13 1 
Total 537 92 13 432 
Note: A notification may have more than one rationale. 
Source:  WTO documents in the series G/SPS/N/USA/. 
                                                      
108 WTO documents G/SPS/ENQ/21/Add.1, 22 June 2007, and G/SPS/NNA/11/Add.1, 22 June 2007. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 64 
  
84. In the WTO Committee on Sanitary and Phytosan itary Measures, since 1 January 2010 the 
United States has raised concerns on measures take n by several Members, including the EU, Turkey, 
Viet Nam, the Philippines, Indonesia, and India, an d it has supported others in their statements about 
measures taken by Chinese Taipei, Albania, Croatia , China, Malaysia, and the EU. Other Members 
have also used the SPS Committee to raise concerns  with measures taken or proposed by the United 
States, including:  Costa Rica on measures affecting imports of flowers and plants; Argentina on foot-and-mouth disease and imports of queen bees; and India on maximum residue limits on basmati rice imports.  A particular concern of several Me mbers has been the FDA Food Safety Modernization 
Act and its implementing regulations.  This issue was raised by India, China, Mexico, Costa Rica, 
Pakistan, and the Philippines, and the United States responded that the law had not been implemented 
yet and that trading partners would be able to pa rticipate in the process of developing implementing 
regulations for the Act through the WTO notification process.
109 
85. The SPS Agreement was also cited in a di spute settlement cases taken against the 
United States on poultry.110,111   
86. As stated above, a number of different agenci es are involved in developing, implementing, 
and enforcing SPS measures.  Among the main agencies are:  
 the Animal and Plant Health In spection Service (APHIS) in th e Department of Agriculture, 
whose responsibilities include the regulation of imports of live plants, grain, oilseed and 
horticultural products, animals, including tho se embryos, semen, ova, and live animals 
intended for research and development; 
 the Food Safety and Inspection Service (FSIS) in the Department of Agriculture, which is 
responsible for the safety of meat, poultry,  and processed egg products, including imports, 
and the recognition of establishments in other countries that meet U.S. regulatory standards 
for these commodities and may export to the United States; 
 the Food and Drug Administration (FDA), whose responsibilities include the regulation of:  
human and veterinary drugs;  food (except m eat, poultry, and processed eggs), including food 
additives;  cosmetics;  and dietary supplements;  and  
 the Environmental Protection Agency (EPA),  whose responsibilities include registering 
pesticides (including herbicides and fungicides) for use in the United States, and establishing 
maximum residue limits (MRLs) for pesticides on food.112 
87. Other agencies involved in SPS issues, include  the Agricultural Marketing Service, the 
Agricultural Research Service, and the National In stitute of Food and Agriculture in USDA, the 
Centers for Disease Control and Prevention in the Department of Health and Human Services, the 
National Marine Fisheries Service in the Department  of Commerce, Customs and Border Protection in 
                                                      
109 WTO SPS Information Management System da tabase.  Viewed at:  http://www.wto.org/ 
english/tratop_e/sps_e/sps_e.htm [May 2012];  and WTO documents G/SPS/R/66, 23 May 2012;  G/SPS/R/64, 
17 January 2012;  G/SPS/R/63, 12 Septembe r 2011;  and G/SPS/R/ 62, 27 May 2011. 
110 DS392 United States – Certain Measures Affecting Imports of Poultry from China. 
111 The SPS Agreement was also cited in the request  for consultations in another case on clove 
cigarettes (DS406 United States-Measures Affecting the Pr oduction and Sale of Clove Cigarettes), but the Panel 
noted that "no analysis or request for findings  was made in respect to [the] conditional SPS 
claims"(WT/DS406/R para. 7.9) and they were not examined.  
112 WTO document WT/TPR/S/235/Rev.1, 29 October 2010, pp. 44-45. United States WT /TPR/S/275/Rev.1 
 Page 65 
 
 
the Department of Homeland Security, and the Alcohol and Tobacco Tax and Trade Bureau in the 
Department of the Treasury. 
88. The Food Safety Working Group, an interagenc y group set up in March 2009 by the President 
to advise him on how to strengthen the food safety system has continued to work to improve 
coordination throughout the Government.113  The Working Group has been credited with improving 
cooperation between agencies and, as a result, impr oving food safety.  However, it has also been 
noted that it has not developed a government-wide performance plan for food safety.  Although the FDA Food Safety Modernization Act was recognized as strengthening a major part of the food safety 
system, "it does not apply to the federal food safet y system as a whole or create a new risk-based food 
safety structure" (Box III.1).
114 
(2) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Customs procedures and documentation 
89. Since the elimination of the Shipper's Export Declaration in 2008, information on exports 
must be filed electronically through the Automated Export System (AES), which is used to collect data for statistical purposes as well as to support expor t controls.  The information must be filed by 
the U.S. principal party in interest (USPPI) or an authorized agent.  An Internal Transaction Number 
(ITN), which is generated by the AES, is assi gned to a shipment confirming that the export 
information was accepted and is on file in the AES.  The ITN is sent electronically to the filer of the 
information as proof of filing citation.  This cita tion, or the applicable Electronic Export Information 
(EEI) filing exemption, must be submitted to the ex porting carrier on the bill of lading, air waybill, 
export shipping instructions, or other commercial load ing documents.  The carrier is responsible for 
collecting the ITN or EEI filing exemption before  loading the merchandise for export.  Other 
documents may be required dependi ng on the product and its destina tion.  Enforcement of export 
controls and other export-relate d measures requires certification a nd notification requirements that 
depend on the product, the destination, a nd the use the product will be put to.   
90. According to the World Bank, on average four documents are needed for exports (a customs 
export declaration, a bill of lading, a certificate of origin, and a commercial invoice), and exporting a 
container costs about US$1,050 and takes six days, including two days to prepare documents and one 
day for customs clearance and technical control.
115   However, the authorities pointed out that that 
they do not require a commercial invoice or certificat e of origin to be subm itted for export, and export 
data are filed electronically only with no document involved. 
(ii) Export taxes and fees 
91. The U.S. Constitution's Export Clause bars Congress from imposing taxes on exports.116  
Thus, taxes contingent on exports, such as the Harbour Maintenance Tax, which do not represent 
compensation for services rendered, may not be a pplied.  However, fees may be applied for 
government supplied services, facilities, or benefits117, such as user fees for providing certification for 
                                                      
113 For more details, see WTO document WT/TPR/S/235/Rev.1, 29 October 2010, pp. 41-45. 
114 Government Accountability Office (2011). 
115 World Bank (2011). 
116 Constitution of the United States, Article I, Section 9:  "No Tax or Duty shall be laid on Articles 
exported from any State".   
117 Onecle online information, "Duties on Exports from States".  Viewed at:  http://law.onecle.com/ 
constitution/article-1/54-duties-on-exports-from-states.html [May 2012]. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 66 
  
the exportation of plant and plant pr oducts under the Plant Protection Act118, and fees for export 
certificates for human and animal drugs and de vices under the Federal Food Drug and Cosmetic 
Act.119  In these cases, the fees relate to certificat es or other documents required by the importing 
country rather than for export from the United States. 
(iii) Prohibitions, restrictions, and licensing 
92. The United States maintains export restrictions and controls for national security and foreign 
policy reasons, including addressing shortages of scarce materials.  Export controls may be based on domestic legislation, policy decisions, UN Security Council Resolutions or international  agreements 
(such as the Convention on International Trade in  Endangered Species of Wild Fauna and Flora 
(CITES), and the Chemical Weapons Convention) as well as U.S. participation in non-binding 
arrangements such as:   
 Wassenaar Arrangement on transfers of c onventional arms and dual-use goods and 
technologies
120;   
 Missile Technology Control Regime (MTCR), which seeks to coordinate national export 
licensing efforts on the non-proliferation of unmanned delivery systems capable of delivering weapons of mass destruction
121; 
 Treaty on the Non-Proliferation of  Nuclear  Weapons (NPT), and the Exporters Committee 
(Zangger Committee), which seeks to harmonize implementation of the Treaty's requirements to apply International Atomic Energy Agency safeguards to nuclear exports
122; 
 Nuclear Suppliers Group (NSG) on the non-pro liferation of nuclear weapons through the 
implementation of guidelines for nucl ear exports and nuclear-related exports123;  and 
 Australia Group (AG), an informal forum of countries which, through the harmonization of 
export controls, seeks to ensure that exports do not contribute to the development of chemical 
or biological weapons.124   
93. Trade sanctions may be applied by the Department of the Treasury under the authority of, 
inter alia , the International Emergency Economic Powers Act (IEEPA)125, the Trading with the 
Enemy Act126, and the United Nations Participation Act.127  The Department of the Treasury's Office 
of Foreign Assets Control (OFAC) administers economic and trade sanctions under these laws, and 
                                                      
118 7 USC, Chapter 104, Subchapter III, Section 7759(f)(2). 
119 21 USC, Chapter VIII Section, 381(e)(4)(B). 
120 Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and 
Technologies online information.  Viewed at:  http://w ww.wassenaar.org/introduction/index.html [May 2012]. 
121 Missile Technology Control Regime online informa tion.  Viewed at:  http://www.mtcr.info/english/ 
index.html [May 2012]. 
122 Zangger Committee online information.  Viewed at:  http://www.zanggercommittee.org/ 
Seiten/default.aspx [May 2012]. 
123 Nuclear Suppliers Group online information.  Viewed at:  http://www.nuclearsuppliersgroup.org/ 
Leng/default.htm [May 2012]. 
124 The Australia Group online information.  Viewed at:  http://www.australiagroup.net/en/index.html 
[May 2012]. 
125 50 USC Chapter 35. 
126 50 USC Appendix, Chapter 106, 40 Stat.411. 
127 22 USC Chapter 7, Subchapter XVI. United States WT /TPR/S/275/Rev.1 
 Page 67 
 
 
may, in this capacity, restrict exports to fore ign countries and regimes and persons (entities and 
individuals) that are subject to such sanctions. 
94. Export licences are actually required for only a sma ll percentage of total exports.  However, it 
is up to the exporter to determine whether a produc t and/or its destination require a licence and to 
research the end-use of the product.  The law on e xport controls is contained in several different 
pieces of legislation and responsibility for implem entation is divided among different government 
agencies.128 
(a) Arms Export Control Act 
95. Under the Arms Export Control Act (AECA)129 and the International Traffic in Arms 
Regulations (ITAR), all manufacturers, exporters, a nd brokers of items on the U.S. Munitions List 
(USML)130 must register with the Directorate of Defense Trade Controls (DDTC) in the Department 
of State, and often must obtain an export licence or other authorization for the export of any item on 
the USML.  An exporter may make a self-determina tion, based on the USML, as to whether the item 
is controlled on the USML.  However, should the ex porter prefer a formal government opinion, it may 
request a Commodity Jurisdiction (CJ) determination.  An appeal of a CJ determination may be made 
to the Managing Director of the DDTC for a final determination.   
96. An exporter may also ask for a review of a decision by the DDTC concerning refusal, 
revocation or amendment of an export licence, in which case the Under Secretary for Arms Control 
and International Security has the authority to make a final decision.131  However, out of a total of 
over 82,000 applications for export licences or author ization in 2011, less than 1% were refused and 
there were no appeals of these decisions.   
97. U.S. Immigration and Customs Enforcement, Home land Security Investigations (HSI), in the 
Department of Homeland Security  is responsible fo r investigating violations and attempted violations 
of the AECA and ITAR, as well as other potential violations involving exports, such as smuggling, 
pursuant to 18 U.S.C. Section 554.  HSI works wi th the U.S. Department of Justice to prosecute 
criminal cases.    
98. Civil penalties that may be imposed on an enterp rise for violations of the AECA include a 
fine and a Consent Agreement that outlines the m easures required to improve compliance within the 
enterprise.  In 2010 and 2011, four  Consent Agreements were imposed.132  
99. For commodities controlled by the Internationa l Traffic in Arms Regulations (ITAR), a 
destination control statement appears on the commerc ial invoice, and bill of lading, which indicates to 
the carrier and all foreign parties that the item ma y be exported only to certain destinations.   
(b) Export Administration Regulations 
100. Exports and re-exports of certa in goods, technology, and software that have commercial and 
military or proliferation applications ("dual- use" items) are controlled through the Export 
                                                      
128 WTO document WT/TPR/S/235/Rev.1, 29 October 2010, pp. 48-50. 
129 22 USC Chapter 39. 
130 22 CFR Sections 120-130. 
131 22 CFR Section 128.13. 
132 Department of State online information, "Consent Agreements".  Viewed at:  
http://www.pmddtc.state.gov/compliance/c onsent_agreements.html [May 2012]. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 68 
  
Administration Act (EAA)133 and the Export Administration Regulations (EAR)134, which is 
administered by the Bureau of Industry and Secur ity (BIS) in the Department of Commerce.  The 
EAR includes a list of products, the Commerce Control List (CCL)135, which may require a licence 
from the BIS before they may be exported or re-e xported.  The rules are frequently updated and 
changes posted on the BIS website.136  The need for a licence depends  on the item, the country of 
destination, its end-use, and the end-user and it is up to the exporter to find out if a licence is needed 
(unless informed directly by the BIS).   
101. The Bureau of Industry and Security is also  responsible for licensing products that are 
determined to be in short supply under the EAA. 
102. In 2010, U.S. companies exported US$3.7 b illion in licensed items (of which 5% were 
exported  under a special comprehensive licence) , and US$16.1 billion  under a licence exception, 
representing 0.3% and 1.3%, respectivel y, of overall U.S. goods exported. 
103. The Export Administration (EA) in the Bureau of Industry and Security is responsible for 
analysing applications for export licences, classifi cation of items, and development of proposals for 
the control or decontrol of items covered by the Wassenaar Arrangement, the Nuclear Suppliers 
Group, the Australia Group, and the Missile Technolog y Control Regime.  All applications for export 
licences are reviewed under the timefr ames set out in Executive Order 12981.137  Applicants denied an 
export licence application may appeal to the Under S ecretary for Industry and Security.  In the past 
two years, the BIS has received between 10 an d 15 appeals.  In FY 2011, the BIS processed 
25,093 export licence applications valued at approximately US$89.6 billion up from 
21,660 applications pr ocessed in FY 2010. 
104. The Office of Export Enforcement (OEE) in the Bureau of Industry and Security and 
U.S. Immigration and Customs Enforcement, Homela nd Security Investigations (HSI) are responsible 
for investigating potential criminal violations of the dual-use export control laws.  HIS and the OEE work with the Department of Justice to prosecute criminal cases, and  the Office of Chief Counsel for 
Industry and Security to impose civil fines and deny export privileges.   
105. A licence is required for exports or re-exports to Cuba of all commodities, technology, and 
software subject to the EAR, with a few exceptions .  The Bureau generally denies such applications, 
although applications for certain products are reviewed on a case-by-case basis.  Similarly, the EAR imposes varying degrees of strict controls on exports or re-exports to the Islamic Republic of Iran, the 
Democratic Peoples' Republic of Korea, the Repub lic of Sudan, and the Syrian Arab Republic. 
(c) Atomic Energy Act 
106. The Nuclear Regulatory Commission (NRC), established as an independent government 
agency under the Energy Reorganization Act, is responsible for administering export controls on 
                                                      
133 Since August 21, 2001, the EAA has been in lapse but under Executive Order 13222 of 
17 August 2001 (3 CFR, 2001 Comp. 7 83 (2002)) and Presidential Notices (the most recent being that of 
15 August 2012 (77 FR 49699 of 16 August 2012)), the EAR has continued in effect under the International 
Emergency Economic Powers Act (50 USC Sections 1701 et seq .). 
134 15 CFR Chapter VII, subchapter C. 
135 15 CFR Chapter VII, subchapter C, Section 774. 
136 BIS online information.  Viewed at:  http://www.bis.doc.gov/index.htm. 
137 60 FR 62981 (8  December 1995). United States WT /TPR/S/275/Rev.1 
 Page 69 
 
 
source, special nuclear, and by-product ma terial, and nuclear facilities and equipment.138  T h e  
Department of Energy is responsible for the re-expor t of such nuclear material and equipment and the 
export of nuclear technology.  An exporter must submit an application to the NRC and decisions may 
be appealed to the federal courts of appeal. 
(d) Export Control Reform Initiative  
107. In August 2009, the President directed that an inter-agency process to review the export 
control system139 be launched.  This review found that the current system was overly complicated, 
contained too many redundancies,  and reduced the focus on the most critical national security 
priorities. As a result, the Administration la unched the Export Control Reform Initiative (ECR 
Initiative), which is being implemented in th ree phases:  the first two phases are focused on 
establishing harmonized control lists and processes am ong the Departments of Commerce, State, and 
the Treasury; and the third phase is the establishment of a single control list, a single licensing agency, 
an information technology system, and a single en forcement coordination agency.  A November 2010 
GAO report noted that some progress had been made  in addressing weaknesses in the export control 
system and that the export control initiatives ha ve the potential to address others, if fully 
implemented.140   
108. A number of proposed and final rules have b een published under the ECR Initiative, with a 
focus on rebuilding the U.S. export control lists.  These rulemakings are being made in a two-step 
process of publishing proposed and final rules to ensu re that public input is included before issuing 
final rules. All proposed and final rules, as well as all other measures taken as part of the Initiative, 
are made available to the public in a single location.141 As examples of rules that have been proposed 
and then published in final, in May 2011, the De partment of State amended ITAR by simplifying 
licence procedures for approved end-users to allow access to items on the USML by dual and third-country nationals employed by the end-user.
142  In June 2011, the Bureau of Industry and 
Security published a final rule on the Strategic Tr ade Authorization Licence Exception which amends 
the EAR.  Under the rule, export licences will no longer be required for exports, re-exports, and 
transfers in the country of destination of some ite ms on the CCL for destinations that "pose relatively 
low risk that those items will be used for a purpose that licence requirements are designed to prevent."  
Eligibility for the exception depends on the parties to a transaction providing notifications giving 
assurances against diversion of im ports to other destinations.143   
109. The Export Enforcement Coordination Center (E2C2) was opened in March 2012.  The 
Center is administered by the Department of Ho meland Security (DHS) and coordinates with the 
Department of Commerce, the Department of State,  the Department of Defense, the Department of 
Energy, the Department of Justice, the Department  of Treasury, and the Office of the Director of 
National Intelligence.  The aim of the E2C2 is to coordinate and im prove criminal, administrative, and 
related export enforcement activities, and to protect national security through greater export 
                                                      
138 The commodities under the NRC's export licensing authority are set out in 10 CFR Sections 110.8 
and 110.9. 
139 White House Press Release, "Statement of the Pr ess Secretary", 13 August  2009.  Viewed at:  
http://www.whitehouse.gov/the_press_office/Stat ement-of-the-Press-Secretary/ [April 2010]. 
140 Government Accountability Office (2010). 
141 See Export.gov online information, "President's Export Control Reform Initiative".  Viewed at:  
http://www.export.gov/ecr. 
142 22 CFR Parts 120, 124, and 126.  See Federal Register , Vol. 76, No. 94, 16 May 2011.  Viewed at:  
http://export.gov/static/2011-05-16%20Dual%20Nationals%20Final_Latest_eg_main_030527.pdf. 
143 15 CFR Parts 732, 738, 740, 743, and 774.  See Federal Register , Vol. 76, No. 116, 16 June 2011.  
Viewed at:  http://www.gpo.gov/fdsys/pkg/FR -2011-06-16/pdf/2011-14705.pdf [May 2012]. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 70 
  
enforcement and intelligence exchange .  On the same day, the multi-agency Information Triage Unit 
(ITU) was also opened in the Department of Co mmerce.  The ITU is responsible for gathering 
information on exports that require licences and di sseminating this information among the agencies 
responsible for making decisions on export licences.144 
(iv) Official support and related fiscal measures 
(a) Export subsidies and drawbacks 
110. Under the Agreement on Agriculture, the Unite d States has the right to provide export 
subsidies for 14 agricultural products, subject to limits on the quantities that may be exported with 
subsidies in any year, and limits to the budgetary outlay for exports of each of these products.  The 
notifications to the Committee show that, since 2007,  export subsidies have been used for exports of 
some dairy products (Chapter IV(1)(iii)(a)). 
111. A number of different types of drawback of du ties, taxes, and fees paid on imported products 
remain in operation.145  The drawback schemes cover a variety of imported goods, including import 
duties, taxes, and fees on:  goods imported into the United States that are re-exported; goods used in 
the manufacture of products (including packaging) that are exported; imports of goods that are 
"commercially interchangeable" with  domestically produced products that are exported; imports of 
salt used to cure fish or meat; imported material used to construct and equip vessels built for foreign 
account and ownership; and imported material used to repair jet ai rcraft engines that are exported.146 
(b) National Export Initiative 
112. Under Executive Order 13534 of 11 March 2010, the President set out the National Export 
Initiative (NEI) with the goal of doubling exports ove r five years by "helping firms – especially small 
businesses – overcome the hurdles to entering new export markets, by assisting with financing, and in 
general by pursuing a Government-wide approach  to export advocacy abroad, among other steps".147  
The NEI addresses several issues intended to in crease exports, including:  developing programmes 
that improve information and other technical assi stance to first-time exporte rs, and assist current 
exporters in identifying new export opportunities in in ternational markets; pr omoting existing federal 
resources for export assistance; increasing the ava ilability of export credits to SMEs; promoting 
exports of goods and services through trade mission s and commercial advocacy; improving market 
access by actively opening new markets; reducing si gnificant barriers to trade, and enforcing trade 
agreements; and promoting balanced growth in the global economy. 
(c) Finance, insurance, and guarantees 
113. The Export-Import Bank of the United States (Ex-Im Bank) is the official export credit 
agency of the United States with the mission of assis ting in financing exports to international markets 
by "assuming credit and country risks that the pr ivate sector is unable or unwilling to accept" and 
                                                      
144 White House Press Release, "Fact Sheet:  Latest Steps to Implement the President's Export Control 
Reform Initiative" , 7 March 2012.  Viewed at:  http://www.wh itehouse.gov/the-press-office/2012/03/07/fact-
sheet-latest-steps-implement-presid ents-export-control-reform-initi. 
145 WTO document WT/TPR/S/235/Rev.1, 29 October 2010, p. 51. 
146 19 USC 1313. 
147 Executive Order 13534 – National Export Initiative, 11 March 2010.  Viewed at:  
http://www.whitehouse.gov/th e-press-office/executive-order-national-export-initiative [May 2012]. United States WT /TPR/S/275/Rev.1 
 Page 71 
 
 
"matching the financing that other governments provide to their exporters."148  The Ex-Im Bank has 
been an independent executive agency since 1934 an d funds both programme and administrative costs 
from receipts, which are also used to fund reserves to cover future claims.  Since 9 September 2001, 
the Bank has operated under the Federal Credit Reform Act, which is subject to periodic extensions 
granted by Congress, most recently in May 2012, with the next reauthorization scheduled for 
September 2014.  In addition, Ex-Im Bank's ove rall exposure limit was raised to US$140 billion 
by 2014. 
114. Ex-Im Bank provides export financing through various programmes including: 
 direct loans to foreign buyers of exports from the United States, normally for capital-intensive 
goods such as commercial aircraft, heavy equipment, and project finance; 
 medium and long-term guarantees for financia l institutions lending to foreign buyers of 
U.S. exports; 
 working capital guarantees for lenders (normally  commercial banks) on secured, short-term 
working capital loans to finance the productio n of goods for export by U.S. companies, 
particularly small businesses; 
 short and medium-term export credit insurance to  exporters and lenders against the risk of 
default on debt obligations used to finance export contracts; and 
 special financing programmes such as aircraft finance, project finance, and supply chain 
finance. 
115. Ex-Im Bank operates in 186 countries around the world and has identified nine key markets 
(Brazil, Colombia, India, Indonesia, Mexico, Nigeria, South Africa, Turkey, and Viet Nam). 
116. To the extent necessary, Ex-Im borrows from the U.S. Treasury to finance medium- and 
long-term loans.  However, in the past five y ears, Ex-Im Bank has genera ted US$1.9billion in excess 
revenues over its costs of operations.149  According to the authorities, the Ex-Im Bank's fees are set in 
accordance with the OECD Arrangement on Officially  Supported Export Credits.  The Bank typically 
covers up to 85% of the value of eligible goods an d services in a U.S. supply contract or all of the 
U.S. content of eligible goods and services in that contract.  Certain ocean-borne cargoes financed by 
Ex-Im Bank direct loans and long-term guarantee s exceeding US$20 million or with a repayment 
period of more than seven years must be transported on U.S. flag vessels, unless a waiver is obtained 
from the U.S. Maritime Administration.150  According to MARAD, 10 waivers were granted in 2010 
and 16 in 2011. 
117. The "efforts at Ex-Im Bank are focused on supporting President Obama's National Export 
Initiative (NEI) and the goal of doubling U.S. exports by 2015."151  Since 2008, the Bank has greatly 
increased its export financing through loans, guara ntees, and export credit insurance (Table III.18) 
with the increased activity primarily attributed to gr eater demand driven by a lack of private-sector 
                                                      
148 Ex-Im Bank online information, "Mission".  Vi ewed at:  http://www.exim.gov/about/mission.cfm 
[May 2012]. 
149 Ex-Im Bank Press Release, "U.S. Exports in Apr il Hit $182.9 Billion", 8 June 2012.  Viewed at:  
http://www.exim.gov/pressreleas e.cfm/09F38661-098E-3C86-337C 6EF4D8E519CB/ [June 2012]. 
150 Public Resolution No. 17 of the 73rd Congress.  This Public Resolution is implemented by the Ex-Im 
Bank under regulations contained in 12 CFR 402.3. 
151 Ex-Im Bank (2011), p. 5.   WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 72 
  
liquidity.152  Under the NEI, the Bank has increased its e fforts to provide export financing for small 
businesses, through the Small Business (Global A ccess) initiative, launched in 2011, and the 
development of new products, such as express insurance and an online application process. 
Table III.18 
Ex-Im Bank authorizations, 2008-11 
 2008 2009 2010 2011 
Number US$ million Number US$ million Number US$ million Number US$ million 
Loans 2 356.0 16 3,033.3 15 4,260.6 18 6,322.9 
Long-term 2 356.0 16 3,025.5 14 4,255.5 17 6,315.0 
Medium-term/ 
tied aid 0 0 0 7.8 1 5.1 1 7.9 
Guarantees 673 10,179.4 619 11,474.7 719 13,105.9 784 19,400.4 
Long-term 79 8,101.5 57 9,628.4 67 10,224.9 97 15,479.4 
Medium-term 135 697.0 89 315.3 95 702.5 81 693.0 
Working capital 459 1,380.9 473 1,531.0 557 2,178.5 606 3,228.0 
Credit Insurance 2,029 3,863.5 2,256 6,513.1 2,798 7,101.3 2.949 7,003.8 
Short-term 1,879 3,635.5 2,153 6,275.8 2648 6,788.4 2,836 6,765.0 
Medium-term 150 228.0 103 237.3 150 312.9 113 238.8 
Source:    Ex-Im Bank (several issues), Annual Reports . 
118. At the end of FY 2011 (30 September 2011), the Bank had over US$60 billion in outstanding 
guarantees, loans, insurance, and claims with an  additional US$29 billion un disbursed, giving a total 
exposure of US$89 billion, up from US$68 billion in FY  2009.  The largest exposure is in the air 
transportation sector, which accounted for nearly half  of total exposure in FY 2011.  Geographically, 
the Bank's greatest exposure is to Mexico (U S$8.3 billion), India (US$7.0 billion), Ireland 
(US$4.3 billion), Turkey (US$3.8 billion), and Colombia (US$3.8 billion). 
(3) OTHER MEASURES AFFECTING INVESTMENT AND TRADE  
(i) Business framework and business investment incentives 
119. The U.S. business climate is one of encouragin g private enterprise and fostering competition 
based on free-market economic principles.  The United States also uses a number of tools and policies to encourage private-sector growth, investment, job creation, and small business development. 
120. Following the economic downturn the U.S. Government has turned to a number of fiscal 
incentives to help spur the economic recovery.  In particular a number of tax incentives to businesses 
have been adopted in the last few years:   
 the American Recovery and Reinvestment  Act (ARRA) extended the temporary bonus 
depreciation incentive originally contai ned in the Economic Stimulus Act
153;   
 the Hiring Incentives to Restore Employment (HIRE) Act of 2010 included an employment 
tax credit154;  and  
 the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act 
(TRUIRJCA) of 2010, reduced the workers' payro ll taxes by 2%.  It also included a provision 
                                                      
152 Ex-Im Bank (2011), p. 37. 
153 Public Law 110-185 and Public Law 111-5. 
154 Public Law 111-147. United States WT /TPR/S/275/Rev.1 
 Page 73 
 
 
to encourage investment through the 100% business expensing provision, which allows for 
bonus depreciation in the first year, allowing for 100% deductions.155 
121. More recently, the President proposed a new framework for business tax reform in 
February 2012.  The proposed reforms include provi sions to:  (a) eliminate dozens of tax loopholes 
and subsides, broaden the base and cut the corpor ate tax rate to spur growth in America;  
(b) strengthen American manufacturing and innovation;   (c) strengthen the international tax system, 
including establishing a new minimum tax on forei gn earnings, to encourage domestic investment;  
(d) simplify and cut taxes for America's small busin esses;  and (e) restore fiscal responsibility and 
"not add a dime to the deficit".156  To date, these reforms are only a proposal from the Administration, 
however, the U.S. Congress is also holding hearings on possible business tax reform. 
122. The United States also has a significant number of state, local, and regional economic 
development organizations that aim to facilitate business investment attraction.  The newly created 
SelectUSA initiative further coordinates and bui lds upon this by partnering with economic 
development organizations, providing a single entr y point for information, and serving as a national 
advocate for business investment in the Unite d States.  The U.S. Economic Development 
Administration is also involved in promoting co llaborative regional innovation, public/private 
partnerships, and global competitiveness. 
123. The growth of small businesses has been a priori ty for economic growth in the United States 
as small businesses account for approximately half of private-sector non-farm employment.157  
Through the Small Business Administration (S BA), loans, loan guarantees, procurement 
opportunities, contracts, counselling sessions, and ot her forms of assistance are offered to small 
businesses.  The SBA is involved in a number of initiatives, alone or in conjunction with other 
agencies to help promote businesses, trade, and inv estment.  For example, the SBA is part of the 
Advanced Manufacturing Jobs and Innovation A ccelerator Challenge, which aims to foster 
innovation-fueled job creation through public-private pa rtnerships.  It aims to promote regional-driven 
economic development that supports cluster-b ased development and advanced manufacturing.158  
SBA was appropriated USD$30 million a year for two years (2010 and 2011 fiscal years), under the 
Small Business Jobs Act of 2010, to provide grants to states to promote small business exports.  The 
grants are made on a competitive basis to stat es that have submitted proposals for their own 
custom-designed programmes. 
(ii) State trading enterprises, government corporations, and government enterprises 
124. The United States has a number of entities that contain elements of governmental and 
corporate organization.  These entities vary considerab ly in structure, finance, and management.   
125. One type, known as Government Sponsored Enterp rises (GSEs), exists and operates by virtue 
of federal law.  Some GSEs have private equity shareholders.  The GSEs are characterized by private-sector ownership, limited competition, ac tivities limited by Congressional charter, and 
chartered privileges that create an in ferred federal guarantee of obligations.
159  There are currently five 
GSEs in operation (Table III.19). 
                                                      
155 Public Law 111-312. 
156 White House and Department of the Treasury (2012). 
157 White House (2012b). 
158 SBA Press Release, "Obama Administration Launches $26 Million Multi-Agency Competition to 
Strengthen Advanced Manufacturing Clusters Across the Nation", 29 May 2012.  Viewed at:  
http://www.sba.gov/about-sb a-services/7367/148601. 
159 Kosar (2007). WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 74 
  
Table III.19 
Government sponsored enterprises 
GSE Area of operation 
Federal National Mortgage Association (Fannie Mae)a Residential and multi-family mortgages 
Federal Home Loan Mortgage Corporation (Freddie Mac)a Residential and multi-family mortgages 
Federal Agricultural Mortgage Corporation (Farmer Mac) Creates a secondary market for agricultural, rural housing, and rural 
utility loans 
Federal Home Loan Bank System  Provides funding to  member banks so the banks can provide community 
development credit 
Farm Credit Systemb Guarantees payments as to principa l and interest on securities issues by 
member banks 
a Currently in conservatorship. b The Farm Credit System now encompasses the roles of the Federal Intermediate Credit Banks, Federal Land Banks, and the 
Regional Banks for Cooperatives. 
Source:  Kosar, K. (2007), Government-Sponsored Enterprises (G SEs):  An Institutional Overview , CRS Publication 
RS21663, 23 April.  Viewed at:  h ttp://www.fas.org/sgp/crs/ misc/RS21663.pdf;  and information provided by 
U.S. authorities. 
126. A second category comprises government agenci es established by Congress as corporations.  
There is no single definition of a government cor poration, therefore they are often enumerated 
differently depending on their purpose.  The use of a corporate structure for a government agency may arise for several reasons.  These ag encies for the most part do no t operate commercially but serve 
governmental or public policy functions.  Some have special privileges and receive budgetary 
allocations.  In most cases, a corporate structure al so allows these agencies to be self-sustaining.  A 
corporate structure also allows C ongress, as the agency authorizer, to clearly define its role.  Many 
government agencies structured as corporations have limited mandates as defined by their legal charters. This prevents the agencies from taking on roles outside of their defined mandates. A 
corporate structure may provide (usually also includes) a clearly defined management structure through the use of a board of director s or similar governing body (Table III.20). 
Table III.20 
Government corporations, 2011 
Government corporation Legal reference Area of operation 
Commodity Credit Corporation 15 U.S.C. 714 Commodity credit financing 
Export-Import 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 Prison Industries (UNICOR) 18 U.S.C. 4121 Prison services 
Financing Corporationa 12 U.S.C. 1441 Financing 
Government National Mortgage Corp oration 12 U.S.C. 1717 Mortgagees 
National Railroad Passenger Corporation 
(AMTRAK) 49 U.S.C. 241 Passenger rail services 
Overseas Private Investment Corporation 22 U.S. C. 2191 International inve stment and financing 
Pension Benefit Guaranty Corporation 29 U.S.C. 1301 Pensions 
Presidio Trust of San Francisco 16 U.S.C. 460bb Park and recreation 
Resolution Funding Corporation 12 U.S.C. 1441(b) Fina ncing and bonds for debt created 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 Naviga tion, 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 
Federal Home Loan Banks 12 U.S.C. Ch. 11 Banking 
Table III.20 (cont'd) United States WT /TPR/S/275/Rev.1 
 Page 75 
 
 
Government corporation Legal reference Area of operation 
National Credit Union Administration Central 
Liquidity Facility 12 U.S.C. 1795b Credit Unions 
Community Development Financial Institutions 
Fund 12 U.S.C. 4701 Banking 
Corporation for National and Community Service 42 U.S.C. 12651 National and communities services 
Government National Mortgage A ssociation 12 U.S.C. 1717 Mortgages 
Millennium Challenge Corporation 22 U.S.C. 7703 Foreign assistance 
International Clean Energy Foundation 42 U.S.C. Part  B Foreign assistance for green house gas reduction 
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 , CRS Publication RL30365, 8 June.  Viewed 
at:  http://www.fas.org/sgp/ crs/misc/RL30365.pdf;  Government Corpor ation Control Act, 31 U.S.C. 9101;  and 
information provided by U.S. authorities. 
127. The United States has also identified certain government entities as state-trading enterprises 
pursuant to the provisions of GATT Article XVII.  According to a 2010 notification to the WTO, the 
United States maintains four state-trading enterprises (Table III.21).160 
Table III.21 
State-trading enterprises, 2010 
Enterprise Products affected Purpose  
Commodity 
Credit Corporation Non-fat dry milk (0402), butter 
(0405), cheese (0406), honey (0409), dry beans (0713), wheat (1001), rye (1002), barley (1003), 
oats (1004), corn (1005), rice 
(1006), sorghum (1007), soybeans (1201), peanuts (1202), flaxseed (1204), Sunflower seeds (1206), 
sugar (1212), cotton (5201), mohair 
(5102), wool (4102), and pulses (0708) The Commodity Credit Corporation (CCC) is a government-owned and operated 
entity within the U.S. Department of Ag riculture (USDA).  CCC was created to 
stabilize, support, and protect farm income and prices.  CCC also helps maintain balanced and adequate supplies of agricultural commodities, and aids in their orderly 
distribution 
Isotopes Production and 
Distribution Fund Isotopes under Harmonized Tariff 
System headings 2844 and 2845 The Department of Energy provides radioactive and stable isotope products and 
associated services.  The IP&D produces and sells radioactive and stable isotopes, 
byproducts, surplus materials, and related isotope services.  These products and services are sold worldwide and are used for a variety of research, development, biomedical, and industrial applications.  The programme's objectives are to produce 
and distribute isotopes for research and development, medical diagnostics and 
therapy, and other applications that are in the national interest 
Power 
Administrations Electrical energy, Harmonized 
Tariff System Number 2716 The Power Marketing Administrations (PMAs) market wholesale electricity 
generated at hydroelectric dams owned and managed by the United States Army 
Corps of Engineers (Corps) and the United States Bureau of Reclamation (Reclamation).  Bonneville also markets electricity generated by a nuclear plant owned and operated by Energy Northwest, and by a non-federally owned and 
operated hydro project.  Western also markets about 400 MW of capacity generated 
by the Navajo coal-fired plant in Arizona.  The Federal Government began to market electricity after Congress authorized the construction of the dams and established major water projects by the Corps and Reclamation, primarily in the 1930s through 
the 1960s.  The Corps and Reclamation operate these projects to provide or manage 
water for such multiple purposes as irrigation, flood control, navigation, recreation, water supply, and environmental enhancement.  These agencies also generate electricity at hydropower plants located at federal water projects.  The PMAs sell the 
power that is not used for project purposes to cooperatives and public bodies, such as 
municipal utilities, irrigation districts, military installations, and to other utilities, and any power surplus to those needs to other power purchasing entities 
Strategic 
Petroleum 
Reserve Crude petroleum, Harmonized 
Tariff System Number 2709 The Strategic Petroleum Reserve (SPR) is a crude oil stockpile, managed by the 
Department of Energy (DOE).  The SPR mission is to reduce vulnerability to 
economic, national security, and foreign policy consequences of supply interruptions 
Source:  WTO document G/STR/N/ 13/USA, 22 July 2010.   
                                                      
160 WTO document G/STR/N/13/USA, 22 July 2010.   WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 76 
  
(iii) Government procurement 
(a) Overview of U.S. Federal Procurement 
128. For fiscal year 2010, U.S. spending on fede ral procurement contracts amounted to 
US$517 billion, approximately 16% of 2010 federal government expenditures.  The Department of 
Defense accounted for the most significant share wi th 64%, and all non-defense agencies with the 
remaining 36%.  The Departments of Energy and of Veterans Affairs accounted for 5% and 4.5%, 
respectively (Chart III.8).  In terms of distributi on of federal procurement among the states, California 
and Virginia each accounted for approxim ately 11% of all federal procurement.161 
Chart III.8
Federal government procurement, by agency, 2010
Source: Census Bureau (2011), Consolidated Federal Funds Report for Fiscal Year 2010 ,  September.Defense
64.1%Energy
5.0%All other (Commerce, Agriculture, 
State, Homeland Security, 
Transportation)
13.5%
Total procurement:  US$516.7 billion.Veterans Affairs
4.5%Health & Human Services
3.5%GSA
3.3%NASA
3.1%U.S. Postal Service
3.0%
 
(b) U.S. procurement legislation 
129. The first major U.S. government procurement legislation enacted, and still operating after 
80 years, is the Buy American Act, which requires the U.S. Federal Government to purchase domestic goods.
162  Title III of the Trade Agreements Act of 1979 allows the President to waive the 
discriminatory purchasing requirements with respect  to purchases covered by the GPA and FTAs, for 
the signatories of those agreements, as well as fo r least developed countries.  However, the Buy 
American Act applies to purchases below the GPA and FTAs thresholds and to non-covered entities.  
Exceptions under the Buy American Act apply when:  (i) it is deemed inconsistent with the public 
                                                      
161 Census Bureau (2011). 
162 41 U.S.C. Chapter 83. United States WT /TPR/S/275/Rev.1 
 Page 77 
 
 
interest;  (ii) the cost is considered unreasonabl e;  (iii) the products are for use outside of the 
United States;  (iv) the products are not produced or  manufactured in the United States in sufficient 
quantities or of satisfactory quality;  and (v) the procurement is for less than US$2,500. 
130. An agency is allowed to use a foreign supp lier if the price of the domestic product is 
"unreasonable".  The threshold for determining "unr easonable" is generally 6%.  However, if the 
contract involves a small business or labour surplus ar ea, a differential of 12% is applied, and for the 
Department of Defense, a th reshold of 50% is applied.163 
131. U.S. procurement legislation also has specifi c rules on what qualifies as an American good, 
i.e. specific origin rules that differ from rul es of origin and marking for importation purposes.  
Non-manufactures are considered U.S. products if mined or produced in the United States.  
Manufactures are considered U.S. products if manuf actured in the United States and the cost of U.S. 
components is more than 50% of the overall cost of  all components.  In addition, special rules apply 
for construction contracts:  origin is not based on th e nationality of the contractor or similar, but on 
the origin of the articles, materials, and supplies used  by the contractor in c onstructing or repairing the 
building or work.164 
132. The second major procurement law is the Office  of Federal Procurement Policy Act of 1974 
(OFPP Act).  This legislation provided overall dir ection for government-wide procurement policies, 
regulations, and procedures.  In order to promot e standard processes, the OFPP Act provided for the 
creation of the Federal Acquisition Regulation (FAR).   The FAR establishes the rules and regulations 
for federal procurement of goods and services through the acquisition process.  It is codified in 
Title 48 of the Code of Federal Regulations.  Nearly  all federal agencies are required to comply with 
the FAR, but certain agencies are exempt.165  The Competition in Contracting Act (CICA) was 
enacted in 1984 and its implementation required revi sions to the FAR.  The CICA introduced more 
competition through full and open competition in the awarding of government contracts, with the goal 
of reducing the costs of procurement. 
133. In January 2011, the U.S. Congress passed new le gislation relating to the reorganization of 
public contracts as Title 41 of the United States Code, "Public Contracts".166  This legislation revises 
and restates certain laws relating to public contract s and re-enacts them as Title 41, U.S.C.  The new 
law consolidates various provisions that had been enacted separately over many years, reorganizing 
them, conforming style and terminology, modern izing obsolete language, and correcting drafting 
errors. The changes were to restate ex isting law without substantive effect.  
134. Under U.S. laws and rules, agencies may reserve  contracts exclusively for certain designated 
groups.  These provisions are known as set-asides.  There are five set-aside categories:  (i) small business;  (ii) woman-owned small business;  (iii) disabled veteran-owned small business;  
(iv) historically under-utilized small business zon es (HUBZones);  and (v) a minority small business 
development programme that utilizes set-asides.  The Small Business Act sets a government-wide 
small business contracting goal of 23% of all federal procurement do llars to be awarded to small 
business.  The Small Business Administration (SBA) negotiates individual small business goals with each federal agency.  Included in the 23% goal are individual goals for woman-owned small business 
(5%), small disadvantaged business (5%), disabled veteran-owned small business (3%), and HUBZone small business (3%).  The Department of  Veterans Administration (DVA) is responsible 
for two DVA contract award specific set-asides, one for veteran-owned sm all business and one for 
                                                      
163 Luckey (2009).   
164 Luckey (2009). 
165 For example, U.S. Postal Service and CIA are exempt. 
166 Public Law 111-350. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 78 
  
service-disabled veteran-owned business.  In additio n, the Department of Commerce administers a 
contracting and grants programme  for minority business enterprise.167 
135. In August 2010, the United States notified the final Regulation implementing the "buy 
American" provision in the American Recovery an d Reinvestment Act of 2009 (ARRA) pursuant to 
Article XXIV:5(b).168  The rule applied only with respect to contracts funded with ARRA funds to 
ensure compliance with U.S. obligations unde r international agreements when undertaking 
construction covered by such agreements.   
(c) New WTO government procurement commitments 
136. WTO GPA Members recently reached consensus on a revision of the GPA and re-negotiation 
of the specific commitments contained in th e annexes pertaining to each Member.  The 
U.S. commitments, undertaken in the 1994 GPA, remain virtually the same.169  While the thresholds 
for procurement did not change, the number of central government covered entities has increased 
by 12.  Commitments for sub-central government  entities (i.e. states) and other entities (i.e. 
government corporations) remain unchanged, except for the increased transparency with the listing for 
several states of the executive bran ch entities that they cover.  In addition, the United States covered 
telecommunications projects funded by the U.S. Rural Utilities Service under Annex 3.170 
(d) Special provisions, exceptions, etc. 
137. The United States passed new legislation in late 2010 to create a federal excise tax on foreign 
entities receiving payments for goods and services.171  When the law goes into effect, an amount of 
2% is applied to foreign entities not party to an international procurement agreement.  This is 
understood to apply to countries that are not members of the GPA or do not have a free-trade 
agreement with the United States.  The regulator y changes to implement the law have not been 
finalized;  the changes will follo w the FAR rulemaking procedures before entering into effect. 
138. Procurement at the sub-central (i.e. state) level is a matter of state law.  Various state 
procurement rules may have similar "buy American " provisions that can be seen as restrictive or 
discriminate on the basis of origin or similar requirements.  For example, several states have 
restrictions on the public procurement of American flags, requiring them to be manufactured in the 
United States.  In Minnesota, law officials' uniforms are required to be of U.S. origin. 
139. The United States also has special provisions re garding procurement under legislation relating 
to sanctions on certain countries.  This not only resu lts in direct restrictions on the country concerned, 
but also indirectly on firms that do certain types of business with that country.  The Comprehensive 
Iran Sanctions, Accountability, and Divestment Ac t of 2010 (CISADA), prohibits U.S. executive 
agencies from entering into or renewing a contract, for goods or services, with an entity that exports 
sensitive technology, as defined in section 6 of CISADA, to Iran.172  Regulations requiring 
government contractors to self-certify regarding th is issue became effective on 2 November 2011.  
                                                      
167 Set-asides for small business are in respect of all federal government contracts, but may vary on the 
size of the contract.  For small contracts (less than US$150,000), set-asides are automatic, and for large 
contracts (US$500,000), a sub-contracting plan is often necessary (SBA online information, "Goaling Program".  
Viewed at:  http://www.sba.gov/ about-sba-services/2636).   
168 WTO document GPA/98/Add.2, 6 September 2010. 
169 WTO document WT/Let/844, 9 January 2012. 
170 WTO document GPA/113, 2 April 2012. 
171 Public Law 111-347. 
172 Public Law 111-195. United States WT /TPR/S/275/Rev.1 
 Page 79 
 
 
(iv) Subsidies and other government assistance 
140. Subsidies, as defined and notified under GATT Article XVI:1 and Article 25 of the 
Agreement on Subsides and Countervailing Duties ar e reported to the WTO by Members including 
the United States.  According to the latest notif ication in October 2011, the United States reported 
50 federal programmes, and over 500 sub-federal programs (Table III.22). 
Table III.22 
Federal subsidy programmes, 2011 (fiscal year 2010)  
(US$ million) 
Federal programmes  Amount reported (US$ million)  
Agriculture 14,424 
Dairy Export Incentive Program (DEIP) 2a 
Agriculture Income Support and Marketing Assistance for Covered Commodities   13,532b 
Expensing of Multi-period Livest ock and Crop Pr oduction Costs 140c 
Treatment of Loans Forgiven Solv ent Farmers as if Insolvent 20c 
Capital Gains Treatment of Ce rtain Agricultural Income 490c 
Exemption from Excise Tax for Tobacco Produc ts Supplied to Their Employees by Tobacco 
Product Producers Per unit amount only 
Five-year Recovery Period for Certain Fa rming Business Machinery or Equipment 240c 
Energy and fuels 18,099 
Energy Supply – Renewable Energy Resources 815d 
Energy Conservation Programs – Transportation Sector 304d 
Energy Conservation Programs – Building Technologies 219d 
Energy Conservation – Industry Sector 94d 
Fossil Energy Research and Development 477d 
Expensing of Exploration and Development (E &D) Costs for Oil, Gas and other Fuels 400c 
Excess of Percentage over Cost Deple tion for Oil, Gas and Other Fuels 980c  
Alternative Fuel Production Credit 170c 
Capital Gains Treatment of Royalties on Coal 50c  
Energy Efficient Appliance Credit 150c 
Alcohol Fuel Credit 8,570c 
Biodiesel and Renewable Diesel Credit 510c 
Alternative Fuels Credit 3,960c 
Tax Credit for Refined Coal and Indian Coal Less than 50c 
Credits for Investment in Advanced Coal Facilities and Advanced Gasification Facilities 240c 
Advanced Energy Property Credit 180c 
Credit for Production of Low-Sulfur Diesel and De duction for Investment in Low-Sulfur Diesel 
Refineries Under 10c 
Deduction for Investment in In creased Refinery Capacity 760c 
Amortization of Geological a nd Geophysical Expenditures 150c 
Deduction for Tertiary Injectants Less than 10c 
Fisheries 112 
Fisheries Finance Program (FFP) 69e 
Saltonstall-Kennedy Grant Program:  Fish eries Research and Development 8  
Sea Grant 9d 
Columbia River Hatcheries 26d 
Lumber and timber 380 
Capital Gains Treatment of Certain Timber Income 50c 
Expensing of Multi-period Timber Growing Costs 230c 
Expensing and Seven-Year Amortizati on for Reforestation Expenditures 50c 
Reduced Corporate Capital Gains Tax Rate for Qualified Timber Gain 50c 
Medical 489 
Orphan Drug Tax Credit 470c 
The Office of Isotopes for Medicine and Science 19a 
Metals, minerals, and extraction (non-fuel) 900 
Excess of Percentage over Cost De pletion for Non-fuel Minerals 770c 
Expensing of Exploration and Developm ent Costs for Non-fuel Minerals 110c 
Table III.22 (cont'd) WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 80 
  
Federal programmes  Amount reported (US$ million)  
Capital Gains Treatment of Iron Ore Less than 10c 
Special Rules for Mining Reclamation Reserves Less than 10c 
Shipyards 15 
Assistance to Small Shipyards Grant Program 15d 
Textiles 1 
Textile/Clothing Technology Co rporation Program (TC2) 1d 
Timepieces and jewellery 3 
Insular Possessions Watch and Jewellery Programs 3 
Other 2,030 
Empowerment Zones and Renewal Communities 730c 
New Markets Tax Credit 720c 
New York Liberty Zone 20c 
Gulf Opportunity Zone 360c 
Kansas Disaster Area 100c, f 
Midwestern Disaster Area 100c 
a Budgetary outlay basis. 
b Includes some fiscal year 2009 data. 
c Revenue loss basis. 
d Appropriations basis. e Loan basis. 
f 2009 fiscal year. 
Note:  Subtotals are approximate.  Sub -federal entities are not included as they  are too numerous (see WTO document 
 G/SCM/N/220/USA, 19 October 2011 for details). 
Source:    WTO document G/SCM/N/ 220/USA, 19 October 2011.  
141. As illustrated through the WTO notification, th e agriculture and energy and fuel sectors are 
the largest recipients of government assistance a nd have grown in recent years.  One of the major 
contributors to the growth in this sector is interest  in biofuels, or using in centives to find alternatives 
to fossil fuels.  This has gained further momentum  in recent years due to the high energy prices and 
the negative contribution to the current account caused by substantial petroleum imports (Chapter I).  
Biofuel incentives are also important as they could have a direct or indirect impact on certain aspects of global trade, due to diversion of food products  to fuel, commodity price fluctuations, and with 
respect to agricultural policies.  There are a numb er of programmes, grants , tax credits, and other 
incentives related to energy biofuels (Table III.23).   
142. As examined during the last Review, the United States implemented a number of fiscal 
stimulus measures or government assistance to mitigate the impact of the financial crisis.  While some of these programmes are winding down, some still play an important role in the ongoing recovery and 
have an impact on the current economic and business climate, including the Authoritative Resources on the American Recovery and Reinvestment Ac t of 2009 (ARRA) and the Troubled Asset Relief 
Program (TARP, as contained in the Emergency Economic Stabilization Act (EESA).  The recently 
re-authorized Trade Adjustment A ssistance (TAA) also provides support for workers and firms, and is 
an important aspect of U.S. trade policy. 
143. The TARP provided government support to AIG, the automotive industry, banks, and 
financial institutions.  On 31 Ma y 2012, the lifetime cost of TARP  was estimated at US$63 billion.  
While many of the TARP programmes are winding down, significant assets remain under government 
control or ownership and a number of programmes re main active, especially in the housing market.  
The United States has articulated broad princi ples for exiting TARP, including exiting TARP 
programmes as soon as practicable and seeking to ma ximize taxpayer returns.  As concerns the 
Automotive Industry Financing Program, TARP h as received US$40 billion of its approximately 
US$80 billion investment.  Chrysler exited the progr amme in July 2011, but GM and Ally Financial 
(former GMAC financing) remain included,  as US$37.2 billion of reimbursement remains United States WT /TPR/S/275/Rev.1 
 Page 81 
 
 
outstanding.  Likewise, AIG is still covered under TARP  and is expected to have a lifetime cost of 
US$18.7 billion.173 
Table III.23 
Federal programmes on biofuels, 2011 
Federal programmes  Legal citation Description 
Renewable Fuel Standard P.L. 109-58 §1501 Mandated use of renewable fuel in gasoline: 4 billion gallons in 2006, increasing to 36 
billion gallons in 2022 
Volumetric Ethanol Excise 
Tax Credita P.L. 108-357 §301 Gasoline suppliers who blend ethanol with gasoline are eligible for a tax credit of 
US$0.45 per gallon of ethanol 
Small Ethanol Producer 
Credita P.L. 101-508 An ethanol producer with less than 60 million gallons per year in production capacity 
may claim a credit of US$0.10 per gallon on the first 15 million gallons produced in a year 
Biodiesel Tax Credita P.L. 108-357 Producers of biodiesel or diesel/biodiesel blends may claim a tax credit of US$1.00 per 
gallon of biodiesel 
Small Agri-Biodiesel Producer Credit
a P.L. 109-58 An agri-biodiesel (produced from virgin agricultural products) producer with less than 
60 million gallons per year in production capacity may claim a credit of US$0.10 per 
gallon on the first 15 million gallons produced in a year 
Renewable Diesel Tax 
Credita P.L. 109-58 Producers of renewable diesel (similar to biodiesel, but produced through a different 
process) may claim a tax credit of US$1.00 per gallon of renewable diesel 
Credit for Production of Cellulosic Biofuel P.L. 110-246 Producers of cellulosic biofuel may claim a tax credit of US$1.01 per gallon.  For 
cellulosic ethanol producers, the value of the production tax credit is reduced by the value of the volumetric ethanol excise tax credit and the small ethanol producer credit – the credit is currently valued at US$0.46 per gallon.  The credit applies to fuel produced 
after 31 December 2008 
Special Depreciation 
Allowance for Cellulosic Biofuel Plant Property P.L. 109-432 Plants producing cellulosic biofuels may take a 50% depreciation allowance in the first 
year of operation, subject to certain restrictions 
Alternative Fueling Station Credit
a P.L. 109-58 §1342 A credit of up to $30,000 is available for the installation of alternative fuel 
infrastructure, including E85 (85% ethanol and 15% gasoline) pumps 
Biorefinery Assistance  P.L. 110-246 §9001 Loan guarantees and grants for the construction and retrofitting of biorefineries to  
produce advanced biofuels  
Repowering Assistance P.L. 110-246 §9001 Grants to biorefineries that use renewable biomass to reduce or eliminate fossil fuel use  
Bioenergy Program for 
Advanced Biofuels  P.L. 110-246 §9001 Provides payments to producers to support and expand production of advanced biofuels 
Feedstock Flexibility 
Program for Producers of 
Biofuels (Sugar) P.L. 110-246 §9001 Authorizes  the use of CCC funds to pu rchase surplus sugar, to be resold as a biomass 
feedstock to produce bioenergy  
Biomass Crop Assistance Program (BCAP) P.L. 110-246 §9001 For biomass crop establishment costs and annual payments for biomass production; also 
provides payments to assist with costs for biomass collection, harvest, storage, and 
transportation  
Rural Energy for America Program (REAP) P.L. 110-246 §9001 Loan guarantees and grants for a wide range of rural energy projects, including biofuels 
Biomass Research and 
Development P.L. 106-224 Grants for biomass research, development, and demonstration projects 
Biorefinery Project Grants Various statutes Funds cooperative R&D on biomass for fuels, power, chemicals, and other products 
Loan Guarantees for Ethanol 
and Commercial Byproducts 
from Various Feedstocks P.L. 109-58 §§1510, 
1511, and 1516 Several programs of loan guarantees to construct facilities that produce ethanol and 
other commercial products from cellulosic material, municipal solid waste, and/or 
sugarcane 
DOE Loan Guarantee Program  P.L. 109-58 
Title XVII Loan guarantees for energy projects that reduce air pollutant and greenhouse gas 
emissions, including biofuels projects 
Cellulosic Ethanol Reserve Auction P.L. 109-58 §942 Authorizes DOE to provide per-gallon payments to cellulosic biofuel producers 
Import Duty for Fuel 
Ethanola P.L. 96-499 All imported ethanol is subject to a 2.5% ad valorem  tariff;  fuel ethanol is also subject 
to a most-favored nation added duty of US$0.54 per gallon (with some exceptions)  
Flexible Fuel Vehicle Production Incentive P.L. 94-163 Automakers subject to Corporate Average Fuel Economy (CAFE) standards may accrue 
credits under that program for the production and sale of alternative fuel vehicles, including ethanol/gasoline flexible fuel vehicles (FFVs) 
a Expired at the end of 2011. 
Source: Yacobucci, B.D. (2011), Biofuels Incentives:  A Summary of Federal Programs ", CRS Publication R40110, 1 July.  
Viewed at:  http://fpc.state.gov /documents/organ ization/168094.pdf. 
                                                      
173 Department of Treasury (2012). WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 82 
  
144. ARRA has current expected outlays of US$840 billion, up from US$787 billion, since its 
inception in 2009.174  It continues to provide money for three main categories aimed at economic 
recovery:  tax cuts, entitlement programmes, and federa l contracts, grants, and loans (Chart III.9).  In 
the category of federal contracts, grants, and loans,  the majority of funding is for education, followed 
by transportation, infrastructure, and energy/environment.  Most of the funding for tax cuts goes to 
individual tax credits, and most of the entitlement funding is for Medicaid/Medicare and unemployment insurance.  There is no legislative e xpiry for ARRA, although many of the individual 
provisions are limited in time and have deadlin es associated with the appropriations (budget). 
Chart III.9
American Recovery and Reinvestment Act (ARRA) Funds paid out
Source: WTO Secretariat, based on Recovery online info rmation.  Viewed at: http://www.rec overy.gov/
Transparency/fundingoverview/Pages/fundingbreakdown.aspx.Tax benefits (tax credits, tax 
incentives, energy incentives)
39.3%
Contracts, grants and loans 
(education, transportation, 
infractructure, energy/envireonment)
30.9%Entitlements (Medicaid/Medicare, 
unemployment insurance, 
economic recovery payments)
29.8%
Total funds paid out:  US$758 billion.
 
145. TAA has been an important aspect of U.S. trad e policy for over half a century, helping firms 
and workers adjust to trade liberalization.  In pa rticular, it helps with worker retraining, financial 
assistance, and benefits; and for firms it provides technical assistance to develop recovery plans.  As a result of proceeding with three new FTAs in Oct ober 2011, the President pushed for re-authorization 
of the TAA in order to improve or modify a number of its provisions.  Among the other important 
changes, the re-authorization extended the worker , firm, and farmer programmes until 31 December 
2013; discontinued TAA for communities; restored and enhanced funding levels for many of the programmes; discontinued eligibility for public-sector workers;  and made provisions retroactive to 
the expiry of the previous enhancements.
175 
                                                      
174 Recovery online information.  Viewed at:  www.recovery.gov. 
175 Hornbeck and Rover (2011). United States WT /TPR/S/275/Rev.1 
 Page 83 
 
 
(v) Competition policy 
146. U.S. federal legislation on competition policy, or  antitrust, has been in existence for 112 years 
and is constituted by three core laws or pillars.  The Sherman Act, passed in 1890, is a comprehensive 
law aimed at preserving free and unfettered competition.176  It outlaws restraint of trade and 
monopolization.  The Federal Trade Commission Ac t of 1914 prohibits unfair methods of competition 
and unfair or deceptive acts or practices.  The Cl ayton Act prohibits merger s and acquisitions where 
the result would lessen competition.177  The Robinson-Patman Act and the Hart-Scott-Rodino 
Antitrust Improvement Act amended the Clayton Ac t to ban certain discriminatory prices and to 
require advance notification of me rgers and acquisitions.  The U.S. antitrust laws often have severe 
penalties or fines for violations, including impris onment.  The Federal Trade Commission (FTC) and 
the Antitrust Division of the Department of Justi ce (DOJ) enforce the federal antitrust laws.  In 
addition to the main federal laws, most states ha ve antitrust laws, often m odelled after the federal 
laws.   
147. There have been no major changes to the core antitrust laws for many years.  Contrary to 
most aspects of U.S. trade policy that occur through new laws or actions by Congress and the 
Executive branch, U.S. competition policy is gene rally developed through interpretation by the 
Judicial branch, and through administrative proceed ings at the FTC.  The DOJ or the FTC initiate 
many cases each year pursuant to the releva nt antitrust laws (Tables III.24 and III.25). 
Table III.24 
DOJ investigations initiated pursuant to antitrust laws, 2008-11 
Total investigations initiated, by primary type of conduct 2008 2009 2010 2011 
Sherman §1 – Restraint of trade 66 70 46 47 
Sherman §2 – Monopoly 0 4 2 2 
Clayton §7 – Mergers 84 68 64 90 
Others 22 22 7 3 
Source:   Department of Justice, statistics. 
Table III.25 
FTC investigations initiated pursuant to antitrust laws, 2008-11 
 2008  2009  2010  2011 
Merger investigations opened   224 135 186  222
Non-merger investigations opened   39 31 32  23
Abuse of dominance (monopolization) investigations openeda  11  8  18  7 
a The number of "abuse of dominance inves tigations opened" is as reported in the Global Competition Review survey, and is a 
subset of non-merger investigations opened. 
Source: Federal Trade Commission, statistics.  
148. While the three pillars of antitrust legislation provide the basic structure, there are other 
U.S. laws or regulations that could facilitate antic ompetitive practices.  In the area of international 
trade:  the Agricultural Marketing Agreement Act of 1937 allows the Secretary of Agriculture to enter 
into marketing agreements with producers and pr ocessors of agricultural commodities, and these are 
specifically exempt from the antitrust laws178;  the Export Trading Company Act of 1982 provides 
certain antitrust immunity for expor t trade and export trade activities179;  and the Webb-Pomerene Act 
                                                      
176 15 U.S.C. 1-7. 
177 15 U.S.C. 12-27. 
178 7 U.S.C. 601-627. 
179 15 U.S.C. 4001-4003. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 84 
  
provides immunity for associations of otherwise competing businesses to engage in collective export 
sales.180 
149. In 2011, the Federal Trade Commission ame nded the Hart-Scott-Rodino Pre-merger 
notification rules and the form for reporting th e proposed merger.  The new rules, effective 
18 August 2011, include significant changes.  Additiona lly in 2010, the Department of Justice and the 
FTC amended the Horizontal Merger Guidelines.  Th e amendments retained the core elements of the 
previous guidelines but contain a number of important clarifications concerning market definition, and 
expand the discussion on assessing unilateral effects.181 
(vi) Trade-related intellectual property rights  
(a) Introduction 
150. Intellectual property (IP) has a central place in  the domestic economy and the international 
trade profile of the United States.  The United States is one of the most well established and mature IP jurisdictions, however, the legal, economic, and tr ade policy context of IP continued to evolve 
significantly during the review period, notably through:  
 major legislative developments (e.g., the Leah y-Smith America Invents Act) and continuing 
reform of IP administration (such as improvement  in patent quality and pendency reduction in 
the patent examination process);  
 significant judicial decisions on central issues of patentability particularly as regards 
patent-eligible subject matter;  
 regulatory legislation with significance for IP pr otection, for instance an abbreviated process 
for approving "biosimilar" generic versi ons of innovative biological medicines;  
 strengthened domestic enforcement, including through the work of the Office of the 
U.S. Intellectual Property Enforcement Coordinato r, and efforts to build stronger enforcement 
in foreign markets;   
 a policy focus on the role of IP in promo ting domestic economic growth and creation of 
high-value jobs, and in strengthening the U.S. position in international trade.  IP protection 
has been stressed in the implementati on of the National Export Initiative (NEI)
182, which aims 
at doubling U.S. exports within five years;  and  
 consolidation of a trend towards development of  markets in IP as such, ranging from the rapid 
expansion of markets in digital products to majo r transactions in patent portfolios in the IT 
sector.  
(b) Economic policy context 
151. Policymakers continued to emphasize the central importance of IP for the trade, economic 
and employment position of the United States, and – in line with international developments – sought 
to base IP policy on a firm empirical foundation.  A 2012 report, jointly prepared by the Economics 
and Statistics Administration and the U.S. Patent an d Trademark Office, assessed that U.S. industries 
                                                      
180 15 U.S.C. 61-66. 
181 Varney (2011).  
182 Executive Order 13534, 11 March 2010.   United States WT /TPR/S/275/Rev.1 
 Page 85 
 
 
that protect their works through patents, tradem arks or copyrights supported 27.1 million jobs, or 
close to 19% of all employment in the United States in 2010183, and indirectly supported a further 
12.9 million jobs.  A substantial share of this IP -intensive employment was in trademark-intensive 
industries, which sustained 22.6 million jobs, wh ile patent-intensive industries accounted for 
3.9 million jobs, and copyright-intensive industries for 5.1 million jobs.184  IP-intensive industries 
contributed just over US$5 trillion in value added, or almost 35% of U.S. GDP in 2010.   
152. IP was integral to trade policy concerns to boost high-value exports of goods and services.  
The same report estimated that merchandise exports of IP-intensive industries accounted for close to 
61% of total U.S. merchandise exports in 2010, a nd merchandise imports of IP-intensive industries for 
almost 70% of total U.S. merchandise imports.  That same year, manufacturing industries were 
responsible for 99% and 79% of IP-intensive me rchandise exports and imports, respectively.  The 
report estimated that exports of IP-intensive servi ce-providing industries accounted for about 19% of 
total U.S. private services exports. Exports of software publishers were the largest group of 
IP-intensive service-providing industries in 2007, followed by the motion picture and video industry, financial investment activities, and scientific research and development. 
153. The IP component of trade in technology, kn ow-how, creative expressions, brands, and other 
types of IP is difficult to measure precisely since these often take the form of intangibles embedded in services and physical goods.  However, trade in IP is also undertaken as speci fic IP licences, and the 
value of this trade may be estimated from balance- of-payments statistics, distinctly from figures for 
trade in goods that incorporate IP or for IP-rela ted services.  In the case of the United States, a 
comprehensive assessment of IP licence trade is made possible by the detailed statistics available on 
international payments and receipts of royalties and licence fees.
185  This shows that the United States 
has traditionally posted a large balance-of-payments su rplus in IP licence trade.   The surplus declined 
in 2009 but recovered to reach an all-time record of US$84 billion in 2011 (Chart III.10). 
154. The IP licence surplus was the result of U.S. residents having collected almost US$121 billion 
in royalties and licence fees in 2011, while paying nearly US$37 billion to foreign residents 
(preliminary data).  Both receipts (exports) and pa yments (imports) increased considerably between 
2009 and 2011 (by 24.1% and 22.6% in nominal terms), to reach historical peaks, which is in line 
with the overall expansion of U.S. exports and imports of goods and ser vices.  In monetary terms, IP 
licence exports are as significant as U.S. exports of ag ricultural food products, and larger than those of 
mining or automotive products (see Chapter I(3)). IP  licence exports and imports contributed 5.7% 
and 1.4% to total exports and impor ts of goods and services in 2011. 
155. The United States is by far the world's single larg est IP licence exporter, collecting about half 
of world royalties and licence fees in 2010 (last year available).186  The United States paid 
approximately 15% of world royalties and licence f ees in the same year, which made it the second 
                                                      
183 Economics and Statistics Administration and U.S. Patent and Trademark Office (2012).  
184 Total IP-intensive industry employment is less than the sum of patent, trademark, and 
copyright-intensive industry employmen t because several industries intensiv ely use both patents and trademarks 
or copyrights and trademarks. 
185 Royalties and licence fees cover transactions with non–residents that involve intangible assets – 
including patents, trade secrets, and other proprietary rights – that are used in connection with the production of goods;  copyrights;  trademarks;  franchises;  rights to reproduce or distribute motion pictures and television 
recordings; rights to broadcast live events; software licensing fees; and other IPRs.  The term royalties generally 
refers to payments for the utilization of copyrights or trademarks, and the term licence fees to payments for the use of patents or industrial processes. 
186 WTO Secretariat estimates, based on World Bank  online information, "Ind icators:  Science and 
Technology:  Royalties and License Fees".  Viewed at:  http://data.worldbank.org/indicator?display=default [May 2012]. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 86 
  
single largest IP importer.  As noted by the U.S. authorities, IP-related imports provide benefits for 
U.S. consumers and producers by increasing market  competition and thus lowering prices, and by 
supplying intermediate inputs for U.S. industries th at make these industries' finished products more 
competitive.187 
020406080100120140
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Chart III.10
Royalties and licence fees, 2002-11
(US$ billion)
Source: Bureau of Economic Analysis online information,  "U.S. International Transactions, 1960-present. 
Viewed at: http://www.bea.gov/international/index.htm#services [May 2012].Receipts (exports) Balance Payments (imports)
Note: Data for 2011 are provisional.
 
156. The large two-way trade in IP licences between the United States and its partners reflects the 
fact that U.S. residents control a significant propor tion of IP rights (IPRs) worldwide, while foreign 
residents account for a considerable share of IPRs in the United States.  For example, U.S. residents 
own some 8%-9% of the patents in force worldw ide (excluding the United States), while foreign 
residents account for about 48% of the patents in force in  the United States.188  This suggests that the 
United States' large market and well developed IP regime offer an attractive environment for both 
U.S. and foreign IP right holders. 
157. The combined value of IP li cence receipts and payments was US$139 billion in 2010 (the 
most recent year available) (Chart III.11.  See al so Table AIII.3).  This trade is geographically 
concentrated, with only three U.S. trading partne rs – Canada, the European Union, and Japan – 
accounting for 61% in 2010.  However, trade with developing countries has been more dynamic, and 
the highest rates of growth in U.S. IP licence trade between 2006 and 2010 was with Argentina, 
                                                      
187 Economics and Statistics Administration and U.S. Patent and Trademark Office (2012). 
188 WTO Secretariat estimates, based on WIPO online in formation, "Statistics on Patents".  Viewed at:  
http://www.wipo.int/ipstats/en/sta tistics/patents/ [May 2012]. United States WT /TPR/S/275/Rev.1 
 Page 87 
 
 
Brazil, Chile, China, Chinese Taipei, and India.  In these markets, except fo r Chinese Taipei, receipts 
and payments associated with film and television tape distribution expanded particularly strongly. 
Chart III.11
Royalties and licence fees, distribution of receipts and payments, 2010
Combined value of receipts to, and payments by U.S. residents: US$ 139 billion .
By trading partner/region
Source: Bureau of Economic Analysis online information,  "Royalties and licence fees". Viewed at:  
http://www.bea.gov/int ernational/international_services.htm#detailedstatisticsfor [May 2012].Canada
6.7%
Industrial 
processes
39.9%Others
2.3%By type of intangible asset
Books, records, & tapes
1.8%
Film & 
television tape 
distribution
10.9%Trademarks
13.6%Franchise 
fees
3.4%General use 
computer 
software
28.8%Broadcasting, recording of 
live events, & others
1.6%
Other Americas
9.9%
Japan
13.3%
Other Asia
15.6%European Union
41.1%Other 
Europe
11.1%
 
158. Industrial processes generated 40% of U.S. IP licence trade, followed by computer software, 
with almost 30%, and trademarks with close to 14% (Chart III.11).  The fastest growing IP types were 
computer software and trademarks, whic h expanded 56% and 53%  between 2006 and 2010.189 Ireland 
and, far behind, Japan made the largest contributi on to computer software expansion, and Japan and 
Switzerland to trademark growth. Payments for righ ts related to industrial processes have been less 
dynamic, possibly reflecting the subdued performance of the manufacturing sector, although improving over the past two years.  
159. Most U.S. IP licence trade ta kes place within multinational companies that serve foreign 
markets through affiliates located in those markets.   The value of receipts and payments within 
U.S. multinational companies (affiliated transactions) represented about 65% of the total value of IP 
licence transactions in 2010 (Table AIII.3).  This wa s slightly lower than the share in 2006 (67%), as 
affiliated transactions have tended to  expand at a slower pace than those involving unaffiliated firms.  
On the other hand, affiliated transactions have sh own greater stability during the recent years of 
economic turmoil.  This resilience has been attributed  to the nature of long-te rm contracts, the reliance 
on inputs from affiliated parties in the integrat ed operations of multinational companies, and 
cost-sharing arrangements within these companies.
190 
                                                      
189 WTO Secretariat estimates, based on Bureau of Economic Analysis online information, "Royalties 
and license fees". Viewed at: http://www.bea.gov/intern ational/international_services.htm#detailedstatisticsfor 
[May 2012]. 
190 Koncz-Bruner and Flatness (2011). WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 88 
  
160. Some of the most dynamic recent developments  in domestic and international trade in IP 
licences has been at the consumer level, with the ra pid growth in markets for content in the form of 
digital downloads, notably software applications  for mobile platforms, e-books, and audio and 
audiovisual works.  A publishing industry report recorded a 332.6% increase in export revenues from 
e-books in 2011191, lifting the share of e-books in publishing exports from 1.5% in 2010 to over 6%.  
Digital downloads of music reportedly rose 17% in 2011 to reach US$2.6 billion192, offsetting a 
decline in shipments of physical media in a year when digital shipments exceeded conventional music 
media for the first time.  One online music store, operated by U.S. corporation Apple Inc., confirmed 
its status in the review period as the world's largest music retailer193, exporting to over 
120 countries194;  it also reported over 30 billion downloads of software applications in under 
four years, with payments of over US$5 billion to software developers. 
161. The significance for the United States of trade in IP licences and in IP-intensive goods and 
services is mirrored by the high level of expenditur es on R&D, which OECD data set at 2.9% of GDP, 
by far the largest such outlay within the OECD.195  Some 30% of R&D expenditures are estimated to 
be government-financed.196  The 2012 U.S. Budget provided US$ 148 billion for R&D overall, a slight 
nominal increase (0.5%) over actual 2010 expenditures.197  Government assistance to R&D activities 
takes different forms including, in addition to IPR pr otection, direct grants a nd "tax expenditures" (see 
section (iv)).  Against a background of polic y focus on the continuing competitiveness of the 
U.S. economy and the need for high value jobs, the impact of such assistance would be assessed to the extent that it is commensurate with the positive externalities generated
198, and to the extent that the 
balance between assistance and externalities avoids distortions to the incentives framework for R&D 
activities, not just domestically but also internationally. 
(c) Institutional framework 
162. Several agencies are responsible for various ad ministrative and enforcement aspects involving 
intellectual property in the United States.  The United States Patent and Trademark Office (USPTO) 
plays a key role in strengthening and facilitating IP protection. Beyond  its administrative and statutory 
functions, USPTO provides advice on IP policy issues,  gives assistance to foreign governments and 
                                                      
191 Association of American Publishers online info rmation, "US Publishers See Rapid Sales Growth 
Worldwide".  Viewed at:  http://w ww.publishers.org/press/68/.   
192 Recording Industry Associa tion of America (2012).   
193 Apple Press Release, "Apple's App Store Downlo ads Top 25 Billion", 5 March 2012.  Viewed at:  
http://www.apple.com/pr/library/2 012/03/05Apples-App-Store-Downlo ads-Top-25-Billion.html;  and 
International Federation of the Phonographic Industry (2012). 
194 Apple online information, "iTunes Support".  Viewed at:  http://www.apple.com/support/ 
itunes/ww/.   
195 OECD online information, "OECD.Stat Extracts:  Indicator on Gross Domestic Expenditure on 
R&D".  Viewed at:  http://stats.oecd.org/BrandedVi ew.aspx?oecd_bv_id=strd-data-en&doi=data-00182-en 
[May 2012]. 
196 WTO Secretariat estimates, based on OECD onlin e information, "Gross domestic expenditure on 
R-D by sector of performance and source of funds". Viewed at:  http://www.oecd-ilibrary.org/science-and-
technology/data/oecd-science-technology-and-r-d-statistics/gross-domestic-expenditure-on-r-d-by-sector-of-performance-and-source-of-funds_data-00189-en?isPartOf=/content/datacollection/strd-data-en [May 2012]. 
197 White House, Office of Science and Technology Policy (2011).   
198 For example, a recent report from the Office of Tax Policy, U.S. Department of the Treasury, 
estimated that the Research and Experimentation Tax Credit produces approximately a dollar-for-dollar increase 
in current research spending, while supporting a large nu mber of well paid, highly skilled jobs as some 70% of 
research costs that qualify fo r the credit are labour costs. On the cost side, the same report estimated that close to 
US$9 billion in research credits were claimed in  FY2008 (Department of the Treasury, 2011).   United States WT /TPR/S/275/Rev.1 
 Page 89 
 
 
international organizations, and c onducts programmes and studies to strengthen the effectiveness of IP 
protection domestically and throughout the world.199   
163. The USPTO established the Office of Chief Economist in March 2010 to provide advice on 
the economic implications of policies affecting the U.S. IP system.  USPTO's Economic Research 
Agenda covers matters such as the relationshi p between IP and economic growth, the economic 
impact of trademark examination on relative gr ounds, managing IP in the context of technology 
standards, and facilitating more efficien t markets for technology and knowledge.200  The USPTO also 
conducts training and education programmes, in cluding through the Global Intellectual Property 
Academy, which offers courses designed for fore ign government officials and other stakeholders. 
Moreover, it has developed the Intellectual Pr operty Awareness Assessment Tool, a web-based 
system designed to assess IP knowledge and prov ide training resources for small and medium-sized 
enterprises and inventors.201  
164. The United States Copyright Office (USCO) is charged by Congress with administering the 
Copyright Act; it is an office of public record, wher e claims to copyright are registered and where 
documents relating to copyright may be recorded wh en the requirements of the copyright law are met. 
The USCO also provides advice to Congress on th e development of national and international 
copyright policy, drafts legislation, and prepares technical studies on copyright-related matters.  Like the USPTO, the Copyright Office works with ot her U.S. government agencies and international 
organizations to promote adequate  and effective protection of U.S. copyright works internationally.
202   
165. A number of other agencies work to promote e ffective intellectual property protection both in 
the United States and aboard; these include the Depart ment of State, the Department of Commerce, 
and USTR.   
166. The mission of the USTR includes "to sup port and implement the Administration’s 
commitment to aggressively protect American IP overseas"203, in view of the impact of IPR 
infringements in foreign markets on U.S. businesses and on key U.S. comparative advantages in innovation and creativity.  USTR's Office of Intell ectual Property and Innovation uses a range of tools 
to promote strong IP laws and effective enforcement worldwide (see below).  
(d) Participation in WTO and international initiatives 
167. The United States aims to use Trade Policy Reviews of its trading partners to seek 
constructive engagement on TRIPS implementation.
204  The reviews of its own trade policies 
regularly cover IP issues, with the most recent covering patents, copyright, broadcast signals, 
circumvention of technological measures, trademarks and geographical indications205, as well as 
enforcement activities, including annual and out -of-cycle Special 301 Reports and Section 337 
investigations.  The United States also responde d to questions on its implementation of DSB 
recommendations concerning two of the four IP-re lated cases in which the United States had taken 
                                                      
199 American Inventors Protection Act of 1999 (Public Law 106-113). 
200 For details, see USPTO online information,  "Office of Chief Economist". Viewed at: 
http://www.u spto.gov/ip/officechiefecon /index.jsp [May 2012]. 
201 USPTO online information, "IP Awareness Asse ssment".  Viewed at:  http://www.uspto.gov/ 
inventors/assessment [May 2012].   
202 17 U.S.C. section 701; see also USCO Circul ar 1a.  Viewed at http://www.copyright.gov/ 
circs/circ1a.  
203 USTR (2012a).   
204 USTR (2012a). 
205 WTO document WT/TPR/M/235/Add.1, 1 November 2010. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 90 
  
part as respondent206, i.e. Section 110(5) of U.S. Copyright Act, and Section 211 Omnibus 
Appropriations Act of 1998.207 Acknowledging that in those two cases its implementation had not 
been completed, the United States noted that it had been working actively towards compliance in 
furtherance of the purpose of the dispute settlement  system, and engaged to continue to work to 
implement the relevant DSB recommendations and rulings.208 
168. With respect to the 110(5) matter, the U.S. Admi nistration continues to work closely with the 
U.S. Congress, and will continue to confer with th e European Union, in order to reach a mutually 
satisfactory resolution of this matter.  With resp ect to the Section 211, the U.S. Administration will 
continue to work on a solution th at would resolve this matter.   
169. The United States was not active in any TRI PS-related dispute settlement cases during the 
review period (see Chapter II(2)).  However, in th e course of one case covering also a wide range of 
non-IP measures, Measures Affecting Trade in Large Civil Aircraft209, the panel considered measures 
on the allocation of IP rights under government contr acts, and did not determine them to be covered 
by the SCM Agreement.  
170. The United States continued its active role in  the TRIPS Council during period under review, 
in particular introducing material concerning IP enforcement, and communicating (with several other 
Members) the text of the Anti-Counterfeiting Tr ade Agreement (ACTA;  see section below).210  
USTR views the TRIPS Council as an opportunity for sharing experiences to ensure effective 
implementation of IP enforcement obligations.211   
171. During the review period, several updates were made on IP laws notified to the TRIPS 
Council.212  Table III.26 lists the United States' main IP  laws currently in force, and summarizes the 
protection they provide;  Table AIII.4 lists al l laws notified under the TRIPS Agreement.  The 
United States updated the Council on its implementa tion of Article 66.2 of the TRIPS Agreement213, 
its programmes on TRIPS-related technical assistance and capacity building214, and notified the 
Deputy Assistant USTR for IP and Innovation as its contact point both for TRIPS-related technical 
cooperation and for cooperation on enforcemen t under Article 69 of the TRIPS Agreement.215 
                                                      
206 As respondent, the United States has taken part in the following IPR-related cases:  DS160, DS176, 
DS186, and DS224.  For details, see WTO (2010), Table III.12. 
207 WTO documents WT/DS160/R, 15 June 2000;  and WT/DS176/R, 6 August 2001. 
208 WTO document WT/TPR/M/235/Add.1, 1 November 2010. 
209 WTO document WT/DS353/R, 31 March 2011. 
210 WTO document IP/C/W/563, 7 October 2011. 
211 USTR (2012a). 
212 Article 63.2 requires Members to notify their IP R-related laws and regulations. Since 2010, the 
United States has notified the following statutes (WTO document between parentheses):  Trademark Technical 
and Conforming Amendment Act of 2010 (IP/N/1/USA/2, 8 June 2010);  Leahy-Smith America Invents Act 
(IP/N/1/USA/3, 21 October 2011);  and Appendix R – Cons olidated Patent Rules – Title 37 – Code of Federal 
Regulations Patents, Trademarks, and Copyrights;  U.S. Trademark Law – Rules of Practice and Federal 
Statutes;  and U.S. Trademark Technical and Confor ming Amendments ( IP/N/1/USA/4, 22 February 2012). 
213 Article 66.2 requires developed country Members to provide incentives to promote technology 
transfer to LDCs.  See WTO documents IP/C/W/551 /Add.5, 25 October 2010, and IP/C/W/558/Add.6, 
20 October 2011. 
214 WTO documents IP/C/W/550/Add.5, 25 October 2010, and IP/C/W/560/Add.6, 21 October 2011. 
215 WTO documents IP/N/7/Rev.3, 17 February 2010, and IP/N/3/Rev.11, 4 February 2010.  Article 69 
requires Members to establish and no tify contact points to exchange information on trade in counterfeit and 
pirated goods. United States WT /TPR/S/275/Rev.1 
 Page 91 
 
 
Table III.26 
Summary of intellectual property prot ection in the United States, May 2012 
Form Main legislation Coverage Duration 
Copyright and 
related rights Copyright Law of the United 
States, Title 17 of the 
U.S. Code Authors' rights in the artistic, literary and 
scientific domains;  to enjoy copyright 
protection a work must be an original creation Life of author plus 70 years for works 
created on or after 1 January 1978.  
Anonymous works, pseudonymous 
works, and works made for hire 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 Any inventions that are new, useful, and 
non-obvious.  Apply to process, machine, 
manufacture or composition of matter, or improvements thereof 20 years from filing date 
Industrial 
designs Patent Law of the United 
States, as incorporated in Title 35 of the US Code The ornamental design of a product is entitled to 
the protection afforded to designs, provided it is new 14 years from date of grant 
Trademarks The Lanham Act of 1946, as 
amended (15 U.S.C. 1051 et seq.) Any sign used to identify and distinguish goods 
or services from 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 
Geographical 
indications The Lanham Act of 1946, as 
amended (15 U.S.C. 1051 et 
seq.), and Federal Alcohol 
Administration Act of 1935 Protection against misuse of geographic signs 
and names of viticultural significance Unlimited 
New plant 
varieties Plant Variety Protection Act 
Amendments of 1994 
(7 U.S.C. 2321 et seq.) New plant varieties:  not previously sold for 
purposes of exploitation of the variety, in the 
United States, more than 1 year prior to the date 
of filing;  or in any ar ea outside of the United 
States more than 4 years prior to the date of 
filing, or, in the case of a tree or vine, more than 
6 years prior to th e date of filing 20 years from the date of issue of the 
certificate in the United States 
Layout designs 
of integrated 
circuits Semiconductor Chip 
Protection Act of 1984 Topography of microelectronic semiconductor 
products provided it is original (the result of its 
creator's own intellectual effort) and is not staple, commonplace or fa miliar in the industry 
at the time of its creation 10 years from filing date (or, if earlier, 
from first use) 
Undisclosed 
Information Economic Espionage Act of 
1996 and state laws Any information, including a formula, pattern, 
compilation, program device, method, 
technique, or process, not generally known to 
the relevant portion of the public, that provides an economic benefit to its holder, and is the 
subject of reasonable efforts to maintain its 
secrecy  Indefinite 
Note: In some cases common law may control aspects of IPR protection. 
Source:  WTO document WT/TPR/S/235/Rev.1, 29 Octo ber 2010 – updated by the WTO Secretariat. 
172. Multilateral, bilateral, and regional institutions a ll play a part in U.S. trade policy efforts to 
enhance IP protection and enforcement. WTO accessi on negotiations are viewed as an opportunity to 
improve IP standards, in view of concerns about infringement in several accession countries.216  Thus, 
with the exception of LDCs, the United States requi res full implementation of TRIPS obligations as a 
condition of entry into the WTO. 
173. All but one of the 14 RTAs entered into by the United States and included in the WTO's RTA 
Information System contain substantive IP provisions (see also Chapter II(3)).217  These provisions 
                                                      
216 USPTO online information, "Office of the Administrator for Policy and External Affairs:  WTO 
Accessions". Viewed at: http://www.uspto .gov/ip/global/trade/ir_trade_w toaccessions.jsp [May 2012]. 
217 The exception is the US-Israel FTA, which is  the earliest U.S. RTA included in the WTO RTA 
Information System online information.  Viewed at:  http://rtais.wto.org/UI/Pu blicMaintainRTAHome.aspx 
[May 2012].  WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 92 
  
vary somewhat across RTAs, but generally cover en forcement procedures, including border measures, 
and substantive standards across the full category of  IP, broadly requiring a level of protection similar 
to that in the United States, although flexibiliti es were introduced by the "New Trade Policy for 
America".218  WTO non-discrimination principles mean that these additional IP standards have a 
systematic reach and impact beyond the orig inal parties to bilateral agreements.219 
174. Bilateral talks under Trade and Investment Fr amework Agreements (TIFAs) also cover IP 
protection and enforcement220; the United States has signed 22 bilateral agreements or memoranda of 
understanding specifically covering IP, which are c onsidered important for furthering the protection 
and enforcement of IPRs.221  The United States has also sought to  enhance IPR protection in foreign 
countries by conducting regular reviews of their enforcement efforts (see below). 
(e) Patent law 
175. The Leahy-Smith America Invents Act222 entered into effect in 2011, representing  the most 
significant reform of U.S. patent law in the past 50 years.  Key features of this complex legislation 
include:  
 changing the rule of entitlement to an i nvention as between competing inventors from 
"first-to-invent" to "first-to-file", which brings U.S. law in this regard into alignment with the 
practice in other national and regional pate nt systems.  The Act continues existing 
U.S. practice in providing a one-year, pre-f iling "grace period" whereby disclosures of the 
invention by the applicant within the one  year window do not affect patentability;  
 replacement of "first-to-invent"-based inte rference proceedings for resolving conflicting 
claims of entitlement to a patent for  the same  invention with "first-t o-file"-based derivation 
proceedings that can be used to determine whethe r an inventor named in an earlier application 
derived the claimed invention from the inve ntor named in a later application;  
 measures to provide cost-effective alternatives to litigation, measures that are expected to 
improve patent quality and reduce litigation by  expanding third-party review of patents 
through pre-issuance submissions, inter partes  review, and post grant review;  and  
 establishment of a prior user rights regime consis tent with similar regimes provided for in the 
laws of major trading partners.  
                                                      
218 USPTO online information, "Office of the Administ rator for Policy and External Affairs:  Trade:  
Free Trade Agreements (FTAs)".  View ed at:  http://www.uspto. gov/ip/global/trade/ir_trade _fta.jsp [May 2012].  
The Trade Promotion Authority Act of 2002, as a negotiating objective, to promote IP rules that "… reflect a 
standard of protection similar to that found in Unite d States law". Viewed at:  http://www.bilaterals.org/ 
IMG/pdf/TPAA_2002.pdf. 
219 Unlike in the case of goods and services, no gene ral derogation from the MFN principle is available 
for IP under multilateral rules.  For a detailed discussion of the costs and benefits of harmonizing national 
policies across jurisdictions in th e context of RTAs, see WTO (2011). 
220 The United States has signed TIFAs with 45 countries or trading groups. Viewed at:  
http://www.ustr.go v/trade-agreements/trade-invest ment-framework-agreements.  
221 With the Bahamas, Bulgaria, Cambodia, China, Chinese Taipei, Ecuador, Hungary, Jamaica, Japan, 
Korea (Rep. of), Latvia, Nicaragua, Paraguay, Peru, th e Philippines, Sri Lanka, Trinidad and Tobago, and 
Viet Nam (Trade Compliance Center online information.   Viewed at:  http://tcc.export.gov/Trade_Agreements/ 
All_Trade_Agreements/ [May 2012]).   
222 H.R. 1249, An Act to amend title 35, United States Code, to provide for patent reform.  Viewed at:  
http://www.gpo.gov/fdsys/pkg/BILLS-112hr 1249eh/pdf/BILLS-112hr1249eh.pdf.   United States WT /TPR/S/275/Rev.1 
 Page 93 
 
 
176. The Act also provides that while disclosure of best mode continues to be a requirement for 
obtaining a patent in the first instance, failure to  disclose the best mode cannot be raised as a ground 
for invalidating, cancelling, or otherwise holding un enforceable any claim in a granted patent.  The 
Act further codifies long-standing USPTO policy that  claims directed to or encompassing human 
organisms are not patent-eligible subject matter.   
177. The Act established several mechanisms aime d at boosting competitiveness of U.S. markets 
and at supporting innovative firms, particularly small businesses.  For example, it establishes a new 
category of applicant known as a "micro entity", in  recognition of the substantial contributions made 
by small businesses and independent inventors that  are resource-challenged to economic growth and 
innovation, and accordingly, grants them a 75% discount of certain fees.  
178.  The Act also includes provisions for the estab lishment of a prioritized examination process, 
whereby examination of an application may be ex pedited upon payment of a fee.  In addition, 
Congress required the USPTO to produce a study on how USPTO can best help small businesses with 
patent protection overseas, such as whether a loan or grant programme should be established to help 
small businesses cover the costs of application, maintenance, and enforcement fees or related 
technical assistance.   
179. During the review period, a number of landmark j udicial decisions were made on patent law, 
shedding light on how the core principles of patentabilit y are applied in current U.S. law.  In Bilski 
v. Kappos (2010), the Supreme Court provided guid ance for determining when a claimed process is 
directed to patent-eligible subject matter or to an ineligible abstract idea.  In Mayo v. Prometheus 
(2012), the Court addressed the difference between claims  directed to patent-eligible applications of 
natural laws and claims directed to the natural laws themselves.   
180. Timeliness and quality of patent examination c ontinued to be a key focus for the USPTO.  
Timeliness of patent procedures was measured by tota l pendency, i.e. the average number of months 
from filing date to final disposition of an applica tion (issued as a patent or abandoned).  Against a 
goal of reducing this period to 20 months by 20 15, pendency in the review period varied between 
33.5 and 33.9 months.  The USPTO also undertook a range of initiatives during the review period to 
further improve quality and timeliness, including  through international cooperation.  Among those 
activities were:   
 worksharing initiatives with other patent offices on patent examination, notably the Patent 
Prosecution Highway, which speeds up patent examination and reduces costs by allowing 
examiners to reuse search and examination r esults for corresponding applications filed in 
other participating countries.  There was a significant increase in the number of international 
partners during the review period,  and the petition fee for use of this pathway was eliminated;   
 the Green Technology Pilot Program, which ran from December 2009 to December 2011, 
enabling applicants to request accelerated exam ination for patents on green technologies.  Of 
5,550 petitions under the programme , 3,533 were granted, leading (as at April 2012) to 
1,062 issued patents;   
 the Cooperative Patent Classification (CPC) Proj ect, a partnership with the European Patent 
Office aimed at harmonizing the existing classification systems (ECLA and USPC, respectively) and migrating towards a common classification scheme;   
 a second pilot programme under the Peer to Patent  project, enabling public participation in the 
patent examination process;  WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 94 
  
 patent examination quality initiatives, including  the development of new metrics for patent 
quality;  and  
 Patents for Humanity, a voluntary pilot progr amme to recognize patent owners who apply 
their patented technology to address humanitarian needs. 
(f) Data protection 
181. The Patient Protection and Affordable Care Ac t (Affordable Care Act), signed into law on 
23 March 2010, amended the Public Health Service Ac t (PHS Act) to create an abbreviated pathway, 
through the Biologics Price Competition and Innovati on Act (BPCI Act), for approval of biological 
products that are shown to be "biosimilar" to or  "interchangeable" with a biological product already 
licensed by the FDA.  The Affordable Care Act pr ovided for a 12 year period of data exclusivity from 
the time of FDA approval of the original product, after which follow-on biologics would be able to 
rely on data provided for the original approval, toge ther with data demonstrating the similarity of the 
generic product.  
(g) Trademarks and geographical indications 
182. The Trademark Technical and Conforming Amendments took effect on 8 November 2011, 
and amended the Rules of Practice in Trademark Cases to implement the Trademark Technical and 
Conforming Amendment Act of 2010.  The Act be came law on 17 March 2010, and made small 
technical and conforming corrections to the Lanham Act, as well as more significant changes regarding filing Affidavits or Declarations of Use or Excusable Nonuse to maintain a registration.  
Specifically, the legislation gave Madrid Protocol registrants the benefit of six-month grace periods 
immediately following the statutory time periods for filing their trademark registration maintenance documents under Section 71, 15 U.S.C. 1141k. 
183. "Changes in Requirements for Specimens and for Affidavits or Declarations of Continued 
Use or Excusable Nonuse in Trademark Cases" t ook effect on 21 June 2012.  The rule was 
promulgated to help access and to ensure the accuracy of the trademark register, by allowing the USPTO to require any additional specimens, informa tion, exhibits, and affida vits or declarations 
deemed reasonably necessary to examine a post-registra tion affidavit or declar ation of continued use 
or excusable nonuse in trademark cases; to conduct a two-year pilot progra mme to assess the accuracy 
and integrity of the register; and, upon request, to require more than one sp ecimen in connection with 
a use-based trademark application, an allegation of  use, or an amendment to a registered mark. 
(h) Copyright  
184. The increasing availability of digitized mate rial online sparked litigation with significant 
implications for the publishing industry, including foreign holders of copyright.  Associations of 
publishers and artists had brought separate lawsuits against Google, Inc. for copyright infringement in 
relation to the Google Book Search project, an initia tive to digitize books in libraries and make them 
searchable on the Internet.  A proposed settlement sp arked international debate  over how to facilitate 
access to orphan works, as well as  on the compatibility of the settlement with international copyright 
law, as the terms of the settlement would have a ffected the rights of rights owners from around the 
world.  In March 2011, the Southern District Court of New York rejected the proposed settlement 
agreement, citing, inter alia , concerns over copyright law, antitrust law, and international law, as well 
as the adequacy of class representation.
223  A particular concern was that the settlement would have 
released Google from future acts that were not covere d by the claims of the law suits, which the court 
                                                      
223 Authors Guild v. Google, Inc., 770 F. Supp. 2d 666 (S.D.N.Y. 2011). United States WT /TPR/S/275/Rev.1 
 Page 95 
 
 
felt should be left to the legislature, and forced ri ght holders to opt out of the settlement agreement if 
they did not want to be covered.   
185. Following the Court's settlement rejection, the Au thors Guild filed their fourth amended class 
action complaint in October 2011, and in N ovember 2011 the American Society of Media 
Photographers, et al., filed their first amended class action complaint against Google, Inc.  The 
members of the Authors Guild then filed a motion to  be declared a class, for the purposes of suing 
Google, Inc. as a class, and to be a plaintiff alongs ide the Authors Guild as co-plaintiffs. Google, Inc. 
filed a motion to have the plaintiff associations in  both cases dismissed and to require the individual 
members join the case individually.  In May 2012, the Judge issued a single opinion on both 
motions.224  The order granted class action status to th e individual members of the Authors Guild and 
denied Google's motion to remove the plaintiff asso ciations as named plaintiffs from the renewed case 
brought by the Authors Guild and the case brought by several associations including the American 
Society of Media Photographers, the Graphic Artists  Guild, the Picture Archive Council of America, 
the North American Nature Photography Associa tion, and Professional Photographers of America. 
186. On 18 January 2012, in the case of Golan v. Holder225, the Supreme Court upheld the 
constitutionality (under the Copyright Clause) of th e restoration of copyright protection to foreign 
works that had previously fallen into the public  domain, through the operation of the Uruguay Round 
Agreements Act (which included provisions to  implement U.S. obligations under the TRIPS 
Agreement).   
187. Congress has asked the Copyright Office to undertake various studies, three of particular note.  
First, with a view to reviewing the scope of fede ral protection for recordings, as directed by Congress, 
the Copyright Office undertook a study on "the desira bility and means of bringing sound recordings 
fixed before 15 February 1972, under Federal jurisdiction";  these recordings are currently "protected 
under a patchwork of State statutory and common laws from their date of creation until 2067".226  Its 
report recommended that the term of protection for sound recordings fixed prior to 15 February 1972 
be 95 years from publication or, if the work was not pub lished prior to the effective date of legislation 
federalizing protection, 120 years from fixation.  Such protection would not continue past 2067, and 
for such recordings where these terms expired be fore 2067, protection could be extended if the 
recording had been available to the public at a reasonable price.  At the time of writing, this 
recommendation had not been deve loped into legislation.  
188. Second, a study entitled "The Satellite Tele vision Extension and Localism Act (STELA)," 
was prepared by the Copyright Office and delivered to Congress on 29 August 2012.227  As directed 
by Congress under Section 302 of the Satellite Te levision Extension and Localism Act of 2010228, the 
Report considers the repeal of statutory licensing provisions in Sections 111, 119, and 122 of the 
Copyright Act, which currently govern the retransm ission of distant and local television broadcast 
                                                      
224 Authors Guild, et al, v. Google, Inc. American Society of Media Photographers, et al, v. Google, 
Inc., no. 05 Civ. 9136, 10 Civ. 2977 (S.D.N.Y. May 31, 2012). 
225 565 U. S. ____, 132 S. Ct. 873 (2012). 
226 Federal Register , "Protection of Sound Recordings Fixed Before February 15, 1972", Vol. 75, 
No. 212, 3 November 2010.  For the docket of this study, including public comments, related documents and the final report issued on 28 December 2011, a U.S Co pyright Office Study on the Desirability and Means for 
Bringing Sound Recordings Fixed Before February 15 1972 (U.S. Copyright Office online information, "A 
Study on the Desirability of and Means for Bringing Sound Recordings Fixed Before February 15, 1972, Under Federal Jurisdiction", see:  http://www.copyright.gov/docs/sound/).  
227 The text of the Copyright Office report on STEL A (also sometimes referred to as the "Section 302 
Report") is viewed at U.S. Copyright Office (2011a). 
228 See Public Law No. III-175, 124 Stat. 1218 (2010).   WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 96 
  
signals by cable operators and satellite carri ers.  The Report provides recommendations for 
commencing and carrying out such repeal responsib ly and on a reasonable schedule, and addresses 
possible methods and mechanisms for the po ssible phase-out of these licenses.  Third, on 
31 October 2011, the Office published "Legal Issues in Mass Digitization:  A Preliminary Analysis 
and Discussion Document", which addressed issues rai sed by the intersection between copyright law 
and the mass digitization of books.229 The purpose of this discussion document is to facilitate further 
discussions among the affected parties and the public (such as voluntary initiatives, legislative 
options, or both) and to identify questions to cons ider in determining an appropriate policy for the 
mass digitization of books. 
(i) Enforcement 
189. Several initiatives to improve the coordination a nd effectiveness of domestic mechanisms to 
enforce IP rights matured during the review period.  In recognition of the need for more effective 
coordination and a stronger information base for enfo rcement of IP rights, the Prioritizing Resources 
and Organization for Intellectual Property (PRO-IP) Act of 2008 created a new position of Intellectual 
Property Enforcement Coordinator (IPEC).  This pos ition was filled following Senate confirmation in 
2009.  The PRO-IP Act required the IPEC to coordi nate the development of a joint strategic plan 
against counterfeiting and infringement.  The plan was issued in 2010, containing 33 enforcement 
strategy action items within six categories:  (i) l eading by example;  (ii) increasing transparency;  
(iii) ensuring efficiency and coordination;  (iv)  enforcing rights internationally;  (v) securing the 
supply chain;  and (vi) build ing a data-driven government. 
190. In June 2012, on the second anniversary of the Joint Strategic Plan on Intellectual Property 
Enforcement, the IPEC reported on progress under the plan230, highlighting growth in enforcement 
activities between 2009 and 2011, customs seizures in that period rising 67% to 24,792, including increases of 183% in counterfeit consumer-safety and critical-technology merchandise, and nearly 
600% in counterfeit pharmaceuticals. The report stressed the significant impact of voluntary 
approaches to combating online infringement, such  as voluntary agreements to quarantine sites 
engaged in counterfeiting and pir acy through cooperation with credit card companies, domain name 
registrars, and online advertisers.  Among legisl ative recommendations made in the 2011 White Paper 
on Intellectual Property Enforcement,  two entered law as part of th e National Defense Authorization 
Act of 2012, concerning penalties for counterfeit goods or services sold to  or for use by the military or 
national security applications, and granting explicit authority to U.S.  Customs and Border Protection 
to share information to help determine whether suspected counterfeit semiconductors, electronics, or 
other products are genuine.  The report also emphasized greater efficiency and inter-agency coordination; for instance, in FY 2010 a 5% incr ease in funding for IP enforcement, reportedly 
yielded a 33% rise in seizures of counterfeit and pirated goods.   
191. Section 337 investigations conducted by the U.S.  International Trade Commission, may result 
in exclusion orders directing U.S. Customs to  prevent IP-infringing imports from entering the 
United States.  During the review period, the Comm ission conducted a survey on the effectiveness of 
exclusion orders.  Its results reflected the con tinuing challenges of enforcement:  39% of survey 
responders believed that infringing goods covered by an exclusion or der had not been imported since 
issuance of the order compared with 35% in a simila r survey in 2005;  those believing that infringing 
goods had since been imported rose from 48% to 51%.   
                                                      
229 For the text of the Copyright Office report on Mass Digitization, see U.S. Copyright Office online 
information, "Legal Issues in Mass Digitization: A Pr eliminary Analysis and Discussion Document".  Viewed 
at:  http://www.copyright.gov/docs/massdigitization/;  an d for the full report see U.S. Copyright Office (2011b).  
230 White House (2012a). United States WT /TPR/S/275/Rev.1 
 Page 97 
 
 
192. Effective IP enforcement in foreign markets remains a strong priority for U.S. authorities. The 
Joint Strategy included the goal of working coll ectively to strengthen enforcement of IP rights 
internationally, including through:  (i) combati ng foreign-based and foreign-controlled websites that 
infringe American IP rights, as a "growing problem that undermines … national security, particularly 
… national economic security";  (ii) enhancing fore ign law enforcement cooperation to combat piracy 
and counterfeiting;  and (iii) promoting enforcement of U.S. IP rights through trade policy tools, including bilateral trade dialogues and problem-s olving, communicating U.S. concerns clearly 
through reports such as the Special 301 Report, comm itting trading partners to protect American IP 
through trade agreements such as the ACTA and the Trans-Pacific Partnership (TPP), and, when 
necessary, asserting rights through WTO dispute se ttlement processes. The policy is adopted of 
conducting these efforts in a manner consistent with  the balance found in U.S. law and the legal 
traditions of its trading partners.
231 
193. The IPEC Second Anniversary report noted that administration officials at the most senior 
levels had repeatedly pressed foreign trading partne rs to improve IP enforcement, and had adopted, in 
the Statement by G-8 Leaders on the Global Economy in May 2012232, a statement affirming "the 
significance of high standards for IPR protection a nd enforcement, including through international 
legal instruments and mutual assistance agreem ents, as well as through government procurement 
processes, private-sector voluntary codes of best practices, and enhanced customs cooperation, while 
promoting the free flow of information". The statem ent also committed, in the interests of public 
health and consumer safety, to exchange informa tion on rogue internet pharmacy sites in accordance 
with national law, and to share best practi ces on combating counterfeit medical products.   
194. The United States and seven other WTO Members signed the ACTA on 1 October 2011.233  
The ACTA aims to strengthen the internationa l legal framework for combating commercial-scale 
counterfeiting and piracy.  It calls for stronger le gal frameworks, deeper in ternational cooperation, 
and better enforcement practices.  The U.S. aut horities consider that the ACTA will help defend 
U.S. jobs in innovative and creative industries against IP theft.234  The U.S. authorities have noted that 
the ACTA is consistent with existing U.S. law and does not require the enactment of implementing 
legislation.235  The TRIPS Council discussed the ACTA at some of its recent meetings, when 
questions, answers, and divergent views were presented by Members236:  the United States 
commented that "the effective enforcement of IPRs  was critical to sustaining economic growth across 
all industries and globally." 
195. The annual Special 301 Reports237 issued by the USTR in 2011 and 2012 continued to 
monitor developments concerning IP protection in U. S. trading partners, and cited the significance of 
IP protection for U.S. jobs and export performance.  In both years, 77 trading partners were reviewed, 
and 42 (in 2011) and 40 (in 2012) we re placed on one of the Special 301 lists (Priority Watch List, 
Watch List, or Section 306 monitoring list). Areas  of particular concern included online copyright 
piracy, internet trading in physical counterfeit goods, test data protection, infringing goods sent by 
                                                      
231 White House (2010). 
232 White House Press Release, "Statement by G-8 Leaders on the Global Economy", 19 May 2012.  
Viewed at:  http://www.whitehouse. gov/the-press-office/2012/05/19/statement-g-8-leaders-global-economy.   
233 The ACTA was signed in Tokyo by Australia, Canada, Korea (Rep. of), Japan, New Zealand, 
Morocco, Singapore, and the United States. 
234 USTR online information, "Anti-Counterfeitin g Trade Agreement (ACT A)".  Viewed at:  
http://www.ustr.gov/acta [May 2012].   
235 USTR online information, "ACTA: Meeting U.S. Objectives".  Viewed at:  http://www.ustr.gov/ 
about-us/press-office/fact-sheets/2011/septembe r/acta-meeting-us-objectives [May 2012].   
236 WTO documents series IP/C/M/. 
237 For details of the process, see USTR (2012a), Annex 1:  Statutory Background on Special 301. WT/TPR/S/275/Rev.1 Trade Policy Review 
Page 98 
  
regular courier services, separate shipping of labels for counterfeit products, collection of royalties for 
performance of musical works, trade secret pr otection and "enforced technology transfer", 
government use of illegitimate software, and unauthor ized registration of trademarks under country 
code top level domain name (ccTLD) extensions.  The Special 301 process also focused on specific 
websites and physical markets concerns, which are c onsidered particularly relevant for enforcement 
action. While USTR had identified such "notorious  markets" in Special 301 Reports since 2006, in 
2010 it announced that the Notorious Markets List  would be published separately from the Special 
301 Report, in order to increase public awareness and guide related trade enforcement actions.  Such 
lists of notorious markets were pub lished in February and December 2011.238  Special 301 Reports 
also described positive trends in a number of  countries, outlined international cooperation and 
capacity building on enforcement, and identified inte rnational best practices among trading partners.  
 
                                                      
238 USTR (2011).