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III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures 
1. U.S. Customs and Border Protection (CBP), pa rt of the U.S. Department of Homeland 
Security, is in charge of administering and enfo rcing customs legislation.  The Advisory Committee 
on Commercial Operations of Customs and Border Protection, also known as COAC, is the formal 
venue for consultations with the private sector on customs matters.1 
2. Customs regulations are contained in title 19 of the Code of Federal Regulations.  CBP 
maintains a searchable database of its rulings.2  It also publishes the Customs Bulletin , a weekly 
compilation of decisions, rulings, regulations, and regulatory proposals on customs matters.  
Importers can request advance written rulings from CBP.3  Advance rulings are binding. 
3. Part 174 of title 19 of the Code of Federal Re gulations specifies procedures for administrative 
review of certain customs decisions.4  The number of protests filed for administrative review totalled 
37,485 in 2008, and 36,022 in 2009.  Judicial review  is conducted by the U.S. Court of International 
Trade (CIT), and beyond that, the U.S. Court of Appeals for the Federal Circuit, and the 
U.S. Supreme Court.  In 2009, 423 cases were  filed in the CIT involving customs issues. 
4. There are no special registration requirements for importers;  the use of a customs broker is 
optional.  Only U.S. citizens can  be licensed as customs brokers.5 
5. Under the SAFE Port Act of October 2006, CBP must operate a "single portal system" for the 
collection and distribution of "standa rd electronic import and export data".6  The Act makes 
participation mandatory for federal agencies with  import and export responsibilities, although the 
Office of Management and Budget (OMB) may ex empt certain agencies.  According to the 
authorities, the OMB has not exempt ed any agencies.  In addition to  CBP, 46 agencies participate in 
the single window.  The single window is not yet fully operational due to delays in the implementation of the Automated Commercial Environment or ACE, the cargo processing system that will include the single window.
7  The authorities have not set a target date for the establishment of a 
fully operational single window. 
6. The average release time for U.S. imports  is among the shortest in the world.8  Release of 
merchandise is not contingent upo n the completion of all import formalities, including payment of 
duties.  In general, importers must file CBP fo rm 3461 (entry/immediate delivery) within 15 calendar 
days of a shipment's arrival at a U.S. port.9  CBP has five working days from the filing date to release 
or detain the merchandise.  CBP form 7501 (entry summary), with estimated duties attached, must be 
filed no later than ten working days after the merc handise has entered the United States.  Duties may 
                                                      
1 Omnibus Budget Reconciliation Act of 1987, Public Law 101-203. 
2 Customs Rulings Online Search System.  Viewed at:  http://rulings.cbp.gov. 
3 19 CFR 177. 
4 19 CFR 174. 
5 CBP (2005). 
6 Section 405. 
7 ITDS (2009). 
8 World Bank online information, Doing Business:  Measuring Business Regulations.  Viewed at:  
http://www.doingbusiness.org. 
9 CBP (2004). United States WT/TPR/S/235 
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be paid electronically if both forms are filed through a CBP-approved electronic data interchange 
(EDI) system, rather than in paper format.  A cu stoms bond must be posted for each importation of 
merchandise.10 
7. CBP maintains several advan ce information requirements.  In October 2002 CBP issued 
regulations, commonly known as the 24-hour rule , requiring the presentation of vessel manifest 
information 24 hours prior to loading the car go on a U.S.-bound vessel at a foreign port.  
Subsequently, the Trade Act of 2002 directed CB P to promulgate regulations for the mandatory 
collection of electronic cargo information prior to th e arrival of the cargo in the United States by any 
mode of commercial transportation.  CBP issued these regulations in December 2003.11 
8. Pursuant to section 203 of the SAFE Port Act, in November 2008 CBP issued regulations that 
establish additional advance inform ation requirements for vessel-ope rating carriers, and new advance 
information requirements for importe rs of merchandise arriving to the United States by vessel.  The 
regulations, commonly known as the "10+2 rule", ente red into effect in January 2009, and allow for 
full enforcement from January 2010.12  Under the 10+2 rule, carriers must provide CBP with a vessel 
stow plan no later than 48 hours after the vessel 's departure from the last foreign port before the 
United States.  If the voyage is less than 48 hours, th e stow plan must be sent prior to arrival at a U.S. 
port.  Carriers must also submit "container status  messages" regarding certain events relating to 
containers no later than 24 hours after the message is  entered into their tracking system.  Carriers are 
only required to create or collect container status message data that they already create or collect on 
their own, and that they maintain in their electronic equipment tracking system.  Carriers of bulk and 
break bulk cargo are exempt from these requirements. 
9. Under the 10+2 rule, importers of merchandise arriving in the United States by vessel must 
provide CBP with an "importer security filing" consis ting of ten elements of information.  The first 
eight, which must be provided at least 24 hours befo re the cargo is loaded on the vessel, are:  name 
and address of the seller;  name and address of the bu yer;  importer of record number or foreign trade 
zone applicant identification number;  consignee number;  name and address of the manufacturer or 
supplier;  name and address of the "ship-to party";  country of origin;  and HS code.  The other two 
elements, which must be provided at least 24 hours prio r to the vessel's arrival at a U.S. port, are the 
"container stuffing location" and the name and address of the consolidator.  Bulk cargo is not subject 
to the importer security filing.  All filings unde r the 10+2 rule must be done through a CBP-approved 
EDI system. 
10. CBP estimates that the annual cost of complying with the 10+2 rule ranges from 
US$890 million to US$7 billion per year.13  It indicates that approximately 11 million shipments 
delivered by 1,000 carrier companies to between 200,000 and 750,000 importers will be subject to the 
rule. 
11. CBP relies on the Automated Targeting System (ATS), a mathematical model that uses 
weighted rules to assign a risk  score to incoming shipments and select them for additional 
                                                      
10 CBP has the authority to require bonds under 19 USC 1623.  See WTO (2008). 
11 For a description of the advance information requirements contained in these regulations, see WTO 
(2008). 
12 Federal Register , 73 FR 71729, 25 November 2008.  The name "10 + 2" is shorthand for the number 
of advance data elements required by CBP.  Carriers are generally required to submit two data elements (a vessel stow plan and container status messages) in add ition to the elements that they were already required to 
transmit in advance (the "2" of "10+2");  and importers are required to submit an Importer Security Filing 
containing 10 data elements (the "10" of "10+2"). 
13 Federal Register , 73 FR 71729, 25 November 2008. WT/TPR/S/235 Trade Policy Review 
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examination.  Approximately 25 million containers cr ossed the U.S. border by truck, sea, and rail in 
2008;  sea and truck each accounted for around 45% of  crossings, and rail accounted for the rest.14  
Around 22% of all containers crossing the U.S. borde r were subject to additional examination:  90% 
for containers crossing by rail, 25% by truck, and 3% by vessel. 
12. Under the Container Security Initiative (CSI),  CBP officers are deployed to participating 
foreign ports, where they identify high-risk contai ners.  Host-country officers inspect these containers 
using non-intrusive 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.  CSI is operational in 
58 foreign seaports, which cover around 80%  of U.S.-bound containerized cargo. 
13. The Implementing Recommendations 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.15  This prohibition will enter into effect on 
1 July 2012, or at an earlier date set by the Secretary of Homeland Security.16  The Secretary may 
delay the implementation by renewable two-year periods after certifying the existence of at least two 
of six conditions listed in the Act.  One such cond ition would be fulfilled if the "use of systems that 
are available to scan containers ... will significantl y impact trade capacity and the flow of cargo".17 
14. In late 2009, the Secretary of Homeland Secur ity indicated that the Department of Homeland 
Security would face "prohibitive challenges" in  implementing 100% scanni ng by 2012, and would 
therefore "seek the time extensions authorized by law".18  The Secretary also indicated that 100% 
scanning was currently "unworkable" at many po rts "without seriously hindering the flow of 
shipments or redesigning the ports themselves, which would require huge capital investment".  In this 
context, the Secretary stated that the Department of Homeland Security would continue to work with 
Congress to mitigate security th reats "across all pathways". 
15. As part of its Secure Freight Initiative, CBP de ploys systems to scan U.S.-bound containers at 
ports in certain foreign countries.  According to th e U.S. authorities, the U.S. Government pays for all 
costs associated with p ilot projects under the Secure Freight Initiative.  The authorities also note that 
CBP will expand scanning operations to "ports of more strategic importance" in accordance with a 
"risk-based deployment strategy".  Pilot programme s are in place at ports in Honduras, Pakistan, the 
United Kingdom, and, in a more limited way, in Oman;  the pilot programmes in Hong Kong, China 
and Korea have been terminated. 
16. CBP conducts post-clearance audits in the form of "focused assessments" or "quick response 
audits".  Focused assessments consist of a full review  of an importer's internal controls for managing 
the risk of non-compliance with import regulations.  Quick response audits focus on a single issue.  
CBP conducted 320 audits in fiscal  year 2008, and 345 in 2009. 
17. CBP continues to administer a supply chain security programme known as C-TPAT.  
C-TPAT provides businesses that adopt "supply chain security criteria" with reductions in the risk score assigned by CBP to their shipments.  As a result, C-TPAT shipments face less frequent 
                                                     
 
14 CBP (2008). 
15 Public Law 110-53, Section 1701. 
16 Section 1701(b)(2). 
17 Section 1701(b)(4)(E). 
18 "Transportation Security Challenges Post-9/11", testimony of secretary Janet Napolitano before the 
U.S. Senate Committee on Commerce, Science, and Transportation, 2 December 2009. United States WT/TPR/S/235 
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examinations than non-C-TPAT shipments with a si milar risk profile.  Risk-score reductions are 
commensurate with one of three security levels a dopted by participants.  According to CBP, C-TPAT 
importers are four to six times le ss likely to incur an examination.19 
18. Participation in C-TPAT is voluntary.  Partic ipation by foreign manufacturers outside the 
NAFTA area requires an invitation by CBP.  There are 1,008 foreign manufacturers participating in 
C-TPAT;  86% are located in Mexico, and the r est in Canada.  At end 2009, 9,300 businesses had 
received C-TPAT certification. 
19. Under mutual recognition agreements with Cana da, Jordan, New Zealand, Japan, and Korea, 
CBP takes into consideration the standing of part icipants in these countries' authorized economic 
operator programmes when conducting its own risk determinations. 
(ii) Customs valuation 
20. 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.20  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.21 
21. There have been no changes in customs valuati on legislation since the last Review of the 
United States, in 2008.  Relevant provisions are cont ained in the Trade Agreements Act of 1979.  The 
transaction value, which is the preferred valu ation method under U.S. legislation, excludes 
international freight, insurance, and other c.i.f. charges.  The transaction value method is used for 
approximately 86% of imports.22  In the previous Review of the United States it was noted that CBP 
had solicited public comments on a proposal to use the pr ice paid in the last, rather than the first, sale 
prior to importation into the United States for pur poses of determining the transaction value in a 
transaction involving a series of sales.23  In August 2008, CBP withdrew this proposal.24 
22. Administrative and judicial review of customs valuation decisions are governed by the same 
procedures as decisions on other customs matters (see section (i) above). 
(iii) Rules of origin 
23. The United States applies non-preferential and pref erential rules of origin.  The preferential 
rules of origin maintained under several FTAs conc luded after 1997 have yet to be notified to the 
WTO (January 2010).25  Determination of origin relies on self-certification. 
24. All merchandise imported into the United States may be reviewed by CBP with respect to 
country of origin.  Non-preferential rules of origin are applied for purposes of MFN treatment, 
government procurement, country of origin markin g, and anti-dumping and countervailing measures.  
In administering non-preferential rules of origin, CBP uses "substantial transformation" as the primary 
                                                      
19 CBP (2008). 
20 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. 
21 GATT document L/5005, 17 July 1980. 
22 Based on a survey carried out by CBP between October 2008 and July 2009.  See USITC (2009c). 
23 See WTO (2008). 
24 Federal Register, 73 FR 49940, 25 August 2008. 
25 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. WT/TPR/S/235 Trade Policy Review 
Page 24 
 
 
test to determine the origin of an imported good w ith components from more than one country.  Under 
this test, a good is considered to originate in the last country where it underwent a process that 
resulted in a new and different article of commerce with a name, character, or use different from its components.
26  The substantial transformation test may be adapted and interpreted further by agencies 
other than CBP to fit the needs and purposes of th e particular context in which non-preferential rules 
are applied. 
25. The substantial transformation test, which has evolved through numerous court decisions, is 
fact-specific and is applied on a case-by-case basis.  According to CBP, its administration "has not been without problems, [which] derive in large part from the inherently subjective nature of 
judgments made in case-by-case adjudications as to wh at constitutes a new and different article and 
whether processing has resulted in a new name, character, and use".
27  CBP considers that the 
substantial transformation test has often resulted in  "a lack of predictability and certainty for both 
CBP and the trade community".  In July 2008, CBP  issued a proposal to establish uniform rules of 
origin in customs legislation by replacing the sy stem of case-by-case adjudication under substantial 
transformation with the NAFTA marking rules, a set of  codified origin rules that rely primarily on 
changes in tariff classification.28  The U.S. authorities indicate that  they have analysed the public 
comments on its proposal, and are considering what action to take, if any. 
26. Preferential rules of origin are maintained under FTAs and unilateral tariff concessions.  To 
qualify for unilateral tariff con cessions, goods with components from more than one country must 
generally meet a substantial transformation test a nd local-value content requirement of 35%.  Some 
FTAs, including with Israel, Jordan, and Oman also use this rule of origin.29 
27. NAFTA, CAFTA-DR, and the FTAs with Austra lia, Chile, Peru, and Singapore mostly use 
changes in tariff classification to determine the orig in of a good with components from more than one 
country.  Changes in tariff classification are some times used in combination with regional-value 
content requirements.  Under the CAFTA-DR "d iagonal" cumulation provision, for purposes of 
determining whether a lim ited amount of certain w oven apparel is origina ting under the agreement, 
materials used in the production of such woven appa rel that are produced in Mexico and that would be 
originating under the CAFTA-DR if they had been  produced in a CAFTA-DR country are considered 
as having been produced in a CAFTA-DR country.30  No other U.S. FTA contains provisions on 
diagonal cumulation.  In the context of the previous  Review of the United States, the authorities noted 
that this scheme benefits U.S. companies with inve stments in Mexico, and helps to integrate regional 
production. 
(iv) Tariffs 
(a) MFN and other trading partners 
28. The United States continues to apply the genera l policy of granting Normal Trade Relations 
(that is MFN) duty status to all trading partners31 with the exceptions of Cuba and the Democratic 
People's Republic of Korea.  Imports from these tw o countries are subject to the rate imposed by the 
Smoot-Hawley Tariff Act of 1930.  The United St ates provides conditional MFN tariff treatment to 
                                                      
26 See, for example, Anheuser-Busch Brewing Assn. v.  United States, 207 U.S. 506 (1908);  and 
United States v.  Gibson-Thomsen Co., 27 CCPA 267 (1940). 
27 Federal Register , 73 FR 43385, 25 July 2008. 
28 Federal Register , 73 FR 43385, 25 July 2008. 
29 See WTO (2008). 
30 Appendix 4.1-B of the CAFTA-DR. 
31 19 USC 2136. United States WT/TPR/S/235 
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several countries of the former Soviet Union, all of  which have bilateral commercial agreements with 
the United States.32 
(b) Applied MFN tariffs 
29. In common with only a few other WTO Members,  the United States levies customs duties on 
the basis of the f.o.b. value at th e point of export, rather than c.i. f. value at point of entry.  The 
following paragraphs are based on the 2009 Harm onized Tariff Schedule of the United States 
(HTSUS).  With the large number of non- ad valorem  tariffs in the Schedule, it has not been possible 
to use the 2010 Schedule because unit prices are not yet available.  However, this is unlikely to make 
a major difference to average tariff levels. 
30. There were 10,449 tariff lines at the 8-digit le vel in the 2009 HTSUS.  Of these, 196 tariff 
lines give in-quota tariff rates for agricultural products  (WTO definition).  The same products are also 
covered by other tariff lines together with their out-o f-quota tariff rates.  The following analysis refers 
only to the 10,253 out-of-quota tariff rates.  However, the inclusion or exclusion of 196 tariff lines on calculations of the average tariff is not severe:  th e average tariff for agriculture products, excluding 
these lines was 8.9%;  the average, including them w as 8.75%.  The reason is that there are relatively 
few tariff lines involved, and the tariff quotas are fo r products with high out-of-quota rates, while the 
in-quota tariffs are closer to the average tariff rate. 
31. For the 10,253 tariff lines for out-of-quota tariff rates, the simple average applied MFN tariff, 
including the ad valorem  equivalents of specific and compound rates, was 4.8% in 2009, the same as 
in 2007.  Just over 10% of tariff lines in the Schedule are non- ad valorem  tariffs (see Table III.1 and 
Chart III.1), mostly for agriculture products (WTO definition).  The past few years have seen 
commodity prices fluctuate significantly, resulting in  corresponding changes in the AVEs for some of 
the products subject to non- ad valorem  tariffs in the United States.  While the average tariff is 
relatively low, there is a considerable variation w ithin and between some ISIC groups or HS chapters. 
Table III.1 
Structure of the tariff schedule, 1998, 2000, 2002, 2004, 2007 and 2009a 
(%) 
 1998 2000 2002 2004 2007 2009 
Total number of out-of-quota tariff linesa 9,997 10,001 10,297 10,304 10,253 10,253 
Number of tariff lines with in-quota tariff rates 196 196 196 196 196 196 
Non-a d valorem  tariffs (% of all tariff lines) 14.0 12.4 12.2 10.6 10.7 10.7 
Non- ad valorem  with no AVEs (% of all tariff lines) 0.0 0.0 0.0 0.0 0.0 0.0 
Duty-free tariff lines (% of all tariff lines) 18.6 31.5 31.2 37.7 36.5 36.3 
Dutiable tariff lines average rate (%) 7.2 8.0 7.4 7.8 7.6 7.6 
Domestic tariff "peaks" (% of all tariff lines)b 4.9 5.3 5.6 7.1 6.9 6.7 
International tariff "peaks" (% of all tariff lines)c 7.7 7.0 6.6 5.5 5.2 5.3 
Bound tariff lines (% of all tariff lines)d 100.0 100.0 100.0 100.0 100.0 100.0 
 
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, base d on data provided by the U.S.  authorities and notifications. 
                                                      
32 Azerbaijan, Belarus, Kazakhstan, Moldova, Russia, Tajikistan, Turkmenistan, and Uzbekistan. WT/TPR/S/235 Trade Policy Review 
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Chart III.1
Tariff distribution according to the type of duty
(Share of total tariff lines)
Source:  WTO Secretariat estimates, based on data provided by the authorities.Ad valorem 
duty
52.8%Duty free
36.6%Non- ad 
valorem  duty
10.7%
 
32. Agriculture, by any product definition, tends to have the highest tariffs and the greatest 
variability, as measured by the standard deviation.   Within agriculture, the sectors with the highest 
tariffs are tobacco, dairy, and sugar.  Outside of ag riculture, the textiles and a pparel chapters have the 
highest tariff levels, although the greatest variability is  in the leather, rubber, footwear, and travel 
goods sector, mainly because of high tariffs for footwear (see Chart III.2). 
33. For 2007 and 2008 the United States provided a notification for imports under its Uruguay 
Round commitments for 44 tariff quotas covering 171 agriculture tariff lines.33  Only three of the 
tariff quotas are free of duty, and rates vary in the other quotas up to a maximum of 51.1% for a tobacco tariff line (see Chapter IV(1)(iii)). 
(c) WTO bindings 
34. Following the Uruguay Round, the United States bound all tariff lines in Chapters 1-97, 
except two lines covering crude petroleum.  In genera l the applied tariff is the same as the bound tariff 
and there is very little difference between the averag e bound and applied rates.  The last tariff line to 
reach its final bound MFN tariff rate, HS 3404.20.00  (artificial waxes and prepared waxes of 
polyethylene glycol), became free of duty in January 2009. 
 
 
                                                     
 
33 WTO document G/AG/N/USA/72 of 1 March 2010. United States WT/TPR/S/235 
 Page 27 
 
 
0 5 10 15 20 25 30 35 40 45 50 55 60
WTO Agriculture
Animals & prod. thereof
Dairy products
Coffee, tea, cocoa, sugar
Cut flowers, plants
Fruit & vegetables
Grains
Oil seeds, fats, oils & their prod.
Beverages & spirits
Tobacco
Other agri. prod.
WTO Non-agriculture (incl. petroleum)
Fish & fishery prod.
Mineral prod., precious stones & metals
Metals
Chemicals & photographic supplies
Leather, rubber, footwear & travel goods
Wood, pulp, paper & furniture
Textile & clothing
Transport equipment
Non-electric machinery
Electric machinery
Non-agriculture articles
PetroleumChart III.2
Tariff averages and dispersion by product groups, 2010
(Percent)
Product groups Average (%)
Note
Source: (26.6)
(5.8)
(13.8)
(6.7)(21.4)(2.4)
(2.9)(4.3)(5.5)
(2.1)
(5.5)(2.7)(2.1)
(12.1)
(5.3)
(4.7)(2.6)
(1.9)(5.6)(20.8)
(2.3)(11.6)(124.4) (8.0)
Simple average applied MFN tariff (4.8%)
The figures in brackets correspond to the standard deviation.
WTO Secretariat estimates, based on data provided by the authorities. 
 
(d) Preferential tariffs 
35. Tariff preferences may be granted by the United States either unilaterally or in the context of 
bilateral or regional free-trade agreements.  Th e United States has free-trade arrangements with 
17 countries through 11 different agreemen ts (see Chapter II(3) and Table AII.2).34  Since the 
previous Review of the United States, the agre ements with Costa Rica (as part of CAFTA-DR), 
Oman, and Peru have entered into fo rce (see Table AII.2 for an analys is of the Agreements with Peru 
and Oman).  A summary of CAFTA-DR was provided in the previous Trade Policy Review of the United States. 
(e) Temporary tariff suspensions 
36. Until recently, Congress has been in the practice of  temporarily suspending or reducing tariffs 
on imports of a wide variety of goods (usually in puts for manufacturing) through miscellaneous tariff 
bills (MTBs).  Proposals for temporary duty suspensi ons or reductions are reviewed by the relevant 
Congressional bodies, Executive Branch agencies, and the U.S. International Trade Commission.  The 
public is also invited to submit comments on MT Bs.  Those that meet Congressional criteria are 
combined into a single miscellaneous tariff bill, th e most recent of which was passed in 2006 but 
expired at the end of 2009.  In April 2010, many  different bills were before Congress proposing or 
extending a temporary suspension or reduction of du ties on a variety of products, but none had been 
passed. 
                                                     
 
34 See WTO document WT/TPR/S/200/Rev.1 (Table AIII.3) for a summary analysis of free-trade 
agreements in force in 2008. WT/TPR/S/235 Trade Policy Review 
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(v) Other charges affecting imports 
37. Imports continue to be subject to a merc handise processing fee and a harbour maintenance 
fee.  The merchandise processing fee applies to imports valued at more than US$2,000.35  The fee is 
set at 0.21% of the import value;  the statutory minimum and maximum are US$25 and US$485.  
Imports eligible for preferences under U.S. FTAs (e xcept with Jordan and Morocco), ATPDEA, and 
AGOA's textile and apparel provisions are exem pt.  Imports from Israel, CBERA and lesser 
developed countries are also exempt, regardless of whether they qualify for preferences.  The application of the merchandise processing fee h as been extended until October 2014, following the 
adoption of the American Jobs Creation Act of 2004. 
38. 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.
36  They have also 
noted that the merchandise processing fee's statutor y ceiling was introduced in part "to address GATT 
concerns".37 
39. Imports valued at more than US$2,000, and unloaded at a port receiving federal funds for 
maintenance are subject to a harbour main tenance fee regardless of their origin38;  domestic cargo 
valued at more than US$1,000 is also subject to th e fee.  The fee, which can only be charged once for 
the same cargo, is set at 0.125% of the value of the cargo and is collect ed by CBP.  The U.S. 
authorities indicate that the purpose of the harbour maintenance fee is to "have the businesses that 
benefit directly from the use of U.S. harbours ... b ear the cost of maintenance of those harbours".39 
40. Exported cargo is exempt from the harbour maintena nce fee;  this follows a 1998 decision by 
the U.S. Supreme Court that the harbour maintenanc e 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".40 
41. The United States applies federal excise taxes on:   fuels;  crude oil and petroleum products;  
ozone depleting chemicals;  sport fishing equipmen t;  bows, quivers, broadheads, and points;  arrow 
shafts;  certain tyres;  "gas guzzler" automobiles;  heavy trucks, trailers, and tractors;  vaccines;  
distilled spirits;  tobacco products;  cigarette pa pers and tubes;  and firearms and ammunition.41  The 
tax is applied on both imports and domestic goods at the same rates.  The Ch ildren's Health Insurance 
Program Reauthorization Act of 2009 increased the federal excise tax on all tobacco products and 
cigarette paper and tubes from April 2009.42 
42. Beer is also subject to federal excise tax.  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 annual production of less than 
                                                      
35 19 USC 58c. 
36 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
37 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
38 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. 
39 WTO document WT/TPR/M/126/Add.3, 22 November 2004. 
40 United States v.  United States Shoe Corp., 523 US 360 (1998), 31 March 1998.  Section 11116(b)(1) 
of the Safe, Accountable, Flexible, Efficient Transpor tation Equity Act (P.L. No. 109-59) amended the harbour 
maintenance tax to exempt exports. 
41 26 USC 4001 et seq. 
42 Public Law 111–3. United States WT/TPR/S/235 
 Page 29 
 
 
two million barrels of beer.  Importe d beer is subject to the rate of  US$18 per barrel of 31 gallons, the 
same rate as domestic beer that is  not eligible for the reduced rate.43 
43. Imported and domestic wine is subject to federal excise tax ranging from US$0.226 to 
US$3.40 per wine gallon.44  Small domestic producers (with annual production of 150,000 wine 
gallons or less) are eligible for a credit of US$0. 90 per wine gallon (US$0.056 for hard cider) on the 
first 100,000 wine gallons.  Decreasing credit ra tes are available for wineries producing between 
150,000 and 250,000 wine gallons per year. 
44. According to the U.S. authorities, tax advantages for producers of beer and wine "have no 
trade distorting effect", since total production of b eer and wine by small producers is small, and small 
producers frequently face higher costs of production.45 
45. The following services are subject to federal ex cise tax:  local telephone and teletypewriter 
exchange services;  use of international air travel facilities;  transportation of persons and property by 
air;  passenger ship voyages;  and certain polici es issued by foreign insu rers (see Chapter IV(2)). 
46. 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) Contingency measures 
(a) Anti-dumping and countervailing duties 
47. The United States considers that trade remedi es form an essential part of the current 
rules-based international trading system. 
48. There have been no major changes in anti- dumping (AD) and countervailing duties (CVD) 
legislation since the last Review of the United Stat es.  AD and CVD legislation is contained in title 19 
of the U.S. Code (sections 1671-77).  Regulations are included in title 19 of the Code of Federal 
Regulations.46  The International Trade Administration in  the U.S. Department of Commerce and the 
U.S. International Trade Commission (USITC) are res ponsible for the administration of legislation on 
AD and CVD in the United States.  The confer ence report accompanying the 2010 Consolidated 
Appropriations Act directed the Secretary of Co mmerce to work with the Secretaries of the 
Departments of Homeland Security and the Treasury to  conduct an analysis of the relative advantages 
and disadvantages of prospective and retrospective AD and CVD systems.47 
49. Aspects of U.S. AD, and to a lesser extent, CVD investigations, procedures and findings were 
the subject of WTO disputes during the review pe riod.  Complaints under the Dispute Settlement 
Understanding were brought by Brazil, China, Korea,  Thailand, and Viet Nam (Table AII.1).  Most 
concerned, at least in part, the U.S. practice of not granting offsets for non-dumped sales, also known 
as "zeroing", in calculating dumping margins. 
50. Under the Deficit Reduction Act of 2005, whic h repealed the Byrd Amendment, CBP has 
continued to distribute AD and CVDs assessed on entries of goods made and filed before 
1 October 2007 to members of the affected domestic  industry that supported the petition for the AD or 
                                                      
43 26 USC 5051. 
44 26 USC 5041. 
45 WTO document WT/TPR/M/200/Add.1, 9 September 2008. 
46 Parts 201, 207, 351, 353, and 355. 
47 See Federal Register , 75 FR 16079, 31 March 2010. WT/TPR/S/235 Trade Policy Review 
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CVD investigation.  CBP distributed US$264 milli on in fiscal year 2007, US$180 million in 2008, 
and US$248 million in 2009.48  The U.S. Court of Appeals for th e Federal Circuit reversed a decision 
by the U.S. Court of International Trade that  the Byrd Amendment's so-called "petition support 
requirement" was unconstitutional.  Under the petition support requi rement, if a domestic company 
publicly expressed support for the imposition of an AD or  CVD order, then it was eligible to receive 
some part of the funds collected as a result of the order.49  The U.S. Supreme Court was asked to 
review this decision in late 2009. 
51. After a downward trend between  2004 and 2006, initiations of AD investigation rose sharply 
in 2007, decreased in 2008, and then increased slightly  in 2009 (Table III.2).  Of the 43 investigations 
initiated in 2007 and 2008, around 95% resulted in provisional measures, compared with around 
three quarters in 2005-06. 
Table III.2 
Anti-dumping investigations initiated, 2004-09 
 2004 2005 2006 2007 2008 2009 
Investigation initiations 26 14 7 27 16 20 
Of the investigations initiated,  the following determinations 
have been madea:       
 Preliminary injury determina tions, affirmative 21 9 7 26 16 18 
 Preliminary injury determinations, negative 1 4 0 1 0 2 
 Provisional measures applied 21 9 7 25 16 4 
 Final dumping determinati ons, affirmative 21 9 7 25 15 4 
 Final dumping determinati ons, negative 1 0 0 1 0 0 
 Final duty orders imposed 16 8 2 21 15 4 
 Final injury determinations, negative 5 2 3 4 0 0 
 Suspension agreements 0 0 2 0 2b 0 
Continuationsc 18 43 48 32 18 18 
Revocationsd 13 21 19 30 13 1 
Imports subject to investigation initiations (US$ million)e 4,899 353 961 2,460 .. .. 
 As % of total imports 0.33 0.02 0.05 0.11 .. .. 
 
.. Not available. 
 
a Data on injury and dumping determinati ons, provisional and final meas ures imposed, and suspension agreements are reported on 
the basis of the year in which the releva nt investigation was initiated, regardless of  the year in which a given action (e.g., 
preliminary injury determination,  preliminary dumping determination, final injury  determination) actually occurred.  Data on al l 
other actions (i.e., initiations, continuations, and revocations) ar e reported on the basis of th e year in which the action act ually 
occurred. 
b This includes the re-negotiation of a non-market economy agre ement with Ukraine as a market economy agreement and the 
replacement of the Mexican tomato suspen sion agreement with a new agreement. 
c Number of AD orders continued as a result of sunset reviews. 
d As a result of sunset reviews. 
e Figures refer to fiscal year.  
Source:  WTO Secretariat, based on Import Admi nistration online information.  Viewed  at:  http://ia.ita .doc.gov/stats/inv-
 initiations-2000-current.html;  and data provided by the U.S. authorities.  
52. Final AD duty orders peaked in 2007, after declining steadily during 2004-06.  In 2007-08, 
84% of investigations resulted in final AD duty or ders, compared with 48% in 2005-06.  Of the 20 
investigations initiated in 2009, n one had resulted in final duty or ders by December 2009, (4 had 
resulted in such orders by mid 2010). 
                                                      
48 CBP online information, Continued Dumping and Subsidy Offset Act of 2000.  Viewed at:  
http://www.cbp.gov/xp/cgov/trade/pr iority_trade/add_cvd/cont_dump. 
49 SKF USA, Inc. v. United States, 556 F. 3d 1337 (Fed. Cir. 2009). United States WT/TPR/S/235 
 Page 31 
 
 
53. The United States had 246 AD duty orders and 8 suspension agreements in effect in 
December 2009, up from 224 AD duty orders and 8 suspension agreements in December 2007.  Imports from 40 countries or territories were affected (Table III.3).  Imports from China are subject to 
the largest number of U.S. AD duty orders, with 32% of the total, followed by the EU with 13%, and 
Japan with 8%;  Chinese Taipei, India, and Ko rea each account for 6%.  Between 2006 and 2009, 
there was a 40% increase in AD orders applied on China, and a 24% decrease in AD orders on EU 
countries;  for most other countries and territori es, the number decreased or remained the same. 
Table III.3 
Anti-dumping measures by country and product, 2004-09 
 2004 2005 2006 2007 2008 2009 
Trading partner/region       
Argentina 6 6 5 3 2 2 
Brazil 14 14 13 10 11 11 
Canada 9 6 3 2 1 2 
China 55 57 58 62 69 82 
Chinese Taipei 17 16 16 15 16 16 
EU countries (27) 57 53 50 36 32 32 
India 12 13 14 14 14 16 
Indonesia 5 5 6 6 6 6 
Japan 29 27 23 21 20 20 
Korea 19 17 16 14 14 15 
Mexico 9 10 9 8 7 8 
Russia 3 4 4 8 4 8 
South Africa 4 4 3 3 3 3 
Thailand 7 8 8 7 6 6 
Turkey 3 3 3 3 3 3 
Ukraine 6 6 6 7 6 7 
Other America 4 5 5 3 4 3 
Other Asia (including Australia) 10 10 10 7 10 10 
Other Europe 4 4 4 3 4 4 
Total number of measures 273 268 256 232 232 254 
 
Source:  WTO Secretariat, based on USITC online inform ation, http://info.us itc.gov/oinv/sunset.nsf/ 
 AllDocID/96DAF5A6C0C5290985256A0A004DEE7D?OpenDocume nt;  and information provided by the U.S. 
 authorities. 
54. Around 45% of AD duty orders involve iron and st eel products.  Other product categories that 
are commonly subject to AD duty orders are chemicals and pharmaceuticals, miscellaneous manufactured product, and metals a nd minerals, whose individual shar es in total orders range between 
10% and 18%. 
55. Of the 254 AD duty orders and suspension agreements in effect in December 2009, 
approximately 57% had been in place less than 10 years, 28% between 10 and 20 years, and 15% had 
been in place more than 20 year s.  The average duration of an AD duty order is between 9 and 10 
years. 
56. The AD duty orders that have been in effect for between 25 and 36 years affect greige 
polyester cotton printcloth, chloropicrin, potassium permanganate, and barium chloride from China;  
small diameter carbon steel pipe from Chinese Taip ei;  sorbitol from France;  pressure sensitive 
plastic tape from Italy;  and polychloroprene rubbe r and prestressed concrete steel wire strand from 
Japan. 
57. AD duties applied during the period under review  vary widely.  Definitive duties resulting 
from investigations completed in 2009 range from 3% to 235%. WT/TPR/S/235 Trade Policy Review 
Page 32 
 
 
58. The value of imports subject to AD investiga tion initiations has fluctuated since 2004.  It 
totalled approximately US$2.5 billion in fiscal year 2007, two-and-a-half times more than in the previous fiscal year, but only half the amount in fiscal year 2004 (Table III.2).  The 2007 figure represents around 0.1% of total U.S. imports. 
59. The United States has not entered into any new suspension agreements since its last Review 
in 2008.  There were eight suspension agreements  in place at end 2009, with Argentina, Mexico, 
Russia, and Ukraine.
50  Five involve a price undertaking, two involve export limits combined with 
price undertakings, and one is based on export limits. 
60. Initiations of CVD investigations almost tripled on average between 2004-06 and 2007-09 
(Table III.4).  All investigations initiated in 2007 and 2008  resulted in a final duty order, compared 
with 40% in 2005-06.  Of the 14 inv estigations initiated in 2009, 11 ha ve resulted in the application of 
provisional measures, and 2 in final duty orders. 
Table III.4 
Countervailing duty investigations  and measures imposed, 2004-09 
 2004 2005 2006 2007 2008 2009 
Investigation initiations 3 2 3 7 6 14 
Of the investigations initiated,  the following determinations 
have been madea       
 Preliminary injury determinations, affirmative 3 2 3 7 6 13 
 Preliminary injury determinations, negative 0 0 0 0 0 1 
 Provisional measures applied 3 2 3 7 6 11 
 Final CVD determinations, affirmative 1 2 3 7 6 3 
 Final CVD determinations, negative 2 0 0 0 0 1 
 Final duty orders imposed 0 2 0 7 6 2 
 Final injury determinations, negative 1 0 3 0 0 1 
Continuationsb 0 12 3 7 1 1 
Revocationsc 0 4 6 9 3 0 
 
a Data on injury and CVD determinations, and provisional and fi nal measures imposed are reported on the basis of the year in 
which the relevant investigation was initia ted, regardless of when a given action (e .g., preliminary inju ry determination, 
preliminary CVD determination, final inju ry determination) actually occurred.  Da ta on all other actions (i.e., initiations, 
continuations, and revocations) are reported on the basis of the year in which th e action actually occurred. 
b Number of CVD orders continued as a result of sunset reviews. c As a result of sunset reviews. 
 
Source:  WTO Secretariat, based on Import Admi nistration online information.  Viewed  at:  http://ia.ita .doc.gov/stats/inv-
 initiations-2000-current.html. 
61. The increase in the number of CVD investigations  mostly reflects the change in 2007 in the 
U.S. Department of Commerce's longstanding policy not to apply CVDs to economie s that it classifies 
as "non-market".  Although the Department of Co mmerce has the legal authority to apply CVDs to 
non-market economies, it had decided in 1984 that "subsidies had no measurable economic effect in 
the Soviet-style economies that were then under consideration".51  The U.S. Court of Appeals for the 
Federal Circuit upheld this policy in 1986. 
62. The Department of Commerce's policy change w ith respect to the application of CVDs on 
non-market economies was made in the context of its CVD investigation on subsidies provided to 
Chinese producers and exporters of coated free-shee t paper.  In March 2007, the Department of 
Commerce decided to apply preliminary CVDs on im ports of coated free-sheet paper from China, 
                                                      
50 WTO document G/ADP/N/188/USA, 18 September 2009. 
51 ITA online information, "Commerce Department Targets Chinese Subsidie s on Coated Free-Sheet 
Paper".  Viewed at:  http://www.trade.gov/press/pub lications/newsletters/ita_0407/china_paper_0407.asp. United States WT/TPR/S/235 
 Page 33 
 
 
stating that "China's economy [had] developed to the point that [the Department of Commerce] can 
add another trade remedy tool".  Of the 27 CVD investigations initiated si nce 2007, 5 have involved 
countries other than China. 
63. There were 41 CVD orders in effect in Decemb er 2009, 10 more than in 2007, but fewer than 
in 2004.  Approximately 30% of CVD orders involve China, and 20% India.  Other cases involve 
Korea (10% of total orders), and Brazil and Indone sia, (7% each).  Half of all CVD orders were 
imposed on iron and steel products, and almost 20% on miscellaneous manufactured products.  
Agriculture and forest products, and chemicals a nd pharmaceuticals each acco unted for 14% of all 
CVD orders. 
64. In those instances when CVDs were applied as a result of the investig ations initiated since 
January 2008, they ranged between 1% and 300%. 
65. The average duration of a CVD duty order is nearly nine years.52  Of the 41 orders in effect in 
December 2009, 5 had been in effect for around 23 years and affected heavy iron construction 
castings from Brazil, pistachios from Iran, stainl ess steel cooking ware from Korea, and welded 
carbon steel pipe from Turkey.  In 2007 and 2008, 20 CVDs were subject to sunset reviews;  12 were 
revoked, up from 10 in 2005-06. 
66. CVD petitions are often accompanied by AD petitions, often resulting in the simultaneous 
application of AD and CVDs.  Around 90% of the 41 C VD orders in effect in December 2009 have a 
companion AD order. 
(b) Safeguards 
67. U.S. legislation on global safeguards is cont ained in title 19 of the U.S. Code (section 
2251-54).  The USITC conducts global safeguard inv estigations, and the President makes the final 
decision whether to provide relief, and about the form and amount. 
68. Safeguard measures by the United States may incl ude tariffs, quantitative restrictions, tariff 
quotas, or other measures listed in legislation.  Under NAFTA, Canada and Me xico must be excluded 
from the application of global safeguard measures,  unless their imports, considered individually, 
account for a substantial share of to tal imports and make an important contribution to serious injury.  
None of the U.S.' other FTAs establish such a requirement. 
69. Since its last Review in 2008, the United St ates has not applied any global safeguard or 
initiated any investigation.  The United States ha s applied the price-based version of the Special 
Agricultural Safeguard on certain agri cultural products (Chapter IV(1)). 
70. The USITC conducts country- or region-specific saf eguard investigations (special safeguards) 
under legislation that implements U.S. FTAs.  No  special safeguard measures were maintained, or 
investigations initiated during the period under review. 
71. Under title 19 of the U.S. Code (section 2451), the USITC conducts safeguard investigations 
pursuant to the transitional product-specific safeg uard mechanism contained in paragraph 16 of 
China's Protocol of Accession, and the President mak es the final decision whether to grant relief.  One 
such investigations on imports from China was initia ted during the period under review.  It resulted in 
the application of additional duties on imports of passenger vehicle and light truck tyres from China, 
                                                      
52 WTO Secretariat, based on USITC online informa tion.  Viewed at:  http://info.usitc.gov/oinv/ 
sunset.nsf/AllDocID/96DAF5A6C0C5290985256A0A004DEE7D?OpenDocument. WT/TPR/S/235 Trade Policy Review 
Page 34 
 
 
following a determination by the USITC that such  tyres were being imported "in such increased 
quantities or under such conditions as to cause ma rket disruption to the domestic producers".53  The 
additional duty is 35% during the first year, 30%  during the second year, and 25% during the last 
year.  The applied MFN duty is 4%.  China has re quested the establishment of a panel to rule on the 
consistency of this measure with WTO disciplines (Table AII.1). 
(vii) Quantitative restrictions, controls, and licensing 
72. Bans or approval requirements for foreign policy purposes are applied on most imports from 
two WTO Members:  Cuba and Myanmar.  Simila r restrictions are applied on imports from the 
Democratic People's Republic of Korea, Iran, and certain areas of Sudan.54 
73. Quotas on imports from China of 34 categories of textiles and apparel expired on 
31 December 2008.  These quotas had been applied since 2006 in accordance with a transitional 
safeguard mechanism for textiles and clothing contained in China's WTO Accession Protocol.55  With 
the elimination of these quotas, the United States no longer maintains any quantitative restrictions to 
protect domestic producers. 
74. Import controls for "public interest" reasons are applied on natural gas.  Imports of basic steel 
mill products are subject to automatic licensing, ir respective of their origin.  This requirement, 
established in December 2002 as part of a safegua rd, was extended twice, in 2005 and 2009, under 
new statutory authority unrelated to the safeguard .  According to the U.S. authorities, the steel 
licensing requirement does not restrict the quantity or value of steel impor ts, and is designed to 
provide fast and reliable statistical information on steel imports to the Government and the public.  
Licences are issued at no cost to persons who have  pre-registered with the U.S. Department of 
Commerce;  the registration process is free and can be completed online. 
75. U.S. quantitative restrictions and controls to safeguard consumer health or protect public 
safety or the environment are implemented through non-automatic licensing requirements.  They cover:  fish, wildlife, plants, animals, plant and animal products, narcotic dr ugs, alcoholic beverages, 
tobacco, firearms, explosives, and nuclear facilities.  The latest U.S. reply to the questionnaire on 
import licensing procedures, submitted in October 20 09, contains details of these licensing schemes.
56 
76. The United States amended the Lacey Act in 20 08 to prevent trade in illegally harvested 
plants and products made from such plants.  As amended, the Lacey Act prohibits, inter alia , imports 
of plants and products derived from plants taken in violation of a fo reign plant protection law.  To 
assist in the enforcement of that prohibition, the amended Lacey Act establishes a declaration 
requirement for imports of certain plant and plan t products.  Enforcement of this requirement is 
subject to a phase-in period from December 2008.57 
                                                      
53 Presidential Proclamation 8414, Federal Register , 74 FR 47859, 17 September 2009, and USITC 
(2009a). 
54 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). 
55 WTO (2008). 
56 WTO document G/LIC/N/3/ USA/6, 14 October 2009. 
57 Federal Register , 74 FR 45415, 2 September 2009. United States WT/TPR/S/235 
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(viii) Technical regulations and standards 
77. 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.  
However, Congress may define specific parameters  for technical regulations or conformity 
assessment procedures, or even establish technical regulations and conformity assessment procedures legislatively. 
78. Technical regulations and conformity assessment procedures may also be adopted by states in 
areas of their competence, including all areas not expr essly pre-empted by federal legislation.  States 
may delegate authority to establis h technical regulations and conformity assessment procedures to 
regional, local, or municipal governments.  The s ub-federal measures notified to the WTO during the 
period under review relate to the protection of hu man life and health, environmental protection, and 
consumer safety. 
79. Title IV of the Trade Agreements Act of 1979, as amended, is the legal basis for 
implementing the TBT Agreement in the United States.
58  The Trade Agreements Act designates the 
Office of the USTR as the lead agency within  the federal Government for coordinating and 
developing international trade policy related to standards-related activities and in discussions and 
negotiations with foreign countries on standards-re lated matters;  in this connection, the Trade 
Agreements Act requires the USTR to inform and cons ult with federal agencies with expertise in the 
matters under discussion and negotiation.59  The United States submitted a notification on the 
implementation and administration of the TBT Agreement in February 1996.60  The U.S. enquiry 
point and notification authority under the Agreem ent is the National Institute of Standards and 
Technology (NIST) of the Department of Commerce. 
80. The United States made 203 notifications of technical regulations to the WTO between 
November 2007 and January 2010.61  The Department of Transportation and the Department of 
Energy, each accounted for 10% of total notificati ons, followed by the Food and Drug Administration 
(9%), and the Consumer Product Safety Commi ssion, Department of Agriculture, and the 
Environmental Protection Agency (7% each).62  Approximately 40% of  notifications were by 
sub-federal entities, and covered products like energy appliances, fertilizers, motor vehicles, industrial 
maintenance coatings, furniture, cigarettes, and ammu nition.  During the period under review, 83 sub-
federal measures were notified.  The United States  accounts for the vast majority of sub-federal 
measures notified to the WTO. 
81. The average period for comment sp ecified in U.S. notifications of technical regulations and 
conformity assessment procedures between Nove mber 2007 and January 2010 is around 40 days, 
                                                      
58 19 USC 2531 et seq. 
59 WTO document G/TBT/2/Add.2, 19 February 1996. 
60 WTO document G/TBT/2/Add.2, 19 February 1996. 
61 WTO documents G/TBT/N/USA/311-513, excluding no tifications contained in documents with the 
symbols "Add" and/or "Corr". 
62 Total notifications by the Department of Agriculture include notifications by the Animal and Plant 
Health Inspection Service, Food Safety and Inspection Service, an d Agricultural Marketing Service. WT/TPR/S/235 Trade Policy Review 
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compared with the multilaterally recommended period of 60 days.63  Close to 30% of notifications, 
mostly by sub-federal entities, did not specify a "final date for comments". 
82. Between July 2007 and March 2010, WTO Member s raised concerns in the TBT Committee 
over several U.S. technical regulations (Table AIII. 1).  Of the 13 concerns raised, one was followed 
by formal dispute settlement (March 2010).64 
83. The rulemaking procedures for development of  technical regulations and conformity 
assessment procedures by federal agencies are set out in the Administrative Procedure Act.  As part of the process for the adoption of technical regulatio ns and conformity assessment procedures, the 
agency responsible must publish a notice of propo sed rulemaking and provide interested persons, 
regardless of nationality or residency, an op portunity for comment.  With limited exceptions, 
Executive Order 12889 requires a comment period of at least 75 days for "any proposed Federal technical regulation or any Federal sanitary or phytosanitary measure of general application".
65  The 
comment period must be, to the greatest extent pr acticable, at least 30 days for proposed technical 
regulations applied to perishable  goods;  a 75-day period is not required when proposed technical 
regulations or sanitary and phytosanitary measures  are necessary to address "urgent" problems.  
Executive Order 12889 does not define urgent problems.   Under the Administrative Procedure Act, a 
final technical regulation or conformity assessment procedure must be published at least 30 days prior to its effective date;  a shorter period is possible if the final measure relaxes an existing measure.  Rulemaking notices are published in the Federal Register .
66 
84. Around 84% of final rules published between January 2008 and 15 April 2010 include notice 
and comment periods prior to the publication of the final rule.  An agency can  only be exempted from 
the notice and comment requirements if it finds that, "for good cause", such requirements are 
"impracticable, unnecessary, or contrary to the public interest".67  However, the two types of final 
rules issued without prior notice and comment (interim final rules and direct final rules) generally also 
involve public comment.  Agencies solicit public co mments on interim final rules and consider such 
comments when they issue the final rule that conc ludes the rulemaking procedure.  Regarding direct 
final rules, the U.S. authorities note that an ag ency must initiate a rulemaking procedure involving 
notice and public comment if it receives any adverse comments. 
85. Executive Order 12866 of September 1993 calls on federal agencies to assess the costs and 
benefits of feasible regulatory alternatives to addr ess a particular problem, and select the approach 
that maximizes net benefits.  "Significant" regul ations, including "economically significant" ones, 
must be sent to the Office of Mana gement and Budget (OMB) for review.68  Economically significant 
regulations are those that have an effect on the ec onomy of US$100 million or more in any one year.  
                                                      
63 The Secretariat calculated this estimate by aver aging the periods between the date on which a 
notification was issued, and the "final date for commen ts" specified in that notif ication.  The Secretariat 
considered notifications contained in WTO documents G/TBT/N/USA/311-513, excluding documents with the 
symbols "Add" and/or "Corr". 
64 See WTO document series WT/DS384 and WT/DS386. 
65 Federal Register , 58 FR 69681, 30 December 1993. 
66 U.S. Government Printing Office online informa tion, "GPO Access".  Vi ewed at:  http://www.gpo 
access.gov/fr/index.html. 
67 5 USC 553(b). 
68 Executive Order 12866-Regulatory Planning and Review, 30 September 1993.  Federal Register , 
58 FR 51735, 4 October 1993. United States WT/TPR/S/235 
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The OMB reviewed approximately 280 economically  significant rules between October 2007 and 
January 2010.69 
86. Most states have enacted their own administ rative procedures, which govern the development 
and adoption of technical regulations  and conformity assessment procedures by state agencies.  In the 
context of this review, the Secretariat examined th e transparency provisions contained in 13 of these 
Acts, including the 5 states with the largest GDP in 2008 (California, Texas, New York, Florida, and 
Illinois)70;  all 13 establish requirements for publication of  proposed regulations.  They also require 
minimum public comment periods, which range from 20 days in Iowa to 60 days in North Carolina.  
Although emergency regulation is exempt from these requirements, in most states it cannot remain in 
effect beyond a specified period, for example, 90 days in Florida and New York, and 180 days in 
Texas.  Sub-federal regulatory agencies are commonl y required to conduct economic impact analyses 
prior to adopting technical regulations  and conformity assessment procedures. 
87. The United States relies on a broad range of approaches to conformity assessment.  
Regulatory agencies determine the extent to whic h they use risk assessment to select the specific 
approach.  The type of instrument used varies depending on the sector;  one instrument used is 
supplier's self-declaration of conformity;  anot her is third-party certification.  Accreditation 
programmes are operated by all levels of government  and the private sector, and frequently rely on 
private-sector conformity assessment bodies.  With respect to government accreditation programmes, bodies fulfilling the criteria specified by the regulator, regardless of their loca tion, are accredited or 
otherwise recognized to perform conformity assessment activities. 
88. Strategies to ensure compliance with technical  regulations include sampling at manufacturing 
premises or retail outlets, inves tigation of consumer complaints, and inspections at the border. 
89. During the period under review, the United Stat es enacted the Consumer Product Safety 
Improvement Act (CPSIA), which establishes new re gulatory requirements for many of the 15,000 
consumer products under the jurisdiction of the Consumer Product Safety Commission, including all 
products intended for children aged 12 or less (Box III.1).  The adoption of the CPSIA followed a 
series of high-profile recalls in 2007 and 200 8 of toys and other children's products.
71 
90. The United States has notified to the WTO 12 measu res taken under CPSIA.  In the context of 
the TBT Committee, China has expr essed concerns about the "non-transparency" of the CPSIA, the 
"unnecessarily stringent" requirements on lead limits, and the "different treatment" given by the 
Consumer Product Safety Commission to Chinese governmental laboratories.72  The United States has 
indicated its disagreement with these allegations during Committee discussions. 
91. Under the CPSIA, the Consumer Product Safety  Commission must develop, in consultation 
with U.S. Customs and Border Protection (CBP), a "risk assessment methodology" for the 
identification of shipments of consumer products that are intended for import and likely to include 
products in violation of import provisions enforced  by the Commission.  In addition, the Commission 
must develop a plan for sharing information and e nhancing coordination with CBP.  As part of the 
implementation of a risk-assessment methodology, the U.S. authorities note that they are working to 
                                                      
69 OMB online information, "Reginfo.gov".  Viewed at:  http://159.142.187.10/public/do/eoCounts 
SearchInit?action=init. 
70 In addition, the Secretariat reviewed the admini strative procedure acts of:  Arizona, Connecticut, 
Iowa, Missouri, Mississipi, New Jersey , North Carolina, and Wisconsin. 
71 CPSC online information, "Statement of Chairman Inez M. Tennenbaum on the Commission Report 
to Congress Pursuant to the Statement of Managers Accompanying P.L. 111-117", 15 January 2010. 
72 WTO document G/TBT/M/49, 22 December 2009. WT/TPR/S/235 Trade Policy Review 
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identify manufacturers and importers who are "rep eat offenders" of federal consumer product safety 
laws.  The Commission has dedicated full-time staff to  the Commercial Targeting Analysis Center, an 
inter-agency facility established by the U.S. Depart ment of Homeland Security and CBP to enhance 
information sharing and import enforcement c oordination among relevant federal agencies. 
Box III.1:  The Consumer Product Safety Improvement Act (CPSIA) 
The CPSIA, signed into law in August 2008, seeks to enhance the safety of consumer products, in particular children's 
products, through a variety of regulator y and enforcement tools, including: 
• Specific product regulations:  the Act se ts new limits for lead content in ch ildren's products, and the amount of 
lead in the paint used on those products.  It prohibits the sale in the United States of certain children's products 
containing specified phthalates, whic h are compounds used as softeners fo r plastics.  The Consumer Product 
Safety Commission must study and develop technical regulations for the safety of various durable infant and 
toddler products.  In September 2008, the General Couns el of the Commission determined that the CPSIA 
prohibits the sale in the United States after 10 Februa ry 2009 of children's products exceeding the lead content 
limit regardless of whether they were manufactured prior to that date. 
• Labelling requirements:  the Act requires manufacturer s to have a tracking label or other distinguishing 
permanent mark on children's products, "to the extent practi cable".  The tracking label must contain certain basic 
information, including the source of the product, the date of manufacture and more detailed information on the 
manufacturing process such as a batch or run number.  The Commission has the authority to issue a rule further 
defining the detail required in the tracking labels.  Moreove r, the Commission may, in the future, require that the 
additional information contained on tracking labels for ch ildren's products be expanded to cover all consumer 
products. 
• Certification and testing requirements:  consumer products (other than for children) subject to a product safety 
regulation enforced by the Commission must meet a general certification requirement through a supplier's 
self-declaration of conformity, regardle ss of whether the product is produced in  the United States or abroad.  The 
declaration must be based on a te st (not necessarily by a third- party laboratory) or a "reasonable testing 
programme".  Products covered by th is requirement include:  all terra in vehicles;  bunk beds;  lighters; 
matchbooks;  garage door openers;  porta ble gas containers;  la wn mowers;  mattresses;   swimming pool slides; 
and paint and household furniture subject to lead pain t regulations.  With respect  to children's products su bject to 
a children's product safety rule, self-declara tions of conformity must be based on third- party testing by a 
conformity assessment body that has been accredited to test the product for compliance with the relevant 
children's product safety rule.  Based on such testing, th e manufacturer or importer must  provide a certificate that 
the children's product complies with the relevant children's  product safety rule;  the certificate must accompany 
each shipment.  As at March 2010, third-party testing was required to support a certificate of compliance with 
regulations on bicycle helmets, lead paint, dive sticks a nd similar articles, cribs, rattles, pacifiers, bicycles, bunk 
beds, small parts, and lead in metal components of childre n's metal jewellery.  Additional children's products will 
be subject to third- party testing requirements as soon as the Co mmission has issued the relevant laboratory 
accreditation requirements. 
• Laboratory accreditation requirements:  domestic and foreign laboratories may be accredited to test children's 
products for compliance with children's product safety ru les.  Laboratories may be accredited by the Commission 
or by an independent organization accredited by th e Commission.  The Commission may accredit as third- party 
conformity assessment bodies "firewal led" laboratories owned by manufacturers of children's products.  There 
are specific requirements for the accreditation of government-owned laboratories.  The Commission has 
published accreditation procedures for seve n product categories.  It also maintains a list of accredited laboratories 
on its website (http://www.cpsc.gov). 
Source : WTO Secretariat. 
 
92. CPSIA directed the U.S. Government Accountab ility Office (GAO) to review several issues 
regarding the Commission's authority to prevent the entry of unsafe products into the United States.  
In accordance with this mandate, the GAO issued  a report in August 2009 recommending that the 
Commission:  ensure the expeditious implementati on of key CPSIA provisions;  strengthen its ability United States WT/TPR/S/235 
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to target shipments;  and develop a long-term pl an for ensuring the safety of consumer products 
entering the United States, including plans for international engagement.73 
93. The Consumer Product Safety Commission does no t have systematic data on the economic 
effects resulting from the implementation of the CPSI A.  However, Commission staff estimate that 
the typical cost of third-party testing for toys is between US$1,000 and US$2,000, or around 4.4% of 
a hypothetical toy manufacturer's per unit revenue.74  Also, the Commission acknowledges that 
"market disruption" may occur if the lead cont ent limit of 100 parts per million, effective from 
August 2011, is applied to products manufactured prior to that date.75 
94. According to Commission staff, Congress should consider allowing the Commission to 
exempt certain products from the limits established by the CPSIA "to ease the burdens of testing and 
certification on products unlikely to present more than  a negligible health risk, and to regulate on a 
timetable influenced by the seriousness of  the actual risks not artificial deadlines".76  They noted that 
this would allow the Commission to consider th e impact of regulation, and would increase 
transparency and accountability, since exceptions to  CPSIA requirements would be made "on a notice 
and comment basis". 
95. A number of technical regulations establish re quirements for the labelling or marking of 
goods with their country of origin.77  Under the Tariff Act of 1930, imported items, with some 
exceptions, must be conspicuously and indelibly ma rked in English to i ndicate to their "ultimate 
purchaser" their country of origin.78  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 parts content,  the country where they were assembled, and the 
countries of origin of their engine and transmission.79  Textile and apparel articles must be labelled to 
show their country of origin in accordance with th e Textile Fiber Products Identification Act and the 
Wool Products Labelling Act.80  There are also country-of-origin labelling requirements for certain 
agricultural products and fish (Chapter IV(1)). 
96. Yellowfin tuna sold in the U.S. market can  only be labelled as " dolphin safe" if caught 
without the chase and encirclement of dolphins and without killing or seriously injuring any dolphins 
in the set in which the tuna was caught.81  Following a request by Mexico, a WTO panel was 
established in April 2009 to revi ew the consistency with WTO rules of U.S. dolphin safe labelling 
provisions. 
97. The American National Standards Institute ( ANSI) accredits organizations whose standards 
development process meets ANSI requirements of due process and consensus.  There are 275 ANSI-
accredited standards development organizations (M arch 2010).  ANSI adopted Annex 3 of the TBT 
Agreement (Code of Good Practice) in 1997.82  The work programme of the ANSI-accredited 
                                                      
73 GAO (2010). 
74 The manufacturer is assumed to produce 10,000 units.  Consumer Product Safety Commission, "Staff 
Briefing Package", 1 April 2010.  Viewed at:  http ://www.cpsc.gov/libra ry/foia/foia10/brief/prodcert2.pdf. 
75 CPSC (2010). 
76 CPSC online information, "Letter from Acting Chairman Nord to Representative John D. Dingell 
About the CPSIA Implementation", 20 March 2009.  View ed at:  http://www.cpsc.g ov/about/cpsia/cpsia.html. 
77 WTO (2008). 
78 19 USC 1304. 
79 49 USC 32304.  The regulations to implement the Act are contained in 49 CFR 583. 
80 15 USC 68 and 70. 
81 50 CFR 216.91. 
82 WTO document G/TBT/CS/N/83, 21 October 1997. WT/TPR/S/235 Trade Policy Review 
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standards development organizations on whose behalf  ANSI notified its accep tance of the code are 
available from each organization.  Compliance with standards is voluntary, but in practice the U.S. 
market often provides strong incentives for impo rted and domestic products to meet certain 
standards.83 
(ix) Sanitary and phytosanitary measures 
98. 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 Servi ce (APHIS) of the Department of Agriculture 
USDA) regulates imports of plants, animals, and their products; 
− the Food Safety and Inspection Service (FSIS) of the USDA regulates most imports of meat, 
poultry, and some egg products; 
− the Food and Drug Administration (FDA) regulat es imports of all other foods for human 
consumption and animal feed, and imported veterinary drugs;  and 
− the Environmental Protection Agency (EPA) is responsible for regulating imports of 
pesticides, and for setting limits on the amount of pesticides that may remain in or on 
imported food. 
99. In addition, the responsible agencies at St ate-level may develop and apply their own SPS 
measures.  The authorities noted that, under fede ral law, States are perm itted to establish SPS 
measures, provided that these are consistent with fe deral rules and regulations , and with obligations 
under relevant WTO disciplines. 
100. The establishment of SPS measures is governed at the federal level by a number of statutes, 
including:  the Federal Food, Drug, and Cosmetic Act; the Food Quality Protection Act;  the Federal 
Meat Inspection Act;  the Plant Protection Act;  th e Federal Insecticide, Fungicide, and Rodenticide 
Act;  and the Toxic Substances Control Act.  In  general, SPS measures are subject to the same 
administrative rulemaking procedures as technical regulations (see above). 
101. In September 2007, the Food and Drug Admi nistration Amendments Act of 2007 (FDAAA) 
was signed into law (Public Law 110–85).  The FDA AA required the FDA to establish an electronic 
portal by which instances of reportable food must be  submitted to the FDA by responsible parties and 
may be submitted by public health officials.  "Repor table food" is defined as an article of food (other 
than dietary supplements or infant formula) for wh ich there is a reasonable probability that the use of, 
or exposure to such an article will cause serious a dverse health consequences or death to humans or 
animals.84  Reportable Food Registry requirements do not apply to meat, poultry, and egg products 
under the exclusive jurisdiction of the USDA.  The Registry electronic portal opened on 
8 September 2009. 
102. The United States continues to make comprehens ive use of the notification mechanism in the 
WTO Committee on Sanitary and Phytosanitary Measures, making hundreds of notifications 
                                                      
83 WTO (2006). 
84 The FDA does not define "reasonable probability."  Responsible parties are asked to evaluate the 
facts of their particular situation in order to determine if  a food is reportable.  Examples of Class I recalls (the 
most serious) include peanut butter contaminated with Salmonella or under-processed canned chili that contained Clostridium botulinum toxin. United States WT/TPR/S/235 
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(Table III.5).  The U.S. enquiry point and nationa l notification authority under the SPS Agreement is 
the International Regulations and Standards Divi sion in the Foreign Agricultural Service of the 
USDA.85  Notifications include proposed measures th at have been published recently in the 
Federal Register .  The authorities noted that the Enquiry Point holds regular meetings with state 
regulatory authorities to ensure transparen cy of relevant state-level SPS measures. 
Table III.5 
Notifications by the United States, 1995-2010 
Objective/rationale Total Addenda /corrigenda Emergency Regular 
Food safety 329 126 2 201 
Protect humans from animal/plant pest or disease 297 126 4 167 
Plant protection 284 132 13 139 
Animal health 94 51 5 38 
Protect territory from other damage from pests 14 3 11 0 
Total 449 190 19 240 
 
Note: A notification may have more than one rationale.  
Source:  WTO notifications in the series G/SPS/N/USA/... 
103. Members have used the SPS Committee to raise specific concerns with the United States on a 
number of issues.  China, in particular, raised a number of concerns, including:  Christmas trees and 
wooden handicrafts;  potted dwarf plants in growing media;  cooked poultry products;  delays in the 
risk assessment process for apples;  and issues related to catfish.  In addition, the EU raised concerns 
about import restrictions on dairy products related to  Grade A milk, and Brazil raised concerns about 
the economic analysis requirement in proposals for changes in SPS regulations and import restrictions 
on pork and beef.86  The United States has also used the SPS Committee itself to announce changes or 
proposed changes to policies and to raise its own concerns with measures taken by other Members. 
104. On 17 April 2009, China requested consultati ons under the Dispute Settlement system on 
measures taken by the United States affecting the impor t of poultry products from China.  China went 
on to request that a panel be established and, on 31 July 2009, at the second request, the DSB 
established a panel (see also Table AII.1).87 
105. The United States is a member of the Codex Alimentarius Commission and the 
World Organization for Animal Health (OIE), and a contracting party to the International Plant 
Protection Convention (IPPC).  The contact points ar e in FSIS for Codex, and APHIS for OIE and the 
IPPC.  According to the authorities, SPS measures ar e based on international standards and guidelines 
"where they exist and as appropriate".88  The authorities state that SPS requirements applied on 
imports of plants, animals, and their products are established on the basis of the risk posed to human, 
animal or plant life or health or to the environment arising from the imports. 
(a) Animal and Plant Health Inspection Service (APHIS) 
106. Among its broad range of responsibilities, AP HIS is responsible for "protecting and 
promoting U.S. agricultural health, regulating gene tically engineered organisms, administering the 
Animal Welfare Act and carrying out w ildlife damage management activities."89 Its strategic plan 
                                                      
85 WTO documents G/SPS/ENQ/21/Add.1, 22 June 2007, and G/SPS/NNA/11/Add.1, 22 June 2007. 
86 WTO documents G/SPS/R/45, 46, 49, 51, 53, 54, 55, and 56. 
87 WTO documents WT/DS392/1, 2, and 3. 
88 WTO document WT/TPR/M/160/Add.1, 27 September 2006. 
89 USDA APHIS online information.   Viewed at:  http://www.aphis.usda .gov/about_aphis/ [May 2010]. WT/TPR/S/235 Trade Policy Review 
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goes on to state that it is responsible for guardi ng the United States "against the introduction, 
re-emergence or spread of animals and plant pests and diseases that could limit production and/or 
damage export markets."90 
107. Imports of live animals into the United States are regulated by APHIS.  In all cases involving 
live animal imports (except for pets) prior notice must  be given to the FDA's Prior Notice Center.  In 
general, imports of live animals ar e not permitted from countries affected by specific diseases, such as 
cattle from countries affected by BSE, FMD, or rinderpest.91  Imports from other countries normally 
require an import permit from APHIS;  an official veterinary health certificate from the country of origin;  quarantine prior to export and after arrival in  the United States;  and negative test results for a 
variety of diseases before and during quarantine in the United States.
92 
108. Imports of animal-derived products are also regulated by APHIS.  These include animal 
tissues, blood, cells or cell lines, and RNA/DNA extr acts.  They do not include imports intended for 
human or animal consumption but for research and de velopment.  In general a veterinary permit is 
needed for imports of such animal products, partic ularly of products that can carry diseases exotic to 
the United States and/or from countries where th ese diseases are present.  The procedures involved 
depend on the product, and the country or region of origin and guidelines are set out in the Animal 
Product Manual.93 
109. Specific permits are required for imports (and, in some cases, transport across State borders) 
of plants and plant products, including fruits and vegetables for human consumption.  In 
October 2008, APHIS launched an on-line database, the Fruits and Vegetables Import Requirement 
(FAVIR), which provides information about products  and countries-of-origin and their import status 
in the United States.94  In addition, APHIS has e-manuals that cover animal and other plant products.95 
110. 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 the U.S. 
counterpart.  A risk assessment may be necessary to  evaluate these requests.  APHIS issued a final 
rule in the Federal Register , effective 17 August 2007, that revises and reorganizes the import 
regulations for fruits and vegetabl es.  Among other things, the rule:  (i) establishes a framework under 
which APHIS may authorize certain imports without rulemaking;  (ii) establis hes a similar framework 
for the approval of pest-free areas;  and (iii) elim inates the listing of specific commodities that may be 
imported subject to certain types of risk-managemen t measures.  According to APHIS, all of these 
changes will simplify and expedite the process fo r approving new imports and pest-free areas while 
continuing to allow for public pa rticipation in the rulemaking process.  The changes do not alter 
which fruits and vegetables are eligible for impor tation or how the risks associated with those 
commodities are evaluated or mitigated.96 
                                                      
90 USDA APHIS (2007). 
91 For the health status of countries as recogni zed by the USDA see APHIS online information.  
Viewed at:  http://www.aphis.usda.gov / import_export/animals/animal_diseas e_status.shtml [February 2010]. 
92 For more details of the procedures and documentation required for imports of live animals see 
APHIS online information.  Viewed at:  http://www.aph is.usda.gov/import_export/animals/live_animals.shtml 
[March 2010]. 
93 APHIS online information.  Viewed at:  http ://www.aphis.usda.gov/import_export/plants/manuals/ 
ports/apm.shtml [March 2010]. 
94 The FAVIR database is available at:  http ://www.aphis.usda.gov/favir/ [March 2010]. 
95 APHIS online information.  Viewed at:  http ://www.aphis.usda.gov/import_export/plants/manuals/ 
online_manuals.shtml [May 2010]. 
96 USDA APHIS (2008). United States WT/TPR/S/235 
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111. 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.97  As of December 2009, APHIS had 120 risk analyses in progress in 41 countries or 
regions.98  Based on the results of a risk assessment, APHIS may allow imports, subject to SPS 
requirements.  These are mostly issued as regulations , and must adhere to the procedural requirements 
of Section (ix) of the Administrative Procedure Act.  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. 
(b) Food Safety and Inspection Service (FSIS) 
112. The FSIS is responsible for ensuring the safety of meat, poultry, and egg products in the 
United States.  The Office of International Affa irs (OIA) in the FSIS is responsible for setting 
standards and accompanying measures, including in spections, for imports and exports of these 
products.  The Import Inspection Division of the OIA inspects imports in 125 official import 
establishments after they have already met Custom s and the APHIS requirements.  The International 
Audit Staff of the OIA participate in the process fo r obtaining approval to export to the United States 
and in subsequent audits to ensure food safety  is equivalent to that in the United States. 
113. The FSIS continues to use the Hazard Analysis  and Critical Control Point (HACCP) systems 
as the "optimal framework for bu ilding science-based process control to prevent food safety hazards 
into food production systems."
99   The United States has recognized establishments in 34 countries 
with systems equivalent to its own meat, poultry, an d/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.100 
114. The competent authority of a country that want s to export meat, poultry or egg products to the 
United States must apply to the FSIS to start the process of assessment to verify that its sanitary 
measures are equivalent to those in the United Stat es.  This is followed by a document review to 
examine the laws and regulations a nd an on-site review of all aspect s affecting the sanitary conditions 
in the country.101 
115. In May 2009, the FSIS advised importers that  imported food products  containing small 
amounts of meat, poultry or processed egg products, for which APHIS does not issue veterinary import permits, must obtain these ingredients from an approved source.
102 
116. The FSIS reinspects all shipments of meat, poultry,  and egg products at the border after they 
have passed through Customs and Border Protecti on and APHIS.  The process is referred to as 
"reinspection" because imported products should have already undergone an equivalent system in the 
exporting country.  In most cases, reinspection means routine controls, primarily to ensure that the 
consignment is from a certified establishment in an eligible country.  If the consignment is not 
properly certified it may be refused entry.  The Au tomated Import Information System (AIIS), decides 
which consignments should be subjected to more intensive rein spection, which can involve physical 
inspection, sampling, and testing. 
                                                      
97 Title 7 Code of Federal Regulations, Section 319.5. 
98 USDA APHIS (2009). 
99 Federal Register  61 FR 38806, 25 July 1996. 
100 For the list of certified facilities see FSIS online info rmation.  Viewed at:  http://www.fsis.usda.gov/ 
regulations_&_policies/Index_of_Certifie d_Countries/index.asp [March 2010]. 
101 USDA FSIS (2009b). 
102 USDA FSIS (2009a). WT/TPR/S/235 Trade Policy Review 
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117. In the year beginning October 2008, the FSIS in spected over 1.5 million tonnes of meat and 
poultry.  Of this 25 tonnes was refused reinspection because:  the foreign country was not eligible;  
the foreign establishment was not listed;  APHIS had placed animal disease restrictions on the country;  the product presented for reinspection was not  eligible;  or duplicate shipping marks were 
identified;  and 2,940 tonnes were rejected becau se they did not meet the United States' import 
requirements.
103 
(c) Food and Drug Administration (FDA) 
118. The FDA, an agency of the Department of H ealth and Human Services, is responsible for 
regulating:  human and veterinary drugs;  vaccines and other biologi cal products;  medical devices;  
food (except meat, poultry and eggs);  cosmetics;  dietary supplements;  products that emit radiation;  
and tobacco.  The FDA's mission is to ensure that all FDA-regulated products, regardless of source, 
meet or exceed U.S. requirements. 
119. Under Section 307 of the Public Health Securi ty and Bioterrorism Preparedness and Response 
Act of 2002 (Bioterrorism Act), the FDA must receive advance notice of shipments of imported food (other than meat, poultry, and eggs) into the United States.
104  This can be done online through the 
Automated Broker Interface (ABI), the Automated Commercial System (ACS), or the FDA's Prior 
Notice System Interface. 
120. Under the Bioterrorism Act, all domestic a nd foreign facilities that manufacture, process, 
pack, and hold food for consumption in the United Stat es must register with the FDA.  A number of 
entities are exempted from this rule, including:  farm s;  restaurants;  retail food establishments;  and 
fishing vessels.  Registration can be done online or by letter.105  According to the FDA, some 420,859 
food facilities are subject to the registration require ment, about half of which are located in the 
United States. 
121. Normally, entry declarations for imports are ma de electronically on the Customs and Border 
Protection system.  Shipments of products that are regulated by the FDA are automatically passed to 
its Operational and Administrative System for Import Support (OASIS).  OASIS screens the 
information to determine whether further evaluation by FDA staff is needed.  The further evaluation 
could include:  additional information or documentati on in order to make an admissibility decision;  
field examination;  and/or sample collection; and detaining the product based on evidence collected 
during field exam or sample results or as a result of an existing import alert.  Products that are 
detained are subject to refusal unless testimony su bmitted by the owner or consignee overcomes the 
appearance of the violation.  In nearly all cases,  imports can travel under bond while an FDA review 
takes place;  imported goods are only occasionally held by Customs and Border Protection or the FDA. 
(d) Environmental Protection Agency (EPA) 
122. The EPA is responsible for registering pes ticides for use in the United States and for 
establishing maximum residue limits (MRLs) for pesticid es in or on food sold in  the United States.  
The term "pesticide" is broadly defined and incl udes herbicides and fungicides.  The same MRLs 
apply to both imported and domestica lly produced food.  All pesticides must be registered by the EPA 
before they can be used or imported for use in the United States.  Residues in food must be covered by 
                                                     
 
103 USDA FSIS (2010). 
104 The Bioterrorism Act, Title III, Sec. 307.  Viewed at:  http://www.fda .gov/RegulatoryInformation/ 
Legislation/ucm148797.htm [March 2010]. 
105 FDA (2009a). United States WT/TPR/S/235 
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an EPA-established tolerance/MRL, or a specific exem ption.  Foods with residues not covered by an 
applicable tolerance or exemption, or in excess of an established tolerance, may not be legally 
marketed.  Pesticide registration requires submis sion and evaluation of comprehensive data on 
potential health and environmental effects.  To establish a tolerance (or exemption) for a food-use 
pesticide, the EPA must conclude that there is a "r easonable certainty of no harm" to consumers of the 
food.  This requires a comprehensive aggregate and cumulative risk assessment process, taking into 
consideration all non-occupational exposure to the pesticide and related pesticides that have a 
common mechanism of toxicity.  The EPA must also make a specific safety finding for infants and young children.  Pesticide registrations are review ed periodically, at least once every 15 years, and 
may be reviewed at any time if risk concerns arise. 
(e) Food Safety Working Group 
123. In March 2009, the President announced the creation of the Food Safety Working Group to 
advise him on how to strengthen the food safety system.  The Working Group is chaired by the Secretaries of the Department of Health and Human Services and the Department of Agriculture, and brings together cabinet secretaries and senior offi cials from these departments.  According to the 
authorities, the aim of the Working Group is to fo ster coordination throughout the federal government 
on a new, public health focused approach to food safety based on three core principles:  
(1) prioritizing prevention;  (2) strengthening su rveillance and enforcement;  and (3) improving 
response and recovery.  The USTR has been an active member of the Working Group providing guidance on various recommendations and initiatives while ensuring compliance with international 
trade obligations. 
124. Since its creation, the Food Safety Worki ng Group has served as a mechanism to discuss and 
address cross-cutting issues such as new food safe ty legislation, pathogen reduction and facility 
inspection activities across the U.S. Government.  The Group is currently working on a series of 
initiatives to reduce salmonella in eggs and poultry products, step up enforcement in beef facilities, 
and to establish a national trace-back and response system to quickly identify sources of illness to 
protect consumers and help industry recover faster. 
(f) Agricultural biotechnology 
125. 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. 
126. Responsibility for regulating agricultural biotechnol ogy in plants is shared among the APHIS, 
the FDA, and the EPA.  The APHIS is responsible fo r genetically engineered plants, the FDA for the 
safety of food and feed derived from such plants, and the EPA for food and feed uses of pesticides 
engineered into plants.  The Coordinated Framew ork for Regulation of Biotechnology of June 1986 
sets out policy and the roles of different agencies fo r the regulation of agricultural biotechnology in 
plants.  The United States Regulatory Agencies Unified Biotechnology Website has a database of more than 100 genetically engineered  plants intended for food or feed that have completed reviews by 
the applicable regulatory agencies. 
127. In January 2009, the FDA issued a Final Gu idance on Regulating Genetically Engineered 
Animals.
106  The Guidance clarifies that a recombinant DNA construct in a genetically engineered 
animal meets the definition of an animal drug and thus is subject to regulation under the new animal 
                                                      
106 FDA (2009b). WT/TPR/S/235 Trade Policy Review 
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drug provisions of the FFDCA.  This means th at GE animals must be approved prior to 
commercialization regardless of intended use.  If GE  animals are intended for food use, the edible 
products from those animals must be shown to be safe for human consumption.  For all uses, the 
recombinant DNA construct introduced into the anim al must be safe for the animal.  Under the 
National Environmental Policy Act (NEPA), all GE animals must undergo an environmental 
assessment.  The Center for Veterinary Medicine and other Centers in the FDA are responsible for 
approving and regulating any products, such as pharm aceuticals, that may be derived from genetically 
engineered animals. 
128. 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.  The processes outlined above apply equa lly to domestic and to imported 
goods. 
(2) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Customs procedures and documentation 
129. There is no general registrati on requirement for exporters. 
130. Exports are subject to data filing requirements.107  There is a single window, the Automated 
Export System (AES), fo r filing export data.108  AES operates in all U.S. ports and is used for all 
modes of transport.  Participants in this system  include U.S. Customs and Border Protection (CBP), 
the U.S. Department of Commerce's Bureau of the Census and Bureau of Industry and Security, and 
the Directorate of Defense Trade Controls of the U.S. Department of State. 
131. The Shipper's Export Declaration has been di scontinued.  Since mid 2008, data on exports 
that previously required an SED must be filed through the Automated Export System.109  CBP uses 
risk management to select export car go for more intensive examination. 
(ii) Export taxes and fees 
132. The United States does not apply taxes on exports:  the Constitution's Export Clause bars 
Congress from imposing any tax on exports.110 
133. Exported cargo is exempt from the harbour maintenance fee following a 1998 decision by the 
U.S. Supreme Court (section (1)(v) above). 
(iii) Prohibitions, restrictions and licensing 
134. Practically all commercial exports from the United States require at least some basic 
documentation.111  In 2008, the Census Bureau promulgate d regulations that eliminated the paper 
Shipper's Export Declaration (SED), which must now be filed in electronic form through the 
                                                      
107 15 CFR 30.2. 
108 AES.  Viewed at:  http://www.aesdirect.gov. 
109 15 CFR 30.1. 
110 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). 
111 WTO (2008). United States WT/TPR/S/235 
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Automated Export System (AES).  The AES is used to  collect export trade data for statistical purposes 
as well as for export control and enforcement purposes.   Electronic export information is filed in the 
AES by an exporter or an authorized agent.  An Internal Transaction Number (ITN), an AES-
generated number assigned to a shipment confirming th at the export information was accepted, is on 
file in the AES, and is sent electronically to the f iler of the information as proof of filing citation.  
This citation must be submitted to the exporting carrier on the bill of lading, air waybill, export 
shipping instructions, or other commercial load ing documents.  The carri er is responsible for 
presenting the proof of filing citation to the CBP at  the port of export.  Other documents may be 
required depending on the product and its destination. 
135. On average four documents are needed for expor ts:  a customs export declaration; a bill of 
lading; a certificate of origin; and a commercial invoice.112   For commodities controlled by the 
International Traffic in Arms Regulations (ITAR),  a destination control statement appears on the 
commercial invoice, and the ocean or air waybill of  lading which indicates to the carrier and all 
foreign parties that the item can be exported only to certain destinations.  All goods subject to ITAR 
restrictions must be reported to AES regardless of whether an export licence is required.  Exports of 
goods, software, technology or services subject to U.S. export control laws and regulations may 
require approval in the form of licences.   
(iv) Export restrictions and controls 
136. The United States maintains export restrictions and controls for national security and foreign 
policy reasons, including addressing shortages of scarce materials.  Export controls can be based on 
domestic legislation, policy decisions, UN Security Council Resolutions or on U.S. participation in 
the non-binding:  Wassenaar Arrangement, which d eals with controls of conventional arms and 
dual-use exports;  Missile Technology Control Regi me (MTCR);  Nuclear Suppliers Group (NSG);  
and the Australia Group (AG), which deals with ch emical and biological non-proliferation.  The 
United States also participates in the Chemical Weapons Convention (CWC).   Export controls are 
implemented through licensing systems that also cover re-exports. 
137. Trade sanctions may be applied by the Department of the Treasury under the authority of, 
inter alia, the International Emergency Economic Powers  Act (IEEPA), the Trading with the Enemy 
Act, and the United Nations Participation Act.  Th e Department of the Treasury's Office of Foreign 
Assets Control (OFAC) administers economic and tr ade sanctions under these laws, and may, in this 
capacity, restrict exports to foreign countries and regimes and persons (entities and individuals) that 
are subject to such sanctions. 
138. The main legal basis for export controls in the United States is divided across different 
legislative acts and the administration across diffe rent government agencies.  In August 2009, the 
President directed the National Economic Council  and National Security Council to launch an 
inter-agency process to review the export control system.113  The Statement of the White House Press 
Secretary announcing the President's directive said that U.S. export control systems, though robust, 
were rooted in the Cold War era and needed to be  updated to address today's threats and the changing 
economic and technological landscape.  In his State of the Union address in January 2010, the 
                                                      
112 World Bank (2009). 
113 The White House online information, "Statement of  the Press Secretary", 13 August.  Viewed at:  
http://www.whitehouse.gov/the_press_office/Stat ement-of-the-Press-Sec retary/ [April 2010]. WT/TPR/S/235 Trade Policy Review 
Page 48 
 
 
President stated that export controls would be  reformed "consistent with national security."114  Similar 
sentiments were expressed by the Defense Secretary in April 2010.115 
139. According to the authorities, the objective of the proposed reform is to  improve export control 
systems for munitions and dual-use products.  The Defense Secretary has identified four 
"singularities" that are to reshape the export control system:  a single control list;  a single licensing 
agency;  a single entity to coordinate enforcement;  and a single information technology system for export controls.  The reform is to take place in th ree phases:  the first reforms, in the Commerce and 
the State Departments, are to be in 2010 and the th ird, which will require legislation, is being sought 
by the end of the year. 
(a) The Arms Export Control Act
116 
140. The Directorate of Defense Trade Controls (DDTC) in the Department of State administers 
those provisions of the Arms Export Control Act (AECA) of 1976, as amended, that deal with 
commercial exports.  The AECA is implemente d through the International Traffic in Arms 
Regulations (ITAR) and applies to defence articles,  including technical data, on the United States 
Munitions List (USML) and to defence services.117  The list of defence articles and technical data on 
the USML is divided into 21 categories that cover firearms, ammunition, guided missiles, etc as well 
as a classified category and a miscellaneous category.  If there is doubt whether the USML covers a particular article or service, an exporter may requ est a Commodity Jurisdiction (CJ) determination.  
Appeals of decisions can be made to the Managing Director of the DDTC;  this final ruling is not subject to judicial review.
118 
141. Any real or juridical person who intends to e xport a defence article or defence service on the 
USML must be registered with the DDTC and generally must apply for an export licence prior to export.  The DDTC maintains a list of persons who are ineligible to receive export licences.
119  
Applications for an export license or other authoriza tion for a defence article or defence service on the 
USML can be made on-line through the DTrade system.  The Department of State, as delegated by the 
President, has broad discretion when deciding whether to approve a licence.  According to the 
authorities, it is the policy of the United States to  deny licenses and other approvals for exports of 
defence articles and defence ser vices destined for, and originating in certain countries.120  The DDTC 
may revoke, suspend or amend licences for defenc e articles and services without prior notice when 
certain regulatory criteria are met.121  An exporter may ask for a review of a decisions or action of the 
DDTC;  the Under Secretary for Arms Control a nd International Security has the final word.122  The 
                                                      
114 The White House online information, "Remarks by the President in State of the Union Address",  
27 January 2010.  Viewed at:  http://www.whitehous e.gov/the-press-office/remark s-president-state-union- 
address [April 2010]. 
115 Department of Defense, American Forces Press Service, "Gates Proposes Revamp of Export 
System", 20 April 2010.  Viewed at:  http://www.def ense.gov/news/newsarticle.asp x?id=58830 [April 2010]. 
116 U.S. Code, Title 22, Chapter 39.  Viewed  at:  http://www.law.cornell.edu/uscode/html/ 
uscode22/usc_sup_01_22_10_39.html [April 2010]. 
117 22 CFR Sections 120-130 (Section 121 is the USML).  Viewed at:  
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title22/22tab_02.tpl [April 2010]. 
118 U.S. Code 22, Section 2778(h).  An appeal of the Managing Director's decision can also be made 
through the Deputy Assistant Secretary of State for Defense Trade C ontrols, to the Assistant Secretary for 
Political-Military Affairs. 
119 Department of State (2010c). 
120 22 CFR section 126.1 and Department of State (2010b). 
121 22 CFR, section 126.7. 
122 22 CFR, section 128.13.  See also:  Shenai (2010). United States WT/TPR/S/235 
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AECA specifically provides that the designation of an item as a defence article or defence service is 
not subject to judicial review.123 
142. Civil penalties imposed on an enterprise for viola tions of the AECA usually include a fine and 
a Consent Agreement that outlines the measur es required to improve compliance within the 
enterprise.  In 2008 and 2009, six Consent Agreements were imposed.124 
(b) The Export Administration Act (EAA)125 
143. The EAA regulates exports and re-exports of goo ds, technology, and software that have 
commercial and military or proliferation applicatio ns, or "dual-use" items.  Since August 2001, the 
EAA has been in lapse but succe ssive annual Presidential Notices, under the International Emergency 
Economic Powers Act, have continued the Export Administration Regulations (EAR).  The EAA is 
implemented pursuant to the EAR and administered by  the Bureau of Industry  and Security (BIS) in 
the Department of Commerce. 
144. The Commerce Control List (CCL) covers ten cat egories (numbered 0 to 9) of dual-use items 
that range from advanced materials a nd toxins to computers and electronics.126  A BIS licence may be 
required to export or re-export items on the CCL fro m the United States, depending upon the item, its 
country of destination, end-use, and the end-user.  It is the responsibility of the exporter to determine 
whether a licence is needed  and to apply for one.127  Items not listed on the CCL may also be subject 
to control for sanctions, prolifera tion, or national security reasons. 
145. The Office of Enforcement Analysis (OEA) in th e Bureau of Industry and Security screens all 
export licence applications to ensure export control enforcement information is considered before any 
final licence decision is made.128  Multiple agencies may review  licence applications to assess 
diversion risks, to address foreign policy and national security concerns, and to determine the 
reliability of those receiving controlled U.S.-origin commodities or technical data.  Export controls are updated regularly by the Bureau of Industry and Security to reflect geopolitical and technological developments. 
146. A licence is required for exports or re-exports to Cuba of all commodities, technology, and 
software subject to the EAR, with  a few exceptions.  The Bureau of Industry and Security generally 
denies such applications, although applications fo r certain products are reviewed on a case-by-case 
basis.  Similarly, the EAR also imposes varying degr ees of strict controls on export or re-exports to 
Iran, the Democratic Republic of Korea, Sudan, and Syria. 
                                                     
 
123 However, see U.S. v. Pulungan, 569 F.3d 326 (7th Fed Cir 2009).  Viewed at:  http://www.fas. 
org/sgp/jud/pulungan.pdf [April 2010]. 
124 Department of State (2010a). 
125 50 USC 2401-2420 (2000).  Since August 21, 2001, the EAA has been in lapse and the President 
has kept the EAR in effect under the International Emergency Economic Powers Act, 50 USC 1701-1707. Executive Order 13,222 of 17 August 2001 (3 CFR, 2001 Comp. 783 (2002)), extended by successive 
Presidential Notices, the most recent on 13 August 2009 (74 FR 41325, (14 August 2009).  The EAA and EAR 
are available on the Government Printing Office website at:  http://www.access.gpo.gov/bis/.  
126 CCL.  Viewed at:  http ://www.access.gpo.gov/bis/ear/ear _data.html [May 2010]. 
127 For more details see Bureau of Industry and Security online information.  Viewed at:  
http://www.bis.doc.gov/licensing/index.htm [April 2010]. 
128 WTO (2008). WT/TPR/S/235 Trade Policy Review 
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147. In addition to the Bureau of Industry and Secu rity, the Departments of State, Defense and 
Energy have authority to review any expor t licence application submitted to the Bureau.129  If any of 
the agencies disagree with a licensing decision by th e Bureau, the agency may appeal the decision to 
the Operating Committee, a staff-level interagency committee.  Any of those agencies may appeal the 
Operating Committee Chair's decision to the Advi sory Committee on Export Policy (an Assistant 
Secretary-level interagency body) and from there to the Export Administration Review Board (Cabinet-level) and then to the Pr esident.  All agency appeals must be filed within five days.  The 
licence applicant may appeal final licensing d ecisions to the Under Secretary of the BIS.
130 
148. The EAA allows the monitoring and restriction of exports in short supply.131  The Bureau of 
Industry and Security is responsible for determini ng whether it is necessary to restrict the export of 
commodities in short supply.  Specific procedures appl y for:  crude oil;  petroleum products other than 
crude oil produced or derived fro m the Naval Petroleum Reserves (NPR) or that became available for 
export as a result of an exchange of any NPR-pr oduced 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. 
149. In addition, the Bureau of Industry and Security  is responsible for the administration of export 
controls under the Energy Policy and Conserva tion Act, the Mineral Leasing Act, the Naval 
Petroleum Reserves Production Act, and the Outer Con tinental Shelf Lands Act.  The Department of 
Energy is responsible for authorizing the exportatio n of natural gas, including 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 Un ited States has a free-trade agreement requiring 
national treatment for trade in natural gas are deemed  to be consistent with the public interest, and 
applications are granted wit hout modification or delay. 
150. In FY2009, The Bureau of Industry and Secu rity processed 20,284 applications for export 
licences worth US$62.4 billion and approved 84% of  them.  The average time to process an 
application was 26 days.  During that period, 301 cases were appealed to the Operating Committee, of 
which 24 went to the Advisory Co mmittee on Export Policy.  Licences are denied when they do not 
meet the criteria for approval set out in the EAR. 
(c) Atomic Energy Act (AEA) of 1954 
151. Under the Atomic Energy Act of 1954, as amende d by the Nuclear Non-Proliferation Act of 
1978, the Nuclear Regulatory Commission (NRC) is responsible for administering export controls 
over source, special nuclear, and by-product ma terial, and nuclear facilities and equipment.132  Under 
the Atomic Energy Act, the Department of Energy is responsible for the re-export of such nuclear 
material and equipment and the export of nuclear technology.  Export licence applications are posted 
on the NRC website and most are provided to ot her interested federal agencies for review. 
152. Export licensing decisions made by the NRC are subject to judicial review in the federal 
courts of appeals. 
                                                      
129 15 CFR Part 750 (describing the BIS license application pro cess);  Executiv e Order 12,981, 
60 FR 62981, (8 December 1995) (descr ibing the interagency procedures fo r the administration and review of 
export controls). 
130 15 CFR Part 756. 
131 WTO (2008). 
132 The commodities under the NRC's export licensing authority are found in 10 CFR Sections 110.8 
and 110.9. United States WT/TPR/S/235 
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(v) Official support and related fiscal measures 
153. The United States provides export subsidies to e ligible exporters of agricultural commodities 
(Chapter IV(1)). 
154. Under U.S. drawback legislation, importers can cl aim a refund of up to 99% of duties, taxes, 
and fees paid on imported products if they export  that imported product, or a product that is 
manufactured from a product that is "of the same kind and quality" as that imported product.133  If the 
imported product is not used within the United States, the company can claim a refund of up to 99% of duties, taxes, and fees paid on the imported pr oduct if it exports a product that is "commercially 
interchangeable" with the imported product on which duties, taxes, and fees were paid.
134  F o r  
example, a domestic winery can claim a refund of up to 99% of federal excise tax paid on imported 
wine for sale in the domestic market if that same  winery exports an equal value of its own-produced 
wine.135  Under the legislation, wine "of the same co lour having a price variation not to exceed 50% 
between the imported wine and the exported wine" is deemed to be commercially interchangeable. 
(vi) Finance, insurance, and guarantees 
155. The United States provides export financing through its official export credit agency, the 
Export-Import Bank (Ex-Im Bank).136  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.137  Ex-Im Bank accepts risks that 
the private sector is unwilling or unable to take ;  however, Ex-Im Bank support is contingent upon a 
finding of "reasonable assurance of repayment".138  In December 2006, Ex-Im Bank activities were 
renewed until September 2011.139  In the context of the National Export Initiative launched in early 
2010, the President instructed the Ex-Im Bank to "tak e steps" to increase the availability of credit to 
small and medium-sized enterprises.140 
156. Ex-Im Bank is a self-sustaining independent executive agency and a wholly owned U.S. 
government corporation.  It funds both programme and administrative costs entirely from receipts collected from the Bank's borrowers  (Table III.6).  These receipts are also used to set aside prudent 
reserves to cover estimated future claims.  Ex -Im Bank fees are set in accordance with OECD 
disciplines.  Ex-Im Bank borrows from the U.S. Treasu ry to finance medium and long-term loans.  All 
its obligations carry the full faith and credit of the U.S. Government. 
157. 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 lo an guarantees to financial institutions lending to 
foreign buyers;  and medium and long- term direct loans to overseas buyers. 
                                                     
 
133 19 USC 1313(c) and (b). 
134 19 USC 1313(j). 
135 See Federal Register , 74 FR 52928, 15 October 2009. 
136 The mission and mandates of Ex-Im Bank are codified in the Export-Import Bank Act of 1945, as 
amended. 
137 12 USC 635, subchapter I, b(1)(A). 
138 Section 2b of the Charter of the Ex port-Import Bank of the United States. 
139 Export-Import Bank Reauthorization Act of 2006. 
140 The White House online information.  "Executive Order – National Export Initiative", 11 march 
2010.  Viewed at:  http://www.whitehouse. gov/the- press-office/executive-order-national-export-initiative. WT/TPR/S/235 Trade Policy Review 
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158. Goods and services must be shipped from th e United States and meet U.S. content 
requirements to be eligible for Ex-Im Bank credit.  Specifically, for medium- and long-term financing, support is limited to the lesser of:  85% of the va lue of eligible 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 requirements;   rather they reflect "a concerted attempt to 
balance the interests of labour and industry".
141  Ocean-borne cargo financed by Ex-Im Bank direct 
loans or long-term guarantees exceeding US$20 million or with a repayment period of more than seven years must be transported on U.S. flag  vessels, unless a waiver is obtained from the 
U.S. Maritime Administration.
142  Around 34 waivers were granted in 2008 and 2009.  According to 
the Inspector General of Ex-Im Bank, the requirement  to use U.S. flag vessels "may have limited the 
Bank's ability to achieve the most prompt and eff ective possible response" to the financial crisis.143 
Table III.6 
Ex-Im Bank credit and budget authorizations, 2004-09 
(US$ million) 
Fiscal year Credita Supported exportsb Programme and administrative 
costsc 
2004 13,321 17,834 .. 
2005 13,936 17,858 313.8 
2006 12,151 16,119 263.8 
2007 12,569 16,041 124.5 
2008 14,399 19,597 103.4 
2009 21,021 26,441 111.4 
 
.. Not available.  
a Value of loans, insurance, and guarantees provided by Ex-Im Bank. 
b Estimated value of exports supported by Ex -Im Bank loans, insurance, and guarantees. 
c New Ex-Im Bank loans, guarantees, and insurance result in a pr ogramme budget cost when the net present value of expected 
 cash disbursements exceeds expected cash recei pts.  Cash receipts typically include fees  or premiums, loan principal and inter est, 
 and cash disbursements typically include claim payments and loan disbursements.  Administrative costs are the costs to 
 administer and service Ex-Im Bank's entire credit portfolio.  
Source : WTO (2008);  and Export-Import Bank of the United States (various years),  Annual Report.  
159. The amounts authorized by Ex-Im Bank to support export activities increased by 
approximately 15% between 2007 and 2008, a nd by almost 46% between 2008 and 2009 
(Table III.6).  In addition, the composition of Ex-Im Bank's support has changed considerably:  
whereas direct loans totalled 1% of Ex-Im Bank support during 2006-08, in fiscal year 2009 the share of direct loans in total support increased to appr oximately 14%.  This refl ects Ex-Im Bank's response 
to higher demand for direct lending following the outbreak of the credit crisis.
144 
160. Ex-Im Bank's exposure was approximately US$68 billion in September 2009.  Total exposure 
since fiscal year 2005 has averaged nearly US$61 bil lion.  Air transport accounted for almost half of 
this, followed by oil and gas, with 12%, and manufac turing and power projects, each with nearly 7%.  
Ex-Im Bank's exposure is largest in Mexico, I ndia, the United Arab Emirates, and Ireland. 
161. The Small Business Administration (SBA) mainta ins loan programmes to support exports by 
small businesses.  For example, under its Export Working Capital Program, SBA guarantees 90% of 
financing for export transactions.  The guaranteed portion of a loan cannot exceed US$1.5 million.  
                                                      
141 Ex-Im Bank (2007). 
142 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. 
143 Ex-Im Bank (2009). 
144 Ex-Im Bank (2009). United States WT/TPR/S/235 
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The SBA fee is 0.25% of the guaranteed portion of the loan with a maturity of one year or less.  Since 
2006, SBA has guaranteed between 1,500 and 3,300 loan s to U.S. exporters every year;  the average 
loan guarantee ranged from US$221,600 to US$329,900. 
(vii) Promotion and marketing assistance 
162. In 2010 the U.S. President announced the goal of doubling U.S. exports in five years, and 
launched the National Export Initiativ e to help achieve this goal.145  The National Export Initiative, 
established by executive order in March 2010, compri ses efforts to:  improve access to trade finance, 
particularly for small and medium-sized exporters ;  strengthen "advocacy", promotion, and marketing 
activities;  ensure that U.S. companies have "free and fair" access to markets abroad, including 
through enforcement of international agreements;  a nd to reform the U.S. system of export controls 
(section (2)(iv)).146  The National Export Initiative also addresses "macroeconomic rebalancing" by 
instructing the Secretary of the Treasury to prom ote "balanced and strong growth in the global 
economy" through the G-20 and other mechanisms. 
163. The National Export Initiative creates an Export Promotion Cabinet consisting of the heads of 
several federal agencies.  The Cabinet must work  with the Trade Promotion Coordinating Committee 
(TPCC), a statutory body that coordinates the export promotion activities of 19 federal agencies.147  
The TPCC's priorities are to:  engage more comp anies, especially small businesses, in exporting;  
ensure success in key emerging growth markets;   develop strategies and opportunities for industry 
sectors where the United States is globally compe titive;  and provide advocacy support to U.S. 
companies competing for major public sector projects in foreign markets.148 
164. As part of the National Export Initiative, the President requested US$88 million in funding for 
the Department of Commerce's International Tr ade Administration.  The International Trade 
Administration plans to use part of these funds to expand its presence in foreign countries to "advocate and find customers for U.S. companies".
149 
(3) OTHER MEASURES AFFECTING INVESTMENT AND TRADE  
(i) Business framework and foreign investment regime 
165. The United States consistently ranks am ong the top economies for the ease of doing 
business.150 
                                                      
145 The White House online information, "Remarks by  the President in State of the Union Address, 
U.S. Capitol", 27 January 2010.  Viewed at:  http://www.whitehouse.gov/th e-press-office/remarks- 
president-state-union-address. 
146 Federal Register , 75 FR 12433, 16 March 2010, and The White House online information, 
"Remarks by the President at the Export-Import Bank's Annual Conference", 11 Ma rch 2010.  Viewed at:  
http://www.whitehouse.gov/th e-press-office/remarks-pr esident-export-import-ba nks-annual-conference. 
147 15 USC 4727 et seq. 
148 International Trade Administration online information, "Trade Promotion Coordinating Committee 
Announces Export Promotion Priorities", 23 October 20 09.  Viewed at:  http://www.trade.gov/press/press_ 
releases/2009/tpcc_102309.asp. 
149 Department of Commerce online information, "Co mmerce Secretary Gary Locke Unveils Details of 
the National Export Initiative", 4 February 2010.  Viewed at:  http://www.commerce.gov/NewsRoom/Press 
Releases_FactSheets/PROD01_008895. 
150 World Bank online information, "Doing Business:  Measuring business regulations".  Viewed at:  
http://www.doingbusiness.org/ExploreEconomies/?economyid=197. WT/TPR/S/235 Trade Policy Review 
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166. Foreign firms may establish a branch or incor porate as a subsidiary in the United States.  
There is no federal incorporation requirement.  Laws for incorporation vary across states.  
Incorporation does not need to be made in the stat e where the firm operates.  U.S. corporations or 
subsidiaries of foreign corporati ons "qualify" to do business outside the state of incorporation by 
making a filing in each state where they intend to do  business.  Branches of foreign corporations must 
also fulfil this requirement.  State qualificati on requirements do not diffe rentiate between U.S. 
corporations, and subsidiaries and branches of foreign corporations. 
167. Businesses are subject to taxation by federal and state governments.  Most states levy a tax on 
corporate income.  Due to the variability inherent  in state corporate tax systems, compliance costs 
with state corporate income taxes have been found to be twice as high as for federal corporate income 
taxes.151  The statutory top marginal rate of federal corporate income tax is 35%;  the combined 
federal and sub-federal statutory corporate income  tax rate is 39.1%, the second highest among OECD 
countries.152 
168. Section 721 of the Defense Production Act of 1950, as amended by the Foreign Investment 
and National Security Act of 2007 (FINSA), aut horizes CFIUS, a statutory interagency committee 
chaired by the Secretary of th e Treasury, to review "covered transactions", that is, mergers, 
acquisitions, or takeovers that could result in "f oreign control of a person engaged in interstate 
commerce in the United States".  CFIUS has authority to enter into "risk mitigation agreements" with 
parties to a covered transaction to address national security risks when no other provision of law 
provides adequate and appropriate au thority to resolve those national secu rity risks.  Furthermore, the 
President may suspend or prohibit a covered transac tion when he believes there is credible evidence 
that the foreign person exercisi ng control of the U.S. business might  take action that threatens to 
impair national security.153 
169. During the period under review, the Department of the Treasury revised the regulations that 
implement CFIUS proceedings.  According to the De partment of the Treasury, the revised regulations 
"increase clarity, reflect developments in business pr actices over the past several years, and make 
additional improvements based on experience with the prior regulations".154 
170. The objective of CFIUS proceedings under section 721 is to "determine the effects of the 
transaction[s] on the national security of the Unite d States."  Section 721 does not define national 
security, but provides an illustrative list of factors to  be considered in assessing whether a transaction 
poses national security risks.  As required by FINSA,  the Department of the Treasury issued guidance 
in December 2008 on the types of transactions th at CFIUS has reviewed and that have presented 
"national security considerations" (Box III.2). 
171. Reviews are primarily triggered by a voluntary notice to CFIUS by the parties to the 
transaction.  However, CFIUS agenci es and the President have the au thority to initiate unilaterally a 
review of transactions that have not been notified voluntarily.  The statutory time limit to conduct the 
review is 30 days.  Following a review, CFIUS may conduct an additional 45-day investigation.  For 
example, foreign-government-controlled transactions and certain transactions that result in foreign 
control of U.S. "critical infrastructure" are subject  to an investigation unless the Secretary or Deputy 
Secretary of the Treasury, and of any lead agency , determine that the transaction will not impair 
                                                      
151 Gupta and Mills (2003). 
152 This combined rate is the sum of the federal Government rate adjusted for deductions in respect of 
sub-federal income tax, and a "representative" sub -federal rate.  OECD online information, OECD Tax 
Database.  Viewed at:  http://www.oecd.org/ctp/taxdatabase. 
153 50 USC 2170 et seq. 
154 Federal Register , 73 FR 70702, 21 November 2008. United States WT/TPR/S/235 
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national security.  Neither the law nor the revised regulations establish particular asset classes as 
"critical infrastructure" for the purpose of CFIUS re views.  Rather, CFIUS considers the particular 
systems or assets involved in each covered tran saction, in determining whether the transaction 
involves "critical infrastructure".  The term "f oreign government contro lled transaction" covers 
transactions that result in control of a U.S. busin ess by, for example, foreign government agencies, 
state-owned enterprises, government pensi on funds, and sovereign wealth funds.155 
172. CFIUS or a lead agency designated to act on behalf of CFIUS may enter into, modify, 
monitor, and enforce agreements with any party to a covered transaction to mitigate any national 
security risk that arises as a result of the transac tion.  Under FINSA, CFIUS must justify any risk 
mitigation agreement through a national security risk-based analysis.  Executive Order 11858, as 
amended on 23 January 2008, contai ns additional disciplines on CFIUS' use of risk mitigation 
agreements. 
Box III.2:  Transactions that have pres ented national security considerations 
CFIUS examines the national security aspects of certain c overed FDI transactions to determine whether any of the 
transactions would adversely a ffect national security and pose a national securi ty risk.  According to guidance published by 
the Department of the Treasury in December 2008, CFIUS vi ews national security risk as the interaction between 
vulnerability, which emanates from the natu re of the U.S. business in which contro l is being acquired by a foreign person, 
and threat, which emanates from possible actions of the foreign person.  The guidance also states that national security 
considerations are not, in th emselves, national security risks.  CFIUS ta kes into account all the relevant facts and 
circumstances in its analysis of whether a covered transaction poses national security risk.  The guidance identifies types of 
cases that raised national security consider ations related to the identity of the U.S.  business, and others that raised nationa l 
security considerations related to the identity of the foreign person.  Selected examples of the former include past 
transactions involving U.S. businesses that: 
• supply goods and services to U.S. government agencies  and sub-federal authorities with national security 
functions; 
• supply goods and services that could e xpose national security vulne rabilities or create vulne rability to sabotage or 
espionage; 
• maintain operations, or produce or supply goods and serv ices with implications fo r U.S. national security, 
including businesses that involve "critical infrastructu re", businesses in energy, transportation (including 
maritime shipping and port terminal operations and aviati on maintenance, repair, and overhaul), and "businesses 
that could significantly and directly affect the U.S. financial system"; 
• have access to classified information; 
• engage in the defence, secu rity, and national security-related law-enforcement sectors; 
• engage in activities related to we apons and ammunition manufacturing, aerospace, and radar systems;  or 
• produce certain types of advanced technol ogies that may be useful in defending , or in seeking to impair, national 
security, including semiconductors and other equipment or component s with commercial and military 
applications in networ k and data security. 
Selected examples of the types of transactions that presented national security considerations related to the identity of the 
foreign person include transactions by fo reign persons that:  are controlled by a foreign government;  come from a country 
with a record on non-proliferation and other national security-re lated matters that could raise concerns;  or have a track 
record of taking actions, or of intending to take  actions that could impair U.S. national security. 
Source : WTO Secretariat, based on Guidance Concerning the National Securi ty Review Conducted by the Committee on 
 Foreign Investment in the United States  (Federal Register , 73 FR 74567, 8 December 2008). 
 
173. The number of voluntary notices of covered FDI transactions increased every year between 
2006 and 2008, but dropped substantially in 2009,  along with a general decline in worldwide 
investment activity.  There were 469 notices filed dur ing 2006-09 (Table III.7).  Nearly 13% of these 
notices proceeded to a 45-day investigation.  A nother 14% were withdrawn during the review or 
                                                      
155 Federal Register , 73 FR 74571, 8 December 2008. WT/TPR/S/235 Trade Policy Review 
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investigation phase;  according to the U.S. authoriti es, the vast majority of these transactions were 
later the subject of new notices submitted to CFIUS;  in the few remaining cases, the parties abandoned the transaction.  The percentage of 45- day investigations increased significantly between 
2006 and 2009.  The U.S. authorities indicate that th is increase could be the result of several factors, 
including:  national security considerations presente d by cases that were notified to CFIUS;  the 
presumption in FINSA that foreign-government-contro lled cases will be subject to investigation;  and 
parties' decision to withdraw fewer cases because, after enactment of FINSA, CFIUS may conclude an investigation if it has no unresolved national security concerns without sending the case to the 
President for a final decision.  Only two covered FD I transactions were subject to a final decision by 
the President, who allowed both to proceed. 
Table III.7 
Overview of CFIUS reviews, 2006-09 
 2006 2007 2008 2009 
Voluntary notices 111 138 155 65 
Notices withdrawn during 30-day review 14 10 18 5 
45-day investigations 7 6 23 25 
Notices withdrawn during 45- day investigation 5 5 5 2 
Mitigation agreements .. 14 2 .. 
Presidential decisions 2 0 0 0 
 
.. Not available.  
Source : WTO Secretariat, based on CFIUS online informati on.  Viewed at:  http://www.ustreas.gov/offices/ 
 international-affairs/cfius/reports.shtml;  and information provided by the authorities. 
174. Almost all notices of covered transactions submitted to CFIUS between 2006 and 2008, half 
related to the manufacturing sector (mostly computer s and electronics, transportation equipment, and 
machinery), and one third to the information sector .  Mining and wholesale/retail trade accounted for 
nearly all remaining notices.  FDI by the Unite d Kingdom accounted for 26% of notices between 2006 
and 2008, followed by Canada, France, Israel, and Australia, which together accounted for 29%. 
175. The United States continues to maintain a dditional reporting requirements for foreign 
investors in agricultural land holdings, and fo r foreign investments in U.S. businesses under the 
International Investment and Trade in Services Survey Act.156  This is separate from section 721 and 
CFIUS. 
176. The United States also maintains sector-specifi c market access restrictions on FDI at the 
federal level (Box III.3). 
177. U.S. states also maintain restrictions on FDI, mostly in insurance and real estate.  A recent 
study by the Government Accountability Office identifie d 28 states that impose restrictions on foreign 
ownership of insurance companies.157  The same study indicates that 37 states have measures that 
affect foreign ownership of real estate.  These measures range from registration requirements to ownership prohibitions of certain types of land;  15 states had laws restric ting foreign ownership of 
agricultural land. 
 
                                                     
 
156 WTO (2008). 
157 GAO (2009b). United States WT/TPR/S/235 
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Box III.3:  FDI restrictions at  the federal level, March 2010 
Air transport 
Foreign investment in the voting interest  of U.S. air carriers is limited to 25%.   However, the U. S. Department of 
Transportation can, on a case-by-case basis,  allow total foreign equity investment s (voting and non-voting) above 25%, as 
long as actual control remains in  the hands of U.S. citizens. 
Foreign investors may have up to one third of the directors in U.S. air carriers. 
Except in limited circumstances, air carriers that are not citizens of the United States may not carry passengers or cargo 
between U.S. cities. 
Maritime transport (Title 46 of the US Code, including the Shipping Act of  1916, and the Merchant Marine Act of 
1920) 
Foreign investment in U.S. flag coastwise trade vessels is limited to 25%  ownership and control. 
Foreign investors may own 100% of a U.S. -flagged international trade vessel as l ong as the vessel owner is organized and 
incorporated under the laws of the United States, its chief execu tive office and chairman of the board are U.S. citizens, and 
no more than a minority of the number of its board of dire ctors necessary to constitute a quorum are non-U.S. citizens. 
Vessels that are more than 25% foreign owned and contro lled may not carry cargo or passengers between U.S. ports. 
Communications (Communications Act of 1934, as amende d, and Submarine Cable La nding License Act of 1921) 
Foreign governments may no t hold radio licences. 
Direct foreign investment in corporati ons that hold broadcast, common carrier (telecommunication services), and certain 
other radio licences is limited to 20%;  foreign entities may inve st up to 25% in a U.S. parent company of a U.S. licencee; 
and up to 100% if the Federal Communications Commission (FCC) fi nds that it is in the public interest.  With respect to 
licences to provide common carrier and certain other radio serv ices, the FCC applies a presumption that it is in the public 
interest to grant licences to applicants whose U.S. parent company is up to 100% foreign owned by investors of a WTO 
Member. 
Banking (International Banking Act, as amended by the Foreign Bank Supervision Enhancement Act of 1991) 
Foreign banks must get approval before establishing a branch or agency, or acqui ring ownership or control of a commercial 
lending company. 
Banks must generally be subject to comp rehensive supervision on a consolidated ba sis by appropriate authorities in their 
home country. 
Fisheries (Magnuson-Stevens Fishery Conservation and Management Act, as amended) 
Foreign investment in U.S. commercial fishing ve ssels is limited to 25% ownership or control. 
Vessels that are more than 25% foreign owned are only allo wed to fish in U.S. fisher ies under certain international 
agreements and are subject to annual quotas. 
Nuclear energy (Atomic Energy Act of 1954) 
Entities that are known or are reasonably be lieved to be owned, controlled, or dom inated by foreign interests may not hold 
a licence for nuclear reactor facilities. 
Foreign ownership of nuclear production, utilization, and enri chment facilities, and licensing for source material and 
special nuclear material, must be evaluated for its impact on the common defence and security of the United States. 
Mining (General Mining Law of 1872;  Mineral Leasing Act of 1920, as amended;  and Deepwater Ports Act of 
1974, as amended) 
No foreign investor may directly purchas e or own federal mineral deposits that ar e open to exploration or other important 
mineral leases;  however, foreign investors may own up to 100% of a U.S. company that holds  mineral or mining leases. 
No foreign investor may directly hold a licence to c onstruct or operate a deepwater oil or natural gas port beyond State 
seaward boundaries and beyond the territo rial limits of the United States. 
Source: WTO Secretariat, based on GAO (2009b), Sovereign Wealth Funds:  Laws Limi ting Foreign Investment Affect 
 Certain U.S. Assets and Agencies Have Various Enforcement Processes , GAO-09-608, May, Washington, D.C.  
 
(ii) State trading, state-owned enterprises, and privatization 
178. In June 2008, the United States notified seven  entities or programmes as state trading 
enterprises.158  The United States replied to questions submitted by one Member in relation to its 
                                                      
158 WTO document G/STR/N/12/USA, 23 June 2008. WT/TPR/S/235 Trade Policy Review 
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notification.159  The questions relate to agricultural ma rketing arrangements, and exemptions from 
competition legislation for certain activities (see also section (vi)). 
179. Congress has created "government corporations" to achieve certain public policy objectives.  
Title 5 of the U.S. Code defines a government corp oration as "a corporation owned or controlled by 
the Government of the United States".160  The Government Corporation Control Act (GCCA) states 
that the term government corporation means "a mixed-ownership Government corporation and a 
wholly-owned government corporation."  It then  lists 28 entities, including the Federal Deposit 
Insurance Corporation, Tennessee Valley Authority , and the Federal Prison Industries in the 
Department of Justice, all of which are subject to  the budget, auditing, and de bt management practices 
specified in the GCCA.161 
180. In addition, there are government-sponsored enterprises (GSEs), which Congress defined in 
the Omnibus Reconciliation Act of 1990.  All five GSEs are fina ncial institutions chartered by 
Congress for a public purpose, but are privately owned, for-profit firms.  According to their charters, 
GSEs benefit from immunity from state taxes.  As  part of its response to the credit and economic 
crises, the federal Government provided support to  two GSEs, Fannie Mae and Freddie Mac, in the 
form of preferred stock purchase agreements  and coverage of losses (see Chapter I). 
181. The U.S. Government acquired an equity st ake in several companies under the Troubled 
Asset Relief Program.  Its equity interest is a pproximately 80% in American International Group 
(AIG), 60% in the reconstituted GM, 56% in GMAC , 10% in the reconstituted Chrysler, and 27% in 
Citigroup (see also section (iv) and Chapter IV(2)).  The Government plans to dispose of its equity 
stake in GM and Chrysler "as soon as practicable".162  In March 2010, the U.S. Department of the 
Treasury announced its intention to dispose of approximately 7.7 billion shares of Citigroup common 
stock during 2010, subject to market conditions. 
(iii) Government procurement 
182. The value of U.S. Government consumpti on expenditure, and gross investment was 
US$2.9 trillion in 2009, up from US$2.5 trillion in  2006.  Of this, US$1.2 trillion correspond to 
federal spending and US$1.8 trillion to state and local government spending.163  Defence consumption 
expenditure and gross investment amounted to almost 70% of total federal spending. 
183. The value of federal procurement w as approximately US$535 billion in 2009.164  T h e  
Department of Defense accounted for almost 70% of the total, followed by the Department of Energy, 
with 6%.  Around 36% of procurement corresponds  to manufactured goods;  28% to professional, 
scientific, and technical services;  and almost 10% to  administrative and waste management services;  
construction represents roughly 7% of total procurement. 
184. The United States is a party to the WTO Agreement on Government Procurement (GPA).  
During the period under review, the United States ma de notifications under the GPA on:  national 
legislation165;  statistics for the period 2000-08166;  and the thresholds in national currency for 
                                                      
159 WTO document G/STR/Q1/USA/13, 8 July 2008. 
160 5 USC 103. 
161 31 USC 9101. 
162 Congressional Oversight Panel (2009). 
163 BEA online information.  Viewed at:  http://www.bea.gov. 
164 Federal Procurement Data System.  Viewed at:  http://www.fpds.gov. 
165 WTO documents GPA/98, 24 April 2009 and GPA/98/Add.1, 1 April 2010. United States WT/TPR/S/235 
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2010-11.167  In October 2008, the United States proposed to modify Annex 2 of Appendix I to reflect 
changes in the name of a covered sub-federal entity.168  This was certified in November 2008.169  In 
April 2010, it proposed modifications of Appendi x IV "of a purely formal or minor nature".170  This 
was certified in May 2010.171 
185. In February 2010, the United States notified that it was modifying Appendix I of the GPA to 
extend to Canada its Annex 2 commitments on sub -federal procurement.  Previously, these were 
available to all GPA parties except Canada.  The modification also exempts Canada from certain domestic-content requirements under seven programmes involving construction with stimulus 
funds.
172  These commitments, which were added to Annex 3 of the GPA, are available only to 
Canada.  The changes by the United States to its GPA commitments was the result of a bilateral 
agreement reached with Canada in early 2010.  The United States has offered the same exemptions to 
other GPA parties, subject to the negotiation of reciprocal commitments. 
186. The federal Government's procurement policy is to strive for an open and competitive 
process, subject to certain preferences for domes tic good.  In March 2009, the President issued a 
memorandum that instructs federal agencies to elim inate waste, fraud and abuse, and maximize the 
value achieved from their contracts.173  According to the memorandum, reports had shown that 
"non-competitive and cost-reimbursement contracts ha ve been misused, resulting in wasted taxpayer 
resources, poor contractor performance, a nd inadequate accountability for results". 
187. The memorandum directs agencies to:  improve th e effectiveness and efficiency of the federal 
acquisition system:  strengthen contract management and internal review practices;  maximize the use 
of competition in contracting;  improve how cont racts are structured;  build the skills of the 
acquisition workforce;  and clarify the role of ou tsourcing.  The Office of Management and Budget 
(OMB) has issued government-wide guidance addressing these priorities.174 
188. Federal procurement is governed by several laws, including the Buy American Act of 1933, 
the Federal Property and Administrative Services Ac t of 1949, the Office of Federal Procurement 
Policy Act of 1974, the Competition in Contracti ng Act of 1984, the Federa l Acquisition Streamlining 
Act of 1994, the Clinger-Cohen Act of 1996, th e Small Business Act of 1953, and the Services 
Acquisition Reform Act.  The GPA is implemented in  U.S. law at the federal level primarily through 
the Trade Agreements Act of 1979.  Sub-federa l procurement is governed by state and other 
sub-federal laws and regulations.  State procurement funded by the federal Government must comply 
with certain federal statutory requirements. 
189. Federal procurement is decentralized.  The OM B, through the Office of Federal Procurement 
Policy (OFPP), provides overall leadership and direc tion for government-wide procurement policies, 
                                                                                                                                                                     
166 WTO documents GPA/62/Add.4, GPA/70/Add.4, GPA/76/Add.5, GPA/80/Add.5, GPA/84/Add.3, 
GPA/88/Add.2, GPA/91 /Add.1, all dated 18 December 2008;  GP A/94/Add.1, 19 Febr uary 2009;  and 
GPA/102/Add.3, 15 July 2010. 
167 WTO document GPA/W/309/Add.1, 17 December 2009. 
168 WTO document GPA/MOD/USA/6, 7 October 2008. 
169 WTO document WT/Let/635, 17 November 2008. 
170 WTO document GPA/MOD/USA/8, 26 April 2010. 
171 WTO document WT/Let/675, 3 June 2010. 
172 WTO document GPA/MOD/USA/7, 18 February 2010. 
173 The White House online information.  "Memorandum on Government Contracting", 4 March 2009.  
Viewed at:  http://www.whitehouse.gov/the_pre ss_office/Memorandum-for-the-Heads-of-Executive- 
Departments-and-Agencies-Subject-Government. 
174 OMB online information, "Briefing Room:  Presidential Memorandum on Government 
Contracting".  Viewed at:  http://www.whitehouse.gov/omb/pro curement_index_gov_contracting. WT/TPR/S/235 Trade Policy Review 
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regulations, and procedures.  OFPP and other federal agencies dissem inate information on the federal 
procurement system through Acquisition Centra l, and tender opportunities through the Federal 
Business Opportunities website (FedBizOpps).175  Federal agencies report contract awards to the 
Federal Procurement Data System, which is available to the public.176  Sub-federal governments have 
their own procurement agencies. 
190. The Federal Acquisition Regulation (FAR) estab lishes uniform policies and procedures for 
the acquisition of goods and services by executive agencies with appropriated funds (Box III.4).  
Individual executive agencies often develop internal  procurement policy and procedures to implement 
and supplement the FAR.  Agencies may deviat e from the FAR "when necessary to meet [their] 
specific needs and requirements", subject to authorization by the agency's head.177  The FAR applies 
to executive agencies, including wholly owned governme nt corporations subject to chapter 91 of title 
31 of the U.S. Code;  however, certain agenci es may have exceptions in their enabling acts. 
Box III.4:  Selected federal procurement procedures 
Publication of procurement opp ortunities:  federal agencies  must publish notices of proposed procurement in excess of 
US$25,000 in FedBizOpps at least 15 days before a request for tender.  Exceptions  include notices that would result in 
the disclosure of classified information.  The 15-day require ment does not apply to the proc urement of commercial items.  
Also, publication is not required when the head of the procur ing agency determines in writing that advance notice is not 
"appropriate or reasonable", after consultation with th e Administrator for Federal Procurement Policy and the 
Administrator of the Small Business Admini stration.  Approximately 83% of federa l procurement transactions in fiscal 
year 2007 were under US$25,000, accounting for 2% of the total value of procurement. 
Submission of bids:  for procurement in excess of US$100,000, pr ospective suppliers must be given at least 30 days from 
publication of the tender request to subm it their bids;  a shorter period is allowe d for procurement valued at or below 
US$100,000 and procurement of commercial items, as defined in the FAR.  For procurement covered by the GPA or an 
FTA, at least 40 days must be granted;  if an annual forecast has been published, this period can be reduced to 10 days.  
For sub-federal procurement covered by  the GPA, invitations to tender must  be published within GPA deadlines. 
Supplier registration and prequalification:  prospective suppliers must register in the Central Contractor Registration 
(CCR) database prior to being awarded a federal procur ement contract.  Registrati on is automatic and takes 
approximately one hour.  Suppliers estab lished outside the United States must  first obtain a NATO Commercial and 
Governmental Entity Code.  There are so me 629,300 suppliers registered in the C CR;  no information was available on 
the number of suppliers establ ished abroad.  Federal agencies may order goods and services directly from schedules 
maintained by the U.S. General Services Administration (GSA ).  To be included in these schedules, suppliers must 
submit an offer in response to a schedul e solicitation by the GSA.  The GSA establishes long-term contracts with 
suppliers who offer "fair and reasonable pr ices" for products that fit the generic descriptions in the relevant schedule 
solicitation.  The GSA determines whether prices are fair and reasonable by comparing the prices offered to the 
Government with the prices offered to  commercial customers.  Some procurem ent methods involve prequalification of 
suppliers.  For example, under two-step sealed bidding, which is used for proc urement of complex items, prospective 
suppliers need to submit an  acceptable technical proposal prior to be ing permitted to participate in a tender. 
Procurement methods:  under U.S. legi slation, procuring agencies requestin g tenders and awarding contracts must 
promote full and open competition through the use of sealed bids  or other "competitive" procedures specified in the FAR.  
The legislation permits the use of non-competitive procedures under certain conditions, including the availability of one 
supplier only;  "unusual and compelling urgency";  the need to maintain a "facility, producer, or manufacturer, or other 
supplier ... in case of a nationa l emergency or to achieve industrial mobilizati on";  and a determination by the head of the 
procuring agency that "it is necessary in  the public interest to use procedures ot her than competitive procedures...".  The 
contracting officer must provide written justification and s eek approval for deviating from full and open competition.  
Between 2000 and 2006, approximately 63% of procurem ent was awarded through competitive procedures.  
Box III.4 (cont'd) 
                                                      
175 Acquisition Central.  Viewed  at:  http://www.acquisition.gov;  and FBO.  Viewed at:  
https://www.fbo.gov. 
176 FPDS.  Viewed at:  http://www.fpds.gov. 
177 FAR, Subpart 1.4. United States WT/TPR/S/235 
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Award of contracts:  contracts can be aw arded only on the basis of the factors specifi ed in the requests for tender.  Under 
sealed- bidding procedures, awards must be made to the offer that  is "most advantageous to the Government, considering 
only price and price-related factors".  These factors are specified in the FAR and include "foreseeable costs or delays to the 
Government" resulting from transportation or in spection;  and federal, state, and local  taxes.  Under procedures other than 
sealed bids, the federal agency must select the offer that repr esents the "best value".  The evaluation factors include price, 
quality, past performance and technical abil ity of the supplier, and, for procurement that offers a significant opportunity for 
subcontracting, the partic ipation of small businesses.  Procuring agencies  must notify unsuccessful bidders within three 
days of the contract award. 
Dispute settlement:  Suppliers  may file protests against f ederal procurement actions with the procuring agency, the 
Government Accountability Office (GAO), or the U.S. Court of  Federal Claims (COFC).  The GAO receives between 800 
and 1,500 protests per year, and the COFC between 50 and 100.  If dissatisfied with a decision by the GAO, suppliers are 
permitted to file a subsequent protest with  the COFC.  COFC decisions may be taken to the U.S. Court of Appeals for the 
Federal Circuit.  The Contract Disputes  Act of 1978 establishes procedures and requirements for resolv ing claims relating 
to government procurement. 
Source : WTO Secretariat, based on the Fe deral Acquisition Regulations [https ://www.acquisition.gov/F ar];  Federal 
 Procurement Data System (2007);  OMB online inform ation, "Memorandum for Chief Acquisition Officers and 
 Senior Procurement Executives", 31 May 2007.   Viewed at:  http ://www.whitehouse.gov/omb/ 
 procurement/comp_contracting/competition_memo_053107.pdf;  and GSA online information 
 [http://www.gsa.gov].  
 
191. The federal Government's procurement policy with respect to goods, as embodied in the Buy 
American Act of 1933 (BAA), is to acquire domestic  products only, subject to exceptions.  Under the 
regulations to implement the BAA,  domestic goods receive preferen tial treatment in most federal 
procurement (Table III.8).  Preferential treatment  is also granted to qualifying goods from GPA 
parties and parties of FTAs with provisions on procur ement, provided that the procurement is covered 
by the GPA or FTA.  The value of manufactured goods subject to the BAA averaged approximately US$177 billion per year during 2007-09;  domestic  manufactured goods represent around 95% of the 
total.
178 
192. The American Recovery and Reinvestment Act of 2009 (ARRA), signed into law in 
February 2009, contains two "buy American" pr ovisions.  Under section 604 the Department of 
Homeland Security must acquire textile and appare l goods manufactured in the United States, subject 
to certain exceptions.  Section 1605 establishe s a domestic preference for iron, steel, and 
manufactured goods produced in the United States and used as construction material in public 
buildings and public works funded by the ARRA.  To implement section 1605 of the ARRA, the 
United States has issued regulations and guidance.179  The guidance was amended in March 2010.180  
Agencies that receive funding under ARRA may issu e additional regulations or guidance, which are 
reviewed and approved by the OMB.181 
193. Section 1605 of the ARRA must be applied "in a manner consistent with United States 
obligations under inte rnational agreements".182  Thus, for ARRA-funded pr ocurement covered by the 
GPA or an FTA, iron, steel, and manufactured goods  of parties to those agreements receive national 
treatment.183 
                                                      
178 Federal Procurement Data System online information.  Viewed at:  https://www.fpds.gov. 
179 2 CFR 176, FAR 25.6, and OMB, "Interim Final Guidance for Federal Financial Assistance", 
Appendix 9 of the Updated Implementing Guidance for the American Recovery and Reinvestment Act of 2009, 
3 April 2009. 
180 WTO document GPA/98/Add.1, 1 April 2010. 
181 WTO document GPA/W/307, 1 October 2009. 
182 Section 1605(d).  This condition also applies to Section 604. 
183 WTO document GPA/W/304, 27 April 2009. WT/TPR/S/235 Trade Policy Review 
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Table III.8 
Domestic preferences applied under the Buy American Act and the stimulus package, March 2010 
 Buy American Act Section 1605 of the American Recovery and 
Reinvestment Act (ARRA) 
Procurement subject to 
preferences Federal procurement of goods (manufactured and 
unmanufactured) valued above US$3,000 and for use 
within the United States ARRA-funded procurement of iron, steel, and 
manufactured goods used as construction materials 
for public buildings and public works (for 
unmanufactured goods, the Buy American Act 
applies) 
 
Criteria to qualify as 
"domestic" An unmanufactured end-product must be mined or 
produced in the United States.  For an end-product 
manufactured in the United States, the cost of its components mined, produced, or manufactured in the 
United States must exceed 50% of the cost of all its 
components, unless the item is commercially available off-the-shelf 
 For iron and steel, all manufacturing processes 
(except the refinement of steel additives) must be 
performed in the United States;  other construction materials must be manufactured in the United States; 
components are not subject to any domestic-content 
requirements 
Preference margin 6% added to the bid price of non-domestic goods (12% 
if the lowest domestic offer is from a small business);  a 50% margin is used for procurement by the 
Department of Defense 
 25% added to the overall cost of projects that 
involve the use of non-domestic construction 
materiala 
National treatment Parties to the GPA and FTAs that cover government 
procurement, CBERA beneficiaries, and least 
developed countries, subject to specified thresholds  Parties to the GPA and FTAs that cover government 
procurement, and least developed countries, subject 
to specified thresholds 
Rule of origin  to qualify 
for national treatment Substantial transformation Substantial transformation 
 
a Iron, steel, and other manufactured construction materials used  for federal and sub-federal c onstruction projects funded with  
 ARRA funds are subject to this criterion.   In addition, for federal construction c ontracts, 6% is adde d to any foreign non-
 manufactured construction material, if included in the offer. 
 
Source:  WTO Secretariat. 
194. The preference margin for domestic goods un der ARRA is higher than under the BAA 
(Table III.8).  Thus, the overall level of restri ctiveness on foreign goods in ARRA-funded federal 
procurement is higher relative to most non-ARRA-funde d federal procurement, to the extent that the 
procurement is not covered by the GPA or a relevant FTA.  The Secretariat estimates that, relative to 
the BAA, the value of additional imports that c ould be affected by the implementation of ARRA's 
higher domestic preference margins in federa l procurement could total US$370 million per year.184 
195. Iron, steel, and manufactured goods used in ma ss transit and highway projects funded with 
grants administered by the Federal Transit Author ity or Federal Highway Administration are subject 
to domestic preferences.185 
196. Federal procurement policy seeks to provide "m aximum practicable opportunities" to several 
categories of small businesses.186  Procurement of supplies or services valued at more than US$3,000 
but less than US$100,000 is reserved exclusively for small businesses, unless the procuring entity 
determines that there is not a "reasonable expect ation of obtaining two or more responsible small 
                                                      
184 The value of ARRA funds devoted to infrastructur e projects total around US$102 billion, based on 
Baughman and Francois (2009).  Manufactured goods (as proxied by the total value of manufactured goods 
subject to BAA requirements) represented roughly 36% of total procurement in 2008.  Thus, the value of goods 
subject to section 1605 of the ARRA is estimated at  US$37 billion (102 multiplied by 0.36);  the share of 
foreign goods purchased under the BAA's "unreasonable cost exception" (domestic preference provision) is 
estimated at 0.01%, the actual share of foreign goods purchased under this exception in 2007 and 2008. 
185 These preferences are specified in 49 US C 5323(j) and 23 USC 313, respectively. 
186 FAR 19.201. United States WT/TPR/S/235 
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business concerns that are competitive in term s of market prices, quality, and delivery".187  
Procurement of more than US$100,000 must be set aside for small businesses when there is a 
reasonable expectation that offers will be received from at least two small businesses, and awards will 
be made at a "fair market price".188 
197. In fiscal year 2007, small businesses were awarded approximately 22% of the 
US$378.5 billion in procurement for which they were eligible.189  The statutory goal is at least 23%.190  
Nearly US$44 billion in federal procurement was awarded in fiscal year 2007 to small businesses 
through non-competitive or restricted competition methods. 
198. Access conditions to state procurement are defined in state legislation;  37 states participate in 
the GPA.  Under reciprocity laws, many states in crease the price of an out-of-state offer by the 
preference margin granted in that state to resident bi dders.  Domestic preferences at the state level are 
in the form of preferences for specific products (e.g ., coal in Illinois, Pennsylvania, and Virginia, and 
printing services in several other states), preferences  to all or broad categories of in-state products 
(e.g., Alaska, Florida, New Mexico, New York, South Carolina, Louisiana, and Wyoming), and 
preferences to in-state firms (e.g., small businesses in Arizona, California and Illinois, all resident 
firms in Alaska).  Sub-federal entities other th an states may also grant domestic preferences. 
(iv) Subsidies and other government assistance 
(a) General features 
199. Government assistance to businesses is granted at the federal level, as well as by state and 
local governments.  The main instruments of suppor t are tax benefits, dire ct payments, and credit 
programmes.  Tax benefits have traditionally been the main form of federal government support to 
business. 
200. Annual tax benefits for business averaged ar ound US$98 billion between fiscal years 2007 
and 2009, compared with around US$86 b illion between fiscal years 2004 and 2006.191  The largest 
tax benefits result from the deferral of income from controlled foreign corporations (CFCs), an 
accelerated depreciation allowance, deductions for U. S. production activities, and credits for research 
activities.  Under the American Recovery and Rein vestment Act of 2009, tax benefits to businesses 
are projected at around US$74 billion between 2009 and 2011 (see also Chapter I).192 
201. The latest U.S. subsidies notification to the WTO, submitted in May 2010, contains 
information on assistance to businesses disaggregated by sector.193  The notification contains data up 
to fiscal year 2008. 
202. The U.S. notification lists programmes providi ng subsidies at the federal and sub-federal 
levels.  Since the previous Review of the United States, the amounts notified have increased sharply 
                                                      
187 FAR 19.502-2. 
188 FAR 19.502-2(b). 
189 Federal Procurement Data System (2007). 
190 Section 603(b) of the Small Business Reauthorization Act of 1997. 
191 U.S. Government Printing Office, "Budget of the Government of the United States", various years 
192 Joint Committee on Taxation (2009a).  Enacted in February 2009, the bill also allocates 
US$230 billion for tax rebates that benefits individuals, e.g. a new payroll tax credit,  extension of first-time 
homebuyer credit, expanded education credit, and a deduction of sales taxes from car purchases. 
193 WTO document G/SCM/N/186/USA, 18 May 2010.  The document notes that the notification is 
transparency-oriented, and carries no le gal weight as to the actual identification or measurement of a subsidy, its 
status as an actionable subsidy, or its trade effects. WT/TPR/S/235 Trade Policy Review 
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under three categories:  other energy and fuels;  metals, minerals, and extraction;  and others 
(Table III.9).  This reflects, in part, relatively large increases in the va lue of subsidies for the 
production of ethanol, biodiesel, oil,  gas, and non-fuel minerals. 
203. During the period under review, the United States adopted several fiscal stimulus packages to 
stabilize consumption and investment, and help the U.S. economy recover from the financial and 
economic crisis (see Chapter I).  The largest was the American Recovery a nd Reinvestment Act of 
2009 (ARRA), whose cost is estimated at US$787 billion for fiscal years 2009-19.  Roughly one third of ARRA funds is in the form of tax cuts to individuals and business tax incentives;  aid to states represent another one fifth, and social safety sp ending about 11%.  The other one-third of ARRA 
encompasses direct government investment spendi ng, including spending on infrastructure, health 
information technology, research on renewable energy, and tax credits for particular types of private 
investment, such as advanced energy manufacturing. 
204. The automotive and energy sectors, have been  among the largest recipients of government 
support during the review period;  assistance to agri culture and financial services, two of the other 
largest recipients, is discussed in Chapter IV. 
Table III.9 
Federal programmes notified to the WTO, fiscal years 2005-08a 
Sector Main forms of support Total amount 2005-06
(annual average, 
US$ million) Total 
amount 2007 
(US$ million) Total 
amount 2008 
(US$ million) 
Energy development, storage and 
transportation Grants, cooperative 
agreements 2,085.1 1,519.8 1,786.2 
Other energy and fuels Tax concessions 6,780.0 8,850.0 9,828.0 
Fisheriesb Grants, loans 77.0 75.1 75.8 
Lumber and timber Income tax concessions 455.0 500.0 530.0 
Medical Income tax concessions and 
sale of isotopes 244.4 275.6 304.8 
Metals, minerals, and extraction Income tax concessions, 
guarantees 257.5 410.0 950.0 
Textiles Grants 2.9 0 1.7 
Timepieces and jewellery Import duty exemptions, direct 
payments 4.3 4.3 3.6 
Others Income tax concessions 2,204.6 5,170 3,690 
 
a Excludes subsidy programmes to agriculture , which are discussed in Chapter IV(1). 
b Excludes loans. 
 
Source: WTO documents G/SCM/N/123/US A, 15 November 2007, G/SCM/ N/155/USA, 20 May 2009, and 
 G/SCM/N/186/USA, 18 May 2010. 
(b) Assistance to the automotive industry 
205. The Department of the Treasury (Treasury) established the Automotive Industry Financing 
Program (AIFP) in December 2008 to "prevent a significant disruption of the American automotive 
industry, which would pose a systemic risk to fina ncial market stability and have a negative effect on 
the economy of the United States".194  Under this program the Treasury has provided about 
US$85 billion of Troubled Asset Relief Program (TARP) funds to help support automakers, 
automotive suppliers, consumers, and automobile finance companies.195 
                                                      
194 Department of the Treasury online information, "Road to Stability:  Automotive Industry Financing 
Program", 9 April 2010.  Viewed at:  http://www.financialstability.gov/ roadtostability/aut oprogram.html. 
195 GAO (2009c). United States WT/TPR/S/235 
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206. A sizeable amount of AIFP funding has been allocated to support the restructuring of two 
large automotive producers:  Chrysler Group LLC (Chrysler) and General Motors Company (GM) 
(Table III.10).196  Assistance to these two companies has been provided in the form of loans and 
equity investments.197  In addition, the AIFP provided funding to ensure that auto suppliers receive 
compensation for their services and products, to prov ide consumers with confidence that warranties 
would be honoured, and to support the automotive fi nance companies affiliated with GM and Chrysler 
(Chrysler Financial and GMAC Inc.), which provi de consumer financing for vehicle purchases and 
dealer financing for inventory build-up.  The 2011 President's Budget projects that the federal Government will not recoup approximately 30% of the total value of support granted under the 
AIFP.
198 
Table III.10 
Assistance for the automobile industry 
Firm Form of support Value of support 
(US$ million) Observations 
Chrysler Loans to Chrysler for general 
business purposes 12,500 US$7.1 billion will be repaid as a term loan, including US$5.1 billion 
to be repaid within 8 years and US$2 billion to be repaid within 
2.5 years.  Treasury also receive d a 9.85% equity share in new 
Chrysler. 
 Supplier Support Programme 123 All funds have been repaid and the programme has been terminated. 
 Warranty Commitment 
Programme 28 All funds have been repaid and the programme has been terminated. 
General 
Motors Loans to GM for general 
business purposes 49,500 Treasury converted most of its lo ans to old GM to US$2.1 billion in 
preferred stock, 61% of common equity in new GM;  a US$7.1 billion loan assumed by new GM was repaid in full. 
 Supplier Support Programme 29 All funds have been repaid and the programme has been terminated. 
 Warranty Commitment 
Programme 361 All funds have been repaid and the programme has been terminated. 
 Loan to participate in GMAC 
rights offering 884 Treasury exchanged this loan for a portion of GM's equity in GMAC. 
As a result, Treasury received a 35.4% common equity interest in GMAC.  The GM loan was terminated. 
Chrysler Financial Loan funded through Chrysler 
LB Receivables Trust 1,500 Loan repaid in full plus US$7.4 million in interest. 
GMAC Preferred stock with exercised 
warrants 16,300 Treasury converted some of its preferred stock to common stock, 
increasing its common equity in terest in GMAC to 56.3%. 
 
Source:  GAO (2009c)  Troubled Asset Relief Program:  Continued Stewar dship Needed as Treasury Develops Strategies 
 for Monitoring and Divesting Financia l Interests in Chrysler and GM , GAO-10-151, November.  Viewed at:  
 http://www.gao.gov;  and data pr ovided by the U.S. authorities. 
207. Under its June 2010 credit agreement with the Treasury, Chrysler must manufacture in the 
United States at least 40% of its yearly U.S. sales vol ume or ensure that its U.S. production volume is 
at least 90% of its 2008 U.S. production volume.199  The July 2010 agreement between the Treasury 
and GM states that GM "agrees to use its commercia lly reasonable best efforts to ensure that the 
volume of manufacturing conducted in the United States is consistent with at least 90% of the level 
                                                      
196 In June 2009, substantially all of Chrysler's assets were sold to a newly formed entity, 
Chrysler Group LLC or "new Chrysler";  and in July 2009 , substantially all of GM's assets were sold to a newly 
formed entity, General Motors Company or "new GM". 
197 For details, see US Department of the Treasury online information, "Road to Stability:  Automotive 
Industry Financing Program".  Viewed at:  http://www.f inancialstability.gov/roadtostability /autoprogram.html. 
198 Table 4-8 in Analytical Perspectives, Budget of the United States Government, Fiscal Year 2011.  
Viewed at:  http://www.gpoacce ss.gov/usbudget/fy11/index.html. 
199 Section 5.17, "$7,142,000,000 First Lien Cr edit Agreement Among New Carco Acquisition LLC 
(to be renamed Chrysler Group LLC) as the Borrower, and The Lenders Parties Hereto From Time to Time",  
10 June 2009.  Viewed at:  http://www.financialstability.gov/roadtostability/autoprogram.html. WT/TPR/S/235 Trade Policy Review 
Page 66 
 
 
envisioned in [its] Business Plan, absent a materi al adverse change in its business or operating 
environment which would make the co mmitment outlined herein non-economic".200 
208. Another initiative involving assistance to the au tomobile industry is the Consumer Assistance 
to Recycle and Save (CARS) Act of 2009.  Re ferred to as the "cash-for-clunkers" programme, it 
provided credits to consumers who traded in old,  fuel-inefficient vehicles when buying or leasing 
new, more fuel-efficient vehicles.  According to  the U.S. authorities, the CARS Act appropriated 
US$1 billion for this programme;  an additional US $2 billion was subsequently redirected to the 
programme from the Innovative Technology Loan Guarantee Program at the U.S. Department of Energy.  The law applied equally to the purchase of domestic and foreign vehicles.  Nearly 680,000 
vehicles valued at US$2.8 billion were purchased  under the CARS programme, which ended in 
August 2009.
201 
(c) Assistance to the energy sector 
209. ARRA expands or creates energy incentives for businesses and utilities that produce or use 
renewable energy.  These incentives generally take the form of tax credits for the production of 
electricity from wind, refined coal, geothermal, biomass, solar, and combined heat and power 
systems.  ARRA allocated US$2.3 billion for clean energy manufacturing tax credits, and an 
estimated US$16 billion for renewable energy ge neration payments in lieu of tax credits. 
210. Federal policy comprises various tax credits a nd a biofuel charge on ethanol imports.  Some 
of these tax credits expired at the end of 2009 a nd have not been renewed.  In addition, the 
United States maintains a renewable fuel standard, a mandate that requires an increase in biofuel use 
from 9 billion gallons in 2008 to 36 b illion gallons in 2022 (Table III.11). 
211. The largest of the biofuel tax expenditures is the Volumetric Ethanol Excise Tax Credit 
(VEETC), which provides a US$0.45 per gallon excise tax credit to blenders of ethanol and gasoline.  
Prior to the enactment of the Food, Conservation, and Energy Act of 2008, the tax credit was US$0.51 per gallon.  The cost of the VEETC in forgone tax revenue totalled US$4 billion in fiscal year 2008, 
compared with US$2.7 billion in fiscal year 2006.
202  The cost is expected to increase to almost 
US$7 billion in 2015.  The Food, Conservation, and Energy Act of 2008 also extended through 2010 a 
charge of US$0.54 per gallon on imports of ethanol from MFN sources (ethanol used for fuel under subheading HS 9901.0050).  In addition, imports of ethanol are subject to an ad valorem  MFN tariff 
rate of 1.9% or 2.5% (under subheading HS 2207.2000 or 2207.1060). 
212. ARRA amended the Department of Energy 's Innovative Technology Loan Guarantee 
Programme to include the deployment of eligible renewable energy, electric power transmission, and 
leading-edge biofuels projects whose cons truction starts before 30 September 2011.
203  Guarantees 
cannot exceed 80% of project costs.  The programme received US$4 billion to cover the Government's expected costs of the loan guarantees.   Applicants for loan guarantees must determine 
whether the Buy American requirements of the ARRA apply to their proposed projects.  
(See section (iii) above). 
                                                     
 
200 Section 5.27, "$7,072,488,605 Secured Credit Ag reement Among General Motors Company, as the 
Borrower, the Guarantors and the United States Department of the Treasury, as the Lender", 10 July 2009. 
201 National Highway Traffic Safety Administrati on online information, "Transaction Data and 
Reports".  Viewed at:  ht tp://www.cars.g ov/carsreport. 
202 GAO (2009a).  This study contains a useful description of analytical work on the economic impact 
of U.S. biofuel policy. 
203 Section 406. United States WT/TPR/S/235 
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Table III.11 
Renewable and alternative fuel incentives, 2010 
Fuel type Amount of tax credit Expiry 
Biodiesel US$1 per gallon, plus US$0.10 per gallon for 
small agri-biodiesel producers 
 31 December 2009 
Renewable diesel US$1 per gallon 
 31 December 2009 
Alcohol fuel (not ethanol, other than from natura l gas or coal US$0.60 per gallon 31 December 2010 
 
Ethanol US$0.45 per gallon, plus 
US$0.10 per gallon for small producers 
(for the first 15 million gallons of ethanol 
produced each year)  31 December 2010 
Cellulosic biofuel US$1.01 per gallon (for alcohol, 
US$1.01 per gallon less the amount of the alcohol fuel mixture credit and small ethanol 
producer's credit in effect at the time of 
production)  31 December 2012 
Alternative fuels (liquefied petroleum gas;  compressed or 
liquefied natural gas;  liquefi ed hydrogen;  any liquid fuel 
derived from coal through the Fischer-Tropsch process;  compressed or liquefied gas deri ved from biomass;  and liquid 
fuel derived from biomass) US$0.50 per gallon 31 December 2009 
(30 September 2014 
for liquefied hydrogen)
 
Source: Joint Committee on Taxation (2009b), Estimated Budget Effects of the Re venue Provisions Contained in the 
 Conference Agreement for H.R. 1, The "American Recovery and Reinvestment Tax Act of 2009" , JCX 19-09, 
 12 February.  Viewed at:  http ://www.jct.gov/publications.html. 
(v) Trade related intellectual property rights 
(a) Introduction 
213. The United States has a comprehensive and highly developed system for the protection of 
intellectual property rights and is active in prot ecting its rights abroad, including through dispute 
settlement in the WTO.  Since 1995, it has starte d proceedings in 15 cases in the WTO and been the 
respondent in 4 (Table III.12).204  The panel report in one of these disputes was adopted during the 
period under review.  The USTR has primary respon sibility for promoting protection for intellectual 
property through bilateral and regional trade in itiatives, the Anti-Counterfeiting Trade Agreement 
(ACTA), and reviews of intellectual property rights in connection with the implementation of trade 
preference programmes such as the GSP, and APEC.205 
214. The ACTA is being negotia ted among several countries206 with the intention of concluding a 
treaty to "combat counterfeiting and piracy."  Following the eighth round of negotiations in 
New Zealand in April 2010, the consolidated draf t text resulting from the discussions was released.207 
215. The United States continues to be active in the WTO TRIPS Council and the negotiations on 
TRIPS issues in the Doha Development Agenda.  It updated its notification of the contact point in the 
United States for technical cooperation and for inte rnational cooperation (Artic le 69) of TRIPS as the 
                                                      
204 WTO online information.  "Find disputes cases".   Viewed at:  http://www.wto.org/english/tratop_ 
e/dispu_e/ find_dispu_cases_e.htm. 
205 USTR (2009a). 
206 Participants in the 8th round of negotiations on ACTA were Australia, Canada, European Union and 
the 27 Member states, Japan, Korea, Mexico, Morocc o, New Zealand, Singapore, Switzerland, and the United 
States. 
207 USTR (2010a). WT/TPR/S/235 Trade Policy Review 
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Deputy Assistant USTR for IP and Innovation in the USTR.208  In June 2009, it also notified the text 
of the law Prioritizing Resources and Orga nization for Intellectual Property Act 2008.209  In the DDA 
negotiations, in March 2010, the Chairman reporte d to the Trade Negotiations Committee that the 
United States continues to support the 2005 joint proposal on geographical indications for wines and 
spirits, along with a number of other delegations. 210 
Table III.12 
Dispute Settlement cases involving the United States as at June 2010 
(a)  Complainant 
Number Respondent Short title Result 
Patents 
DS36 Pakistan Patent Protection for Pharmaceutical and Agricultural Chemical 
Products Mutually agreed solution 
7 March 1997 
DS37 Portugal Patent Protection under the Indus trial Property Act Mutually agreed solution 
8 October 1996 
DS50 India Patent Protection for Pharmaceutical and Agricultural Chemical 
Products Appellate Body report  
19 December 1997 
DS196 Argentina Certain Measures on the Protection of Patents and Test Data Mutually agreed solution 
20 June 2002 
DS199 Brazil Measures affecting patent protection Mutually agreed solution 
19 July 2001 
DS170 Canada Term of Patent Pr otection Appellate Body report  
18 September 2000 
DS171 Argentina Patent Protection for Phar maceuticals and Test Data Protection for 
Agricultural Chemicals 
 Mutually agreed solution 
20 June 2002 
Copyright 
DS28 Japan Measures Concerning Sound Recordings Mutually agreed solution 
5 February 1997 
DS82 Ireland Measures Affecting the Grant of Copyright and Neighbouring 
Rights 
 Mutually agreed solution 
13 September 2002 
DS115 European Union Measures Affecting the Grant of Copyright and Neighbouring 
Rights 
 Mutually agreed solution 
13 September 2002 
Trademarks/Gis 
DS174 European Union Protection of Tradem arks and Geographical Indications for 
Agricultural Products and Foodstuffs 
 Panel report 
15 March 2005 
TRIPS enforcement 
DS83 Denmark Measures Affecting the Enfo rcement of Intellectual Property Rights 
 Mutually agreed solution 
13 June 2001 
DS86 Sweden Measures Affecting the Enfo rcement of Intellectual Property Rights 
 Mutually agreed solution 
11 December 1998 
DS124 European Union Enforcement of Intellect ual Property Rights for Motion Pictures and 
Television Programs  Mutually agreed solution 
26 March 2001 
DS125 Greece Enforcement of Intellectual Pr operty Rights for Motion Pictures and 
Television Programs  Mutually agreed solution 
26 March 2001 
DS362 China Measures Affecting the Prot ection and Enforcement of Intellectual 
Property Rights Panel report 
26 January 2009 
Table III.12 (cont'd) 
                                                      
208 WTO documents IP/N/7/Rev.3 of 17 February 2010 and IP/N/3/Rev.11 of 4 February 2010. 
209 WTO document IP/N/1/USA/E/1 of 18 June 2009. 
210 WTO document TN/IP/20 of 22 March 2010 and TN/IP/W/10/Rev.2 of 4 July 2008 (originally 
distributed as TN/IP/W/10 in March 2005). United States WT/TPR/S/235 
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(b)  Respondent 
Number Complainant Short title Result 
Patents 
DS224 Brazil US Patents Code Consultations requested 
31 January 2001 
Copyright 
DS160 European Union Section 110(5) Copyright Act Panel report 
15 June 2000 
Trademarks/Gis 
DS176 European Union Section 211 Omnibus Appr opriations Act of 1998 Appellate Body report 
2 January 2002 
TRIPS enforcement 
DS186 European Union Section 337 of the Tariff Act of 1930 and Amendments thereto Consultations requested 
12 January 2000 
 
Source:  WTO Secretariat. 
216. Intellectual property is critical to the United States' economy and, according to one source, 
was worth between US$5 and US$5.5 trillion in 2005.211  It has also been repeatedly stated in 
Congress that intellectual property is the basis fo r economic competitiveness in the United States and 
the only sector where the United States has a tr ade surplus with every nation in the world.212  In terms 
of royalties and licence fees, which is a subset of intellectual property, the United States has a balance 
of payments surplus with most countries, with so me exceptions, like France and Sweden.  The surplus 
nearly doubled between 2004 and 2008 before falling to about US$ 60 billion in 2009 (Chart III.3). 
217. Except for the Prioritizing Resources and Organi zation for Intellectual Property (PRO-IP) Act 
2008, there have been no major changes to the legi slation on intellectual property:  Table III.13 below 
is the same as in the previous Trade Policy Review .  The PRO-IP Act aims to improve enforcement of 
intellectual property rights by increasing penalties a nd improving resources for investigation.  In 
addition, the Act created the post of Intellectua l Property Enforcement C oordinator (IPEC) in the 
Executive Office of the President to replace the national Intellectual Property Law Enforcement 
Coordination Council.  The IPEC is responsible for formulating the Administration's strategic plan to 
combat intellectual property theft, and to work with  the agencies responsible  for IP enforcement to 
effectively and efficiently implement that plan.  The IPEC established an interagency working group 
to support this effort and has received significant feedback and input from relevant U.S. agencies, the 
public, and industry.  The IPEC is currently review ing feedback and comments and is in the process 
of formulating the strategy. 
 
                                                      
211 Shapiro and Hassett (2005). 
212 For example, see:  H. Res. 1208:  Supporting the goals of World Intellectual Property Day, 
introduced to the House of Representatives 23 May 2010;  S.  Res. 379:  A resolution to express the sense of the 
Senate regarding the protection of in tellectual property, Introduced to the Senate 17 December 2009;  and 
H. Res. 314:  Supporting the goals of World Intellectual Property Day, and for other purposes 17 April 2007.  Govtrack. online information.  Viewed at:  http://www.govtrack.us/ [April 2010]. WT/TPR/S/235 Trade Policy Review 
Page 70 
 
 
010,00020,00030,00040,00050,00060,00070,00080,00090,000100,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Chart III.3
Balance of Payments for royalties and licence fees, 2000-09
Source:  BEA (2010), "U.S. International Transactions Accounts Data".  Viewed at:Payments Receipts
  http://www.bea.gov/international/bp_web/simpl e.cfm?anon=71&table_id=22&area_id=1 [June 2010].
 
218. The Webcaster Settlement Act of 2008 and the Webcaster Settlement Act of 2009 have also 
become law.213  These Acts allow internet radio stations and commercial webcasters and the recording 
industry to negotiate royalty rates.  Several agreem ents were reached under the two Acts, the terms of 
which have been published by the U.S. Copyright Office in Federal Register  Notices dated 3 March 
2009, 17 July 2009, and 12 August 2009.214 
                                                      
213 For the texts of these Acts see:  http://www.copyright.gov/legislation/archive/;  and http://www. 
copyright.gov/legislation/[April 2010]. 
214 Federal Register  Notices.  Viewed at:  http://www.c opyright.gov/fedreg/ [April 2010]. United States WT/TPR/S/235 
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Table III.13 
Summary of intellectual property pr otection in the United States corresponding to TRIPS obligations, 2010  
Form Main legislation Coverage Duration 
Copyright and 
related rights Copyright Law, Title 17 of the 
US 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 US CodeThe 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 US CodeAny inventions that are new, useful, and 
non-obvious.  Apply to process, machine, manufacture or composition of matter, or 
improvements thereof 20 years from filing date 
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) 
Trademarks 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 trademark 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 
 
Note: In some cases common law protectio n may apply to intellectual property. 
 
Source:  World Intellectual Property Organization;  U.S. Depa rtment of Commerce;  and notifications to the WTO. 
(b) Patents 
219. The authority to establish laws on patents a nd copyright in the United States is based on 
Section 8 of the Constitution under the Powers of Congress, which include the powers to:  "regulate 
commerce with foreign nations";  and "to promote the progress of science and useful arts, by securing 
for limited times to authors and inventors the ex clusive right to their respective writings and WT/TPR/S/235 Trade Policy Review 
Page 72 
 
 
discoveries."215  The United States is the only country to give patent protection on the first-to-invent 
rather than the first-to-file principle. 
220. United States Code Title 35 sets out the law on patents in the United States.216  It states that:  
"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of 
matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the 
conditions and requirements of this title."217  The term of patent is 20 years from date of first filing for 
protection; the term may be adjusted for ad ministrative delays during examination of the 
application218, which was affirmed in 2010 by the Court of Appeals for the Federal Circuit in Wyeth v. 
Kappos .219 
221. In June 2010, the U.S. Supreme Court issued its decision in Bilksi v. Kappos .  The decision 
states that, because the law does not categorically exclude them, patent claims for business methods 
may be considered patentable subject matter, provided that they are not just abstract ideas.  In addition, the Court noted that the machine-or-transfo rmation test is a useful  tool “for determining 
whether some claimed inventions are processes under § 10 1”, but it is not the sole test for determining 
patentability of a process claim.  This confirms  that claims that do not meet the machine-or-
transformation test may still be eligible to be pate nted, but that such claims must also meet the 
statute’s patentability requirements of nove lty, non-obviousness, and written description.
220   
222. The United States Patent and Trademark Office (USPTO) provides for online applications for 
patents, and the whole process, including design, util ity, and plant patents is set out in a flowchart 
with hyperlinks for more details on its website.221 
223. The USPTO has continued to implement the 2007- 2012 Strategic Plan.  The Plan is described 
by the USPTO as "an ever-changing document with the USPTO continually reviewing, refining, and 
updating it to adjust to changing conditions, and to incorporate the best thinking of the IP community and beyond."  Electronic filing of patent appli cations has continued to  increase, from 2.2% of 
applications in FY2005 to 82.5% in FY2009 while the number of patents filed rose from 409,532 in 
2005 to 496,886 in 2008 before falling s lightly to 485,500 in 2009.  The time taken to issue a patent 
after filing continued to increase from 29 m onths in 2005 to 35 months in 2009, although 
"optimizing" patent quality and timeliness is the first strategic goal of the USPTO.
222  The USPTO has 
set targets for patent pendency (the time taken to pr ocess an application), which it usually meets, but 
the targets themselves are longer each year (Table III.14). 
                                                      
215 For the full text of the Constitution of the United States see:  http://www.archives. 
gov/exhibits/charters/constitution_transcript.html [April 2010]. 
216 For the full text of United States Code Title 35 see:  http://www.uspto.gov/web/ 
offices/pac/mpep/consolidate d_laws.pdf [April 2010]. 
217 35 US Code S.101. 
218 35 US Code S.154. 
219 Wyeth v Kappos , 591 F.3d 1364 (Fed. Cir. 2010). 
220 Bilski v Kappos  561 U.S.  (2010).  Viewed at:  http://www.supremecourt.gov/opinions/09pdf/08-
964.pdf [July 2010]. 
221 USPTO online information.  Viewed at:  http://www.uspto.gov/patents/process/ind ex.jsp. 
222 USPTO (2009. United States WT/TPR/S/235 
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Table III.14 
Patent pendency months 
Year Average time to first action Average time to completion 
 Target Actual Target Actual 
2005 21.3 21.1 31.0 29.1 
2006 22.0 22.6 31.3 31.1 
2007 23.7 25.3 33.0 31.9 
2008 26.9 25.6 34.7 32.2 
2009 27.5 25.8 37.9 34.6 
 
Source:  USPTO. 
224. The time taken to process applications, and, at the same time, improve quality, has been a 
critical goal for the USPTO.  In addition to grea tly increasing the proportion of applications filed 
electronically, it has also increased  recruitment and training of patent examiners through its Patent 
Training Academy, which was ISO 9001:2008 certified in 2009.  The USPTO also has a number of 
other programmes related to improving pendency, in cluding:  obtaining reactions to proposals for a 
deferred examination system;  and starti ng an Accelerated Examination programme. 
225. In 2008, the USPTO received 257,818 patent appli cations from residents of the United States 
and 239,068 from residents of foreign countries.  In that year it issued 93,726 patents to U.S. residents 
and 90,713 to foreign residents.223  The number of applications and the necessarily complex process to 
exam them indicates the task facing the Offi ce and the importance attached to pendency. 
226. Decisions of the USPTO patent examiners may be  appealed to the USPTO's Board of Patent 
Appeals and Interferences (BPAI), whose decisions may,  in turn, be appealed to the Court of Appeals 
for the Federal Circuit (CAFC) and the Supreme Co urt.  In FY2009 15,483 cases were appealed to the 
BPAI .224 
(c) Trade marks and geographical indications 
227. Registration of a trade mark in the USPTO is  not essential for legal protection, as rights are 
acquired by using one in business.  However, regi stration of a trade mark provides for additional 
rights, including:  incontestability after five years of uncontested use;  legal presumption of ownership;  and the entitlement to use the mark in  connection with the goods or services identified in 
the registration.  Trade marks used exclusively with in a State may be registered with that State's 
authorities.  Filing an application in the USPTO ma y be based on use in comme rce or intent to use, 
but to register a trade mark with the USPTO requi res, with some exceptions, actual use in commerce 
that can be regulated by the United States Congr ess (for example interstate commerce or commerce 
between the U.S. and another  country). 
228. The United States offers protection for geographi cal indications (GIs) for all classes of goods 
and services, through its trade mark system; app lications are processed through the USPTO which 
states that these can be viewed as a "subset" of trademarks.
225  A GI, like a trade mark, may not be 
registered if it is considered to be a generic term , that is, a when it identifies a category or genus of 
                                                      
223 USPTO (2009). 
224 USPTO (2009). 
225 USPTO (2010). WT/TPR/S/235 Trade Policy Review 
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good that can come from anywhere, in contrast to a term that identifies the producing or 
manufacturing source of the good.226 
229. As with patents, appeals of decisions on app lications to the USPTO can be made to the 
Trademark Trial and Appeal Board (TTAB) and, from there, to the courts. 
230. Applications by foreign nationals under the Pari s Convention and the Madrid Protocol are not 
required to show use of a trade mark in order to register it.227  However, to maintain registration, use 
is required.  Applicants submitting an application in  the USPTO may file an international application, 
under the Madrid Protocol. 
231. Applications for registration of trade marks increased from 323,501 in 2005 to 401,392 in 
2008 before falling back to 352,051 in 2009.  Of the applications received in 2009, 274,603 were filed 
by residents of the United States and 77,448 from r esidents of foreign countries.  On average it took 
2.7 months to process an application to initial acceptance or rejection.228  Practically all applications 
are through the Trademark Electronic Application System (TEAS). 
232. The legislation governing trade marks is th e Lanham (Trademark) Act of 1946 (title 15, 
chapter 22 of the United States Code).229  No significant new specific trade mark legislation was 
enacted during the period under review.  In 2009, the Trademark Trial and Appeal Board issued an 
opinion clarifying that a foreign party may no longer rely on the Santiago Convention as a vehicle to oppose a trademark application in the United States.
230  In addition, in October 2008, the United States 
completed ratification of the Singapore Treaty on the Law of Trademarks, which entered into force in 
March 2009. 
(d) Copyright 
233. Like patents, and unlike trade marks, the power to legislate on copyright in the United States 
is vested in Congress through Section 8 of the Co nstitution (see above).  Copyright protection under 
U.S. law is of limited duration:  at present, life of the author plus 70 years.  For works made for hire, 
copyright protection is the shorter of 120 years af ter creation or 95 years after publication.  Although 
registration is not required for copyright protection,  registration provides some benefits.  Registration 
allows for the possibility of statutory damages and a ttorney's fees in civil cases, establishes a public 
record of the copyright claim, and allows the copy right owner to record the registration with Customs 
and Border Protection to protect against imports of infringing copies. 
234. The copyright law of the United States is set out in Title 17 of the United States Code.231  The 
U.S. Copyright Office, a separate department of th e Library of Congress, is responsible for registering 
claims, maintaining records, advising Congress on copyright issues, and receiving and distributing 
royalties pursuant to some of the statutory licences contained in the Copyright Act.  It is also 
responsible for representing the United States at inte rnational meetings.  The United States is a party 
                                                      
226 See, Trademark Manual of Exam ining Procedure (TMEP).  §1209.0 1(c), et.  Seq., available at 
http://tess2.uspto.gov/tmdb/tmep/1200.htm#_T120901c 
227 WTO (2008). 
228 USPTO (2009). 
229 For the full text of the Lanham Act, see:  http://www.law.cornell.edu/uscode/ 
html/uscode15/usc_sup_01_15_10_22.html [April 2010]. 
230 Franpovi, S. A. v. Rosalinda Wessin and Da niel Pena TTAB (9 February 2009), Opposition 
No. 91181129.  Viewed at:  http://des.uspto.gov/Fo ia/ReterivePdf?flNm=91181129-02-09-2008&system= 
TTABIS [April 2010]. 
231 Title 17 U.S.C.  Viewed at:  http://www. copyright.gov/title17/circ92 .pdf. [April 2010]. United States WT/TPR/S/235 
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to the Geneva Phonograms Convention, Universal Copyright Convention, the Berne Convention, the 
WIPO Copyright Treaty, and the WIPO Performance s and Phonograms Treaty (WPPT).  It is not a 
party to the Rome Convention, and has an exemption from the WPPT for broadcasting and public performance rights. 
235. Online registration of copyright is possible thro ugh the Copyright Office's eCO system which 
introduced in 2008 and replaced several older system s.  The number of copyright claims submitted 
electronically has increased from 54% in FY2009 to 75% FY2010.  In FY2009, the Copyright Office 
received 532,370 claims and registered  382,086.  There were also 1,067 pre-registrations.  In general, 
the pre-registration service, introduced in 2006, is for unpublished works in areas where there is a 
history of infringement prior to authorized commercial distribution.
232 
236. In the event of a refusal to register a copyright , an applicant may ask for a reconsideration by 
the Registration and Recordation Program and then the Copyright Office Review Board.  In FY2009, 
the Registration and Recordation Program heard first requests for reconsideration covering 408 
claims, reversing 93 refusals.  In the same year , the Copyright Office Review Board issued final 
reconsideration decisions on 46 works, 45 of which were denied. 
(e) Enforcement activities 
237. The USTR continued to conduct its annual review s examining the adequacy and effectiveness 
of IP protection in foreign countries, and its eff ect on market access for U.S. persons in accordance 
with Section 182 of the Omnibus Trade and Competitiveness Act of 1988 (Special 301).  The 2010 Special 301 review process examined IPR protec tion and enforcement in 77 trading partners.
233  
According to the report:  11 countries are on the Priority Watch List234;  29 countries are on the 
lower-level Watch list235;  and 1 country will continue to be subject to Section 306 monitoring under a 
bilateral Memorandum of Understanding that est ablishes objectives and actions for addressing IPR 
concerns in that country.236  Three countries were removed from the list altogether237, while 
out-of-cycle reviews were announced for two count ries to assess progress on specific IPR issues 
before the next review begins in 2011.238 
238. 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 
                                                      
232 Pursuant to the Artists' Rights and Theft Prevention Act of 2005, the Copyright Office offers 
preregistration to serve as a place-hold er for limited purposes, notably where a copyright owner needs to sue for 
infringement while a work is still being prepared for commerc ial release.  Preregistrati on is available for certain 
works within the following categories:  motion pictures, sound recordings, musical compositions, literary works being prepared for publication in book form, computer programs (including videogames), and advertising or 
marketing photographs.  See 17 U.S.C. § 408(f) and 411;  37 C.F.R. 202.16.  Preregistration is not a substitute 
for registration. 
233 USTR (2010b). 
234 China, Russia, Algeria, Argentina, Canada, Chile, India, Indonesia, Pakistan, Thailand, and 
Venezuela. 
235 Belarus, Bolivia, Brazil, Brunei, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, 
Finland, Greece, Guatemala, Italy, Jamaica, Kuwait, Lebanon, Malaysia, Mexico, Norway, Peru, Philippines, 
Romania, Spain, Tajikistan, Turkey, Turkmeni stan, Ukraine, Uzbekistan, and Viet Nam. 
236 Paraguay. 
237 The Czech Republic, Hungary, and Poland. 
238 The Philippines and Thailand. WT/TPR/S/235 Trade Policy Review 
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mask work, or vessel hull design.  Section 337 inves tigations are instituted by the U.S. International 
Trade Commission (USITC);  administrative law ju dges make an initial determination of whether 
there is an infringement/contravention of the law, wh ich 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.  Exclusion orders direct Customs and Border Protection to bar entry into the 
United States of infringing goods from specifically identified entities (limited exclusion orders), or 
infringing goods from whatever source (general ex clusion orders).  The President may disapprove a 
USITC order within 60 days.  USITC Section 337 de terminations may be appealed to the federal 
courts. 
239. In 2008 and 2009, 72 Section 337 i nvestigations were instituted, almost all of which involved 
claims regarding intellectual property rights, partic ularly patent infringement.  At the beginning of 
April 2010, there were 79 outstanding exclusion orde rs (compared with 66 reported in the previous 
U.S. Review) affecting imports of  a range of products, including mach inery and equipment, electrical 
and electronic products, some durab le consumer goods, pharmaceuticals and chemicals, and consumer 
items. 
240. In FY2009, units of the Department of Home land Security Customs and Border Protection 
and Immigration and Customs Enforcement made 14 ,841 seizures of counterfeit and pirated goods 
with a domestic value of US$260.7 million, down slightly from FY2008 seizures (14,992) and 
domestic value (US$272.7 million).  Footwear con tinued to be the top commodity, accounting for 
38% of the total value.239 
(vi) Competition policy 
(a) General features and policy 
241. There have been no major changes in federa l competition legislation during the review 
period.  The Sherman Act, Clayton Act, and the Federal Trade Commission Act are the main federal 
competition laws.  The Antitrust Division of the Department of Justice (DOJ) and the Federal Trade Commission (FTC) enforce these laws. 
242. Nearly all U.S states have competition legislati on.  In general, federal legislation does not 
supersede sub-federal competition legislation, but co exists.  According to the U.S. authorities, state 
courts generally interpret sub-fede ral competition legislation consisten tly with federal law, and federal 
and state competition enforcers cooperate closely to ensure that their actions are consistent, and to 
minimize unnecessary burdens on private parties.
240 
243. The head of the DOJ's Antitrust Division indi cated in May 2009 that "inadequate antitrust 
oversight" had contributed to the economic crisis, and that antitrus t had to be among "the frontline 
issues in the Government's broader response to the distressed economy".241  The FTC Chairman noted 
that "vigorous antitrust enforcement is especially important in down cycles".242 
244. In May 2009, the DOJ withdrew a report it had issued in 2008, that sought to provide 
guidance on section 2 of the Sherman Act, which makes it illegal to acquire or maintain monopoly 
                                                      
239 CBP (2009). 
240 WTO document WT/TPR/M/200/Add.1, 9 September 2008. 
241 DOJ online information, "Vigorous Antitrust Enfo rcement in this Challenging Era", remarks by 
Assistant Attorney General Christine A. Varney for the U.S. Chamber of Commerce, 12 May 2009.  Viewed at:  
http://www.justice.gov/atr/pub lic/speeches/245777.htm. 
242 FTC (2010). United States WT/TPR/S/235 
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power through improper means.243  Section 2, which covers all types of unilateral conduct by firms, is 
primarily aimed at preventing injury to competition through exclusion of rivals.  According to the 
DOJ, the 2008 report "raised too many hurdles to government antitrust enforcement and favoured 
extreme caution and the development of safe harbour s for certain conduct within reach of Section 
2".244  Furthermore, the DOJ indicated that the repor t's withdrawal signalled a "shift in philosophy" 
and was "the clearest way to let everyone know th at the Antitrust Division [of the DOJ] will be 
aggressively pursuing cases where monopolists try to u se their dominance in the marketplace to stifle 
competition and harm consumers".  The DOJ di d not litigate any new cases under section 2 of the 
Sherman Act during the period under review. 
245. The DOJ and FTC are updating the Horizontal  Merger Guidelines, which describe their 
standards for reviewing mergers.  As part of this  initiative, the agencies held five public workshops 
between December 2009 and January 2010 .  According to the head of the DOJ's Antitrust Division, 
the workshops revealed gaps between  current practice and the Guidelines.245  In April 2010, the FTC 
released the proposed revision of the Guidelines for public comment.246 
246. Under the Hart-Scott-Rodino Antitrust Impr ovements Act of 1976 (HSR Act), proposed 
mergers above a certain value must be notified to  the DOJ and FTC prior to completion.  The DOJ 
and FTC may litigate, in federal district court, proposed mergers that may substantially lessen 
competition;  the FTC may also litigate such merg ers administratively.  According to the U.S. 
authorities, between 2000 and 2009, the FTC challenge d 207 mergers, resulting in:  the abandonment 
of 58 transactions;  consent decrees in 117 merg ers;  and injunctive relief awarded by an 
administrative law judge or a court in 32 matters.  During the same period, the DOJ filed 90 cases 
blocking proposed mergers or requiring divestitur es.  Another 87 transactions were abandoned or 
restructured following DOJ opposition. 
247. In November of 2009, the DOJ and FTC ente red into a Memorandum of Understanding with 
the Russian Federal Anti-Monopoly Service.  This is the only bilateral antitrust arrangement entered 
into by the U.S. antitrust agencies during the review  period.  The United States also has agreements 
on competition cooperation with Australia, Brazil, Canada, the European Union, Germany, Israel, 
Japan, and Mexico.247 
(b) Exemptions 
248. Limited exemptions from competition law exist in several federal statutes (Box III.5).  
According to the Antitrust Modernization Commissi on, a bi-partisan commission created by Congress 
that operated between 2004 and 2 007, exemptions from competition law can harm the U.S. economy 
and, in the long run, reduce the competitiveness of the industries that sought these exemptions.248 
                                                      
243 See Department of Justice (2008). 
244 DOJ online information, "Justice Department Withdraws Report on Antitrust Monopoly Law", 
11 May 2009.  Viewed at:  http://www.usdoj.g ov/atr/public/press_releases/2009/245710.htm.] 
245 DOJ online information, "an Update on the Review of the Horizontal Merger Guidelines", Remarks 
by Assistant Attorney General Christine A. Varney as Prepared for the Horizontal Merger Guidelines Review 
Project's Final Workshop, 26 January, Washington, D.C.   Viewed at http://www.justice.gov/atr/public/speeches/ 
254577.htm. 
246 FTC online information, "Fed eral Trade Commission Seeks View s on Proposed Update of the 
Horizontal Merger Guidelines", 4 February 2010.  Viewed at:  http://www.ftc.gov/opa/2010/04/hmg.shtm. 
247 DOJ online information, "Antitrust Cooperation Agreements".  Viewed at:  http://www.usdoj. 
gov/atr/public/international/int_arrangements.htm. 
248 Antitrust Modernization Commission (2007). WT/TPR/S/235 Trade Policy Review 
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249. The Webb-Pomerene Act and the Export Tradi ng Company Act of 1982 grant immunity from 
competition law to certain exporters.  Seven associa tions were registered with the FTC under the 
Webb-Pomerene Act (May 2009):  the American Co tton Exporters Association, American Natural 
Soda Ash Corporation, American-European Soda Ash Shipping Association, California Dried Fruit 
Export Association, Overseas Distribution Solution , Paperboard Export Association of the United 
States, and Phosphate Chem icals Export Association.249  Under the Export Trading Company Act of 
1982, 70 entities hold certificates of review, cove ring some 2,500 individuals and firms (July 2008).250  
The list of certificate holders is available to the public.251 
250. U.S. state laws and regulations that limit competition sometimes override federal competition 
law.  Under the Supreme Court's state action doctrine, the actions of a state legislature are immune 
from potential liability under federal competition le gislation.  The actions of governmental or 
quasi-governmental entities that are not considered to be the "state", including municipalities, public 
service commissions, and state regulatory boards, are immune only under specific conditions.  An FTC staff report recommended that litigation, amicus curiae  briefs, and competition advocacy be used 
to clarify the state action doctrine and preclude  it from being misapplied to grant overly broad 
antitrust immunity.
252 
Box III.5:  Selected statutory exemptions from competition laws, March 2010 
Capper-Volstead Agricultural Producer s' Associations Act (7 USC 291-92):  Authorizes agricultural producers to act 
together for the purpose of "collectively processing, prepari ng for market, handling, and marketing" their products, and permit s 
cooperatives to have "market agencies in common". 
Capper-Volstead Cooperative Marketing Act of 1926 (7 USC 451-57):  Authorizes agricultural producers and associations to 
acquire and exchange pricing, production, and marketing data. 
Agricultural Marketing Agreement Act of 1937 (7 USC 601-27, 671-74):  Authorizes those engaged in the handling of certain 
agricultural commodities in designated regions, with the approval of the Secretary of Agriculture, to take specific actions, su ch 
as influencing supply and quality, and pooling funds for promoti on and research;  these arrangements are specifically exempted 
from the application of the antitrust laws. 
Webb-Pomerane Act (15 USC 61-66):  Grants limited antitrust immunity to associ ations for the purpose of engaging in 
collective exports of goods, provided that this does not result in conduct that has anti-competitive effects in the United Stat es or 
injure domestic competitors. 
Export Trading Company Act of 1982 (15 USC 4001-03):  Grants limited antitrust immunity to export activities specified in a 
"certificate of review" issued by the Secretary of Commerce with  the concurrence of the Attorney General.  To obtain the 
certificate an applicant must show that the proposed activities do not:  substantially lessen competition or restrain trade in the 
United States, or substantially restrain the export trade of th e applicant's competitors;  unreasonably enhance, stabilize, or 
depress prices in the United States of the class of goods or se rvices exported by the applicant;  constitute unfair methods of 
competition against competing exporters;  and do not include any act that may reasonably be expect ed to result in the sale for 
consumption or resale in the United States of the cl ass of goods or services exported by the applicant. 
McCarran-Ferguson Act (15 USC 1011-15):  Exempts from the antitrust laws the "bus iness of insurance" to the extent 
"regulated by state law";  the Sherman Act continues to be appli cable to all agreements or acts by those engaged in the "busine ss 
of insurance" to boycott, coerce, or intimidate. 
Fishermen's Collective Marketing Act (15 USC 521-22):  Authorizes fishermen to act toge ther for the purpose of catching, 
producing, preparing for market, processing,  handling, and marketing their products.  
Box III.5 (cont'd) 
                                                      
249 FTC online information, "Webb-Pomerene Act Filings ".  Viewed at:  http://w ww.ftc.gov/os/statutes/ 
webbpomerene/index.shtm. 
250 WTO document G/STR/Q1/USA/13, 8 July 2008. 
251 ITA online information.  Viewed at:  http://ita.doc.gov/td/oetca. 
252 FTC (2003). United States WT/TPR/S/235 
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Newspaper Preservation Act of 1970 (15 USC 1801-04):  Provides a limited exemption for joint operating arrangements 
between newspapers to share production facilities and combine th eir commercial operations;  the newspapers are required to retai n 
separate editorial and reporting staffs and to determine their editorial policies independently. 
Sports Broadcasting Act of 1961 (15 USC 1291-95):  Exempts agreements among professional football, baseball, basketball, and 
hockey teams to negotiate jointly, through their leagues, for the sale of television rights. 
Small Business Act (15 U.S.C. 631-57f):  Authorizes the Small Business Administrator, to approve, under certain conditions an 
agreement between small business firms covering a joint programme  of research and development;  the Administrator's approval 
confers antitrust immunity on acts and omissions pursuant to the ag reement.  In addition, the Act confers antitrust immunity on  
joint actions undertaken by small business firms pursuant to a voluntary agreement approved by the President to further the 
objectives of the Small Business Act, if found by the President to be in the public interest. 
Defense Production Act of 1950 (50 USC 2061-171):  The President, in conjunction with the Attorney General, may approve 
voluntary agreements among various industry groups for the development of preparedness programmes to meet potential national 
emergencies;  persons participating in those agreements ar e immunized from antitrust laws with  respect to good faith activities  
undertaken to fulfil their responsibilities under the agreement. 
Federal Aviation Act of 1958 (49 USC 408, 409, and 412):  The Department of Transportation may grant antitrust immunity to 
agreements between U.S. and foreign carriers. 
Shipping Act of 1984 (46 USC 1701-19):  International 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. 
Standard Setting Development Organization Advancement Act (15 USC 4301-05):  Limits potential civil liability of standards 
development organizations under certain circ umstances, for example, it limits awards against standards development organization s 
in federal or state antitrust suits to actual (rather than treble ) damages and attorneys' fees and costs if the standards develo pment 
organization makes a notification to the Federal Trade Commission and Attorney General and if the antitrust claim results from 
conduct within the scope of the notification. 
Soft Drink Interbrand Competition Act (15 USC 3501-03):  Permits the owners of trademarked soft drinks to grant exclusive 
territorial franchises to bottlers or distributors of those pr oducts, exempts (from competition laws) contracts or agreements 
containing these exclusive ri ghts, provided that the " product is in substantial and effective competition with other products of the 
same general class";  outright price-fixing agreements or other horizontal restraints of trade and group boycotts remain subjec t to 
competition laws. 
Source: WTO Secretariat.