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II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(1) OVERVIEW  
1. Support for the multilateral trading system is  at the core of U.S. trade policy.  
The Administration remains determined to seize  the "historic opportunity" for a comprehensive 
multilateral agreement.  The United States has me t most of its WTO notification obligations;  
exceptions include notifications on agricultural tari ff quotas and government pr ocurement statistics.  
The United States has made progress in implementing several WTO rulings calling for changes to U.S. legislation but a few rulings have not been fully implemented. 
2. Trade promotion authority, which the Administration views as an important tool for achieving 
U.S. trade objectives, expired on 1 July 2007.  In May 2007, the Administration and congressional 
leaders agreed to a trade policy "template", whic h has been described as "open[ing] the way for 
bipartisan work on Trade Promotion Authority" .  The template contains provisions on labour, 
environment, intellectual property, investme nt, government procurement, and port security. 
3. While the United States considers that a compre hensive multilateral agreement offers the best 
chance to create expanded trade and developmen t opportunities around the world, it believes that 
bilateral and regional trade liberalization can also pr ovide significant benefits.  Consistent with this, 
the United States has continued to enter into prefer ential agreements.  In early 2008, the United States 
had free-trade agreements in force with 14 countries,  compared with seven during its last Review, and 
three at the start of the current Administration in early 2001.  Free-trade agreements with another six 
countries had been completed but were not yet in  force.  The United States grants unilateral 
preferences to developing countries under several sc hemes, which may be conditional on adherence to 
criteria that, according to the U.S. authorities, are intended to promote sound policies and allow 
beneficiaries to expand trade and investment. 
4. The United States has long maintained a policy of national treatment of foreign direct 
investment, subject to sector-specific considerati ons, prudential concerns, and national security.  In 
2007 Congress amended the process by which the Executive reviews the national security 
implications of certain foreign direct investments.  It would be important to ensure that these changes 
do not undermine predictability for foreign investors. 
(2) I
NSTITUTIONAL AND POLICY FRAMEWORK  
5. There have been no major changes to the institutional framework governing trade policy 
formulation since the last Review of the United Stat es.  The main agency on trade policy matters in 
the Executive Branch is the Office of the United States Trade Representative (USTR), which is part of 
the Executive Office of the President.  The USTR is responsible for developing and coordinating 
U.S. international trade policy, and overseeing negot iations with other countries.  The head of the 
USTR is the U.S. Trade Representative, a Cabinet member who serves as the President's principal advisor, negotiator, and spokesperson on trade issues. 
6. The USTR consults with other government agencies on trade policy matters through the 
Trade Policy Review Group and the Trade Policy Staff Committee, administered and chaired by the USTR and composed of 20 federal agencies a nd offices.  The National Economic Council and 
National Security Council are also part of the interagency coordination mechanism on trade policy. 
7. The USTR works in close consultation with C ongress.  It provides regular briefings for the 
Congressional Oversight Group, composed of members from several congressional committees, and United States WT/TPR/S/200 
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chaired by the Chairman of the House Ways a nd Means Committee and of the Senate's Finance 
Committee. 
8. Input on trade policy formulation is also r eceived from the private sector, through a policy 
advisory committee system consisting of the Presi dent's Advisory Committee for Trade Policy and 
Negotiations, administered by the USTR;  four policy advisory committees;  and 22 technical and 
sectoral advisory committees. 
9. Under the Bipartisan Trade Promotion Authority Act of 2002, Congress stated that the 
expansion of international trade is vital to the national security and economic growth and strength of 
the United States.1  In addition, Congress defined the "princ ipal trade negotiating objectives" of the 
United States, categorized under 17 different headings.2 
10. The Administration and congressional leaders concluded a "trade policy template" in 
May 2007.  According to the USTR, the template provides a "clear and reasonable path forward for 
congressional consideration of Free Trade Agreemen ts with Peru, Colombia, Panama, and Korea 
[and] opens the way for bipartisan work on Trade Promotion Authority".3  The USTR indicates that 
the template aims to incorporate into U.S. free-trade agreements internationally recognized labour 
principles, a "specific list" of multilateral envi ronmental agreements, and "certain flexibilities" 
regarding intellectual property protection to ensure that U.S. partners "are able to achieve an 
appropriate balance between fost ering innovation in, and promoting access to, life-saving medicines".  
The template also covers investment, government pr ocurement, and port security.  In late 2007, the 
U.S. Congress passed, and the President signed into law, the United States – Peru Trade Promotion 
Agreement Implementation Act. 
11. The trade promotion authority (TPA) granted to the Executive under the Bipartisan Trade 
Promotion Authority Act of 2002 expired on 1 July 2007.  As at early 2008, it had not been renewed.  
Under the TPA, the USTR was required to cons ult closely with Congress, and Congress had to 
approve or reject legislation implementing a new trade agreement without amendment and within a 
fixed period.  The Administration views TPA as an important tool for achieving U.S. trade objectives. 
12. During the period under review, workers, fi rms, and farmers adversely affected by 
international trade were eligible for benefits  under the Trade Adjustment Assistance (TAA) 
programme, authorized by the Trade Act of 1974,  as amended.  The TAA programmes expired in 
December 2007, but the Consolidated Appropria tions Act of 2008 contained an appropriation to 
operate fully the TAA programme for workers for fiscal year 2008.  The Department of Labor 
administers the TAA programme for workers.  Bene fits include income support, job training, and 
health coverage.  According to the Government Accountability Office, the number of worker petitions 
filed under this programme declined from 2,992 in  fiscal year 2004 to 2,456 in fiscal year 2006.4  
Around one third of these were denied each year, commonly because workers we re not involved in 
the production of "articles", a basic programme  requirement.  The petitions certified by the 
Department of Labor between fiscal years 2004 an d 2006 as meeting the relevant requirements to 
                                                      
1 19 USC 3801. 
2 Trade barriers and distortions, trade in services, foreign investment, intellectual property, 
transparency, anti-corruption, improvement of the WTO and multilateral trade agreements, regulatory practices, 
electronic commerce, recipro cal trade in agriculture, labour and the environment, dispute settlement and 
enforcement, WTO extended negotiations, trade remedy laws,  border taxes, textile negotiations, and worst 
forms of child labour (19 USC 3802). 
3 USTR online information, "Trade Facts:  Bipartis an Trade Deal".  Viewed  at:  http://www.ustr.gov/ 
assets/Document_Library/Fact_Sheets/2007/asset_upload_file127_11319.pdf. 
4 GAO (2007). WT/TPR/S/200 Trade Policy Review 
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obtain benefits cover some  400,000 workers.  Industries accounti ng for the largest number of certified 
petitions in 2006 were textile mill products, apparel, and electronic and other electrical equipment and 
components (except computer). 
13. Benefits under the TAA programme for firms, wh ich is administered by the Department of 
Commerce, consist of matching funds for projects to improve a manufacturer's competitiveness.  The 
average amount awarded was US$7 million per year between fiscal years 2001 and 2006.  During the same period, the mean value of annual assistance  per firm was US$48,407;  only one petition for 
assistance was rejected. 
14. Under the TAA programme for farmers, the De partment of Agriculture provides technical 
assistance and cash benefits for eligible farmers.  Of the 25 petitions reviewed in fiscal year 2006, 
four were certified.  These covered 208 producer s of Concord juice grapes, snapdragons, and 
avocados.  Cash benefits paid under the programme  amounted to US$825,000 in fiscal year 2006.  No 
petitions were certified in fiscal year 2007. 
(3) F
OREIGN INVESTMENT REGIME  
(i) National treatment 
15. The United States maintains a policy of nationa l treatment for foreign direct investment 
(FDI), subject to sector-specific considerations , prudential concerns, and national security.  The 
President may suspend or prohibit foreign acqui sition of a U.S. business for national security 
considerations.  In addition, sector-specific restrict ions on FDI exist with respect to atomic energy 
operations, rights of way for oil pipelines, leases to develop mineral resources on on-shore federal 
lands, and certain fishing operations.  Most other fe deral measures that limit FDI, or subject it to 
reciprocity, relate to services, notably air and maritime transport, and financial services.  Restrictions on national treatment apply with respect to th e eligibility for public funding for research and 
development;  emergency loans for agricultural pur poses;  and loans, guarantees, and political-risk 
insurance for investment.
5  As noted in previous Reviews of the United States, restrictive measures 
are also applied at the State level, in particular on real estate and financial services. 
(ii) Reporting and review requirements 
16. FDI into the United States is subject to reporting requirements under the International 
Investment and Trade in Services Survey Act.  Ther e are also reporting requirements with respect to 
foreign acquisitions of agricultural land.6 
17. In addition, pursuant to section 721 of the De fense Production Act of 1950, formerly referred 
to as the "Exon Florio" provision, the United States reviews the national security implications of 
certain foreign direct investments.  Section 721,  as amended by the Foreign Investment and National 
Security Act of 2007 (FINSA), establishes a pro cess by which the President may conduct national 
security reviews of "covered transactions", that is , mergers, acquisitions, or  takeovers that could 
"result in foreign control of a person engaged in interstate commerce in the United States".  The 
President has delegated authority to conduct such reviews to the Committee on Foreign Investment in 
the United States (CFIUS), an interagency committee within the Executive Branch  that is chaired by 
the Secretary of the Treasury.  FINSA establishes CFIUS in statute;  previously, CFIUS operated 
pursuant to an Executive Order. 
                                                      
5 WTO (2004), Chapter II(5). 
6 Agricultural Foreign Investment Disclosure Act. United States WT/TPR/S/200 
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18. In July 2007, the President signed into law FINSA, which took effect on 24 October 2007.  In 
January 2008, the President issued an Executiv e Order that specifies CFIUS’ membership and 
authorizes the CFIUS chairperson to designate a lead agency or agencies for each transaction 
reviewed.7  In addition, the Secretary of the Treasury is  developing regulations to further implement 
FINSA.  The authorities note that the proposed regulations will be published in the Federal Register  
and will be subject to public comment before fina l regulations are published and become effective.  
The Secretary of the Treasury will also publish guidance in the Federal Register on which types of 
foreign mergers and acquisitions rai se national security considerations. 
19. Under section 721, the President may suspend or prohibit a covered transaction when there is 
credible evidence that the foreign entity might take  action that threatens to impair national security, 
and no other provision of federal law provides adeq uate and appropriate authority to protect national 
security.8  The President must decide whether to ta ke action under section 721 within 15 days of the 
completion of a formal CFIUS investigation.  CFIU S has 45 days to complete this investigation. 
20. To determine whether a formal, 45-day investig ation is warranted, CF IUS conducts a review, 
triggered by a voluntary notification by one of the parties involved in a covered transaction, or by 
CFIUS' own decision or that of the President.  Th e statutory time limit to conduct this review is 
30 days.  In reviewing a transaction, CFIUS must determine the effect of the transaction on national 
security, based on all relevant national security f actors, including those added by FINSA to an 
illustrative list contained in section 721.  Under FINS A, the term "national security" includes issues 
relating to "homeland security", for example its app lication to "critical infrastructure" as defined in 
the Act.9 
21. FINSA automatically subjects to a 45-day CFIUS investigation all transactions that result in 
"foreign government control", unless certain senior-l evel officials determine that the transaction will 
not impair national security.  In investigating impa irment of national security, CFIUS must consider 
several factors, including "the adherence of the subj ect country to non-proliferation control regimes", 
"the relationship of such country with the United St ates, specifically on its record on cooperating in 
counter-terrorism efforts", and the country 's export control laws and regulations.10 
22. Transactions that result in control of U.S. critical infrastructure and that could impair 
U.S. national security are also subject to a 45-day i nvestigation.  This may be waived if senior-level 
officials determine that the transaction will not im pair national security.  In addition, CFIUS may 
review a previously reviewed transaction wher e CFIUS received false or inaccurate material 
information during the initial review or investigati on, or if a "mitigation" agreement resulting from the 
initial review or investigation was "intentionally and materially breached".11 
23. Between 2005 and 2007 CFIUS received 325 voluntary notices of foreign mergers or 
acquisitions.  According to the U.S. authorities,  this accounts for less than 7% of all foreign 
acquisitions of U.S. companies during that period.  Of the 325 notices, 15 proceeded to a 45-day 
investigation after the conclusion of CFIUS’ 30-da y review;  two notices were subject to a final 
decision by the President, who allowed both to proceed. 
24. Under FINSA, CFIUS or a lead agency designate d by the Secretary of the Treasury may enter 
into, modify, monitor, and enforce agreements with any party to a covered transaction to mitigate the 
                                                      
7 Federal Register , 73 FR 4677, 25 January 2008. 
8 50 USC 2170 et seq. 
9 Section 2, Foreign Investment and National Security Act of 2007. 
10 Section 4, Foreign Investment and National Security Act of 2007. 
11 Section 2, Foreign Investment and National Security Act of 2007. WT/TPR/S/200 Trade Policy Review 
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transaction's national security risk.  Every mitigation agreement must be justified by a written analysis 
of the national security risk posed by the transa ction.  Between 2005 and 2007, 37 of the 325 notices 
to CFIUS resulted in such agreements.  FINSA also creates extensive new reporting requirements 
from CFIUS to Congress.12 
25. In addition to section 721, the United States a pplies industrial security regulations.  These 
generally require a contractor to obtain facility secu rity clearance and individual security clearance in 
order to perform a government contract involving access to classified sites or information.  Where a 
contractor is determined to be under foreign owners hip, control, or influence, the Department of 
Defense may withhold clearance unless certain step s are taken, such as the use of voting trust 
agreements, whereby the foreign stockholders are eff ectively divested of management control in the 
contractor. 
(iii) International investment arrangements 
26. Apart from the GATS, under which the United St ates has made commitments regarding the 
supply of services through commercial presence, the United States is a party to the OECD Code of Liberalization of Capital Movements
13, and the OECD National Treatment Instrument, which is not 
legally binding.14 
27. There are 40 bilateral investment treaties in force between the United States and other 
countries (Table II.1).  The NAFTA and most free- trade agreements signed by the United States 
contain separate chapters on foreign investment, which are substantively identical to the provisions of 
U.S. bilateral investment treaties.  Bilateral investment treaties and investment provisions in free-trade 
agreements concluded by the United States allow the parties to make exceptions to specified 
obligations.15   
Table II.1 
Bilateral investment agreements, January 2008 
Country Entry into force Country Entry into force 
Albania 4 January 1998 Jordan 13 June 2003 
Argentina 20 October 1994 Kazakhstan 12 January 1994 
Armenia 29 March 1996 Kyrgyzstan 12 January 1994 
Azerbaijan 2 August 2001 Latvia 26 December 1996 
Bahrain 30 May 2001 Lithuania 22 November 2001 
Bangladesh 25 July 1989 Moldova 25 November 1994 
Bolivia 6 June 2001 Mongolia 1 January 1997 
Bulgaria 2 June 1994 Morocco 29 May 1991 
Cameroon 6 April 1989 Mozambique 3 March 2005 
Congo, Democratic Republic of 28 July 1989 Panama 30 May 1991 
Congo, Republic of 13 August 1994 Poland 6 August 1994 
Croatia 20 June 2001 Romania 15 January 1994 
Table II.1 (cont'd)
                                                      
12 Section 7, Foreign Investment and National Security Act of 2007. 
13 The Code of Liberalization contains legally bi nding obligations regarding the liberalization of 
specified capital movements, including foreign direct investment, subject to certain exceptions and country-specific reservations. 
14 The National Treatment Instrument contains a co mmitment, that is not legally binding, to accord 
national treatment to foreign-owned or controlled firms in the post-establishment phase. 
15 WTO (2004). United States WT/TPR/S/200 
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Country Entry into force Country Entry into force 
Czech Republic 19 December 1992 Senegal 25 October 1990 
Ecuador 11 May 1997 Slovakia 19 December 1992 
Egypt 27 June 1992 Sri Lanka 1 May 1993 
Estonia 16 February 1997 Trinidad and Tobago 26 Dec 1996 
Georgia 17 August 1997 Tunisia 7 February 1993 
Grenada 3 March 1989 Turkey 18 May 1990 
Honduras 11 July 2001 Ukraine 16 November 1996 
Jamaica 7 March 1997 Uruguay 1 November 2006 
 
Source:  WTO Secretariat, based on data from the Trade Compliance Center, U.S. Department of Commerce online 
 information.  Viewed at:  http://www.t cc.mac.doc.gov. 
28. In addition, the United States has concl uded 32 trade and investment framework 
agreements.16  The agreements establish an institutional fra mework for consultations on bilateral trade 
and investment policies.  Also of relevance to foreign investment are the treaties of friendship, commerce, and navigation still in force between the United States and some 40 countries;  the last 
such treaty was concluded with Thailand in 1966. 
(4) I
NTERNATIONAL RELATIONS  
(i) World Trade Organization 
29. The President's 2007 Trade Policy Agenda notes that "at the core of U.S. trade policy is a 
steadfast support of the rules-based multilateral trading system".17  According to the Agenda, the 
United States will continue to work with other WT O Members in pursuit of a successful conclusion to 
the DDA that opens new markets and creates meaningful new trade flows. 
30. The United States is an original Member of th e WTO.  It participated in the post-Uruguay 
Round negotiations on telecommunica tions and financial services;  its commitments in these areas 
were annexed to the Fourth and Fifth Protocols of  the GATS.  The United States is a party to the 
Agreement on Government Procurement and a partic ipant in the Information Technology Agreement. 
31. The United States met most of its notification obligations between 2005 and 2007.  
Exceptions include notifications on agricultural tariff quotas and government procurement statistics 
(Table AII.1).  The U.S. authorities indicate that they will submit procurement statistics as soon as the 
overhaul of the Federal Procurem ent Data System is complete. 
32. In the context of the DDA, the United States has made numerous contributions in a wide 
range of areas, including agriculture, market acc ess for industrial goods and services, anti-dumping, 
subsidies, intellectual property, and trade facilita tion.  The United States has made several proposals 
regarding the WTO dispute settlement mechanism.18 
33. Since the inception of the WTO, the United St ates has been complainant in 88 dispute 
settlement cases and respondent in 99.  From mid 2005 to end 2007, it was a complainant in eight 
disputes and a respondent in ten (Table AII.2). 
                                                      
16 USTR online information, "Trade and Invest ment Framework Agreements".  Viewed at:  
http://www.ustr.gov/Trade_Agreem ents/TIFA/Section_Index.html. 
17 USTR (2007b).  
18 WTO documents TN/DS/W/89, 31 May 2007;  TN/DS/W/86, 21 April 2006;  TN/DS/W/82, 
24 October 2005, and addenda. WT/TPR/S/200 Trade Policy Review 
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34. The United States has taken steps to give e ffect to WTO Dispute Settlement Body (DSB) 
decisions since its last Review, but a few decisions remain to be implemented.  The Continued Dumping and Subsidy Offset Act of 2000 (the Byrd Amendment), was repealed by the Deficit Reduction Act of 2005 (Chapter III(2)(vi)).  D ecisions relating to Section 211 of the Omnibus 
Appropriations Act of 1998, some aspects of the U. S. anti-dumping investigation of certain hot rolled 
steel products from Japan, and Section 110(5) of the U.S. Copyright Act remain to be implemented.  
The U.S. authorities indicated during the DSB meeting of February 2008 that the Administration was committed to working with Congress to implement the outstanding DSB decisions in these cases. 
35. The United States announced in May 2007 that it was invoking procedures under GATS 
Article XXI to modify its schedule of commitments.
19  This was in response to the DSB's decisions in 
the case regarding measures affecting the cro ss-border supply of gambling and betting services 
brought in 2003 by Antigua and Barbuda.  Follo wing compensation negotiations under Article XXI 
with Antigua and Barbuda and six other Member s, the United States announced in December 2007 
that it had reached agreement with Canada, the EC, and Japan.  Pursuant  to Article 22.2 of the Dispute 
Settlement Understanding, Antigua  and Barbuda requested in mid 2007 authorization from the DSB 
to suspend the application to the United Stat es of concessions under the GATS and the TRIPS 
Agreement.  A WTO arbitrator decided in Dece mber 2007 that Antigua and Barbuda would be 
entitled to suspend WTO obligations to the United States with respect to services and intellectual 
property rights valued at up to US$21 million per year.20 
(ii) Preferential and other arrangements 
(a) Free-trade agreements 
36. According to the President's 2007 Trade Policy Agenda, although a comprehensive 
multilateral agreement offers the best chance fo r expanded trade and de velopment opportunities 
around the world, bilateral and regional trade liber alization can also provide significant benefits.21 
37. As at early 2008, the United States had free-tr ade agreements in force with:  Australia, 
Bahrain, Canada and Mexico, Chile, Israel, Jordan, Morocco, Singapore, and four of the five members 
of the Central American Common Market (El Sa lvador, Guatemala, Honduras, and Nicaragua) and 
the Dominican Republic.  Free-trade agreements had been completed but were not yet in force with:  Costa Rica, Colombia, Oman, Panama, Peru, a nd Korea.  These agreements share several 
characteristics, including with respect to coverage and the scope of tariff elimination (Table AII.3). 
38. U.S. merchandise exports to free-trade agreem ent partners totalled US$377 billion in 2006, 
close to 41% of all U.S. exports.
22  Although the value of exports to free-trade agreement partners has 
increased by around one third since 2004, as a share of total exports it has remained constant.  
U.S. merchandise imports from free-trade agreemen t partners were approxi mately US$568 billion in 
2006, around 31% of total imports.  The share of im ports from free-trade agreement partners has also 
remained constant since 2004, although the absolute value of imports from those partners has risen by 
around 27%. 
39. During the period under review, the only formal disputes under the free-trade agreements 
entered into by the United States were under the NAFTA.  Chapter 19 of the NAFTA provides for bi-
                                                      
19 USTR online information, "Statement on Internet Gambling".  Viewed at:  http://www.ustr.gov/ 
Document_Library/Press_Releases/2007/December/Statement_on_Internet_Gambling.html. 
20 WTO document WT/DS285/ARB, 21 December 2007. 
21 USTR (2007b). 
22 The data in this paragraph are from USITC (2007b). United States WT/TPR/S/200 
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national panel reviews of anti-dum ping and countervailing duty fina l determinations and underlying 
legislation.  There were nine active cases under chap ter 19 reviewing determinations by U.S. agencies 
(January 2008).  Six panels challenging U.S. agen cy determinations were formed in each 2005 and 
2006, and three in 2007.23  New cases brought against the United States since 2005 concerned 
primarily softwood lumber and steel products. 
40. Disputes relating to the investment provisions  of NAFTA Chapter 11 are settled through an 
investor-state arbitration process.  There are tw o active Chapter 11 cases against the United States 
(February 2008).24  Several NAFTA Chapter 11 disputes ha ve been concluded since 2005.  One 
involved injuries to a Canadian marketer and di stributor of methanol, allegedly resulting from a 
California ban on the use or sale in California of a gasoline additive.  The tribunal released its final 
award in August 2005, dismissing all the claims.  In July 2007, a consolidation tribunal terminated the 
remaining NAFTA Chapter 11 disputes submitted by Canadian softwood lumber companies.  In January 2008, a tribunal dismissed the consolidated claims of more than 100 Canadian cattlemen for 
lack of jurisdiction.  The claimants had allege d damages resulting from the decision by the United 
States to close the border with Canada to imports of  certain Canadian cattle following the discovery of 
a case of bovine spongiform encephalopathy in a cow in Canada. 
41. The United States is holding free-trade agreemen t negotiations with Malaysia (March 2008).  
Negotiations with Thailand and the Southern Africa n Customs Union were suspended.  According to 
the U.S. authorities, the United States and the United  Arab Emirates have decided to deepen their 
economic relationship through an enhanced proces s of consultation under the bilateral trade and 
investment framework agreement. 
(iii) Unilateral preferences 
42. The United States grants unilateral preferential tariff treatment under the Generalized System 
of Preferences (GSP), the African Growth and Opportunity Act (AGOA), the Caribbean Basin 
Economic Recovery Act (CBERA), and the And ean Trade Preference Act (ATPA).  These 
preferences may be conditional on compliance with various U.S. policy objectives. 
43. Under the GSP programme, the United States grants duty-free treatment on certain products 
from eligible developing countries.
25  There are 1,510 "import sensitive"  tariff-line items ineligible for 
GSP treatment, including certain footwear, textiles a nd apparel, watches, electronics, steel articles, 
and glass products.26  In addition, articles subject to safe guard actions or certain national security 
provisions may be ineligible for GSP treatment .  Duty-free imports under the GSP programme 
amounted to US$30.8 billion in 2007, 1.6% of to tal U.S. imports.  Angola was the leading GSP 
beneficiary in 2007, followed by India, Thailand, and Brazil. 
44. "Competitive need limitations" re quire the termination of a country's GSP eligibility with 
respect to a specific product if U.S. imports from th at country account for 50% or more of the value of 
total U.S. imports of that product, or exceeded a certain threshold (US$130 million in 2007) in the 
previous calendar year.  However, the President may grant a waiver of these limitations, and the 
product may continue to be eligible for duty-free tr eatment.  Waivers of comp etitive need limitations 
                                                      
23 NAFTA Secretariat online information, "NAFTA Ch apter 19 Binational Panel Decisions".  Viewed 
at:  http://www.nafta-sec-alena.org/De faultSite/index_e.aspx?DetailID=380. 
24 State Department online information.  Viewed at:  http://www.state.gov/s/l/c3741.htm. 
25 19 USC 2461 et seq. 
26 19 USC 2463. WT/TPR/S/200 Trade Policy Review 
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are posted on-line.27  In December 2006, Congress extended the GSP programme through 
31 December 2008 and modified the President's aut hority to revoke certain waivers of competitive 
need limitations.28 
45. Liberia and East Timor were designated as leas t-developed beneficiary developing countries 
under GSP in 2006.29  GSP was restored to Ukraine in February 2006.30  With the entry into force of 
their free-trade agreements with the United States, Bahrain, Morocco, and four of the five members of 
the Central American Common Market (El Salva dor, Guatemala, Honduras, and Nicaragua) and the 
Dominican Republic no longer qualify for GSP preferences.31  Romania and Bulgaria do not qualify, 
following their accession to the EC in January 2007.32 
46. Under the AGOA, the United States grants duty -free treatment on products benefiting from 
GSP and on 1,835 additional tariff-line items from e ligible sub-Saharan African countries.  Imports 
under AGOA were US$36.1 billion in 2006, a 10.4% increase with respect to 2005.33  The leading 
supplier of imports under AGOA in 2006 was Nigeria,  which accounted for approximately 72% of the 
total, followed by Angola, with around 13%.  Almo st 95% of AGOA imports consisted of petroleum 
products.  Apparel imports under AGOA we re worth US$1.3 billion in 2006. 
47. In December 2006, the President signed into law the Africa Investment Incentive Act of 2006, 
which extends through September 2012 duty-free treatm ent on imports of clothing produced in "lesser 
developed" AGOA beneficiaries, regardless of the origin of the fabric or yarn.34  The quantity of 
clothing that can benefit from this treatment each year is capped at 3.5% of U.S. annual clothing 
imports.35  No benefits are available if the third-countr y fabric or yarn is available in "commercial 
quantities" in AGOA countries.  The Act also expa nds duty-free treatment to fabrics and textile 
products wholly formed in lesser developed AGOA be neficiaries from yarn and fabric produced by 
one or more lesser developed AGOA beneficiaries. 
48. In 2007, the President designated Liberia and Mauritania as eligible to receive AGOA 
benefits.36  As at April 2007, 26 countries were e ligible to receive AGOA apparel benefits.37 
                                                      
27 USTR online information, "CNL Waivers:  Current Waivers to GSP Competitive need Limitations".  
Viewed at:  http://www.ustr.gov/T rade_Development/Prefe rence_Programs/GSP/CNL_ Waivers_Current_ 
Waivers_to_GSP_Competitive_Need_Limitations_(CNLs).html. 
28 Sections 8001 and 8002, Tax Relief and Health Care Act of 2006. 
29 Federal Register , 71 FR 9425, 24 February 2006, and 72 FR 459. 
30 Federal Register,  71 FR 5899, 3 February 2006. 
31 Federal Register , 71 FR 43635, 1 August 2006 (Bahrain);  70 FR 76651, 27 December 2005 
(Morocco);  71 FR 38509, 6 July 2006 (Guatemala);  71 FR 16971, 4 April 2006 (Honduras and Nicaragua);  
and 72 FR 10025, 6 March 2007 (Dominican Republic). 
32 Federal Register , 72 FR 2717, 22 January 2007. 
33 USITC (2007b). 
34 Lesser developed beneficiary sub-Saharan African countries are defined as countries with a per 
capita gross national product of less than US$1,500 a year in 1998 as measured by the World Bank. 
35 19 USC 3721(c)(1)(B). 
36 The following are eligible for AGOA benefits:  Angola, Benin, Botswana, Burkina Faso, Burundi, 
Cameroon, Cape Verde, Chad, Republic of Congo, Democratic Republic of Congo, Djibouti, Ethiopia, Gabon, 
the Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Leso tho, Liberia, Madagascar, Malawi, Mali, Mauritania, 
Mauritius, Mozambique, Namibia, Niger, Nigeria, Rw anda, Sao Tome and Principe, Senegal, Seychelles, 
Sierra Leone, South Africa, Swazila nd, Tanzania, Uganda, and Zambia. 
37 Benin, Botswana, Burkina Faso, Cameroon, Cape Verde, Chad, Ethiopia, Ghana, Kenya, Lesotho, 
Madagascar, Malawi, Mali, Mauritius, Mozambique, Namibia,  Niger, Nigeria, Rwanda, Senegal, Sierra Leone, 
South Africa, Swaziland, Tanzania, Uganda, and Zambia. United States WT/TPR/S/200 
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49. The CBERA, enhanced by the Caribbean Basin Trade Partnership Act (CBTPA), provides 
duty-free treatment for a wide range of products from beneficiary countries.38  CBTPA, which expires 
in September 2008, provides duty-free treatment for certain textile and apparel imports from 
beneficiary countries.  The Haitian Hemispheric O pportunity through Partne rship Encouragement Act 
of 2006 enhanced Haiti's benefits under CBERA.  Imports under CBERA (including CBTPA) were 
US$9.9 billion in 2006, almost 20% less than in 2005 .  This marked decline reflects the termination of 
benefits for El Salvador, Guatemala, Honduras, an d Nicaragua following the entry into force of the 
Dominican Republic-Central America-United States Free Trade Agreement.  CBERA imports in 2006 
were composed primarily of mineral fuels, methanol, and apparel products. 
50. The ATPA, as amended by the Andean Trade Pr omotion and Drug Eradication Act expired in 
February 2008, but was subsequently extended thro ugh 2008.  Under ATPA a wide range of products 
from Bolivia, Colombia, Ecuador, and Peru are eligib le for duty-free treatment.  No major changes 
have occurred with respect to this programme's cove rage since the last Review of the United States.  
In 2006, imports under ATPA were US$13.5 bill ion, US$2 billion more than a year earlier.39  Ecuador 
became the largest source of U.S. imports under ATPA in 2006, followed by Colombia.  Petroleum 
products accounted for 68% of imports under ATPA. 
51. The waiver granted by the WTO General Counc il for CBERA expired on 31 December 2005;  
the waiver for ATPA had expired on 4 December  2001.  AGOA has never been covered by a WTO 
waiver.  The United States submitted revised waiver requests for the three programmes in 
March 2007.40  These were discussed in the WTO Council on Trade in Goods in 2007 but no decision 
has yet been made. 
(iv) Aid for trade 
52. In its New Strategic Framework for Foreign Assistance, announced in January 2006, the 
United States identifies trade capacity building as a priority objective for the promotion of economic 
growth.41  The guiding principles of U.S. trade capacity building are long-term sustainability of 
programme results, local ownership and commitment, and donor coordination. 
53. The U.S. Government defines trade capacity building activities as those "designed to promote 
trade and/or [that] have a direct link to promo ting a country's ability to conduct trade within the 
international trading system".42  The United States counts only the trade-related component of 
particular projects towards its aid for trade comm itments.  According to the United States, only a 
small portion of U.S. funding for infrastructure projects is included in the aid for trade definition.43 
54. Several U.S. agencies are involved in trade capacity building.  Interagency working groups 
within the U.S. Government seek to improve the effectiveness and coherence of U.S. trade capacity 
building activities;  coordination of these groups is  led by the USTR.  The two leading agencies 
involved in the implementation are USAID and th e Millennium Challenge Corporation (MCC).  The 
MCC, established in 2004, provides assistance to lowe r and lower-middle income countries that meet 
                                                      
38 The following received benefits as at early 2008 :  Antigua and Barbuda, Ar uba, Bahamas, Barbados, 
Belize, British Virgin Islands, Costa Rica, Dominica, Gr enada, Guyana, Haiti, Jamaica, Montserrat, Netherlands 
Antilles, Panama, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, and Trinidad and 
Tobago. 
39 USITC (2007b). 
40 WTO documents G/C/W/508/Rev.1, G/C/W/509/Rev.1, and G/C/W/510/Rev.1, 28 March 2007. 
41 OECD (2007b). 
42 OECD (2007b). 
43 OECD (2007b). WT/TPR/S/200 Trade Policy Review 
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specific governance and economic indicators.  Traditi onally, USAID has funded the majority of U.S. 
trade capacity building assistance.  In fiscal year 2006, however, the MCC became the largest source, 
accounting for 44% of the total, compared with 34% from USAID.44  About 80% of MCC funds for 
trade capacity building assistance were for physical infrastructure. 
55. The United States maintains a publicly availabl e, online database of its trade capacity 
building activities.45  According to this database, U.S. f unding for this assistance was US$1.4 billion 
in fiscal year 2007, up from US$637.8 million in fiscal year 2002;  average annual funding was US$1.1 billion between fiscal years 2002 and 2007.  Physical infrastructure accounted for around 
26% of total funding for trade capacity building assistance during this period, followed by trade 
related agriculture, with 11%, a nd business services and training, human resources and labour, and 
financial sector development and good governance, each with around 10%.  Latin America and the 
Caribbean were the top recipients of funding fo r trade capacity building assistance, accounting for 
approximately 30% of the total
46 followed by sub-Saharan Africa (25%), the Middle East and North 
Africa (15%), Asia (13%), the former Soviet Repub lics (12%), and Central and Eastern Europe (6%). 
56. According to the latest WTO/OECD Report on Trade-Related Technical Assistance and 
Capacity Building, U.S. commitments for trade -related technical assistance and capacity building 
averaged US$3 billion per y ear between 2003 and 2005.47  The bulk of support was for trade-related 
infrastructure, which accounted for approximately 72% of total U.S. commitments.  Support for trade development accounted for around 22%, and support fo r trade policy and regul ations accounted for 
the remaining 6%.  OECD data differ from those reported in the U.S. database on trade capacity 
building activities primarily because OECD data  encompass all U.S. funding for relevant 
infrastructure projects, whereas U.S. data cover onl y the trade-related component of such funding. 
                                                     
 
44 Langton (2007). 
45 See USAID online information, "Trade Capacity Building Database".  Viewed at:  http://qesdb. 
cdie.org/tcb/index.html. 
46 The total excludes non-targeted global funding. 
47 OECD and WTO (2007).