United States WT /TPR/S/200/Rev.1 
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III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) OVERVIEW  
1. The United States accords MFN tariff treatment to all WTO Members except Cuba.  All 
except two tariff lines are bound, generally at low rat es, which lends predictability to the U.S. trade 
regime.  The average applied MFN tariff was 4.8% in 2007, virtually the same as in 2004 (4.9%).  
The applied MFN rate for agriculture (WTO defi nition) fell from 9.7% in 2004 to 8.9% in 2007, 
reflecting the rise in commodity pri ces and the resulting decline in the ad valorem  equivalent rates.  
At 4%, the 2007 average applied MFN rate for non-agricultural products remained unchanged.  
Around 2% of all lines are subject to tariff quotas;  hi gh out-of-quota tariffs are one of the main forms 
of import protection for certain agricultural produc ts.  Tariff preferences may be granted by the 
United States either unilaterally or in the c ontext of free-trade agreements (Chapter II). 
2. In addition to tariffs, imports are subject to ad valorem  harbour maintenance and merchandise 
processing fees;  the second is not applied on impo rts from some preferential partners.  A customs 
bond must be posted for each importation of mercha ndise into the United States.  Initial production 
volumes of small domestic wine and beer producers benefit from either a reduced federal excise tax 
rate or an excise tax credit.  This bene fit is not available for imported products. 
3. Security considerations have continued to drive significant changes relating to customs 
procedures.  The SAFE Port Act of 2006 codifi ed and expanded existing cargo and supply-chain 
security programmes, and established additional fili ng requirements for importers.  Under the Act, 
from mid 2012, all containers must be scanned prior to being loaded on a U.S.-bound vessel.  However, the Act recognizes that this requirement co uld have a significant impact on trade, and offers 
the possibility of delaying the implementation for specific ports. 
4. Non-tariff import restrictions are maintained  largely for non-commercial purposes.  This 
includes a ban on imports of marine mammal products, shrimp, and tuna from countries found not to be in compliance with U.S. environmental provisions. 
5. Anti-dumping (AD) remains a key trade policy in strument for the United States.  At end 
2007, the United States maintained some 232 AD measu res in force, affecting imports from 39 trading 
partners.  During 2005-07, the United States initiated some 33 investigations and applied 
19 provisional measures, but imposed only 11 final du ties.  Applied AD duties can be substantial, up 
to 280%, and thus affect significantly U.S. domestic  prices.  As most AD measures are imposed on 
intermediate goods like steel and chemical pr oducts, they increase costs for downstream producers 
and consumers.  Although temporary,  some 40% of the AD measures in force have in practice granted 
protection for over 10 years.  The percentage of U. S. imports directly affected by AD measures is less 
than 0.1% and the number of AD orders issued si nce 2005 has been lower than  in earlier years.  
Nevertheless, it would be important to ensure that AD measures do  not retard adjustment to changing 
conditions in international markets. 
6. At end 2007, the United States maintained no saf eguard measures but 31 countervailing (CV) 
orders were in place involving 13 trading partners .  Although the Continued Dumping and Subsidy 
Offset Act of 2000 (the Byrd Amendment) was re pealed in 2005, AD and CV duties assessed before 
October 2007 continue to be distributed to U.S. producers who supported the petition for 
investigation.  Total disbursements were estimated  at approximately US$1.9 billion from the entry in 
force of the Byrd Amendment to end 2007. WT/TPR/S/200/Rev.1 Trade Policy Review 
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7. There have been no major changes in the in stitutional framework governing the development 
of technical regulations, conformity assessment procedures, and sanitary and phytosanitary measures at the federal level since the last Review of the United States.  During the review period, the 
United States notified, for the first time since th e creation of the WTO, technical regulations and 
conformity assessment procedures proposed by sub -federal agencies.  A new approval process for 
first-time imports of fruits and vegetables subject  to designated phytosanitary measures became 
effective in August 2007.  It replaces the approva l process based on the promulgation of regulation, 
which is otherwise applicable to all first-time im ports of plants, animals, and their products, and 
which can take up to three years. 
8. Two WTO Members, Cuba and Myanmar, ar e subject to economic sanctions.  The 
United States maintains export restrictions and controls for national security or foreign policy 
purposes, or to address shortages of scare materials.  U.S. entities are required to apply for an export 
licence in certain cases when they inte nd to transfer controlled technol ogies to foreign nationals in the 
United States. 
9. Other assistance to domestic producers takes the form of federal and sub-federal tax 
exemptions, financial outlays, and credit programmes.  In its latest notification to the WTO, covering 
fiscal years 2003 and 2004, the United States lists around 430 programmes providing subsidies, of 
which 42 at the federal level and the rest at the sub- federal level.  Agriculture and energy are by far 
the largest recipients of notified federal support.  U.S. domestic support, although not targeted at 
trade, may affect global markets as the United St ates is among the world's largest producers and 
consumers of numerous products. 
10. The United States uses competition policy to promote efficiency and enhance consumer 
welfare.  Federal antitrust legislation covers all s ectors and interstate and foreign commerce, subject 
to some exceptions.  Competition policy enforcem ent has continued to focus on the activities of 
international cartels, anti-competitive mergers and non-merger enforcement.  The Antitrust 
Modernization Commission presented a report to  Congress in April 2007 that recommended, among 
other things, simplifying and unifying merger clear ing procedures and harmonizing the work of state 
and federal antitrust agencies, partic ularly with respect to mergers. 
11. U.S. policy with respect to market access fo r government procurement is to grant national 
treatment based on the principle of reciprocity.  For procurement not covered by the GPA or other 
international agreements, the United States mainta ins a number of domestic purchasing requirements, 
such as those under the Buy American Act.  U. S. procurement policy also seeks to increase the 
participation of small and other businesses through set- aside programmes.  In some states, sub-federal 
regulations grant preferences to local suppliers, and impose local-content requirements under certain 
conditions.  Although these measures could assist the targ eted groups, they could also raise the cost of 
government procurement. 
12. The United States is an important producer and exporter of goods and services that embody 
knowledge and other intellectual de velopments.  The United States seeks to promote increased IPR 
protection and enforcement through a variety of mechanisms, including FTAs, bilateral intellectual 
property agreements and bilateral investment treatie s.  The United States also pursues high standards 
of IP protection through its engageme nt in WTO activities and negotiations. United States WT /TPR/S/200/Rev.1 
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(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures 
13. Customs and Border Protection (CBP), part of the Department of Homeland Security, is in 
charge of administering and enforcing customs re gulations.  The principal mission of CBP is to 
prevent terrorists and terrorist weapons from enteri ng the United States, while facilitating the flow of 
legitimate trade and travel.1 
14. As part of its ongoing modernization progr amme, CBP has continued to develop the 
Automated Commercial Environment (ACE), a car go processing system intended to operate as a 
single on-line access point to process import (and e xport) formalities on an account, rather than a 
shipment-by-shipment, basis.2  As at March 2008, there were around 15,000 ACE accounts.  ACE has 
been deployed to all 99 U.S. land ports, and CBP intends to deploy ACE to all sea and air ports.  The 
development of ACE is expected to be completed by end 2010, rather than by 2009, the date reported 
in the Secretariat report for the previous Review  of the United States.  According to the U.S. 
authorities, the delay results from increased system  development and testing times.  The SAFE Port 
Act makes participation in the single-window concep t mandatory for federal agencies with import and 
export responsibilities, although the Office of Mana gement and Budget may exempt certain agencies. 
15. Imports of goods into the United States must be  accompanied by entry documents as specified 
in the Customs Regulations.3 
16. A customs bond must be posted for each importation of merchandise.4  An importer may 
apply for a single transaction customs bond which c overs only one import entry, or a continuous 
customs bond, which remains in force for one year  and covers multiple transactions at any U.S. 
Customs district or port.  In general, the singl e entry bond must cover the value of the imported 
merchandise plus import duties, taxes, and fees.  If the imported merchandise is subject to requirements imposed by agencies other than CBP, th e amount of the bond must be three times this 
value.  The minimum amount for continuous bonds is generally US$50,000 or 10% of total import 
duties, taxes, and fees paid in the previous 12 m onths, whichever is greater.  According to CBP, bonds 
allow importers to take possession of their merc handise before all CBP formalities have been 
completed, thus facilitating trade.
5 
17. The main development affecting customs proce dures since mid 2005 has been the enactment 
of the SAFE Port Act in October 2006.6  The Act authorizes and expands the Container Security 
Initiative (CSI) and the Customs-Trade Partnershi p Against Terrorism (C-TPAT), and establishes 
additional import requirements for security purposes. 
(a) Advance electronic cargo information 
18. Under the Trade Act of 2002, CBP must recei ve, by way of a CBP-approved electronic data 
interchange system, information pe rtaining to cargo before the cargo is brought into (or sent from) the 
                                                      
1 CBP online information, "Protecting Our Borders Against Terrorism".  Viewed at:  http://www.cbp. 
gov/xp/cgov/toolbox/about/mission/cbp.xml. 
2 The ACE Secure Data Portal can be  viewed at: http s://ace.cbp.dhs.gov. 
3 CBP (2006b). 
4 CBP has the authority to require bonds under 19 USC 1623. 
5 CBP online information, "Questions and Answers on CBP Bonds".  Viewed at:  http://www.cbp.gov/ 
linkhandler/cgov/toolbox/publications/tr ade/qa_bonds.ctt/q_and_a_bonds.doc. 
6 Public Law 109-347. WT/TPR/S/200/Rev.1 Trade Policy Review 
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United States by any mode of commercial transportation (sea, air, truck, or rail).7  The time limit for 
sending the cargo information to CBP depends on the mode of transportation used (Table III.1).  
Cargo passing through the United States that is not destined to be unloaded in a U.S. port is also 
subject to the requirement.  For shipments arriving by  sea, air, or rail, relevant cargo information must 
be transmitted to CBP through the appropriate Auto mated Manifest System (AMS);  for shipments 
arriving by road, cargo information must be tran smitted to CBP through the ACE truck manifest 
system. 
Table III.1 
Requirements for the advance transmission of electronic cargo information 
Mode of 
transportation Transmission system Time limit for reception by CBP Parties responsible for 
transmission 
Sea Vessel Automated Manifest 
System (AMS)a Containerized and non-exem pt break bulk cargo:  
24 hours prior to loading at foreign portb 
Bulk and exempt break bulk cargo:  24 hours prior 
to vessel arrival if voyage is more than 24 hours;  
otherwise at vessel departure Carrier, non-vessel-operating 
common carrier 
Air Air AMS 4 hours prior to arrival in the Unites States, or at 
"wheels up" from western hemisphere airports 
north of the equator Carrier, importer or customs 
broker, freight forwarder, 
express consignment facility, other air carriers 
Truck ACE Truck Manifest System One hour prior to arrival in the United States;  30 
minutes prior to arrival for shipments that qualify 
under the Free and Secure Trade programmec Carrier, importer, customs 
broker 
Rail Rail AMS 2 hours prior to arrival in the United States Carrier 
 a AMS is a cargo inventory control and release notif ication system for sea, air, and rail carriers. 
b A break bulk cargo carrier may apply to CBP for an ex emption from the filing requirements under the 24-hour rule. 
c Under the Free and Secure Trade programme, qualifying road shipments from Canada and Mexico receive expedited clearance. 
 
Source: Federal Register , 68 FR 68140, 5 December 2003, and 71 FR 62922, 27 October 2006. 
19. Apart from the information required under the Trade Act of 2002, the SAFE Port Act requires 
that certain other cargo information be transmitted electronically to CBP.8  As at early 2008 this 
requirement was not in effect pending the adoption of  regulations.  With a view to developing such 
regulations, CBP issued a notice of proposed rulemaking.9  According to CBP, the additional advance 
information it proposes to request would "signi ficantly enhance the risk assessment process by 
allowing CBP to better separate higher-risk ship ments from lower-risk shipments that should be 
afforded more rapid release decisions".10  According to the regulatory analysis conducted in the 
context of the notice of proposed rulemaking, CBP est imates that the annualized  costs associated with 
the proposed filing requirement range  from US$380 million to US$640 million. 
                                                      
7 See WTO (2006). 
8 Section 203(b). 
9 Federal Register , 73 FR 90, 2 January 2008.  According to this document, the following would need 
to be submitted 24 hours before a cargo is loaded at a foreign seaport:  names and addresses of the manufacturer 
or supplier, consolidator, seller, buyer,  and first party to receive the goods after they have been released from 
Customs;  container stuffing location;  importer-of-re cord and consignee numbers;  and merchandise country of 
origin and Harmonized Tariff Schedule code.  In additio n, CBP proposes that carriers submit the "vessel stow 
plan" and certain "container status messages" 48 hours after the vessel's departure to the United States, or prior 
to the vessel's arrival in the United States for voyages of less than 48 hours. 
10 CBP (2006a). United States WT /TPR/S/200/Rev.1 
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20. As part of its Secure Freight Initiative, CBP is considering the feasibility of establishing the 
Global Trade Exchange, a database operated by the private sector to enhance risk assessment of 
international cargo.11 
(b) Container Security Initiative (CSI) and Secure Freight Initiative 
21. In October 2006, the SAFE Port Act authorized the CSI, which had been operating on the 
basis of Executive authority since its inception in 2002.  CSI involves the screening and inspection of 
U.S.-bound, high-risk containers at the port of departure.12  Under CSI, CBP officers are deployed to 
participating foreign ports, where they identify high -risk containers.  Host-country officers inspect 
these containers using non-intrusiv e inspection equipment, physical  inspection, or both, and CBP 
officers observe the inspections.  According to CBP, U.S.-bound cargo inspected at a foreign CSI port 
will not be inspected upon arrival in the United States, unless additional information changes the 
initial risk assessment, or the integrity of a container seal has been compromised. 
22. The SAFE Port Act lists the factors that CBP  must consider in designating CSI-eligible 
ports.13  These include the "level of risk for the pot ential compromise of containers by terrorists", 
cargo volume with the United States, results of Co ast Guard assessments, and the extent to which the 
host government is committed to sharing critical information with CBP.  CSI was operational in 
58 foreign seaports in late 2007, up from 35 in April 2005.14  Approximately 90% of U.S.-bound 
cargo containers originate in or are transhipped from a CSI port. 
23. The SAFE Port Act requires CBP to conduct a pilot programme to scan all U.S.-bound 
containers at foreign seaports, rather th an only those considered "high risk".15  As part of its Secure 
Freight Initiative, CBP was implementing such a pr ogramme at ports in Honduras, Pakistan, and the 
United Kingdom, and in a more limited way, in Hong  Kong, China;  Korea;  Oman;  and Singapore.  
These seven ports also participate in CSI.  CBP  must submit to Congress an evaluation of the 
feasibility and cost of expanding this programme to other foreign ports w ithin 180 days of the 
programme's full implementation.  The authorities indicate that the programme should be rolled out in all seven ports by July 2008. 
24. In addition, the Implementing Recommendati ons of the 9/11 Commission Act of 2007 
prohibits containers from being loaded on a U.S. -bound vessel unless they have been scanned using 
non-intrusive imaging and radi ation detection equipment.
16  This prohibition will enter into effect on 
1 July 2012, or at an earlier date set by the Secret ary of Homeland Security based on the lessons of the 
pilot programme mandated by the SAFE Port Act.17  The Secretary may delay the implementation for 
specific ports by renewable two-year periods after certifying that they meet at least two of six 
conditions listed in the Act.  One such condition wo uld be fulfilled if the "use of systems that are 
available to scan containers ... will significantly  impact trade capacity and the flow of cargo".18  The 
CBP Commissioner has remarked that  a requirement to subject all U.S.-bound containers to image 
                                                      
11 CBP online information, "Secure Freight Initiative at a Glance".  Viewed at:  http://www.usembassy. 
org.uk/press_release/12oct07-secure_freight/CBP_Fact_S heet--SFI--Secure_Freight_Initiative_at_a-glance.pdf. 
12 See WTO (2006). 
13 Section 205. 
14 CBP online information.  Viewed at:  http:// www.cbp.gov/xp/cgov/border_security/international_ 
activities/csi/csi_in_brief.xml. 
15 Section 231. 
16 Public Law 110-53, Section 1701. 
17 Section 1701(b)(2). 
18 Section 1701(b)(4)(E). WT/TPR/S/200/Rev.1 Trade Policy Review 
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scanning and radiation detection monitoring at fore ign seaports would have an "enormous" impact on 
trade, and would result in "lower profits and higher transportation costs for U.S. importers".19 
(c) C-TPAT 
25. In 2007 the SAFE Port Act authorized the C-TPAT, a voluntary programme that had been 
operating on the basis of Executive authority since its inception in 2002.  Under C-TPAT, businesses 
conduct a comprehensive self-assessment of their s upply chain against minimum security criteria and 
submit relevant information to CBP to obtain C-TPAT  certification.  CBP then conducts an on-site 
assessment to validate participation in C-TPAT, normally within a year of certification.20  CBP should 
revalidate C-TPAT participation at least once every four years.21  CBP has published minimum 
criteria for importers;  sea, rail, and highway carri ers (with special criteria for long-haul highway 
carriers from Mexico);  customs brokers;  mari ne port and terminal operators;  and foreign 
manufacturers.22 
26. Participation in C-TPAT is open to U.S. importers23;  international sea, air, and rail carriers;  
U.S. licensed customs brokers;  U.S. air freight cons olidators, ocean transportation intermediaries, and 
non-vessel operating common carriers;  U.S., Canadian, and Mexican border crossing land carriers;  and U.S. port and terminal operators.  Mexican a nd Canadian manufacturers may also participate;  
other foreign manufacturers may participate only if i nvited to do so by CBP.  Invitations are extended 
on the basis of supply-chain factors, including specif ic security concerns, st rategic threat posed by 
geographic regions, or strategic import volume.   At end 2007, 608 Mexican and Canadian 
manufacturers were participating in C-TPAT. 
27. C-TPAT participants benefit from reductions in the risk score assigned to their shipments by 
CBP.  Therefore, their shipme nts face less frequent inspecti ons than those of non-C-TPAT 
participants with a similar risk profile.  Validated  C-TPAT participants receive larger reductions in 
their risk scores than certified participants.  Th e most significant reductions are reserved for C-TPAT 
participants whose security measu res exceed the minimum security criteria and conform to "best 
practice".  According to CBP, participants in this category are subject to "very infrequent 
examinations for security reasons".
24 
28. At end 2007, 7,915 businesses had received C- TPAT certification;  of these, some 85% had 
been validated, and 3% had adopted security best practices. 
29. CBP and the New Zealand Customs Service signed a security arrangement in July 2007, 
under which, participants in New Zealand's Secu re Exports Scheme will receive C-TPAT benefits 
when exporting to the United States "once [the Unit ed States and New Zealand] have established the 
compatibility of the membership levels  between their supply chain programs".25  In mid 2007, the 
United States was developing similar securi ty arrangements with the EC and Jordan. 
                                                      
19 CBP online information, Remarks by CBP Commissioner at the Center for Strategic and 
International Studies, 11 July 2007.  Viewed at:  http://www.cbp.gov/xp/cgov/newsroom/commissioner/ 
speeches_statements/commish_remarks_csc.xml. 
20 Section 215, SAFE Port Act. 
21 Section 219, SAFE Port Act. 
22 CBP online information, "New C-TPAT Mi nimum Security Criteria".  Viewed at:  
http://www.cbp.gov/xp/cgov/import/commercia l_enforcement/ctpat/security_criteria/. 
23 CBP defines a U.S. importer as a U.S. company (which may be a U.S. subsidiary of a foreign 
company) that is authorized to import into the United Stat es as the "importer of record" by posting a single entry 
or continuous entry bond. 
24 CBP (undated). 
25 CBP online information, "U.S., New Zealand Estab lish Joint Trade Security Arrangement", 29 June 
2007.  Viewed at:  http://www.cbp.gov/xp/cgov/ newsroom/news_releases/062007/06292007_2.xml. United States WT /TPR/S/200/Rev.1 
 Page 29 
 
 
(ii) Customs valuation 
30. In 1996, the United States notified the WTO that its customs valuation legislation, as notified 
to the GATT, remained valid under th e WTO Customs Valuation Agreement.26  Previously, the 
United States had notified the amendments to inco rporate into U.S. law the provisions of the 
Agreement on Implementation of Article VII of the GATT.27 
31. The customs valuation disciplines applied by the United States are contained in the Trade 
Agreements Act of 1979.  In general, the customs value of imports is the transaction value, which 
excludes international freight, insurance, and other c.i.f. charges.  Where the transaction value cannot 
be used, the legislation establishes five alternative valuation methods and their order of application, 
which reflects the hierarchy established by the WTO Customs Valuation Agreement.  The U.S. 
authorities indicate that they do not capture the fre quency of use of each valuation method, and that 
they do not use reference prices. 
32. For purposes of applying the transaction value method in transactions involving a series of 
sales, CBP normally uses the price paid in the "first or earlier" sale, that is, the sale between the 
manufacturer and the foreign intermediary.  In January 2008, CBP solicited public comments on its 
proposal to use the price paid in the last sal e prior to the importation into the United States.28  I f  
adopted, CBP's proposal would result in the transaction value being determined on the basis of the 
price paid by the buyer in the United Stat es, rather than a foreign intermediary. 
33. CBP determines the final value of imports after th e importer has filed the declared value.  The 
importer may request a written explanation of how CBP determined the final value, within 90 days.  
In addition, importers may challenge CBP's final va lue by filing a protest and application for further 
review within 180 days.  The denial of a protest ma y be appealed to the U.S. Court of International 
Trade, whose decisions may in turn be appealed to the U.S. Court of Appeals for the Federal Circuit, 
and beyond that, the U.S. Supreme Court.  The U.S. authorities indicate that they do not maintain data 
on the number of valuation protests filed with port s;  as at end 2007, about 150 valuation cases were 
pending at the U.S. Court of International Trade. 
34. The value declared by the importer must be in U.S. currency.  Importers must use the 
exchange rates certified by the Federal Reserve Bank of New York, generally on the first business day 
of the calendar quarter in which the export to the United States took place. 
(iii) Rules of origin 
35. The United States applies non-preferential and pref erential rules of origin.  The preferential 
rules of origin maintained under several bilateral free-trade agreements conc luded after 1997 have yet 
to be notified to the WTO (March 2008).29  Determination of origin relies on self-certification. 
36. Non-preferential rules of origin are applied for purposes of MFN treatment, government 
procurement, country of origin marking, a nd may be used for anti-dumping and countervailing 
measures.30  In general, an article is considered to have  been produced in a country if it is wholly the 
                                                      
26 WTO document G/VAL/N/1/USA/1, 1 April 1996.  The reply by the United States to the checklist of 
issues on customs valuation is contained in GATT document VAL/2/Rev.1/Add.1, 16 July 1981. 
27 GATT document L/5005, 17 July 1980. 
28 Federal Register , 73 FR 4254, 24 January 2008. 
29 The U.S. notifications on rules of origin are contained in WTO documents G/RO/N/1/Add.1, 22 June 
1995;  G/RO/N/6, 19 December 1995;  G/RO/N/12, 1 October 1996;  and G/RO/N/18, 3 November 1997. 
30 The legislation on non-preferential rules of origin is contained in:  19 USC 1304 and General Note 3 
to the U.S. Harmonized Tariff Schedule (MFN treatment);  19 USC 2511 et seq., 19 USC 3592, and 19 CFR WT/TPR/S/200/Rev.1 Trade Policy Review 
Page 30 
 
 
growth, product, or manufacture of that country or has been substantially transformed into a new and 
different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed.
31  However, these general standards may be adapted and 
interpreted further by agencies other than CBP to fit the needs and purposes of the particular context 
in which non-preferential rules are applied. 
37. Preferential rules of origin are maintained unde r free-trade agreements and unilateral tariff 
concessions (Table AIII.1).  U.S. free-trade agreemen ts, including those that have entered into force 
since the last Review of the United States, use the "wholly obtained" criterion.  For goods that do not 
meet this criterion, most agreements establish sp ecified changes of tariff classification to determine 
eligibility, and to a lesser extent, regional value cont ent criteria, either separately or in combination.  
For some products, these rules may also establish certain production requirements. 
38. In general, rules of origin under unilateral ta riff concessions  require goods that do not meet 
the wholly obtained criterion to fulfil local-conten t requirements to qualify for preferential tariff 
treatment.  The value of imported inputs may be  counted toward satisfying the local-content 
requirement if the inputs have been substantially transformed into a new and different article of 
commerce before being used to produce the good that  is imported into the United States.  This 
criterion is known as double substantial transformation.   Special provisions apply to apparel under the 
African Growth and Opportunity Act, Caribbean Basin Trade Partnership Act, and Andean Trade 
Promotion and Drug Eradication Act.  To qualif y for preferential tariff treatment under these 
programmes, apparel must use U.S. components, regional components up to an annual cap, or for 
AGOA, third-country components up to an  annual cap (see also Chapter II(4)(iii)). 
39. Under the Central America-Dominican Republic-United States Free Trade Agreement 
(CAFTA-DR), inputs from Canada and Mexico to produce woven apparel fulfil the origin 
requirement, subject to a cap.32  To benefit from this provision, Canada and Mexico must provide 
reciprocal treatment to the United States, Central America, and the Dominican Republic.  According to the U.S. authorities, this scheme benefits U.S. companies with investments in Mexico and Canada, 
and helps to integrate regional production. 
(iv) Tariffs 
(a) MFN and other trading partners 
40. The general policy of the United States, embodied in Section 126 of the Trade Act of 1974, is 
to grant MFN tariff treatment to all its trading partners.
33  The United States may adopt laws that deny 
MFN tariff treatment to particular countries.  All WTO Members except Cuba receive MFN 
treatment.  In addition, the United States does not  grant MFN treatment to the Democratic People's 
Republic of Korea.  Imports from these two countries ar e subject to the "statutory rate", which is the 
rate imposed by the Smoot-Hawley Tariff Act of 1930 , as amended.  The statut ory rate is shown in 
column 2 of the Harmonized Tariff Schedule.  Permanent MFN tariff treatment was extended to Ukraine in March 2006 and to Viet Nam in December 2006.
34 
                                                                                                                                                                     
177.21 (government procurement);  19 CFR 102.0, and 19 CFR 134 (country of origin marking);  and 19 CFR 
102.21 (textiles and clothing).  See also WTO (2006). 
31 19 USC 2518. 
32 Appendix 4.1-B of the CAFTA-DR. 
33 19 USC 2136. 
34 Proclamation 7995 of 31 March 2006, Federal Register  71 FR 16969, 4 April 2006;  and 
Proclamation 8096 of 29 December 2006, Federal Register  72 FR 451, 4 January 2007. United States WT /TPR/S/200/Rev.1 
 Page 31 
 
 
41. The United States accords MFN tariff treatment on a temporary and conditional basis to:  
Azerbaijan, Belarus, Kazakhstan, Moldova, Russia, Tajikistan, Turkmenistan, and Uzbekistan, all of 
which have entered into bilateral commer cial agreements with the United States.35  These countries 
are denied permanent, unconditional MFN tariff treatmen t on the basis of Title IV of the Trade Act of 
1974, which requires that the U.S. President deny  MFN tariff treatment to any non-market economy 
that was ineligible for such treatment on 3 January  1975 (when the legislation was enacted), and that 
denies or seriously restricts the rights of its citizens to emigrate.  This provision is known as the Jackson-Vanik amendment.
36 
(b) Applied MFN tariffs 
42. The United States levies customs duties on the basis of the f.o.b. value of imports at the point 
of export. 
43. The Harmonized Tariff Schedule of the United St ates was enacted by the Omnibus Trade and 
Competitiveness Act of 1988 and became effective in January 1989.  It is based on the Harmonized 
Commodity Description and Coding System (HS).37  The 2008 Harmonized Tariff Schedule reflects 
the fourth amendment to the HS (HS 2007).  The following analysis is based on the 2007 Harmonized 
Tariff Schedule of the United States.  Although th e 2008 Harmonized Tariff Sc hedule was available at 
the time of preparing this report, ad valorem  equivalents of non- ad valorem  tariff rates were available 
only for 2007.38 
44. The 2007 Harmonized Tariff Schedule comprises 10,253 tariff lines at the HS 8-digit level 
(Chapters 1-97) (Table III.2).39  The simple average applied MFN tariff, including the ad valorem  
equivalents of specific and compound rates was 4.8% in 2007, virtually the same as in 2004 (4.9%) 
(Table AIII.2).  The average applied tariff for agri culture (WTO definition) decreased from 9.7% in 
2004 to 8.9% in 2007.  The 2007 average applied tariff for non-agricultural products was 4%, the same as in 2004.  In 2007, duty-free lines repr esented approximately 37% of all tariff lines. 
45. Excluding the non- ad valorem  rates, the simple average applied MFN tariff was 4.4% in 
2008.  The average applied MFN tariff (excluding non- ad valorem rates) was 8.2% for agriculture 
(WTO definition), and 3.9% for non-agricultural products. 
46. The decrease in the average a pplied MFN tariff rate for agriculture between 2004 and 2007 
largely reflects increases in pr ices of agricultural products and the resulting reduction in the 
ad valorem  equivalents (AVEs) of non- ad valorem  tariff rates applied on such products.  Significant 
reductions were recorded in the AVE rates of da iry products, sugar, and food preparations, with 
declines between 90 and 270 percentage points.  Th e AVEs decreased for 525 of the 1,149 tariff lines 
subject to non- ad valorem  rates between 2004 and 2007.   However, on average non- ad valorem  tariffs 
continue to afford higher protection than ad valorem  duties.  In 2007, the average AVE of non- ad 
valorem  tariff rates was 9.2%, compared with 4.3% for ad valorem  duties.  Apart from agricultural 
products, non- ad valorem  tariff rates also apply to articles of  apparel and clothing, footwear and 
headgear, watches, and precision tools. 
                                                     
 
35 19 USC 2434. 
36 19 USC 2432. 
37 The Harmonized Tariff Schedule is included in a document produced and updated regularly by the 
International Trade Commission.  Viewed at:  http://www.usitc.gov/tata/hts/index.htm. 
38 The ad valorem  equivalents of non- ad valorem  tariff rates were provided by the U.S. authorities in 
the context of this Review. 
39 The tariff lines corresponding to the in-quota and out-of-quota rates applied to the same product are 
counted as one. WT/TPR/S/200/Rev.1 Trade Policy Review 
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Table III.2 
Structure of the tariff schedule 
(Per cent) 
  1998 2000 2002 2004 2007 
1. Total number of tariff linesa 9,997 10,001 10,297 10,304 10,253 
2. Non- ad valorem  tariffs (% of all tariff lines) 14.0 12.4 12.2 10.6 10.7 
3. Non- ad valorem  with no AVEs (% of all tariff lines) 0.0 0.0 0.0 0.0 0.0 
4. Tariff quotas (% of all tariff lines) 2.0 2.0 1.9 1.9 1.9 
5. Duty-free tariff lines (% of all tariff lines) 18.6 31.5 31.2 37.7 36.5 
6. Dutiable lines tariff average rate (%) 7.2 8.0 7.4 7.8 7.6 
7. Domestic tariff "peaks" (% of all tariff lines)b 4.9 5.3 5.6 7.1 6.9 
8. International tariff "peaks" (% of all tariff lines)c 7.7 7.0 6.6 5.5 5.2 
9. Bound tariff lines (% of all tariff lines)d 100.0 100.0 100.0 100.0 100.0 
 
a Chapters 1-97, at 8-digit level, excluding in-quota tariff lines. 
b Domestic tariff peaks are defined as those exceed ing three times the overall average applied rate. 
c International tariff peaks are defined as those exceeding 15%. 
d Two lines applying to crude petroleum are not bound. 
 
Source: WTO Secretariat calculations , based on data provided by the U.S. authorities. 
47. Around 5% of all tariff lines had MFN rat es exceeding 15% in 2007.  The agricultural 
products (WTO definition) subject to the highest ad valorem  or AVE rates were tobacco (350%), sour 
cream (177.2%), and peanuts (163.8%).  Other agricu ltural products are subject to tariffs of between 
50% and 110%, including milk and cream, butte r substitutes, cheese, goose liver, sugar, cocoa 
powder, preparations for infant use, prepared must ard, and cotton fibres.  Regarding non-agricultural 
products, tuna, apparel, footwear , and brooms were subject to ad valorem or AVE rates between 30% 
and 64% (see also Chapter IV(4)). 
48. Tariff quotas cover slightly less than 2% of all tariff lines (see Chapter IV(2)). 
(c) WTO bindings 
49. Following the Uruguay Round, the United States bound all tariff lines in Chapters 1-97, 
except two lines covering crude petroleum.  The average bound tariff rate is 4.7%. 
50. All tariff lines have reached their final bound MF N tariff rate, except HS 3404.2000 (artificial 
waxes and prepared waxes), which will become free of duty in January 2009.  In general, applied 
tariffs are at their bound rates. 
51. The WTO certified U.S. Schedule of Concessi ons reflecting the 1996 changes in the HS 
became effective in March 2005.40  The United States has submitted to the WTO lists of tariff items 
affected by the 2002 changes to the HS.  It was covered by the collective General Council waiver 
suspending the application of GATT binding disci plines to allow WTO Members to implement the 
HS 2002 changes domestically pending the incorpor ation of these changes into their schedules of 
concessions.41  This waiver expired in December 2006.  It  was also covered by the collective waiver 
regarding the HS 2007 changes until December 2007.42 
                                                      
40 WTO document WT/LET/493, 17 May 2005. 
41 WTO document WT/L/638, 6 December 2005. 
42 WTO document WT/L/675, 19 December 2006. United States WT /TPR/S/200/Rev.1 
 Page 33 
 
 
(d) Preferential tariffs 
52. Tariff preferences may be granted by the United States either unilaterally or in the context of 
bilateral or regional free-trade agreements. 
53. The United States grants unilateral preferential ta riff treatment to trading partners qualifying 
under the U.S. Generalized System of Preferenc es (GSP), the Caribbean Basin Economic Recovery 
Act (CBERA), as amended by the Caribbean Basin Trade Partnership Act (CBTPA), the Andean 
Trade Preference Act (ATPA), as amended by the Andean Trade Promotion and Drug Eradication Act (ATPDEA), and the African Growth and Oppor tunity Act (AGOA) (see Chapter II(4)(ii) and 
Table AIII.3).  Products of the U.S. insular possessi ons, freely associated states, and the West Bank 
and Gaza Strip are also eligible for unilateral tariff preferences.
43 
54. The United States grants preferential tariff treat ment to originating goods under the free-trade 
agreements with Australia, Bahrai n, Canada and Mexico, Chile, Israel, Jordan, Morocco, Singapore, 
and four of the five members of the Central American Common Market (El Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic (Chapter II and Table AIII.3). 
(e) Temporary tariff suspensions 
55. The U.S. Congress has occasionally inserted into  larger legislative packages provisions 
temporarily suspending or reducing tariffs applied on specific products.  For example, in August 2006 
Congress enacted pension legislation that includ ed some 300 temporary tariff suspensions or 
reductions.  These provisions were signed into law in August 2006 as part of the Pension Protection 
Act of 2006.  Also, the Tax Relief and Health Care  Act of 2006, signed into law in December 2006, 
included some 500 additional temporary tariff suspen sions or reductions.  Both sets of temporary 
tariff suspensions will be effective until 31 December 2009. 
56. The vast majority of products for which Me mbers of Congress propose to eliminate or reduce 
tariffs temporarily are chemicals, raw materials, and other manufacturing inputs.
44  In accordance with 
long-standing Congressional practice, proposals for temporary duty suspensions or reductions must be "non-controversial", which means that no domestic pr oducer must object to them.  In addition, lost 
revenue resulting from the duty suspension or reduction must not exceed US$500,000 per product.
45  
Proposals for duty suspensions or reductions are reviewed by the relevant Congressional 
subcommittees, Executive Branch ag encies, and the International Trade Commission  In general, 
temporary duty suspensions or reductions are contained in chapter 99 of the Harmonized Tariff 
Schedule. 
(v) Other charges affecting imports 
57. Certain imports continue to be subject to a merchandise processing fee and a harbour 
maintenance fee;  both were described in the Secretariat report for the last Review of the 
United States.  The merchandise processing fee applies to imports valued at more than US$2,000.46  
The fee is set at 0.21% of the import value;  the statutory minimum and maximum are US$25 and 
US$485.  Originating imports under the free-trade ag reements concluded between the United States 
                                                      
43 See Harmonized Tariff Schedule general notes 3(a), 4, 7, 10, 11, 16, and 17 for the provisions of 
these preferential programmes. 
44 Jones (2007). 
45 U.S. Senate Committee on Finance, Press Release,  "Grassley, Baucus Solicit Input for Miscellaneous 
Tariff Bill", 25 April 2006.  Viewed at:  http: //finance.senate.gov/press/Gpress/2005/prg042506.pdf. 
46 19 USC 58c. WT/TPR/S/200/Rev.1 Trade Policy Review 
Page 34 
 
 
and Australia, Bahrain, Canada and Mexico, Chile , the Dominican Republic and Central America, 
Israel, and Singapore are exempt.  Eligible imports from less developed countries and CBERA 
beneficiary countries are also exempt, as are certain products imported under the GSP.  The 
application of the merchandise processing fee has been extended until September 2014, following the 
adoption of the American Jobs Creation Act of 2004. 
58. According to the U.S. authorities, Congress intended the merchandise processing fee to 
approximate the cost to CBP of pro cessing the entry of imported merchandise.47  They have also 
noted that the merchandise processing fee's statutor y ceiling was introduced in part "to address GATT 
concerns".48  The American Jobs Creation Act of 2004 required the Secretary of the Treasury to issue 
recommendations concerning the possible elimination of fees collected by the Department of 
Homeland Security, including the merchandise processing fee.49  Such recommendations have not yet 
been issued.  In the context of th e last Review of the United States, the U.S. authorities indicated that 
they had no intention of eliminating the merchandise processing fee.50 
59. Water-borne imports valued at more than US$2, 000, and unloaded at a port receiving federal 
funds for maintenance are subject to a harbour  maintenance fee regardless of their origin51;  domestic 
cargo valued at more than US$1,000 is also subject to the fee.  The fee, which can only be charged 
once for the same cargo, is set at 0.125% of the va lue of the cargo and is collected by Customs and 
Border Protection.  The U.S. authorities indicate that  the purpose of the harbour maintenance fee is to 
"have the businesses that benefit directly from th e use of U.S. harbours ... bear the cost of 
maintenance of those harbours".52  In addition, they described the fee as "negligible".53 
60. Exported cargo is exempt from the harbour maintena nce fee;  this follows a 1998 decision by 
the U.S. Supreme Court that the harbour maintenan ce fee bore "the indicia of a tax", and that the 
value of the export cargo – the basis on which the fee is determined – did not "correlate reliably with 
the federal harbour services, facilities, and be nefits used or usable by the exporter".54 
61. The United States applies federal excise taxe s on certain imported and domestic products, 
including fuels, certain automobiles, heavy tr ucks and trailers, spor ting goods, firearms and 
ammunition, distilled spirits, tobacco products, and paper.55 
62. Beer (imported and domestic) is subject to fede ral excise tax at a rate of US$18 per barrel of 
31 gallons.56  A reduced rate of US$7 is applied on the first 60,000 barrels of beer produced in a year 
by a domestic brewer with an annual production of two million barrels of beer or less.  Imported beer 
is not eligible for the reduced rate. 
                                                      
47 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
48 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
49 Section 892(e), American Jobs Creation Act of 2004. 
50 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
51 This charge, enacted as part of the Water Resources Development Act of 1986 (26 USC 4461) is 
referred to as a "tax" in the Act, and as a "fee" in th e regulations (19 CFR 24.24).  The list of ports receiving 
federal funds for maintenance is contained in 19 CFR 24.24. 
52 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
53 WTO document WT/TPR/M/160/Add.1, 27 September 2006. 
54 United States v. United States Shoe Corp., 523 US 360 (1998), 31 March 1998.  Section 11116(b)(1) 
of the Safe, Accountable, Flexible, Efficient Transportation Equity Act (P.L. No. 109-59) amended the harbour 
maintenance tax to exempt exports. 
55 26 USC 4001 et seq. 
56 26 USC 5051. United States WT /TPR/S/200/Rev.1 
 Page 35 
 
 
63. Imported and domestic wine is s ubject to federal excise tax at a rate ranging from US$1.07 to 
US$3.40 per wine gallon.57  Small domestic producers (those with an annual production of 150,000 
wine gallons or less) are eligible for a credit of US$0.90 per wine gallon on the first 100,000 wine 
gallons.  Decreasing credit rates are available fo r wineries producing between 150,000 and 250,000 
wine gallons per year. 
64. The United States does not apply a value adde d tax.  Sub-federal governments may impose 
sales taxes and additional excise tax es on imports and domestic products. 
(vi) Anti-dumping and countervailing measures 
65. The United States considers that effective ru les on anti-dumping and subsidies are necessary 
to address injurious dumped and subsidized import s, and can also contribute toward sustaining 
support for further trade liberalization.  In this respect, it has noted that, "maintaining confidence in 
the enforcement of agreed rules and support for fu rther trade liberalization, addressing the harmful 
effects of trade distorting practices, and eliminating or reducing those practices to the extent possible 
are essential to the long term viability of the WT O and the economic prosperity of its Members".58 
66. In the context of the WTO Negotiating Group on Rules, the United States considers trade 
remedies as an integral part of the curre nt rules-based international trading system.59  T h e  
United States has also presented a number of propos als for the clarification and improvement of the 
AD and SCM Agreements, including proposals regard ing offsets for non-dumped comparisons, also 
known as "zeroing".60 
(a) Legislation and administration 
67. The main U.S anti-dumping (AD) and countervailin g duties (CVD) legislation is Title VII of 
the Tariff Act of 1930, as amended by the Trade Ag reements Act of 1979.  The Trade and Tariff Act 
of 1984, the Omnibus Trade and Competitiveness Act of 1988, and the Uruguay Agreements Act of 
1994 (URAA) introduced further modifications to AD  and CVD legislation.  The regulations that 
govern the way AD and CVD investigations (including reviews) are included in title 19 of the Code of 
Federal Regulations, parts 201, 207, 351, 353, and 355.61 
68. The International Trade Administration (ITA)  in the U.S. Department of Commerce 
(USDOC), and the United States International Trad e Commission (USITC), are responsible for the 
administration of laws and agreements with respect  to AD and CVD measures in the United States.  
The ITA determines the existence and margin  of dumping and subsidy in AD and CVD 
investigations, while the USITC determines material  injury to the domestic industry resulting from 
imports of the dumped or subsid ized products.  The ITA's AD/CVD Petition Counseling and Analysis 
Unit, established in 2004, assists U.S. companies with  respect to recourse to U.S. unfair trade laws.  
                                                      
57 26 USC 5041. 
58 WTO document TN/RL/W/27, 22 October 2002. 
59 WTO document TN/RL/W/27, 22 October 2002. 
60 WTO documents TN/RL/W/98, 6 May 2003, TN/RL/W/130, 20 June 2003, TN/RL/W/168, 
10 December 2004, TN/RL/W/208, 5 June  2007, and other TN/RL documents. 
61 19 CFR Parts 351, 353, and 355 62 FR 27295, 19 May 1997 (AD Duties, Final Rule);  19 CFR Part 
351 63 FR 65347, 25 November 1998 (CV Duties, Final Rule);  19 CFR 351.222(b) 64 FR 29818, 3 June 1999 (Proposed Regulation Concerning the Revocation of AD Duty);  19 CFR 351.222(b) and 19 CFR 351.222(c) 64 
FR 51236, 22 September 1999 (Amended Regulation Concerning the Revocation of AD and CV Duty Orders);  
19 CFR part 351 63 FR 13516, 20 March 1998 (Procedures for Conducting Five-year ("Sunset") Reviews of AD CV Duty Orders);  19 CFR Parts 351 and 354 63 FR 24391, 4 May 1998 (AD and CV Duty Proceedings. WT/TPR/S/200/Rev.1 Trade Policy Review 
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The Unit provides assistance, inter alia , to help understand legisl ation and regulations and 
information on how to file petitions. 
69. The USDOC initiates AD and CVD investigations , generally at the request of petitioners, 
based on written applications;  it has the authority to self-initiate investigations, but seldom uses this 
authority.  Investigation petitions must be f iled simultaneously with the USDOC's ITA and the 
USITC.  Following the investigation initiation, the US ITC makes a preliminary injury determination:  
if this is negative, the investigation is termin ated, if affirmative, the ITA issues a preliminary 
determination of dumping or s ubsidization.  The investigatio n continues, whether the ITA's 
preliminary determination is affi rmative or negative.  If there is  an affirmative determination, 
provisional measures may be applied.  If the ITA's fi nal determination finds a margin of dumping or a 
subsidy rate above the de minimis  level, the USITC issues a final injury determination:  if affirmative, 
the ITA issues an order imposing AD or CVD duties, if  negative, the investigation is terminated, no 
order is issued, provisional measures are lifted, and cash deposits returned. 
70. AD and CVD investigations may be suspe nded under some circumstances based on an 
agreement with the exporter or, in certain cases, fo reign governments, to cease exports, or to eliminate 
the injurious effect.  With respect to AD, unde r suspension agreements, exporters accounting for 
substantially all of the imports of the merchandi se under investigation may agree to cease exports or 
accept price undertakings.  In the case of non-ma rket economies, AD suspension agreements may 
combine price undertakings and additional elemen ts in order to prevent price suppression or 
undercutting. In CVD cases, the Government allege d to be providing the subsidy may agree to 
eliminate the subsidy, to completely offset the net subsidy, or to cease or limit exports of the 
merchandise to the United States.  Any agreement en tered into with a WTO Member considered to be 
a market economy to suspend an AD investigation may involve only price undertakings;  agreements with respect to CVD investigations may also involve quantitative restrictions. 
71. Administrative reviews of CVD and AD orders may be requested by interested parties every 
12 months.  They are conducted to determine the amount of duty to be finally assessed on imports 
during the review period, and to re-calculate th e amount of net countervailable subsidy or dumping 
margin for merchandise under the outstanding CVD or AD duty order, to establish the deposit rate for 
ensuing periods.  If no review is requested for a particular 12-month period, final duties are assessed 
in the amount deposited for that period. 
72. Sunset reviews are conducted under section 751(c)  of the U.S. Tariff Act of 1930, as amended 
by the URAA, which requires that the USDOC an d the USITC conduct such reviews no later than 
five years after an AD or CVD definitive measure is imposed, to determine whether its revocation 
would be likely to lead to continuation or recu rrence of dumping or countervailable subsidies 
(USDOC) and of material injury to the industry (U SITC).  Sunset reviews are order-specific (country- 
and product-specific);  suspension agreements  are also subject to sunset review.
62  The USDOC's 
Sunset Policy Bulletin  (SPB) provides guidance on methodological or analytical issues for the conduct 
of sunset reviews not explicitly ad dressed by statutes and regulations.63  
73. A Panel established to examine U.S. sunset review procedures found that certain aspects of 
these procedures were WTO inconsistent.64  As a result, the USDOC issued amended regulations65, 
effective 31 October 2005 which changed the "waiver' ' provisions that govern treatment of interested 
                                                      
62 Sunset review procedures  and rules are set out in Federal Register  Vol. 63, 5 June 1998, or viewed 
at:  ftp://ftp.usitc.gov/pub/notices/sunrules.pdf. 
63 USDOC (1998). 
64 WTO documents WT/DS268/AB/R, 29 November 2004 and WT/DS268/R, 16 July 2004.   
65 The regulations are contained in 70 FR 62061, 28 October 2005. United States WT /TPR/S/200/Rev.1 
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parties who do not provide a substantive response to the USDOC's notice of initiation of a sunset 
review, and clarified the basis for parties' particip ation in a public hearing in an expedited sunset 
review.  By introducing further and more preci se requirements for companies wishing not to 
participate in a sunset review (affirmative waive r), they eliminate the possibility of the USDOC's 
order-wide likelihood determinations being based on assumptions about likelihood of continuation or 
recurrence of dumping or a counterva ilable subsidy due to the parties'  waiver.  Also, as a consequence 
of the amendments, the USDOC no longer makes company-specific likelihood findings for companies that fail to file a statement of waiver and fail to file a substantive response to the notice of initiation 
(deemed waiver). 
74. Under sunset review procedures, orders issued  after 1 January 1995 are reviewed five years 
after they become effective (normal reviews).  The USDOC and USITC also reviewed orders in place 
before 1 January 1995 (transition order reviews). 
75. Under Treasury Department Order No. 165 Revised, as amended, the Commissioner of 
Customs is entitled to require the posting of bonds or other securities considered necessary to protect 
the revenue or to assure compliance with any pertinen t law, regulation, or instruction, including AD 
and CVD orders, as well as to determine the form  and conditions of these bonds (Customs bonds).  
Bonds may be applied on a single transaction or  for multiple transactions (continuous bonds). 
76. In addition, Customs may require enhanced  bond amounts from importers of merchandise 
subject to increased default risk.
66  In this respect, additional bond requirements for importers of 
certain agriculture/aquaculture merchandise subject  to anti-dumping/countervailing duty cases, also 
known as "Enhanced Continuous Bond Requirements" (EBR) have been challenged in the WTO and 
led to the establishment of a panel.67  The Panel Report rejected certain claims against the 
United States, namely that the U.S. laws, rules a nd regulations that authorize the imposition of the 
EBR were inconsistent as such with WTO provision s, but found the application of the EBR to shrimp 
from India and Thailand to be WTO inconsistent.68 
77. The Continued Dumping and Subsidy Offset Act of 2000 (CDSOA), also known as the Byrd 
Amendment, was repealed by Title VII Subtitle F of the Deficit Reduction Act of 2005 (Repeal of 
Continued Dumping and Subsidy Offset).  In accordance with the 2005 Act, however, all AD and 
CVD duties assessed on entries of goods made and file d before 1 October 2007 have continued to be 
distributed to members of the affected U.S. industry who supported the petition for investigation.69  
Allocations have been distributed on a fiscal-year ba sis, in proportion to qua lifying expenditures:  the 
estimated value of disbursements was US$225 milli on in FY2005 and US$380.6 million in FY2006.  
Disbursements under the CDSOA since it came into  force in FY2001, total some US$1.9 billion.70  
CDSOA deposits in the Clearing Account were US$1.21 billion on 1 October 2006.71  This is 
considerably lower than the US$3.95 billion reporte d for FY2004, and the US$5.6 billion registered in 
                                                      
66 Amendment to Bond Directive 99-3510-004.  Customs and Border Protection online information 
"Questions and Answers on CBP Bonds".  Viewed at:  http://www.cbp.gov/linkhandler/cgov/toolbox/ 
publications/trade/qandabonds.ctt/q_and_a_bonds.doc. 
67 WTO documents WT/DS343/9, WT/DS345/8, 1 August 2007. 
68 WTO document WT/DS345/R, 29 February 2008. 
69 Title X of the Agriculture, Rural Development,  Food and Drug Administration, and Related 
Agencies Appropriations Act of 2001 (P.L No: 106-387).  Viewed at:  http://thomas.loc.gov. 
70 U.S. Customs and Border Protection online information.  Viewed at:  http://www.cbp.gov/xp/cgov/ 
import/add_cvd/cont_dump/. 
71 The amounts displayed in the Clearing Account represent estimated duties filed on the entry of the 
imported products by the importer. WT/TPR/S/200/Rev.1 Trade Policy Review 
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FY2005, and corresponds mainly to the termination of duties collected under the AD and CVD orders 
on softwood lumber from Canada, which totaled some US$2.9 billion. 
78. The WTO-consistency of the CDSOA was challe nged by 11 WTO Members in late 2000, and 
in January 2003 the Appellate Body affirmed a Pa nel's findings that certain aspects of the CDSOA 
were not consistent with multilateral rules.72  In 2006, the United States stated that, through the 
Deficit Reduction Act of 1 February 2006, it had ta ken all actions necessary to implement the DSB's 
recommendations and rulings.  The 11 complainants disagreed;  the EC and Japan have notified the 
DSB of the list of retaliatory duties, in 2007 cove ring imports with a value of up to US$81.19 million 
for the EC and up to US$48.18 million for Japan.73 
(b) Anti-dumping 
79. The number of AD investigation initiations decreased sharply starting in 2004, but increased 
in 2007 (Table III.3).  There were only seven initiations  in 2006, but in 2007 29  investigations were 
initiated.  Of the 20 investigations initiated in 2005 and 2006, 16 (80% of the total) resulted in the 
imposition of provisional measures.  All the investig ations initiated in 2006 re sulted in the application 
of provisional measures, while the USITC made prelim inary negative determinations of injury in four 
of the cases initiated in 2005.74  As at February 2008, only four of the 29 investigations initiated in 
2007 had been subjected to provisional measures. 
Table III.3 
Anti-dumping investigations and measures imposed, 1980-07 
 1980-90 1991-01 2002 2003 2004 2005 2006 2007 
Investigation initiations 418 492 35 36 26 13 7 29 
Preliminary injury determinations, 
affirmative 336 410 15 29 25 9 7 4 
Preliminary dumping determination, 
affirmative, of which .. .. 15 23 25 9 7 4 
provisional measure applied .. .. 12 23 25 9 7 4 
Final dumping determina tions 283 355 14 20 21 9 5 2 
Final injury determinations, of which 183 231 12 16 16 6 2 0 
duty order imposed 183 229 12 16 16 6 2 0 
Suspension agreements 0 2 1 1 0 0 2 0 
Sunset determinationsa n.a. 391 11 6 30 65 74 29 
Revocations 69 142 7 2 33 21 15 26 
 
.. Not available. 
n.a. Not applicable.  
a Number of AD orders continued or revoked as a result of sunset reviews. 
 Note: Figures refer to the year in which the investigation was initiated. 
 
Source:  WTO Secretariat, based on U. S. Department of Commerce;  USITC;  and notifications. 
80. In 2005, 17 new AD duty orders were issued, wh ile only seven were issued in 2006;  in 2007, 
only two new AD orders were issued, and two susp ension agreements on lemon juice with Argentina 
and Mexico signed.  Final duty or ders were applied in six of th e 13 cases initiated in 2005;  for the 
                                                      
72 WTO documents WT/DS217/1, 9 January 2001;  WT/DS217/R, 16 September 2002;  and 
WT/DS217/AB/R and WT/DS234/AB/R, 16 January 2003. 
73 WTO documents WT/DS217/49, 2 May 2006;  WT/DS217/50, 24 August 2006;  WT/DS217/51, 
24 April 2007;  and WT/DS217/52, 27 August 2007. 
74 For details see http://ia.ita.doc.gov/stats/inv-initiations-2000-current.html. United States WT /TPR/S/200/Rev.1 
 Page 39 
 
 
rest there was a USITC final negative determinati on.  For cases initiated in 2006, two definitive AD 
orders had been issued, and two suspensi on agreements signed by February 2008. 
81. At end-December 2007, final AD orders were a pplied to imports from 39 countries, compared 
to 44 countries in late 2004 (Table III.4).  Over th e review period, there was an increase in the orders 
applied on China and Indi a, and a decrease in the number applied on  EC countries.  This results both 
from the lower number of investigation initiations affecting products from these countries, as well as 
the revocation of duties through sunset and administrative reviews. 
82. At end 2007 some 51% of all AD measures were  being applied on iron and steel products;  
14% on chemicals and pharmaceuticals;  and 10% on ag ricultural and forestry products (Table III.4). 
Table III.4 
Anti-dumping measures by country and product, 2002-07 
Year 2002 2003 2004 2005 2006 2007 
Trading partner /region 266 278 273 268 256 232 
Argentina 6 6 6 6 5 3 
Brazil 14 15 14 14 13 10 
Canada 8 9 9 6 3 2 
China 43 52 55 57 58 62 
EC countries (27) 64 64 57 53 50 36 
India 10 10 12 13 14 14 
Indonesia 6 6 5 5 6 6 
Japan 30 32 29 27 23 21 
Korea Rep. of 18 19 19 17 16 14 
Mexico 8 8 9 10 9 8 
Russia 2 3 3 4 4 8 
South Africa  3 4 4 4 3 3 
Chinese Taipei 17 17 17 16 16 15 
Thailand 5 5 7 8 8 7 
Turkey 4 4 3 3 3 3 
Ukraine 6 6 6 6 6 7 
Other America 5 4 4 5 5 3 
Other Asia (including Australia) 12 9 10 10 10 7 
Other Europe 5 5 4 4 4 3 
Products       
Iron and steel products 165 170 184 166 143 117 
Chemicals and their products 43 50 31 35 33 34 
Plastics and rubber and their products 7 6 2 2 4 4 
Agricultural products 20 20 21 24 23 24 
Pulp of wood 1 1 1 1 0 0 
Textiles and textile articles 4 4 5 3 3 1 
Base metals and thei r articles 11 11 10 13 13 13 
Machinery and mechanical appliances 6 6 6 6 6 6 
Consumer goods, other 11 10 13 18 31 30 
 
Source:  WTO based on U.S. De partment of Commerce, USITC a nd notifications information. 
83. As at 31 December 2007, excluding suspensions, 224  definitive measures were in effect.  At 
that date, 232 AD duty orders and suspension agreem ents were in effect, compared with 273 in 
December 2004. 
84. Of the 263 AD and CVD measures in place at end 2007, 182 had been renewed after a 
review, that is, they had been in place for over five  years.  The oldest AD measure in place dates from 
1973 and, at end 2007, 32 AD a nd 4 CVD measures had been in place for at least 20 years;  98 AD WT/TPR/S/200/Rev.1 Trade Policy Review 
Page 40 
 
 
and 10 CVD measures had been in place for over 10 years.  The average duration of an AD measure in place at end 2007 was some 11 years.
75 
85. Imports subject to AD investigations in FY2005 (last year available) totalled US$353 million, 
which represented 0.03% of total imports, and a ffirmative determinations  were made on imports 
totalling US$297 million.76  Imports subject to AD/CVD measures (including provisional measures) 
represented some 0.3% (US$62 billion) of total U. S. imports over the 1980- 05 period.  Although the 
percentage of imports is relatively low, the app lication of AD duties may not be without cost when 
applied in cases of pricing that is not predatory. 
86. The level of AD duties applied during the period under review varied widely.  The definitive 
duties applied during 1 July 2005-31 December 2007 range from a low of 3.91% to a high of 
280.57%;  provisional duties applied over the same period range from 3% to 280.57% (Table AIII.4). 
87. The United States entered into two new susp ension agreements during the period under 
review, with Argentina and Mexico, both concer ning lemon juice.  At end 2007, eight suspension 
agreements were in place, with Argentina, Mexico , the Russian Federation, and Ukraine;  three of 
these agreements relate to steel.77  Four of the agreements involve a price undertaking, and the other 
four involve export limits combined with price undertakings. 
88. In 2005 and 2006, 145 administrative reviews of AD duties were completed.  In 2006, 
Argentina requested consultations with the Unite d States on its AD duty administrative review on 
certain oil country tubular goods other than drill pipe.78  The U.S. authorities noted that a settlement 
had been reached as at February 2008. 
89. Under sunset review procedures, 210 AD and CV D orders were reviewed from January 2000 
to December 2007, under normal proc edures, of which 58 were revoked.79  Apart from "normal 
reviews", the USDOC and USITC have continued re viewing orders that were in place before 
1 January 1995 (transition period reviews).  All 309 AD and CVD definitive measures in existence on 
1 January 1995 had been reviewed between Ju ly 1998 and 30 June 2001 (First Round Transition 
Reviews);  146 such measures were revoked.  Of those not revoked, 151 definitive measures were 
reviewed again between January 2004 and February 2006 (Second R ound Transition Reviews) and, at 
end 2007, 67 had been revoked.  A lthough revocations have been freque nt in the case of transitional 
reviews, they have been less frequent in the case of  normal sunset reviews.  The majority of normal 
sunset reviews (128 out of 210) conducted between  2000 and end 2007 resulted in a continuation of 
the application of duties.  On the other hand, over  60% of the transitional reviews (187 out of 309) 
resulted in revocations.  Sunset review revocations  increased during 2005-07:  25 in 2005, 24 in 2006 
and 64 in 2007 (compared with 24 over 2002-04). 
90. The 2005-07 revocations included mainly iron a nd steel products (some three quarters of the 
total), as well as chemicals, textiles, automotive products, and sugar;  they covered 24 trading 
partners.80  Duties were continued on iron and steel, ch emicals, industrial textiles and agricultural 
                                                      
75 Calculated from USITC data.  Viewed at:  http://info.usitc.gov/oinv/sunset.nsf/0a915ada53e192cd 
8525661a0073de7d/96daf5a6c0c5290985256a0a004dee7d/$FILE/orders-date-tbl.pdf. 
76 USITC (2006). 
77 WTO document G/ADP/N/153/USA, 13 March 2007. 
78 WTO document G/ADP/D69/1, G/L/781, WT/DS346/1, 26 June 2006. 
79 For a complete list of cases terminated by the ITA see "Sunset Review Schedule and Disposition".  
Viewed at:  http://www.usitc.gov/ussunset.htm;  and "Five-Year ("Sunset") Review Status". 
80 For detailed information on the revocations see ITA online information.  Viewed at:  http://ia.ita.doc. 
gov/sunset/ssy2krev.html. United States WT /TPR/S/200/Rev.1 
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products.81  Most revocations were due to no domestic in terest in the continued application of duties.  
The authorities have noted that the rate of conti nuation of definitive measures places the United States 
below other major users of AD remedies. 
91. Aspects of AD investigations, procedures and fi ndings of U.S. AD measures were the subject 
of WTO disputes during the review period (Table AII.2).  The USDOC's methodology of not granting 
offsets for non-dumped-sales, also known as "zeroing" (negative margins of dumping), in determining 
weighted average dumping margins, continued to be  a source of legal disputes, with DSB cases being 
brought against the United States by Ecua dor, the EC, Japan, Mexico, and Thailand.82  In the case by 
Japan, the Appellate Body upheld a Panel's finding th at U.S. zeroing procedur es constitute a measure 
that can be challenged, but reversed some of the Panel's conclusions, finding, for example that the U.S. 
use of zeroing procedures when calculating margins of dumping on the basis of transaction-to-
transaction comparisons in original investigations, or the reliance, in sunset reviews, on margins of 
dumping calculated in previous proceedings through the use of zeroing, were inconsistent with the 
ADA.83  In the case brought by Mexico and others, th e Panel ruled, in December 2007, that model 
zeroing in investigations "as such" is inconsistent with the ADA, but that simple zeroing in periodic 
reviews is not inconsistent.84 
92. A mutually agreed solution to a number of disputes between the United States and Canada 
regarding U.S. AD and CVD investigations on so ftwood lumber, was reached in September 2006, 
through the signing of a Softwood Lumber Agreement.  In March 2006 a Trade in Cement Agreement 
was signed between the United States and Mexico  settling the longstanding case U.S.-Anti-Dumping 
Measures on Cement from Mexico.  The Cement Agreement allows for increased imports of Mexican 
cement, encourages U.S. cement exports to Mexico , and settles outstanding li tigation issues, providing 
for the AD order to be revoked as of 1 February 2009.85 
(c) Countervailing duties 
93. Between two and three CVD investigations we re initiated per year during the period under 
review (Table III.5).  In contrast to 12 orders re ported in the previous Review of the United States, 
two final CVD orders were issued during the period.  Three investigations were terminated with an 
ITA or USITC negative determination.86 
94. Overall, there were 31 CVD orders in pl ace at end December 2007, down from 57 in 2004, 
involving 13 trading partners.87  Some 60% of the CVD orders in place related to steel products.88 
                                                      
81 For more information on sunset reviews, see ITA online information.  Viewed at:  http://ia.ita.doc. 
gov/sunset/ssy2krev.htm and http://ia.ita.doc.gov/sunset/ssy2kcon.htm. 
82 WTO documents WT/DS335/1, 17 November 2005-WT/DS335/R, 30 January 2007 (Ecuador);  
WT/DS343/1, 27 April 2006-WT/DS343/9, WT/DS345/8, 1 August 2007 (Thailand) ;  G/ADP/D67/1, G/L/778, 
WT/DS344/1 1 June 2006-WT/DS344/6, 22 May 2007 (Mexico). G/ADP/D70/1;  G/L/786, WT/DS350/1, 
3 October 2006;  WT/DS350/8, 4 October 2007 (EC). 
83 WTO documents WT/DS322/R, 20 September 2006, and WT/DS322/AB/R, 9 January 2007. 
84 WTO document WT/DS344/R, 20 December 2007. 
85 WTO document G/ADP/D46/2, G/L/604/Add.1, WT/DS281/8, 21 May 2007. 
86 ITA online information.  Viewed at:  http://ia. ita.doc.gov/stats/inv-initiations-2000-current.html. 
87 The countries affected were:  Argentina (2);  Belg ium (1);  Brazil (3);  Hungary (1);  India (7);  
Indonesia (3);  Iran (2);  Ital y (3);  Korea (5);  Norway (1);  South Af rica (1);  Thailand (1);  and Turkey (2). 
88 Of the 31 orders in place in late 2007, 17 were on steel and iron products;  si x on food products;  four 
on chemicals;  two on paper;  and one each on semiconductors and cooki ng ware.  WTO document 
G/SCM/N/170/USA, 14 March 2008. WT/TPR/S/200/Rev.1 Trade Policy Review 
Page 42 
 
 
Table III.5 
Countervailing duty investigations  and measures imposed, 1980-07 
 1980-90 1991-01 2002 2003 2004 2005 2006 2007 
Investigation initiations 240 89 4 5 3 2 3 5 
Preliminary injury determinations, 
affirmative 210 71 3 2 3 2 3 3 
Preliminary countervailing duty 
determination, affirmative, of which .. .. 3 2 3 2 3 3 
provisional measure applied .. .. 3 2 3 2 3 3 
Final countervailing duty determinations 176 71 3 2 1 2 0 0 
Final injury determinations, of which .. .. 2 2 0 2 0 0 
duty order imposed 107 44 2 2 0 2 0 0 
Revocations 83 93 0 0 2 4 11 7 
 
.. Not available. 
 
Note: Figures refers to the year in which the investigation was initiated. 
 
Source:  WTO based on U.S. De partment of Commerce, USITC a nd notifications information. 
95. Imports subject to CVD investigations in  FY2005 totalled US$26 million, compared with 
US$366 million in FY2002 (last year fo r which information was available).89 
96. CVD-related disputes during the period under review concerned exclusively cases initiated 
prior to 2006 (see Table AII.2).  These cases involved:  the U.S. "change-in-ownership" 
methodologies with respect to privatized companies90;  a U.S. CVD investigation on dynamic random 
access memory semiconductors91;  and the U.S. review of the CVD order on certain softwood lumber 
products.92  An agreement with respect  to the latter was reached through the Softwood Lumber 
Agreement between the United States a nd Canada, signed in September 2006. 
(vii) Safeguards 
(a) Global safeguards 
97. U.S. legislation on global safeguards is contai ned in Sections 201-204 of the U.S. Trade Act 
of 1974, as amended by the URAA.  Under Section 2 01 of the Act, the USITC determines whether an 
article is being imported in such increased quantities th at it is a substantial cause of serious injury, or 
threat thereof, to the U.S. industry producing a like or directly competitive article.  If the USITC 
makes an affirmative determination, it recommends  to the President relief that would address the 
serious injury or threat thereof, and facilitate the adjustment of the domestic industry to import 
competition.  The President makes the final decisi on whether to provide relief and the form and 
amount of relief, within 60 days of receipt of an USITC report. 
98. Under U.S. law, safeguard measures may include  tariffs, quantitative restrictions, or tariff 
quotas, import licensing and other measures as listed in Section 203 of the Act.  NAFTA partners are 
excluded from the application of safeguard me asures, unless they individually account for a 
                                                      
89 USITC (2006). 
90 USDOC, ITA, Notice of Final Modification of Agency Practice Under Section 123 of the Uruguay 
Round Agreements Act, 68 FR 37125, 23 June 2003;  and WTO documents WT/DS212/RW, 17 August 2005, 
WT/DS212/18, 30 September 2005 and WT/DS212/19, 18 November 2005. 
91 WTO documents WT/DS296/AB/R, 27 June 2005 and WT/DS296/11, 11 August 2005. 
92 WTO document WT/DS311/1, G/L/679, G/SCM/D60, 19 April 2004. United States WT /TPR/S/200/Rev.1 
 Page 43 
 
 
substantial share of total imports, and it is shown that they make an important contribution to serious 
injury. 
99. Since its last Review in 2006, the United States has not applied any measures under the 
Agreement on Safeguards;  it has applied price- based safeguards on certain  agricultural products 
(Chapter IV(2)(ii)).  The United States has not initiated any safeguard investigations or new 
section 201 cases during the review period.  The safegua rd measures applied in the four investigations 
initiated between 1998 and 2001, on steel products, expire d or were terminated by end 2003.  A Steel 
Monitoring and Analysis (SIMA) system was establi shed in 2002 to collect timely detailed statistics 
on steel imports.  The SIMA will remain in place until 21 March 2009.93  Licensing requirements 
apply to all basic steel mill imports from all countries.94  The authorities have noted that, while the 
licensing programme was first established in conjunc tion with the safeguards remedy, it now operates 
under separate, unrelated authority. 
(b) Special safeguards 
100. The USITC also conducts country or region-sp ecific safeguard investigations (special 
safeguards) under legislation that implements U.S. free-trade agreements, including NAFTA, 
CAFTA, and the FTA with Australia, Bahrain, Chil e, Morocco, and Singapore.  If the USITC finds, 
as a result of a duty reduction under an FTA, that a domestic industry is seriously injured or 
threatened with serious injury by increased imports, it recommends temporary relief to the President, 
who makes the final decision.  Relief may be in the form of a rollback of a duty reduction under the agreement or suspension of further duty re ductions on the imported good.  No safeguard 
investigations were initiated nor measures of this  type maintained during the period under review. 
101. Under Section 421 of the Trade Act of 1974, the USITC also conducts "China safeguard 
investigations" in which the USITC determines, follo wing Section 16.1 of Part I of the Protocol on the 
Accession of the People's Republic of China to the WTO, whether a product from China is being 
imported into the United States in such increased quantities or under such conditions as to cause or 
threaten to cause market disruption to the domestic producers of like or directly competitive products.  
If the USITC makes an affirmative determination, it proposes a remedy, and sends its report to the 
President, who makes the final remedy decision. 
102. As at September 2007, no Section 421 inves tigations were active.  Five section 
421 investigations were initiated by the USITC between November 2002 and August 2005;  in three 
cases affirmative determinations were made, but no du ties were applied, as the President deemed this 
was not in the national economic interest. 
103. Safeguard actions for textiles in the form of quotas may be applied by the United States (and 
other WTO Members) under China's WTO Accession Pr otocol, which contains a transitional product-
safeguard mechanism for textiles and clothing that expires on 31 December 2008.  The Committee for 
the Implementation of Textile Agreements (CITA), an interagency group chaired by the USDOC, is 
responsible for matters affecting textile trade po licy and for supervising th e implementation of all 
textile trade agreements, including the application of these special safeguard measures.  The USDOC's 
Office of Textiles and Apparel (OTEXA) provides the staff support for the CITA, monitors all 
agreements, and provides economic analysis and data upon which the CITA relies in taking action.
95  
No new requests for safeguard investigations  have been made since November 2005. 
                                                      
93 Federal Register, 11 March 2005 (Vol. 70, No. 47). 
94 For the complete list of products subject to licensing, see ITA online information.  Viewed at:  
http://ia.ita.doc.gov/steel/ license/SMProducts_byhts.html. 
95 Information available at:  http ://www.otexa.ita.doc.gov/cita.htm. WT/TPR/S/200/Rev.1 Trade Policy Review 
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104. In a memorandum of understanding (MOU) concer ning trade in textile and apparel products, 
signed on 8 November 2005, the United States and China established 21 agreed levels for 34 
categories of textiles and textile products manufactur ed in China and exported to the United States 
during three one-year periods beginning 1 January 2006 .  In addition, China is required to use an 
electronic visa information system for shipments of  certain textile products subject to the agreed 
levels and exported to the United States on or afte r 1 January 2006.  The United States agreed not to 
seek consultations on any of the products covered by the MOU.96  Export limits for 2007 were 
adjusted pursuant to paragraph 4 of the MOU in August and November.97 
(viii) Quantitative restrictions and licensing 
105. The United States bans imports from certain countries for foreign policy purposes.  Most 
imports from Cuba, the Democratic People's Republic of Korea, Iran, Myanmar, and certain areas of 
Sudan are subject to bans or approval requirements.98  The Office of Foreign Assets Control of the 
Department of the Treasury is responsible for administering these measures. 
106. Most other U.S. quantitative restrictions and c ontrols on imports are designed to safeguard 
consumer health, or protect public morals or the environment.  These restrictions and controls are 
implemented through licensing requirements for fish and wildlife, plants, animals, and plant and 
animal products, narcotic drugs, alcoholic bevera ges, tobacco, firearms, explosives, and nuclear 
facilities, and are described in the latest U. S. reply to the questionnaire on import licensing 
procedures.99 
107. Imports of basic steel mill products are subject  to automatic licensing, irrespective of their 
origin.  This requirement, established in Decem ber 2002 as part of a safeguards measure, was 
extended in 2005, after public comment, under new statutory authority unrelated to the safeguard.100  
According to the United States, the licensing system does not restrict the quantity or value of steel 
imports;  rather, it is designed to provide fast and reliable statistical information on steel imports to 
the Government and the public.  Licences are issued au tomatically and at no cost to persons who have 
pre-registered with the Department of Commerce.  The registration process is free and can be 
completed on-line.101 
108. The importation of natural gas or liquefied natural gas (LNG) is authorized unless it is 
determined not to be in the public interest.102  The importation of natural gas from a nation with which 
the United States has a free-trade agreement, and of LNG from any country, is deemed to be 
consistent with the public interest, and appli cations for such importation are granted without 
modification or delay.  The Department of Energy  is responsible for authorizing the importation of 
natural gas or LNG. 
                                                      
96 For the complete text of the MOU see USTR online information.  Viewed at:  http://www.ustr.gov/ 
assets/World_Regions/North_Asia/China/asset_upload_file91_8344.pdf. 
97 OTEXA online information Viewed at:  http://otexa.ita.doc.gov/fr2006/chiestlim07C.htm, 
http://otexa.ita.doc. gov/fr2006/chin13(07-07).htm, and http://otexa.ita.doc.gov/fr2006/chin14.htm. 
98 Cuban Assets Control Regulations (31 CFR 515), Foreign Assets Control Regulations (31 CFR 500), 
Iranian Transactions Regulations (31 CFR 560), Burmese Sanctions Regulations (31 CFR 537), and Sudanese 
Sanctions Regulations (31 CFR 538). 
99 WTO document G/LIC/N/3/USA/5, 29 February 2008. 
100 Federal Register , 70 FR 72373, 5 December 2005. 
101 The registration form is available at:  http://ia.ita.doc.gov/steel/license. 
102 15 USC 717b. United States WT /TPR/S/200/Rev.1 
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109. The Marine Mammal Protection Act (MMPA) pr ohibits the importation of marine mammals 
and their parts or products into the United States.   However, the Secretary of Commerce may issue 
permits allowing imports of living marine mammals for scientific research, enhancement, or public 
display.  Parts and products ma y be imported for scientific researc h.  Under the MMPA, yellowfin 
tuna from the eastern tropical Pacific can only be imported if it comes from a country with an 
"affirmative finding".103  Four countries have such a finding:  Ecuador, El Salvador, Mexico, and 
Spain.104  Tuna from these countries can only be labelled as "dolphin safe" if caught without the chase 
and encirclement of dolphins in the entire trip and w ithout killing or seriously injuring any dolphins in 
the set in which the tuna was caught.  A 2002 finding by the Secretary of Commerce, which would have changed the definition of dolphin-safe to cove r tuna caught by the chase and encirclement of 
dolphins, as long as there were no observed dolphin mortalities or serious injury, was found by a 
federal appeals court, in April 20 07, to be "arbitrary and capricious".
105 
110. The Pelly Amendment to the Fishermen's Pr otective Act of 1967 authorizes the U.S. 
Secretary of Commerce to certify a country as carryi ng out activities that diminish the effectiveness of 
an international fishery conservation programme.106  Certification triggers a process for the President 
to consider the imposition of import restrictions ag ainst that country.  Although Iceland, Japan, and 
Norway are certified under the Pelly Amendment, the U.S. authorities indicate that they have not been 
subject to import restrictions. 
111. The United States also prohibits imports of shrimp and shrimp products harvested with 
technology that may adversely affect sea turtle species.107  Exempt from the ban are products from 
countries that have been certified by the Depart ment of State "as having taken certain specific 
measures to reduce the incidental taking of sea tur tles" or as having a fishing environment that does 
not pose a threat to sea turtles.108  Certification takes place annually.  Shrimp harvested in cold-water 
regions is also exempt.  In April 2006, the Depart ment of State certified 39 sources as meeting the 
requirements for export of shrimp to the United States.109 
112. Imports of certain textile and clothing products from China are subject to "agreed levels" (see 
section (vii) above). 
113. Licences are required to import agricultura l products at the in-quota tariff rate 
(Chapter IV(2)(ii)). 
(ix) Technical regulations, conformity assessment, and standards 
114. There have been no major changes, during th e review period, in the legal framework 
governing the development of tec hnical regulations and conformity assessment procedures at the 
federal level.  Technical regul ations and conformity assessment procedures are usually adopted 
administratively by federal agencies, on the basis of regulatory authority delegated by Congress.  Congress normally leaves the definition of key subs tantive provisions to the relevant agency.  
                                                     
 
103 The requirements to obtain an affirmative finding are contained in 50 CFR 216.24(f). 
104 National Oceanic and Atmospheric Administrati on online information, "Tuna/Dolphin Embargo 
Status Update", 21 March 2007.  Viewed a t:  http://swr.nmfs.noaa.gov/psd/embargo2.htm. 
105 United States Court of Appeals for the Ninth Circ uit, Earth Island Institute v. Gutierrez, No. 04-
17018, 27 April 2007. 
106 22 USC 1978. 
107 16 USC 1537. 
108 16 USC 1537. 
109 U.S. Department of State online information, "Sea Turtle Conservation and Shrimp Imports", 2 May 
2006.  Viewed at:  http://www.state.gov/r/pa/prs/ps/2006/65731.htm. WT/TPR/S/200/Rev.1 Trade Policy Review 
Page 46 
 
 
However, Congress may define specific parameters  for technical regulations or conformity 
assessment procedures, or even establish technical regulations and conformity assessment procedures legislatively. 
115. Technical regulations and conformity assessment procedures may also be adopted by States.  
For example, the United States has notified to the WTO several proposed  technical regulations at the 
sub-federal level in, for example, e nvironment and public health and safety.
110  States may delegate 
authority to establish technical regulations and conf ormity assessment procedures to regional, local, or 
municipal governments. 
116. Title IV of the Trade Agreements Act of 1979,  as amended, is the legal basis on which the 
TBT Agreement was implemented in the United States.111  In developing technical regulations and 
conformity assessment procedures, federal agencies  must follow the rulemaking procedures of the 
Administrative Procedure Act.112  Most States have enacted their own administrative procedure acts. 
117. The Office of the USTR is responsible for implementing of the TBT Agreement.113  T h e  
United States submitted a notification on the implementation and administration of the TBT Agreement in February 1996.
114  The U.S. enquiry point and notification authority under the 
Agreement is housed in the National Institute of St andards and Technology (NIST) of the Department 
of Commerce. 
118. For the purpose of WTO notifications, NIST relies on information published in the Federal 
Register  to identify technical regulations and confor mity assessment procedures proposed by federal 
agencies.  The U.S. authorities indicate that NIST has subscribed to a private database on state 
regulatory proposals to identify for notification te chnical regulations and conformity assessment 
procedures proposed by sub-federal agencies.115 
119. The United States made 174 notifications of t echnical regulations to the WTO between July 
2005 and October 2007.116  Around 23% were from the Environmental Protection Agency, 16% from 
the Food and Drug Administration, 13% from the Department of Transportation, 8% from the Department of Agriculture, 6% from the Department  of Energy, and 20% from other agencies.  The 
remaining 14% corresponded to sub-federal measures. 
120. Since its last Review in 2006, the United St ates has notified to the WTO two mutual 
recognition agreements, with Iceland, Liechtenste in, and Norway.  One relates to conformity 
assessment procedures for telecommunications equipment, electromagnetic compatibility, and 
recreational craft, and the other to certificates of conformity for marine equipment.
117 
121. Between July 2005 and July 2007, WTO Memb ers raised concerns in the Committee on 
Technical Barriers to Trade regarding U.S. ener gy conservation standards for consumer products, 
requirements for digital television tuners and child ren's jewellery, and country of origin labelling 
                                                      
110 See, for example, WTO documents G/TBT/N/USA/155, 159, 203, 205, 207, 209, 210, 223, 231, 
235, 245, 248, 249, 275-77, 287, 295, 296, 298-00, and 306-10. 
111 19 USC 2531 et seq. 
112 5 USC 551 et seq. 
113 WTO document G/TBT/2/Add.2, 19 February 1996. 
114 WTO document G/TBT/2/Add.2, 19 February 1996. 
115 WTO document WT/TPR/M/160/Add.1, 27 September 2006. 
116 WTO documents G/TBT/N/USA/124-297, excluding notifications contained in documents with the 
symbols "Add" and/or "Corr". 
117 WTO documents G/TBT/10.7/N/49 and G/TBT/10.7/N/50, both dated 3 March 2006. United States WT /TPR/S/200/Rev.1 
 Page 47 
 
 
regulations.118  Only the concern relating to country of orig in labelling has been raised in a subsequent 
Committee meeting;  none of the concerns has been followed by formal dispute settlement. 
122. As part of the process for the adoption of t echnical regulations and conformity assessment 
procedures, the agency responsible must publis h a notice of proposed rulemaking and provide 
interested persons, regardless of nationality or r esidency, an opportunity for comment.  Executive 
Order 12889 requires a comment period of at least 75 days for "any proposed Federal technical 
regulation or any Federal sanita ry or phytosanitary measure  of general application".119  The comment 
period may be between 30 and 75 days for proposed technical regulations and conformity assessment 
procedures applied to perishable goods or to a ddress "urgent" problems.  Executive Order 12889 does 
not define urgent problems.  Th e final technical regulation or c onformity assessment procedure must 
be published at least 30 days prior to its effectiv e date;  a shorter period is possible if the final 
measure relaxes an existing measure.  However, th e authorities indicate that the period between the 
publication of a final rule and its effective da te is typically much longer than 30 days. 
123. Agencies may also seek general comments on an  issue prior to formulating a technical 
regulation or conformity assessment procedure.  Th is is done through an advance notice of proposed 
rulemaking.  Rulemaking notices are published in the Federal Register .120 
124. An agency is exempted from the notice and co mment requirements if it finds that, "for good 
cause", such requirements are "impracticable, unn ecessary, or contrary to the public interest".121  The 
use of this exception is subject to judicial review.  According to the authorities, about 5% of rules were issued without notice and comment in fiscal year 2007, because many rules were deemed not to 
have a significant impact on international trade. 
125. Executive Order 12866 of September 1993 requir es the Office of Management and Budget 
(OMB) to review all "significant" rules by fede ral government agencies (excluding independent 
regulatory agencies) prior to their publication in the Federal Register  as proposed or final rules.
122  
Significant rules include those that:  raise novel legal or policy issues;  create a serious inconsistency 
or interfere with an action planned or being taken by another agency;  or have an annual effect on the 
economy of US$100 million or more, or adversely affect in a material way the economy, a sector of 
the economy, productivity, competition, jobs, the envir onment, public health or safety, or State, local, 
or tribal governments or communities.  To this end, agencies must submit to the OMB's Office of 
Information and Regulatory Affairs an assessment of the benefits and costs of the proposed rule and 
of "potentially effective and reasonably feasible" a lternatives.  OMB Circular A-4, issued in 2003, 
provides guidance to federal agencies on the de velopment of regulatory analysis required under 
Executive Order 12866.  According to the author ities, OMB concluded reviews of 571 significant 
rules during fiscal year 2007. 
                                                      
118 WTO documents G/TBT/M/41, 12 June 2007;  G/TBT/M/39, 31 July 2006;  G/TBT/M/38, 
23 May 2006;  G/TBT/M/37, 22 December 2005;  and G/TBT/M/36, 4 August  2005.  With resp ect to country of 
origin labelling, see also Chapter IV(2)(v). 
119 Federal Register , 58 FR 69681, 30 December 1993. 
120 U.S. Government Printing Office online in formation, "GPO Access".  Viewed at:  
http://www.gpoaccess.gov/fr/index.html. 
121 5 USC 553 (b).  According to the authorities, one example of "good cause" for obtaining an 
exemption from notice and comment might be the urgent need to remove trees from the flight path at an airport, due to the strong possibility that such trees, if not remo ved on an expedited basis, could cause a catastrophic 
accident. 
122 Executive Order 12866-Regulatory Planning and Review, 30 September 1993.  Federal Register , 
58 FR 51735, 4 October 1993. WT/TPR/S/200/Rev.1 Trade Policy Review 
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126. Under the Congressional Review Act, Congress may disapprove a technical regulation or 
conformity assessment procedure by adopting a resolution, which must be signed by the President to become effective.
123  Congress has used this power only once since 1996.124  Interested persons, 
including foreigners, can petition for the issuance, am endment, or repeal of a technical regulation or 
conformity assessment procedure.  Although federal agencies act on such petitions at their discretion, 
they must respond to all.  In addition, all techni cal regulations or conformity assessment procedures 
may be judicially reviewed. 
127. The United States does not maintain a catalogue of technical regulations and conformity 
assessment procedures.  However, technical regula tions, conformity assessment procedures, and other 
final rules are indexed and published in the consolidated Code of Federal Regulations.125 
128. In the context of its previous Trade Policy Review, the United States indicated that the 
legislation implementing the Uruguay Round Agre ements, and additional guidance to regulatory 
authorities, encouraged the use of relevant inte rnational standards that may be "effective and 
appropriate" for meeting U.S. regulatory objectives.126  The United States also indicated that it did not 
track the extent to which its final regulati ons were based on international standards. 
129. The United States relies on a broad range of a pproaches to conformity assessment.  The type 
of instrument used varies depending on the sector;  one instrument used is supplier's self-declaration 
of conformity;  another is third party certifica tion.  Accreditation programmes are operated by all 
levels of government and the private sector, and frequently rely on private-sector conformity assessment bodies.  Bodies fulfilling the criteria sp ecified by the regulator, regardless of their 
location, are accredited or otherwise recognized  to perform conformity assessment activities. 
130. The U.S. authorities have indicated that there are no centralized data on the extent to which 
U.S. regulators have recognized the equivalence of foreign technical regulations or the results of 
conformity assessment procedures performed abroad.
127 
131. The United States relies on a wide variety of st rategies to ensure compliance with technical 
regulations, including sampling at manufacturing premis es or retail outlets, consumer complaints, and 
inspections at the border. 
132. A number of technical regulations establish re quirements for the labelling or marking of 
goods with their country of origin (see also Ch apter IV(2)(v)).  Under the Tariff Act of 1930, 
imported items must be conspicuous ly and indelibly marked in English to indicate to their "ultimate 
purchaser" their country of origin.128  Exceptions to this requirement include articles that cannot be 
marked or for which the cost of marking would be  "economically prohibitive".  Also exempt are 
vegetables, fruits, nuts, berries, animals, fish, and birds.129  However, the "immediate containers" of 
these products must have country-of-origin labels.  The American Automobile Labeling Act requires 
that new passenger cars, pickup trucks, vans, and sport utility vehicles have labels specifying the 
percentage value of their U.S. and Canadian part s content, the country where they were assembled, 
                                                      
123 5 USC 801 et seq. 
124 GAO (2005b). 
125 U.S. Government Printing Office online information, "Code of Federal Regulations (CFR):  Main 
Page".  Viewed at:  http://w ww.gpoaccess.gov/cfr/index.html. 
126 WTO document WT/TPR/M/160/Add.1, 27 September 2006. 
127 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
128 19 USC 1304. 
129 19 CFR 134.33. United States WT /TPR/S/200/Rev.1 
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and the countries of origin of their engine and transmission.130  Imported textile and apparel articles 
must be labelled to show their country of orig in in accordance with the Textile Fiber Products 
Identification Act and the Wool Products Labelling Act.131 
133. The American National Standards Institute (ANS I) is a private, non-profit organization that 
brings together businesses, professional societies and trade associations, standards-development 
organizations, government agencies, a nd consumer and labour representatives.132  It accredits 
organizations whose standards development pro cess meets ANSI requirements of due process and 
consensus.  These are established in the document ANSI Essential Requirements  and in various other 
guidance documents.133  One of the criteria for accreditation is  to agree to "consider applicable 
international standards".  There are 208 ANSI ac credited standards development organizations. 
134. ANSI-accredited standards development organi zations may submit standards to the ANSI 
Board of Standards Review for approval as an Am erican National Standard.  Standards must have 
been developed in accordance with the criteria established in ANSI Essential Requirements .  The 
public comment period is at least 60 days;  a shorter period is acceptable if the full text of the draft 
standard can be published in Standards Action,  a weekly ANSI online publication, or can be obtained 
in electronic format from a source published there.134  Substantive changes resulting from the 
comments require publication in Standards Action .  There are some 10,000 American National 
Standards.135 
135. ANSI adopted Annex 3 of the TBT Agreement in 1997.136  The work programme of the 
ANSI-accredited standards development organizatio ns on whose behalf ANSI notified its acceptance 
of the code are available from each organization.137 
136. Compliance with standards is voluntary, but in practice the U.S. market often provides strong 
incentives for imported and domestic products to meet certain standards.138 
137. In July 2007, the President established the In teragency Working Group on Import Safety to 
conduct a comprehensive review of import safet y and to identify areas for improvement.  The 
Working Group, which has no statutory or regulatory authority of its own, has recommended several 
TBT-related measures to enhance the safety of impor ts into the United States (see Box III.1 below). 
(x) Sanitary and phytosanitary measures 
138. There have been no major changes in the in stitutional framework governing the establishment 
and implementation of SPS measures at the federal le vel since the last Review of the United States.  
The Animal and Plant Health Inspection Service (A PHIS) of the Department of Agriculture (USDA) 
regulates imports of plants, animals, and their products.  The USDA Food Safety and Inspection 
Service (FSIS) regulates most imports of meat, poultry, and some egg products.  The Food and Drug 
                                                      
130 49 USC 32304.  The regulations to implement the Act are contained in 49 CFR 583. 
131 15 USC 68 and 70. 
132 ANSI online information.  Viewed at:  http://w ww.ansi.org/about_ansi/ overview/overview.aspx? 
menuid=1. 
133 ANSI (2006). 
134 ANSI online information.  Viewed at:  http://www.ansi.org/standardsaction. 
135 ANSI online information.  Viewed at:  http:// www.ansi.org/standards_activities/domestic_programs/ 
overview.aspx?menuid=3. 
136 WTO document G/TBT/CS/N/83, 21 October 1997. 
137 ISO/IEC (2007). 
138 WTO (2006). WT/TPR/S/200/Rev.1 Trade Policy Review 
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Administration (FDA) regulates imports of all othe r foods, and imported veterinary drugs.  The 
Environmental Protection Agency (EPA) is responsib le for regulating imports of pesticides, and for 
setting limits on the amount of pesticides th at may remain in or on imported food. 
139. The establishment of SPS measures is governed at the federal level by the Federal Food, 
Drug, and Cosmetic Act;  the Public Health Se rvice Act;  the Food Quality Protection Act;  the 
Animal Health Protection Act;  the Plant Protec tion Act;  the Federal Insecticide, Fungicide, and 
Rodenticide Act;  and the Toxic Substances Control Ac t.  In general, SPS measures are subject to the 
same administrative rulemaking procedures as technical regulations (see section (ix)). 
140. 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.139  
This entity relies on information published in the Federal Register  to identify federal measures for 
WTO notification.  The United States made 933 notifications of SPS measures to the WTO between July 2005 and October 2007;  it routinely provides addenda to indicate when final rules have been adopted.  The authorities indicate that they are worki ng closely with state authorities to ensure timely 
notification of appropriate sub -federal technical regulations. 
141. Since the last Review of the United States, WTO Members have raised concerns in the SPS 
Committee regarding U.S. measures affecting imports of potted plants from the European 
Communities, wooden Christmas trees fr om China, and fruits and vegetables.
140  No solution has been 
reported with respect to these issues.  None of th e concerns raised have been followed by formal 
dispute settlement. 
142. The United States is a member of the Codex Alimentarius Commission and the World 
Organization for Animal Health (OIE), and a contr acting party to the International Plant Protection 
Convention (IPPC).  According to the United Stat es, U.S. SPS measures are based on international 
standards and guidelines "where they exist and as appropriate".141 
143. The FDA has completed 17 arrangements on SPS issues with 16 foreign agencies in 
12 countries.  These are confidentiality agreements that cover disclosure of non-public information 
among signatory governments as part of coopera tive law enforcement or regulatory activity. 
144. SPS requirements applied on imports of plants, an imals, and their products are established on 
the basis of the disease- or pest-risk posed by such pr oducts.  In the context of the last Review of the 
United States, the U.S. authorities indicated that AP HIS is committed to conducting pest-risk analyses 
in accordance with the IPPC standard for pest-ri sk analysis for quarantine pests (ISPM No. 11).142  
Regarding sanitary requirements, the U.S. authoriti es indicated that APHIS bases its decisions "on the 
guidance set forth under the WTO-recognized international standard-setting bodies".143 
145. Requests for first-time imports of plants, animal s, and their products must be submitted by the 
chief plant protection officer or the chief veterina ry officer of the exporting country to their U.S. 
counterpart.  Requests are made with respect to pa rticular commodities;  a risk assessment may be 
necessary to evaluate these requests.  APHIS may consider risk assessments carried out by third 
parties as part of its evaluation.  APHIS c onducts risk assessments at its own expense. 
                                                      
139 WTO documents G/SPS/ENQ/21/Add.1, 22 June 2007, and G/SPS/NNA/11/Add.1, 22 June 2007. 
140 WTO documents G/SPS/R/42, 25 September 2006;  G/SPS/R/43, 3 January 2007;  and 
G/SPS/R/37/Rev.1, 18  August 2005. 
141 WTO document WT/TPR/M/160/Add.1, 27 September 2006. 
142 IPPC (2007). 
143 WTO document WT/TPR/M/160/Add.1, 27 September 2006. United States WT /TPR/S/200/Rev.1 
 Page 51 
 
 
146. The U.S. authorities note that, under federal law,  U.S. states are pe rmitted to establish SPS 
measures, provided that these measures are consistent  with federal rules and regulations, and with 
U.S. obligations under relevant WTO disciplines. 
147. APHIS evaluates the pest-free status of an area against the criteria of the IPPC standard for 
the establishment of pest-free areas,  which has been incorporated by reference in the relevant 
regulations.144  In recognizing disease-free areas, APHIS relies on the criteria defined in 9 CFR 92.1-
4.  APHIS publishes lists of pest-free areas, regulated  pests, and of the disease status of countries or 
regions.145  In its regionalization assessments, APHIS ta kes into account the World Animal Health 
Organization's recognition of disease-free status to th e extent that it reflects the level of protection 
considered appropriate by the United States. 
148. Based on the results of risk assessment, APHIS may allow imports, subject to SPS 
requirements.  These are mostly issued as regulations , and must adhere to the procedural requirements 
of the Administrative Procedure Act (section (ix)).   There are no statutory limitations regarding the 
duration of the process to approve first-time imports  of plants, animals, and their products into the 
United States.  Typically, this process takes between two and three years.146 
149. In general, imports of plants, animals, and th eir products require an import permit issued by 
APHIS.  Permits specify the conditions under which a product can be imported into the United States;  
these conditions may include treatment, inspection, or  certification, either at the border or in the 
exporting country.  Users can apply for a permit and check the status of their application through an online system known as ePermits.
147  The previous system used by APHIS to process permits (Import 
Authorization System) was discontinued in April 2007. 
150. The USDA maintains a searchable database w ith the import requirements for fruits and 
vegetables.148  APHIS import manuals are available online.149  The EPA has issued a guidance 
document describing the data requirements to est ablish pesticide import tolerances (see below).150 
151. New import regulations for fruits and vege tables became effective in August 2007.151  The  
regulations establish a "notice-based" approval process, which replaces the process based on the 
promulgation of regulation.  According to APHIS, "with international trade in fruits and vegetables 
increasing steadily, APHIS determined that it could not keep pace with the volume of import requests 
by using solely a rulemaking-based  review and approval process".152 
152. The new process applies to fruits and vegetables that are subject to one or more of five 
designated phytosanitary measures.  It involves the announcement of the availability of a pest-risk 
analysis in the Federal Register , and the establishment of a 60-day public comment period.  Barring 
comments that disprove the findings of th e pest-risk analysis, APHIS announces in the 
                                                      
144 7 CFR 319.56-2. 
145 APHIS (undated).  APHIS online information, "Regul ated Pest List".  Viewed at:  http://www.aphis. 
usda.gov/import_export/plants/plant_imports/regulated_p est_list.shtml;  and "Animal Disease Status" at 
http://www.aphis.usda.gov/import_export/a nimals/animal_disease_status.shtml. 
146 APHIS (2007). 
147 USDA online information.  Viewed at:  https://epermits.aphis.usda.gov/epermits. 
148 USDA online information, "Q56 Fresh Fruits and Vegetables Reference Database".  Viewed at:  
https://manuals.cphst.org/q56/Q56Main.cfm. 
149 See APHIS online information.  Viewed at:  http://www.aphis.usda.gov/import_export/plants/ 
manuals/ports/index.shtml. 
150 Federal Register , 71 FR 17099, 5 April 2006. 
151 Federal Register , 72 FR 39482, 18 July 2007. 
152 APHIS (2007). WT/TPR/S/200/Rev.1 Trade Policy Review 
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Federal Register  that it will issue permits for the importa tion of the product in question.  Products 
subject to the notice-based process will no longer be listed individually in  the regulations.  The 
recognition of pest-free areas will also take place through the notice-based approval process.  APHIS will announce in the Federal Register  the recognition of an area as free of specified pests, and provide 
a 60-day public comment period.  After consid ering the comments, APHIS will announce the 
recognition of a pest-free area without issuing regul ations.  U.S. authorities expect the notice-based 
approach to take significantly less time than the rulemaking approach. 
153. Before imports of meat, poultry, or egg pr oducts are allowed, FSIS evaluates whether a 
country's regulatory system for these products a ttains the same level of protection as the United 
States.  If the system is deemed equivalent, U.S. regulations are amended to allow for imports.  FSIS 
has published the process whereby it assesses the equivalence of foreign meat and poultry regulatory 
systems.
153  The United States has recognized 34 foreign systems as equivalent to the U.S. meat, 
poultry, and/or egg products regulatory systems.  Only meat, poultry, and egg products from facilities 
certified by the FSIS-recognized competent authority of the foreign country can be imported into the United States.
154 
154. Under the Public Health Security and Biote rrorism Preparedness and Response Act of 2002 
(Bioterrorism Act), the FDA must receive notice prior to the entry of food that is imported or offered 
for import into the United States.155  In addition, domestic and foreign facilities that manufacture, 
process, pack, and hold food for consumption in the United States must register with the FDA.  The FDA estimates that some 420,000 food facilities are subject to the registration requirement.
156  It has 
received 322,744 registrations, of which close to 60% correspond to facilities located abroad (July 
2007). 
155. All pesticides intended for use in the United States, including imported pesticides, must be 
registered with the EPA;  in addition, imports of pesticides must be notified to the EPA.  Prior to 
granting registration, the EPA evaluates the pestic ide to ensure that it will not have unreasonable 
adverse effects on humans, the environment, or non- target species.  As from 2006, the EPA intends to 
review pesticide registrations every 15 years to ensu re that safety, health, and environmental standards 
are met.  The EPA also sets limits on the amount of pesticides that may remain in or on foods 
("tolerances").  Tolerances are set based on a ri sk assessment and are enforced by the FDA.  The 
Federal Food, Drug, and Cosmetics Act, as am ended by the Food Quality  Protection Act of 1996 
required that nearly 10,000 tolerances be reassess ed to ensure their safety;  EPA had reassessed 
around 99% by end 2006.157 
156. Agricultural biotechnology products are regulated  according to their intended use and must 
conform with the standards set by State and federa l statutes, including the Food, Drug and Cosmetic 
Act;  the Plant Protection Act;  the Insecticide, Fungi cide, and Rodenticide Act;  the Toxic Substances 
Control Act, and State seed certification laws.  There are no national requirements for varietal 
registration of new crops.  APHIS, the EPA, and th e FDA are responsible for regulating agricultural 
biotechnology in the United States. 
                                                      
153 USDA (2003). 
154 For the list of certified facilities see FSIS online information.  Vi ewed at:  http://www.fsis.usda. 
gov/Regulations_&_Policies/Eligible_Foreign_Establishments/index.asp. 
155 See WTO (2006) for further details. 
156 FDA online information, "Compliance Information: Registration".  Viewed at:  http://www.cfsan. 
fda.gov/~furls/ffregsum.html. 
157 EPA online information, "Reevaluation: Review  of Registered Pesticides". Viewed at:  
http://www.epa.gov/oppsrrd1/reevaluation. United States WT /TPR/S/200/Rev.1 
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157. The FDA regulates new plant varieties develope d through genetic engineering.  Foods from 
genetically engineered plants have to meet the same safety provisions as foods from plants derived 
conventionally.  Substances added to food, incl uding new proteins introduced through genetic 
engineering, are considered to be food additives subject to mandatory pre-market approval, unless 
they are pesticides, animal drugs, or are genera lly recognized as safe (GRAS) following a voluntary 
consultation process between the FDA and the food pr ocessor.  The U.S. author ities indicate that as at 
early 2008, all except one new protein in foods from genetically engineered plants have been 
presumptively affirmed as GRAS, because they are essentially the same (in function, structure, and 
levels) as other proteins commonly and safely consumed in food. 
158. Foods derived through genetic engineering that differ materi ally from their conventional 
counterparts, for example in composition or nutr itional quality, must be labelled to indicate the 
difference.  However, the label does not have to  indicate the process by which the difference was 
introduced into the food.  Thus, processors may voluntarily label their foods as derived through 
genetic engineering as long as the information is  truthful and not misleading to consumers. 
159. The FDA has approved certain steroid hormones to increase the rate of weight gain or 
improve feed efficiency in beef cattle.158 
160. The FDA, in conjunction with Customs and Border Protection, undertakes port-of-entry 
reviews of imported food other than meat, poultry,  and egg products, including through sampling and 
analysis "where necessary to ensure that imported food complies with the requirements of the U.S. 
food safety system".159  The FDA uses "import alerts" to disseminate information to its field personnel 
about imports that violate the Federal Food, Drug, and Cosmetic Act and must therefore be refused 
entry into the United States.  Import alerts refer to a specific commodity, a geographical area, a 
particular firm (manufacturer, shipper, grower, importer), or a combination thereof.  Import alerts remain in place until the manufacturer, shipper, grow er, or importer demonstrates to the FDA that the 
violation giving rise to the alert has been corrected.  Import alerts are published online.
160  There is no 
information available on the value of imports subj ect to FDA or CBP inspections at the border. 
161. FSIS inspects all shipments of meat, poultry, a nd egg products at the border.  Approximately 
10% of the shipments undergo an "intensive random re-inspection", which includes product 
examinations, microbiological analysis for pa thogens, or a test for chemical residues.161  O f  t h e  
3,890 million pounds of meat and poultry products imported in fi scal year 2006, around 12.3 million 
were not admitted because they failed to meet U.S. requirements.162 
162. The Interagency Working Group on Import Safe ty has recommended several SPS-related 
measures to enhance the safety of imports into  the United States (Box III.1).  These recommendations 
have not yet been enacted (March 2008). 
                                                      
158 21 CFR 522, 556, and 558. 
159 USTR (2007c). 
160 FDA online information, "FIARS".  Viewed at:  http://www.fda.gov/ora/f iars/ora_import_alerts. 
html. 
161 Committee on Ways and Means online information, "Statement of William James, DVM, MPH, 
Deputy Assistant Administrator for the Office Interna tional Affairs, Food Safety  and Inspection Service, 
Department of Agriculture, Testimony Before the Subcommittee on Oversight of the House Committee on 
Ways and Means", 4 October 2007.  Viewed at:  http://waysandmeans.house.gov/hearings.asp?formmode 
=view&id=6511. 
162 USDA (2006a). WT/TPR/S/200/Rev.1 Trade Policy Review 
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Box III.1:  Selected recommendations of the Interagency Working Group on Import Safety 
In July 2007, the President establishe d the Interagency Working Group on Import Safety to conduct a comprehensive 
review of import safety and to identify areas for improve ment.  The Working Group consists of senior Government 
officials and is chaired by the Secretary of Health and Human Services. 
The Working Group issued a strategic framework in September 2007, and an action plan in November 2007.  The strategic 
framework advocates a strategy that shifts the primary em phasis for import safety from intervention at the border to a 
model based on risk-based pr evention with verification. 
The recommendations from the Working Group's action plan build upon the existing import-safety system and past 
activities by the public and private sectors;  they focus on cost-effective, risk-based approaches across the entire import 
life cycle.  The recommendations are to: 
• create new and strengthen existing safety standards; 
• verify compliance of foreign producers with U.S. safety and security standards through certification; 
• promote good importer practices; 
• strengthen penalties and take strong enforc ement actions to ensu re accountability; 
• make product safety an important princi ple of U.S. diplomatic relationships with foreign countries and increase the 
 profile of relevant foreign assistance activities; 
• harmonize federal government procedures and requirements for proce ssing import shipments; 
• complete single-window interface for the intra-agency, in teragency, and private sector  exchange of import data; 
• create interactive import safety information network; 
• expand laboratory capacity and develop rapid test ing methods for swift id entification of hazards; 
• strengthen protection of inte llectual property rights to  enhance consumer safety; 
• maximize the effectiveness of product recalls; 
• maximize federal-state collaboration; 
• expedite consumer  notification of pr oduct recalls;  and 
• expand use of electronic tr ack and trace technologies. 
Source : WTO Secretariat, based on Interagency Working Group on Import Safety online information.  Viewed at:  
 http://www.importsafety.gov. 
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Documentation 
163. A Shipper's Export Declaration (SED) is used to keep a record of exports and act as a source 
document for official U.S. export statistics.  SEDs must be prepared for shipments valued over U$500 
when they are done through the U.S. Postal Servic e, and for shipments with a value of over US$2,500 
when not using the U.S. Postal Service.  SEDs must be prepared, regardless of value, for all shipments 
requiring an export licence or destined for countries restricted by the Export Administration Regulations.  SED, are prepared by exporters or th eir agent and delivered to the exporting carrier, who 
is required to present it to the CBP at the port of export. 
164. The number of documents re quired for exporting varies according to the product and 
destination.  The following documents are commonly required:  air waybill, bill of lading, commercial 
invoice, certificate of origin, export packing list, and insurance certificate.  For goods subject to export restrictions, a destination control statemen t appears on the commercial invoice, and the ocean 
or air waybill of lading must indicate the carrier a nd all foreign parties that  the item can be exported 
only to certain destinations.  Transactions involv ing products subject to export restrictions and 
controls require approval in the form of licences from the U.S. Government. United States WT /TPR/S/200/Rev.1 
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(ii) Export restrictions and controls 
165. The United States maintains export restrictions and controls for national security or foreign 
policy purposes, or to address shortages of scarce mate rials.  Export controls can be based on U.S. 
domestic legislation, policy decisions, United Nations r esolutions or on U.S. participation in four non-
binding export control regimes:  the Wassenaar  Arrangement, which deals with controls of 
conventional arms and dual-use exports, the Mi ssile Technology Control Regime (MTCR), the 
Nuclear Suppliers Group (NSG), and the Aust ralia Group (AG, chemical and biological non-
proliferation).  The United States participates in the Chemical Weapons Convention (CWC).  Export 
controls are implemented through a licensi ng system;  they also cover re-exports. 
166. The Export Administration Act (EAA) of 1979, as amended, contains the main U.S. legal 
provisions on export control.  The EEA authority has expired, but its provisions are carried out 
pursuant to Executive Order No. 13,222 of 17 August 2001 issued under the authority of the International Emergency Economic Powers Act (IEEPA), which is re newed annually.  Export controls 
for nuclear materials, facilities, and equipment u sed for civil purposes are re gulated by the Atomic 
Energy Act of 1954, as amended (AEA), and administered by the U.S. Nuclear Regulatory Commission (NRC). 
167. The Bureau of Industry and Security (BIS) in the USDOC is responsible for formulating and 
implementing export control policy on dual-use items  (items with both commercial and possible 
military use), software, and technology.
163  The BIS issues regulations contained in the Export 
Administration Regulations (EAR), which set fort h licensing policy and requirements for the export 
and re-export of dual-use items and related software and technology.164  Items that have dual uses are 
listed on the Commerce Control List (CCL) and are subject to general export prohibitions, unless 
allowed by an export licence or other authorizati on, which is dependent upon the item classification, 
the destination, the end-user, and the end-use.165  To determine whether a licence is needed an 
exporter must first classify the item by identifying the item's Export Control Classification Number (ECCN), according to the EAR, and then must refere nce the CCL.  The EAR include a country chart, 
which lists the reasons for control of a given ite m, and specifies whether, based on those reasons, 
exports of certain items to a given country requ ire a licence.  Licences have a standard term of 
24 months and authorize multiple shipments up to the maximum quantity/value authorized under the 
licence.  Exports of defence articles and defence se rvices from the United States are authorized by the 
Department of State under authority of the Arms Export Control Act. 
168. Although export licences are in general individual, the BIS also issues Special 
Comprehensive Licenses (SCLs) in place of individual  licences to exporters that routinely participate 
in export and/or re-export transactions involving multip le destinations.  Under an SCL, exports are 
approved for a four-year period.  In addition, the BIS maintains "catchall" controls for items not 
specifically listed on the CCL but shipped for a sen sitive end-use or end-user, such as a nuclear 
weapons programme.  In these cases, exporters must  apply for a licence for all items shipped, 
regardless of their classification. 
                                                     
 
163 USDOC, "Guiding Principles of the BIS".  Vi ewed at:  http://www.bis.doc.gov/about/bisguiding 
principles.htm. 
164 15 CFR, Chapter 7.  Viewed at:  http://w ww.bis.doc.gov/PoliciesAndRegulations/index.htm. 
165 The CCL comprises the following categories:  nuclear materials, facilities and equipment;  
miscellaneous items;  materials, chemicals, microorganisms and toxins;  materials processing;  electronics;  
computers;  telecommunications and information security;  sensors and lasers;  navigation and avionics;  marine;  propulsion systems, space vehi cles, and related equipment. WT/TPR/S/200/Rev.1 Trade Policy Review 
Page 56 
 
 
169. The BIS Office of Enforcement Analysis (OEA) screens all export licence applications to 
ensure export control enforcement information is considered before any final licence decision is 
made.  An interagency committee reviews licence app lications to assess diversion risks, to identify 
potential violations, and to determine the relia bility of those receiving controlled U.S.-origin 
commodities or technical data.  Export controls are regularly updated by the BIS to reflect 
geopolitical developments.  During the period unde r review, the BIS amended the EAR to rescind 
Iraq's and Libya's designations as states sponsors of terrorism. 
170. 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 BIS generally denies applications, although 
applications for certain products are reviewed on a case-by-case basis.  In May 2006, the BIS 
amended the EAR  clarifying the application of License Exception Baggage (BAG) for Cuba, revised 
in June 2004.166 
171. Controls are also placed on so called "deemed exports".  U.S. entities must apply for an 
export licence, under the "deemed export" rule, to tr ansfer controlled technologies to foreign nationals 
in the United States when transfer of this technology to the foreign national's home country would require an export licence.
167  In May 2006, the BIS announced the establishment of the Deemed 
Export Advisory Committee (DEAC), to review a nd provide recommendations to USDOC on deemed 
export policy.  The DEAC submitted a report to th e Secretary of Commerce in December 2007 with 
recommendations for an overall revamping of  the Deemed Export regulatory regime.168 
172. Modifications to the EAR may be introduced to comply with U.S. participation in multilateral 
arrangements.  Thus, during the period under review , the BIS revised certain CCL entries to bring 
them into conformity with changes agreed  under the Wassenaar Arrangement and the MTCR. 
173. The EAA allows the monitoring and rest riction of exports in short supply.169  The BIS is 
responsible for determining whether it is necessary to restrict the export of commodities in short 
supply, implementing the EAA policy.  Specific pro cedures apply for:  crude oil;  petroleum products 
other than crude oil produced or derived from th e Naval Petroleum Reserves (NPR) or that became 
available for export as a result of an exchange of any NPR-produced or derived commodities;  
unprocessed western red cedar;  and horses exported by sea for slaughter.  These products always require an export licence, regardless of their export destination. 
174. In addition, the BIS administers export controls under the Energy Policy and Conservation 
Act, the Mineral Leasing Act, the Naval Pe troleum Reserves Production Act, and the Outer 
Continental Shelf Lands Act.  The Department of Energy is responsible for authorizing the 
exportation of natural gas or liquefied natural gas (LNG) from the United States, which is authorized 
unless it is determined not to be in the public interest.  Exports to a nation with which the 
United States has a free-trade agreement are deemed to be consistent with the public interest, and 
applications are granted without modification or de lay.  The BIS makes available each year statistics 
on its licensing activities.
170  China was the destination for the largest number of approved licences 
                                                      
166 BIS online information.  Viewed at:  http://www.bis.doc.gov/. 
167 Technology is "released" for export when it is available to foreign nationals for visual inspection; 
when technology is exchanged orally; or when technology is made available by practice or application under the 
guidance of persons with knowledge of the technology.  See §734.2(b)(3) of the EAR, and BIS online 
information.  Viewed  at:  http://www.bis.d oc.gov/DeemedExports/De emedExportsFAQs.html. 
168 See the report and its recommenda tions.  Viewed at:  http://tac.bis.doc.gov/2007/deacreport.pdf. 
169 Regulations are contained in Part 754of the EARs.  BIS online information.  Viewed at:  
http://www.access.gpo.gov /bis/ear/pdf/754.pdf. 
170 Bureau of Industry and Security (2007). United States WT /TPR/S/200/Rev.1 
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in 2006;  29% were for "deemed exports" licences to  release controlled technology or source code to 
Chinese nationals working in U.S. companies and universities. 
175. The EAA requires a detailed description of the extent  of injury to U.S. industry and the extent 
of job displacement caused by U.S. exports of goods and technology to controlled countries, as well as a full analysis of the consequences of exports of turnkey plants and manufacturing facilities to 
controlled countries to produce goods for export to th e United States or compete with U.S. products in 
export markets.  In accordance with this, th e BIS assesses the impact on U.S. industry and 
employment of output from "controlled countries" resulti ng, in particular, from the use of U.S. exports 
of turnkey plants and manufacturing facilities.
171  U.S. exports to controlled countries totalled 
US$51 billion in 2005, or some 6% of total U.S. ex ports;  some 1.7% of U.S. exports to controlled 
destinations were subject to a BIS export licence requirement.172  China is the largest single export 
market within the group, with roughly 82%, followed by Russia with 8% of the total.  Capital goods 
items, including machinery and transportation equipm ent, represented about half of the total U.S. 
exports to controlled countries, especially China. 
176. The Nuclear Regulatory Commission (NRC) is responsible for licensing exports of nuclear 
materials, facilities, and equipment used for civil purposes, pursuant to the Atomic Energy Act of 
1954, as amended.  In July 2005, NRC published a final rule amending its licensing regulations 
(contained in 10 CFR Part 110) and establishing a ne w category of specific licensing requirements for 
certain radioactive materials deemed to be of c oncern for potential use in a radiological dispersion 
device. 
177. Trade sanctions may be applied by the Depart ment of Treasury.  Under the authority of, 
inter alia, the International Emergency Economics Powers  Act (IEEPA), the Trading with the Enemy 
Act, and the United Nations Participation Act, the Department of Treasury's Office of Foreign Assets 
Control (OFAC) administers economic and trade sancti ons, and may in this capacity restrict exports to 
countries, entities, and individuals that are subject to such sanctions.  WTO Members that are subject 
to economic sanctions administered by OFAC are Cuba and Myanmar.  The specific economic 
sanctions may differ depending upon the country or issue.173 
(iii) Export taxes, charges, and levies 
178. The U.S. Constitution's Export Clause bars  Congress from imposing any tax on exports.174 
179. Exported cargo is exempt from the harbour maintenance fee following a 1998 decision by the 
U.S. Supreme Court.175  The Court held that the harbour main tenance fee bore "the indicia of a tax", 
and that the value of the export cargo – the basis on which the fee is determined – did not "correlate 
reliably with the federal harbour services, facilities, and benefits used or usable by the exporter".  
                                                      
171 For these purpose, the EEA controlled countries are: Albania, Armenia, Azerbaijan, Belarus, 
Cambodia, China, Cuba, Georgia, Iraq, Kazakhstan, Kyrgyzstan, La os, Macao, Moldova, Mongolia, 
North Korea, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, and Viet Nam. 
172 BIS online information.  Viewed at:  http:// www.bis.doc.gov/News/2007/annReport06/BIS07_all. 
pdf. 
173 For additional information on OFAC's economic sanctions programme, see Department of the 
Treasury online information.  Viewed at:  http ://www.treas.gov/offices/enf orcement/ofac/programs/. 
174 The Export Clause states:  "No Tax or Duty shall be laid on Articles exported from any State".  
Article I, Section 9, The United States Constitution.  See United States v. International Business Machines 
Corp., 517 U. S. 843 (1996). 
175 United States v. United States Shoe Corp., 523 US 360 (1998), 31 March 1998.  Section 
11116(b)(1) of the Safe, Accountable, Flexible, Effici ent Transportation Equity Act (P.L. No. 109-59) amended 
the harbour maintenance tax to exempt exports. WT/TPR/S/200/Rev.1 Trade Policy Review 
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Thus, the Supreme Court determined that the harbour  maintenance fee, as applied to exports, violated 
the U.S. Constitution's Export Clause. 
(iv) Export assistance 
(a) Finance, insurance, and guarantees 
180. The United States provides export financing through its official export credit agency, the 
Export-Import Bank (Ex-Im Bank).176  Ex-Im Bank is mandated to provi de loans, loan guarantees, and 
insurance at rates and terms that  are fully competitive with those supported by governments in the 
principal countries whose exporters compete with U.S. exporters.177  Ex-Im Bank accepts risks that 
the private sector is unwilling or unable to take178;  however, Ex-Im Bank suppor t is contingent upon a 
finding of "reasonable assurance of repayment".  In December 2006, Ex-Im Bank activities were 
renewed until September 2011.179 
181. Ex-Im Bank provides export financing through va rious loans, loan guarantees, and insurance 
programmes, including:  short and medium-term e xport credit insurance;  working capital loan 
guarantees to exporters;  medium- and long-term loan  guarantees to financial institutions lending to 
foreign buyers;  and medium and long-term direct loans to overseas buyers.  The risk premiums charged under these programmes must be set  in accordance with OECD disciplines. 
182. All Ex-Im Bank programmes carry the full faith and credit of the U.S. Government.  This 
entails a cost for the Government, known as the "subsid y cost", equivalent to the net present value of 
expected cash inflows and outflows resulting from Ex-Im Bank's loans and other programmes.  Under 
the Federal Credit Reform Act, Ex-Im Bank is requi red to estimate the subsidy cost, and to seek an 
appropriation from Congress to cover estim ated net future losses (Table III.6). 
Table III.6 
Ex-Im Bank loan, guarantee, and insurance activities, 2000-06 
(US$ million) 
Fiscal year Financed export value Amou nts authorized Estimated net future losses 
2000 15,548 12,637 902 
2001 12,526 9,242 824 
2002 12,950 10,034 714 
2003 14,311 10,507 334 
2004 17,834 13,321 279 
2005 17,858 13,936 241 
2006 16,119 12,151 191 
 
Source : WTO document G/SCM/N/95/ USA, 31 October 2003, and Export-Impor t Bank of the United States (2006), 
 2006 Annual Report.  Viewed at:  http://www.exim.gov/a bout/reports/ar/ar2006/index.html. 
183. Goods and services must be shipped from th e United States and meet U.S. content 
requirements to be eligible for Ex-Im Bank fina ncing.  Specifically, for medium- and long-term 
financing, support is limited to the lesser of:  85% of the value of e ligible goods and services in a U.S. 
supply contract;  or 100% of the U.S. content in eligible goods and services in that contract.  Ex-Im 
Bank's U.S.-content requirements are not statutory re quirements;  rather they reflect "a concerted 
                                                      
176 The mission and mandates of Ex-Im Bank are codified in the Export-Import Bank Act of 1945, as 
amended. 
177 12 USC 635, subchapter I, b (1) (A). 
178 Export-Import Bank of the United States online information.  Viewed at:  http://www.exim.gov/ 
about/mission.cfm. 
179 Export-Import Bank Reauthorization Act of 2006. United States WT /TPR/S/200/Rev.1 
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attempt to balance the interests of labour and industry".180  Ocean-borne cargo financed by Ex-Im 
Bank direct loans or long-term guarantees 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.
181 
184. Ex-Im Bank authorized US$12.1 billion in support for export activities in fiscal year 2006.182  
That year, 67% of total support was provided as guar antees, 32% as export credit insurance, and less 
than 1% as loans.  Around 42% of total Ex-Im Bank exposure was in the aircraft sector, followed by 
oil and gas with 13%, and power projects with 8%.  The principal destinations for support were 
Mexico, India, Thailand, and Qatar. 
(b) Duty drawback, tax exemptions, and other assistance 
185. The United States maintains a duty drawback programme.  Customs duties and certain 
internal taxes and fees resulting from importation are refunded following the export of the imported 
product or of the article manufactured from the imported product.183  The statutory definition of 
duties, taxes, and fees subject to drawback incl udes customs duties, marking duties, and internal 
revenue taxes "which a ttach upon importation".184  It does not include the harbour maintenance fee. 
186. The Tax Increase Prevention and Reconciliation Act of 2005, signed by the President in May 
2006, repeals the "grandfathering" provisions that allowed U.S. firms to exclude certain "foreign 
trade" income from their taxable in come for transactions "pursuant to a binding contract" in effect on 
a specified date.  As reported in the Secretariat repo rt for the last Review of the United States, these 
grandfathering provisions, which the WTO found to be  prohibited subsidies in September 2005, were 
adopted as part of a set of measures to implement WT O rulings in the context of the dispute on the tax 
treatment of foreign sales corporations.185 
(c) Promotion and marketing assistance 
187. The Trade Promotion Coordinating Committee (TPCC) coordinates the export promotion 
activities of 19 federal agencies.186  TPCC members allocated around US$1.5 billion to promotion 
activities in fiscal year 2006.187  The Department of Agriculture, the Department of Commerce, and 
the State Department accounted for almost 85% of the total. 
188. The TPCC must submit a national export strategy  to Congress each year.  It also publishes the 
Export Programs Guide , which describes some 100 export promotion programmes maintained by its 
members.188  The International Trade Administration of the Department of Commerce manages 
Export.gov, an online access point to TPCC me mbers' information on export promotion. 
                                                      
180 Export-Import Bank of the United States (2007). 
181 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. 
182 Export-Import Bank of the United States (2006). 
183 19 USC 1313.  The provisions relating to drawback of certain excise taxes are contained in 26 USC 
5062. 
184 19 CFR 191.3. 
185 WTO document WT/DS108/RW2, 30 September 2005. 
186 15 USC 4727 et seq. 
187 This amount comprises the budgets of 11 TPCC members for "trade promotion" activities, as 
defined by each member;  no information was available on the budgets of the remaining 8 TPCC members.  
TPCC (2006). 
188 Viewed at:  http://trade.gov/med ia/Publications/pdf/epg_2006.pdf. WT/TPR/S/200/Rev.1 Trade Policy Review 
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189. U.S. States also maintain general programmes to promote exports.  The State International 
Development Organizations seeks to support the activ ities of trade promotion agencies in 39 States.189 
(v) Section 301 and related actions 
190. Sections 301-309 of the Trade Act of 1974 (commonly known as Section 301) provide the 
United States with the authority to enforce trade agreements, resolve trade disputes and open foreign 
markets to U.S. goods and services.  Section 301 is implemented by the USTR to investigate foreign 
trade practices that are considered  to affect U.S. exports of goods and services or impair U.S. rights 
under international trade agreements.  Under S ection 301, the United States may impose trade 
sanctions on foreign countries that either violate such  agreements or maintain such practices.  When 
an investigation involves an alleged violation of a trade agreement, such as the WTO, the USTR must 
follow the consultation and dispute settlement proce dures set out in that agreement.  No new cases 
have been initiated under Section 301 since th e previous Review of the United States. 
191. The “Special 301” provisions of the Trade Act of 1974 require USTR to identify foreign 
countries that deny adequate and effective protection of intellectual property rights. 
(4) OTHER MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Legal framework for business 
192. Forms of legal business structure in the Un ited States include the corporation, sole 
proprietorship, partnership, and limited liability company (LLC).  Joint ventures, branch offices, and 
subsidiaries are variations of these basic business stru ctures.  The most common forms of business are 
sole proprietorships, partnerships, and corpora tions.  LLCs are a relatively new business structure 
allowed by state statutes;  participants may include  individuals, corporations, other LLCs and foreign 
entities, and there is no maximum number of members. 
193. Foreign firms may carry out activities in the Un ited States through a branch or incorporate as 
a subsidiary.  Branch offices or subsidiaries of fore ign corporations must comply with any relevant 
state registration and licensing requirements. 
194. Firms in the United States must comply with th e applicable state registration requirements;  
there is no federal incorporation.  Incorporation does not need to be made in the State where the 
business operates.  Laws for incorporation of a business vary from state to state.  A foreign 
corporation that qualifies to do business in another State is subject to taxes and annual report fees 
from both the State of incorporation and the qualifying  State.  The incorporation decision typically is 
between the State of operations a nd Delaware, which does not have an  income tax for corporations 
that are not actually conducting a business in Delawa re.  In the latter case, companies are established 
as limited liability companies and pay a flat  annual fee to the state of Delaware. 
195. The U.S. Government has undertaken a number of electronic government (E-Gov) initiatives 
to help make federal government information a nd processes more efficient and transparent for 
businesses.190  The White House Office of Manageme nt and Budget has developed a total of 
25 E-Gov initiatives and nine lines of business to  improve how the Federal government provides 
                                                      
189 SIDO online information.  Viewed at:  http://www.sidoamerica.org/index.htm. 
190 E-Government online Information.  Viewed a t: http://www.whitehouse.gov/omb/egov/index.html. United States WT /TPR/S/200/Rev.1 
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services.191  In 2006, the United States ranked third overall out of the 155 economies analysed in the 
World Bank's ease of doing business index.192 
196. Businesses are subject to taxation by federal and state governments.  The tax mix and burden 
varies across states.  Corporations are classified into C corporations and S corporations for tax 
purposes;  the form of taxation between the two differs greatly.  All corporations are, in principle, 
C corporations, which file corporate tax returns and are taxable on their worldwide income without 
regard to their shareholders.  When profits after ta xes are distributed to shareholders, they are subject 
to income tax on the dividends received.  For this type of corpora tion, federal corporate income tax 
varies between 15% and 35% depending on the amount of taxable income. 
197. A corporation can be an S corporation only if it has no more than 100 shareholders, and all of 
them are U.S. citizens or residents and agree to  the S corporation structure.  Generally, an 
S corporation is exempt from federal income tax, although tax is imposed at the shareholder level on 
the S corporation's income.  S corporations are s ubject to tax on certain capital gains and passive 
income. 
198. The United States has tax treaties covering 66 countries.193  Under these treaties, residents of 
foreign countries are taxed at a reduced rate, or ar e exempt from U.S. income taxes on certain items of 
income they receive from sources within the United States.  Rates and exemptions vary among U.S. 
tax treaties.  Generally, U.S. income tax treaties do not restrict the imposition of state level taxes. 
(ii) Other government support 
(a) Overall support 
199. The United States submitted a full notification under Article XVI:1 of the GATT 1994 and 
Article 25 of the Agreement on Subsidies and Countervailing Measures in November 2007.194  The 
notification covers fiscal years 2003 and 2004, and lists around 430 programmes providing subsidies;  
42 were at the federal level and the rest  at the sub-federal level (Table III.7). 
200. Support to businesses may be granted by the federal Government, and by sub-federal 
governments.  Instruments of support include direct  payments, tax benefits, and credit programmes.  
Information on specific federal programmes providing assistance to business is available in the 
Catalog of Federal Domestic Assistance.195  For sub-federal programmes, the U.S. Chamber of 
Commerce has published a state-by-state listing of financial and non-fi nancial business incentives.196 
201. Average annual direct payments by the federal Government for U.S. resident businesses were 
US$47.4 billion between 2002 and 20 06 (the latest year for which data are available).197  Housing and 
agriculture were the main recipien ts, accounting for around 90% of the total.  Direct payments peaked 
                                                      
191 Examples include Business.gov, Regulations.gov, and Forms.gov. 
192 World Bank online information.  Viewed at:  http://www.doingbusiness.org/EconomyRankings/. 
193 The list of countries may be found in Department of the Treasury, Internal Revenue Service, U.S. 
Tax Treaties Publication 901, Rev. June 2007.  Vi ewed at:  http://www.irs.g ov/pub/irs-pdf/p901.pdf. 
194 WTO document G/SCM/N/123/USA, 15 November 2007. 
195 The Catalog of Federal Domestic Assistance on line information. Viewed at:  http://www.cfda.gov. 
196 U.S. Chamber of Commerce online informati on.  Viewed at:  http://www.uschamber.com/ 
research/stateguide.htm. 
197 These data correspond to the "subsidies" category in the U.S. national income and product accounts.  
The data are not necessarily actionable subsidies unde r WTO disciplines.  BEA online information, "National 
Economic Accounts", Table 3.13.  Viewed at:  http://www.bea.gov/national/nipaweb/SelectTable.asp? 
Selected=N. WT/TPR/S/200/Rev.1 Trade Policy Review 
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at US$58.2 billion in 2005, and declined by 15% in  2006.  The 2008 federa l budget estimates that 
direct payments for fiscal years 2007 and 20 08 will remain constant, at about US$47 billion.198  Direct 
payments by sub-federal governments av eraged US$440 million between 2002 and 2006. 
Table III.7 
Federal programmes notified to the WTO, fiscal years 2003 and 2004a 
Sector Number of 
programmes Main forms of support Total 
amount 2003 
(US$ million) Total 
amount 2004 
(US$ million) 
Energy development, storage and transportation 5 Grants and cooperative agreements 1,626.9 1,427.4 
Other energy and fuels 8 Tax concessions 4,110 4,900 
Fisheries 4 Grants (3 programmes) and loans 
(1 programme) 125.6b 78b 
Lumber and timber 3 Tax concessions 450 420 
Medical 2 Tax concessions and sale of isotope 
products 173.5 195 
Metals, minerals, and 
extraction 5 Tax concessions (4 programmes) and 
guarantees (1 programme) 270c 245c 
Textiles 1 Grants 2.9 2.8 
Timepieces and jewellery 1 Duty-f ree entry for watches and watch 
movements from U.S. insular possessions;  direct payments to 
producers of watches and jewellery in 
these areas 4.3 4.2 
Others 4d Tax concessions (3 programmes) and 
grants (1 programme) 2,230 2,179.2 
 
a Excludes subsidy programmes to agriculture, discussed in Chapter IV(2). b Excludes loans. 
c Excludes guarantees. 
d Excludes assistance provided through Ex-I m Bank, discussed in section (3)(iv). 
 
Source: WTO document G/SCM/N/123/ USA, 15 November 2007. 
202. The largest tax benefits for corporations in fiscal year 2008, as measured by the information 
on "tax expenditures" contained in the federal Budget,  relate to accelerated depreciation of machinery 
and equipment, estimated at US$44.8 billion, follo wed by deferral of income from U.S. controlled 
foreign corporations (US$12.8 billion).199  Deductions for U.S. production activities were 
US$11.4 billion.  These deductions result from the American Jobs Creation Act of 2004, which 
introduced a phased-in, 9% tax deduction for certain pr oducers.  The deduction is a percentage of the 
lesser of "qualified production activities income" or ta xable income, and is limited by wages.  Eligible 
companies can claim a deduction of 3% in 2005-06, 6%  in 2007-09, and 9% thereafter.  In fiscal year 
2008, tax benefits relating to general science, sp ace, and technology were worth US$10.1 billion;  
those relating to energy amounted to US$4 billion. 
203. States and local governments also offer a variety of tax and non-tax incentives.  Annual state 
and local expenditures on business incentives have been estimated at US$50 billion.200  Som e sub-
federal incentives target particular business ventures.   For example, in 2007-08 the State of New York 
will finance US$650 million of the cost of a comput er chip facility to be built in the Albany area.201  
                                                      
198 OMB (2007), Table 14-1. 
199 The Congressional Budget Act of 1974 requires that a list be included in the Budget with the 
"revenue losses attributable to provisions of the federal tax laws which allow a special  exclusion, exemption, or 
deduction from gross income or which provide a special credit, a preferential rate of  tax, or a deferral of 
liability".  These revenue losses are known as  tax expenditures.  OMB (2007), Table 19.2. 
200 Peters and Fisher (2004). 
201 State of New York (2006). United States WT /TPR/S/200/Rev.1 
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The State of Alabama and sever al local governments announced tax and non-tax incentives totalling 
US$811 million in 2007 in connection with the construction of a steel plant near Mobile.202  The State 
of Georgia and several local governments agreed to provide US$410 million in incentives, including 
US$220 million in tax credits, exemptions, and abatemen ts, to build an automobile assembly plant in 
Troup County.203 
204. In September 2004, the Supreme Court announced that it had agreed to review a federal 
appeals court ruling that certain Ohio tax credits  granted to business as an incentive to expand 
operations in the state violated the Commerce Clause of the U.S. Constitution.204  The Federal 
Appeals Court reached its conclusion on the grounds th at the economic effect of the Ohio tax credit is 
to encourage further investment in-state at the e xpense of development in other states and that the 
result is to hinder free trade among the states.  Th e Supreme Court concluded in May 2006 that the 
Ohio taxpayers who had objected to the credits lacked standing in federal court.205 
(b) Foreign-trade zones 
205. The Foreign-trade Zones Act of 1934, as amende d, authorizes the establishment of foreign-
trade zones in the United States.206  Foreign and domestic goods may be sent to a foreign-trade zone 
for any operation not prohibited by law, including st orage, exhibition, and manufacturing.  Foreign 
goods admitted into a foreign-trade zone are exempt  from customs duties and certain excise taxes, but 
not from the merchandise processing fee.  Customs duties (and all other applicable taxes and fees) are paid when goods are sent to the U.S. customs terri tory.  In this case, the importer can pay customs 
duties on either the finished good or its foreign inputs.  Manufacturers of goods that are subject to "inverted tariffs" (lower tariff rates on the finished  product than on its foreign input) might benefit 
from establishing in a foreign-trade zone. 
206. The U.S. authorities have indicated that there are no income tax advantages related to foreign-
trade zone operations, and that zones are subject to all other federal, state, and local regulations and 
taxes.  Local property taxes on inventory are the onl y exception, since they are not applied to foreign 
or export-bound domestic merchandi se held in a foreign-trade zone. 
207. The value of domestic and imported goods tr ansferred to foreign-trade zones was 
US$491 billion in fiscal year 2006
207, almost twice as much as in fiscal year 2003.  Around 60% of 
the total consisted of domestic pr oducts.  Imports are mostly compo sed of crude and petroleum oils, 
motor vehicles and parts, electronic products, pharm aceuticals, computers and office equipment, and 
textiles and apparel.  Exports from foreign-trade zones (to destinations outside the United States) 
amounted to some US$30 billion.  There are 163 active foreign-trade zones. 
                                                      
202 County of Mobile, Alabama online information.   Viewed at:  http://www.mobilecounty.org. 
203 Office of the Governor of the State of Georgi a online information, "Fact Sheet:  Kia to Build 
Assembly Plant, Invest $1.2 Billion in Georgia", 13  March 2006.  Viewed at:  http://www.gov.state.ga. 
us/press/2006/031306_Kia_fact_sheet.pdf. 
204 Charlotte Cuno v. DaimlerChrysler, 383 F.3d 379, amended by 386 F.3d 738 (6th Cir. 2004).  See 
also WTO (2006). 
205 Daimler-Chrysler v. Charlotte Cuno, 126 S. Ct. 1854. 
206 19 USC 81.  The Trade Zones Board's regulations are contained in 15 CFR 400.  The Customs and 
Border Protection regulations regarding foreign-trade zones are contained in 19 CFR 146. 
207 Foreign-trade Zones Board (2007). WT/TPR/S/200/Rev.1 Trade Policy Review 
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(iii) Competition policy 
208. The United States' position on competition policy is that, in order to promote efficiency and 
enhance consumer welfare, antitrust la ws protect competition not competitors.208  It considers that, to 
deter or eliminate anticompetitive restraints that impede free market competition properly, antitrust 
law must reflect an economically sound understanding of how competition operates.209 
209. In a 2005 report on competition policy in the United States, the OECD notes that the 
United States has one of the least restrictive regulatory systems in the OECD.210  The report links the 
U.S. economy's good performance for more than a decade to regulatory reform efforts in a broad range of industries, but notes that competition policy could be improved by measures such as 
terminating the antitrust immun ity of government enterprises and eliminating exemptions. 
210. Federal U.S. antitrust legislation covers all sectors of the economy and the interstate and 
foreign commerce of the United States, subject to some exemptions and exceptions, and provides for 
enforcement actions by aggrieved private parti es as well as by the Antitrust Division of the 
Department of Justice (DOJ, criminal and civ il enforcement), and the Federal Trade Commission 
(FTC) (civil enforcement).  The Sherman Antitrust Act, the Clayton Act, and the Federal Trade 
Commission Act are the main U.S. Federal antitrust laws .  There is also antitrust legislation in nearly 
all states. 
211. The Sherman Antitrust Act (15 U.S.C. sections 1- 7) prohibits all contracts, combinations, and 
conspiracies that restrain trade among the states or with foreign countries, including price-fixing agreements, bid rigging, and agreem ents between competitors to allocate customers.  The Sherman 
Act also applies to "vertical" agreements between sellers and buyers.  Under the case law pursuant to 
Section One of the Sherman Act, horizontal conduc t such as price fixing, bid rigging, and market 
allocation, is treated as illegal per se , while other conduct is evalua ted under a "rule of reason" 
standard, pursuant to which a court weighs the an ti-competitive effects against any efficiencies 
flowing from the conduct.  The Sherman Act does no t apply to conduct involving trade or commerce, 
other than imports, with foreign nations unless the conduct has a direct, substantial, and reasonably 
foreseeable effect on domestic or import commerce or on exports. 
212. Violations of the Sherman Act may be prosecute d as civil or criminal offences by the DOJ, or 
challenged by the FTC as civil proceedings under th e FTC Act.  Cartels are prosecuted criminally.  
Criminal offences are punishable by fines and impris onment;  individuals may be subject to fines of 
up to US$1 million and up to ten years in federal pr ison for each offence;  corporations can be fined 
up to US$100 million per offence.
211  Fines may, however, be raised to twice the gain to the 
conspirators or twice the loss to the consumer.  In a civil proceeding, the DOJ may obtain injunctive 
relief against prohibited practices.  Plaintiffs may ob tain treble damage relief for violations of the 
Sherman Act. 
213. Section Seven of the Clayton Act outlaws merg ers and acquisitions that may be likely to 
lessen competition substantially.  The Clayton Ac t also prohibits the lease or sale of goods or 
commodities conditioned upon the purchaser's agreemen t not to use the products of a competitor, if 
this leads to lessening competition.  Enforcement of  the Clayton Act is vested generally in the FTC 
and the Attorney General, which may seek court orde rs to prevent a merger.  The FTC may also issue 
                                                      
208 USDOJ (2001). 
209 Antitrust Modernization Commission (2007). 
210 OECD (2005). 
211 The Antitrust Criminal Penalty Enhancement and Reform Act of 2004 (ACPERA, P.L. No. 108-
237) increased the Sherman Act fine s and penalties.  See WTO (2006). United States WT /TPR/S/200/Rev.1 
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cease and desist orders against mergers in admi nistrative proceedings.  The Act allows for the 
recovery of threefold the damage inflicted to the aggr ieved party plus the cost of the suit (with certain 
exceptions).  Foreign individuals or companies are granted national treatment with respect to private 
lawsuits and may sue for the same amount;  fore ign states may recover an amount equal to the 
damage inflicted plus the cost of the suit. 
214. The Federal Trade Commission Act grants the FTC the authority to define and prohibit unfair 
methods of competition or deceptive acts or practices in  commerce;  generally, this refers to violations 
of the Sherman or Clayton Acts or of another an titrust law.  The Wilson Tariff Act (15 U.S.C. §§ 8-
11) bans private agreements to restrain lawful im ports or free competition in lawful trade, or to 
increase the market price in the United States of any article imported or intended to be imported. 
215. The Hart-Scott-Rodino (HSR) Antitrust Impr ovements Act of 1976 (Section 7A of the 
Clayton Act) requires that parties to certain merger s or acquisitions make pre-merger notifications to 
the FTC and the DOJ.  Since July 2006, pre-merger notifications may be filed electronically.212  
Notification requirements are based on size of transaction and value of sales and assets.  Mergers or acquisitions of foreign assets or voting securities mu st also be reported if their nexus with the 
United States reaches or exceeds certain thres holds;  these thresholds are revised annually.
213  I n  
FY2006, 1,768 transactions were re ported under the HSR Act, a 4% increase with respect to the 
number of transactions (1,695) reported in FY2005.214 
216. A number of statutes provide for limited immun ity from antitrust laws in specified cases.  
Immunity applies, for example, to specified aspects  of agriculture, fishing, insurance, and export 
activities.215  The Webb-Pomerene Act grants limited imm unity from antitrust laws to associations of 
competing businesses solely for the purpose of enga ging in collective exports of goods, provided this 
does not result in conduct that has anti-competitive e ffects in the United States or injure domestic 
competitors.  In 2007, seven associations we re registered with the FTC under the Act.216  The Export 
Trading Company Act of 1982, 15 U.S.C. 4011-4021, created a procedure by which, under certain circumstances, persons engaged in export trade may obtain an export trade certificate of review which 
provides, inter alia , for limited antitrust immunity.  Internati onal ocean carriers are allowed to engage 
in conferences (price-fixing arrangements) by the Shipping Act of 1984 if they are not contested by the Federal Maritime Commission. 
217. In 2006 and 2007, competition policy enforcement continued to focus on the activities of 
international cartels.  Other areas addressed by the antitrust agencies include anticompetitive mergers 
and non-merger enforcement in key sectors such  as health and energy.  For FY2006, the DOJ 
obtained criminal fines totalling US$473.4 millio n, the second largest ever, representing a 40% 
increase over FY2005 (US$338 million), and filed 33 criminal cases, many involving multiple 
                                                     
 
212 Federal Trade Commission (2007a). 
213 In January 2007, they were at US$59.8 million (size-of-transaction or U.S. nexus), 
US$239.2 million (transactions reportable without regard to size of person), US$119.6 million and 
US$12 million (size of person test). 
214 Federal Trade Commission (2007b). 
215 Under the Capper-Volstead Agricultural Produc ers’ Associations Act,  and the Agricultural 
Marketing Agreement Act of 1937 (agriculture), the Fishermen’s Collective Marketing Act (fisheries);  the 
McCarran-Ferguson Insurance Regulation Act (insurance), and the Export Trading Company Act of 1982 and 
the Webb-Pomerene Export Trade Act (exports). 
216 American Cotton Exporters Associ ation;  American Natural Soda Ash Corp.;  American-European 
Soda Ash Shipping Association, Inc.;  California Dried Fruit Export Association;  Overseas Distribution 
Solutions, L.L.C.;  Paperboard Export Association of the United States;  and Phosphate Chemicals Export Association, Inc. WT/TPR/S/200/Rev.1 Trade Policy Review 
Page 66 
 
 
defendants.  The DOJ continues to advocate the dete rrent effect of prison sentences and the prospect 
of extradition, as opposed to a "fines only" approach.217 
218. The outcome of antitrust cases that reach the U.S. Supreme Court continues to have a 
considerable impact on competition policy implem entation.  During the period under review, the 
Supreme Court decided a total of seven antitrust cases.218  In each case, the Court reached the decision 
requested by the United States. 
219. The United States has antitrust cooperation agreem ents with Australia, Brazil, Canada, the 
EC, Germany, Israel, Japan, and Mexico.219  These agreements do not override provisions of domestic 
law that protect the confidentiality of inv estigative information, nor does the OECD's 
Recommendation concerning Co-operation between Member countries on Anticompetitive Practices 
affecting International Trade, to wh ich the U.S. antitrust agencies adhere. 
220. The International Antitrust Enforcement Assi stance Act of 1994 (15 U.S.C. section 6211) 
authorizes the Government of the United States or th e DOJ and the FTC to enter into bilateral antitrust 
mutual assistance agreements with foreign govern ments that authorize th e agencies to share 
confidential information obtained in the agencies' in vestigations and to gather evidence on behalf of 
foreign antitrust authorities.220  The United States has entered into  only one such agreement, with 
Australia.  The United States also has a number of mutual legal assistance treaties, which permit the 
exchange of information in criminal matters and are particularly important for international cartel 
investigations.  U.S. antitrust agencies also coopera te informally with foreign agencies, e.g. through 
the exchange of public information and of confid ential materials submitted by parties that have 
granted waivers of confidentiality rights. 
221. The Antitrust Modernization Commission, created  in 2002 to assess the need to reform 
antitrust laws, presented its report to Congress in Ap ril 2007.  The report concluded that there was no 
need to revise the antitrust laws nor were statutory changes recommended with respect to merger law.  
The report noted the importance of ensuring that me rger enforcement policy be sensitive to the need 
of companies to innovate and obtain the scope a nd scale needed to compete effectively in domestic 
and global markets, while continuing to protect the interests of U.S. consumers.  While noting that 
market power should not be presumed from a patent, copyright, or trade mark in antitrust cases, the report recommended avoiding abuse of the patent system by, in particular, ensuring the quality of patents.
221  The report also recommended simplifying a nd unifying merger clearing procedures and 
harmonizing the work of state and federal antitrust ag encies, particularly with respect to mergers.  
Other recommendations included pursuing more bilateral and multilatera l antitrust cooperation 
agreements to promote global trade, investment, and consumer welfare. 
                                                      
217 USDOJ (2007). 
218 Texaco Inc. v. Dagher;  Illinois Tool Works Inc. v. Independent Ink, Inc.;  Volvo Trucks North 
America, Inc. v. Reeder-Simco GMC, Inc.;  Weyerhaeus er Co. v. Ross Simmons Hardwood Lumber Co., Inc.;  
Bell Atlantic Corp. v. Twombly;  Leegin Creative Leat her Products v. PSKS;  and Credit Suisse First Boston 
Ltd. v. Billing. 
219 USDOJ online information.  Viewed at:  http://www.usdoj.gov/atr/public/international/int_ 
arrangements.htm. 
220 Changes to the scope of and international cooperation for antitrust enforcement are contained in the 
U.S. Safe Web Act of 2006 (Public Law No. 109-455). 
221 Antitrust Modernization Commission (2007). United States WT /TPR/S/200/Rev.1 
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(iv) Government procurement 
(a) Introduction 
222. The United States is a party to the WTO Agreement on Government Procurement (GPA).  
GPA thresholds in SDRs have remained unchang ed since the Agreement entered into effect on 
1 January 1996, but thresholds in U.S. dollar are revised every two years by the USTR. 
223. Annex I of Appendix I of the Agreement contai ns the list of central government agencies 
covered by the GPA;  Annexes 2 and 3 list the 37  states, the Federal and the sub-federal bodies 
applying the GPA.  In 2004, the United States circulated proposed modifications to Appendix I of the Agreement, to reflect changes in the admini strative structure of the Federal Government
222;  these 
changes were incorporated into Annex 1 and b ecame effective on 1 October 2004.  In 2006, the 
United States proposed the withdrawal of the Penns ylvania Avenue Development Corporation, which 
had been dissolved;  this modification was incor porated into Annex I and became effective on 
26 March 2006.223 
224. In the GPA Negotiations on Extension of C overage and Elimination of Discriminatory 
Measures and Practices, the United States submitte d a communication in December 2004 containing 
generic and specific requests.224  In December 2005, the United States submitted an initial offer in the 
context of the negotiations.  A revised  offer was issued in October 2006. 
225. In January 2002, the United States submitted to the WTO the statistical information required 
under Article XIX:5 of the GPA for the years 1996-99.225  The submission for 1999 reported 56,598 
contracts with a total value of more than US$205 billion.226  No new submission has been made since 
then. 
226. Statistics on the procurement activities of the main agencies at the federal level are contained 
in the United States' Federal Procurement Data Syst em (FPDS), maintained by the Office of Federal 
Procurement Policy (OFPP), responsible for coll ecting and disseminating procurement data.  The 
OFPP also works with the General Services Admi nistration (GSA) and other agencies to collect 
information on contractor performance, and dissemi nates information on contracting opportunities 
through a single point-of-entry, known as Federal Business Opportunities (FedBizOpps).  The FPDS 
publishes an annual report of the procurement activ ities of some 50 federal agencies, and produces 
statistics on federal aw ards by department.227  In FY2005, the last year available as at early 2008, the 
total procurement of these agencies was 8.37 million transactions valued at US$424.2 billion (equivalent to 3.4% of GDP);  of this total, 70. 3% was Department of Defe nse (DOD) procurement.  
Among civilian agencies, the Department of Energy accounted for the highest value of procurement 
with 5.4% of the total.  Some 77% of th e transactions in FY2005 were under US$25,000 and 90% 
were under US$100,000.  Around 47.3% of procuremen t corresponded to construction and services;  
39.5% to supplies and equipment;  and 12.7% to resear ch and development.  In value terms, 31.7% of 
contracts reported were awarded in FY2005 to set- aside preferential programmes, mainly to small 
businesses (21.1% of the total) and small disadva ntaged businesses (5.7%).  Procurement by U.S. 
                                                     
 
222 WTO document GPA/MOD/USA/1, 15 January 2004.  The changes mainly reflected the creation of 
the Department of Homeland Security (DHS), which was added to the list. 
223 WTO document GPA/89, 11 December 2006. 
224 WTO document GPA/O/US A/1, 23 December 2004. 
225 WTO documents GPA/21/Add.3, GPA/22/Add.4, GPA/29/Add.4, GPA/40/Add.4, 30 January 2002. 
226 WTO document GPA/40/Add.4, 30 January 2002. 
227 FPDS (2005) and (2004). WT/TPR/S/200/Rev.1 Trade Policy Review 
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agencies performed outside the United States totalle d US$34.8 billion in FY2005, of which 71.2% in 
Asia and 19.3% in Europe.228 
227. The National Governors Association and Nati onal Association of State Budget Officers 
produce estimates of procurement based on stat e spending from revenues derived from general 
sources not earmarked for specific items;  this spending was estimated at US$585 billion for FY2006 
and US$616 billion for FY2007.229 
228. The value of U.S. government consumpti on expenditure and gross investment was 
US$2.52 trillion in 2006, or some 19.1% of GDP, up from 18.5% in 2004.  Of this, US$932.5 billion 
corresponded to federal spending and US$1.59 trillion to state spending.  At the federal level, defence 
consumption expenditure on goods and services to talled US$624.3 billion in 2006;  non-defence 
expenditure totalled US$308.2 billion.230 
(b) Institutional and legal framework 
229. At the federal level, procurement is decentr alized, through the various executive agencies' 
procurement systems.  The Office of Manage ment and Budget (OMB) oversees and coordinates 
federal procurement, and review s proposed regulations for compliance with policy guidance, through 
the Office of Federal Procurement Policy (OFPP).231  The OFPP provides overall direction for 
government-wide procurement policies.  The OFPP Administrator issues policy letters stating 
principles that must be followed by the agencies;  such letters need to be implemented through the 
Federal Acquisition Regulation. 
230. The United States notified to the WTO its basic pr ocurement legislation a nd legislation giving 
effect to the GPA in 1998.232  The GPA is implemented in U.S. law at the federal level primarily 
through the Trade Agreements Act (TAA) of 1979, as amended, which provides authority for the 
President to waive discriminatory purchasing require ments (e.g. the Buy American Act), designate 
eligible countries, and bar procur ement from non-designated countries.  At the state level, the GPA is 
implemented through laws and re gulations in each of the 37 states participating in the GPA. 
231. Legislation on procurement is contained in va rious laws, in particular the Federal Property 
and Administrative Services Act of 1949 (FPASA), the Competition in Contracting Act of 1984 
(CICA), the Federal Acquisition Streamlining Act of 1994 (FASA), the Clinger-Cohen Act of 1996, 
the Small Business Act of 1985, and the Services Acquisition Reform Act. 
232. The Federal Acquisition Regulation (FAR) regulates federal government agencies' 
acquisitions of supplies and services with appropria ted funds.  The FAR system allows individual 
executive agencies and their sub-agencies to devel op specific internal guidelines.  The FAR is updated 
regularly through Federal Acquisition Circulars (FACs)  to reflect changes in procurement procedures, 
the effect of trade agreements, and other cha nges.  Proposed regulations are published in the Federal  
Register and are open to comments, which are considered when drafting the final rules. 
233. The procurement process is guide d in detail by the FAR.  Federal government agencies are 
required to publish notices of proposed procur ement opportunities in excess of US$25,000 in 
FedBizOpps (with some exceptions).  Notices of proposed procurement must be published at least 
                                                      
228 FPDS (2005). 
229 NASBO (2007). 
230 BEA (2007e). 
231 OFPP online information.  Viewed at:  http://www.whitehouse.gov/omb/procurement/index.html. 
232 WTO document GPA/23, 15 July 1998. United States WT /TPR/S/200/Rev.1 
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15 days before a request for bids;  prospective suppliers  have at least 30 days from that date to submit 
bids.  For procurement of commercial items and for procurement opportunities valued at or below 
US$100,000, shorter time-frames may be established and simplified procedures applied.  When 
procurement falls within the scope of the GPA or a free-trade agreement, a period of not less than 40 days must be granted, unless an annual forecast  has been published, in which case this may be 
reduced to 10 days.  State governments covered by the GPA are required to publish invitations to 
tender in their own publications and must conform to GPA deadlines.  In addition to notices of proposed procurement, some states use notices of planned procurement. 
234. Under the CICA, procurement must take place through full and open competitive procedures.  
Executive agencies must solicit sealed bids if time pe rmits, and awards must be made on the basis of 
price (with some exceptions).  The CICA provides for simplified procedures for small purchases.  The 
FASA established a new simplified acquisition thr eshold of US$100,000, a nd allowed purchases not 
exceeding US$3,000 from Buy American Act requireme nts and allowed them to be made without 
obtaining competitive quotations if the contracti ng officer determines that the purchase price is 
reasonable. 
235. The Clinger Cohen Act of 1996, P. L. No. 104-106 establishes the use of a two-phase 
selection procedure for entering into a contract fo r the design and construction of a public building 
facility;  under this procedure the contracting offi cer may pre-select the most highly qualified offers 
(maximum five) based on the use of solicitation eval uation factors.  The Act also authorizes the use of 
simplified acquisition procedures for the acquisition of commercial items valued at US$5.5 million or 
less, under certain circumstances. 
236. Federal regulations allow for the preparation of non-exhaustive lists of suppliers by a federal 
government agency, provided the agency justifies in writing the need for such a list.  The GSA 
maintains lists of approved supp liers and their products on Federal Supply Schedules, which include 
both national and foreign suppliers from parties to the GPA or other international agreements.  The 
authorities have noted that the Federal Supply Schedul es are akin to a catalogue, rather than a list of 
qualified suppliers as used in selective tendering. 
237. The list of Federal Supply Schedule Contractors is available to the public.  Interested 
suppliers can apply for inclusion on the schedules at any time.  Federal agencies, as well as states and 
other sub-federal bodies may maintain lists of qualified suppliers for th eir procurement:  several of the 
37 states covered by the GPA use such lists when tende ring for certain types of procurement.  Lists of 
qualified or registered suppliers are made public. 
238. Contractors are required to register online in the Central Contracting Registration (CCR), the 
primary vendor database for the U.S. Federal Government.
233  In October 2007, some 454,253 
government vendors were registered, of which over 10,000 foreign firms.  Foreign companies must 
first obtain a North Atlantic Treaty Organization Commercial and Government Entity (NCAGE) code. 
239. Procurement at the sub-federal level is govern ed by state or other sub-federal government 
laws and procurement regulations.  In some cases, where procurement is funded with federal money, 
states must comply with certain federal statutor y requirements.  Local governments have their own 
procurement agencies, as well as their own procurement policies. 
                                                      
233 FAR 4.1102, 1 October 2003.  CCR online information.  Viewed at:  http://www.ccr.gov. WT/TPR/S/200/Rev.1 Trade Policy Review 
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(c) Access conditions 
240. U.S. policy with respect to market acce ss for government procurement is based on 
reciprocity.  A number of domestic purchasing requ irements are maintained for procurement not 
covered by the GPA, the WTO plurilateral Agreement on Trade in Civil Aircraft, or preferential trade 
agreements.  Revised GPA and FTA thresholds for 2008-09 are contained in 73 Federal Register 
4115, 25 January 2008.  For the GPA, they were set at US$194,000 for goods and services included in 
Annex 1;  US$528,000 for Annex 2;  US$595,000 fo r Annex 3;  and US$7,443,000 for construction 
services.234  The Trade Agreements Act of 1979 genera lly prohibits federal agencies from purchasing 
goods and services from countries that are not a party to the GPA or other trade agreements that cover government procurement (i.e. non-designated countries).  The authorities indicated that this is aimed 
at encouraging other Members to join the GPA.  
241. The Buy American Act of 1933 (BAA) limits  the purchase of supplies and construction 
materials by government agencies to those defined as "domestic end-products", in accordance with a 
two-part test that must establish that the article is  manufactured in the United States, and that the cost 
of domestic components exceeds 50% of the cost of all the components.  The BAA does not apply to services.  The Trade Agreements Act of 1979 authori zes the President to grant waivers from the Buy 
American Act and other procurement restrictions;  the President delegated this authority to the USTR.   
242. Exceptions to the BAA can be granted if it is determined that domestic preference is 
inconsistent with the public interest, in case of U. S. non-availability of a supply or material, or for 
reasonableness of cost.  The latter applies when the cost of the foreign (non-eligible) product, 
inclusive of import duty and a 6% added margin, is be low the lowest domestic o ffer when this offer is 
from a large business concern;  in th is case the cost of the domestic offer is considered unreasonable.  
If the lowest domestic offer is from a small business concern, the added margin considered is 12%.  
For purchases by the Department of Defense the pri ce difference must be of at least 50%.  In the 
context of this review, the authorities noted that  current data on the use of BAA exceptions is 
incomplete, but that the collection system is bein g corrected, and that better data is expected for 
FY2008. 
243. The Trade Agreements Act of 1979 waives the app lication of the BAA to the end-products of 
designated countries, which include the parties to  the GPA, bilateral agreements that cover 
government procurement, CBERA beneficiaries, and least developed countries.  For CBERA and 
least developed countries, the thresholds are tho se of the GPA;  for NAFTA countries, Australia, 
Bahrain, Chile, the Dominican Republic, El Sa lvador, Guatemala, Honduras, Israel, Morocco, 
Nicaragua, and Singapore, the thresholds are those s tipulated in the relevant agreement.  Eligible 
products are granted non-discriminatory treatment. 
244. The non-statutory Balance of Payments Program, applies provisions similar to those of the 
BAA to Department of Defense
 contracts over US$100,000 for end-products for use outside the 
United States.235  The Independent Agencies Appropriations  Act of 2006 (P.L. No. 109-115) requires 
                                                      
234 Notified to the WTO in WTO document GPA/W/29 9/Add.1, 21 December 2007.  A US$250,000 
threshold applies for goods and servi ces covered by the GPA from certain entities identified in Annex III.  FTA 
thresholds are:  for supply and service contracts:  US$25,000 (NAFTA Canada) for supplies;  US$50,000 (Israel 
for supplies);  US$67,826 (NAFTA Mexico, Australia, Chile, Dominican Republic, El Salvador, Guatemala, 
Honduras, Nicaragua, Singapore);  and for construction contracts:  US$8,817,449 (NAFTA;  Bahrain);  US$7,443,000 (Australia, Chile, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, 
Singapore);  and US$50,000 (Israel)  NAFTA Canada for Services. 
235 Federal Register  Vol. 67, No. 83, 30 April 2002.  Viewed at:  http://www.acqnet.gov/far/FAC/ 
fac2001-07.pdf. United States WT /TPR/S/200/Rev.1 
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the head of each Federal agency to submit a repor t to Congress relating to acquisitions of articles, 
materials, or supplies manufactured outside the United States.  Federal domestic preference requirements are also sometimes included in annual appropriation and authorization bills. 
245. The provisions of the BAA are waived for civil aircraft and related articles that meet the 
substantial transformation test of the Act and orig inate in parties to the WTO Agreement on Trade in 
Civil Aircraft.  The Department of Defense also  waives the restrictions of the BAA/Balance of 
Payments Program for the acquisition of defence e quipment produced in a "qualifying country" (with 
which there is a reciprocal procurement agreement or memorandum of understanding).
236  The FASA 
exempts purchases not exceeding US$3,000 from Buy American Act requirements. 
246. Procurement policy seeks to increase the participation of small businesses, veteran-owned 
small businesses, small disadvantaged business (SDB s), and women-owned small businesses.  The 
USDOC determines annually the authorized SDB pr ocurement mechanisms and application factors 
(percentages).  The Small Business Act (P.L. 85-536) requires, in principle, each contract with an 
anticipated value greater than US$2,500 but less than US$100,000 to be reserved exclusively for 
small business concerns.  The Small Business Admi nistration (SBA) manages five main programmes 
to promote the ability of small businesses to  compete for federal procurement contracts.237  The SBA 
also administers two business assistance programmes for SDBs.238 
247. The Veterans Benefits Act of  2003 established the Service-Di sabled Vetera n-Owned Small 
Business Concerns (SDVOSBC), a procurement programme that allows federal contracting officers to restrict competition to SDVOSBCs and award a sole source or set-aside contract where certain criteria are met.  A number of other set-asides and pricing preferences are in place, such as the HUBZone 
Empowerment Contracting Program and the Small Business Competitiveness Demonstration 
Program.  The goal is for procurement awarded to  small businesses to represent 23% of all prime 
contracts. 
248. The set-aside goal for SDBs is 5% of prime contracts and sub-contracts, the same as the goal 
for women-owned small businesses.  The goal for HUBZones businesses and for SDVOSBCs is 3% 
of prime contracts and sub-contracts, in each case. 
249. In certain cases imported supplies for use in government contracts may be exempted from 
customs duties.  These goods are listed in sub-chapte rs VIII and X of Chapter 98 of the U.S. tariff 
schedule.  Other supplies may also be granted duty-free entry;  in this case, the contract price must be 
reduced by the amount of duty that would be payable if the supplies did not enter duty free.  Supplies (excluding equipment) for government-operated v essels or aircraft may be imported duty free.
239 
250. Sanctions applied to certain EC Me mbers were removed as of April 2006.240  Under 
Section 305(g) (1) of the Trade Agreements Act of 1979, the United States had applied sanctions, 
                                                      
236 Australia, Belgium, Canada, Denmark, Egypt, Fr ance, Germany, Greece, Israel, Italy, Luxembourg, 
the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.  Products 
from Austria and Finland could also be exempted, on a purchase-by-purchase basis. 
237 Prime Contracting Assistance;  Subcontracting Assi stance;  Government Prop erty Sales Assistance;  
Certificate of Competency;  and Service-Disabled Veteran-Owned Small Business Concerns programme.  Code 
of Federal Regulations Title 13, Volume 1, revised 1 January 2005. 
238 The 8(a) Business Development Program and th e Small Disadvantaged Business Certification 
Program.  For further information see FAR Su b-Part 19.8, at:  http://www.arnet.gov/far/. 
239 FAR Subpart 25.9.  Viewed at:  http://w ww.arnet.gov/far/curren t/pdf/FAR.book.pdf. 
240 FAC 2005-09. WT/TPR/S/200/Rev.1 Trade Policy Review 
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since May 1993, on Member States considered to discriminate against U.S. products and services in 
their government procurement practices.241 
251. Each U.S. State has its own procurement access c onditions.  As noted, 37 States participate in 
the GPA;  among those that do not, some restrict foreign participation in biddings, others offer 
preferences to in-state suppliers, or apply domestic  purchase requirements (Table AIII.5).  Only North 
Carolina, Oklahoma, Rhode Island, and Wiscons in do not grant any form of preference. 
252. The U.S. Administration adopted a new reciproc ity approach to sub-federal procurement in 
three FTAs (Colombia, Panama, and Peru).  Based on this policy, government procurement of eight 
U.S. states and Puerto Rico were covered in the FTAs signed with Colombia, Panama, and Peru.  The 
Administration considers that states gain wh en their purchases are covered under FTAs through 
greater opportunities for companies in that State to  sell their products and services in the foreign 
partner's government purchasing market, and th rough guaranteed open competition, which can 
increase product choice and reduce costs.242 
(v) Trade-related intellectual property rights 
(a) Introduction 
253. U.S. laws and regulations on trade-related aspect s of intellectual property rights (IPRs), as 
well as their updates, were notified to the WTO in  1996;  the notification was supplemented in 1998 
(Table III.8).243  U.S. intellectual property legislation w as reviewed by the TRIPS Council in 1996, 
and has been reviewed regularly in WTO Trade Policy Reviews.244  Updates of legislation addressing 
IPRs, including amendments presented in a consolid ated text, have been notified subsequently.245 
254. The United States is a member of the World Intellectual Property Organization (WIPO), and 
participates in a large number of internationa l conventions and treaties related to IPRs.246 
255. The United States seeks to promote increased IPR protection and enforcement through a 
variety of mechanisms.  The United States has addre ssed IPR subject matter in the context of bilateral 
intellectual property agreements and memoranda of understanding, bilateral investment treaties, and 
trade and investment framework agreements.  IPR i ssues have also been incl uded in U.S. free-trade 
agreements in force or pending approval or implementation.247  The United States pursues high 
standards of IP protection through its engage ment with countries seeking accession to the WTO. 
256. On 17 December 2005, the United States accepted the Protocol Amending the TRIPS 
Agreement adopted by the General Council on 6 December 2005 (WT/L/641).248  In a Joint 
Communication with the EC, Japan, and Switzerland to the TRIPS Council, submitted in November 
2006, the United States recalled the importance of effec tive IPR enforcement, in particular in terms of 
                                                      
241 Austria, Belgium, Denmark, Finland, France, Ireland, Italy, Luxembourg, Netherlands, Sweden, and 
the United Kingdom. 
242 USTR (2006). 
243 WTO documents IP/N/1/USA/1, 21 January 1997, and IP/N/1/USA/U/2, 6 October 1998. 
244 WTO document IP/Q/USA/1, 30 October 1996. 
245 WTO documents IP/N/1/USA/C/3 and IP/N/1/USA /I/1, 9 February 2004; and IP/N/1/USA/I/2, 
9 February 2004, and  IP/N/1/USA/I/3, 20 February 2004. 
246 WIPO online information.  Available at:  htpp://www.wipo.org. 
247 See Chapter II and USTR online information.  Viewed at:  http://www.u str.gov/Trade_Agreements/ 
Bilateral/Section_Index.html. 
248 WTO document WT/Let/5 06, 22 December 2005. United States WT /TPR/S/200/Rev.1 
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innovation and investment.249  In January 2007, the United States made a submission to the TRIPS 
Council with respect to border enforcement of IPRs.250 
Table III.8 
Summary of intellectual property pr otection in the United States corresponding to TRIPS obligations, 2008  
Form Main legislation Coverage Duration 
Copyright 
and related 
rights Copyright Law, 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 shortest 
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 
Industrial 
designs Patent Law of the United States, as 
incorporated in Title 35 of the U.S. 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 
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 20 years from filing date 
Plant variety 
protection 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 area 
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 the date of filing 20 years from the date of issue 
of the certificate in the United 
States 
Topography 
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 familiar in the industry at the time of its creation 10 years from filing date (or, if 
earlier, from first use) 
Trade marks The Lanham Act of 1946, as amended 
(15 U.S.C. 1051 et seq) Any sign used to iden tify and distinguish 
goods or services from one enterprise from those of another enterprise 10 years from registration date;  
renewable indefinitely  as long as the trade mark is in use in 
commerce that is lawfully regulated by Congress 
Trade secrets 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 
 
Source:  World Intellectual Property Organization;  U.S. De partment of Commerce;  notifications to the WTO. 
257. The United States is an important producer and exporter of goods and services that embody 
knowledge and other intellectual deve lopments.  In this respect, IP  has been recognized in Congress 
as the backbone of U.S. economic competitiveness an d the only sector where the United States has a 
                                                      
249 WTO document IP/C/W/485, 2 November 2006. 
250 WTO document IP/C/W/488, 30 January 2007:  "Enforcement of Intellectual Property Rights 
(Part III of the TRIPS Agreement):  Experiences of Bo rder Enforcement: Communicatio n by the United States". WT/TPR/S/200/Rev.1 Trade Policy Review 
Page 74 
 
 
trade surplus with every nation in the world.251  It has also been noted that over 50% of U.S. exports 
depend on some form of IP, and that IP assets toda y represent more than one third of the value of 
U.S.-based corporations and over 17% of GDP.  Th e United States traditionally posts a balance-of-
payments surplus in IP-related trade, as measured by royalties and licence fees.  In 2006, net receipts 
were US$36 billion and gross receipts US$62.4 billion.252 
258. The United States considers that IP and innovati on are of critical importance to the enhanced 
productivity and growth of the U.S. economy253, and that IPRs can facilita te the commercialization of 
inventions and encourage public disclosure.254  In its view, the ability of innovative industries to 
continue to develop new products  depends largely on a strong and effective IP system and the 
capacity to market new products effectively du ring the period when exclusive IPRs exist.255  O n e  
rationale advanced for advocating IPR prot ection is that IP encourages innovation.256  I n  t h e  U . S .  
view, IPRs do not necessarily confer market power because other products or processes may be 
substitutes for the patented invention or copyrighted work257;  and IP laws and antitrust laws share the 
same fundamental goals of enhancing co nsumer welfare and promoting innovation.258 
(b) Patents 
259. Patents are granted by the United States Patent and Trademark Office (USPTO) using the 
first-to-invent rule;  the United States is  the only WTO Member to use this rule. 
260. The U.S. Government has specific statutory au thority in some cases to allow compulsory 
licensing of the subject matter of a patent, for example under the Atomic Energy Act and the Clean Air Act;  however, these provisions have not been used for over 20 years.  Under the Technology 
Transfer Commercialization Act of 2000, for Federa l Government-owned inventions, a federal agency 
may grant an exclusive or partially exclusive licence  if necessary to attract the investment needed to 
bring the invention to practical application. 
261. The number of patent applications filed with  USPTO continued to increase in the period 
under review.  Despite efforts by the USPTO to reduce the time needed to review applications, there 
was a slight increase in the pendency time (average time between filing and issuance), to some 
31.9 months in FY2007.  In 2006, the USPTO granted a total of 184,377 patents.
259  The share of 
patents issued by the USPTO to non-residents has rema ined stable in recent years, at some 48% of the 
total;  the top ten private-sector patent recipients  in 2005 comprised four U.S. corporations, five 
Japanese, and one Korean.260 
262. Under its 21st Century Strategic Plan, a five -year plan devised in 2002, the USPTO has 
continued to promote the electronic processing and f iling of patent applica tions and streamline the 
                                                      
251 110th Congress, House of Representatives Resolution 314, 17 April 2007.  Viewed at: 
http://thomas.loc.gov/. 
252 BEA (2007). 
253 USTR online information.  Viewed at:  http ://www.ustr.gov/Trade_Sectors/Intellectual_Property 
/Section_Index.html. 
254 USDO (2007). 
255 USTR (2005).  Executive Summary, p. 9, and (2007a), pp. 12-13. 
256 USDOJ and FTC (2007). 
257 USDOJ and FTC (2007).  U.S. law does not pres ume the existence of mark et power from the mere 
presence of an IPR (Abbott, 2003). 
258 USDOJ and FTC (2007). 
259 USPTO (2007). 
260 USPTO online information:  Viewed at:  h ttp://www.uspto.gov/web/ offices/com/speeches/05-
03.htm. United States WT /TPR/S/200/Rev.1 
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patent application process.  In 2006, the USPTO  implemented the Internet-based Electronic Filing 
System-Web (EFS-Web), to allow electronic patent application and document submission.261  T h e  
USPTO also issued new procedures for accelerated examination effective 25 August 2006.262  T o  
improve patent quality, the USPTO issued rule changes in October 2007 which, when implemented, 
will require applicants to identify with more specifi city the claimed invention to be examined.  The 
USPTO also published Examination Guidelines to he lp determinations regarding the obviousness of 
claimed inventions.263 
(c) Trade marks and geographical indications 
263. In addition to federal registration, trade mark  protection in the United States arises from the 
actual use of the mark under state laws and federal unfair competition laws.  Although federal 
registration of a mark is not required to establish ri ghts to the mark, nor to use it, it grants the holder 
additional rights, such as the legal presumption of ow nership, validity, and the entitlement to use the 
mark in connection with the goods or services id entified in the registration.  Although it is not 
required that a trade mark be used commercially before  an application for federal registration is filed, 
for domestically filed applications, use is required pr ior to registration.  For applications filed by 
foreign nationals pursuant to the Paris Convention and the Madrid Protocol, use (or a statement of 
acceptable non-use) is not required for registration, but  is required to maintain the registration.  The 
Trademark Dilution Revision Act of 2006 (P.L. No : 109-312) revised and clarified the 1995 Federal 
Trademark Dilution Act, entitling an owner of a fam ous mark to an injunction against the use of a 
mark of trade name in a manner that is likely to cause dilution by blurring or tarnishment, as well as to 
oppose applications or cancel registrations that are likely to cause dilution with the famous mark. 
264. Applications for federal trade mark registra tion are filed with the USPTO.  A trade mark 
owner with an application filed w ith, or a registration issued by, th e USPTO and who is a national of, 
has domicile in, or has an industrial or commercial es tablishment in the United States may also file an  
international application, pursuant to the Madrid Protocol, with the USPTO.  Holders of international 
registrations based on U.S. registrations may requ est extensions of protection in other Madrid 
Protocol member states.  The USPTO received 3,13 1 international applications and 12,718 requests 
for extension of protection or subsequent designa tion from the International Bureau of the Madrid 
Protocol in FY2006.264  Trade mark registrations totalled 188,899 in FY2006, out of 354,000 trade 
mark applications of which 93.8% were filed th rough the Trademark Electronic Application System 
(TEAS).  There were 27,592 trade marks registered to residents of foreign countries in FY2006. 
265. The United States offers protection for geographi cal indications (GIs) for all classes of goods 
and services through its trade mark system.265  The United States, together with other countries, has 
submitted a proposal to other WTO Members for a mu ltilateral system for notification and registration 
of GIs for wines and spirits in the context of Article 23.4 of the TRIPS Agreement.266 
                                                      
261 USPTO (2006). 
262 For details see USPTO online information.  Viewed at:  http://www.uspto.gov/web/patents/ 
accelerated/ae_stat_charts.pdf. 
263 57526 Federal Register Vol. 72, No. 195, 10 October 2007, Department of Commerce, Patent and 
Trademark Office [Docket No. PTO-P-2007-0031], Examination Guidelines for Determining Obviousness Under 35 U.S.C. 103 in View of the Supreme Court D ecision in KSR International Co. v. Teleflex Inc. 
264 USPTO (2006). 
265 USPTO online information.  Viewed at:  http://www.uspto.gov. 
266 WTO document IP/C/W/386, 8 November 2002. WT/TPR/S/200/Rev.1 Trade Policy Review 
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(d) Copyright 
266. The United States grants automatic protection to  copyrighted works, in cluding software, from 
all WTO Members as well as Berne Convention si gnatories, and other international copyright 
agreement signatories.  The U.S. Copyright Office is the registry of claims to  copyright, and administers 
the mandatory deposit provisions of the copyright la w and its various compulsory licensing provisions.  
Registration may be made at any time within the li fe of the copyright.  Al though registration is not 
required for protection, copyright  law provides several inducement s or advantages to encourage 
copyright owners to make registra tion, such as establis hing a public record of the copyright claim and 
allowing the copyright owner to record the registra tion with U.S. Customs and Border Protection (CBP) 
for protection against the importation of infringing copies.  Copyright la w permits the pre-registration of 
certain types of works that have had a history of infringement prior to authorized commercial 
distribution.267  Pre-registration serves as  a "place-holder" for limited purposes, notably where a 
copyright owner needs to sue for infringement whil e a work is still being prepared for commercial 
release.  During FY2006, the Copyright Office received 594,125 claims to copyright and registered 520,906 claims.
268 
267. The United States is a party to the Geneva Phonograms Convention and the WIPO 
Performances and Phonograms Treaty, but not to the Rome Convention.  U.S. copyright law does not 
use the term "neighbouring rights" separate fro m copyright.  Performances and phonograms are 
protected through the application of the Copyright  Act and other laws, but public performance rights 
for sound recordings are limited, and generally apply only to digital transmissions other than over-the-
air broadcasts transmissions within a business estab lishment or to business establishments for use in 
the ordinary course of their business, and certain retransmissions. 
268. The Copyright Act provides for sev eral types of statutory licences.  Generally, interested 
parties are given the opportunity to negotiate the te rms of the licence;  a rate will be set by the 
authorities only if they fail to agree.  The Copyright Royalty and Distribution Reform Act of 2004 and the amendments contained in the Copyright Roya lty Judges Program Technical Corrections Act of 
2006 replaced the Copyright Arbitration Royalty Panels with Copyright Royalty Judges (CRJs);  in January 2006, three CRJs were appointed. 
(e) Enforcement activities 
269. The Office of the United States Trade Re presentative (USTR) conducts annual reviews 
examining the adequacy and effectiveness of IP protection in foreign countries, and their effect on market access for U.S. persons  in accordance with Section 182 of the Omnibus Trade and 
Competitiveness Act of 1988 (Special 301).  The 20 07 Special 301 exercise reviewed 87 countries.  
USTR identified 12 trading partners on the Priori ty Watch List for intellectual property protection.
269  
In addition, 30 countries were placed on the Watch List.270  One country was designated for Section 
306 monitoring to ensure compliance with the co mmitments of bilateral intellectual property 
agreements.271 
                                                      
267 Motion pictures, sound recordings, musical compositions, literary works being prepared for 
publication in book form, computer programs (including vi deogames), and advertising or marketing photographs. 
268 United States Copyright Office (2006). 
269 Argentina, Chile, China, Egypt, India, Israel , Lebanon, Russia, Thailand, Turkey, Ukraine, and 
Venezuela (USTR 2007). 
270 Belarus, Belize, Bolivia, Brazil, Canada, Chinese Taipei, Colombia, Costa Rica, Dominican 
Republic, Ecuador, Guatemala, Hunga ry, Indonesia, Italy, Jamaica, Korea, Kuwait, Lithuania, Malaysia, 
Mexico, Pakistan, Peru, Philippines, Poland, Romania, Saudi Arabia, Tajikistan, Turkmenistan, Uzbekistan, 
Viet Nam. 
271 USTR (2007). United States WT /TPR/S/200/Rev.1 
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270. Section 337 of the Tariff Act of 1930, declares unlawful "unfair methods of competition and 
unfair acts in the importation and sale of products in th e United States, the threat or effect of which is 
to destroy or substantially injure a domestic industry, prevent the establishment of such an industry, or 
restrain or monopolize trade and commerce in the United States."  The injury requirement does not 
apply to alleged infringement of a valid U.S. pate nt, federally registered trade mark, copyright, or 
mask work, or vessel hull design.  Section 337 inv estigations are instituted by the United States 
International Trade Commission (USITC);  administ rative law judges make an initial determination of 
whether there is an infringement/contravention of th e law, which is then subject to review by the 
USITC.   If the USITC determines that Section 337 has been violated, it may issue exclusion orders, 
cease and desist orders, or both.  Ex clusion orders direct the CBP to bar entry into the United States of 
infringing goods from whatever source (general exclusion orders) or from specifically identified 
entities (limited exclusion orders).  The President may disapprove a USITC order within 60 days. 
271. Between 1 January 2005 and 30 September 2007, 88 new Section 337 investigations were 
instituted;  all except three involved allegations of  patent infringement, occasionally in combination 
with the infringement of other IPRs.  Investig ations covered products from 29 trading partners.272  In 
the period between 1 January 2005 and 30 September 2007, the USITC issued 24 exclusion orders, of 
which 17 were limited exclusion orders, and seven were general exclusions, together with cease and 
desist orders.273  As of 1 October 2007, there were 66 outs tanding exclusion orders, compared with 61 
reported in the previous U.S. Review, affecting imports of a range of pr oducts, including machinery 
and equipment, electrical and electronic products, some durable consumer goods, glasses, soft drinks, 
and cigarettes. 
272. The Stop Counterfeiting in Manufactured Goods  Act of 2006 (P.L. 109-181) amended the 
federal criminal code to revise provisions prohibitin g the trafficking in counterfeit goods and services 
to include trafficking in labels or  similar packaging of any type or  nature bearing a counterfeit mark 
and that are intended to be used on or in connection with the goods or  services for which the genuine 
mark is registered  The Act subjects to forfeiture any article that bears or consists of a counterfeit 
mark and any property used to violate the prohibition against counterfeit marks. 
273. The value of infringing goods seized by CBP in FY2006 reached US$155.4 million, and the 
number of seizures reached 14,675, a 66% increase by value with respect to FY2005.  Footwear 
accounted for 41% of the total value of goods seized in FY2006;  wearing apparel, handbags, 
computers, and consumer electronics also figured prominently in the seizures made by CBP during FY2006.  The Department of Justice reports its enfo rcement activities regularly in a number of fora.  
A report of the DOJ's enforcement activities can be  found in the National Intellectual Property Law 
Enforcement Coordination Council Report for 2007, published in January 2008.
274 
                                                      
272 For further information see USITC online information.  Viewed at:  http://info.usitc.gov/ouii/ 
public/337inv.nsf. 
273 The orders affected imports from 23 trading partners:  Australia, Brazil, Canada, China, Chinese 
Taipei, France, Germany, Haiti, India, Indonesia, Ir eland, Japan, Korea, Malaysia, Mexico, Netherlands, 
Nicaragua, Panama, Portugal, Singapore, Spain, Switzerland, and Hong Kong, China.  USITC online 
information.  Viewed at:  http://info.usitc.gov/ouii/public/337inv.nsf/All?OpenView. 
274 The report may be viewed at:  www.stopfakes.gov.