OPERATION OF THE TRADE

	



	
	










	

THE YEAR IN TRADE:

AGREEMENTS PROGRAM

DURING 1997
Marcia E. Miller, Chairman

Lynn M. Bragg, Vice Chairman

Carol T. Crawford

Address all communications to

Secretary to the Commission

United States International Trade Commission

Washington, DC 20436

COMMISSIONERS

U.S. International Trade Commission

Robert A. Rogowsky

Director of Operations

Acting Director, Office of Economics

www.usitc.gov
This report was principally prepared by

Country and Regional Analysis Division

Arona Butcher, Chief

Walker A. Pollard, Project Leader

Kim S. Frankena, Deputy Project Leader

Thomas Jennings James Stamps

Magdolna Kornis Edward C. Wilson

Diane Manifold S. Michael Youssef

Office of the General Counsel

William W. Gearhart

Office of Tariff Affairs and Trade Agreements

Terry O’Brien

Office of Unfair Import Investigations

Jeffrey Whieldon

Office of Investigations

Debra Baker

Office of Industries

James Bedore

Jonathan Coleman

Roger Corey

William Greene

David Lundy

Laura Rodriguez-Archila

Office of Information Systems

Barbara V. Bobbitt

Dean M. Moore

With the assistance of 

David Colin, Intern

Supporting assistance was provided by:

Patricia M. Thomas, Secretarial Services

v

CONTENTS



Chapter 1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Purpose and organization of the report 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Summary of 1997 trade agreements activities 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

The World Trade Organization 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

The Organization for Economic Cooperation and Development 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Regional trade initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Bilateral trade relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Administration of U.S. trade laws and regulations 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Trade sanctions activities 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

The international economic environment and world trade in 1997 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

International economic environment 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Asian financial crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

U.S. balance of payments position 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

U.S. trade in 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

World trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Chapter 2. Trade Activities in the WTO and the OECD in 1997 . . . . . . . . . . . 17

WTO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Ongoing negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Financial services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Scope and structure 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Objective of the negotiations 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Summary of commitments on financial services 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

The Quad and OECD member states 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Japan and Korea 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Eastern Europe 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Southeast Asia 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Latin America 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

North America 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Other countries 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Impact on the United States 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Basic telecommunications services 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Information Technology Agreement 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

High-level meeting on least-developed countries 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Outcome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Select WTO committee activity 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

General Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
vi

CONTENTS—Continued



Chapter 2. Trade Activities in the WTO and the OECD in 1997—Continued

Council for trade in goods 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Council for trade in services 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Council for trade-related intellectual property rights 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Dispute settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Trade policy review body 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Other committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Committee on trade and environment 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Committee on trade and development 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Committee on regional trade agreements 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Committee on balance-of-payments restrictions 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

New issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Working group on the interaction between trade and competition policy 41 . . . . . . . . . . . . . . . 

Working group on the relationship between trade and investment 41 . . . . . . . . . . . . . . . . . . . . . 

Working group on transparency in government procurement 43 . . . . . . . . . . . . . . . . . . . . . . . . 

Multilateral trade agreements 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Marrakesh protocol market-access commitments 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on agriculture 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on the application of sanitary and phytosanitary measures 44 . . . . . . . . . . . . . . . . . 

Agreement on textiles and clothing 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on technical barriers to trade 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on trade-related investment measures 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on antidumping measures 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on customs valuation 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on preshipment inspection 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on rules of origin 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on import licensing 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on subsidies and countervailing measures 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on safeguards 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

State trading enterprises 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Plurilateral trade agreements 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Termination of the WTO meat and dairy agreements 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on government procurement 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agreement on trade in civil aircraft 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Trade activities in the OECD in 1997 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Multilateral Agreement on Investment 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Bribery Convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Regulatory reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Other new trade agenda issues 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Chapter 3. Regional Trade Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

The North American Free Trade Agreement 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

U.S. trade with NAFTA partners 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Meeting of NAFTA Free Trade Commission 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Three-year review of NAFTA’s operation and effects 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

NAFTA implementation issues 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Changes to Mexico’s standards development system 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Certification requirements 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
vii

CONTENTS—Continued



Chapter 3. Regional Trade Activities—Continued

New labeling requirements 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Recognition of conformity assessment bodies 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Intellectual property rights 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Dispute settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

NAFTA Chapter 20 (General Dispute Settlement) 68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

NAFTA Chapter 19 (Panel Review of AD/CVD Determinations) 69 . . . . . . . . . . . . . . . . . . . . . . . . 

NAFTA Chapter 11 (Investment Disputes) 70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

APEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Individual action plan implementation 71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Early voluntary sectoral liberalization 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Trade and investment facilitation 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Economic cooperation and development 73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Regional financial developments 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Free Trade Area of the Americas 74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Final phase discussions before negotiations 75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

FTAA negotiation framework 76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Negotiating groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Chairmanship of the FTAA process 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Participation of civil society 77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Africa initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Partnership for economic growth and opportunity in Africa 78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

African Growth and Opportunity Act 79 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Chapter 4. U.S. Relations with Major Trading Partners . . . . . . . . . . . . . . . . . . . . 85

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Dairy dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Background to Canadian dairy pricing policy 86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

The dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

Timetable for dispute settlement 88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Recent developments in the Pacific salmon fishery 89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Salmon supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

U.S.-Canada Pacific Salmon Treaty 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Cultural industries in Canada: the case of magazines 92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

1997 developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

New transatlantic agenda 94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Mutual recognition agreement 95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Transatlantic business dialogue 97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

WTO disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Bananas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Libertad (Helms-Burton) Act 100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Meat hormone ban . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Bilateral agricultural and health-related issues 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Veterinary equivalence agreement 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
viii

CONTENTS—Continued



Chapter 4. U.S. Relations with Major Trading Partners—Continued

Specified risk material ban 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Genetically modified organisms 104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Autos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Airport transport services 106 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Open skies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

Beyond rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

Additional flights and slots 107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Third-country code sharing 107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Harbor services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

Prior consultation system 108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Port restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Mandatory weights and measurements 109 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Sunday work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Agricultural trade issues 111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

U.S. sweeteners and Mexican sugar 111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Apples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

WTO accession negotiations 114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Nontariff barriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

Accession terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

Unilateral liberalization measures 118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Hong Kong reversion to Chinese sovereignty 118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Bilateral issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

Intellectual property protection 119 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

Other issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

Protection of intellectual property rights 121 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

WTO accession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

Other trade issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

Telecommunications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

Automobiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

Chapter 5. Administration of U.S. Trade Laws and Regulations . . . . . . . . . . . 127

Import relief laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Safeguard actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Adjustment assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Assistance to workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

NAFTA-related assistance to workers 129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Assistance to firms and industries 129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Laws against unfair trade practices 130 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Section 301 investigations 130 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Super 301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
ix

CONTENTS—Continued



Chapter 5. Administration of U.S. Trade Laws and Regulations—Continued

Special 301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Antidumping investigations 137 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Countervailing duty investigations 138 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Reviews of outstanding antidumping and countervailing duty orders 138 . . . . . . . . . . . . . . . . . . . . . . . . . 

Section 337 investigations 140 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Other import administration laws and programs 141 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Tariff preference programs 141 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Generalized System of Preferences 141 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Caribbean Basin Economic Recovery Act 142 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Andean Trade Preference Act 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

National security import restrictions 145 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agricultural Adjustment Act 146 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

U.S. textile and apparel trade program 146 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

The Uruguay Round Agreement on Textiles and Clothing 146 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

U.S. actions under the ATC in 1997 147 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Other trade agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

NAFTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

Proposed legislation on textiles and apparel from Africa 150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

U.S. textile and apparel trade in 1997 150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Developments in the rules of origin for textiles and apparel 151 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Major U.S. trade sanctions activities 152 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Figures

1-1. Selected trade events, 1997 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1-2. U.S. merchandise trade with the world, by product sectors, 1997 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1-3. U.S. merchandise exports, imports, and trade balance with major trading

partners, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

3-1. Summary of 1997 activities in support of african economic growth 80 . . . . . . . . . . . . . . . . . . . . . . . 

3-2. Summary of African Growth and Opportunity Act 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Tables

1-1. Competitive economic indicators of the United States and specified major trading

partners, 1996-97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

1-2. U.S. trade and current account balances, 1996-97 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2-1. WTO membership in 1997 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2-2. WTO accession working parties in 1997 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2-3 Summary of dispute settlement stages 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2-4 Dispute panel activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

2-5. WTO appellate body activity 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2-6. Checklist of issues regarding trade and competition 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2-7. Checklist of issues regarding trade and investment 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2-8. Signatories to the WTO Plurilateral Trade Agreements in 1997 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

2-9. Subjects covered by the OECD Multilateral Agreement on Investment 50 . . . . . . . . . . . . . . . . . . . . . . . . 

2-10. International efforts against bribery and corruption 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

3-1. U.S. trade with NAFTA partners, 1995-97 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

5-1. Results of petitions filed under the Trade Adjustment Assistance program,

FY 1997 and FY 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
x

CONTENTS—Continued



Tables—Continued

5-2. Training, job search, and relocation allowances provided under the Trade

Adjustment Assistance program, FY 1997 and FY 1996 128 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

5-3. Results of petitions filed under the NAFTA Transitional Adjustment Assistance

program, FY 1997 and FY 1996 129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

5-4. Training, job search, and relocation allowances provided under the NAFTA

Transitional Adjustment Assistance program, FY 1997 and FY 1996 129 . . . . . . . . . . . . . . . . . . . . . 

5-5. Summary of activity on section 301 investigations on which actions were taken

during 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

5-6. Results of antidumping duty investigations, 1995-97 139 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

5-7. Results of countervailing duty investigations, 1995-97 139 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

5-8. U.S. imports for consumption from GSP beneficiaries and the world, 1997 143 . . . . . . . . . . . . . . . . . . . . 

5-9. U.S. imports for consumption under the GSP from leading beneficiaries,

and total, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

5-10. U.S. imports for consumption from CBERA countries, 1995-97 145 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

5-11. U.S. imports for consumption from Andean countries, 1995-97 145 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

5-12. Countries with which the United States has textile and apparel quotas, as of

March 31, 1998, and U.S. imports of textiles and apparel from these countries

in 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

5-13. Summary of major U.S. trade sanctions operative in 1997 154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

5-14. Other trade sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

Appendix

Statistical tables

A-1. U.S. merchandise trade with Canada, by SITC numbers (revision 3), 1995-97 160 . . . . . . . . . . . . . . . . . . 

A-2. Leading exports to Canada, by Schedule B numbers, 1995-97 161 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-3. Leading imports from Canada, by HTS numbers, 1995-97 162 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-4. U.S. merchandise trade with the European Union, by SITC numbers

(revision 3), 1995-97 163 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-5. Leading exports to the European Union, by Schedule B numbers, 1995-97 164 . . . . . . . . . . . . . . . . . . . . 

A-6. Leading imports from the European Union, by HTS numbers, 1995-97 165 . . . . . . . . . . . . . . . . . . . . . . . 

A-7. U.S. merchandise trade with Japan, by SITC numbers (revision 3), 1995-97 166 . . . . . . . . . . . . . . . . . . . 

A-8. Leading exports to Japan, by Schedule B numbers, 1995-97 167 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-9. Leading imports from Japan, by HTS numbers, 1995-97 168 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-10. U.S. merchandise trade with Mexico, by SITC numbers (revision 3), 1995-97 169 . . . . . . . . . . . . . . . . . . 

A-11. Leading exports to Mexico, by Schedule B numbers, 1995-97 170 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-12. Leading imports from Mexico, by HTS numbers, 1995-97 171 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-13. U.S. merchandise trade with China, by SITC numbers (revision 3), 1995-97 172 . . . . . . . . . . . . . . . . . . . 

A-14. Leading exports to China, by Schedule B numbers, 1995-97 173 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-15. Leading imports from China, by HTS numbers, 1995-97 174 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-16. U.S. merchandise trade with Taiwan, by SITC numbers (revision 3), 1995-97 175 . . . . . . . . . . . . . . . . . . 

A-17. Leading exports to Taiwan, by Schedule B numbers, 1995-97 176 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-18. Leading imports from Taiwan, by HTS numbers, 1995-97 177 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-19. U.S. merchandise trade with Korea, by SITC numbers (revision 3), 1995-97 178 . . . . . . . . . . . . . . . . . . . 

A-20. Leading exports to Korea, by Schedule B numbers, 1995-97 179 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-21. Leading imports from Korea, by HTS numbers, 1995-97 180 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-22 Antidumping cases active in 1997, filed under authority of title VII of the Tariff

Act of 1930, by final outcomes and by USITC investigation numbers 181 . . . . . . . . . . . . . . . . . . . . . 
xi

CONTENTS—Continued



Appendix—Continued

Statistical tables—Continued

A-23. Antidumping orders and findings in effect as of Dec. 31, 1997 183 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-24. Countervailing duty cases active in 1997, filed under authority of title VII of the Tariff Act of

1930, by final outcomes and by USITC investigation numbers 190 . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-25. Countervailing duty orders and findings in effect as of Dec. 31, 1997 191 . . . . . . . . . . . . . . . . . . . . . . . . . 

A-26. Section 337 investigations completed by the U.S. International Trade Commission

during 1997 and those pending on Dec. 31, 1997 193 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-27. Outstanding section 337 exclusion orders as of Dec. 31, 1997 196 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-28. U.S. imports for consumption of leading GSP-duty-free imports, 1997 199 . . . . . . . . . . . . . . . . . . . . . . . . 

A-29. U.S. imports for consumption and imports eligible for GSP treatment, by import

categories under the Harmonized Tariff Schedule (HTS), 1997 200 . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-30. U.S. imports for consumption of leading imports under CBERA, 1995-97 201 . . . . . . . . . . . . . . . . . . . . . 

A-31. U.S. imports for consumption under CBERA, by country, 1993-97 202 . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-32. U.S. imports for consumption under ATPA, by country, 1995-97 203 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

A-33. U.S. imports for consumption of leading imports under ATPA, 1995-97 204 . . . . . . . . . . . . . . . . . . . . . . . 
xii

List of Frequently Used Abbreviations

and Acronyms

ACP African, Caribbean, and Pacific

AD Antidumping

 APEC Asia-Pacific Economic Cooperation

ASEAN Association of Southeast Asian Nations

ATC Agreement on Textiles and Clothing

ATPA Andean Trade Preference Act

CBERA Caribbean Basin Economic Recovery Act

CFTA United States-Canada Free-Trade Agreement

CVD Countervailing Duty

EU European Union

FTA Free-Trade Agreement

FTAA Free Trade Area of the Americas

FY Fiscal Year

GATS General Agreement on Trade in Services

GATT General Agreement on Tariffs and Trade

GDP Gross Domestic Product

GSP Generalized System of Preferences

HTS Harmonized Tariff System

IMF International Monetary Fund

IPR Intellectual Property Rights

ITA Information Technology Agreement

LTFV Less Than Fair Value

MFA Multifiber Arrangement

MFN Most Favored Nation

NAFTA North American Free Trade Agreement

NTM Nontariff Measure

OECD Organization for Economic Cooperation and Development

OFAC Office of Foreign Assets Control

SITC Standard Industrial Trade Classification

SMC Singapore Ministerial Conference

TAA Trade Adjustment Assistance

TRIMS Trade-Related Investment Measures

TRIPS Trade-Related Aspects of Intellectual Property Rights

UNCTAD United Nations Conference on Trade and Development

URA Uruguay Round Agreements

URAA Uruguay Round Agreements Act

USITA International Trade Administration, U.S. Department of Commerce

USITC U.S. International Trade Commission

USTR United States Trade Representative

WTO World Trade Organization
1

CHAPTER 1

Introduction

Purpose and Organization

of the Report

This report is the 49th in a series of reports

submitted to the U.S. Congress under section 163(c) of

the Trade Act of 1974 and its predecessor legislation.1

It is one of the principal means by which the U.S.

International Trade Commission (USITC or the

Commission) provides Congress with factual

information on trade policy and its administration. The

report also serves as a historical record of the major

trade-related activities of the United States to be used

as a general reference by government officials and

others with an interest in U.S. trade relations. The trade

agreements program includes “all activities consisting

of, or related to, the administration of international

agreements which primarily concern trade and which

are concluded pursuant to the authority vested in the

President by the Constitution” and congressional

legislation.2 Regional or other trade agreements

activities without U.S. participation are not covered in

this report.

Chapter 1 summarizes selected trade events and

trade agreements during the year and provides an

overview of the 1997 international economic

environment. Chapter 2 focuses on the 1997 activities

of the World Trade Organization (WTO) and the

Organization for Economic Cooperation and

Development (OECD). Chapter 3 discusses

developments in regional forums and describes

initiatives on Africa launched in 1997. Chapter 4

focuses on bilateral trade agreements concluded during

the year, as well as other selected activities, between

the United States and its major trading partners—the

European Union (EU), Canada, Japan, Mexico, Korea,

Taiwan, and China. Chapter 5 discusses the

administration of U.S. trade laws, regulations, and

programs. The report covers the 1997 calendar year,

1 Section 163(c) of the Trade Act of 1974 (Public Law

93-618, 88 Stat. 1978) states that “the International Trade

Commission shall submit to the Congress at least once a

year, a factual report on the operation of the trade

agreements program.”

2 Executive Order No. 11846, Mar. 25, 1975.

and occasionally, early 1998 events. The report also

has a statistical appendix.

Summary of 1997 Trade

Agreements Activities

U.S. trade agreements activities continued in 1997

within multilateral, regional, and bilateral forums

(figure 1-1). Particularly pertinent to the trade

agreements program was an unsuccessful effort to

renew the President’s “fast track” authority to negotiate

trade agreements.

The Constitution vests the Congress with the

power “to regulate commerce with foreign nations.”

However, since the Reciprocal Trade Agreements Act

of 1934, the Congress has periodically delegated

authority to the President to negotiate and to proclaim

reductions in tariffs under reciprocal trade agreements,

subject to certain conditions, generally subject to

Congressional action or approval.3 Over the years, the

President’s negotiating authority was expanded to

include nontariff barriers to trade, which had risen in

importance as obstacles to U.S. exports as tariff

barriers were reduced. Agreements addressing such

barriers tend to require changes in domestic law and

practice, which must in turn be passed by Congress.4

Fast track was created to preserve Congress’

constitutional role in the regulation of foreign

commerce, while ensuring that the President can

negotiate with considerable authority. Recent fast track

authority has had two distinct components: first, a

grant by Congress to the President of authority to

negotiate trade agreements, usually in accordance with

certain specified negotiating objectives and subject to

certain limitations; and, second, a commitment from

3 U.S. House of Representatives, Committee on Ways

and Means, “Reciprocal Trade Agreements,” Overview and

Compilation of U.S. Trade Statutes, WMCP No. 105-4, June

25, 1997, pp. 185-219.

4 For further background, see, Vladimir N. Pregelj,

Trade Agreements: Renewing the Negotiating and

Fast-Track Implementing Authority, Aug. 1, 1997, CRS Issue

Brief, No. IB97016.
2

Figure 1-1

Selected trade events, 1997

JANUARY

Jan. 15 The United States Trade Representative (USTR) announces Clinton Administration’s decision to

withdraw 50 percent of the trade benefits granted to Argentina under the U.S. Generalized System of

Preferences (GSP) as a result of the “out-of-cycle” review under the U.S. Government’s “Special 301”

program.

Jan. 24 The United States and Japan resolve a dispute over protection of U.S. sound recordings as Japan

adopts amendments to the Japanese Copyright Law to comply with the WTO Agreement on

Trade-Related Aspects of Intellectual Property Rights (TRIPS).

FEBRUARY

Feb. 2 The United States and China agree to a four-year textile trade pact extending current quota

arrangements in Chinese textiles and apparel exports to the United States, and reducing quotas in

areas of repeated transshipment violations.

Feb. 10 WTO Appellate Body rules that the United States cannot impose import restraints on underwear

produced in Costa Rica.

Feb. 15 WTO Basic Telecom Services Agreement concluded and expected to enter into force on 

January 1, 1998.

Feb. 25 WTO panel formed to examine complaints by India, Malaysia, Pakistan, and Thailand against the

United States concerning U.S. embargo of imports of certain shrimp.

Feb. 28 The United States and Pakistan resolve a matter concerning Pakistan’s TRIPS obligations regarding

patent protection of pharmaceutical and agricultural chemical products.

The United States and Taiwan sign a draft agreement abolishing limitations on the number of airlines

flying between the two nations and the frequency of flights and number of destinations in each 

country, and also granting the right of unrestricted extension of flights to third countries.

MARCH

Mar. 8 In response to a petition filed by the U.S. wheat gluten industry, USTR initiates a section 301

investigation of certain subsidies of the European Union that are allegedly adversely affecting U.S. 

modified starch exports to Europe.

Mar. 11 U.S. tariff-rate quota allocations of raw cane sugar are increased by 200,000 metric tons.

Mar. 14 WTO finds in favor of the United States regarding Canada’s policies on imports of U.S. periodicals.

Mar. 20 Fourth meeting of the North American Free Trade Agreement (NAFTA) Commission concludes with

agreements to implement tariff acceleration by July 1, 1997.

Mar. 21 European Union (EU) Commission proposes $2.1 billion in subsidies for shipyards in Spain, Germany,

and Greece.

Mar. 26 Forty countries finalize the Information Technology Agreement (ITA) to eliminate tariffs on information

technology products by the year 2000.

APRIL

Apr. 1 USTR requests WTO consultations regarding the implementation by the Philippines of its tariff-rate

quotas for pork and poultry.

Apr. 3 The United States and Jordan agree to a Bilateral Investment Treaty, providing guarantees to

investors in both countries.

Apr. 7 USTR requests WTO consultations to challenge the Japanese practices of quarantining certain U.S.

agricultural exports.

WTO financial services negotiations resumed.

Apr. 11 EU suspends its WTO case against the enactment by the United States of title III of the Cuban Liberty 

and Democratic Solidarity (Libertad) Act pending consultations to develop binding disciplines on 

dealings in property confiscated in Cuba.

Apr. 24 African Growth and Opportunity Act introduced in Congress.

Apr. 30 The United States withdraws its request for a WTO dispute settlement panel regarding EU obligations

on imports of grains.
3

Figure 1-1—Continued

Selected trade events, 1997

MAY

May 2 USTR terminates a GSP worker rights review of Guatemala and initiates GSP reviews of worker

rights in Belarus and Swaziland.

May 12 USTR announces allocation of the 200,000 metric ton increase in the amount available under the U.S.

raw cane sugar tariff-rate quota.

May 13-16 Trade ministers agree to formally launch Free Trade Area of the Americas (FTAA) negotiations in 

April 1998 at the third FTAA Trade Ministerial Meeting in Belo Horizonte, Brazil.

May 20 In accordance with NAFTA, the United States and Mexico reach an agreement to afford national

treatment to each country’s telecommunications equipment test data by allowing for private sector

agreements between Mexican and U.S. testing laboratories.

May 22 USTR initiates a review of the Philippines’ eligibility to qualify for GSP benefits in response to a

petition by the U.S. meat industry.

May 29 As part of the General Agreement on Trade in Services (GATS), WTO adopts guidelines for

recognition of qualifications in the accountancy sector to facilitate accountants’ abilities to serve

foreign markets.

May 30 Over 1,700 products from least-developed beneficiary developing countries (LDBDCs) are designated

for duty-free treatment under the GSP program.

JUNE

June 13 The United States and the EU agree to a package of mutual recognition agreements

affecting six industries and approximately $50 billion in two-way trade.

June 17 President Clinton announces the Partnership for Growth and Opportunity in Africa.

June 19 Hong Kong accedes to the WTO Agreement on Government Procurement.

The United States and Japan agree to an enhanced initiative on deregulation and competition policy.

June 20 European Union files WTO complaint against the United States concerning selective procurement

measures enacted by the Commonwealth of Massachusetts to discourage companies from doing

business with Burma.

June 27 The United States and Vietnam sign their first ever bilateral copyright agreement affording U.S.

copyrighted works the same protection that Vietnamese nationals receive in Vietnam.

June 30 WTO dispute settlement panel finds in favor of the United States with regard to the European Union’s

ban on the use of growth promoting hormones on cattle.

JULY

July 15 The United States requests WTO dispute settlement consultations with India regarding the phase-out

of Indian quantitative restrictions on consumer and agricultural goods.

July 23 The United States and Korea conclude negotiations on trade in telecommunications goods and

services.

AUGUST

Aug. 5 President Clinton signs into law the retroactive renewal of the GSP through June 30, 1998.

Aug. 13 The United States and Laos conclude negotiations on a bilateral trade agreement and a bilateral

investment treaty.

Aug. 15 President Clinton signs into law the International Dolphin Conservation Program Act, providing for an

end to embargoes of imports of certain yellowfin tuna that had been required by statute, effective

when a legally binding international dolphin conservation program is formalized.

Aug. 19 Executive Order 13059 confirms that virtually all trade and investment activities with Iran by U.S.

persons, wherever located, are prohibited.

SEPTEMBER

Sept. 4 The U.S. Federal Maritime Commission imposes sanctions of $100,000 per voyage on container

vessels owned or operated by Japanese companies entering the United States in retaliation for

Japan’s failure to reform its harbor services practices to allow for greater market access for foreign

shippers.

The United States requests WTO dispute settlement consultations regarding actions by Mexico in its

antidumping investigation on high-fructose corn syrup.

Sept. 5 WTO dispute panel finds in favor of the United States with regard to India’s failure to provide

intellectual property rights protection.

Sept. 8 The United States and Canada agree to a settlement on the sugar-containing products re-export

program as well as a suspension of Canada’s tariff-rate quota on barley and barley-containing

products from the United States.
4

Figure 1-1—Continued

Selected trade events, 1997

Sept. 9 The WTO Appellate Body upholds the claims of the United States, Ecuador, Honduras, and Mexico

that EU banana subsidies violate WTO rules.

Sept. 16 Clinton Administration submits proposal on renewing “fast-track” negotiating authority.

Sept. 26 USITC finds that the U.S. vector supercomputer industry is threatened with material injury due to

unfairly traded Japanese vector supercomputers.

OCTOBER

Oct. 1 The United States and Japan agree to improve and extend the 1994 Nippon Telegraph and Telephone

(NTT) Procurement Procedures arrangements until 1999.

USTR announces that Korea’s barriers to imported automobiles have been identified as a priority

foreign country practice under the “Super 301” provisions of U.S. trade law.

Oct. 24 The United States and China reach an interim agreement on market access for foreign financial

information companies in China.

Oct. 27 Panama removed from the Special 301 “watch list” with regard to its WTO TRIPS obligations.

The United States and Japan reach final agreement to end a dispute over port practices.

NOVEMBER

Nov. 4 Executive Order 13067 imposes comprehensive U.S. economic and trade sanctions against Sudan.

Nov. 5 Taiwan agrees not to implement an earlier decision to adopt capital reserve requirements that would

have severely restricted operations of U.S. insurance companies in Taiwan.

Nov. 10 President Clinton requests the House to refrain from voting on “fast track” legislation until passage can

be assured.

Nov. 22 Asia-Pacific Economic Cooperation (APEC) Trade Ministers meeting in Vancouver agree to finalize

trade liberalization plans in the first half of 1998, with implementation to begin in 1999, in nine sectors: 

environmental goods and services, medical equipment, chemicals, energy, forest products, fish and

fish products, toys, gems and jewelry, and telecommunications (a mutual recognition arrangement). In

addition, Ministers directed that work to develop proposals proceed in six additional sectors: oilseeds

and oilseed products, food products, natural and synthetic rubber, fertilizers, automotive, and civil

aircraft.

Nov. 25 WTO dispute settlement panel rules in favor of the United States with regard to duties and taxes

assessed by Argentina on U.S. textile and apparel products.

DECEMBER

Dec. 4 WTO Appellate Body rules in favor of the United States with regard to India’s failure to provide

intellectual property rights protection to pharmaceutical and agricultural companies as required by the

WTO TRIPS Agreement.

Dec. 5 WTO issues an interim decision in favor of Japan regarding the United States’ complaint about access

to the Japanese photographic film and paper market.

The United States and the EU reach agreement on global electronic commerce at the U.S.-EU

Summit.

Dec. 12 WTO Financial Services negotiations conclude with 102 WTO member countries committing to market

opening in financial services sectors effective January 1999.

Dec. 15 The United States and Japan settle a WTO dispute regarding Japan’s taxation of distilled spirits.

Dec. 16 The United States and Nicaragua conclude a Bilateral Property Rights Agreement extending

protection to copyrights, patents, trademarks, trade secrets, semiconductor layout designs, encrypted

satellite signals, and geographical indications as well as providing for enforcement.

Dec. 17 Thirty-four countries sign the OECD Convention on Combating Bribery of Foreign Public Officials in

International Business Transactions.

Dec. 18 Fifty-five WTO Members agree to meet to consider the date of entry into force of the WTO Basic

Telecom Agreement.

The United States and the EU sign an Agreed Minute that develops technical specifications for

fur-bearing animal trap performance, suggests guidelines for further research into trap design, and

envisions the phasing out of certain trapping devices currently in use.

Dec. 19 The United States and Turkey resolve a section 301 investigation and WTO dispute by ensuring equal

treatment of U.S. films shown in Turkey.

Dec. 23 Pursuant to their 1985 Free Trade Agreement (FTA), the United States and Israel agree to lower fees

charged by Israel on imports of U.S. almonds.

Source: Compiled by the staff of the U.S. International Trade Commission.
5

Congress that it will hold an “up or down” vote within

a specified time on legislation to approve and

implement the resulting agreements. The quid pro quo

is active consultation with Congress before, during,

and after negotiations. The rationale was that foreign

partners will only provide their best “bottom line”

offers if they know that the deals negotiated by the

U.S. Executive will not be amended piecemeal when

submitted for Congressional approval. Indeed, most

partners refuse to begin serious negotiations until the

U.S. team has clear authority in hand. Since 1974, all

Presidents have had such authority, which is generally

granted for limited periods of time and for specified

purposes. Fast track approval was most recently used

to implement the North American Free Trade

Agreement (NAFTA) and the Uruguay Round of

multilateral trade negotiations. The latest grant of fast

track authority expired in 1994.

President Clinton initiated his fast track campaign

on September 10, 1997, highlighting the need for a

renewal of broad negotiating authority that would

allow an expansion of trade with Latin America, Asia,

within the WTO, and at the sectoral level. The

President unveiled his specific legislative proposal for

such authority on September 16, 1997, in a bill entitled

the “Export Expansion and Reciprocal Trade

Agreements Act of 1997.” The bill proposed to extend

trade agreement negotiating authority for agreements

regarding tariff and nontariff barriers until October 1,

2001, and, with extension, until October 1, 2005.

In presenting his fast track proposal to the

Congress, President Clinton argued that the United

States has much to gain from continued trade

liberalization. The United States is the world’s leading

exporter. Fast-growing foreign markets, particularly in

the developing world, offer lucrative opportunities.

Because foreign barriers to U.S. exports and

investment remain high, and U.S. barriers are

comparatively low, the United States has a clear

economic stake in “leveling the playing field” through

trade agreements. Fast track is also needed for the

United States to effectively influence global and

regional trade rules, according to the President’s

statement.5 In testimony before the House Ways and

Means Committee, U.S. Trade Representative (USTR)

Charlene Barshefsky indicated that fast track would be

used to pursue an ambitious trade agenda including

bilateral, regional, multilateral, and sectoral trade

negotiations. She added that these talks offer the

5 “Message to the Congress Transmitting the Proposed

‘Export Expansion and Reciprocal Trade Agreements Act of

1997,’ ” Sept. 16, 1997, Weekly Compilation of Presidential

Documents, Sept. 22, 1997, pp. 1344-5.

promise of knocking down barriers to highly

competitive U.S. goods and services, especially in

emerging economies, supporting U.S. growth and job

creation.6

Fast track renewal proved controversial, in part due

to disagreement over the goals, conditions, and

limitations that would be attached to the procedure.

Particularly sharp disagreement emerged over what

links, if any, should be made among the goals of

expanded trade, improved worker protection, and

strengthened environmental protection. In cooperation

with the Administration, the Senate and the House

crafted their own fast track bills, S. 1269 and H.R.

2621, seeking to clearly define the areas where linkage

among the three areas of policy could be pursued under

fast track.

In a statement following the postponement on

November 10, 1997, of a vote on H.R. 2621, President

Clinton expressed optimism that a compromise

ultimately would be reached that would enable a strong

majority of both parties to support fast track renewal.

However, he said, time was needed to address the

issues that had emerged in the debate over the

measure.7 In his January 27, 1998, State of the Union

address, President Clinton renewed his request for fast

track authority, arguing that, “We must shape this

global economy, not shrink from it.”8

Highlights of the other activity described later in

the report are presented below.

The World Trade Organization

The final phase of the Uruguay Round of

multilateral trade negotiations came to an end on

December 12, 1997, as 102 WTO member states

agreed to a most-favored-nation (MFN)-based

agreement on market access, national treatment, and

broader liberalization of global financial services—

insurance, banking, securities, pensions and investment

management services, financial information providers,

and all related financial services. Member states have

until January 1999 to ratify the protocol that will give

effect to the agreement.

6 USTR, Testimony of U.S. Trade Representative

Charlene Barshefsky, Renewal of Fast Track Authority,

before the House Ways and Means Trade Subcommittee,

Sept. 30, 1997.

7 The White House, “Statement by the President,”

regarding fast track authority, White House Press Release,

Nov. 10, 1997.

8 “Address Before a Joint Session of the Congress on the

State of the Union,” Jan. 27, 1998, Weekly Compilation of

Presidential Documents, Feb. 2, 1998, p. 132.
6

In February 1997, negotiations regarding basic

telecommunications concluded with an agreement to

provide market access for local, long-distance, and

international service. Negotiations arising out of the

1996 WTO Singapore Ministerial Conference

regarding the Information Technology Agreement

(ITA) concluded in March 1997, with 43 countries

agreeing to eliminate most tariffs on these products by

2000. The ITA entered into force on July 1, 1997,

covering nearly 95 percent of world trade in

information technology products.

Dispute settlement and implementation of existing

agreements also were important focal points for WTO

activity. During 1997, the number of WTO dispute

settlement cases surpassed 100, considered to be an

indicator that WTO members actively support the rules

of the multilateral trading system and have confidence

in the integrated and more automatic disputesettlement mechanism that came into effect in 1995.

By the start of 1998, the WTO had received 115

requests for consultations on 80 distinct matters. In

October and November 1997, the WTO Council for

Trade in Goods heard from the Textiles Monitoring

Body on the first major review of the implementation

of the WTO Agreement on Textiles and Clothing

(ATC). Developing countries expressed dissatisfaction

with the review, accusing the importing countries of

concentrating on a narrow, legalistic definition of ATC

obligations that refused to deal with the concerns of the

developing countries. The importing countries insisted,

and the Textiles Monitoring Body agreed, that they

had met their ATC obligations.

The WTO also undertook new initiatives. In

October 1997, the WTO sponsored a High-Level

Meeting on Integrated Initiatives for Least-Developed

Countries’ Trade Development. The meeting brought

together the 48 UN-designated least-developed

countries with the core multilateral organizations, and

others, in an effort to promote growth in the

least-developed countries. Better coordination of

national and international aid efforts, appropriate

macroeconomic policies, and improved market access

and supply-side measures are among the steps being

pursued. Examination of three “new issues” got

underway in mid-1997 with the initiation of the three

WTO Working Groups called for at the December

1996 Singapore Ministerial Conference, covering (1)

the interaction between trade and competition policy,

(2) the relationship between trade and investment, and

(3) transparency in government procurement. The

General Council will determine after two years how

the work of each body should proceed.

The Organization for Economic

Cooperation and Development

In November 1997, the OECD adopted the

Convention on Combating Bribery of Foreign Public

Officials in International Business Transactions, the

most recent in a series of measures taken to address the

issue of corruption. The convention was signed by the

29 OECD member states, as well as by 5 nonmember

countries. It addresses corruption in the form of

promising or giving a bribe (“active” bribery), as

opposed to receiving one (“passive” bribery).

Although final agreement on a Multilateral

Agreement on Investment (MAI) was not achieved by

the target date of May 1997, progress was made in

establishing an overall framework to cover all forms of

investment coming from all signatory investors,

including the establishment and activities of enterprises

that are foreign-owned or -controlled. Negotiations

continued into 1998 over the most contentious

issues—national reservations and other similar

exceptions or exemptions. The MAI is to be a

free-standing treaty, open to accession by nonmembers.

The OECD has led international efforts to examine

regulatory reform issues, which can have important

implications for market access. In 1997, the OECD

released its report examining Member governments’

experiences with reform, which aims to enhance

competition, reduce regulatory costs, boost efficiency,

lower prices, stimulate innovation, and help economies

remain competitive. The report set out seven policy

recommendations on regulatory reform.

Regional Trade Initiatives

Regional initiatives continued to assume

importance in overall U.S. trade policy. During 1997,

there were two major initiatives on Africa, one

sponsored by Congress and the other by the President.

The African Growth and Opportunity Act was

introduced in Congress on April 24, 1997. The

proposed legislation would provide for increased trade

benefits for countries in Sub-Saharan Africa, allow

duty-free and quota-free imports of textiles and apparel

from those countries, and provide an opportunity for

these countries to enter into Free Trade Agreement

(FTA) negotiations with the United States. The other

initiative, the Partnership for Economic Growth and

Opportunity in Africa, was announced by the President

on June 17, 1997. The Partnership initiative would

involve increased access to the U.S. market for African

exports, increased technical assistance to Sub-Saharan

Africa, increased private investment, efforts to
7

eliminate bilateral debt, and annual economic meetings

at the cabinet/ministerial level. Under both programs,

countries that adopt reforms and open their markets

would be eligible for the most benefits.

During 1997, the Asia-Pacific Economic

Cooperation (APEC) forum continued to work towards

the goals of free and open trade and investment in the

Asia-Pacific region by 2010 for developed economies

and 2020 for developing economies. A major focus of

APEC’s work was on early voluntary sectoral

liberalization. At the APEC Ministerial in November

1997, nine sectors were selected for immediate work

including: environmental goods and services, the

energy sector, fish and fish products, toys, forest

products, gems and jewelry, medical equipment and

instruments, chemicals, and telecommunications (a

mutual recognition arrangement). APEC’s work in the

areas of trade and investment facilitation and economic

cooperation and development continued throughout the

year.

At the May 13-16, 1997, Third Free Trade Area of

the Americas (FTAA) Trade Ministerial Meeting in

Belo Horizonte, Brazil, Trade Ministers from the 34

participating countries agreed to formally launch

FTAA negotiations at the second hemispheric Summit

meeting in Santiago, Chile, in April 1998. Key

differences remained, however, over the scope and

timing of the FTAA negotiations. A Preparatory

Committee was established, and throughout the year,

the participants in the 12 FTAA working groups

continued to lay the groundwork for the planned FTAA

negotiations. The working groups focused on

compiling inventories of hemispheric practices,

identifying areas of commonality and divergence, and

providing recommendations on how to proceed in the

construction of the FTAA in each respective area.

Regarding NAFTA, a March 1997 meeting of the

NAFTA Free Trade Commission served as the venue

for NAFTA Trade Ministers to act upon a number of

outstanding issues. Among other things, the Ministers

agreed to implement accelerated elimination of tariffs

for a list of several dozen items, announced plans to

begin a second round of tariff acceleration talks, and

received and approved reports from the working

groups and committees charged with overseeing

NAFTA’s day-to-day implementation. In July, the

President submitted a required report to Congress on

NAFTA’s first three years’ operation and effects,

prompting other efforts to assess the accord.

Agriculture, standards, and intellectual property rights

issues required ongoing attention by NAFTA officials

in 1997. Dispute settlement activity, meanwhile,

included first-ever cases under NAFTA’s innovative

investor-state dispute settlement mechanism.

Bilateral Trade Relations

Canada

During the final year of the tariff implementation

stage of the free trade agreement between Canada and

the United States, economic and trade relations

between the two countries were relatively smooth.

However, a dispute developed over Canada’s system of

milk pricing. In November 1997, the United States

formally complained to the WTO about alleged export

subsidies for dairy products granted by Canada.

Bilateral consultations failed to resolve the dispute, and

a request to establish a WTO dispute settlement panel

was made in early 1998.

Tension continued to build during 1997 in an

ongoing dispute between the United States and Canada

over bilateral allocations of benefits and costs of the

Pacific salmon fishery. In the spring of 1997, the

Canadian Government seized several U.S.-flag fishing

vessels, followed by a blockade by British Columbia

fishing vessels of a U.S.-flag ferry. Efforts to resolve

the dispute continued into 1998.

During 1997, the United States was successful in

its challenge before the WTO over Canada’s policy on

magazines. The United States had filed a complaint in

1996 over Canadian actions prohibiting or restricting

imports of certain periodicals and the tax treatment of

split-run periodicals, alleging that these measures

violated General Agreement on Tariffs and Trade

(GATT) rules. On July 30, 1997, the WTO Dispute

Settlement Body adopted the Appellate Body Report

and the Panel report finding Canadian violations.

European Union

U.S.-EU trade relations in 1997 were marked by

two distinct components: ongoing cooperation towards

the creation of a transatlantic marketplace

characterized by the free movement of goods, services,

and investment, as envisaged when the New

Trans-Atlantic Agenda was launched in 1995, and the

eruption of numerous bilateral trade disputes over

matters ranging from agriculture to computers.

Reflecting a high level of cooperation over regulatory

matters, the United States and the EU announced a

Mutual Recognition Agreement (MRA) package that

should substantially reduce standards-related obstacles

to $40 billion worth of EU-U.S. trade. A high-level

business forum known as the Trans-Atlantic Business
8

Dialogue (TABD), meanwhile, served as the catalyst

for a U.S.-EU initiative on global electronic commerce,

along with other joint projects.

The United States won several WTO dispute

settlement cases against the EU, including those

covering beef hormones and bananas, both

longstanding issues on the bilateral agenda.

Japan

Transportation-related issues dominated U.S.

relations with Japan in 1997. The United States

continued to monitor progress under the 1995

U.S.-Japan Automotive Agreement with bilateral

discussions focused on the slow pace of change in

Japan in the areas of expanded dealership

opportunities, auto sales, and deregulation in the parts

aftermarket. As a result of these discussions, Japan

agreed to take some measures in each of these areas.

During 1997, the United States and Japan also engaged

in a series of bilateral negotiations on air cargo and

passenger services, resulting in an agreement on

January 30, 1998, addressing “beyond rights,”

additional flights and slots, and third-country code

sharing.

In October 1997, Japan narrowly averted having its

ships detained by the U.S. Coast Guard and Customs

Service for failing to pay fines imposed by the Federal

Maritime Commission (FMC). On February 26, the

FMC had cited restrictions on and requirements for use

of Japanese ports in imposing fees on Japanese

carriers. Following promises by Japan to address

concerns of U.S. shipping carriers, the sanctions were

postponed until September, when they were reinstated.

The two countries reached a final agreement on

October 27 after Japan agreed to pay $1.5 million in

fees and reform its port practices.

Mexico

Two presidential meetings marked U.S.-Mexican

relations during 1997. In May, President Clinton and

Mexican President Ernesto Zedillo presided over the

closing session of the 14th U.S.-Mexico Binational

Commission meeting in Mexico City, where 11

agreements were signed in areas of agricultural trade,

financial and commercial matters, and border issues. In

November, President Zedillo’s visit to Washington,

DC, resulted in Mexico’s commitment to facilitate the

prosecution of fugitive drug traffickers in Mexico, a

U.S. commitment to discourage illegal sales of

weapons to Mexico, and the resolution of a

long-standing maritime dispute on the Gulf of Mexico.

The August signing of U.S. legislation that would

partially lift the U.S. embargo on tuna imports,

imposed in 1991 because of dolphin killings associated

with catching tuna, also improved the bilateral trade

atmosphere. The embargo primarily affects tuna

imported from Mexico.

Mexico’s administration of antidumping

investigations was the subject of bilateral discussions

in 1997. In February, Mexico’s Secretariat of

Commerce and Industrial Development (SECOFI)

initiated an antidumping investigation on behalf of an

association of sugar producers in Mexico, charging

sales at less than fair value of high-fructose corn syrup

(HFCS) imports from the United States. In June,

SECOFI imposed preliminary antidumping duties on

U.S.-made HFCS. The dispute between Mexican sugar

producers and U.S. HFCS producers escalated further

when, in September, the United States requested WTO

dispute settlement consultations regarding this

antidumping action. In March, SECOFI initiated an

antidumping investigation on behalf of the Regional

Agricultural Union of Fruit Producers of the Mexican

state of Chihuahua, alleging sales at less than fair value

of imports of red delicious and golden delicious apples

from the United States. In September, SECOFI

imposed a preliminary antidumping duty on the

imports in question.

China

Economic and trade relations between China and

the United States in 1997 centered on China’s efforts to

accede to the WTO. Throughout the year, China

introduced a number of market-opening measures,

including tariff reductions, selective elimination of

import quotas, and reductions in phase-out periods for

nontariff measures. China also pledged not to

reintroduce export subsidies on agricultural products.

China and the United States remain at odds over

Chinese offers on tariffs and nontariff barriers, market

access, intellectual property rights, guarantees of

national treatment for foreign companies, statutory

inspection and a restrictive sanitary regime,

transparency and judicial review, customs valuations,

subsidies, agricultural trade practices, and trade in

services.

U.S. negotiators maintain that China continues to

protect its agricultural sector with unscientific sanitary

and phytosanitary measures, high tariffs, and the ability

of state trading companies to control market access for

imports. The United States noted that China still uses

restrictive phytosanitary measures to bar imports of

U.S. oranges, apples, lemons, grapefruit, plums,

grapes, tobacco, and Pacific Northwest wheat.
9

The United States and China concluded several

bilateral agreements during 1997 that included the

extension of the U.S.-China maritime agreement until

June 1998, and market-access agreements for textiles,

sweet cherries, and grapes. On October 24, 1997, the

USTR announced that China and the United States had

successfully concluded an interim agreement that

secured market access for foreign financial information

companies such as Dow Jones and Reuters. Also in

October 1997, the United States and China’s National

Space Agency agreed to add language to the

U.S.-China Bilateral Agreement on Space Launch

Services that established clear guidelines on pricing of

China’s commercial space launch services.

On July 1, 1997, Hong Kong reverted to Chinese

sovereignty after 150 years of British rule. On that

date, the Hong Kong Special Administrative Region of

the People’s Republic of China was created. Hong

Kong retains autonomy in the conduct of trade.

Taiwan

There were positive developments during 1997 in

U.S.-Taiwan relations on intellectual property rights

(IPR) and civil aviation, but limited progress on

Taiwan’s WTO application. On April 30, 1997, USTR

announced its annual “Special 301” list for countries

violating U.S. copyrights and, for the first time since

1988, Taiwan was not named. On February 28, 1997,

Taiwan and the United States signed a draft agreement

that abolished limitations on the number of airlines

flying between the two nations and the frequency and

number of destinations in each country, and also grants

the right of unrestricted extension of flights to third

countries. During October bilateral talks between the

United States and Taiwan, negotiators were unable to

reach a definitive agreement on Taiwan’s accession to

the WTO. Among the remaining key issues are: full

access to Taiwan’s agricultural market (especially pork,

chicken, rice, and offal), privatization of the

government’s tobacco and wine monopoly, tariffs and

quotas on automobiles, and Taiwan’s government

procurement practices.

Korea

There were two major bilateral trade issues

involving the United States and Korea in 1997. In July,

USTR Barshefsky announced the revocation of

Korea’s designation as a “priority foreign country”

under section 1374 of the 1988 Trade Act following

the successful conclusion of a year of negotiations in

which the United States had sought to open the

telecommunications market in Korea for U.S.

equipment and services suppliers. In October, USTR

identified Korea’s barriers to imported automobiles as

a priority foreign country practice under the “Super

301” provisions of U.S. trade law. Negotiations are

expected to begin in the Spring of 1998.

Administration of U.S. Trade

Laws and Regulations

Developments in U.S. trade programs during the

year included the following:

 The Department of Labor instituted 1,280

investigations for trade adjustment assistance to

workers in FY 1997, down somewhat from the

number instituted in FY 1996. Additionally,

774 petitions were filed under the U.S.

NAFTA-related transitional adjustment

assistance program for workers. This figure

represents a small increase over the number of

such filings in the previous fiscal year. The

Department of Commerce certified 159 firms as

eligible to apply for trade adjustment assistance

during FY 1997, a slight increase over the

number in FY 1996.

 Following final affirmative determinations by

the Commission and the Department of

Commerce, 11 new antidumping orders were

issued in 1997. No new countervailing duty

orders were issued.

 The Commission’s section 337 caseload was

dominated by investigations involving complex

technologies, particularly in the computer and

telecommunications fields. The Commission

concluded fifteen investigations under section

337 during the year, and issued exclusion orders

in six of those investigations.

 USTR initiated six section 301 investigations in

1997. These included investigations on EU

circumvention of export subsidy commitments

on dairy products and on Japan’s market access

barriers to agricultural products.

 The U.S. Generalized System of Preferences

(GSP) expired on May 31, 1997, but was

renewed retroactively through June 30, 1998,

by legislation signed by the President on August

5, 1997; an additional 1,783 Harmonized Tariff

System (HTS) subheadings were designated for

duty-free treatment under the GSP for products

of countries which have been designated as a
10

least-developed beneficiary developing

country. Cambodia was added as a beneficiary

developing country and designated as a leastdeveloped beneficiary developing country.

 The United States’ market access agreement

with China went into effect in early 1998

whereby China substantially reduced its tariffs

for a number of textile and apparel products.

The United States-China bilateral trade

agreement on silk products expired on

December 31, 1997. Silk products can now be

imported from China into the United States free

of quota.

 The USITC conducted an investigation

concerning the likely impact of providing

quota-free and duty-free entry to textiles and

apparel from Sub-Saharan Africa (SSA). The

Commission estimated that allowing duty-free

and quota-free entry for textiles and apparel

from SSA would result in minimal effects on the

domestic industry and its workers.

 1997 tariff preference levels (TPLs) for wool

apparel from Canada were filled primarily with

men’s and boys’ wool suits as they had been in

1996. H.R. 2432, a bill to provide relief for

domestic producers of tailored wool apparel

from increased imports of such apparel from

Canada was introduced in Congress.

 The United States agreed to create some

exemptions to its statutorily-based rules of

origin for textile and apparel products in order

to avoid adversely affecting trade in fabrics,

scarves, and other “flat goods.” Marking

requirement exemptions for imported silk

scarves and silk fabrics and exemptions for

discharge printed fabrics from quotas under the

ATC went into effect on January 1, 1998,

resolving a problem with the EU.

 Trade Sanctions Activities

Some U.S. sanctions were tightened in 1997 and

efforts to address concerns by U.S. trading partners

over U.S. unilateral sanctions continued. An Executive

Order issued on May 21, 1997, prohibits new

investment in Burma by U.S. persons, adding to other

sanctions against Burma already in place. The United

States also tightened economic sanctions against Iran

and Sudan. On June 20, 1997, the EU filed a complaint

with the WTO against the United States concerning the

selective procurement measures enacted by the

Commonwealth of Massachusetts against companies

that do business in Burma. Meanwhile, the United

States and the EU worked to resolve an EU complaint

before the WTO over the Libertad (Helms-Burton) Act

imposing further economic sanctions on companies

that do business in Cuba and that deal in U.S. property

confiscated in Cuba. On August 15, 1997, President

Clinton signed into law the International Dolphin

Conservation Program Act, which provides for an end

to the unilateral embargoes on imports of yellowfin

tuna required by existing U.S. law, effective when a

legally binding international dolphin conservation

program is formalized.

The International Economic

Environment and World

Trade in 1997

International Economic

Environment

World economic expansion has been supported by

continued solid growth with low inflation in the United

States, the United Kingdom, and Canada, and

strengthened growth in Western Europe.9 World real

output is estimated to have grown by 4.2 percent in

1997 compared with 4.1 percent in 1996.10 Tight

monetary policies and commitments to reduce budget

deficits in a number of countries, including the United

States, Canada, and most EU members, have played a

major role in keeping inflation low and inducing stable,

albeit moderate, rates of economic expansion. Table

1-1 shows economic indicators for the United States

and selected trading partners.

During the year under review, the U.S. economy

grew to near full capacity as real output expanded

buoyantly. Real gross domestic product (GDP) grew by

3.8 percent in 1997 compared with an increase of 2.8

percent in 1996. Inflation, as measured by the GDP

price deflator, declined to 2.0 percent in 1997

compared with 2.3 percent in 1996. Unemployment

dipped below 5.0 percent for the first time since 1973.

Conditions in U.S. financial markets bolstered growth.

Long-term interest rates were near their lowest levels

since the early 1970s. The stock market registered

9 International Monetary Fund (IMF), World Economic

Outlook, Oct. 1997, p. 1.

10 Ibid.
c indicators of the United States and specified major trading partners, 1996-97

Unemployment Government Merchandse Current

Real GDP Inflation rate1 rate2 budget balances3 trade balances account balance3

1996 1997 1996 1997 1996 1997 1996 1997 1996 1997 1996 1997

Percent change from

previous year

Percent Percent Billion dollars Percent

2.8 3.8 2.4 2.0 5.4 4.9 -1.1 -0.0 -191.2 -198.9 -1.9 -2.1 

 . . . . . 

1.5 3.6 1.2 1.5 9.7 9.2 -1.8 0.4 30.1 19.4 -0.5 -1.0 

 . . . . . 

3.5 0.5 0.2 1.7 3.4 3.4 -4.4 -2.8 83.6 98.9 1.4 2.2 

 . . . . . 

1.4 2.4 2.0 2.0 10.3 11.4 -3.4 -3.0 71.3 78.0 -0.6 -0.3 

 . . . . . 

2.3 3.4 2.6 2.0 8.0 6.9 -4.7 -2.3 -19.7 -20.6 -0.1 0.3 

 . . . . . 

1.5 2.3 1.8 1.3 12.3 12.4 -4.1 -3.1 15.0 29.8 1.3 2.3 

 . . . . . 

0.7 1.3 4.5 2.2 12.1 12.3 -6.7 -3.0 60.7 54.6 3.4 3.6 

 . . . . . 

1.7 2.6 2.7 2.0 11.4 11.3 -4.3 -2.7 164.0 178.1 1.1 1.4 

 . . . . . 

5.1 6.7 34.0 20.9 5.5 4.1 (4) (4 

 . . . . . ) 6.5 1.6 -0.6 -1.6

2.8 3.0 4.6 4.1 7.5 7.3 -2.7 -1.4 69.0 81.9 0.1 0.0 

 . . . . . 

9.7 9.2 6.1 3.0 (4) (4) (4) (4) (4) (4 

 . . . . . ) 0.9 1.3

5.7 6.0 3.1 2.5 (4) (4) (4) (4 

 . . . . . ) 17.5 9.8 3.9 1.4

7.1 6.2 6.0 4.5 2.0 2.5 4.9 3.9 -15.3 -5.7 -4.8 -2.6 

 . . . . . 

4.9 5.4 6.0 6.2 (4) (4) (4) (4 

 . . . . . ) -18.4 -20.0 -1.0 -1.2

7.0 6.5 1.4 2.5 (4) (4) (4) (4 

 . . . . . ) -0.5 -1.0 15.0 13.0

6.7 1.0 5.8 11.0 (4) (4) (4) (4 

 . . . . . ) -16.2 -9.5 -8.0 -5.0

8.2 7.0 3.5 3.7 (4) (4) (4) (4 

 . . . . . ) 3.4 2.0 -5.2 -6.6

deflators.

r force.

s a percent of nominal GDP.

mates of the OECD.

Outlook, 62, December 1997, and official statistics of the U.S. Department of Commerce.
12

all-time highs during the year, and credit remained

readily available to investors. This combination of

growth and low inflation reflected the favorable

influences of declining commodity prices and a strong

dollar, but was also attributable to more durable

changes in the product market and the flexibility of

U.S. labor markets. Gains in competitiveness in labor

and product markets and rapid, technology-driven

gains in efficiency have supported brisk economic

growth and low inflation.11

Major U.S. trading partners experienced slower

output growth than the United States. Canadian real

output grew at an annual rate of 3.6 percent, up from

1.5 percent in 1996. Canada’s economic growth in

1997 was underpinned by tight fiscal policies that

reduced budget deficits, and relaxed monetary policy

that lowered interest rates. This mix of fiscal and

monetary policy encouraged domestic investment and

boosted domestic demand. Moreover, foreign demand

for Canada’s exports rose in response to the

depreciation of the Canadian dollar over most of the

year, thus improving Canada’s international

competitive position.12

Among EU members, with the exception of the

United Kingdom, output growth was weak and

unemployment remained high.13 A slowdown in

domestic and public investment spending weakened

economic growth, and monetary policy was eased in an

attempt to countervail public spending cuts. Aggregate

domestic demand remained sluggish due to eroded

consumer and business confidence. As a result, new

investment was too slow to spur growth and reduce

unemployment. Nonetheless, foreign exchange markets

within the EU stabilized and reductions of fiscal

deficits required for the upcoming European Monetary

Union (EMU) were achieved in most, if not all, of the

EU members. However, uncertainties about the

feasibility of the EMU weakened consumer and

investor confidence. In addition, the rigidity of EU

labor markets increased labor costs and may have

served to dampen growth and employment.14

11 Economic Report of the President, February 1998;

U.S. Bureau of Labor Statistics, Productivity and Costs,

Fourth quarter, 1997; and International Economic Review

(IER), Jan./Feb.1998.

12 OECD Economic Outlook, 62, December 1997, 

pp. 92-95.

13 Ibid., pp. 67-71.

14 IMF, World Economic Outlook, pp. 1-6.

In Japan, the OECD estimated that economic

growth slowed from 3.5 percent in 1996 to 0.5 percent

in 1997. The decline in the rate of growth resulted

from a slow rise in domestic demand, reflecting a

slowdown in public sector investment and housing

construction.15 Following a surge in early 1997,

economic activity declined sharply in the second

quarter, partly because of a reversal of the first-quarter

surge in consumption in anticipation of an increase in

the consumption tax in April. Japan’s financial sector

has suffered from bad-debt problems, although the

severity of the Japanese problem is much less than in

other Asian economies. Nonetheless, bad debt

problems have led to the shutdown of several banks

and security firms. These developments have led to

further deterioration in consumer confidence and

spending.

Growth prospects in developing and emerging

economies in 1997 were mixed. In Latin America

(including Mexico and the countries of the Caribbean,

Central America, and South America), economic

growth that started in mid-1996 continued to gather

momentum, especially in Argentina, Brazil, and Peru.

Inflows of foreign investment and lower domestic

interest rates created favorable conditions for

broad-based growth. In Mexico, the combination of

lower interest rates and inflows of foreign investment

helped to stimulate substantial economic growth.16

Asian financial crisis

In the Pacific Rim, economic activity continued to

expand in 1997, particularly in China, Korea, Taiwan,

and Singapore; but financial and bank debt problems

and trade and fiscal imbalances arising near mid-year,

first in Thailand, then in Korea, Malaysia, and

Indonesia, have caused currency uncertainties,

throughout East Asia. The currencies of Thailand,

Korea, Malaysia, and Indonesia collapsed as foreign

investors started to withdraw their short-term

investment funds. Stock market indexes plummeted,

reaching their lowest levels in years. As the crisis

unfolded, political uncertainties and doubts about the

commitment and ability of authorities to implement the

necessary adjustments and reforms exacerbated

pressures on currency and stock markets.

In many respects, Thailand, Indonesia, Malaysia,

and Korea face similar problems. Each has suffered a

loss of confidence and a sharp currency depreciated.

Moreover, in each country, weak financial systems,

excessive unhedged foreign borrowing by the domestic

private sector, and a lack of transparency about the ties

15 OECD Economic Outlook, 62, pp. 67-71. 16 Ibid., pp. 117-119.
13

between government, business, and banks have

contributed to the crisis and complicated efforts to

defuse it. Korea, Thailand, and Indonesia called on the

International Monetary Fund (IMF) for assistance.

IMF-supported reform programs have been

implemented to varying degrees.17

Although not yet clear, the financial crisis in South

Asia is expected to have some effects on the U.S.

trading position with these economies. For example,

U.S. exports to these countries could decline because

of the liquidity crunch and the appreciation of the U.S.

dollar in terms of the Asian currencies. Also, U.S.

imports could increase due to the relatively higher U.S.

growth rates and the decline in import prices from

these countries as the value of the dollar rises.

The OECD assessed the impact of the Asian

financial crisis on other economies. According to

OECD estimates, the crisis will reduce U.S. GDP

growth by 0.3 percent in 1997 and 0.7 percent in 1998.

Net U.S. exports will decline by 0.1 percent in 1997

and by 0.3 percent in 1998.18 The IMF predicted that

the impact of the Asian crisis will be felt mostly by

these countries themselves and by Japan, since fully

18.2 percent of Japan’s trade is conducted with

emerging economies in Asia. This compares with 11.3

percent for the United States and 3.8 percent for

Germany.19

17 “Fischer Presents IMF Perspective of Origins,

Implications of Asian Crisis,” IMF Survey, vol. 27, Jan. 26,

1998, pp. 21-22.

18 OECD Economic Outlook, 62, p 6.

19 IMF, World Economic Outlook, pp. 1-6.

U.S. Balance of Payments

Position20

In 1997, the United States ranked as the world’s

largest merchandise exporter followed by Germany

and Japan. Exports of goods (on balance of payments

basis) rose from $612.1 to $678.3 billion, but imports

increased considerably more, to $877.3 billion from

$803.2 billion in 1996, as shown in table 1-2. The

strengthening of domestic demand for imports due to

relatively higher rates of U.S. growth led to a widening

of the 1997 merchandise trade deficit to $198.9 billion.

The U.S. current account deficit grew to $166.4

billion in 1997. The deficits on the merchandise trade

and investment income were partially offset by an

increase in the surplus on services. The balance on

investment income shifted to a deficit of $14.3 billion

in 1997 from a surplus of $2.8 billion in 1996 as

payments on foreign assets in the United States

increased to $250.3 billion, whereas income receipts

from U.S. assets abroad increased to $236.0 billion.

Net inflows of foreign capital into the United States

increased in 1997 to $263.6 billion from $195.2 billion

in 1996.

In 1997, the U.S. surplus on services trade rose to

$85.3 billion. U.S. trade in services grew in almost

every category. U.S. total services trade (exports plus

20 U.S. Department of Commerce, Bureau of Economic

Analysis, U.S. International Transactions: Fourth Quarter

and Year, 1997, BEA 98-06.

Table 1-2

U.S. trade and current account balances, 1996-97

(Billion dollars)

1996 1997

Merchandise exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612.1 678.4

Merchandise imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -803.2 -877.3

Balance on merchandise trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -191.2 -198.9

Balance on services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80.1 85.3

Balance on goods and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -111.0 -113.6

Income receipts on U.S. assets abroad . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206.4 236.6

Income payments on foreign assets in the United States . . . . . . . . . . . . . -203.6 -250.3

Balance on investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8 -14.3

Balance on goods, services, and income . . . . . . . . . . . . . . . . . . . . . . . . . . -108.2 -127.9

Unilateral transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -40.0 -38.5

Balance on current account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -148.2 -166.5

U.S. assets abroad, net, outflow (-) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -352.4 -426.9

Foreign assets in the U.S., net, inflow (+) . . . . . . . . . . . . . . . . . . . . . . . . . . 547.6 690.5

Net capital inflows (+), outflows (-) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195.2 263.6

Source: U.S. Department of Commerce, Bureau of Economic Analysis, U.S. International Transactions: Fourth

Quarter and Year, 1997, BEA 98-06.
14

imports) reached $421.1 billion in 1997, a $27.8 billion

increase over 1996. U.S. exports of services in 1997

totaled $253.2 billion dollars, imports rose to $167.9

billion. The U.S. deficit on goods and services was

$113.6 billion.

U.S. Trade in 1997

U.S. merchandise exports reached a record $678.3

billion in 1997. Imports rose to $877.3 billion up from

$803.2 billion in 1996. The U.S. merchandise trade

deficit with the world rose to $198.9 billion in 1997

from $191.2 billion in 1996. As shown in figure 1-2,

the majority of U.S. exports consisted of manufactured

goods, which accounted for 70.8 percent of U.S.

exports in 1997. Chemicals accounted for 10.8 percent

of exports; food, 7.4 percent; fuel and raw materials,

7.2 percent; and all other goods, 3.8 percent. The

majority of U.S. imports were manufactured goods,

74.4 percent; followed by fuel and raw materials, 11.2

percent; chemicals, 6.0 percent; food, 4.6 percent; and

all other goods, 3.7 percent.

Figure 1-3 shows U.S. merchandise exports,

imports, and trade balances with major trading

partners. Leading U.S. exports to, and imports from,

major U.S. trading partners are highlighted in the

appendix. In 1997, U.S. trade with NAFTA countries

accounted for about 30.6 percent of total U.S. exports

and imports. Japan accounted for $58.4 billion of the

U.S. merchandise trade deficit in 1997, followed by

China ($49.5 billion), Canada ($33.1 billion), the EU

($24.1 billion), Mexico ($16.6 billion), and Taiwan

($13.6 billion). The United States registered a trade

surplus of $1.4 billion with Korea in 1997.

Total U.S. exports and imports grew by about 9.7

percent in 1997 compared with the previous year, as

exports grew by 10.5 percent and imports grew by 9.1

percent. U.S. exports to Mexico rose by 25.1 percent,

and U.S. exports to Canada rose by 13.2 percent. U.S.

exports to Japan declined, U.S. exports to China rose

slightly, and U.S. exports to Taiwan grew by 11.6

percent. U.S. imports from Japan rose by 5.0 percent to

$120.5 billion and imports from China rose by 21.1

percent to $62.0 billion. The U.S. trade deficit with

Japan and China totaled $107.9 billion or 49 percent of

the total U.S. trade deficit in goods.

World Trade

The United States ranked as the world’s largest

merchandise exporter in 1997, followed by Germany

and Japan. World trade in goods and services grew at a

faster rate than world output in 1997 according to IMF

forecasts. World trade volume is estimated to have

grown by 7.7 percent in 1997. Trade growth in 1997,

however, was above the average annual gains of the

previous ten years, and far outstripped the 4.2 percent

growth in world output.21

21 IMF, World Economic Outlook, pp. 147 and 175.
15





































































Other

Figure 1-2

U.S. merchandise trade with the world, by product sectors, 1997

U.S. Exports

Note.—Because of rounding, figures may not add up to the totals shown. Exports are domestic exports, f.a.s. Imports

are imports for consumption, customs value.

Source: Compiled from official statistics of the U.S. Department of Commerce.

Manufactures

Food

70.8%)

Chemicals

Other

Food

U.S. Imports

Fuel/raw material

7.2%) $455.3 (

$24.3 (

$46.3 (

3.8%)

$69.5 ( 10.8%)

$47.9 ( 7.4%)

Chemicals

$51.9 (6.0%)

Manufactures

$642.2 (74.5%)

$32.1 (3.7%)

$39.4 (4.6%)

Fuel/raw material

$96.8 (11.2%)

(Billion dollars)
16

Figure 1-3

U.S. merchandise exports, imports, and trade balance with major trading partners, 1997





































































–400

–200

0

200

400

600

800

1000

Canada EU Japan Mexico China Taiwan Korea World

Major trading partners

Billion dollars

Canada $134.8 $167.9 $-33.1

EU 131.8 155.9 -24.1

Japan 62.1 120.5 -58.4

Mexico 68.4 85.0 -16.6

China 12.5 62.0 -49.5

Taiwan 18.9 32.5 -13.6

Korea 24.3 22.9 1.4

World 643.2 862.4 -219.2

Exports Imports Trade balance

Exports

Imports

Trade Balance
17

CHAPTER 2

Trade Activities In The WTO And The

OECD In 1997

This chapter reviews select activities of the World

Trade Organization (WTO) and the Organization for

Economic Cooperation and Development (OECD) in

1997. The WTO is the principal multilateral body for

negotiation, implementation, and settlement of disputes

regarding international trade agreements, with 132

members as 1997 ended. Among developments in

1997, ongoing negotiations held under WTO auspices

concluded for financial services, basic telecommunications, and information technology products. High-level

consultations were also held between core multilateral

agencies and a number of the least-developed countries

in an initial effort to create a more integrated approach

to providing these countries with multilateral and bilateral assistance. Dispute cases brought under WTO

rules surpassed 100 during 1997, which is seen as an

indication of members’ support for the multilateral dispute settlement system.

The OECD provides a forum for consultation and

policy coordination on economic and trade issues of

interest to its 29 industrialized member countries. In

1997, negotiations over a multilateral agreement on investment largely settled on the overall framework provisions, only to become bogged down in negotiations

over detailed individual country reservations, exceptions, and exemptions, as well as questions over the

agreement’s possible reach and jurisdiction beyond the

national government level. OECD member countries

and others also signed a multilateral convention on

combating bribery as part of ongoing efforts to prevent

trade barriers in the private sector from replacing those

reduced by governments under the Uruguay Round.

WTO

Ongoing Negotiations

During 1997, sectoral negotiations under the aegis

of the WTO were concluded that address financial services, basic telecommunications, and information

technology. The first two issues were the last remaining ongoing negotiations of the Uruguay Round.1

Financial Services

On December 12, 1997, all the major compacts of

the Uruguay Round finally ended with the successful

conclusion of the twice-extended negotiations on financial services.2 The negotiations produced the WTO

Agreement on Financial Services, which covers insurance, banking, securities, pensions and investment

management services, financial information providers,

and all related financial services. The Agreement covers 95 percent of the global financial services market as

measured by revenue.3 Of 132 WTO members,

1 At the December 1993 conclusion of the Uruguay

Round, participants agreed that multilateral negotiations

would continue for certain service sectors. These ongoing

negotiations addressed the movement of natural persons,

financial services, basic telecommunications, and maritime

transport services. On June 30, 1995, negotiations on the

movement of natural persons concluded, clarifying issues

under the Uruguay Round General Agreement on Trade in

Services (GATS) about regulation of the entry and temporary

stay of services personnel within the national territory of

GATS signatories. On June 30, 1996, negotiations on maritime transport services were scheduled to conclude, but were

suspended on June 28, 1996, because certain participants

believed an insufficient number of acceptable offers had

been submitted. The talks are to resume and conclude as part

of the comprehensive negotiations on trade in services in the

year 2000, called for under GATS Article XIX (Negotiation

of Specific Commitments). Until January 2000, the participants agreed not to apply measures concerning maritime

transport services so as to improve their negotiating position,

although they may liberalize such services.

2 U.S. Department of State telegram “WTO Financial

Services Agreement Reached,” message reference No.

08651, prepared by U.S. Mission, Geneva, Dec. 16, 1997;

and U.S. Department of State telegram “WTO Financial

Services Agreement: Treasury Secretary Rubin and USTR

Ambassador Barshefsky Press Release,” message reference

No. 008652, prepared by U.S. Mission, Geneva, Dec. 16,

1997.

3 White House, Office of the Press Secretary, Statement

by Secretary Rubin and Ambassador Barshefsky Regarding

the Successful Conclusion of WTO Financial Services Negotiations, Dec. 13, 1997.
18

1024 made market-opening commitments, including

new or improved offers from 70 countries in the 1997

round of negotiations.5 The commitments encompass

$17.8 trillion in global securities assets; $38 trillion in

global (domestic) bank lending; and $2.2 trillion in

worldwide annual insurance premiums.6 Across all insurance sectors, encompassing life, nonlife, reinsurance, brokerage and auxiliary services, 52 countries

agreed to provide broad market access to foreign financial services producers. In banking, 59 countries permit

100 percent ownership of subsidiaries or branches to

foreign bankers. In securities, 44 countries agreed to

permit 100 percent ownership of subsidiaries or

branches.7 WTO member states have until January 29,

1999, to ratify the Agreement,8 which is officially

known as the Fifth Protocol to the General Agreement

on Trade in Services.

Background

The liberalization of financial services, including

guarantees of market access and national treatment9

for foreign firms into other countries’ markets, was

identified as a broad goal at the outset of the Uruguay

Round of negotiations in Punta del Este. At the formal

end of the Round in April 1994, however, ministers of

the member states of the newly created WTO agreed

that four services industries needed further work and

authorized continued negotiations.10 In the case of fi4 Seventy member states offered revised (new or improved) schedules during the period July-Dec. 1997. Thirtytwo other WTO member states submitted financial services

schedules in 1993 or 1995 and left them on the table, choosing not to revise them in 1997.

5 White House, Statement by Secretary Rubin and Ambassador Barshefsky, Dec. 13, 1997.

6 Ibid.

7 Ibid.

8 WTO, Committee on Trade in Financial Services,

Fifth Protocol to the General Agreement on Trade in Services, Dec. 12, 1997. There are provisions as to alternative

actions if some members fail to ratify the Protocol. See the

WTO, Council for Trade in Services, Decision of December

1997 on Commitments in Financial Services, S/C/W/32,

Dec. 13, 1997. Such measures include a period of 60 days

beginning on March 1, 1999, when members could modify

or withdraw all or part of the commitments on financial services inscribed in their Schedules of Commitments.

9 Market access determines the conditions under which

companies may enter a given market. National treatment

confers on foreign firms essentially the same rights and obligations enjoyed by domestic firms.

10 In addition to financial services, extended negotiations focused on basic telecommunications, the movement

of natural persons, and maritime transport services. The basic telecommunications negotiations were successfully concluded in February 1997, and took effect (after an agreed

upon delay) on Feb. 5, 1998. See “Date agreed for telecoms

pact,” Financial Times, and “WTO telecom pact effective

Feb. 5,” Journal of Commerce, both on Jan. 27, 1998.

nancial services, such negotiations were extended until

June 30, 1995. The scope of these negotiations was

broad, including banking, investment, insurance, and

all other financial services related to these three areas.

The negotiations excluded services performed by central banks and other monetary authorities, agencies

governing social security and other public retirement

plans, and other services performed by entities acting

on behalf of member governments.11 The objective of

the request/offer process employed in the negotiations

was to develop liberalizing commitments on market access and national treatment that could be extended to

all parties on a most-favored-nation (MFN) basis.12

More broadly, extended negotiations on financial services required negotiators to strike an acceptable balance between greater liberalization and prudential regulation. All countries enforce the latter in order to protect consumers and ensure the solvency of financial

systems. Because prudential regulations predominantly

focus on establishment of commercial presences,13 the

negotiations to liberalize financial service markets ultimately focused most intensely on rights to invest in

and establish a commercial presence in foreign markets.

The extended negotiations of 1995 resulted only in

an interim agreement.14 Realizing the importance of

financial services to all international trade transactions,

however, WTO member states agreed to yet another

extension of these negotiations, which resumed formally in April 1997 and ended on December 12, 1997.15

On the latter date, negotiations concluded with a permanent agreement, based on the MFN principle.

Scope and Structure

The Uruguay Round’s General Agreement in Trade

in Services (GATS) includes all service sectors in the

broad GATS “Framework” agreement signed in Marrakesh in April 1994, which took effect on

11 GATT Secretariat, The Results of the Uruguay Round

of Multilateral Trade Negotiations (Geneva: GATT Secretariat, 1995), p. 355.

12 The MFN principle states that whatever trade liberalizing commitments a nation makes to one trading partner it

must also make to all other WTO member states.

13 Ingo Walter, Global Competition in Financial Services (Cambridge: Ballinger Publishing Co., 1988), p. 182.

14 For a discussion of the financial services negotiations

through June 30, 1995, see USITC, “Financial Services: An

Overview of the World Trade Organization’s Negotiations,”

Industry, Trade, and Technology Review, USITC publication

2942, Dec. 1995, pp. 1-12.

15 See WTO, Council for Trade in Services, “Second

Decision on Financial Services,” adopted July 21, 1995

(S/L/9). The originally agreed date for completion of the

extended/renewed negotiations was December 31, 1997. In

April 1997, WTO members unanimously agreed to move

this deadline to December 12.
19

January 1, 1995. For with all sectors, including those

of the financial sector, the individual country offers to

its trading partners are defined in each country’s

“schedule of specific commitments.” These schedules

delineate the market access and national treatment

commitments that are to apply equally to its trading

partners, including the MFN exceptions and local reservations it withholds (a bottom-up approach). The negotiation of these country schedules on a bilateral “request/offer” basis contributed to the protracted Uruguay Round negotiations, not least in financial services. More than 100 nations made individual requests

for liberalized trade to every other partner, which then

decided if the request could be met on an MFN basis,

in each of four different “modes” of delivery of the

service for both market access and national treatment.

These four modes were cross-border delivery of services, consumption abroad, commercial presence, and

the presence of natural persons.

Objective of the Negotiations

In essence, the negotiation’s agreements provide

guarantees regarding the conditions under which foreign financial services providers may operate in WTO

members’ territories. A list of such guarantees could be

expected to lead to comparative rankings of the degree

to which foreign investors and financial services providers are welcome in a given nation.16 At the same

time, negotiators recognized that the 1997 agreement

was only a basic foundation for global trade in financial services; time would determine if a considerably

grander infrastructure might eventually be

constructed.17

The broad objective of all services negotiations under the GATS has been to create a rule-based global

system that could be enforced by impartial WTO expert panels.18 The system would include (1) transpar16 USITC staff conversations with WTO negotiators,

Geneva, 1992-1997.

17 Ibid.

18 This enforcement mechanism differentiates the General Agreement on Trade in Services (GATS/WTO) from the

old General Agreement on Tariffs and Trade (GATT) system,

which required unanimous consent to act. Under the new

GATS, this is totally reversed: action is automatic unless

there is unanimous consent that the WTO should not act.

Once a WTO panel has reached a decision, only a unanimous vote of the WTO’s Council for Trade in Services can

overturn it. There is also a modest formal appellate procedure, which is aimed at insuring that panel decisions form,

over time, a cohesive set of rulings. Additionally, financial

services panels must include members with expertise in financial matters. See WTO, “Dispute Settlement,” at Internet

address http://www.wto.org/wto/dispute/dispute.htm, retrieved Apr. 6, 1998.

ent national rules; (2) MFN-based national commitments that could not be withdrawn penalty free without

unanimous agreement of WTO members (or, if withdrawn unilaterally, penalties paid); (3) effective access

by foreign services providers to other WTO member

country markets; (4) foreign financial services providers to receive essentially the same treatment as domestic producers;19 (5) use of the WTO dispute resolution

mechanism to resolve disagreements on interpretation

and enforcement of commitments; and (6) progressive

liberalization of commitments over time.20 These

would in turn provide financial institutions around the

world with a written, enforceable set of rules for international trade in financial services, giving them a

level of certainty and predictability in planning for foreign investment and operations that they never had before.

During the 1995 financial services negotiations, the

United States decided that the financial services schedules of a number of key countries were not sufficiently

liberalizing to warrant guaranteeing current and future

access to the U.S. market on an MFN basis.21 Thus the

final 1995 U.S. schedule, which took effect on June 30,

1995, guaranteed only the level of market access

associated with the current activities of foreign firms

already in the U.S. market. However, these companies’

opportunities to expand, for example, by taking advantage of 1994 legislation for interstate bank branching,

possible future Glass-Steagall reform on integrated

banking, and opportunities for new companies to enter

the U.S. market, were not guaranteed and could be

conditioned on reciprocal access being accorded U.S.

firms in the company’s home market.22 It was due in

part to this U.S. position and the resulting broad MFN

exemptions written into the U.S. schedule of commitments that led to the 1995 interim agreement and the

decision to further extend the negotiation to 1997. In

19 Rules and regulations of any country may provide

special rules for foreign providers of services, often for prudential regulatory reasons. But adverse discrimination based

on nonprudential considerations should be avoided.

20 A WTO member can undertake such progressive liberalization unilaterally at any time and bind it in its schedule.

The next formal WTO services negotiations are scheduled

for the year 2000.

21 For a discussion of the financial services negotiations

through June 30, 1995, see U.S. International Trade Commission (USITC), “Financial Services: An Overview of the

World Trade Organization’s Negotiations,” Industry, Trade,

and Technology Review, USITC publication 2942, Dec.

1995, pp. 1-12.

22 U.S. Department of State telegram, “WTO Financial

Services Negotiations,” message reference No. 5108, prepared by U.S. Mission, Geneva, June 30, 1995. Also U.S.

Department of State telegram, “WTO Financial Services

Negotiation,” reference No. 165936, prepared by U.S. Department of State, Washington, DC, July 11, 1995.
20

short, it was broadly acknowledged by negotiators and

industry representatives that a WTO financial services

agreement that did not include an unambiguous MFNbased commitment by the United States, the world’s

largest financial services trading nation, would tend to

undermine the fundamental premise of the agreement

and not meet the initial goal of liberalizing global trade

and investment in this key sector.23

In early 1997, U.S. negotiators met with U.S. financial services regulators and industry representatives

in order to determine broadly what additional commitments the United States would need from the extended

negotiations in order to agree to a permanent MFNbased agreement. At the end of March 1997, the United

States forwarded a formal request to each of its trading

partners (with the exception of Canada, the European

Union (EU), Mexico, and Switzerland), listing the improvements the United States wanted to see in each

trading partners’ 1995 offer. Trading partners who had

no financial services offer on the table were invited to

submit one. In addition to specific requests based on

broad GATS principles, and items such as improved

scope of offers to include additional financial services

subsectors and the elimination of economic needs

tests,24 the United States requested its trading partners

to make commitments that would broadly:

 allow foreign services providers in WTO member countries to establish and operate in the

form of their choice, i.e., as a subsidiary, branch,

or joint venture;

 permit full majority ownership;

 guarantee the existing rights of foreign financial

services providers;25 and

 provide substantially full national treatment.26

23 USITC staff conversations with global trade negotiators and industry representatives, 1992-1997.

24 Economic needs tests assess the impact of new market entrants on the indigenous industry. Such assessments

may result in a negative determination if market entry is

considered likely to have a detrimental effect on market

structure, profitability, population density, geographic distribution, and job creation.

25 Such existing rights would include the equity percentage held in joint ventures, or other treatment. Once a stipulation is gained, it should not be withdrawn. Companies

would not be forced to divest such provisions, even if more

onerous conditions are imposed on new market entrants.

26 USTR and U.S. Dept. of the Treasury, letters to WTO

financial services trading partners, March 31, 1997.

Summary of Commitments on

Financial Services

The Quad and OECD member states

As with many multilateral negotiations in Geneva,

the “Quad” trading partners (the United States, the European Union, Japan, and Canada) informally led the

overall negotiation by placing their schedules on the

table early, sharing information and coordinating their

requests to all trading partners, and exchanging views

frequently in regard to the progress and problems of

the negotiation. All four Quad partners, plus Switzerland and several other nations, had their new (revised)

“best” offers on the table by July 1997, attempting to

encourage other countries to finalize and submit their

own schedules. The United States, for example, withdrew its broad MFN exemptions from its 1995 schedule. These early schedules, with all subsequent ones,

were made on a conditional basis, subject to withdrawal or modification pending the satisfactory completion

of the whole negotiation.27

The Quad partners are the primary providers of

global financial services simply due to the size of their

markets and the existing trade between them, although

these markets are relatively mature.28 Between 1994

and 1995 (latest available figures) the overall U.S. insurance market grew by only 1.1 percent, and the figure for the G7 countries29 was 3.3 percent. Conversely,

the emerging world economies were growing at a

much faster pace. For example, the insurance markets

of the five original members30 of the Association of

South East Asian Nations (ASEAN) grew by 12.8 percent in real terms during the same period.31 Such

growth indicators caused negotiators to focus on establishing improved rules for investment and the conduct

of global financial services in emerging economies at a

time when the globalization of these economies, for

trading in both good and services, was still in its relative infancy. Such globalization is dependent on financial services in nearly all its aspects. Moreover, although OECD financial services guidelines are generally liberal ones, the OECD has no formal enforcement

mechanism. Therefore, binding OECD commitments in

the WTO is important because it brings such commitments under the WTO dispute resolution mechanism.

27 See WTO, Committee on Trade in Financial Services,

minutes of meetings, Geneva, July and Sept., 1997.

28 For example, annual insurance premiums for the four

Quad markets represented over 86 percent of the global total

in 1995, which is the latest figure available. Swiss Re, Sigma, No. 4/1997, p. 18.

29 The G7 countries are the United States, Canada, Germany, United Kingdom, France, Italy, Japan.

30 The five original members of ASEAN were Indonesia, Malaysia, Philippines, Thailand, and Singapore.

31 Swiss Re, Sigma, p. 26.
21

The United States made the decision early in 1997

that it would make no additional requests for improvements to the schedules of the European Union, Canada,

or Mexico.32 Cross-investment and trade between the

United States and these three trading partners was already extensive. For Canada and Mexico, the North

American Free Trade Agreement (NAFTA) had primarily resolved or gone beyond the WTO financial services issues in Geneva, while negotiations with the European Union were carried out in 1993 and 1995.33

The United States presented a similar situation visa-vis most of its other OECD trading partners. The

founder OECD member states already had generally

acceptable WTO schedules from previous financial services negotiations in 1993 and 1995, which largely reflected a “standstill” position of their existing laws and

regulations. The newer OECD trading partners, including Mexico, Hungary, Poland, and the Czech Republic,

generally were willing to bind the OECD accession

commitments made since the 1995 interim agreement

in their 1997 WTO schedules, thus producing considerably liberalized financial services schedules.34

Japan and Korea

The exceptions among the OECD member states

were Japan and Korea.35 Japan was perceived as presenting a particular problem. Although its WTO schedule generally reflected a liberalized financial services

regime, Japan’s trading partners were of the view that

the internal regulatory controls and practices of Japan36 effectively limited foreign commercial participation in Japan’s financial markets. The United States

had attempted to resolve this problem with extended

“Framework” bilateral negotiations on both insurance

and pensions/investment rules. In two complex, separate sets of talks in the period 1994 to 1996, agreements in these areas had been reached.37 Prolonged

32 The converse was not true. The EU did present a

request list to the United States, headed by the request that

the United States withdraw its broad MFN exemptions from

its 1995 offer. See USTR and U.S. Dept. of the Treasury,

letters to WTO financial services trading partners requesting

revisions to WTO schedules, March 31, 1997.

33 Also see later comments on Latin and North America.

34 See WTO Financial Services final schedules for the

OECD member states, Geneva, Dec. 1997.

35 Ibid.

36 These practices included the keiretsu system of interlocking company directorates and an informal system of

regulatory practices whereby written or oral “administrative

guidance,” technically nonbinding but perceived as a government mandate, was provided to Japanese firms in lieu of

formal, transparent rulings of law which could be appealed.

37 USTR, Measures by the Government of the United

States and the Government of Japan Regarding Insurance,

disagreements subsequently ensued, however, as to

precisely what obligations had been undertaken and

implemented. In the case of insurance, for example, it

took another year of talks and an additional formal

agreement to clarify the obligations of the earlier

text.38 Having encountered similar difficulties with

these kinds of bilateral agreements with Japan, the

United States, the EU, and other trading partners

sought to include the provisions of these agreements as

“additional commitments” in the Japanese WTO schedule, thus binding them and subjecting interpretation

and enforcement of their provisions to the WTO dispute settlement mechanism in case of further disagreement.39 Japan strongly resisted such an inclusion,40

but finally agreed to include them during the final

hours of the negotiation.41 The United States agreed to

include its own obligations from these bilateral texts in

its own schedule, also as “additional commitments.”42

Some WTO observers believe that this ability to include items that fall outside the GATS traditional purview in WTO schedules, such as regulatory practices,

is a sign that the WTO can address “real” trade liberalization deterrents in future negotiations.43

37—Continued

October 11, 1993; and U.S. Treasury Department, Measures

by the Government of the United States and the Government

of Japan Regarding Financial Services, Feb. 3, 1994. Both

the United States and Japan pledged to multilateralize these

agreements in public statements to the WTO’s Committee on

Financial Services in 1995. The European Union thus joined

the United States and several other countries in requesting

Japan to list the obligations undertaken in the agreements in

their WTO schedules.

38 USTR, Supplementary Measures by the Government

of the United States and the Government of Japan Regarding

Insurance, Dec. 24, 1996.

39 USITC staff interviews with financial services executives, Washington and Geneva, May 1997.

40 The initial WTO revised schedule by Japan, tabled in

Geneva on July 11, 1997, made no mention of these provisions.

41 WTO, Committee on Trade in Financial Services,

Communication from Japan, Revised Offer on Financial

Services, Dec. 12, 1997.

42 As opposed to highly specific Japanese additional

commitments, the U.S. obligations are general in nature, e.g.,

“Taking note of principles of federalism under the United

States Constitution, recognizing that insurance has been regulated at the state government level since the beginning of

insurance regulation in the United States, ...the Government

of the United States welcomes efforts by the National

Association of Insurance Commissioners (‘NAIC’) to promote the harmonization of state insurance regulation,

through such steps as its Accreditation Program and the

preparation of model insurance laws.” See WTO, Committee on Trade in Financial Services, Communication from the

United States of America, Revised Offer on Financial Services, Dec. 12, 1997.

43 USITC staff conversations with WTO financial services negotiators and financial services executives, Geneva,

Dec. 5-12, 1997.
22

Korea posed other difficulties. Korea acceded to

the OECD in 1996 and undertook various financial liberalization promises to be introduced over time. The

United States and other WTO trading partners requested that Korea, at a minimum, bind all of these

commitments, plus additional ones, in its WTO schedule.44 Korea refused, arguing that the presidential

elections in Korea in December 1997 made further improvement politically impossible,45 and bound only its

OECD commitments that had taken effect through August 1997. Thus, although Korea’s schedule does reflect considerable liberalization over its 1995 offer, including removal of its economic needs test, the schedule does not guarantee foreign firms access to pensions, brokerage, joint-ventures with Korean insurance

firms, and other items that its trading partners had requested and that were part of Korea’s OECD (eventual)

accession commitments.46

Eastern Europe

Eastern European countries scheduled significant

trade liberalizing commitments during the 1997 negotiation, partially because they were starting from a

low base. Nations such as Hungary, Poland, the Czech

Republic, and Bulgaria,47 and to a somewhat lesser degree the Slovak Republic, Slovenia, and Romania had

provided truncated schedules in 1995 but had passed

new liberalizing domestic legislation in the intervening

period. These nations now proved ready to guarantee

the levels of access associated with the liberalized rules

to both domestic and foreign investors via WTO bindings. Indeed, several of these states had acceded to the

OECD, and proved willing to bind their OECD commitments on an MFN basis.48

44 See USTR and U.S. Dept. Of the Treasury, letter to

Korea requesting revisions to its WTO schedule, March 31,

1997.

45 See Korea’s revised WTO financial services offer,

Geneva, Sept. 4, 1997.

46 During the ratification process extending through

January 1999, Korea’s trading partners are expected to encourage Korea to bind further liberalizations in its formal

WTO schedule. Korea’s acceptance of International Monetary Fund loans, helping it to stabilize its currency and financial system, is considered likely to assist this effort to broaden further its formal WTO financial services commitments.

47 Bulgaria acceded to the WTO only in December

1996. It is the only known non-OECD country that agreed

to submit its schedule in accordance with the “Understanding on Commitments in Financial Services,” thus indicating

an enhanced willingness to open its financial markets more

widely to foreign market access and national treatment.

Southeast Asia

One of the greatest question marks to a successful

negotiation was the degree to which the member states

of ASEAN would be willing to liberalize their financial services sectors in regard to market access and national treatment.49 These states had burgeoning markets for financial services, created by economic growth

rates of about 10 percent annually for the past decade.

The 1995 financial services negotiation had pointed to

several ASEAN problem areas as seen by developed

market economies.50 Furthermore, during the progress

of the 1997 negotiation, Thailand, Indonesia, the Philippines, and Malaysia (plus Korea) faced a series of

currency devaluations and financial crises.51 This led

to claims that there was no time to deal with financial

services liberalization.52 The United States, the European Union, and other WTO member states noted,

however, the existence of the stringent and broad provisions for prudential regulatory relief within the

GATS, as well as the fact that the negotiation was not

about either monetary policy or currency exchange

rates;53 rather, it was about guarantees of market access and national treatment for foreign investors. Further, some contended that if foreign competition in

Asian domestic financial markets had been allowed

earlier, the crises might well have been mitigated, as

evidenced by the largely unaffected economic performance of such economies as Hong Kong and Singapore.54

The most significant problem with ASEAN countries for the OECD members in general, and the United

States in particular, concerned the Malaysian insurance

schedule.55 Malaysia’s 1997 offer was somewhat

48 See WTO Financial Services final schedules for the

various nations, Geneva, December 1997.

49 WTO, Committee on Trade in Financial Services,

Minutes of meetings, Geneva, Jan.-June 1995, and Apr.-Dec.

1997.

50 See USITC, “Financial Services: An Overview of the

World Trade Organization’s Negotiations,” Industry, Trade,

and Technology Review, USITC publication 2942, Dec.

1995, pp. 1-12.

51 These had started in Thailand in April 1997, and

gradually spread through much of the region.

52 See WTO, Committee on Trade in Financial Services,

Minutes, Statement by Thailand, June 1997.

53 See WTO Secretariat study, Open Markets in Financial Services and the Role of the GATS, Geneva, Sept. 15,

1997. Also, letter of U.S. Treasury Secretary Robert E. Rubin to WTO Director General Renato Ruggiero, dated Aug.

15, 1997; and U.S. Dept. of the Treasury, press release,

“Building a Global Financial Services System for the 21st

Century,” remarks by Deputy Treasury Secretary Lawrence

H. Summers to the Congressional Economic Leadership

Council, Aug. 12, 1997.

54 Ibid.

55 WTO, Committee on Trade in Financial Services,

Minutes of meetings, Geneva, Apr.-Dec. 1997.
23

improved over its 1995 one. The main improvements

were an increase to 51 (from 49) percent foreign equity

allowance for life and nonlife (property/casualty) insurance companies already established in Malaysia,56

and the creation of seven new nonlife and six new life

reinsurance licenses57 that would be issued before June

2005, subject to certain criteria. The problem, however,

was Malaysia’s retention of a provision forcing nine

foreign insurance companies to divest their equity

holdings exceeding 51 percent58 to Malaysian partners

no later than June 1998. Failure to do so could mean

that their acquired rights would be forcibly divested to

a maximum 30 percent equity share. As a matter of

principle, this was unacceptable to the United States

and to other WTO trading partners.59 In 1995, the

United States had indicated to Malaysia that such a tactic was inconsistent with the core purpose of the

GATS. Rather than promoting trade liberalization, the

United States argued, Malaysia was attempting to use

an enforceable multilateral trade agreement to formally

enshrine a regressive action. Nevertheless, despite negotiations at very high levels, Malaysia did not move

on this question. After much discussion in the final

hours of the negotiation, both in Washington and Geneva, the United States added a narrowly drafted MFN

exception to its schedule stating that it reserved its

right to retaliate against any nation that attempted to

forcibly divest a company’s historically acquired rights

after December 12, 1997.60 Malaysia was the only

country in the negotiation that placed such a regressive

provision in its schedule. The United States made clear

that it hoped it could “. . . resolve outstanding issues in

56 New foreign entrants to the Malaysian market are

capped at a 30 percent equity holding.

57 Six new reinsurance licenses (unspecified) had been

promised in the 1995 Malaysia schedule.

58 See WTO, revised Malaysian financial services

schedule, Geneva, Dec. 1997. Such historical equity share

holdings are known as “acquired rights” in the jargon of

international trade negotiations. At least one company under

pressure to divest was a wholly-owned subsidiary of a U.S.

insurance company.

59 U.S. Deputy Trade Representative Jeffery Lang, remarks to the Conference on Insurance and the WTO, International Insurance Council, Washington, D.C., Mar. 10, 1998.

60 Remarks by U.S. Deputy Trade Representative Ambassador Jeffrey Lang to the WTO Committee on Trade in

Financial Services, Dec. 12, 1997. The exemption applies

only to insurance, is for an indefinite period, and is justified

as the “need to protect existing U.S. ownership of service

suppliers operating in other Members.” (sic) The exemption

reads as follows: “Measures according differential treatment

in regard to the expansion of existing operations, the establishment of a new commercial presence or the conduct of

new activities, in a circumstance in which a Member adopts

or applies a measure that compels, or has the effect of compelling, a person of the United States, on the basis of its nationality, to reduce its share of ownership in an insurance

this area so as to avoid the necessity of retaining this

exception.”61

On the same issue, in contrast to the Malaysian

position, a major impetus to a successful conclusion of

the negotiation was obtained as the Philippines,62 Indonesia, and Singapore (as well as non-ASEAN nations

Pakistan and Argentina) formally and unambiguously

grandfathered the acquired rights of foreign firms operating in their markets.63 Additionally, Indonesia came

forth with a schedule guaranteeing 100 percent foreign

ownership in stock-exchange listed foreign subsidiaries. The United States considered the ASEAN country schedules of Singapore, the Philippines, and Indonesia to be broadly acceptable, while those of Malaysia and Thailand contained unacceptable major restrictions.64

Latin America

Broadly, the Latin American schedules reflected

considerable domestic liberalization since 1995, irrevocably guaranteeing, for example, 100 percent ownership for foreign financial services firms in Brazil, Bolivia, Chile, Columbia, Ecuador, Peru, Uruguay, and

Venezuela.65 Brazil again failed to amend Article 159

60—Continued

services provider operating in the Member’s territory to a

level below that prevailing on 12/12/97.” WTO, Committee

on Trade in Financial Services, Communication from the

United States of America, Revised Offer on Financial Services, S/FIN/W/12/Add.5/Rev.2, Dec. 12, 1997.

61 WTO, Committee on Trade in Financial Services,

final plenary session, statement by U.S. Representative Ambassador Jeffrey M. Lang, Dec. 12, 1997.

62 The Phillippines had grandfathered existing acquired

rights in its 1995 schedule.

63 See the final WTO schedules of financial services

commitments for these nations, WTO Secretariat, Geneva,

Dec. 12, 1997. It should be noted that some nations take the

position that grandfathering acquired rights is not desirable,

in that such provisions create two tiers of investors--those

already established and future investors--with perhaps different rules governing them. Australia was one quiet proponent

of this position early in the 1997 extended negotiation.

64 USITC staff conversations with USTR officials and

U.S. financial services executives, Geneva, Dec. 10-15,

1997. In addition to the Malaysian problem on acquired

rights, the Thai insurance offer, for example, did not budge

from the guaranteed 25 percent foreign equity limit on life,

nonlife, and brokerage, even though current Thai practice

permits considerably more. Overall, the United States devoted an extraordinary amount of time and effort to negotiations with the ASEAN member states, with two special trips

to the region by U.S. negotiators, and many other forms of

conversations and communications in varied forums. These

included the 1997 APEC Senior Officials meeting in August,

the IMF/World Bank annual meeting in September in Hong

Kong, and the Vancouver APEC Leaders’ Meeting in November, among others.

65 Argentina currently allows 100 percent ownership in

insurance in some circumstances, but did not bind this com-
24

of its Constitution, as promised over several years of

the negotiation and which would permit guarantees of

significant liberalization in its financial services market

for foreign producers.66 Brazil did note in writing,

however, its intention to bind such liberalization in its

WTO schedule within two years of the passage of necessary legislation.67

North America

Although it had no impact on the United States because of rights it already enjoys under the NAFTA,

Canada did liberalize its WTO offer by allowing bank

branching on an MFN basis. Similarly, WTO trading

partners encouraged liberalization of Mexican financial

markets, and Mexico did so by raising the allowable

aggregate foreign participation levels in domestic financial sectors from 30 percent to 40 percent for insurance companies, and by extending the scope of its

commitments to include pension funds. This would

make Mexican investment more attractive to some

non-NAFTA financial services providers. Moreover,

many large foreign financial service companies already

had subsidiaries in the United States or Canada, and

thus already were eligible for NAFTA benefits by entering the Mexican market via these entities.

Other countries

India’s position on insurance disappointed many

WTO members and private-sector financial executives

from several OECD nations.68 The insurance market

of India remains a state-owned monopoly, despite

65—Continued

mitment in its schedule. Some countries allow 100 percent

foreign ownership as either formal subsidiary companies or

as branch operations. Some restrict 100 percent foreign

ownership to subsidiary operations only. Among the latter

for insurance are Brazil, Chile, and Venezuela. For banks,

100 percent foreign ownership is guaranteed in Argentina,

Brazil, Bolivia, Chile, Colombia, Ecuador, and Uruguay.

66 See, for example, WTO, Committee on Trade in Financial Services, Minutes of meetings, Geneva, Nov.-Dec.

1997.

67 WTO, Committee on Trade in Financial Services,

Communication from Brazil, Revised Offer on Financial

Services, Dec. 12, 1997. In insurance, Brazil promised to

bind the dissolution of the national reinsurance company,

IRB, prior to the two-year window after the passage of the

necessary legislation. Brazil’s trading partners will likely

monitor legislative activity during the protocol ratification

period, with the view towards insisting that Brazil incorporate and bind new liberalizing legislation in its schedule.

68 See, for example, comments by the United States,

EU, and Canadian delegations to the WTO Committee on

Trade in Financial Services, Minutes of meetings, Geneva,

April-Dec. 1997. Also, USITC staff interviews with financial services executives, Geneva, Dec. 10-14, 1997.

serious consideration of privatization since 1993;69 India thus made no significant commitments on insurance in its schedule. However, India did improve

slightly its banking and securities offer, and removed

an MFN exemption requiring reciprocal treatment for

Indian firms in other WTO countries. Pakistan and

Egypt produced improved offers over 1995, but those

had started from meager foreign participation provisions—several financial services sectors in those nations still await liberalization.70 In other areas, Turkey

and South Africa made significantly liberalized trade

offers, as did several other smaller nations, including,

for example, Israel, Bahrain, and Cuba.71 Several African and Caribbean area WTO member states also submitted improved offers.72

Impact on the United States

 President Clinton, U.S. Trade Representative Barshefsky, Secretary of the Treasury Rubin, and the U.S.

financial services industry all hailed the successful

conclusion of the agreement.73 In the words of Deputy

U.S. Trade Representative Jeffrey Lang who headed

the U.S. negotiating team in these talks in both 1995

and 1997:

69 In November 1993, a Government of India-appointed

study commission (Moholtra) recommended that private

investment and foreign participation in the insurance sector

be permitted. This proposal is highly politically sensitive,

due principally to the large numbers of people employed in

this state sector who fear loss of their jobs. Subsequent Indian governments have not yet found it possible to carry

legislation that would permit private investment in India’s

insurance market, although an insurance regulatory agency

has been created (previously unneeded due to the nationalized system).

70 WTO, Committee on Trade in Financial Services,

financial services revised schedules, Dec. 12, 1997.

71 Ibid.

72 Ibid. Among these were Nigeria, Kenya, Tunisia,

Costa Rica, Mauritius, Senegal, Jamaica, and the Dominican

Republic. Conversely, the Cote D’Ivoire submitted a new,

regressive table of MFN exemptions dealing primarily with

CFA franc zone restrictions.

73 See, for example, The White House, Office of the

Press Secretary, “Statement by the President on Financial

Services Agreement,” Dec. 12, 1997; The White House,

Office of the Press Secretary, “Statement by Secretary Rubin

and Ambassador Barshefsky Regarding the Successful Conclusion of WTO Financial Services Negotiations,” Dec. 13,

1997; remarks by Timothy Geithner, Assistant Treasury Secretary for International Affairs, at the Coalition of Service

Industries Briefing, Washington, DC, Jan. 13, 1997 (Reported in LEGI-SLATE Report for the 105th Congress, Federal Information Systems Corporation, Transcript

980130016). Also, industry comment as found in “BankAmerica Response to WTO Financial Services Agreement,”

Business Wire, Dec. 13, 1997, NewsEdge; and the letter by

the International Insurance Council (Washington, D.C.) to

the President of the United States, Dec. 13, 1997 commending the United States on the successful completion of the

negotiations.
25

Financial services is one of the fastest growing

areas of the global economy. It’s also one of our

most competitive industries here in the United

States, with significant U.S. domestic employment. We export nearly seven times what we import in financial services.

Given this competitive advantage, we made clear

that we wouldn’t sign on to a deal unless other

countries made commercially meaningful commitments to open their markets . . . . The deal reached

in December goes a long way to achieving those

objectives. . . . In fact, when we began negotiating

on financial services, most of the countries that are

part of the deal today only had limited foreign participation in their markets. But the agreement we

reached guarantees access to nearly every significant financial market in the world.74

Basic Telecommunications Services

Negotiators concluded the Agreement on Basic

Telecommunications Services on April 30, 1996, but

extended negotiations concerning specific commitments until February 15, 1997. As detailed fully in the

1996 edition of this report, the agreement was concluded among 72 countries and covers nearly 93 percent of world revenues in telecommunications.75 It

provides market access for local, long-distance, and international service through any means of network

technology. In all, 69 countries scheduled commitments that allow, or will phase in, foreign ownership or

control of many or all telecommunications service providers and facilities, with 57 trading partners adopting

procompetitive regulatory principles.76

The agreed deadline for acceptance of the telecommunications agreement and associated national schedules of specific commitments was December 1, 1997,

and the agreement’s entry-into-force was to be January

1, 1998. However, given the considerably reduced implementation period available following the extension

of negotiations into February 1997, several parties had

difficulties completing their acceptances by the December date, forcing the original entry-into-force date

to be postponed. On December 19, 1997, WTO Members that had accepted the agreement (50 that had

74 Remarks by Ambassador Jeffrey Lang, Deputy U.S.

Trade Representative, at the Coalition of Service Industries

Briefing, Washington, DC, Jan. 13, 1997 (Reported in LEGISLATE Report for the 105th Congress, Federal Information

Systems Corporation, Transcript 980130125).

75 WTO, “WTO Telecoms Deal Will Ring in the

Changes on 5 February 1998,” PRESS/87, Jan. 26, 1998.

76 For further details, see section on “Telecommunications Services Negotiations” in USITC, The Year in Trade:

OTAP, 1996, USITC publication 3024, pp. 36-39.

accepted formally, plus another 5 that indicated their

acceptances were ready) met in Geneva to consider a

new effective date for the agreement. At that time, the

following participants had not accepted the agreement’s protocol: Argentina, Belgium, Bolivia, Brazil,

Brunei, Bulgaria, Chile, Dominica, Dominican Republic, Ghana, Guatemala, Papua New Guinea, the Philippines, Poland, and Romania. Negotiators met again on

January 26, 1998, and agreed that the Agreement on

Basic Telecommunications Services would enter into

force on February 5, 1998.77

Information Technology Agreement

On March 26, 1997, 39 countries concluded an Information Technology Agreement (ITA), as agreed at

the WTO Singapore Ministerial Conference in December 1996.78 The ITA entered into force on July 1, 1997,

covering nearly 95 percent of world trade in information technology products with participation rising to 43

countries. In most cases, tariffs will be eliminated on

these products by 2000. The information technology

sector accounts for roughly $1 trillion in global production and $500 billion in trade flows.79 Participants

in the ITA agreed to complete negotiations in

mid-1998 to expand coverage and implement the results of the negotiation beginning in January 1999. In

January 1998, most of these participants announced

that they were prepared to begin negotiations in the

WTO on an “ITA-II” that would extend coverage more

fully into product areas that are driven by information

technology, such as computer-based scientific and analytical equipment, global positioning systems, and related inputs and manufacturing equipment such as for

the production of printed circuit boards.80 In addition,

China pledged in November 1997 to participate in the

ITA as part of its accession negotiations.

High-Level Meeting on

Least-Developed Countries

At the WTO Singapore Ministerial Conference in

December 1996, Ministers adopted the “Comprehen77 USTR, “WTO Sets February 5, 1998 for Entry into

Force Date of Global Telecommunications Agreement,”

press release 98-06, Jan. 26, 1998.

78 For further detail, see USITC, The Year in Trade:

OTAP, 1996, USITC publication 3024, pp. 20-23.

79 USTR, “U.S. Ready to Lead in ‘ITA II’ Negotiations

to Expand Sweeping Information Technology Trade Agreement,” press release 98-07, Jan. 27, 1998, p. 2.

80 Ibid. The President is required to obtain advice regarding such expanded coverage, forthcoming in the USITC

investigation, Advice on the Proposed Expansion of the Information Technology Agreement (Investigation No.

332-390).
26

sive and Integrated Plan of Action for Least-Developed

Countries.” Its aim is to provide an overall, coordinated approach for measures taken in favor of these

countries. The Plan of Action focuses on four specific

areas: (1) implementation of the Uruguay Round

Agreements Decision on Measures in Favour of LeastDeveloped Countries; (2) human and institutional capacity-building; (3) market access; and (4) other initiatives. One element of the Singapore Ministerial Declaration called for a meeting with the United Nations

Conference on Trade and Development (UNCTAD)

and the International Trade Centre “as soon as possible

in 1997, with the participation of aid agencies, multilateral financial institutions, and least-developed countries to foster an integrated approach to assisting these

countries in enhancing their trading opportunities.”81

The LDC Plan of Action foresees closer cooperation between the WTO and other multilateral agencies

that are engaged in promoting growth in the least-developed countries (LDCs82) to coordinate various national and international aid efforts, ensure appropriate

macroeconomic policies, and create improved market

access and supply-side measures. In June 1997, preparations were made for a high-level meeting (HLM) on

least-developed countries that would first bring together six core multilateral financial and aid organizations

involved with the LDCs—the International Monetary

Fund (IMF), International Trade Centre, UNCTAD,

United Nations Development Program (UNDP), World

Bank, as well as the WTO.

The High-Level Meeting on Integrated Initiatives

for Least-Developed Countries’ Trade Development

was held October 27-28, 1997, bringing together LDCs

with the core multilateral organizations as well as interested WTO Members, observers, and other intergovernmental organizations (IGOs) involved in this area.

In May 1997, the WTO Director-General sent invitations to all 48 LDCs to participate in the HLM, based

on each such country’s completion of a comprehensive

assessment of its needs for trade-related technical assistance and for human and institutional capacity building. To help in each LDC’s self-assessment, the invitation included a checklist concerning trade-related technical cooperation that encompassed areas of trade

policy, impediments to expanding LDC trade, trade

81 WTO, “Singapore Ministerial Declaration,” reprinted

in Focus, No. 15, Jan. 1997, pp. 7-10.

82 The abbreviation “LDC” has also been widely

employed for “less-developed country” meaning a developing country as distinct from a developed country. In some

cases, the abbreviation “LLDC” has at times been used to

distinguish the 48 LLDC least-developed countries designated by the United Nations from other developing countries.

promotion efforts and support services, and communication and other technological assistance. The WTO

drew up a list of leading products exported by LDCs to

assist with market-access initiatives. On September

25-26, 1997, prior to the HLM, a Joint WTO-UNCTAD Symposium on Trade-Related Issues Affecting

Least-Developed Countries was held in Geneva to

gather the views of nongovernmental organizations

(NGOs) concerning building capacity to trade and encouraging investment in the LDCs.83

Agenda

The HLM agenda included initiatives to improve

market access for LDCs, country-specific roundtables,

and thematic roundtables. The country roundtables featured 12 LDCs that had completed their national needs

assessments. These countries were Bangladesh, Chad,

Djibouti, Guinea, Haiti, Madagascar, Mali, Nepal, Tanzania, Uganda, Vanuatu, and Zambia. The country

roundtables were intended to identify actions that the

LDCs (individually or regionally) and aid agencies can

take to overcome supply-side constraints to increased

participation by LDCs in the multilateral trading system and world trade.

The thematic roundtables focused on two subjects:

(1) building the capacity to trade in least-developed

countries and (2) encouraging investment in least-developed countries. Their goal was to identify actions

that the LDCs (individually or regionally) and aid

agencies can take to promote private domestic and foreign direct investment in the tradeable goods and services sectors of LDC economies.

Outcome

Trade Ministers from 38 LDCs participated in the

HLM along with the six intergovernmental agencies

and delegates from other WTO and UNCTAD member

governments. Announcements of existing or improved

preferential market-access measures for LDCs were

made by 19 developed and developing countries. These

participants included Australia, Bulgaria, Canada,

Egypt, the EU, Hungary, India, Japan, Korea, Malaysia, Mauritius, Morocco, Norway, Singapore, South

Africa, Switzerland, Thailand, Turkey, and the United

States. In addition, Hong Kong (China) said it will donate $1.25 million to the WTO trust fund for technical

assistance.84 The announcements of improved market

access are to apply for the most part from the beginning of 1998. According to press reports, major

83 WTO, “WTO, UNCTAD Get NGO Inputs,” Focus,

No. 23, Oct. 1997, p. 8. 84 WTO, “Inter-Agency Trade Assistance Programme

Launched for Least-Developed Countries,” PRESS/83, 

Oct. 30, 1997.
27

announcements included the following: (1) the EU announced its extension of duty-free access under the

Lomé Convention to LDCs that do not belong to the

group of African, Caribbean, and Pacific (ACP) countries—the former colonies of EU member states—that

are the original beneficiaries of the convention’s preferences; (2) the United States announced that it had

added 1,743 duty-free tariff lines that will apply solely

to LDCs under its Generalized System of Preferences

(GSP) program;85 (3) Norway announced it would provide zero duty treatment for most agricultural and industrial products including textiles from LDCs beginning in 1998; and (4) Canada said it would remove all

duties below 2 percent ad valorem on products from

LDCs as well as accelerate tariff reductions on others.

A number of emerging economies, including

Egypt, Korea, Morocco, Thailand, and Turkey, announced more modest initiatives. Egypt said it would

reduce duties by 10 to 15 percent on roughly 100 product lines. India said it would grant preferential access

under 574 tariff lines, as well as remove quantitative

restrictions applicable under 180 tariff lines, for LDCs.

Indonesia and Malaysia announced they are working

on a tariff-elimination package for the LDCs. Korea

said it would introduce a GSP program. Morocco said

it would grant duty-free access and exemptions from

other charges to less-developed African countries in

early 1998. Singapore said it will maintain zero-rate

tariff duties on 107 products aimed at LDCs. Commitments to cut or eliminate tariffs or other plans aimed at

products from LDCs were also made by Chile, Hungary, Mauritius, and others.

Although pledges to increase market access for

products from the LDCs were praised, most participants recognized that market-access commitments are

not alone sufficient. Rather, a capacity is needed within

the LDCs to produce a broader range of goods, to increase exports of value-added goods, and to institute

reforms that establish sound financial institutions, policies, and practices. Strengthened infrastructure for

transport and telecommunications networks is also required.86

In this respect, the aim of the October 1997 HLM

was to begin a process that is to be continued through

85 This change to the GSP program was accomplished in

1997. For further detail, see section on GSP in ch. 5 of this

report.

86 Frances Williams, “Poor Nations Win Trade Concessions,” Financial Times, Oct. 28, 1997, p. 5; John Zarocostas, “Rich, Emerging Nations Vow More Market Access,”

Journal of Commerce, Oct. 28, 1997, p. 4A; John Zarocostas, “Poor Nations Praise Trade Progress but Ask Developed

Countries for More,” Journal of Commerce, Oct. 29, 1997,

p. 3A.

recognized development channels, where technical assistance resources and mechanisms for coordination already exist, such as the consultative groups and ongoing development roundtables on LDCs within the

World Bank and UNDP. LDCs that were not reviewed

at or did not complete an individual needs assessment

in time for the HLM can then be reviewed through

these development channels as part of the integrated

framework process. A group of 22 additional LDCs

have asked to participate since the HLM, bringing to

34 the number of countries benefiting from the program.87 The six intergovernmental agencies are to review the needs assessments of these countries by

March 15, 1998, following which these agencies will

develop an integrated package of technical assistance

activities for these LDCs. Bilateral donors for each

LDC are to be integrated fully into this process as certain donors often have special experience in assistance

to particular countries, such as the EU assisting LDCs

that were once EU member-state colonies or dependencies. The WTO Secretariat is pursuing discussions with

the other intergovernmental agencies involved on the

establishment of a follow-up mechanism to the HLM.

The WTO Director-General will prepare a report of the

outcome of the HLM for the WTO Ministerial conference in May 1998.88

A second element in the ongoing HLM process is

to expand the focus of consultative groups and LDC

development roundtables within the integrated technical-assistance framework to include investment considerations. A third element is likely to be ensuring a major emphasis on effective liberalization, institutionbuilding, and improving LDC management skills for

an expanded role in international trade and investment

activities.

Select WTO Committee Activity

The World Trade Organization provides a permanent forum for Member governments to address their

multilateral trade relations as well as facilitate the implementation of the trade agreements negotiated during

the Uruguay Round, including its so-called built-in

agenda of future negotiations. The highest authority in

the WTO structure is the Ministerial conference, which

is composed of representatives of all WTO Members

and is required to meet at the Ministerial level at least

every two years. The General Council is the highest

authority when a Ministerial conference is not in

87 WTO, “Follow-up to the High Level Meeting: 22

More LDCs to Benefit from the Progamme,” Focus, No. 26,

Jan. 1998, p. 8. 88 WTO, “Inter-Agency Trade Assistance Programme

Launched for Least-Developed Countries,” PRESS/83, 

Oct. 30, 1997.
28

session, and thus directs the daily work of the WTO.

The General Council also convenes in the following

forms when carrying out tasks assigned to those areas:

 Dispute Settlement Body (DSB)

 DSB Appellate Body

 Trade Policy Review Body (TPRB)

Three subsidiary councils covering the WTO multilateral agreements answer to the General Council:

 Council for Trade in Goods (CTG)

 Council for Trade in Services (GATS Council)

 Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council)

General Council89

During 1997, the General Council met eight times

and discussed items put forward for its consideration,

including observer status for intergovernmental organizations, various waivers of obligations for requesting

Members, particular trade policy actions by certain

Members, accessions, as well as matters internal to the

WTO. The General Council agreed to regularize observer status for intergovernmental organizations that

previously was granted on an ad hoc basis. The General Council appointed officers for 1997 to the various

council and committee chairs, as well as to the three

Working Groups (on Trade and Competition, Investment, and Transparency in Government Procurement)

that were established by the Singapore Ministerial Declaration in December 1996. The General Council extended for one year the Working Party established under the Council for Trade in Goods to conduct the review of the Agreement on Preshipment Inspection.

In 1997, the General Council acted on requests for

waivers from different Members for various reasons,

including waivers of obligations regarding nomenclature changes to the Harmonized System (HS),90

89 WTO, General Council, “General Council - Annual

Report,” WT/GC/10, Jan. 7, 1998; available through the

WTO Document Dissemination Facility (DDF) found at

Internet address http://www.wto.org/wto/ddf/. For the full

reports of the WTO bodies mentioned in this section, see

WTO, “Annual Reports (1997) - Volume I,” and “Annual

Reports (1997) - Volume II,” WT/L/256, Jan. 21, 1998, retrieved from the DDF Jan. 29, 1998.

90 Waivers to change HS tariff classifications were

granted in 1997 to Bangladesh, Bolivia, Nicaragua, Sri Lanka, and Zambia.

renegotiation of national schedules,91 agricultural export subsidy commitments,92 as well as preferential

treatment for developing countries under national import programs. It took note of four Members acceding

to the WTO in 1997, and considered items concerning

other countries in the process of accession. Thirty accession working parties were outstanding at the end of

1997. (See table 2-1 for WTO membership in 1997 and

table 2-2 for WTO accession working parties in 1997.)

The General Council agreed to delete from the WTO

Agreement (Annex 4) the International Dairy Agreement and the International Bovine Meat Agreement,

following the termination of both at the end of 1997.

(For further details, see section in this chapter on “Plurilateral Agreements.”) The General Council also

heard from Members regarding phaseout of India’s balance-of-payments restrictions under GATT Article

XVIII:B, criticism regarding Korean anti-import actions (so-called “frugality” campaign), and complaints

concerning Brazil’s import financing restrictions.

Finally, the General Council considered matters relating to the current term of service for WTO Deputy

Directors-General, conditions of service for other

WTO staff, the budget, and acceptance of the symbol

used at the first WTO Ministerial conference as a logo

for the WTO. In July 1997, the WTO General Council

scheduled the second full WTO Ministerial meeting for

May 18-20, 1998, in Geneva, Switzerland. The conference will be followed by a one-day meeting to commemorate the 50th anniversary of the multilateral trading system.

Council for Trade in Goods93

During 1997, the CTG met 14 times. The CTG appointed officers and heard recommendations on various rules of procedure and the status of notifications.

The CTG opened discussions on trade facilitation and

on the first major review of the Agreement on Textiles

and Clothing as well as referred notification of freetrade agreements to the Committee on Regional Trade

Agreements, among other actions. The CTG also heard

other business regarding Members’ bilateral trade practices.

Trade Facilitation.—Based on a proposal by the

EU, the December 1996 Singapore Ministerial Decla91 Senegal and Zambia.

92 A waiver from its agricultural export subsidy obligations was granted in 1997 to Hungary following negotiations

with Argentina, Australia, New Zealand, and the United

States.

93 WTO, Council for Trade in Goods, “Report (1997) of

the Council for Trade in Goods,” G/L/213, Dec. 9, 1997.
29

Table 2-1

WTO membership in 1997

Angola Germany Niger

Antigua and Barbuda Ghana Nigeria

Argentina Greece Norway

Australia Grenada Pakistan

Austria Guatemala Panama

Bahrain Guinea Papua New Guinea

Bangladesh Guinea-Bissau Paraguay

Barbados Guyana Peru

Belgium Haiti Philippines

Belize Honduras Poland

Benin Hong Kong, China Portugal

Bolivia Hungary Qatar

Botswana Iceland Romania

Brazil India Rwanda

Brunei Darussalam Indonesia Saint Kitts and Nevis

Bulgaria Ireland Saint Lucia

Burkina Faso Israel Saint Vincent and the Grenadines

Burundi Italy Senegal

Cameroon Jamaica Sierra Leone

Canada Japan Singapore

Central African Republic Kenya Slovak Republic

Chad Korea Slovenia

Chile Kuwait Solomon Islands

Colombia Lesotho South Africa

Congo1 Liechtenstein Spain

Congo, Democratic Republic of2 Luxembourg Sri Lanka

Costa Rica Macau Suriname

Cote d’Ivoire Madagascar Swaziland

Cuba Malawi Sweden

Cyprus Malaysia Switzerland

Czech Republic Maldives Tanzania

Denmark Mali Thailand

Djibouti Malta Togo

Dominica Mauritania Trinidad and Tobago

Dominican Republic Mauritius Tunisia

Ecuador Mexico Turkey

Egypt Mongolia Uganda

El Salvador Morocco United Arab Emirates

European Union Mozambique United Kingdom

Fiji Myanmar (Burma) United States

Finland Namibia Uruguay

France Netherlands and N. Antilles Venezuela

Gabon New Zealand Zambia

Gambia Nicaragua Zimbabwe

1 Acceded as the Republic of Congo.

2 Acceded as Zaire, now the Democratic Republic of the Congo.

Source: WTO, “Members,” found at Internet address http://www.wto.org/wto/about/organsn6.htm, retrieved Feb. 13,

1998.

Table 2-2

WTO accession working parties in 19971

Albania Estonia Oman

Algeria Georgia Russian Federation

Andorra Jordan Saudi Arabia

Armenia Kazakhstan Seychelles

Azerbaijan Kyrgyz Republic Sudan

Belarus Latvia Tonga

Cambodia Lithuania Ukraine

China Macedonia Uzbekistan

Chinese Taipei (Taiwan) Moldova Vanuatu

Croatia Nepal Vietnam

1 Acceding countries have WTO observer status. In addition, Ethiopia and the Holy See (Vatican) have observer

status, but without the expectation of acceding to the WTO at this time.

Source: WTO, “Members,” found at Internet address http://www.wto.org/wto/about/organsn6.htm, retrieved Feb. 13,

1998.
30

ration called for the CTG to “undertake exploratory

and analytical work, drawing on the work of other relevant international organizations, on the simplification

of trade procedures in order to assess the scope for

WTO rules in this area.”94 In June 1997, the WTO

Secretariat presented a background note on work being

done on trade facilitation in other organizations. Discussions among Members during the second half of

1997 led to a proposal to hold a WTO symposium in

1998, to assess the scope for possible WTO rules in the

area of trade facilitation. Some delegations expressed

concern that the symposium might detract from efforts

on trade facilitation already under way in the WTO

Agreements on Rules of Origin and on Customs Valuation.95 The symposium was held March 9-10, 1998, to

help identify the main areas where traders face obstacles when moving goods across borders, providing a

direct interface between the practical level (traders)

and trade policy level (officials in capitals and at the

WTO in Geneva).96 The symposium sought to examine trade facilitation in a more comprehensive way,

although there is no agreement in the WTO about the

meaning of “trade facilitation,” despite the consensus

that the WTO’s work should not duplicate similar work

in other institutions.97

Review of the WTO Textiles Agreement.—Beginning in October 1997, the CTG heard from the Textiles

Monitoring Body (TMB) on the first major review of

the implementation of the WTO Agreement on Textiles

and Clothing (ATC) during the first stage of the integration process. Developing countries expressed extreme dissatisfaction with the summary of the four formal meetings devoted to the ATC review as well as any

recommendations or conclusions reached at those

meetings. These countries claimed that importing

countries were ignoring provisions of the ATC and

thereby impairing the balance of rights and obligations

under the agreement. They accused the importing

94 WTO, Singapore Ministerial Declaration, Singapore,

Dec. 13, 1996, par. 21.

95 U.S. Department of State telegram, “WTO Council

for Trade in Goods Meeting on November 19,” message

reference No. 8104, prepared by U.S. Mission, Geneva, Nov.

21, 1997.

96 WTO, “Symposium Set on Trade Facilitation,” Focus,

No. 26, Jan. 1998, p. 8.

97 U.S. Department of State telegram, “OECD Trade

Committee Grapples with How to Keep Liberalization on

Track,” message reference No. 004947, prepared by the U.S.

Embassy, Paris, Mar. 3, 1998; and WTO, Council for Trade

in Goods, “Statement by H. E. Mr. R. Saborio Soto, Chairman of the Council for Trade in Goods, under Item I (Trade

Facilitation),” G/L/226, Mar. 18, 1998, found at Internet

address http://www.wto.org/wto/goods/chair.htm, retrieved

Apr. 2, 1998.

countries of concentrating on a narrow, legalistic definition of ATC obligations that refused to deal with the

concerns of the developing countries. The developing

countries insisted that the review of the ATC could not

be considered closed and indicated that the issue would

reappear at the Ministerial conference. The importing

countries insisted that they met their ATC obligations

and that the exporting countries were attempting to renegotiate the agreement. The importing countries said

that the first-stage review was complete regardless of

whether or not participants could agree on a summary

of deliberations or conclusions and recommendations.98

Council for Trade in Services99

During 1997, the GATS Council considered observer status for intergovernmental organizations,

heard the report from the negotiating group following

conclusion of the Agreement on Basic Telecommunications and verified the commitment schedules, discussed the possible establishment of a WTO standing

committee on telecommunications, and received various notifications—notably those regarding modifications to services regulations affecting specific commitments.

The GATS Council discussed elements of the work

programs underway and adopted proposals from the

standing subsidiary bodies that report to it—the Committee on Financial Services, Committee on Specific

Commitments, Working Party on GATS Rules, and

Working Party on Professional Services. The GATS

Council advanced the deadline for the negotiations on

financial services from December 30 to December 12,

1997, on recommendation from the Committee on Financial Services. The GATS Council agreed in principle to the proposal from the Committee on Specific

Commitments to establish a system of electronically

consolidated and updated schedules of commitments.

In May 1997, the GATS Council adopted Guidelines for the Recognition of Qualifications in the accountancy sector proposed by the Working Party on

Professional Services. These nonbinding guidelines are

intended to be used by governments seeking to negotiate agreements that confer mutual recognition of professional qualifications. The thrust of the guidelines is

to allow parties to focus on overcoming bilateral differ98 U.S. Department of State telegram, “WTO Council

for Trade in Goods Meeting on November 19,” message

reference No. 8580, prepared by U.S. Mission, Geneva, 

Dec. 11, 1997.

99 WTO, Council for Trade in Services, “Council for

Trade in Services - Report to the General Council on Activities during 1997,” S/C/5, Nov. 28, 1997.
31

ences in education, examination standards, experience

requirements, regulatory influence, as well as other

matters, following which additional parties may negotiate their own accession to or the extension of the bilateral agreement to their own situations and thereby extend mutual recognition more broadly.

In November 1997, the GATS Council also

adopted a decision proposed by the Working Party on

GATS Rules to extend negotiations regarding emergency safeguard measures for services to June 30, 1999. A

number of delegates emphasized the need for coordination with the Working Group on Transparency in Government Procurement, established by the Singapore

Ministerial Conference in December 1996, where negotiations over government procurement of services is

concerned (Article XIII). The GATS Council also approved the questionnaire on the exchange of information set out at the Singapore conference to help prepare

for the services negotiations set out as part of the Uruguay Round built-in agenda. The GATS Council largely concluded that 1997 was too early to begin consideration of a work program regarding the next services

round in 2000 (Article XIX).

Also during 1997, the GATS Council heard complaints from the EU against Brazil alleging violation of

standstill commitments concerning freight discrimination in the area of maritime transport services.

Council for Trade-Related Aspects of

Intellectual Property Rights100

During 1997, the TRIPS Council considered various notifications, reviews of national legislation regarding intellectual property rights (IPR), implementation of TRIPS obligations under various articles, technical cooperation, observer status for intergovernmental organizations, dispute developments elsewhere in

the WTO concerning IPR, and preliminary work on negotiations over geographical indications.

Notifications largely concerned national laws, regulations, and IPR contact points, as well as exceptions

to MFN treatment and responses to the IPR enforcement checklist. The TRIPS Council also received notifications on contact points, as well as information regarding technical cooperation activities that developedcountry Members (for the most part) might afford to

developing-country Members.

100 WTO, Council for Trade-Related Aspects of Intellectual Property Rights, “Annual Report (1997) of the Council for TRIPS,” IP/C/9, Nov. 28, 1997.

As a followup to the November 1996 review of

national IPR legislation, the TRIPS Council focused on

copyrights, trademarks, geographical indications, and

industrial designs. In May 1997, the TRIPS Council

began consideration of forthcoming reviews regarding

patents, integrated circuit designs (topographies),

protection of undisclosed information, and control of

anticompetitive practices in contracts. In November

1997, the TRIPS Council also reviewed IPR enforcement and considered so-called mailbox notifications

under TRIPS Article 70.8 and 70.9 that require Members to provide a contact point with which patent holders of rights concerning agricultural chemicals and

pharmaceuticals may register in countries where no applicable patent law yet exists.

The council granted observer status in the TRIPS

Council to organizations that received observer status

from the General Council, and agreed to consult on

other requests not yet considered. The TRIPS Council

also noted that Bulgaria, Mongolia, and Panama—recently acceded to the WTO—would apply the TRIPS

Agreement without a transition period.

In 1997, the TRIPS Council heard developments

relating to IPR that were later brought to the WTO Dispute Settlement Body. In April 1997, the EU requested

consultations with India regarding patent protection for

agricultural chemical and pharmaceutical products. In

May 1997, the United States requested consultations

with Ireland regarding measures affecting the grant of

copyright and related (so-called neighboring) rights;

and, also in May 1997, the United States requested

consultations with Denmark and Sweden regarding the

enforcement of IPR. In September 1997, the dispute

panel released its report regarding a U.S. complaint

against India concerning patent protection for agricultural chemical and pharmaceutical products (Article

70.8 and 70.9 mailbox provisions).

The TRIPS Council also undertook informal consultations over how to proceed with negotiations on

geographical indications, called for under TRIPS Article 24.2 as part of the Uruguay Round “built-in”

agenda.

Dispute Settlement101

During 1997, the number of WTO dispute settlement cases surpassed 100, considered to be an indicator that WTO members actively support the rules of the

multilateral trading system and have confidence in the

integrated and more automatic dispute-settlement

mechanism that came into effect in 1995 under the

101 WTO, “Overview of the State-of-Play of WTO 

Disputes,” found at Internet address 

http://www.wto.org/wto/dispute/bulletin.htm, dated Jan. 8,

1998, retrieved Jan. 9, 1998.
32

WTO. By the start of 1998, the WTO had received 115

requests for consultations on 80 distinct matters. Consultations represent the opening stage of any disputesettlement case, which upon request of the complainant

proceeds automatically to the second stage of establishing a dispute panel if consultations fail to resolve the

contested issue. Following completion of a panel report, either the complainant or respondent may request

the WTO Appellate Body to review issues of law and

legal interpretation in the report. (For further details,

see table 2-3 for a summary of WTO dispute settlement

stages.) Of the disputes since the WTO began on January 1, 1995, that have concluded with a final panel report, nine have been appealed. Seven Appellate Reports have been adopted, while two reports on different

subjects are pending. Table 2-4 on Dispute Panel activity and table 2-5 on Appellate Body activity provide a

brief summary of cases active in 1997.102

102 For the most timely and authoritative source regarding WTO disputes see “Overview of the State-of-Play of

WTO Disputes” at the WTO Internet website

http://www.wto.org/wto/dispute/bulletin.htm.

Trade Policy Review Body103

During 1997, the Trade Policy Review Body reviewed the trade policies of the following Members—

Fiji, Cyprus, Paraguay, Benin, Chile, Mexico, the EU,

and Malaysia. The WTO Trade Policy Review Mechanism, which the TPRB oversees, is designed to facilitate the smooth functioning of the multilateral trade

system by carrying out surveillance of members’ national trade policies and thereby enhancing the transparency of these policies.

103 WTO, Trade Policy Review Body, “Trade Policy

Review Mechanism - Report of the Trade Policy Review

Body for 1997,” WT/TPR/41, Nov. 28, 1997; and WTO,

“Press Releases with Summary Observations,” found at Internet address http://www.wto.org/wto/reviews/tpr.htm, dated

Dec. 9, 1997, retrieved Jan. 13, 1998.

Table 2-3

Summary of dispute settlement stages

Timeline

Period Stage Action

60 days Consult Consultations, mediation.

45 days Panel Panel set up and panelists appointed. Panel

must be established following second panel

request.

180 days Exam Panel examination and final report issued to

parties.

21 days Circulation Final panel report circulated to all WTO Members.

60 days Adoption Dispute Settlement Body adopts panel report or

panel report appealed.

60-90 days Appeal Appellate Body examination.

30 days Adoption Dispute Settlement Body adopts appeals report.

Approximate total time elapsed:

12 months to panel report adoption.

15 months to Appellate Body report adoption.

All disputants are encouraged to consult and settle their differences before reaching WTO dispute settlement procedures. Accordingly, some given times are maximums, others minimums, some binding, some not, making possible

only an approximate dispute schedule without referring to a particular dispute’s terms of reference and its individual

dispute calendar.

Source: WTO, “Settling Disputes - How Long to Settle a Dispute?,” found at Internet address 

http://www.wto.org/wto/about/dispute1.htm, dated Feb. 6, 1998, retrieved Apr. 20, 1998; and WTO, “Settling 

Disputes - The Panel Process,” found at Internet address http://www.wto.org/wto/about/dispute2.htm, dated 

Feb. 6, 1998, retrieved Apr. 20, 1998.
33

Table 2-4

Dispute Panel activity

Complainant Respondent Complaint Outcome

United States Argentina Certain measures

affecting imports of

footwear, textiles,

apparel, and other items

The United States brought a complaint against

Argentina regarding imposition of specific duties on

these items in excess of the bound rate. The United

States alleges that these measures violate GATT

Articles II, VII, VIII, and X, as well as provisions of

the TBT Agreement, Import Licensing Agreement,

and Textiles Agreement. Following U.S. request, a

dispute panel was established on February 25,

1997. The panel circulated its report on November

25, 1997, that found that the minimum specific

duties imposed by Argentina on textiles and apparel

are inconsistent with the requirements of Article II of

GATT 1994 and that the imposed statistical tax of 3

percent ad valorem is inconsistent with Article VIII.

On January 21, 1998, Argentina notified its intention

to appeal.

United States EU Customs classification of

certain computer

equipment

The United States brought a complaint against the

EU, as well as separately against Ireland and the

United Kingdom, regarding the reclassification for

tariff purposes of certain Local Area Network (LAN)

adapter equipment and personal computers with

multimedia capability. The United States alleges

that these measures violate GATT Article II.

Following U.S. request, a dispute panel was

established on February 25, 1997, and the

complaints against Ireland and the United Kingdom

were incorporated on March 20, 1997.

Brazil EU Measures affecting

importation of certain

poultry products

Brazil brought a complaint against the EU that the

regime for the import of certain poultry products and

the implementation of the EU tariff-rate quota for

these products might be inconsistent with GATT

Articles X and XXVII, as well as provisions of the

WTO Agreement on Import Licensing Procedures.

Following Brazil’s request, a dispute panel was

established on July 30, 1997.

United States Japan Measures affecting

consumer photographic

film and paper

The United States brought a complaint against

Japan regarding laws, regulations, and

requirements affecting the distribution, offering for

sale, and internal sale of imported consumer

photographic film and paper. The United States

alleges that imported film and paper is treated less

favorably by these means in violation of GATT

Articles III and X, and also alleges the nonviolation

claim that these measures nullify or impair benefits

accruing to the United States. Following U.S.

requests, a dispute panel was established on

October 16, 1996. The panel circulated its

confidential interim report to the parties involved on

December 5, 1997.

Table continued on next page
34

Table 2-4—Continued

Dispute Panel activity

Complainant Respondent Complaint Outcome

United States Japan Measures affecting

consumer photographic

film and

paper—Continued

Press reports indicate that the panel rejected on

various grounds the U.S. arguments citing 21

separate measures that nullify the benefits of tariff

concessions that Japan granted in the Kennedy

(1963-67), Tokyo (1973-79), and Uruguay (1986-93)

Rounds of trade negotiation. The panel reportedly

rejected some of these measures on procedural

grounds, and found that other measures were never

applied, were voluntary, or did not adversely affect

the competitive conditions for foreign products. In

addition, the panel considered that the United

States should have known of the preexistence of

some of these measures and so could not claim that

expected benefits had been nullified. For further

detail, see chapter 4 on Japan in this and previous

reports.

EU United States The Cuban Liberty and

Democratic Solidarity

Act (“Helms/Burton” law)

The EU brought a complaint against the United

States regarding the Cuban Liberty and Democratic

Solidarity Act of 1996 (commonly known as the

“Helms/Burton” law). The EU alleges that U.S.

restrictions under the act on goods of Cuban origin,

as well as the possible exclusion of non-U.S.

nationals from U.S. territory, violate GATT Articles I,

III, V, XI, and XIII as well as GATS Articles I, III, VI,

XVI, and XVII, and may also nullify or impair

benefits accruing to the EU. Following EU requests,

a dispute panel was established on November 20,

1996. The panel suspended its work following an

EU request to do so on April 25, 1997. For further

details, see chapter 4 on the European Union in this

and previous reports.

India, Malaysia,

Pakistan, and

Thailand

United States Import prohibition of

certain shrimp and

shrimp products

India, Malaysia, Pakistan, and Thailand brought a

complaint against the United States regarding a ban

on the import of shrimp and shrimp products under

U.S. Public Law 101-62, section 609. These

complainants allege a nonviolation claim that these

measures nullify or impair benefits accruing to them.

Following requests by several complainants, a

dispute panel was established on February 25,

1997.

Mexico Guatemala Antidumping

investigation of imports

of Portland cement from

Mexico

Mexico brought a complaint against Guatemala

regarding an antidumping investigation begun on

imports of Portland cement from Mexico. Mexico

alleges that the investigation violates the

Antidumping Agreement, Articles 2, 3, 5, and 7.1.

Following Mexican request, a dispute panel was

established on March 20, 1997.

Canada Australia Measures affecting the

importation of salmon

Canada brought a complaint against Australia

regarding its prohibition of salmon imports based on

quarantine regulations. Canada alleges that the

prohibition is inconsistent with GATT Articles XI and

XIII, as well as the SPS Agreement. Following

Canadian request, a dispute panel was established

on April 10, 1997. For further details, see chapter 4

in this report on Canada.

Table continued on next page
35

Table 2-4—Continued

Dispute Panel activity

Complainant Respondent Complaint Outcome

EU, Japan, and

the United

States

Indonesia Certain measures

affecting the automobile

industry

The EU, Japan, and the United States brought

separate complaints against Indonesia regarding

duty and luxury tax exemption for imports of

“national vehicles” and their components. Japan

alleged that these measures violate GATT Articles I

and III, as well as provisions of the TRIMS and

Subsidies Agreements. Following Japanese

request, a dispute panel was established on June

12, 1997, incorporating all three complainants.

EU and the

United States

Korea Taxes on alcoholic

beverages

The EU and the United States brought separate

complaints against Korea regarding internal taxes

imposed on certain alcoholic beverages under its

Liquor Tax Law and Education Law. The EU and

the United States allege that these two laws appear

inconsistent with GATT Article III. Following an EU

request, a dispute panel was established on

October 16, 1997, incorporating the U.S. complaint

as well.

EU Argentina Measures affecting

textiles, clothing, and

footwear

The EU brought a complaint against Argentina

regarding imposition of specific duties on these

items in excess of the bound rate. The EU alleges

that these measures violate GATT Article II, as well

as provisions of the WTO Agreement on Textiles

and Clothing. Following an EU request, a dispute

panel was established on October 16, 1997.

EU India Patent protection for

agricultural chemical and

pharmaceutical products

The EU brought a complaint against India regarding

the absence of patent protection for agricultural

chemical and pharmaceutical products under the

WTO Agreement on Trade-Related Aspects of

Intellectual Property Rights (TRIPS Agreement).

The EU claims that India has failed to fulfill its

obligations under TRIPS Article 70 to provide a

“mailbox” notification mechanism for registering

patents for these products. Following an EU

request, a dispute panel was established on

October 16, 1997.

EU Chile Taxes on alcoholic

beverages

The EU brought a complaint against Chile alleging

Chile’s Special Sales Tax on spirits imposes a

higher tax on imported spirits than on a locally

brewed spirit (Pisco). The EU contends that this

differential treatment violates GATT Article III:2.

The EU requested a dispute panel, which was

established November 18, 1997.

United States India Quantitative restrictions

on imports of

agricultural, textile, and

industrial products

The United States brought a complaint against India

concerning quantitative restrictions on a large

number of agricultural, textile, and industrial

products which, the United States alleges, are

inconsistent with India’s obligations under GATT

Articles XI and XVIII, as well as provisions of the

Agriculture Agreement and Import Licensing

Agreement. The United States requested a dispute

panel, which was established November 18, 1997.

Table continued on next page
36

Table 2-4—Continued

Dispute Panel activity

Complainant Respondent Complaint Outcome

United States Japan Measures affecting

agricultural products

The United States brought a complaint against

Japan concerning its prohibition of imports of

agricultural products under quarantine provisions.

The United States alleges violations of GATT Article

XI, the Agriculture Agreement, the SPS Agreement,

as well as nullification and impairment of benefits.

The United States requested a dispute panel, which

was established on November 18, 1997.

New Zealand EU Measures affecting

butter products

New Zealand brought a complaint against the EU

regarding customs decisions that exclude certain

butter from New Zealand’s country-specific tariff

quota established under the EU’s WTO Schedule of

Commitments. New Zealand alleges violations of

GATT Articles II, X, and XI, as well as violations of

the TBT Agreement and the Import Licensing

Agreement. New Zealand requested a dispute

panel, which was established on November 18,

1997.

Source: WTO, “Overview of the State-of-Play of WTO Disputes,” found at Internet address

http://www.wto.org/wto/dispute/bulletin.htm, dated Mar. 16, 1998, retrieved Mar. 17, 1998.
37

Table 2-5

WTO Appellate Body activity

Complainant Respondent Complaint Outcome

United States Japan Taxes on alcoholic

beverages

The Appellate Body circulated its report modifying

the panel report on October 4, 1996, which was

adopted on November 1, 1996. The United States

applied for binding arbitration to determine the

reasonable period of time for implementation by

Japan of the Appellate Body recommendations.

The Arbitrator’s report, which was circulated

February 14, 1997, found the reasonable period for

implementation to be 15 months.

Costa Rica United States Restrictions on imports

of cotton and man-made

fiber underwear

Costa Rica brought a complaint against the United

States concerning restrictions on textile imports and

alleging violation of the WTO Agreement on Textiles

and Clothing (ATC). The panel circulated its report

in November 1996 that found U.S. restraints in

violation of the ATC. Costa Rica notified its decision

to appeal one aspect of the panel report on

November 11, 1996. The Appellate Body adopted

its report on February 25, 1997. The United States

notified the WTO Dispute Settlement Body (DSB)

that the measures in questions had expired March

27, 1997, in effect, complying with the

recommendations of both panel and appeals

reports.

Philippines Brazil Measures affecting

desiccated coconut

The Philippines brought a complaint against Brazil

alleging that countervailing duties applied to

Philippine exports of desiccated coconut were

inconsistent with GATT and WTO rules. The panel

circulated its report in October 1996 that found that

the rules cited were not applicable to the dispute.

The Philippines notified its decision to appeal

certain aspects of the panel report on December 16,

1996. The Appellate Body circulated its report

modifying the panel report on February 21, 1997,

which was adopted March 20, 1997.

India United States Measures affecting

imports of woven wool

shirts and blouses

India brought a complaint against the United States

alleging that transitional safeguard measures on

textile imports were in violation of the WTO ATC,

Articles 2, 6, and 8. The panel circulated its report

on January 6, 1997, that found that the U.S.

measure violated the ATC. India notified its

decision to appeal certain aspects of the panel

report on February 24, 1997. The Appellate Body

report was adopted May 23, 1997, upholding the

Panel report.

Table continued on next page
38

Table 2-5—Continued

WTO Appellate Body activity

Complainant Respondent Complaint Outcome

United States Canada Certain measures

concerning periodicals

The United States brought a complaint against

Canada alleging that measures prohibiting or

restricting the import of certain periodicals were

thought to violate the GATT Article III. The panel

circulated its report on March 14, 1997, that found

that the Canadian measures violate GATT rules.

Canada notified its decision to appeal certain issues

of law and interpretation of the panel report on April

29, 1997. The Appellate Body circulated its report

on June 30, 1997, which upheld the Panel report,

and was adopted on July 30, 1997. For further

detail, see chapter 4 on Canada in this and previous

reports.

Ecuador,

Guatemala,

Honduras,

Mexico, and the

United States

EU Regime for the

importation, sale, and

distribution of bananas

Ecuador, Guatemala, Honduras, Mexico, and the

United States brought a complaint against the

European Union (EU) that the EU regime for import,

sale, and distribution of bananas might be

inconsistent with GATT Articles I, II, III, X, XI, and

XIII, as well as provisions of the WTO Agreements

on Agriculture, Import Licensing, Trade-Related

Investment Measures (TRIMS), and the General

Agreement on Trade in Services (GATS). The

panel circulated its report on May 22, 1997, that

found that the EU measures violate GATT import

rules as well as licensing procedures. The panel

further found that the Lomé Convention waiver

waives the inconsistecy with GATT Article XIII, but

not the inconsistencies arising from the banana

licensing system. The EU notified its decision to

appeal certain issues of law and interpretation of the

panel report on June 11, 1997. The Appellate Body

circulated its report on September 9, 1997, which

upheld the panel report, and was adopted on

September 25, 1997. On November 17, 1997, the

complainants requested that the “reasonable period

of time” to implement the DSB recommendations be

determined through binding arbitration. On

December 1, 1997, the complainants formally

requested that the WTO appoint an arbitrator. The

EU and the United States presented their case to

the arbitrator on December 17, 1997. The arbitrator

circulated his report on January 7, 1998, finding the

reasonable period of time for implementation to be

the period from September 25, 1997, to January 1,

1999. For further detail, see chapter 4 on the

European Union in this and previous reports.

Table continued on next page
39

Table 2-5—Continued

WTO Appellate Body activity

Complainant Respondent Complaint Outcome

Canada and the

United States

EU Measures affecting meat

and meat products

(hormones)

Canada and the United States brought separate

complaints against the European Union regarding

measures affecting meat and meat products relating

to hormones. The United States claims that

measures under the EC Council directive prohibiting

the use in livestock farming of certain substances

having a hormonal action are inconsistent with

GATT Articles III or XI, as well as the WTO

Agreements on Agriculture, Sanitary and

Phytosanitary Measures (SPS), and Technical

Barriers to Trade (TBT). Canada made essentially

the same claims. The panel circulated its report on

August 18, 1997, that found that the EU ban on

imports of meat and meat products from cattle

treated with any of six specific hormones for growth

promotion purposes was inconsistent with the SPS

Agreement. The EU notified its decision to appeal

certain issues of law and interpretation of the panel

report on September 24, 1997. The Appellate Body

report was circulated January 16, 1998, and

adopted on February 13, 1998. For further detail,

see chapter 4 on the European Union in this and

previous reports.

United States India Patent protection for

agricultural chemical and

pharmaceutical products

The United States brought a complaint against India

regarding the absence of patent protection for

agricultural chemical and pharmaceutical products

under the WTO Agreement on Trade-Related

Aspects of Intellectual Property Rights (TRIPS

Agreement). The United States claims that India

has failed to fulfill its obligations under TRIPS

Articles 27, 65, and 70, to provide a “mailbox”

notification mechanism for registering patents for

these products. The panel circulated its report on

September 5, 1997, that found that India has not

complied with its obligations. India notified its

decision to appeal certain issues of law and

interpretation of the panel report on October 15,

1997. The Appellate Body circulated its report on

December 19, 1997, which upheld the panel report

with modifications regarding Articles 70.8 and 70.9.

The Appellate Body report was circulated December

19, 1997, and adopted on January 16, 1998.

Source: WTO, “Overview of the State-of-Play of WTO Disputes,” found at Internet address

http://www.wto.org/wto/dispute/bulletin.htm, dated Mar. 16, 1998, retrieved Mar. 17, 1998.
40

Other Committees

Committee on Trade and

Environment104

The Committee on Trade and Environment (CTE)

met three times105 during 1997 to continue its work

program set out in the April 1994 Marrakesh Ministerial Decision on Trade and Environment and reaffirmed

at the December 1996 Singapore Ministerial Conference. The committee addressed market access issues,

items related to links between multilateral environment

and trade agreements, and trade in services and the environment as well as inter- and nongovernmental organizations. In May 1997, the committee held a symposium with NGOs to exchange views relating to WTO

work on trade, the environment, and sustainable development. In September 1997, the committee exchanged

information and views with the secretariats of seven

multilateral environmental agreements and two environmental financial mechanisms. In 1997, the CTE

also extended observer status to several intergovernmental bodies—the United Nations Framework Convention on Biological Diversity, the Convention on International Trade in Endangered Species of Wild Flora

and Fauna (CITES), and the Latin American Economic

System.106

Committee on Trade and

Development107

In 1997, the Committee on Trade and Development, and especially its Subcommittee on Least-Developed Countries, devoted activity largely to preparations

and followup for the October 1997 High-Level Meeting on Integrated Initiatives for Least-Developed

Countries’ Trade Development. (For further detail, see

section on “High-Level Meeting on Least-Developed

Countries” in this chapter.) The committee also focused on other matters regarding the committee’s

Manual on Technical Cooperation and Training Activities and its Three-Year Plan for these activities.

104 WTO, Committee on Trade and Development, “Report (1997) of the Committee on Trade and Development,”

WT/COMTD/13, Nov. 21, 1997.

105 May 21-22, Sept. 22-24, and Nov. 24-26, 1997.

106 WTO, “WTO Committee on Trade and Environment

Adopts 1997 Report,” Trade and Environment Bulletin,

PRESS/TE 020, Dec. 3, 1997.

107 WTO, Committee on Trade and Environment, “Report (1997) of the Committee on Trade and Environment,”

WT/CTE/2, Nov. 26, 1997.

Committee on Regional Trade

Agreements108

In 1997, the Committee on Regional Trade Agreements made progress in examining both the “backlog”

of 32 agreements carried over from the GATT as well

as 13 newly notified regional trade agreements. Of the

45 regional trade agreements (RTAs) referred to the

committee since it was established by the General

Council in 1995, 37 have come from the Council for

Trade in Goods, 7 from the Council for Trade in Services, and 1 from the Committee on Trade and Development. To streamline the examination process, the

committee developed two sets of guidelines—in 1996,

a “Standard Format for Information on Regional Trade

Agreements;” and in 1997, a “Standard Format for Information on Economic Integration Agreements.” As

called for in its terms of reference, the committee continued consideration of the systemic implications of

RTAs. The committee is developing a checklist of issues arising out of examinations, discussions, and written submissions, and is considering approaches for

analyzing them, such as legal analysis of relevant

WTO provisions, comparisons of RTAs, and debate on

the context and economic aspects of RTAs.

During 1997, the committee received notifications

for bilateral free-trade agreements (FTAs) concerning

trade in goods under GATT Article XXIV between the

following sets of trading partners:

 Bulgaria and Czech Republic

 Bulgaria and Slovak Republic

 Canada and Chile

 Moldova and Romania

 Slovenia and Bulgaria

 Slovenia and Estonia

 Slovenia and Latvia

 Slovenia and Lithuania

 Slovenia and Macedonia

During 1997, the committee received notifications

for FTAs concerning trade in services under GATS Article V between the following trading partners:

 Australia and New Zealand

 Canada and Chile

In addition, the EU gave notification of an “interim

association agreement” between the EU and the Palestine Liberation Organization for the West Bank and

Gaza Strip.

108 WTO, Committee on Regional Trade Agreements,

“Report (1997) of the Committee on Regional Trade Agreements to the General Council,” WT/REG/3, Nov. 28, 1997.
41

Committee on Balance-of-Payments

Restrictions109

During 1997, the chairman of the Committee on

Balance-of-Payments Restrictions held consultations

with Bangladesh, Bulgaria, the Czech Republic, India,

Nigeria, Pakistan, the Slovak Republic, and Tunisia. Of

note was a proposal by India to phase out its balance of

payments (BOP) restrictions following a statement

from the IMF saying that Indian trade restrictions

based on BOP considerations were no longer justified.

India indicated to the General Council that negotiations

with its trading partners on a phaseout period may result in a 6-year plan to end BOP restrictions. Members

also agreed to a plan by Tunisia to phase out its BOP

restrictions by July 1, 2000. The Czech Republic reported that it had eliminated an import deposit scheme

in August 1997. BOP consultations with Nigeria, however, were suspended when some Members objected to

a proposed 8-year phaseout plan for import prohibitions. Bangladesh and Pakistan were reported to be facing serious BOP situations.110 Bulgaria lowered an import surcharge in July 1997 such that the committee

deemed Bulgaria in compliance with its WTO obligations. The Slovak Republic reinstituted an import surcharge in July 1997 that had been eliminated in January 1997 on BOP grounds.

New Issues

Ministers at the WTO Singapore Ministerial Conference in December 1996 established three working

groups to study and analyze the new issues regarding

trade and its relationship to competition policy, investment, and transparency in government procurement. In

April 1997, the General Council agreed on chairmen

for the groups. The General Council will determine after two years how the work of each body should proceed.

Working Group on the Interaction

between Trade and Competition

Policy111

In the Singapore Ministerial Declaration, Ministers

called upon the WTO Members to “establish a working

109 WTO, Committee on Balance-of-Payments Restrictions, “Report (1997) of the Committee on Balance-of-Payments Restrictions,” WT/BOP/R/37, Nov. 12, 1997.

110 WTO, “WTO Focus - BOP Consultations,” Focus, No. 24, Nov. 1997, p. 8.

111 WTO, Working Group on the Interaction between

Trade and Competition Policy, “Report (1997) to the General

Council,” WT/WGTCP/1, Nov. 19, 1997.

group to study issues raised by Members relating the

interaction between trade and competition policy, including anti-competitive practices, in order to identify

any areas that may merit further consideration in the

WTO framework.”112 The Working Group on the Interaction between Trade and Competition Policy held

its first meeting July 7-8, 1997, under the chairmanship

of Professor Frédéric Jenny of France. The group received 19 written contributions from participants at its

first meeting which, along with discussions, yielded a

checklist of issues for possible consideration. (See

table 2-6 for the checklist of issues regarding trade and

competition.) The Working Group held its second

meeting September 16-17, 1997. At its third meeting,

November 27-28, 1997, the group began discussions

concerning the various relationships between trade and

competition (first checklist topic) and an analysis of

existing instruments, standards, and activities regarding

trade and competition (second checklist topic).113

Working Group on the Relationship

between Trade and Investment114

The Singapore Ministerial Declaration called for

the establishment of “a working group to examine the

relationship between trade and investment.” The

Working Group on the Relationship between Trade and

Investment held its first meeting on June 2-3, 1997,

under the chairmanship of Ambassador Krirk-Krai Jirapaet of Thailand. The chairman summarized the discussions, yielding a checklist of issues for possible

consideration. (See table 2-7 for a checklist of issues

regarding trade and investment.)

At its second meeting on October 6-7, 1997, the

group heard papers suggesting that foreign direct investment promotes economic growth and development.

Organizations including the IMF, OECD, UNCTAD,

United Nations Industrial Organization, and World

Bank presented papers, as did country representatives

including Japan, Hong Kong (China), and

112 WTO, Singapore Ministerial Declaration, Singapore,

Dec. 13, 1996, par. 20.

113 U.S. Department of State telegram, “Working Group

on the Interaction between Trade and Competition Policy,”

message reference No. 7705, prepared by U.S. Mission, Geneva, Nov. 6, 1997; Bureau of National Affairs, “WTO

Working Group Begins Examination of Competition Rules,”

BNA International Trade Daily, Bureau for National Affairs,

Inc., article No. 43351002, Dec. 1, 1997.

114 WTO, Working Group on the Relationship between

Trade and Investment, “Report (1997) to the General Council,” WT/WGTI/1, Nov. 25, 1997.
42

Table 2-6

Checklist of issues regarding trade and competition

I. Relationship between the objectives, principles, concepts, scope and instruments of trade and competition policy. 

In addition:

— their relationship to development and economic growth.

II. Stocktaking and analysis of existing instruments, standards and activities regarding trade and competition policy,

including of experience with their application:

— national competition policies, laws and instruments as they relate to trade;

— existing WTO provisions;

— bilateral, regional, plurilateral and multilateral agreements and initiatives.

III. Interaction between trade and competition policy:

— the impact of anti-competitive practices of enterprises and associations on international trade;

— the impact of state monopolies, exclusive rights and regulatory policies on competition and international

trade;

— the relationship between the trade-related aspects of intellectual property rights and competition policy;

— the relationship between investment and competition policy;

— the impact of trade policy on competition.

IV. Identification of any areas that may merit further consideration in the WTO framework.

Source: WTO, “Trade and Competition Policy—Many Submissions Mark First Meeting,” Focus, No. 20, June-July

1997, p. 3.

Table 2-7

Checklist of issues regarding trade and investment

I. Implications of the relationship between trade and investment for development and economic growth, including:

— economic parameters relating to macroeconomic stability, such as domestic savings, fiscal position 

and the balance of payments;

— industrialization, privatization, employment, income and wealth distribution, competitiveness, transfer 

of technology and managerial skills;

— domestic conditions of competition and market structures.

II. The economic relationship between trade and investment:

— the degree of correlation between trade and investment flows;

— the determinants of the relationship between trade and investment;

— the impact of business strategies, practices and decision-making on trade and investment, including

through case studies;

— the relationship between the mobility of capital and the mobility of labor;

— the impact of trade policies and measures on investment flows, including the effect of the growing number

of bilateral and regional arrangements;

— the impact of investment policies and measures on trade;

— country experiences regarding national investment policies, including investment incentives and

disincentives;

— the relationship between foreign investment and competition policy.

III. Stocktaking and analysis of existing international instruments and activities regarding trade and investment:

— existing WTO provisions;

— bilateral, regional, plurilateral and multilateral agreements and initiatives;

— implications for trade and investment flows of existing international instruments.

IV. On the basis of the work above:

— identification of common features and differences, including overlaps and possible conflicts, as well as

possible gaps in existing international instruments;

— advantages and disadvantages of entering into bilateral, regional and multilateral rules on investment,

including from a development perspective;

— the rights and obligations of home and host countries and of investors and host countries;

— the relationship between existing and possible future international cooperation on investment policy 

and existing and possible future international cooperation on competition policy.

Source: WTO, “Trade and Investment—the Growing Impact of Investment on Trade,” Focus, No. 20, June-July 1997,

p. 2.
43

Poland. The WTO Secretariat presented a survey of

current thinking on the economic relation between

trade and investment, and will prepare an overview of

issues covered in existing bilateral, regional, and plurilateral investment agreements.115

At its third meeting on December 8, 1997, the

group looked at implications of the relationship between trade and investment, growth, and development.

The group also began its next phase to examine existing international investment instruments and activities

regarding trade and investment. Topics suggested for

consideration included the definition of investment, investment incentives, performance requirements, the

role of regional trade agreements, the effect of trade

measures on foreign direct investment, and determinants of investment decisions by firms.116

Working Group on Transparency in

Government Procurement117

The Singapore Ministerial Declaration called for

the establishment of a “working group to conduct a

study on transparency in government procurement

practices, taking into account national policies, and,

based on this study, to develop elements for inclusion

in an appropriate agreement.”118 The Working Group

on Transparency in Government Procurement held its

first meeting May 23, 1997, under the chairmanship of

Ambassador Werner Corrales Leal of Venezuela. At the

first meeting, the group heard from the United Nations

Commission on International Trade Law and the World

Bank about their work in the area of government procurement.

At its second meeting July 21, 1997, the group

identified the following aspects of “transparency” for

future study:

 access to procurement laws,

 information on supplier qualifications,

115 WTO, “News Briefs--Trade and Investment,” Focus, No. 23, Oct. 1997, p. 4.

116 U.S. Department of State telegram, “Next Up: Study

Investment Agreements: WTO Trade and Investment Working Group Continues Work,” message reference No. 8553,

prepared by U.S. Mission, Geneva, Dec. 11, 1997.

117 WTO, Working Group on Transparency in Government Procurement, “Report (1997) to the General Council,”

WT/WGTGP/1, Nov. 19, 1997.

118 WTO, Singapore Ministerial Declaration, Singapore,

Dec. 13, 1996, par. 21.

 information on award criteria and decisions (including national preferences),

 adequate time limits for bid submission,

 procurement entities and threshold values that

are subject to transparency requirement,

 mechanisms for domestic review, and

 procedures for dispute settlement between governments if needed.

Canada and the United States presented papers

suggesting guiding principles that might be important

for transparency in government procurement, while the

EU outlined its procurement procedures and practices.

The group chairman called for all delegations to provide information on national procedures and practices.

The group held its third meeting November 3-4,

1997. The WTO Secretariat presented a paper comparing elements of transparency contained in existing international instruments of government procurement,

those in nonprocurement WTO agreements, as well as

offering information on procurement practices in individual WTO members drawn from a variety of sources.

Substantive discussions revealed differences over issues such as whether there should be a review or appeal mechanism in any agreement on transparency in

government procurement; whether transparency requires more than simple publication of government

procurement laws, regulations, opportunities, etc.; and

how dispute settlement should apply to obligations under a transparency agreement. The chairman suggested

he would prepare a checklist of issues to focus future

discussions.119

Multilateral Trade Agreements

Beyond the Marrakesh Protocol where national

schedules of commitments are lodged, the Council for

Trade in Goods oversees 12 separate multilateral trade

agreements that help comprise the General Agreement

on Tariffs and Trade 1994 (GATT 1994). A brief summary of activities follows on the committees and other

bodies that report to the CTG, based on annual committee reports issued largely before November 1997.

119 U.S. Department of State telegram, “Third Meeting

of the WTO Working Group on Transparency in Government

Procurement,” message reference No. 8247, prepared by

U.S. Mission, Geneva, Nov. 28, 1997.
44

Marrakesh Protocol Market-Access

Commitments120

The Committee on Market Access met five times

in 1997, focusing on the impact of changes to the Harmonized System (HS) that were introduced on January

1, 1996. However, the General Council has granted

successive waivers that have postponed the effect of a

number of these changes through April 30,

1998—changes such as duty rate consequences for the

goods concerned, where schedules of concessions provide for different treatment. At present, 38 members

have submitted these 1996 HS changes, 39 members

have been granted waivers from making these 1996 HS

changes, and an additional 4 members have waivers

through April 1998 regarding conversion of their preUruguay Round market-access schedules to the HS

system.

Agreement on Agriculture121

The Committee on Agriculture met four times in

1997 to review the progress of the Uruguay Round

agricultural reform program. Reviews focused on required export subsidy and domestic support notifications, the number of which received by the WTO increased from 193 in 1996 to 242 in 1997. Nonetheless,

the committee still considers compliance regarding notification unsatisfactory.

Agreement on the Application of Sanitary and Phytosanitary Measures122

The Committee on Sanitary and Phytosanitary

Measures met three times in 1997 to consider notifications of national sanitary and phytosanitary measures

and their regulatory frameworks. The committee also

considered the status of agricultural problems such as

foot-and-mouth disease, transmissible spongiform encephalopathies, and fruit-fly infestations. Notifications

were updated regarding national enquiry and notification authorities. The committee adopted a provisional

procedure to monitor the use of international standards,

as well as agreed on a procedure for conducting the

scheduled review of the implementation of the Agreement in 1998.

120 WTO, Committee on Market Access, “Report (1997)

of the Committee on Market Access,” G/L/215, Dec. 3,

1997.

121 WTO, Committee on Agriculture, “Committee on

Agriculture: General Council Overview of WTO Activities

(1997),” G/L/211, Nov. 24, 1997.

122 WTO, Committee on Sanitary and Phytosanitary

Measures, “Report (1997) of the Committee on Sanitary and

Phytosanitary Measures,” G/L/197, Oct. 27, 1997.

Agreement on Textiles and

Clothing123

The Textiles Monitoring Body (TMB) met 19

times in 1997. In July 1997, it adopted a comprehensive report on the first stage integration under the

Agreement on Textiles and Clothing (ATC). (For further details, see “Review of the WTO Textiles Agreement” under the “Council for Trade in Goods” section

in this chapter.) The TMB also reviewed notifications

regarding the quantitative restrictions carried over from

the Multifiber Arrangement (MFA), second stage of

ATC integration of products into GATT 1994, early integration of products and elimination of non-MFA restrictions, as well as other arrangements and communications. The TMB reviewed notifications from several Members concerning consultations held over transitional safeguard measures taken under the Agreement.

Agreement on Technical Barriers to

Trade124

The Committee on Technical Barriers to Trade

(TBT) met four times in 1997 to review notification of

laws and regulations concerning technical barriers to

trade, and to carry out the Second Annual Review of

the implementation of the Agreement on Technical

Barriers to Trade and the Code of Good Practice as

well as the First Triennial Review of the operation of

the Agreement. No amendment to the text of the TBT

resulted from the triennial review. However, the committee adopted a number of decisions, recommendations, and arrangements, with a view toward improving

the operation and implementing the Agreement, and to

frame future discussions in the committee.125 A Technical Group was established to study certain guides

produced by the International Standards Organization

(ISO) and International Electrotechnical Commission.

Agreement on Trade-Related

Investment Measures126

The Committee on Trade-Related Investment Measures met twice in 1997 to examine notifications of

123 WTO, Textiles Monitoring Body, “Report (1997) of

the Textiles Monitoring Body,” G/L/206, Nov. 18, 1997.

124 WTO, Committee on Technical Barriers to Trade,

“Report (1997) of the Committee on Technical Barriers to

Trade,” G/L/207, Nov. 19, 1997.

125 WTO, Committee on Technical Barriers to Trade,

“First Triennial Review of the Operation and Implication of

the Agreement on Technical Barriers to Trade,” G/TBT/5,

Nov. 18, 1997.

126 WTO, Committee on Trade-Related Investment

Measures, “Report (1997) of the Committee on Trade-Related Investment Measures,” G/L/193, Oct. 15, 1997.
45

trade-related investment measures in place that are inconsistent with the Agreement. Since March 31, 1995,

24 countries have submitted notifications of such measures. An additional 11 countries have volunteered notifications that they maintain no investment measures

inconsistent with the Agreement.

Agreement on Antidumping

Measures127

The Committee on Anti-Dumping Practices held

two regular meetings in 1997 to review notifications of

domestic antidumping (AD) laws and regulations. The

committee concluded that 55 members had notified

their AD legislation, 22 had notified that they have no

AD legislation, and that 40 members, roughly 34 percent, had failed to notify by October 1997.128 Members are also required to submit semiannual reports on

AD actions.129 The committee concluded in this regard that 23 members had notified their semiannual

AD actions for second half 1996, 30 members had notified that no AD actions were taken during that period,

and 64 members or roughly 55 percent had failed to

notify. For notification of semiannual AD actions taken

in first half 1997, 22 members had notified actions, 23

members had notified no actions, and 72 members,

roughly 62 percent, had failed to notify by October

1997.

127 WTO, Committee on Anti-Dumping Practices, “Report (1997) of the Committee on Anti-Dumping Practices,”

G/L/204, Nov. 6, 1997.

128 Although there were 132 WTO members at the end

of 1997, the total number of notifications may number only

117 when the Commission for the European Communities

(EC) submits a single notification for the 15 member countries of the European Union (EU-15). Although individual

EU member countries are WTO members in their own right,

the EC Commission exercises sole responsibility for EU

member countries regarding matters involving trade in

goods and joint responsibility with EU member countries

regarding other matters such as trade in services or intellectual property rights.

129 The notifications to the WTO Antidumping and Subsidies Committees have been available to the public since

July 1996 through the database dissemination facility found

at the WTO Internet address http://www.wto.org. Prior to the

WTO, the GATT Antidumping and Subsidies Agreements

required similar notifications until these two GATT agreements were terminated at the end of 1995. The final 1995

notifications to these counterpart GATT committees can be

found in a special edition of the USITC’s International Economic Review as a concluding note to these two agreements.

It should be noted that the WTO Antidumping and Subsidies

Agreements apply to all WTO members whereas their GATT

counterpart agreements (also called “codes”) bound only 25

signatories under the GATT Antidumping Code and 26 signatories under the GATT Subsidies Code at the end of 1995.

Agreement on Customs Valuation130

The Committee on Customs Valuation met twice in

1997 to examine national laws and regulations regarding customs valuation, focusing on six members—Bulgaria, Fiji, Liechtenstein, Mexico, India, and Singapore. To date, 13 members have submitted new national legislation, 15 members have notified the WTO that

previous legislation on customs valuation submitted

under the Tokyo Round Agreements remained valid,

and 38 members have failed to notify.

Agreement on Preshipment

Inspection131

The Independent Entity, an organizational body

created to help conduct independent investigations regarding preshipment inspection, was established in

December 1995 to carry out investigations as requested

under the Agreement. Procedures were put in place by

April 1996 although, to date, the Entity has received no

requests to investigate.

Agreement on Rules of Origin132

The Committee on Rules of Origin met four times

in 1997 to review reports from the Technical Committee on Rules of Origin. The committee adopted a management plan to help schedule technical work, and endorsed product-specific rules for a number of HS chapters (25, 26, 27, 41, 43, and 91). The committee also

reached consensus on the origin criteria of a number of

HS headings and subheadings as well. To date, 56

members have notified nonpreferential rules of origin,

while 58 have notified preferential rules.

Agreement on Import Licensing133

The Committee on Import Licensing met twice in

1997. Since January 1995, 44 Members have notified

laws, regulations, and procedures regarding import

128—Continued

USITC, “1995 Termination of GATT Antidumping and Subsidies Codes,” International Economic Review, USITC publication 3078, Nov./Dec. 1997, pp. 12-14 and tables A-1 and

A-2.

130 WTO, Committee on Customs Valuation, “Report of

the Committee on Customs Valuation to the Council for

Trade in Goods,” G/L/205, Nov. 18, 1997.

131 WTO, Agreement on Preshipment Inspection, Independent Entity, “Report (1997) of the Independent Entity to

the Council for Trade in Goods,” G/L/208, Nov. 19, 1997.

132 WTO, Committee on Rules of Origin, “Report

(1997) of the Committee on Rules of Origin,” G/L/210, 

Nov. 27, 1997.

133 WTO, Committee on Import Licensing, “Report of

the Committee on Import Licensing,” G/L/203, Nov. 7,

1997.
46

licensing; 45 have notified responses to the Questionnaire on Import Licensing Procedures.

Agreement on Subsidies and Countervailing Measures134

The Committee on Subsidies and Countervailing

Measures reviewed notifications received in 1997 actions.135 Regarding notification of new and full subsidies, the committee concluded that 42 members had

notified as required, 23 members had notified that they

had no subsidies or countervailing measures (SCM) in

place, and 52 members, over 44 percent, had failed to

notify. By October 1997, the committee had received

40 updates for 1996 regarding subsidies and 20 updates

for 1997. In October 1997, the committee adopted a

common format for updating subsidy notifications.

Regarding notifications of domestic countervailing

duty laws and regulations, the committee concluded

that 72 members had notified such legislation but that

45 members, roughly 39 percent, had failed to notify.

Regarding semiannual notification of SCM for 1996

second half, 8 members notified SCM actions taken, 46

members notified that no actions were taken, and 63

members, roughly 54 percent, failed to notify. For 1997

first half, 7 members notified SCM actions taken, 41

members notified that no actions were taken, and 69

members, nearly 60 percent, had failed to notify by October 1997. No nonactionable subsidies were notified.

In 1997, the Philippines was identified as exceeding the $1,000 threshold entitling it to preferential

treatment under Annex VII(b) of the Agreement. The

Annex designates additional countries that may receive

preferential treatment accorded to the least-developed

134 WTO, Committee on Subsidies and Countervailing

Measures, “Report (1997) of the Committee on Subsidies

and Countervailing Measures,” G/L/201, Oct. 30, 1997.

135 The notifications to the WTO Antidumping and Subsidies Committees have been available to the public since

July 1996 through the database dissemination facility found

at the WTO Internet address http://www.wto.org. Prior to the

WTO, the GATT Antidumping and Subsidies Agreements

required similar notifications, before these two GATT agreements were terminated at the end of 1995. The final 1995

notifications to these counterpart GATT committees can be

found in a special edition of the USITC’s International Economic Review as a concluding note to these two agreements.

It should be noted that the WTO Antidumping and Subsidies

Agreements apply to all WTO Members whereas their GATT

counterpart agreements (also called “codes”) bound only 25

signatories under the GATT Antidumping Code and 26 signatories under the GATT Subsidies Code at the end of 1995.

USITC, “1995 Termination of GATT Antidumping and Subsidies Codes,” International Economic Review, USITC publication 3078, Nov./Dec. 1997, pp. 12-14 and tables A-1 and

A-2.

countries under the Subsidies Agreement. The committee also discussed the possible inclusion of Honduras

in the Annex, making it likely that the Philippines will

be removed and Honduras added.

The Permanent Group of Experts (PGE) made no

progress in 1997 on adopting the Draft Rules of Procedure that were circulated in April 1996. The PGE was

established to provide assistance on request to a dispute panel regarding whether a measure is considered a

prohibited subsidy under the Agreement, as well as advisory opinion on the existence or nature of subsidies.

The Informal Group of Experts (IGE) circulated a

report in July 1997 with 21 recommendations that the

committee is now considering. The IGE was created in

June 1995 to provide guidance on whether a presumption of serious prejudice exists when calculating the

total ad valorem subsidization described in Annex IV

of the Agreement.

Agreement on Safeguards136

The Committee on Safeguards met twice in 1997 to

review notifications of national laws and regulations on

domestic safeguards and to discuss the state of noncompliance with notifications. Safeguards permit a

country to impose import restrictions when increased

imports are found to cause or threaten to cause serious

injury to a domestic industry. All members were required to notify their domestic safeguards legislation

by March 15, 1995. By October 1997, 19 members had

notified pre-WTO safeguards legislation, 12 had notified new safeguards legislation, and 41 had notified

that they had no safeguards legislation in place, with

the remaining 45 members, nearly 39 percent, failing

to notify.

In 1997, the committee received notifications of

safeguard investigations initiated, of investigations of

serious injury or the threat thereof, of investigations

terminated, and of nonapplication of safeguards measures to developing-country members below thresholds

set under Article 9.1. These notifications included ones

on the initiation of an investigation by the United

States on wheat gluten and the nonapplication of safeguards measures by the United States concerning

broom corn brooms. Four of five members with outstanding measures—the EU, Korea, Slovenia, and

South Africa—reported progress on eliminating preexisting Article XIX (safeguards) measures and the

fifth—Cyprus—reported that it would provide the

committee with a written report.

136 WTO, Committee on Safeguards, “Report (1997) of

the Committee on Safeguards,” G/L/200, Oct. 28, 1997.
47

State Trading Enterprises137

The Working Party on State Trading Enterprises

was established in February 1995 to review notifications of state trading enterprises (STEs), to improve the

1960 GATT questionnaire on STEs, and to develop an

illustrative list of these enterprises for use in applying

Article XVII (State Trading Enterprises). New and full

notifications are required in the first and fourth years,

with changes notified in the second and third years.

Since 1995, 55 new and full notifications have been

made; in 1996, 28 updates were received; and in 1997,

16 updates were received. During 1997, the Working

Party reviewed notifications of a number of countries,

and discussed possible improvements to the questionnaire.

Plurilateral Trade Agreements

Termination of the WTO Meat and

Dairy Agreements138

On September 30, 1997, signatories agreed to terminate the International Bovine Meat Agreement and

the International Dairy Agreement, and the councils

overseeing them, at the end of 1997 in the interest of

economy and efficiency. The WTO Committee on

Agriculture and Committee on Sanitary and Phytosanitary Measures are likely to assume the agreements’

functions regarding trade in meat and dairy products.

The two agreements originally entered into force

January 1, 1980, as part of the nine plurilateral agreements agreed during the 1973-79 GATT Tokyo Round

and often known as the Tokyo Round codes.139 The

International Meat Council oversaw the bovine meatagreement, evaluating the world supply and demand

137 WTO, Working Party on State Trading Enterprises,

“Report (1997) of the Working Party on State Trading Enterprises,” G/L/198, Nov. 17, 1997.

138 WTO, International Dairy Council, “International

Dairy Council - Report to the General Council,” WT/L/245,

Nov. 21, 1997; WTO, International Meat Council, “International Meat Council - Report to the General Council,” WT/

L/237, Oct. 16, 1997.

139 The original nine Tokyo Round agreements covered

subjects involving antidumping, subsidies, customs valuation, import licensing, product standards, civil aircraft, government procurement, bovine meat, and dairy products.

These agreements were known as “codes” because they were

“plurilateral” agreements, meaning that they were binding

only on those signatories that agreed to each code’s particular set of rights and obligations. Under the WTO, the first

five of these codes became “multilateral” agreements, that is,

binding on all WTO members. With the termination of the

meat and dairy codes, two Tokyo Round codes remain, covsituation for meat and providing a forum for regular

consultation on matters affecting trade in bovine meat

(beef, veal, and live cattle). The International Dairy

Council oversaw the dairy agreement and set minimum

export prices for international trade in certain dairy

products (certain milk powders, milk fat including butter, and certain cheeses). However, in October 1995,

the Dairy Council suspended operation of these minimum export prices because these had become untenable due to the limited membership in the agreement

and nonparticipation by some key dairy exporting

countries.140

Agreement on Government

Procurement141

In 1997, the Committee on Government Procurement overseeing the Agreement on Government Procurement met three times, considering applications for

observership, modifications to the appendices to the

agreement, a loose-leaf system for appendices to the

agreement, notifications of national implementing legislation, modalities for the three-year review of the

agreement, accessions completed and in progress, as

well as other business involving national actions concerning procurement.

Hong Kong became a signatory to the agreement in

June 1997. Liechtenstein became a signatory to the

agreement in September 1997. Chinese Taipei (Taiwan) continued consultations with signatories regarding its bid for accession. Three recent WTO members—Bulgaria, Mongolia, and Panama—indicated

their intent to seek accession to the agreement. In June

1997, Panama applied for accession to the agreement,

tabling an initial offer of its government procurement

entities. (See table 2-8 for a list of the signatories to the

WTO plurilateral trade agreements in 1997.)

138—Continued

ering civil aircraft and government procurement. Technically, the Tokyo Round codes concerning meat and dairy were

“arrangements” entitled the Arrangement Regarding Bovine

Meat and the International Dairy Arrangement whereas,

under the WTO, they were renamed as “agreements” entitled

the International Bovine Meat Agreement and the International Dairy Agreement.

140 WTO, “Signatories Terminated WTO Plurilateral

Agreements on Meat and Dairy Products,” press release,

PRESS/78, Sept. 30, 1997.

141 WTO, Committee on Government Procurement,

“Report (1997) of the Committee on Government Procurement,” GPA/19, Oct. 29, 1997.
48

Table 2-8

Signatories to the WTO Plurilateral Trade

Agreements in 1997

AGREEMENT ON GOVERNMENT PROCUREMENT

Aruba, Netherlands Korea

Canada Liechtenstein

European Union Norway

Hong Kong, China Singapore

Israel Switzerland

Japan United States

AGREEMENT ON TRADE IN CIVIL AIRCRAFT1

Austria Luxembourg

Belgium Macau

Bulgaria Netherlands

Canada Norway

Denmark Portugal

European Union Romania

Egypt Spain

France Sweden

Germany Switzerland

Ireland United Kingdom

Italy United States

Japan

INTERNATIONAL DAIRY AGREEMENT

Argentina New Zealand

Bulgaria Norway

Chad Romania

European Union Switzerland

Japan Uruguay

INTERNATIONAL BOVINE MEAT AGREEMENT

Argentina New Zealand

Australia Norway

Brazil Paraguay

Bulgaria Romania

Canada South Africa

Colombia Switzerland

European Union United States

Japan Uruguay

1 Greece is a signatory of the Agreement on Trade

in Civil Aircraft pending ratification.

Source: WTO, Committee on Government Procurement, “Report (1997) of the Committee on Government

Procurement,” GPA/19, Oct. 29, 1997; WTO, Committee on Trade in Civil Aircraft, “Report (1997) of the

Committee on Trade in Civil Aircraft,” WT/L/247, Nov.

26, 1997; WTO, International Dairy Council, “International Dairy Council - Report to the General Council,”

WT/L/245, Nov. 21, 1997; WTO, International Meat

Council, “International Meat Council - Report to the

General Council,” WT/L/237, Oct. 16, 1997.

Agreement on Trade in Civil

Aircraft142

During 1997, the Committee on Trade in Civil Aircraft continued its consideration of the status of the

1979 Agreement on Trade in Civil Aircraft (Aircraft

Agreement) under the WTO. Since the conclusion of

the Uruguay Round, a number of proposals have been

advanced to adapt the Aircraft Agreement to the WTO

structure, but without success. One proposal consists of

a draft protocol of technical amendments to the Aircraft Agreement and a draft decision on the relationship between the amended Aircraft Agreement and the

Agreement on Subsidies and Countervailing Measures.

A second proposal consists of two draft decisions, the

first considering technical changes to the Aircraft

Agreement and the second considering application of

the WTO Dispute Settlement Understanding (DSU) to

consultations and dispute-settlement proceedings under

the Aircraft Agreement. A third proposal suggests certain amendments to Article 8.8 (Surveillance, Review,

Consultation, and Dispute Settlement) of the Aircraft

Agreement that are said to largely preserve the balance

of rights and obligations under the agreement.

The balance of rights and obligations under the

Aircraft Agreement forms the central issue of the relationship between the Aircraft Agreement and the WTO

structure. Under the GATT, some signatories to the

Aircraft Agreement—notably the EU—considered it to

be the sole agreement that applied to disputes involving aircraft subsidies, whereas other signatories—most

notably the United States—considered the Agreement

on Subsidies and Countervailing Measures to also be

applicable. Under the WTO, however, the integrated

framework automatically considers the WTO Agreement on Subsidies and Countervailing Measures applicable in dispute cases under the DSU, thereby altering

the previous balance of rights and obligations. (See

table 2-8 for a list of the signatories to the WTO plurilateral trade agreements in 1997.)

Trade Activities in the

Organization for Economic

Cooperation and

Development in 1997

This section describes the trade-related activities of

the OECD in 1997. The OECD provides a forum for

consultation and policy coordination on economic and

142 WTO, Committee on Trade in Civil Aircraft, “Report

(1997) of the Committee on Trade in Civil Aircraft,” WT/

L/247, Nov. 26, 1997.
49

trade issues of interest to members.143 The annual

OECD Ministerial meeting, where Ministers adopt

completed work and review ongoing efforts, was held

May 26-27, 1997. In 1997, Ministers adopted anticorruption measures, worked on the framework elements

of a Multilateral Agreement on Investment (MAI), and

developed policy recommendations on ways to reform

the regulatory regimes in their countries. In addition,

work continued under the rubric of the “new trade

agenda,” including research on the interaction between

trade policy and policies traditionally considered domestic in nature, including those on the environment,

investment, competition (antitrust) policy, and labor.144

Multilateral Agreement on

Investment

After several years of preliminary study in the

OECD Committee on Investment and Multilateral Enterprises (CIME) and Committee on Capital Movements and Invisible Transactions (CMIT), Ministers

asked the OECD in May 1995 to begin negotiations

aimed at reaching a Multilateral Agreement on Investment (MAI) that would:

 provide a broad framework for international investment with high standards for the liberalization of investment regimes and investment

protection and with effective dispute settlement

procedures; and

 be a free-standing international treaty open to

all OECD Members and the European Communities, and to accession by non-OECD Member

countries.145

Although the initial deadline for reaching an agreement was extended from May 1997 to April 1998, given the range of issues that remain to be addressed,

some participants believe a further extension may be

143 At the end of 1997, the 29 OECD member countries

were Australia, Austria, Belgium, Canada, Czech Republic,

Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico,

Netherlands, New Zealand, Norway, Poland, Portugal, Spain,

Sweden, Switzerland, Turkey, the United Kingdom, and the

United States.

144 For further details, see USITC, The Year in Trade:

OTAP, 1996, USITC publication 3024, pp. 43-45; USITC,

The Year in Trade: OTAP, 1995, USITC publication 2971,

pp. 20-21; USITC, The Year in Trade: OTAP, 1993, USITC

publication 2769, pp. 73-75.

145 OECD, A Multilateral Agreement on Investment--Report by the Committee on International Investment and Multinational Enterprises (CIME) and the Committee on 

Capital Movements and Invisible Transactions (CMIT),

OCDE/GD(95)65, General Distribution, OECD: 

Paris, 1995; can be found at Internet address

http://www.oecd.org/daf/cmis/mai/mairpt95.htm, 

retrieved Dec. 12, 1997.

needed.146 Negotiators made rapid progress in the first

two years, developing the overall framework disciplines, but since then, negotiations have slowed and

continued into 1998 over individual national reservations and other similar exceptions or exemptions.

The draft MAI extends beyond traditional foreign

direct investment (FDI) to encompass portfolio investment and intangible assets.147 Treatment and protection of investors and investments under the draft MAI

includes a broad definition of investor and investment,

fair and nondiscriminatory treatment for foreign investors, high standards of investment protection, and an

effective dispute-settlement mechanism. Special topics

dealt with in the MAI include performance requirements and investment incentives, temporary stay and

work of investors and key personnel, and privatization

and monopolies. Other matters include environment

and labor issues, and the OECD guidelines for multinational enterprises. The draft MAI is not expected to

create obligations that conflict with other international

agreements, or the IMF or WTO, and will have its own

institutional arrangements. The MAI will be a freestanding treaty, open to accession by nonmembers.148

(See table 2-9 for subjects covered in the OECD Multilateral Agreement on Investment.)

In addition, MAI negotiations have also become

the venue for seeking resolution of differences over investment in confiscated property and secondary boycotts, issues arising under the U.S. Helms-Burton law,

and those regarding sanctions against countries supporting terrorism such as Iran and Libya. (For further

detail, see the section on the EU in chapter 4 of this

report.)

Final agreement on the draft MAI depends on

reaching a balance of commitments among participants

that include exceptions, derogations, and national reservations. In addition, participants still have concerns

regarding provisions in the consolidated text of the

draft framework agreement. U.S. objectives include

protection of U.S. investors abroad from discrimination, reaching agreement on an appropriate level of

protection for U.S. investments afforded by host coun146 USTR, “Multilateral Agreement on Investment Negotiations in 1997,” 1998 Trade Policy Agenda and 1997

Annual Report, pp. 159-161.

147 OECD, “The Multilateral Agreement on 

Investment - Report by the MAI Negotiating Group - 

May 1997,” found at Internet address 

http://www.oecd.org/daf/cmis/mai/MAIRPT97.HTM,

 retrieved Dec. 12, 1997.

148 For further detail, see documents associated with

OECD, “The Multilateral Agreement on Investment,” 

found at Internet address 

http://www.oecd.org/daf/cmis/mai/maindex.htm, retrieved

Dec. 12, 1997.
50

Table 2-9

Subjects covered in the OECD Multilateral Agreement on Investment

I. General Provisions

Preamble

II. Scope and Application

Definitions

Geographical Scope of Application

Application to Overseas Territories

III. Treatment of Investors and Investments

National Treatment and Most Favored Nation Treatment

Transparency

Special Topics

Temporary entry, stay and work of Investors and Key Personnel

Senior Management and Board of Directors

Employment Requirements

Performance Requirements

Privatization

Monopolies/State Enterprises/Concessions

Investment Incentives

Corporate Practices

Technology R&D

Intellectual Property

Public Debt

Not Lowering Standards

IV. Investment Protection

General Treatment

Expropriation and Compensation

Protection from Strife

Transfers

Subrogation

Protecting Existing Investments

V. Dispute Settlement

State-State Procedures

Investor-State Procedures

VI. Exceptions and Safeguards

General Exceptions

Transactions in Pursuit of Monetary and Exchange Rate Policies

Temporary Safeguard

VII. Financial Services

Prudential Measures

Recognition Arrangements

Authorization Procedures

Transparency

Information Transfer and Data Processing

Membership of Self-regulatory Bodies and Associations

Payments and Clearing Systems/Lender of Last Resort

Dispute Settlement

Definition of Financial Services

VIII. Taxation

IX. Reservations

Lodging of Country-Specific Reservations

X. Relationship to other International Agreements

Obligations under the Articles of Agreement of the International Monetary Fund

The OECD Guidelines for Multinational Enterprises

XI. Implementation and Operation

The Preparatory Group

The Parties Group
51

Table 2-9—Continued

Subjects covered in the OECD Multilateral Agreement on Investment

XII. Final Provisions

Signature

Acceptance and Entry Into Force

Accession

Non-Applicability

Review

Amendment

Withdrawal

Depositary

Status of Annexes

Authentic Texts

Denial of Benefits

Source: OECD, “Multilateral Agreement on Investment - Consolidated Text,” table of contents, DAFFE/

MAI(97)1/REV2, May 13, 1997.

tries, and creating new opportunities for U.S. firms

abroad by removing investment barriers in such areas

as privatization. The United States continues to seek a

“state-of-the-art” agreement that meets or exceeds the

investment standards found in U.S. bilateral investment

treaties or the NAFTA. Some of these key elements

include:

 the better of national or most-favored-nation

treatment, with only limited exceptions;

 disciplines for performance requirements that

distort trade and investment;

 freedom of investment-related transfers;

 expropriation standards consistent with U.S.

law and practice, including prompt, adequate,

and effective compensation; and

 access to binding international arbitration in investor-state disputes.149

Bribery Convention

As the world economy becomes more integrated,

bribery has become an increasingly important issue because it hinders competition, distorts trade, and harms

consumers, taxpayers, and honest traders. (See table

2-10 for background on international efforts against

bribery and corruption.) On November 21, 1997, the

members of the OECD adopted the Convention on

Combating Bribery of Foreign Public Officials in International Business Transactions, the most recent in

149 USTR, “Multilateral Agreement on Investment Negotiations in 1997,” 1998 Trade Policy Agenda and 1997

Annual Report, p. 160.

a series of measures taken to address the problem. The

convention was signed by the 29 OECD member

states, as well as by 5 nonmember countries—Argentina, Brazil, Bulgaria, Chile, and the Slovak Republic.

The convention addresses corruption involved in promising or giving a bribe (“active” bribery), as opposed to

receiving one (“passive” bribery). The convention

seeks a functional equivalence among measures taken

by signatories against the bribery of foreign public officials.150

The OECD has taken a number of other steps in

recent years to fight corruption. In May 1994, OECD

members adopted the 1994 Recommendation on Bribery in International Business Transactions. The recommendation enjoins each member country to take concrete and meaningful steps in a number of areas151 to

deter, prevent, and combat bribery of foreign public

officials in connection with international business

transactions. The OECD Committee on International

Investment and Multinational Enterprises (CIME) was

instructed to review the recommendations made and

national steps taken to implement them, and to report

back to the Ministers in three years. In Autumn 1995,

the CIME Working Group on Bribery in International

Business Transactions began to analyze the criminalization of bribery of foreign public officials. In May

1996, the OECD Council adopted the 1996 Recommendation on the Tax Deductibility of Bribes of Foreign Public Officials, and endorsed the CIME’s

150 OECD, “Convention on Combating Bribery of 

Foreign Public Officials in International Business 

Transactions Adopted,” found at Internet address

http://www.oecd.org/news_and_events/release/nw97104a.htm,

retrieved Nov. 26, 1997.

151 Areas such as criminal law; civil, commercial, and

administrative law; tax legislation, company accounting

requirements; banking provisions; laws and regulations regarding public subsidies, licenses, government procurement

contracts; and the like. See OECD, OECD Actions to Fight

Corruption, OCDE/GD(97)131, 1997, p. 5.
52

Table 2-10

International efforts against bribery and corruption

Since the passage of the United States Foreign Corrupt Practices Act (FCPA) in 1977, it has been a violation of American law for American firms to pay bribes

to foreign officials. However, although domestic bribery is illegal virtually everywhere, very few countries

have laws similar to the FCPA prohibiting payment of

bribes to foreigners. Many governments have dismissed the U.S. efforts to condemn corruption as naive

and unrealistic, but more recently have begun to recognize the costs—in moral, political, and economic

terms—of failing to oppose commercial bribery. A

growing number of business leaders and policymakers

have begun to see from international corruption scandals in the 1980s and 1990s that bribery and corruption

threaten vital interests and impose a number of costs—

 Bribery distorts markets and hinders economic development. It substitutes graft for quality, performance, and suitability in global markets. It sustains rent-seeking behavior at the

expense of efficient channeling of resources to

productive activity.

 Bribes undermine democratic accountability.

Weak governments are further weakened by

corruption, and emergent democracies are

threatened by such graft.

 Bribery creates essentially a nontariff barrier

to trade that disadvantages companies with

legitimate business practices that refuse to engage in the practice.

International resolve is building to combat the bribery of foreign public officials in international business

transactions. The OAS Interamerican Convention

Against Corruption of March 1996 was the first binding international commitment in this area. In December 1996, the United Nations General Assembly approved the Declaration Against Bribery and Corruption

in International Business Transactions, which called

for the criminalization of such bribery and the elimination of tax deductibility for the suppliers of bribes. In

1996, the multilateral financial institutions, such as the

International Monetary Fund and the World Bank,

called on governments to demonstrate their intolerance

for all forms of corruption.

The major multilateral focus against corruption

however is in the OECD. In May 1994, the OECD

adopted a Recommendation Against Bribery in International Business Transactions. The recommendation called on OECD members to “take concrete and

meaningful steps ... to deter, prevent and combat bribery” of foreign public officials in international business

transactions. In 1996, OECD Ministers endorsed an

agreement reached by the OECD Council that members eliminate tax-deductibility of bribes. Also in

1996, following persistent U.S. pressure, OECD members agreed “in principle” to the criminalization of foreign bribery, the first major breakthrough regarding

bribery and corruption with the United States’ main

commercial competitors since passage of the U.S. Foreign Corrupt Practices Act. The agreement stipulates

that a bribery working group will examine the “modalities and appropriate international instruments” to

achieve criminalization and make proposals to Ministers at the spring 1997 Ministerial meeting.

In the WTO, the United States has set its sights on

ensuring that the international procurement process is

open and transparent. The WTO Government Procurement Agreement (GPA) satisfies this standard, but it is

limited with signatories at present representing only 26

countries largely because few countries can meet its

rigorous procedural requirements. Nevertheless, the

United States will continue to press for universal accession to the GPA. At the WTO Singapore Ministerial Conference in December 1997, Ministers called for

the establishment of the Working Group on Transparency in Government Procurement, which began its

work in May 1997 to study the transparency in government procurement practices with the aim of developing

elements regarding transparent procurement that might

be included at some future date in an appropriate

agreement.

Source: U.S. Department of State telegram, “Background Paper on Bribery and Corruption for U.S.-GCC Economic

Dialogue Working Group 1 Meeting,” message reference No. 036529, prepared by U.S. Department of State, Feb. 27,

1997; and Paolo Mauro, “Why Worry About Corruption,” Economic Issues, No. 6, International Monetary Fund, Feb.

1997.
53

conclusion that it is necessary to criminalize the bribery of foreign public officials in a coordinated fashion.

Also in May 1996, the OECD Development Assistance

Committee approved the 1996 Recommendation Concerning Anticorruption Proposals for Bilateral Aid Procurement.

On May 23, 1997, at the OECD Ministerial meeting in Paris, Ministers agreed to the 1997 Revised Recommendation on Combating Bribery in International

Business Transactions, expanding on their 1994 work.

The 1997 Revised Recommendation includes provisions concerning the criminalization of bribery of foreign public officials, the disallowance of tax deductibility of bribes to foreign public officials, accounting

requirements and external/internal audit controls for

companies, public procurement, as well as provisions

regarding international cooperation, institutional arrangements, cooperation with nonmembers, and relations with inter- and nongovernmental organizations.

In May 1997, Ministers reaffirmed their commitment to criminalize bribery of foreign public officials

in an effective and coordinated manner by endorsing

the Revised Recommendation. They agreed that an international convention was an appropriate instrument

to attain such criminalization rapidly, leading to the

convention ultimately adopted in November 1997.

Ministers recognized that achieving progress in this

field requires not only efforts by individual countries

but multilateral cooperation, monitoring, and followup. They recommended that member countries submit

criminalization proposals to their legislative bodies by

April 1, 1998, and seek their enactment by the end of

1998. Ministers urged the prompt implementation of

the 1996 Recommendation on the tax deductibility of

such bribes. Stressing the global relevance of bribery in

international business transactions, the Ministers called

on non-OECD countries to join forces with them to

fight this phenomenon.152

Regulatory Reform

In 1995, Ministers asked the OECD to examine the

significance, direction, and means of reform in regulatory regimes in OECD member countries. The regulatory reform work program aimed to develop conclusions and recommendations from Member governments’ experiences with reform so as to enhance competition, reduce regulatory costs, and thereby boost efficiency, lower prices, stimulate innovation, and help

their economies remain competitive. At the May 1997

Ministerial conference, Ministers received the OECD

152 OECD, “Commentaries on the Convention on 

Combating Bribery of Officials in International Business

Transactions,” found at Internet address

http://www.oecd.org/daf/cmis/bribery/20nov2e.htm, 

retrieved Dec. 12, 1997.

report on regulatory reform. The report set out the following seven policy recommendations on regulatory

reform.

1. Adopt at the political level broad programmes

of regulatory reform that establish clear objectives and frameworks for implementation.

2. Review regulations systematically to ensure

that they continue to meet their intended objectives efficiently and effectively.

3. Ensure that regulations and regulatory processes are transparent, non-discriminatory and

efficiently applied.

4. Review and strengthen where necessary the

scope, effectiveness and enforcement of competition policy.

5. Reform economic regulations in all sectors to

stimulate competition, and eliminate them except where clear evidence demonstrates that

they are the best way to serve broad public interests.

6. Eliminate unnecessary regulatory barriers to

trade and investment by enhancing implementation of international agreements and

strengthening international principles.

7. Identify important linkages with other policy

objectives and develop policies to achieve those

objectives in ways that support reform.153

The report undertook a number of sectoral and thematic studies to measure the economic gains resulting

from regulatory reform. The sector studies reviewed

financial services, professional services, telecommunications services, the agro-food sector, electricity sector, and product standards and conformity assessment.

The thematic studies covered the effects of regulatory

reform on the public sector, consumers and competition, industrial competitiveness and innovation, international market openness, as well as the economywide effects of regulatory reform. These studies suggested that price reductions following the elimination

of economic regulation in specific industries amounted

to significant gains in various member countries, such

as—

153 OECD, “The OECD Report on Regulatory Reform -

Summary,” found at Internet address 

http://www.oecd.org/subject/regreform/, retrieved Dec. 15,

1997.
54

Sector Price reductions after elimination of economic regulation1

(Percent)

Electricity sector Japan (5), Norway (18 to 26), United Kingdom (9 to 15)

Financial services United Kingdom (70), United States (30 to 62)

Telecommunications Finland (66), Japan (41), Korea (10 to 30), Mexico (21), United Kingdom (63)

Air transport Australia (20), Spain (30), United Kingdom (33), United States (33)

Road transport France (20), Germany (30), Mexico (25), United States (19)

1 Price reductions may be in part attributable to factors other than regulatory reform.

Source: OECD, The OECD Report on Regulatory Reform—Synthesis Report, OECD: Paris, 1997.

The report advises governments to systematically

pursue ambitious regulatory reform, meaning both deregulation and better regulation, and warns that delaying such reform will prove costly. Deregulation will

improve already flexible markets while high-quality

regulation will be needed to protect public interests

such as the environment, health, and safety. The study

suggests for example that ambitious reform in key sectors could in the end boost GDP significantly, possibly

as much as between 3 and 6 percent for the more

heavily regulated countries in Europe and for Japan.154

Other New Trade Agenda Issues

Beginning in 1991 and 1992, Ministers directed the

OECD to examine the relation between trade and a

number of subjects that are traditionally a focus of domestic policy, such as the environment, competition

policy, investment, and labor standards. Examination

of these issues has advanced at different rates. Early

examination of trade and investment issues resulted in

the MAI, while examination of other issues, such as

trade and competition policy, has taken longer.

In mid-1996, the OECD Joint Group on Trade and

Competition was established to increase the coherence

between trade and competition policies by strengthen154 OECD, “OECD New Issues - the OECD Reports on

Regulatory Reform - Summary, Synthesis, Sectoral and Thematic Studies,” Oct. 3, 1997, found at Internet address

http://www.oecd.org/news_and_events/publish/pb97-20a.htm,

retrieved Dec. 15, 1997.

ing the work that was carried out previously by separate efforts in the Trade Committee Working Party

(TCWP) and the Competition Law and Policy Committee (CLP). The Joint Group held its first meeting for

organizational purposes on July 8, 1996, following

which the group proposed a two-year work program in

October 1996 and held discussions in preparation for

the WTO Singapore Ministerial Conference in December 1996.

In 1997, the group continued its work, focusing

on—

 issues of transparency, due process, and nondiscrimination that arise during the domestic enforcement of competition laws;

 the consistencies and inconsistencies between

trade and competition policy and how to enhance the coherence of these two policy areas;

and

 the trade effects of exceptions to competition

laws.

Ministers are expected to renew the Joint Group’s

mandate for a further two-year extension, essentially

under current terms of reference, at the OECD Ministerial meeting in May 1998. Multilateral attention on other issues has largely moved on to other forums, such as

the WTO for trade and the environment, and the International Labor Organization for trade and labor.
55

CHAPTER 3

Regional Trade Activities

As in recent years, regional trade initiatives were

an important component of U.S. trade policy during

1997. The United States participated in the North

American Free Trade Agreement (NAFTA), in the

Asia-Pacific Economic Cooperation (APEC) forum,

and in ongoing discussions towards the Free Trade

Areas of the Americas (FTAA). Several reports were

issued in 1997 reviewing NAFTA at the three-year

mark of operation. Building on the model of the World

Trade Organization (WTO) Information Technology

Agreement, APEC ministers agreed to pursue early

voluntary sectoral liberalization in nine agreed-upon

sectors. Hemispheric trade ministers met in 1997 and

intensified preparations for formally launching FTAA

negotiations in April 1998. Attention was also focused

on the African continent, with the launching of U.S.

initiatives aimed at fostering trade and development in

that region.

The North American Free

Trade Agreement

Implemented on January 1, 1994, NAFTA links the

United States, Mexico, and Canada in a free trade

agreement that incorporates much of the preexisting

U.S.-Canada Free Trade Agreement (CFTA) and resulted in the immediate elimination of tariffs on more

than one-half of U.S. imports from Mexico and more

than one-third of U.S. exports to Mexico. NAFTA

phases out remaining tariffs over periods of up to 15

years from the agreement’s entry into force, and provides for consideration of accelerated tariff elimination

for products on a reciprocal basis. NAFTA also addresses a variety of nontariff barriers, commits each

party to high levels of protection for foreign investors

and owners of intellectual property rights, liberalizes

trade in services, and creates dispute settlement mechanisms. NAFTA was accompanied by supplemental accords on environmental and labor cooperation, the first

U.S. trade accord to be linked formally to such commitments.

The Free Trade Commission, made up of the trade

ministers of each member country oversees NAFTA.

Day-to-day operation of the agreement and technical

matters are handled by various committees and working groups composed of trade and other relevant officials from the three governments. Following is a discussion of U.S. trade with NAFTA partners and a review of major developments under NAFTA in 1997,

including the March 1997 meeting of the Free Trade

Commission, the release of assessments of NAFTA’s

first three years of operation, efforts to resolve implementation issues, and activity under NAFTA’s formal

dispute settlement mechanisms.

U.S. Trade with NAFTA

Partners

During 1997, U.S. trade with NAFTA partners continued to expand. U.S. exports to NAFTA partners

grew by more than U.S. imports from NAFTA partners, and the combined U.S. trade deficit with Canada

and Mexico narrowed to $49.7 billion (Table 3-1).

U.S. exports to Mexico grew by 25 percent from 1996

to 1997, reaching $68.4 billion and making Mexico the

United States’ second most important single-country

market (after Canada). U.S. imports from Mexico

grew by 15 percent, to $85.0 billion. The bilateral deficit on merchandise trade with Mexico was $16.6 billion, down from $19.5 billion in 1996. U.S. exports to

Canada rose by 13 percent, to $134.8 billion, while

U.S. imports from Canada rose 7 percent, to $167.9

billion. The U.S. deficit on merchandise trade with

Canada was $33.1 billion, less than the $37.2 billion

deficit in 1996. In 1997, imports entering under NAFTA preferences accounted for 53 percent of U.S. imports from Canada and 74 percent of U.S. imports from

Mexico.

Meeting of NAFTA Free Trade

Commission

The NAFTA Free Trade Commission held its

fourth meeting on March 20, 1997. At its conclusion,
56

Table 3-1

U.S. trade with NAFTA partners, 1995-97

(Billion dollars)

Year NAFTA partner Exports Imports Trade balance Two-way trade

1995 Canada 113.3 144.9 -31.6 258.1 . . . . . . . . . . . . . . . . . 

Mexico 44.9 54.7 -9.8 99.6 . . . . . . . . . . . . . . . . . . Canada and Mexico 158.1 206.6 -48.5 364.1 . . . . . . 

1996 Canada 119.1 156.3 -37.2 275.4 . . . . . . . . . . . . . . . . . 

Mexico 54.7 74.2 -19.5 128.9 . . . . . . . . . . . . . . . . . . Canada and Mexico 173.8 230.5 -56.7 404.3 . . . . . . 

1997 Canada 134.8 167.9 -33.1 302.7 . . . . . . . . . . . . . . . . . 

Mexico 68.4 85.0 -16.6 153.4 . . . . . . . . . . . . . . . . . . Canada and Mexico 203.2 252.9 -49.7 456.1 . . . . . . 

Note.—Because of rounding, figures may not add to totals shown.

Source: Compiled from official statistics of the U.S. Department of Commerce.

U.S. Trade Representative (USTR) Charlene Barshefsky, Canadian Trade Minister Arthur Eggleton, and

Mexico’s Secretary of Commerce and Industrial Development Hermino Blanco Mendoza issued a joint statement1—

 reaffirming their strong commitment to the

NAFTA and its value in promoting trade, investment, economic growth, and jobs in all

three countries and emphasizing the importance

of the continued implementation of the

NAFTA.

 announcing conclusion of the first round of tariff acceleration talks. Effective July 1, 1997, the

NAFTA partners began eliminating tariffs more

quickly than is called for under the NAFTA on a

specified list of several dozen items.

 directing officials to initiate the second round of

tariff acceleration by May 1, and to conclude negotiations by December 15, 1997.2

1 USTR, “Joint Statement of Trade Ministers at the

Fourth NAFTA Commission Meeting, Washington, DC,

March 20, 1997,” press release 97-23, Mar. 20, 1997.

2 USTR later issued a Federal Register notice requesting

comments by Dec. 12, 1997, on items proposed for consideration in the second round of accelerated tariff elimination

talks ( 62 FR 54671, Oct. 21, 1997). USTR requested the

 adopting a recommendation from the trilateral

Advisory Committee on Private Commercial

Disputes3 that supports the utilization of alternative dispute resolution.

 agreeing, in accordance with Article 513, to implement certain technical modifications to the

NAFTA rules of origin (Annex 401) to establish

consistency between Annex 401 of the NAFTA

and the Parties’ tariff laws.

 approving rules for remuneration of expenses to

panelists regarding NAFTA Chapter 19 and 20

dispute settlement cases.

 recognizing receipt and adoption of reports regarding the work of the 20 trilateral Committees

and Working Groups charged with day-to-day

oversight of NAFTA implementation.

2—Continued

ITC’s advice on Oct. 20, 1997. The ITC advice, which is

confidential, was provided Feb. 17, 1998. Notices of the

ITC’s investigation were published at 62 FR 60100, Nov. 6,

1997, and 62 FR 64402, Dec. 5, 1997.

3 This Committee was established pursuant to NAFTA

Article 2022 and comprises both private sector members and

government officials of each party. Its main task is to evaluate and promote the use of alternative means of dispute resolution for private commercial disputes.
57

 authorizing release of the report of the NAFTA

trade remedies working groups. The report recommended adoption of procedural changes by

NAFTA partners in the administration of antidumping and countervailing duty investigations.4

 acknowledging discussion of outstanding issues: telecommunications standards setting (in

Mexico), cross-border transportation, temporary entry, government procurement, and sanitary and phytosanitary issues.

 agreeing that the next NAFTA Commission

meeting at the Ministerial level will be held in

Mexico in the first quarter of 1998.

In addition to reducing their tariffs on intra-NAFTA trade, Canada and Mexico each liberalized some

most-favored-nation (MFN) tariffs during 1997. Mexico reduced applied tariffs on some 1,200 tariff lines of

inputs and machinery.5 On October 7, 1997, Canada

submitted legislation to Parliament to implement a simplified customs tariff and the Information Technology

Agreement (ITA). Among other things, the tariff

changes would implement most Uruguay Round reductions scheduled for January 1, 1999, a year early, eliminate most duties under 2 percent, and reduce tariffs on

a wide range of manufacturing inputs.6

Both countries also continued pursuit of trade

agreements with other partners. The Canada-Chile

FTA was implemented on July 5, 1997, after passage

of legislation to implement the accord by the Chilean

Senate and Canada’s Parliament. The accord provides

Canadian suppliers with immediate duty-free access

for 75 percent of Canadian exports and eliminates

Chile’s 11 percent tariff on most remaining industrial

and resource-based goods over a 5-year period.7

4 Noting that the trade remedies working groups’ work

has been completed, NAFTA ministers stated, “The Governments will continue to consult, as appropriate under the

NAFTA, on issues related to trade remedies with the objective of promoting fair trade and reducing the possibility of

disputes, such as common problems posed by steel imports

into the NAFTA countries.”

5 U.S. Department of State telegram, “Trade Policy Review for Mexico,” message reference No. 7096, prepared by

U.S. Mission, Geneva, Oct. 15, 1997.

6 U.S. Department of State telegram, “Canadian Tariffs

Eliminated on U.S. Goods, Many Others Unilaterally Reduced,” message reference No. 241732, prepared by U.S.

Embassy, Ottawa, Dec. 24, 1997.

7 Department of Foreign Affairs and International Trade,

Canada, “Canada-Chile Free Trade Agreement to be Implemented July 5,” press release No. 113, July 3, 1997.

Canada signed separate arrangements on trade and economic cooperation with Norway on December 3,

1997,8 and with Switzerland on December 9, 1997.9

On April 22, 1997, Canada and Brazil announced that

they would work to expand their trade relations.10

Mexico already has free trade agreements with Chile,

Venezuela, Colombia, Bolivia, Costa Rica, and Nicaragua, and is negotiating NAFTA-like agreements with

the rest of Central America, Ecuador, and Peru. It has

begun preparatory talks with the EU on a comprehensive economic accord and continued ongoing talks with

MERCOSUR.11

Three-Year Review of NAFTA’s

Operation and Effects

During 1997, legislatively mandated reports to

Congress on NAFTA’s impact provided an initial assessment of how the accord had shaped commerce

among the United States, Canada, and Mexico in its

first three years. In July 1997, President Clinton presented to Congress a report on NAFTA’s operation and

effects, as required by Sec. 512 of the NAFTA Implementation Act.12

Among other things, the President’s study concluded that:

 Under NAFTA, Mexico reduced its trade barriers to U.S. exports significantly. The United

States, which started with much lower tariffs,

has made smaller reductions. For example,

Mexico’s average tariffs on American products

dropped from 10 percent to approximately 2.9

percent ad valorem, whereas average U.S. tariffs on Mexican goods fell from 2.07 percent to

0.65 percent.13

8 Department of Foreign Affairs and International Trade,

Canada, “Signature of Arrangement on Trade and Economic

Cooperation Between Canada and Norway,” press release

No. 201, Dec. 3, 1997.

9 Department of Foreign Affairs and International Trade,

Canada, “Canada and Switzerland Sign an Arrangement on

Trade and Economic Cooperation,” press release No. 203,

Dec. 9, 1997.

10 Department of Foreign Affairs and International

Trade, Canada, “Canada and Brazil Strengthen Co-Operation

on Peacekeeping, Trade,” press release No. 77, Apr. 22,

1997.

11 U.S. Department of State telegram, “Information for

WTO Trade Policy Review Mechanism—Mexico,” message

reference No. 9384, prepared by U.S. Embassy, Mexico City,

Sept. 26, 1997. MERCOSUR is the Spanish acronym for the

Southern Common Market, a subregional customs union

operative since January 1, 1995, linking the economies of

Argentina, Brazil, Paraguay, and Uruguay. 12 President of the United States, Study on the Operation

and Effect of the North American Free Trade Agreement, July 1997. 13 Ibid., p. 1.
58

 U.S. trade with North American partners grew

faster than overall U.S. trade during NAFTA’s

first 3 years.14 U.S. exports to Mexico rose

by 36.5 percent during 1993-96 despite a 3.3

percent contraction in Mexico’s GDP during

that period because of the peso crisis, which

began in December 1994.15 U.S. export

growth to Mexico exceeded import growth

from Mexico in 13 of the most recent 14

months reviewed.16

 NAFTA in isolation had a modest positive

effect on U.S. exports, income, investment,

and jobs supported by exports. As such,

NAFTA contributed to the recent strong performance of the U.S. economy.17

 NAFTA protected U.S. exports and jobs during Mexico’s devaluation-induced recession.18

 NAFTA-associated economic reforms played

a part in Mexico’s recovery from the 1995

crisis, which was considerably more rapid

than that experienced after its 1982 crisis.19

 U.S. direct investment in Mexico remained

small and did not significantly impact aggregate U.S. investment.20

 U.S. suppliers have maintained or enhanced

their dominant position of the Mexican market since NAFTA was implemented:21 U.S.

market share rose in 9 of the 12 sectors examined,22 with the size of market share gains

positively correlated to the size of reductions

in Mexican tariffs.23

 NAFTA’s reduction in tariff and nontariff barriers contributed to increased U.S. exports of

motor vehicles, electronic components, textiles and apparel, computers, chemicals, and a

range of agricultural products, and were a factor in increased U.S. imports of Mexican textiles and apparel and light trucks.24

14 Ibid., p. i.

15 Ibid., p. 1.

16 Ibid., p. 9.

17 Ibid., p. 5.

18 Ibid., p. 3.

19 Ibid., p. 4.

20 Ibid., p. 4.

21 Ibid., p. 35.

22 Ibid., p. 34.

23 Ibid., p. 36.

24 Ibid., p. 43.

 U.S. imports from Mexico are in many

instances displacing imports from Asia and

elsewhere that contain low levels of U.S. content.25 Many imports from Mexico—such as

apparel, motor vehicles, computers, and telecommunications equipment—contain substantial levels of U.S. content.26

 NAFTA’s supplemental agreements on labor

and environment have fostered cooperation, enhanced oversight and enforcement of labor

laws, and improved enforcement of Mexican

environmental laws.27

In testimony discussing the President’s report,

Deputy U.S. Trade Representative Jeffrey Lang noted

that “NAFTA is accomplishing what it was designed to

do: gradually elimate tariff and nontariff barriers to

trade and investment.” In the first six months of 1997,

Ambassador Lang observed, Canada and Mexico accounted for nearly half of overall U.S. export growth.

During that period Mexico was the second leading destination for U.S. exports, moving ahead of Japan even

though Mexico’s economy is only one-twelfth the size

of Japan’s.28 (For 1997 as a whole, increased exports

to Canada and Mexico accounted for 48 percent of the

total growth in U.S. exports from 1996 to 1997, according to official statistics of the U.S. Department of

Commerce.)

The President’s report was prepared with input

from other agencies and outside analysts,29 including a

study by the ITC assessing NAFTA’s impact on the

U.S. economy and industries. In USTR’s April 23,

1997, letter requesting the study, the ITC was asked to

take into account economic effects associated with other events occurring during the phase-in of NAFTA.

Complicating such an assessment were factors such as

the limited period of time being reviewed, wide divergences in economic size and performance of the NAFTA economies, and other changes, such as the implementation of Uruguay Round-related tariff reductions

starting January 1, 1995.

25 Ibid., p. 31.

26 Ibid., p. 44.

27 Ibid., p. vi and vii.

28 Ambassador Jeffrey Lang, Deputy USTR, “The North

American Free Trade Agreement,” hearing before the House

Ways and Means Committee, Sept. 11, 1997, prepared testimony, p. 2.

29 Among them was an effort to model the dynamic

gains from NAFTA. See Michael A. Kouparitsas, “A Dynamic Macroeconomic Analysis of NAFTA,” Economic

Perspectives, Federal Reserve Bank of Chicago, Vol. 21, 

No. 1, Jan./Feb. 1997, pp. 14-35.
59

In its report, the Commission concluded, that

NAFTA had, on balance, “positive, although modest,

effects on the U.S. economy and individual industry

sectors after three years.”30 At the same time, the

Commission noted that “many of NAFTA’s most important effects are not easily quantified or observed

and the full effects of the Agreement will take many

more years to make themselves known.”31 NAFTA

was, for example, cited by numerous witnesses at the

Commission’s hearing as improving the climate for

business and increasing awareness of opportunities for

beneficial exchange.32 Other observations and conclusions found in the Commission’s report include the following:

 During 1993-96, imports from Canada and

Mexico grew more rapidly than imports from

the rest of the world, as did U.S. exports to Mexico compared with other trading partners.33

 NAFTA significantly affected the levels of U.S.

trade with Mexico, but did not have a significant

effect on aggregate U.S. trade with Canada. As

a result of NAFTA, the volume of U.S. exports

to Mexico was estimated to be 1.3 percent higher in 1994, 3.8 percent higher in 1995, and 3.2

percent higher in 1996. The volume of U.S. imports from Mexico was 1 percent higher in

1994, 5.7 higher in 1995, and 6.4 percent higher

in 1996.34

 U.S. exports to Mexico increased significantly

due to NAFTA in 13 industries accounting for

about 9 percent of aggregate U.S. exports to

Mexico; U.S. imports from Mexico increased

significantly in 16 industries accounting for 15

percent of aggregate U.S. imports from Mexico

and decreased significantly in 7 accounting for

1 percent of aggregate U.S. imports from Mexico. A greater number of industries (36 of the 78)

significantly increased exports in 1994 because

30 U.S. International Trade Commission, The Impact of

the North American Free Trade Agreement on the U.S. Economy and Industries: A Three Year Review (investigation No.

332-381), USITC publication 3045, June 1997, p. xviii. The

study included a review of NAFTA’s key provisions and

implementation status and economic performance by the

three NAFTA partners and analyzed NAFTA’s impact on the

U.S. economy overall, U.S. trade with NAFTA partners, U.S.

workers in industries competing with Mexican imports, and

68 specific sectors.

31 Ibid.

32 Ibid., p. xviii.

33 Ibid., p. xix.

34 Ibid., p. xxi.

of NAFTA, but did not sustain those increases

in 1995 and 1996.35

 The sharp devaluation of the Mexican peso and

that country’s resulting recession is widely acknowledged to have been the dominant factor

shaping U.S.-Mexico trade flows in the period

since the start of NAFTA in January 1994.36

 The 1982 debt crisis in Mexico was accompanied by a 50 percent decline in U.S. exports

from 1981 to 1983.37 Despite the December

1994 devaluation of the peso, the United States

witnessed an increase in U.S. exports to Mexico

of 35.8 percent between 1993 and 1996.38 [Full

year 1997 data, which were not available for

analysis in the Commission’s study, show that

U.S. exports to Mexico rose another 25 percent,

or by $13.7 billion in 1997 reflecting the recovery of the Mexican economy.]

 Compared with European and Asian exporters,

North American exporters were less adversely

affected by shrinking Mexican imports in 1995

and profited more from resurging Mexican imports in 1996.39

 Analysis of labor market data at the industry

level indicates that 19 of the 120 manufacturing

industries analyzed experienced some NAFTArelated change in hourly earnings or hours

worked.40 Hours worked were more often

found to be positively related to NAFTA, while

earnings were more often found to be negatively affected. Total employment in these industries amounts to 3.4 percent of the total nonfarm

labor force and 17 percent of the total manufacturing labor force.41 (Only a fraction of these

workers was estimated to be affected by

NAFTA.)

35 Ibid., p. xxii. 36 Ibid., p. xxi. 37 Ibid., p. xix. 38 Ibid., p. xx. 39 Ibid.

40 Ibid., pp. 4-17 to 4-18. The industries identified as

being affected by NAFTA were: meats and livestock; textile

mill products; apparel and other finished textile products;

paper products; industrial inorganic chemicals; soaps, detergents, and toiletries; plastic and rubber products; leather

tanning and finishing; flat glass and glassware; vitreous china plumbing fixtures; steel products; nonferrous metals,

wrought; fabricated metal products; industrial machinery;

heavy electrical equipment; electrical lighting and wiring

equipment; electronic components and accessories; measuring, analyzing, and control instruments; and games, toys, and

children’s vehicles, except dolls and bicycles. 41 Ibid., p. 4-18.
60

 While NAFTA will have caused dislocations to

some workers in the labor force, these are small

relative to total job creation over the same period and relative to dislocations associated with

other factors such as technological change.42

 The ITC’s analysis of individual industries and

groups indicates that NAFTA had a significant

effect on the increase in U.S. trade in 9 of 68 sectors: (1) grains and oilseeds, (2) raw cotton,

(3) textile mill products, (4) apparel,

(5) women’s footwear, (6) leather tanning and

finishing, (7) household appliances, (8) motor

vehicles, and (9) motor vehicle parts.43 In the

services sector, NAFTA had a significant effect

on U.S. financial services firms, as Mexico removed limits on foreign investment in banking

and securities.44

The U.S. Department of Agriculture (USDA) submitted its first biennial report on NAFTA’s impact on

agricultural commodities and rural communities in

September 1997, as required by the NAFTA Implementation Act.45 USDA said that its analysis of NAFTA’s effects was complicated by the adoption of fundamental domestic agricultural reform measures in all

three NAFTA countries as well as adverse weather,

which has been a major factor in recent shifts in crossborder trade patterns. Nevertheless, USDA concluded

that, “The impacts of NAFTA on U.S. agriculture and

rural areas have been positive overall, but so far generally small.” Specifically, the report stated—

 NAFTA has had a positive effect overall on U.S.

agriculture, reinforcing the trend toward greater

integration of markets in North America.

 NAFTA’s agricultural provisions have had a

modest positive impact on investment and employment in the U.S. rural economy to date.

 More-open trade has improved the competitiveness of the United States in a broad range of

agricultural sectors and mitigated local production shortfalls, securing more stable supplies

and reducing price volatility. Consumers in all

42 Ibid., p. 4-19.

43 Ibid., p. xxiii.

44 Ibid., p. xxv.

45 U.S. Department of Agriculture, Economic Research

Service, NAFTA: International Agriculture and Trade, WRS-97-2, September 1997.

three NAFTA countries have benefitted from

more access to wider sources of supply.

 USDA estimated that U.S. exports to Mexico

and Canada were 3 and 7 percent higher, respectively, in 1996 than they would have been without NAFTA; imports from Mexico and Canada

were 3 and 5 percent higher respectively.

 USDA found that NAFTA’s biggest impacts

were in products that faced high initial barriers

and rapid liberalization. For example, U.S. beef

exports to Canada were 100 percent higher in

1996 because of NAFTA; and bilateral trade between the United States and Canada in wheat

and wheat products and vegetable oils was 5 to

10 percent higher in 1996 than it would have

been without the agreement.

 NAFTA played a relatively minor role in the increase in U.S. imports of winter vegetables. The

peso crisis, technological shifts in tomato production, and unusual weather in Florida were

far more important than NAFTA-induced tariff

reductions, USDA concluded.

In September 1997 testimony, the U.S. General Accounting Office made the following general observations about NAFTA’s impacts and implementation: (1)

trade with NAFTA partners has accelerated; (2) sectoral impacts are diverse; (3) estimates of jobs “gained”

or “lost” to NAFTA vary substantially and suffer from

methodological limitations,46 although in general, trade

policies do not alter the overall employment level; (4)

the effectiveness of NAFTA in locking in Mexico’s

long-term commitments to market reforms and

46 Job “gain” and “loss” numbers are controversial and

often crude estimates. Moreover, the number of jobs in the

economy is primarily a function of macroeconomic conditions. Both opponents and proponents of NAFTA have relied

on “jobs multipliers” to estimate job losses, but the multipliers themselves are controversial and they have at times been

applied in ways that are not analytically sound, e.g., using a

number for the average number of jobs supported by exports

to assess the employment effect of imports.

The number of workers certified to receive NAFTA

Trade Adjustment Assistance (TAA) is recognized as an

imprecise measure of the number of workers losing jobs

because of NAFTA. Workers do not have to be actually laid

off to qualify for certification; and there is no requirement to

demonstrate that NAFTA per se was the cause of increased

imports or production shifts. Conversely, many NAFTA-impacted workers are unaware of NAFTA-TAA benefits or

seek assistance under other adjustment assistance programs

or accept alternative employment due to training requirements and time limits associated with NAFTA-TAA. Socalled secondary workers that supply firms that relocate or

close due to shifts in production to or increases in imports

from NAFTA partners do not qualify for NAFTA-TAA.
61

promoting Mexican growth is not yet clear; and (5)

NAFTA’s system for avoiding and settling disputes has

helped governments resolve important trade issues.47

The transmittal of these governmental reports

sparked other efforts to assess the accord. Some found

NAFTA’s net effects to be so far, on balance, positive,

others claimed the effects are negative; and still others

suggested that the accord had virtually no impact.48

 Several major studies agreed with the President

that, by lowering high Mexican trade barriers

and helping to stabilize Mexico in the wake of

the December 1994 peso crisis,49 NAFTA had a

modest positive effect on the U.S. economy and

an even more important positive effect on Mexico and overall trade levels among NAFTA partners.50 Indeed, NAFTA was seen by some as a

far-reaching precedent, containing disciplines

worthy of emulation in other trade liberalization

46—Continued

For additional background, see, David C. Datelle, NAFTA’s

Effect on U.S. Jobs, Progressive Policy Institute Backgrounder, Oct. 1997; and David C. Ranney and Robert R.

Naiman, Does Free Trade Create Good Jobs? Institute for

Policy Studies and Great Cities Institute, Jan. 23, 1997.

47 U.S. General Accounting Office, North American

Free Trade Agreement: Impacts and Implementation, Testimony before the Subcommittee on Trade, Committee on

Ways and Means, House of Representatives, Sept. 11, 1997,

GAO/T-NSIAD-97-256, pp. 2-3.

48 For a concise summary of this perspective see, 

Helene Cooper, “Experts’ View of NAFTA’s Impact: It’s a

Wash,” The Wall Street Journal, June 17, 1997. One analysis

falling into this category is Raul Hinojosa-Ojeda, Curt

Dowds, Robert McCleery, Sherman Robinson, David 

Runsten, Craig Wolff, and Goetz Wolff, North American

Integration Three Years After NAFTA: A Framework for

Tracking, Modeling and Internet Accessing the National and

Regional Labor Market Impacts (Los Angeles: UCLA, North

American Integration and Development Center, Dec. 19,

1996).

49 Expanded integration of North American production

and improved cooperation on a range of matters were also

cited as evidence of NAFTA’s role in improving productivity

and fostering needed change by Mexico. See, for example,

Sidney Weintraub, NAFTA at Three: A Progress Report, (Washington, DC: Center for Strategic and International

Studies, 1997), and Nora Claudia Lustig, NAFTA: Setting the

Record Straight, Brookings Policy Brief, May 1997.

50 See, for example, DRI, The Impact of NAFTA on the

North American Economy, (Lexington, MA: DRI/McGrawHill, Jan. 1997); John Sweeney, NAFTA’s Three-Year Report

Card: An “A” for North America’s Economy, (Washington,

DC: The Heritage Foundaton, 1997); and U.S.-

Mexico Chamber of Commerce, NAFTA After Three Years:

A Success, 1997, which each reach similar conclusions to the

President about NAFTA’s overall positive effect and make

similar arguments as to why that is the case. These views

were echoed in opening remarks of Rep. Philip M. Crane

(R-IL) before The Trade Subcommittee of the House Ways

and Means Committee on Effects of NAFTA on the U.S.

Economy, Sept. 11, 1997, LEGI-SLATE Report for 105th

Congress, Sept. 15, 1997, Transcript 972540430, pp. 1-2.

initiatives.51 These analysts maintained that the

peso’s crash and associated recession was the

biggest reason for the expansion of the U.S.

trade deficit with Mexico, but was not related to

NAFTA.52

 Critics claimed that, contrary to “promises” by

NAFTA proponents over job and export

gains,53 NAFTA destroyed U.S. job opportunities,54 heightened pressures on U.S. wages and

benefits,55 widened the U.S. trade deficit,56 had

a disproportionate and negative affect on

51 See, for example, Rebecca Reynolds Bannister, The

NAFTA Success Story: More Than Just Trade, Progressive

Policy Institute, Sept. 1997.

52 See, for example, David M. Gould, “Distinguishing

NAFTA from the Peso Crisis,” The Southwest Economy, Federal Reserve Bank of Dallas, Sept./Oct. 1996, pp. 6-10.

53 Public Citizen’s Global Trade Watch, NAFTA’s Broken Promises: Failure to Create Jobs, (Washington, DC:

Public Citizen, Feb. 1997). Using statements contained in

business and government reports and congressional testimony, Public Citizen attempted to determine whether “promised” job creation or export growth made before NAFTA’s

passage actually materialized after its inception by surveying

the companies involved (67 companies that “made promises”

responded to their survey; 16 did not). As detailed in the

report [p. 3], “89 percent of the companies that we contacted

had not made any significant steps toward fulfilling their

promises of U.S. job creation or export expansion.”

54 See, for example, Jesse Rothstein and Robert E. Scott,

NAFTA’s Casualties: Employment Effects on Men, Women,

and Minorities, Economic Policy Institute, Issue Brief No.

120, Sept. 19, 1997. Using an input-output model (rather

than “jobs multipliers”) the authors analyze how the reduction in net U.S. exports to NAFTA partners since 1993 affected U.S. job opportunities, finding that a disproportionate

number of the jobs eliminated were manufacturing jobs,

which pay relatively higher wages. They also examine exports and imports separately, finding that while increased

exports to Mexico and Canada generated nearly 400,000

jobs, those job gains were offset by increased imports, which

eliminated nearly 800,000 jobs. On balance, they conclude,

NAFTA resulted in a net loss of 394,835 job opportunities in

its first three years. The President’s report [Executive Summary, p. i] indicates that the number of U.S. jobs supported

by exports to Canada and Mexico increased by 311,000 since

NAFTA’s entry into force.

55 Kate Bronfenbrenner, The Effects of Plant Closing or

Threat of Plant Closing on the Right of Workers to Organize, Cornell University, Sept. 30, 1996. The study, commissioned

by the U.S. Department of Labor but yet to be formally released by it, found evidence that since NAFTA’s inception

U.S. employers had increased resort to threats of relocation

to Mexico when facing efforts by employees to form unions

or to collectively bargain over wages and benefits. It should

be noted that since 1993, improvements in real income were

recorded at all quintiles of the U.S. income distribution, according to the President’s report (p. 12).

56 Public Citizen, Clinton Administration’s NAFTA Report: Statement by Lori Wallach, Director, Public Citizen’s

Global Trade Watch, July 11, 1997, p. 1.
62

minorities and rural communities,57 compromisedfood safety, and worsened transborder

problems such as environmental degradation,

drug trafficking, and illegal immigration.58

Analyzing NAFTA cannot be separated from

the peso-induced recession of 1995,59 from

which Mexican wages have yet to recover, they

said.60 NAFTA was thus failing to assure a

stable and prosperous Mexico, according to

critics.61

 The Mexican government said NAFTA had had

a postitive impact on Mexico’s growth and competitiveness and contributed to its economic development. Among other things, NAFTA

helped Mexico become the world’s 10th largest

exporter and 2nd largest developing-country recipient of foreign direct investment in 1996, the

government reported. The benefits of Mexico’s

export growth are also becoming more dispersed: the number of small- and medium-sized

businesses engaged in exports has increased by

nearly 50 percent from 1993 to 1996 and more

than half of the new maquiladoras established

57 See, for example, National Council of La Raza Office

of Research, Advocacy and Legislation, NAFTA Dislocated

Workers: A Latino Perspective, Washington, DC: National

Council of La Raza, June 1997 and Raul Hinojoa Ojeda,

Davin Runsten, and Craig Wolff, The Labor Market Impacts

of North American Economic Integration on Latino, Black,

and White Workers, Los Angeles: UCLA North American

Integration and Development Center, July 1997.

58 See, for example, International Brotherhood of Teamsters, “Clinton Report Glosses Over Harm NAFTA Has

Caused Working Families: Carey,” press release, July 11,

1997 and “Congressman David Bonoir, “NAFTA Isn’t Getting Any Better With Age,” press release, July 11, 1997.

59 NAFTA’s prospect also complicated stabilization

policy in Mexico and in this indirect way, contributed to

Mexico’s 1995 financial crisis, according to DRI, The Impact of NAFTA on the North American Economy, Lexington,

MA: DRI/McGraw-Hill, Jan. 1997, which otherwise finds

that in actual operation NAFTA in isolation, i.e., after factoring out the peso’s depreciation and Mexico’s ensuring recession, increased actual and net U.S. exports to Mexico.

60 NAFTA fueled speculative investments in Mexico

and made it more vulnerable to sudden shifts in currency

values, some suggested. See, for example, Robert Kuttner,

“Why Clinton’s ‘Fast Track’ Loss is a Win,” The Washington

Post, Nov. 16, 1997, pp. C-1 and C-2. Council on Hemispheric Affairs, “NAFTA’s Failure to Deliver,” press release

97-20, June 27, 1997. The President’s report (p. 28) notes

that in March 1997, real wages in Mexico were still 23 percent below their March 1994 level, before the peso crisis hit,

but adds that workers in Mexico’s export-oriented maquiladora industry experienced a smaller decline in real wages.

61 See, for example, Alan Tonelson, “NAFTA Backers’

Flawed Excuses,” The Washington Times, Mar. 28, 1997, 

p. A17.

in Mexico during 1996 were outside the border

region, the government reported.62

It should be noted that such assessments are preliminary. NAFTA’s provisions are being phased in over

a 15-year period that began on January 1, 1994, with

many Mexican tariff reductions and certain other obligations yet to enter into effect. Thus, the reports present a snapshot of NAFTA’s impact one-fifth of the way

through its implementation period. Moreover, the

3-year period examined was marked by substantial divergence in economic performance among the three

NAFTA partners. Mexico, in particular, experienced its

worst recession in 60 years in the wake of the sharp

depreciation of the peso’s value on international currency markets that began in December 1994. The

United States, meanwhile, enjoyed its longest peacetime expansion and began phasing in the results of the

Uruguay Round, including its commitment to accomplish a 35 percent reduction in average U.S. tariffs.

Others believe that NAFTA per se has not likely

had a major effect on the U.S. economy overall. The

United States already had a free trade agreement with

Canada that had largely been implemented; the value

of Mexico’s total annual output (GDP) is only about 3

or 4 percent of that of the United States; and before

NAFTA, U.S. barriers were already generally low. To

the extent NAFTA did cause difficulties for certain

U.S. firms or workers, they were occuring in the context of a growing economy and expanding employment. While some jobs undoubtedly were lost to

heightened competition after NAFTA’s entry into force,

over the 1993 to 1997 time frame, U.S. civilian employment increased by 8.3 million, dwarfing even the

highest estimates of the employment effects of NAFTA.63 The unemployment rate has steadily declined

over the 1994-97 period, reaching a 24-year low of 4.9

percent in 1997.

Even so, lingering debate over the accord’s effects

spilled over into Congressional consideration of the

President’s September 1997 request for “fast track” authority to negotiate trade agreements,64 including a

proposed free trade agreement with Chile, despite Ambassador Barshefsky’s appeal for Congress to look past

NAFTA towards opportunities in Latin America, Asia,

62 Embassy of Mexico, SECOFI-NAFTA Office, “NAFTA Is Successful at Increasing Trade and Competitiveness,”

NAFTA Works, June 1997, pp. 1-5.

63 This point was made in U.S. International Trade

Commission, The Impact of the North American Free Trade

Agreement on the U.S. Economy and Industries: A Three

Year Review, June 1997, ITC investigation No. 332-381,

USITC publication 3045, p. 4-19. For a discussion of the

overall trends in the U.S. economy during NAFTA’s first

three years, see pp. 3-3 to 3-16 of that report.

64 See, for example, Statement of Olympia Snowe (DME) on Fast-Track Authority, Congressional Record, p.

S12631-33, Nov. 13, 1997, and Ileana Ros-Lehtinen (R-FL),

“Why I Opposed ‘Fast Track’,” Miami Herald, Nov. 23,

1997.
63

and the WTO.65 Specifically, opponents of “fast track”

urged that future trade liberalization initiatives not use

NAFTA as a model, given concerns they had that

NAFTA was not safeguarding certain U.S. interests

well enough. (As noted in chapter 1, the President ultimately requested that the House of Representatives refrain from voting on its fast track bill.) Indeed, bills

were introduced in the House and Senate, but not further advanced that would preclude NAFTA’s expansion

and require its renegotiation if certain conditions were

not met.66

NAFTA Implementation Issues

Implementation of NAFTA commitments on agriculture, intellectual property, and standards required

ongoing attention in 1997. Agricultural issues were

dealt with primarily in a bilateral context, and are thus

discussed in the “Canada” and “Mexico” sections of

chapter 4. Textile trade under NAFTA is discussed in

chapter 5. Standards and IPR issues were discussed primarily in the NAFTA context.

Standards

Four key standards-related issues were addressed

under NAFTA in 1997: (1) amendments to Mexico’s

law for developing and enforcing standards, (2) Mexico’s new certification requirements, (3) implementation of new Mexican labeling requirements, and (4) the

scheduled January 1, 1998, implementation of a unique

feature of NAFTA: the requirement that Mexico recognize, on a national treatment basis, conformity assessment bodies located in the United States and Canada. Acceptance of standards as “equivalent” and of

specified regions as disease-free, both innovative features of NAFTA, were also pursued. Finally, Mexico

and Canada expressed concern about U.S. implementation of fastener quality standards and proposed country-of-origin marking rules for frozen vegetables.67

Changes to Mexico’s standards 

development system

Mandatory, government-enforced standards play a

much greater role in Mexico than they do in the United

States. The Mexican government has been revamping

65 Ambassador Charlene Barshefsky, testimony before

the Senate Finance Committee, June 3, 1997.

66 For example, H.R. 78, “NAFTA Renegotiation and

WTO Dispute Settlement Review Commission Act,” was

introduced by Rep. Ralph Regula (R-OH) on Jan. 7, 1997

and S. 1514, the “NAFTA Accountability Act,” was

introduced by Sen. Byron Dorgan (D-ND) on Nov. 10, 1997.

67 U.S. Department of State telegram, “NAFTA Committee on Standards-Related Measures: Report of the July 10

Meeting,” message reference No. 144863, Aug. 2, 1997.

its entire system for formulating standards since the

early 1990s. During 1997, discussions continued over

changes to Mexico’s 1992 Federal Law on Metrology

and Standardization that allow regulatory agencies to

modify official standards without adhering to the normal notice and comment procedures, which are required by NAFTA and the WTO in order to ensure

transparency.

The United States made clear its view that publication in draft and opportunity for comment are required

by NAFTA and the WTO Agreement on Technical

Barriers to Trade (TBT), pointing to the confusion

caused by Mexican implementation of new textile-labeling requirements without advance notice. At April

meetings, Mexico explained that only modifications

“which are not new or do not include more restrictive

requirements” would be promulgated under the streamlined procedures.68 In July 10, 1997, meetings of the

NAFTA Committee on Standards-Related Measures,

Mexico assured the United States that exceptions to

normal notice and comment procedures would be interpreted narrowly and only apply in rare circumstances.69 However, there has been ongoing disagreement with Mexico over its compliance with NAFTA

and TBT notice and comment requirements. During

1997, for example, in discussing U.S. concerns about

the handling of health-related regulations by the Ministry of Health, Mexico asserted that implementing regulations for laws also do not have to be notified in draft

or open for comment.70

On May 20, 1997, Mexico published more extensive changes to the 1992 Law on Metrology and Standardization. The new changes took effect on August 1,

1997. In general, the changes provide greater transparency and increased private sector participation in the

standards and certification process.71 The revision also

68 U.S. Department of State telegram, “NAFTA Committee on Standards: Report of Ninth Meeting [April 10-11,

1997],” message reference No. 73257, prepared by U.S.

Department of State, Washington, DC, Apr. 19, 1997.

69 U.S. Department of State telegram, “NAFTA Committee on Standards-Related Measures: Report of the July 10

Meeting,” message reference No. 144863, Aug. 2, 1997.

70 U.S. Department of State telegram, “Information for

WTO Trade Policy Review Mechanism—Mexico,” message

reference No. 9384, prepared by U.S. Embassy, Mexico City,

Sept. 26, 1997. An April report put it this way, “SECOFI

officials maintain that regulations pursuant to law, such as

the implementing regulations of the 1984 health law, are not

subject to the NAFTA transparency provisions of Ch. 9.”

U.S. Department of State telegram, “Overview of Bilateral

Standards Issues,” message reference No. 3394, prepared by

U.S. Embassy, Mexico City, Apr. 9, 1997.

71 U.S. Department of State telegram, “1997 Trade Act

Report: Mexico,” message reference No. 10605, prepared by

U.S. Embassy, Mexico City, Oct. 31, 1997.
64

holds the potential for resolving specific U.S. concerns.

For example, responses to comments must now be published at least 15 days prior to final publication of standards, and emergency standards can no longer be automatically renewed.72

Nevertheless, the United States expressed reservations about several features of the law.73 Regarding

transparency, U.S. negotiators sought assurances that

new or modified conformity assessment procedures

would be notified and comments taken into account.

The United States was also concerned over how the

new law’s requirement to use international standards

when formulating mandatory standards would affect

U.S. market access to Mexico, given that U.S. sales

often depend on market acceptance of standards developed by U.S. organizations. Finally, the United States

was concerned about provisions of the law that would

subject all future agreements on mutual recognition of

conformity assessment, whether among private sector

or governmental bodies, to approval by the Mexican

government. Approval would be contingent on satisfying three conditions, including “reciprocity.” The

United States was concerned that this requirement

would inhibit mutual recognition agreements (MRAs)

and subject them to extraneous conditions.74

Certification requirements

Many U.S. exports to Mexico must demonstrate

conformity with at least one mandatory standard by

such means as laboratory tests and certifications.75 In

1994, Mexico changed its testing and certification procedures to require more frequent testing of products.

The new law’s requirement that each importer (versus

72 U.S. Department of State telegram, “Mexico Revamps Standards Law,” message reference No. 4958, prepared by U.S. Embassy, Mexico City, May 23, 1997.

73 U.S. Department of State telegram, “BNC Trade and

Investment Working Group: Sugar, Standards, Brooms,”

prepared by U.S. Embassy, Mexico City, May 2, 1997.

74 USTR, informal communication, July 7, 1997.

75 U.S. Department of State telegram, “Mexico Publishes Standards Certification Procedures for Comment,”

message reference No. 60, prepared by U.S. Embassy, Mexico City, Jan. 3, 1997.

each producer) obtain its own standards certification

caused problems for U.S. exporters.76

Proposed changes in Mexico’s certification procedures were published in draft on January 3, 1997. At

the April 1997 and July 1997 meetings of the NAFTA

Committee on Standards-Related Measures, Canada

and the United States both commented on the proposed

changes.77

On October 24, 1997, Mexico published its final

regulations.78 They contained changes that could ease

some of the difficulties with the 1994 procedures. Specifically, the new certification procedures allow foreign

manufacturers to obtain a “dictamen,” or notice, that its

product has been tested to be in compliance with a

Mexican standard; it appears that with a copy of the

manufacturer’s dictamen, any number of importers can

obtain certification for the product.79 However, to obtain that benefit, the manufacturers would have to undergo quality-system certification from a Mexican

quality-system registrar, raising costs.80 Echoing a

concern voiced earlier by Canada,81 at a November

17, 1997, meeting of the NAFTA Committee on Standards-Related Measures, the United States expressed

concern that the new procedures appear to offer national producers more options than foreign manufacturers. NAFTA officials continue to discuss the certification options available under Mexico’s new law.82

New labeling requirements

In 1997, Mexico adopted major changes in its general labeling requirements. Border enforcement of new

76 U.S. Department of State telegram, “Information for

WTO Trade Policy Review Mechanism—Mexico,” message

reference No. 9384, prepared by U.S. Embassy, Mexico City,

Sept. 26, 1997.

77 U.S. Department of State telegram, “NAFTA Committee on Standards: Report of Ninth Meeting,” message

reference No. 73257, prepared by U.S. Department of State,

Washington, DC, Apr. 19, 1997.

78 For background see, U.S. Department of Commerce,

“New Draft Regulations on Product Certification in Mexico,” NAFTA Facts Document 9015.

79 U.S. Department of State telegram, “Review of Standards Issues,” message reference No. 10826, prepared by

U.S. Embassy, Mexico City, Nov. 7, 1997.

80 U.S. Department of State telegram, “Mexican Certification Regulations: Giving with One Hand But Taking with

the Other,” message reference No. 11043, Nov. 14, 1997;

and U.S. Department of State telegram, “NAFTA Committee

on Standards: Report of Ninth Meeting,” message reference

No. 73257, prepared by U.S. Department of State, Washington, DC, Apr. 19, 1997.

81 U.S. Department of State telegram, “NAFTA Committee on Standards-Related Measures: Report of the July 10

Meeting,” message reference No. 144863, Aug. 2, 1997.

82 According to participants, the issue was specifically

discussed at the most recent meeting of the NAFTA Committee on Standards-Related Measures, held November 17,

1997, in Washington, DC.
65

labeling requirements for general consumer goods

(NOM-050) began on March 1, 1997, and for processed foods and alcoholic beverages (NOM-051), on

June 1, 1997.83 However, “on the shelf” enforcement,

to ensure that products sold in stores comply with the

labeling requirements, which was to begin on July 1

and November 1, 1997, respectively, was postponed

until January 1, 1998. Domestic enforcement is handled by Mexico’s consumer protection agency, whereas

border enforcement is handled by the Mexican Customs agency. Imports, therefore, are subject to dual inspection, first at the border and then at the retail level,

whereas domestic products are subject only to retail

enforcement. During 1997, only imports were subject

to inspection.

Efforts under NAFTA continued in 1997 to resolve

questions raised by U.S. business about the new rules,

which were, according to a mid-April report, delaying

or otherwise affecting an estimated 6.5 percent of Mexico’s total imports or $5.8 billion worth of goods84 and

adding significantly to U.S. exporters’ costs.85 Mexico

published clarifications to the new rules in the June, 2,

1997, Diario Oficial that resolved one major concern—the length of time documents certifying compliance with the labeling requirements would remain

valid. On July 24, 1997, a directive was issued clarifying when goods not destined for final use by consumers are exempt from the labeling regulations,86 addressing another problem in interpretation.87

Nevertheless, at the July 10 meeting of the NAFTA

Committee on Standards-Related Measures, the United

States said U.S. industry was continuing to experience

practical difficulties with the requirements. Specifically, the “verification units” responsible for ensuring adequate labeling were overburdened, costly, and slow.

By mid-year, only five verification units had been

named and they were located in Mexico City rather

83 For background see, “Verification Units and Mexico’s

New Labelling Rules,” U.S. Department of Commerce,

NAFTA Facts, Doc. 9016.

84 The estimate was prepared by the National Association of Importers and Exporters of Mexico, and reported in

Mary Sutter, “Mexico’s Label Rules Draw Ire from Top Import-Export Group,” The Journal of Commerce, Apr. 15,

1997.

85 U.S. Department of State telegram, “NAFTA Committee on Standards: Report of the Ninth Meeting [April

10-11, 1997], message reference No. 73257, prepared by

U.S. Department of State, Washington, DC, Apr. 19, 1997.

86 Bureau of National Affairs, “Mexico Issues Directive

Easing Attainment of Labeling Laws Exemption,” International Trade Reporter, Vol 14, No. 31, p. 1325.

87 U.S. Department of State telegram, “Overview of

Bilateral Standards Issues,” message reference No. 3394,

prepared by U.S. Embassy, Mexico City, Apr. 9, 1997.

than at border crossings. None of the entities was permitted to provide postentry verification services to new

importers or small importers.88 Customs enforcement

was strict and often inconsistent,89 and both verification units and Customs were interpreting narrowly the

scope of “families of products” that could be grouped

under one label. Documents known as “constancias”

(providing preapproval of labels) were product- and

importer-specific, forcing producers with multiple importers to submit the same label for approval multiple

times.90 Mexico’s Secretariat of Commerce and Industrial Development (SECOFI) responded to all of these

concerns prior to the November meeting of the Committee on Standards-Related Measures,91 prompting

the U.S. Embassy to commend the Mexican government for its increased willingness to work with U.S.

industry to address implementation concerns.92 Nevertheless, at a November 17, 1997, meeting, the United

States expressed concern that the lag in “on-the-shelf”

enforcement meant that Mexico’s domestic producers

had been given longer lead times to come into compliance. It also expressed concern that border enforcement, appears to be more rigorous than the domestic

enforcement finally being undertaken. The U.S. Government urged Mexico to ensure nondiscriminatory enforcement.

Recognition of conformity assessment

bodies

Effective January 1, 1998, NAFTA Art. 908.2 obligates Mexico to recognize U.S. and Canadian conformity assessment bodies on terms no less favorable than

those accorded to conformity assessment bodies in

88 Postentry verification is not currently permitted for

firms that have been on the importer registry for less than

two years or firms whose imports amounted to less than

$100,000 over the prior year. U.S. Department of State telegram, “Overview of Bilateral Standards Issues,” message

reference No. 3394, prepared by U.S. Embassy, Mexico City,

Apr. 9, 1997.

89 Mary Sutter, “Mexican, Foreign Firms Watch to See

How Strict Label Rules are Enforced,” The Journal of Com- merce, July 1, 1997 and BNA, “Industry Official Says 

Mexico Will be Flexible in Enforcement of New Labeling

Standards,” International Trade Reporter, Vol. 14, No. 25, p.

1076, June 18, 1997.

90 U.S. Department of State telegram, “NAFTA Committee on Standards: Report of the Ninth Meeting [April

10-11, 1997],” message reference No. 73257, prepared by

U.S. Department of State, Washington, DC, Apr. 19, 1997.

91 U.S. Department of Commerce official, telephone

conversation with USITC staff, Mar. 18, 1997.

92 U.S. Department of State telegram, “1997 Trade Act

Report: Mexico,” message refrence No. 10605, prepared by

U.S. Embassy, Mexico City, Oct. 31, 1997.
66

Mexico.93 During 1997, the United States discussed

Mexico’s plans to implement its obligation.94 Government of Mexico officials stated that Mexico has already complied with the national treatment obligation

of NAFTA Art. 908.2 with the change in the metrology

law that became effective August 1, 1997 (see above).

That law transfers the function of accreditation from

the government to a private sector national accreditation body (or bodies), although the government continues to supervise the accreditation process. This national accreditation body will evaluate Mexican, U.S., and

Canadian conformity assessment bodies on an equal

basis, the Mexican government said at a July 10, 1997,

meeting. By late 1997, a private body to perform accreditation had yet to be established. Nevertheless, the

Government of Mexico, which, in the interim, remains

directly responsible for accreditation itself, assured its

NAFTA partners that it would be prepared to accept

applications for accreditation from U.S. and Canadian

bodies by January 1, 1998, as required by NAFTA.95

Intellectual Property Rights

Chapter 17 of NAFTA provides for nondiscriminatory national treatment in intellectual property rights

(IPR) protection and requires each party to ensure that

effective enforcement procedures are in place and civil

judicial procedures are available to rights holders.

Chapter 17 served as a model for the WTO Agreement

on Trade-Related Intellectual Property Rights (TRIPS)

negotiated in the Uruguay Round, and is built on existing international agreements—including the Paris Convention on the Protection of Industrial Rights and the

Rome Convention on the Rights of Authors and Artists. NAFTA goes beyond the TRIPS Agreement,

however. Mexico, as a developing country, has until

the year 2000 to implement fully its TRIPS obligations. However, because NAFTA contains no such

transition period, Mexico already is required to have

TRIPS-consistent IPR legislation.96 Nevertheless,

shortcomings in Mexico’s IPR protectionhave been a

93 NAFTA Art. 908.2 states, “each Party shall accredit,

approve, license or otherwise recognize conformity assessment bodies in the territoriy of another Party on terms no

less favorable than those accorded to conformity assessment

bodies in its territory.” Annex 908.2 gives Mexico until 

Jan. 1, 1998, to implement this obligation.

94 U.S. Department of State telegram, “NAFTA Implementation: Request for Embassy Assistance,” message reference No. 169149, prepared by U.S. Department of State,

Washington, DC, Sept. 10, 1997.

95 Meeting of NAFTA Committee on Standards-Related

Measures, Nov. 17, 1997, meeting notes.

96 U.S. Department of State telegram, “Information for

WTO Trade Policy Review Mechanism,” message reference

major irritant which persisted through 1997, even

though Mexico took some steps during the year to address concerns about them. Canada, meanwhile, was

placed on USTR’s “watch list” in April 1997 because

its recently passed copyright law failed to provide U.S.

copyright holders national treatment.

Even before NAFTA became effective, Mexico had

begun to improve significantly its patent, trademark,

and copyright protection by creating the Industrial

Property Act97 and the Copyright Act98 in 1991. Subsequently, Mexican obligations under NAFTA have

given rise to a wide range of laws and regulations. A

notable piece of NAFTA-inspired legislation is the

1994 amendment to the 1991 Industrial Property Act,

creating the Mexican Institute for Industrial Property

(IMPI) with a mandate to implement Mexico’s laws on

IPR protection. Also noteworthy is Mexico’s new Customs Law, in force since April 1, 1996, which enables

Mexican customs officials to seize pirated merchandise. In 1996, Mexico passed a law providing protection of plant species, as required by NAFTA. Mexico’s

most recent copyright legislation, published on December 24, 1996, imposed stiffer penalties for violators and

strengthened administrative procedures. This new

copyright law substantially increases protection of

computer programs, textile designs, and several other

types of copyrighted material, and permits IMPI to take

action against violators.

Nonetheless, the new law contained serious deficiencies from the U.S. perspective. Particular concerns

included the lack of criminal penalties for sound-recording piracy, the absence of civil remedies, and the

possible decriminalization of end-user piracy.99 Technical amendments to Mexico’s copyright law that addressed some U.S. concerns were passed on April 29,

1997, for example, by bringing commercial piracy of

sound recordings under coverage of criminal law. Efforts to rectify remaining U.S. concerns continued

throughout 1997.

97—Continued

No. 9384, prepared by U.S. Embassy, Mexico City, 

Sept. 26, 1997.

97 Mexico’s “Law for the Promotion and Protection of

Industrial Property” of June 26, 1991, covers patents, trademarks and trade secrets, and replaces the 1976 Law of Inventions and Marks and the 1982 Law on the Transfer of

Technology. Notably, this law extended patent protection

from 14 to 20 years from the date of filing, granted trademarks for 10-year renewable periods, and provided for recovery of damages in case of infringement.

98 The 1991 copyright law includes provisions for increased protection of computer programs against unauthorized reproduction and provides for procedures when claiming damages.

99 United States Trade Representative, 1997 National

Trade Estimate Report on Foreign Trade Barriers, p. 263.
67

Implementation of the new copyright law and

Mexico’s other IPR obligations under NAFTA remained insufficient in 1997. Although Mexico was not

placed on the “priority watch list”100 of IPR violators

in the USTR’s “Special 301” annual review, it was

cited in the “other observations” category as having

continued problems with piracy.101 U.S. producers of

computer software and video and audio recording

equipment continue to allege that Mexico has fallen

short in meeting NAFTA demands, particularly in enforcement issues.102

The weakness of Mexican copyright protection was

addressed among a wide range of IPR issues of mutual

interest at an August 1997 meeting of U.S. and Mexican interagency expert-level delegations.103 The U.S.

side expressed disappointment with the Mexico’s delay

in publishing and starting to enforce regulations based

on the new copyright protection law that were promised for early summer 1997—including civil remedies

for violations.104 The tardiness of enforcing the new

law constituted one of the major unresolved bilateral

IPR issues in 1997. In addition, possible satellite signal

piracy in Mexico emerged as a new copyright issue to

emerge during the August meeting.

Trademarks, especially for pharmaceutical products, constituted another focus of discussion. U.S. and

some third-country pharmaceutical companies were

concerned about some provisions of new draft Mexican

health regulations regarding the use of generic pharmaceuticals in prescriptions. The regulations being developed by the Secretariat of Health would require private

doctors to issue pharmaceutical prescriptions with generic names, although doctors would also be allowed to

specify an appropriate trademarked product. Presently,

100 The priority watch list was established under the

“Special 301” provisions of the Trade Act of 1974. See also

USTR, “USTR Announces Results of Special 301 Annual

Review,” press release, 97-37 and Fact Sheet, p. 18, Apr. 30,

1997.

101 U.S. Department of State telegram, “1997 Trade Act

Report: Mexico,” message reference No. 10605, prepared by

U.S. Embassy, Mexico City, Oct. 31, 1997.

102 International Intellectual Property Alliance, 

“Excerpt from the IIPA Special 301 Recommendations, 

February 24, 1997, Priority Practices Violating the NAFTA:

Mexico,” found at Internet address 

http://www.iipa.com/html/rbc_mexico_301_97.html, retrieved Mar. 13, 1998. See also, U.S. International Trade

Commission, The Impact of the North American Free Trade

Agreement on the U.S. Economy and Industries, USITC publication 3045, June 1997, pp. 3-42 to 3-43.

103 As detailed in earlier editions of this report, the U.S.-

Mexican bilateral working group on IPR was established in

late 1995.

104 U.S. Department of State telegram, “Bilateral IPR

Consultations with Mexico,” message reference No. 166888,

prepared by U.S. Embassy, Mexico City, Sept. 6, 1997.

only public-sector doctors are required to show generic

names on prescriptions.

Pharmaceutical producers expressed concern that

mandated generic names in prescriptions would encourage the poorly controlled Mexican pharmacies always to use generic drugs, even in cases where doctors

had called for trademarked products.105 The U.S. delegation noted that the proposed health provisions

might have the effect of restricting the labeling and advertising of brand-name drugs, thus constituting an encumbrance on the use of the pharmaceutical trademarks involved.106 Only the final language of the regulation will tell to what extent Mexico has addressed the

above concerns and whether the new health law is consistent with Mexico’s TRIPs and NAFTA obligations.

Dispute Settlement

Activity was registered under three of NAFTA’s

distinct dispute settlement mechanisms. These address,

respectively, investment (Chapter 11 of NAFTA, unfair

trade practices (Chapter 19), and the interpretation and

application of NAFTA obligations generally (Chapter

20). The Chapter 11 and Chapter 19 mechanisms are

unique. Regarding general dispute settlement, NAFTA

permits complainants to choose between NAFTA and

WTO dispute settlement for any matter arising under

both agreements, but not to pursue the same complaint

in both forums. Although NAFTA and the WTO

Agreement contain many of the same disciplines and

obligations, their rules and coverage differ in certain

respects. Therefore, NAFTA dispute settlement is the

only formal mechanism for resolving disputes involving NAFTA provisions that are different than WTO obligations. Where WTO rules go beyond the NAFTA,

the WTO is an option. WTO dispute settlement may

offer some benefits over NAFTA dispute settlement,

since it has greater “automaticity,” draws only from

nonparties to the dispute, and provides for appeals.

NAFTA partners continued to avail themselves of

NAFTA mechanisms for resolving disputes, although

1997 also witnessed resort to WTO dispute settlement

to resolve some disputes among NAFTA partners (e.g.,

U.S. complaints over Canadian magazines and Mexican antidumping duties on high-fructose corn syrup).

Disputes over the same action were also considered in

both the WTO and NAFTA in the year: for example,

Colombia requested WTO dispute settlement consulta105 See also U.S. Department of State telegram, “Generic Name in Pharmaceuticals,” message reference No. 07968,

prepared by U.S. Embassy, Mexico City, Aug. 2, 1997.

106 U.S. Department of State telegram, “Bilateral IPR

Consultations with Mexico,” message reference No. 166888,

prepared by U.S. Embassy, Mexico City, Sept. 6, 1997.
68

tions over the U.S. safeguard measure on broom corn

brooms while Mexico pursued its case against the measure under NAFTA.107

During 1997, three cases were filed under NAFTA

provisions for resolving investor-state disputes. This

represented the first use of an innovative provision of

NAFTA that allows any investor from the United

States, Canada, or Mexico to seek binding international

arbitation of disputes with NAFTA governments over

their implementation of NAFTA obligations, for example, over just compensation in the event of expropriation.

The following summarizes developments under

NAFTA dispute settlement as reported by USTR.108

NAFTA Chapter 20 (General 

Dispute Settlement)

Complaints by the United States:

 On March 11, 1997, the United States requested consultations with Mexico concerning

Mexico’s increase in tariffs on certain products in response to the U.S. safeguard action

on broom corn brooms, which the United

States contends is in excess of what is permitted under NAFTA. Consultations were

held April 8.

 Although consultations continued within the

context of efforts to resolve several cross-border transportation issues, no progress was

made in resolving a complaint by the United

States that Mexico is discriminating against

U.S. trucking firms wishing to deliver small

packages in Mexico.

Complaints against the United States:

 On January 14, 1997, Mexico filed a request

for establishment of a panel under NAFTA

Chapter 20 concerning U.S. global safeguard

measures on imports of broom corn brooms.

Imports from Mexico were included in the

U.S. measures. President Clinton had signed a

proclamation November 28, 1996, providing

temporary tariff relief (in the form of

107 The EU pursued (and later put on hold) WTO dispute settlement over the Cuban Liberty and Democratic Solidarity Act of 1986 (Helms-Burton); Canada and Mexico

relied on NAFTA dispute settlement. Both complaints are

effectively on hold at the moment. For details, see the EU

section in chapter 4 of this report.

108 Unless otherwise noted, all information from this

section is drawn directly from USTR, “Update: Developments in U.S. International Dispute Settlement,” Sept. 9.

1997, and February 9, 1998, editions.

a tariff-rate quota) and onDecember 2, 1997,

announced other actions, including targeted

support for the broom industry and increased

enforcement efforts to ensure that broom imports comply with U.S. law.109 The President’s actions came in response to an ITC

finding of serious injury under Section 201 of

the Trade Act of 1974 and under the special

safeguard provisions of NAFTA.

Mexico challenged in particular the ITC’s

finding with respect to the definition of the

U.S. industry, arguing that the U.S. industry

producing an article “like or directly competitive” with imported broom corn brooms included domestic facilities producing both

broom corn brooms and plastic brooms. The

panel held a hearing on September 9, 1997.

The panel report was released on February 11,

1998, finding that the U.S. measure “constitutes a continuing violation of United States

obligations under NAFTA.” Specifically, the

panel report found that the application of increased tariffs to broom corn broom imports

from Mexico violated NAFTA because the

injury determination of the ITC on which the

tariffs were based did not contain sufficient

explanation. The panel declined to address

Mexico’s far-reaching arguments concerning

the legal standards applied by the ITC in section 201 proceedings.110 The panel recommended that the United States bring its “conduct” into compliance “at the earliest possible

time.” USTR is considering next steps.

 On April 4, 1997, Mexico requested Chapter

20 consultations regarding its request that the

Mexicali valley region be designated as free

from karnal bunt disease, thereby permitting

the region to export wheat to the United

States. Consultations were held July 17.

 On July 4, 1997, the United States received a

request from Mexico for consultations under

NAFTA Chapter 20 concerning an internal

notice of the U.S. Customs Service clarifying

the tariff classification of Persian limes. Consultations were held July 17.

109 For details of the President’s action, see, USTR,

“President Assists Broom Corn Broom Industry,” press release 96-92, Dec. 2, 1996.

110 For a further explanation, see, USTR, “USTR Underscores NAFTA Panel Decision on Corn Brooms to Have

Virtually No Effect on U.S. ‘Safeguard’ Regime,” press release 98-12, Feb. 12, 1998.
69

 On September 2, 1997, the United States and

Canada announced that they had successfully

settled a NAFTA dispute and that Canada had

withdrawn its complaint concerning the U.S. reexport program for sugar-containing products,

which had been filed on October 23, 1996. In

the complaint, Canada maintained that NAFTA

Annex 303.7 required that the program no longer be applied after January 1, 1996, to goods reexported to Canada.

On September 8, 1997, the United States and

Canada finalized the terms of a settlement

agreement. Under the settlement, Canada

agreed not to pursue dispute settlement with respect to this program, which gives U.S. firms

access to quota-exempt raw sugar at world

prices if they reexport an equivalent amount of

refined sugar in food products within a specified period thereafter. The United States agreed

that, beginning in the 1997-98 period, it would

allocate to Canada (1) a share of the in-quota

quantity of the U.S. refined sugar tariff-rate

quota (TRQ) for sugar that is a product of Canada, and (2) a share of the in-quota quantity of the

U.S. sugar-containing products TRQ for sugarcontaining products that are a product of Canada. Canada can compete for any quantity of the

refined sugar TRQ that is not allocated among

supplying countries and that is not reserved for

specialty sugar. The United States may transfer

any unused quantity of Canada’s sugar-containing product allocation to the portion of that TRQ

that is not allocated among supplying countries,

if Canada informs the United States that it cannot fill its share.

 Although some progress on technical issues

was reported, no resolution of Mexico’s complaint over the refusal of the United States to

process applications by Mexican truckers to

serve the four U.S. border states was reached in

1997. The NAFTA provision phasing in opening of cross-border trucking was slated to enter

into force on December 18, 1995, but implementation has been suspended pending resolution of outstanding U.S. safety concerns. In a

March 14, 1997, letter to President Clinton, a bipartisan group of 201 House members urged

retention of current safeguards until better

mechanisms to ensure compliance are in place.

Six other lawmakers, including the Chairman of

the House Ways and Means Committee and the

Chairman of its Subcommittee on Trade, wrote

to President Clinton on March 31, 1997, urging

prompt implementation of NAFTA commitments.111 In April 1997, GAO reported that despite increased inspection capabilities at major

border locations, fewer than 1 percent of the

Mexican trucks crossing the U.S-Mexico border during 1996 were inspected and that on average, 45 percent of the vehicles inspected were

placed out of service for serious safety violations.112 After a May 1997 meeting, the two

governments issued a statement reaffirming

their commitment toward full implementation

of the NAFTA and said they had agreed to intensify joint efforts to reach an agreement on land

transportation.113

NAFTA Chapter 19 (Panel Review

of AD/CVD Determinations)

NAFTA allows companies to appeal final antidumping and countervailing duty determinations to

binational panels of experts, which are drawn from the

country of the petitioning party and the responding

party. Such binational panel review under NAFTA

Chapter 19 is in lieu of domestic judicial review. In the

four years since NAFTA entered into force, Chapter 19

panels have completed 15 appeals: 7 concerning U.S.

determinations, 3 concerning Mexican determinations,

and 5 concerning Canadian determinations. Nine appeals are currently under consideration, four involving

U.S. determinations, two involving Canadian determinations, and three involving Mexican determinations. All but two of the NAFTA Chapter 19 cases have

involved U.S. determinations or U.S. exporters.114

During 1997, the first-ever request for a panel by a

domestic interest against its own government was filed.

The request was filed by a Mexican producer when the

Mexican government, after an administrative review of

an outstanding order, removed antidumping duties of

111 The letter is reprinted in “Clinton Trip Delay, House

Letter Work Against Mexican Border Opening,” Inside U.S.

Trade, Apr. 4, 1997, pp. 5-6.

112 United States General Accounting Office, Commercial Trucking: Safety Concerns About Mexican Trucks Remain Even as Inspection Activity Increases, GAO/

RCED-97-68, Apr. 1997, pp. 1-2.

113 The statement was issued at the close of a May 5

meeting of the Trade and Investment Committee of the U.S.-

Mexico Binational Commission and reprinted in U.S. Department of State telegram, “BNC Trade and Investment

Working Group: Sugar, Standards, Brooms,” prepared by

U.S. Embassy, Mexico City, May 2, 1997.

114 NAFTA Secretariat, Status Report NAFTA and FTA

Dispute Settlement Proceedings, Mar. 27, 1998.
70

34.5 percent on two U.S. producers of hydrogen peroxide.115

A September 1997 GAO analysis indicates that the

Chapter 19 process is generally working well. All but 3

of the 14 completed panel decisions examined were

unanimous (that is, the panels did not split along national lines); 5 affirmed the domestic agency’s determination, 2 remands did not result in any change in the

domestic agency’s determination, and 7 resulted in

changes in domestic agency’s determinations upon remand. With respect to U.S. agencies determinations, in

2 of the 7 cases examined, the panel affirmed the domestic agency’s determination. The domestic agency’s

determination was changed in the remaining five. GAO

noted that it was taking an average of 457 days from

the date of receipt of a request for a panel until issuance of a final decision, versus the 315-day guideline

established in NAFTA. Difficulties in finding qualified

panelists were largely responsible.116

On January 16, 1997, the American Coalition for

Competitive Trade (ACCT) filed a lawsuit in the U.S.

Court of Appeals for the District of Columbia Circuit

charging that the Chapter 19 panel system violates the

U.S. Constitution, specifically Articles II (the appointments clause), III (that the judicial power be exercised

by U.S. federal courts), and the Due Process Clause.117

The court dismissed the challenge, finding that the

ACCT failed to meet the standing requirements and the

jurisdictional requirements of the NAFTA Implementation Act.118 Separately, ACCT urged USTR not to include the Chapter 19 panel system in the Free Trade

Area of the Americas (FTAA), noting that Canada and

Mexico have both declined to include the binational

panel review system in their separate FTAs with Chile.

Instead, they rely on WTO dispute settlement.119

115 Bureau of National Affairs, “Mexican Firm Seeks

NAFTA Panel on SECOFI’s Hydrogen Peroxide Ruling,”

International Trade Reporter, Vol. 14, No. 43, Oct. 39, 1997,

p. 1881.

116 U.S. States General Accounting Office, North American Free Trade Agreement: Impacts and Implementation, Testimony before the Subcommittee on Trade, Committee on

Ways and Means, House of Representatives, Sept. 11, 1997,

GAO/T-NSIAD-97-256, p. 14.

117 American Coaliton for Competitive Trade, Inc.

(ACCT), “Coalition Files Case Challenging NAFTA;

Charges Violations of U.S. Constitution,” press release Jan.

16, 1997. American Coalition for Competitive Trade Inc. v.

Clinton, CA DC, No. 97-1036, Jan. 16, 1997.

118 American Coalition for Competitive Trade, Inc. v.

Clinton,128 F.3d 761 (D.C. Cir. 1997) Nov. 14, 1997. For

background see, Bureau of National Affairs, “Court Dismisses Constitutional Challenge of NAFTA’s Binational Panel

System,” International Trade Reporter, Vol. 14, No. 46, Nov.

19, 1997, pp. 2000-01.

119 “Business Coalition Renews Assault on Chapter 19

in New Trade Talks,” Americas Trade, May 15, 1997, 

pp. 5-6.

NAFTA Chapter 11 (Investment

Disputes)

Three complaints were lodged under NAFTA’s

clause providing for binding international arbitration of

investor-state disputes over implementation of NAFTA

commitments in 1997,120 all by U.S. companies or persons.

 DESONA was awarded a 15-year concession

by the county of Naucalpan for management of

solid waste in 1993. The county council nullified the agreement shortly after a contract was

signed. DESONA notified the Government of

Mexico of its intent to file a claim through the

International Center for the Settlement of Disputes (ICSID) on December 9, 1996, and filed a

notice of claim in March 1997. ICSID has accepted and registered the claim. An arbitral panel has been established and a briefing schedule

for the arbitration set.

 On January 3, 1997, Metalclad Corporation notified the Government of Mexico of its intent to

file a claim through the ICSID’s Additional Facility Rule. A formal brief in the complaint was

filed on October 13, 1997. In the claim, Metalclad charged that Mexican government official

actions prevented the opening of a hazardous

waste landfill site the company built in 1995 in

the Mexican state of San Luis Potosi. Specifically, Metalclad charged that the governor of

the state unlawfully expropriated the site when

he declared it part of a 600,000 acre ecological

zone. In addition, Metalclad claims that Mexico

failed to accord Metalclad fair and equitable

treatment, as well as treatment in accordance

with international law and due process. Metalclad, which reportedly spent $22 million on the

facility,121 is seeking damages equal to the project’s fair market value, which is estimated to be

120 Unless otherwise noted, all information from this

section is drawn direclty from USTR, “Update: Developments in U.S. International Dispute Settlement,” Sept. 9.

1997 and February 9, 1998 editions.

121 Joel Millman, “Metalclad Suit Is First Against Mexico Under NAFTA Foreign Investment Rules,” The Wall

Street Journal, Oct. 14, 1997, p. A1. For background see,

U.S. Department of State, “Mexico: Investment Disputes

Report,” prepared by American Embassy, Mexico City, Aug.

11, 1997, message reference No. 7645; “First Chapter 11

Requests for Arbitration with Mexico Filed,” North American Free Trade and Investment Report, Mar. 31, 1997, 

pp. 15-16; Bureau of National Affairs, “U.S. Company Plans

to Present Argument Against Mexico in Trade Arbitration

Case,” International Trade Reporter, Oct. 15, 1997.
71

in excess of $50 million, according to USTR.

The 3-member arbitral panel held its first meeting on July 15, 1997.

 On April 14, 1997, Ethyl Corporation notified

the Government of Canada of its intent to seek

referral of a dispute to arbitration under UNCITRAL rules, as provided for under NAFTA.

The request concerns a Canadian law banning

importation and interprovincial trade in a fuel

additive known as MMT, sold by Ethyl. The

product is produced in the United States and

processed by a Canadian subsidiary of Ethyl.

Canada reportedly resorted to banning importation of and interprovincial trade in MMT because of difficulties in banning its use under the

Canadian Environmental Protection Act.122

Ethyl alleges that the legislation amounts to a

performance requirement, denies it national

treatment, and constitutes an expropriation of

its subsidiary, Ethyl Canada.123 Ethyl’s suit also

is reportedly “based on the grounds that its reputation will suffer, that there is no evidence that

MMT is harmful to health or the environment,

and that the trade ban will cause Ethyl to lose

half its total sales.”124 It is seeking an award of

$250 million in damages plus costs. An arbitral

panel has been established and a hearing scheduled on jurisdictional issues raised by Canada.

Meanwhile, the province of Alberta has filed a

formal complaint with the federal government,

charging that the ban is inconsistent with the

Agreement on Internal Trade (AIT) negotiated

among the federal, provincial, and territorial

governments of Canada.125

None of the cases filed under NAFTA Chapter 11

involves an expropriation per se but rather governmental action (or inaction) that has similar effect. The outcomes of these cases could thus set precedents on the

issue of whether environmental regulations or similar

122 Michelle Sforza and Mark Vallianatos, “Ethyl Corporation v. Government of Canada: Chemical Firm Uses

Trade Pact to Contest Environmental Law,” The Preamble

Collaborative Briefing Paper, n.d.

123 Laura Eggertson, “Ethyl Sues Ottawa over MMT

Law,” The Globe and Mail (Toronto), Apr. 15, 1997.

124 U.S. Department of State telegram, “Canada Passes

Anti-MMT legislation; U.S. firm files [C]$350 million NAFTA Damage Claim,” message reference No. 1444, prepared

by U.S. Embassy, Ottawa, Apr. 18, 1997.

125 “Alberta Files Challenge under Internal Trade Accord on MMT Measure,” Americas Trade, May 1, 1997, 

p. 20; “More Provinces Join MMT Fight Under Canada’s

Internal Trade Pact,” Americas Trade, May 29, 1997, p. 10.

laws are defined as expropriations or “takings” of private property that require governments to pay investors

monetary compensation.126 These cases represent important test cases of such investor-state dispute settlement mechanisms,127 which have been included in

U.S. bilateral investment treaties and the draft OECD

Multilateral Agreement on Investment (MAI).

APEC

During 1997, APEC continued to work towards

achievement of the goals attaining of free and open

trade and investment in the Asia-Pacific region by the

year 2010 for developed economies and 2020 for developing economies as set forth in the Bogor Declaration of 1994.128 During 1997, Canada held the chairmanship of APEC and hosted the annual APEC Ministerial meeting in Vancouver in November, which was

attended by economic and foreign ministers from the

18 member economies.129 Seven other ministeriallevel meetings were held throughout the year, including ministers in charge of finance, trade, environment,

transport, energy, small and medium enterprises, and

human resource development.130

APEC Senior Officials met five times in 1997. The

Senior Officials are responsible for reviewing the work

of APEC’s two permanent Committees—the Committee on Trade and Investment (CTI) and the Economic

Committee (EC).

Individual Action Plan

Implementation

The Individual Action Plans (IAPs),131 announced

at Manila, the Philippines, in 1996, are the major

126 Michelle Sforza and Mark Vallianatos, “Ethyl Corporation v. Government of Canada: Chemical Firm Uses

Trade Pact to Contest Environmental Law,” The Preamble

Collaborative Briefing Paper, n.d. The Bureau of National

Affairs, “Groups See Danger from Ethyl Suit,” International

Trade Reporter, Vol. 14, No. 29, p. 1248, July 16, 1997. The

articles notes that there are no exceptions to NAFTA’s requirement for compensation in the event of expropriation.

127 Laura Eggertson, “Ethyl Sues Ottawa over MMT

Law.”

128 For background information on the Bogor Declaration, see USITC, The Year in Trade: OTAP, 1994, USITC

publication 2894, pp. 35-39. 129 APEC’s members include: United States, Canada,

Mexico, Chile, Japan, China, Taiwan, Hong Kong, South

Korea, Indonesia, Malaysia, Thailand, Singapore, Brunei,

the Philippines, Australia, New Zealand, and Papua New

Guinea.

130 APEC, “APEC in Action: 1997 Results Report,”

Vancouver, Canada, November 1997.

131 For background information on the IAPs, see

USITC, The Year in Trade: OTAP, 1996, USITC publication

3024, pp. 75-78.
72

vehicle for reaching the Bogor goals. Implementation

of the IAPs began on January 1, 1997. The IAPs describe the status of market access regimes, commitments and intentions to reduce restrictions to facilitate

future business decisions, and plans for fully achieving

the Bogor goals. Each of the IAPs covers 15 different

categories of agreed-upon actions. The actions are

categorized into three time frames: short-term (to

2000), medium-term (2001-2005) and long-term

(2005-2010/2020). During 1997, member economies

provided new information on their trade and investment regimes. Four economies—Chile, New Zealand,

Canada, and Hong Kong—offered their IAPs for plurilateral review. In addition, negotiators agreed to new

common format guidelines for IAPs and implementation reports to improve transparency and comparability.

Early Voluntary Sectoral

Liberalization

At the APEC Trade Ministerial meeting held in

Montreal in May 1997, APEC Ministers decided to accelerate the process of identifying possible sectors for

early voluntary liberalization and to complete it by the

end of 1997, two full years ahead of the originally

scheduled date.132 At the May 1997 meeting, APEC

Trade Ministers decided that early voluntary sectoral

liberalization (EVSL) proposals could include both

trade facilitation measures and important economic and

technical cooperation initiatives such as human resources development and technology sharing.133 During the summer, member economies nominated sectors

for EVSL. By August, 61 nominations had been put

forward covering 35 economic sectors. The United

States nominated eight sectors: chemicals, medical

equipment and services, automotive, oilseeds, mutual

recognition agreements in telecommunications and information technology, energy-related services and

equipment, environmental technology and services,

and forest products. In cases where several members

nominated the same sector, discussions were held that

led to joint nominations.

A meeting of Senior Officials was held in Singapore on October 27-28, 1997, to discuss the status of

sectoral nominations and to develop a framework for

132 In 1995, APEC had agreed that as a complement to

the IAPs, members would identify by the end of 1999 specific sectors where early voluntary sectoral liberalization

(EVSL) would have a positive impact on trade, investment,

and economic growth in the region. In 1996, APEC leaders

decided to accelerate EVSL and tasked Ministers with the

work.

133 APEC, “Meeting of Ministers Responsible for Trade,

Statement of the Chair,” Montreal, Canada, May 8-10, 1997.

subsequent discussions. At the Vancouver Ministerial

meeting, 15 sectors were put forth by Senior Officials

for Ministers for early action. APEC Ministers selected

nine of the fifteen sectors for immediate work, which

was to be concluded during the first half of 1998 with a

view to beginning implementation of liberalization in

1999. The nine sectors selected by APEC Ministers

and endorsed by APEC leaders were: environmental

goods and services; energy equipment and services;

fish and fish products; toys; forest products; gems and

jewelry; medical equipment and instruments; chemicals; and a telecommunications mutual recognition arrangement. Members were to complete the work on

these proposals immediately by finalizing the scope of

coverage, flexible phasing, measures covered, and implementation schedule for each of these sectors.134

Ministers are to finalize detailed targets and timelines

on these sectors by the time of the APEC Trade Ministerial meeting to be held in Kuching, Malaysia, in June

1998. Senior Officials were directed to develop proposals for the remaining six sectors for assessment—

rubber, civil aircraft, automotive, fertilizer, oilseeds

and oilseed products, and food—and review by June

1998 and possible recommendation to APEC Leaders

by November 1998.

Trade and Investment

Facilitation

Trade facilitation aims to lower costs, reduce barriers to transacting business, and promote business networks. APEC’s work on trade facilitation is carried out

through the Collective Action Plans (CAPs) under the

Osaka Action Agenda and through the Working

Groups.135 At the November 1997 Ministerial, APEC

Ministers endorsed the work in these areas and noted

the following:

 development of the Blueprint for Customs

Modernization;

 launching of the internet tariff database;

 establishment of APEC internet sites for business information and assistance;

 progress on alignment with international

standards;

134 On Mar. 25, 1998, the Commission instituted investigation No. 332-392 in response to the request. On March

18, 1998, USTR asked the U.S. International Trade Commission to provide advice concerning trade liberalization among

APEC economies in the nine sectors by June 16, 1998.

135 For background information on the CAPs and Working Groups, see USITC, The Year in Trade: OTAP, 1996, pp. 75-78.
73

 development of model mutual recognition

arrangements;

 development of principles to guide work on

dispute mediation;

 improved mobility for business persons;

 nonbinding principles of transparency in government procurement;

 work to make the Asia-Pacific information

highway a reality;

 action plans to create integrated and intelligent transportation systems;

 market and trade information for fishing industries;

 development of guidelines for streamlining

and making more transparent the tendering

approval and regulatory processes for independent power projects;

 and initiatives in the Trade Promotion and

Trade and Investment Data Review Working

Groups.

The Ministers called for renewed efforts on trade

facilitation in the CTI and relevant Working Groups

through 1998.136

Economic Cooperation and

Development

In Manila in 1996, APEC adopted a Framework on

Economic Cooperation and Development, which established the following six priorities as a basis of

APEC’s future work in economic and technical cooperation: (1) developing human resources; (2) fostering

safe and efficient capital markets; (3) strengthening

economic infrastructure; (4) harnessing technologies of

the future; (5) promoting environmentally sound

growth; and (6) encouraging the growth of small and

medium enterprises.137 During 1997, APEC gave

136 APEC, “APEC Ninth Ministerial Meeting Joint

Statement,” Nov. 24, 1997.

137 APEC, “APEC in Action: 1997 Results Report.”

priority to two of the six areas: strengthening economic infrastructure and promoting environmentally sustainable growth. APEC convened public/private dialogue sessions, business workshops, and a symposium

to carry out its work in this area.138 Some examples of

APEC’s 1997 work in the area of economic cooperation and development are as follows:

 Developing Human Resources: A Ministerial

meeting that emphasized education and training

was held in Seoul in September 1997. The

Human Resources Development Working

Group is conducting pilot projects for mutual

recognition of professional skills in engineering, accountancy, and surveying.

 Developing Capital Markets: APEC Ministers

welcomed the Finance Ministers’ work to develop principles to guide financial and capital

market development. During November 18-19,

1997, Finance Ministers discussed a New

Framework for Enhanced Asian Regional

Cooperation to Promote Financial Stability.

 Economic Infrastructure: APEC Ministers endorsed the development of the Vancouver

Framework for Enhanced Public-Private Partnerships in Infrastructure Development and

recommended it to leaders. The Economic

Committee held an Infrastructure Workshop

and associated Public/Private Dialogue to address the issue of sustainable infrastructure development. An APEC Transportation Ministerial was held in Victoria, B.C., in June 1997.

Best practices were identified for the elimination of traffic congestion points in the region.

An APEC Energy Ministerial was held in Edmonton in August 1997 where a manual on best

practices was produced.

 Harnessing Technologies for the Future: Work

was carried out in the Industrial Science and

Technology (emphasizing improving flows of

technological information and technology), the

Transportation, and the Telecommunications

Working Groups. An inaugural meeting for an

APEC Science and Technology Parks Network

was held in Beijing in October 1997.

 Environmentally Sustainable Growth: An

APEC Environmental Ministerial was held in

June that focused on addressing capacity

138 Ibid.
74

building, enhancing technical cooperation, and

building partnerships, particularly with local

authorities. APEC Trade and Foreign Ministers

endorsed a pledge by Environment Ministers

that APEC must do its part to implement regional and global commitments.

 Small and Medium Enterprises (SMEs): An

APEC SMEs Ministerial meeting was held in

Ottawa where an agreement was reached on

the importance of providing a business environment that deals with the special needs of

SMEs. The SME Policy Level Group developed a framework for SME activities across

APEC and issued a detailed guide on services

available for SMEs in the region.139

Membership

At the Vancouver Ministerial, APEC Ministers

agreed on broad guidelines for evaluating applications

for new membership in APEC, but left decisions regarding new members up to the leaders. APEC leaders

did not issue any statements regarding membership in

1997.140

Regional Financial

Developments

In their communique of November 25, 1997,

APEC leaders endorsed a framework for action agreed

to by APEC Finance Ministers in Manila to address

recent financial challenges in the region. The framework was intended to enhance cooperation to promote

financial stability and included: enhanced regional surveillance; intensified economic and technical cooperation to improve domestic financial systems and regulatory capacities; adoption of new IMF mechanisms on

appropriate terms in support of strong adjustment programs; and a cooperative financing arrangement to

supplement IMF resources when necessary. APEC

leaders asked the Finance Ministers to accelerate work

on collaborative initiatives to promote the development

of financial and capital markets. APEC leaders noted

that APEC could play a valuable role in exploring

ways of intensifying its economic and technical cooperation among member countries in cooperation with

the World Bank, the IMF, and the Asian Development

Bank. APEC Finance Ministers were to report on

139 APEC, “APEC In Action: 1997 Results Reports.”

140 APEC, “APEC Ninth Ministerial Meeting Joint

Statement.”

progress on all of the initiatives early in 1998 and on

concrete outcomes at their next meeting.141

Free Trade Area

of the Americas

In December 1994, the 34 democratically elected

heads of state of the Western Hemisphere met in

Miami for the first hemispheric summit since 1967. At

the Miami Summit, President Clinton and the other

leaders committed “to begin immediately to construct

the Free Trade Area of the Americas (FTAA) in which

barriers to trade and investment will be progressively

eliminated. . . . to conclude the negotiations of the Free

Trade Area of the Americas no later than 2005, and

agree that concrete progress toward the attainment of

this objective will be made by the end of this

century.”142

Since the 1994 Miami Summit, hemispheric trade

ministers, vice ministers, and their representatives have

met on numerous occasions in anticipation of the formal launch of the FTAA negotiations. In addition,

twelve working groups have been created to lay the

groundwork for eventual FTAA negotiations. The

working groups are for: dispute settlement (established

in May 1997); market access; customs procedures and

rules of origin; investment; sanitary and phytosanitary

measures; standards and technical barriers to trade;

subsidies, antidumping and countervailing duties;

smaller economies; competition policy; government

procurement; intellectual property rights; and services.

Each working group has been directed to compile inventories of hemispheric practices; identify areas of

commonality and divergence; and provide recommendations on how to proceed in the construction of the

FTAA in each respective area.143

As required by Sec. 108 of the NAFTA Implementation Act, the U.S. President periodically reports

to the Congress with recommendations on future free

trade area negotiations. In its September 1997 report,

the Administration stated that the FTAA “needs to go

beyond the WTO and be future-oriented. . . . be responsive to new technologies and new ways of doing

141 APEC, “APEC 97 Leaders Declaration,” 

November 25, 1997, Vancouver, Canada.

142 Declaration of Principles and Plan of Action, reprinted in Business America, Dec. 1994, pp. 10-13. For additional information on the 1994 Miami Summit, see USITC,

The Year in Trade: OTAP, 1994, pp. 39-41.

143 For a summary of work on the FTAA during 1996

and the working groups, see USITC, The Year in Trade:

OTAP, 1996, p. 75. U.S. Department of State telegram, “Corrected Version of the Belo Declaration,” message reference

No. 105746, prepared by U.S. Department of State, Washington, DC, June 5, 1997.
75

business, and . . . be the ‘state-of-the-art’ in trade and

investment agreements when it is concluded.”144

As the FTAA process entered 1997, several countries had expressed different opinions and tabled specific proposals for the scope and the timing of the

FTAA negotiations. Among the issues about which

opinions differed were—

 compatibility of the FTAA with existing or

new subregional economic groupings;

 phasing and scope of the FTAA negotiations;

and,

 the role of input from labor in the negotiations.

At the September 1996 FTAA Vice Ministerial

Meeting in Florianopolis, Brazil, the United States put

forward a position paper listing 12 issues for discussion at subsequent meetings during 1997. Among other

things, the United States proposed that the FTAA negotiations commence with a first stage of negotiations

focusing on hemisphere-wide disciplines—namely, investment, services, government procurement, standards

and technical barriers to trade, sanitary and phytosanitary procedures, customs procedures, intellectual property rights, and market access for industrial and agricultural products. The proposed second stage of the negotiations, beginning approximately at the turn of the

century, would address subsidies, safeguards, antidumping and countervailing duties, competition policy,

and dispute settlement.145 The United States also proposed that the FTAA “incorporate the best appropriate

elements of the WTO or existing sub-regional integration arrangements,” that the FTAA “strive to further

secure the observance and promotion of worker

rights,” and that the FTAA be a “hemisphere-wide”

and “comprehensive agreement.”146

Final Phase Discussions Before

Negotiations

The year 1997 marked the final phase of discussions among the FTAA members leading up to the

April 1998 launch of formal negotiations. The hemi144 USTR, Report to the Congress: Recommendations

on Future Free Trade Area Negotiations, Sept. 1997, p. 4;

also found at Internet address

http://www.ustr.gov/reports/index.html, retrieved Mar. 13,

1998.

145 U.S. Department of State telegram, “U.S. Position

Paper on the Twelve Issues Related to How and When to

Launch Free Trade Area of the Americas (FTAA) Negotiations,” message reference No. 26851, prepared by U.S.

Department of State, Washington, DC, Feb. 13, 1997.

146 Ibid.

spheric vice ministers met in February (Recife, Brazil)

and in April (Rio de Janeiro, Brazil) 1997, to address

the U.S. proposals as well as the ongoing differences of

opinions. By the April meeting, there was agreement in

favor of a comprehensive launch of FTAA negotiations

at the 1998 Summit meeting. However, the United

States and several Latin American countries continued

to differ in their respective proposals on how and what

to negotiate. Brazil had proposed a slower timetable for

negotiations in three phases, with primarily “business

facilitation” measures such as the harmonization of

customs procedures and certain standards to be negotiated first, and tariff-reducing market access talks not

scheduled until a later phase closer to the 2005 deadline.147

At the Third FTAA Trade Ministerial Meeting held

in Belo Horizonte, Brazil, on May 13-16, 1997, the foreign trade ministers reviewed the FTAA work program; evaluated the progress that has been achieved in

trade liberalization in the hemisphere since the Miami

Summit, noting in particular the increasing widening

and deepening of existing subregional and bilateral

agreements; and considered the work undertaken by

the vice ministers regarding the various approaches for

construction of the FTAA. In their Joint Ministerial

Declaration, the ministers committed to formally

launch the FTAA negotiations at the April 1998 FTAA

Summit of the Americas in Santiago, Chile, and agreed

to so recommend to their respective heads of state.

However, because of ongoing differences of opinions,

the ministers agreed to leave the formulation of the

FTAA negotiation procedures, including such issues as

objectives, approaches, structure, and venue of the negotiations, for their next (fourth) meeting, scheduled

for March 1998. The ministers also reached agreement

in the following areas:

 to use consensus as the basis of decision making

in the FTAA process;

 to ensure that the outcome of the FTAA negotiations will constitute a “comprehensive single

undertaking” that can coexist with bilateral and

subregional agreements “to the extent that the

147 Numerous press reports during April-May 1997 documented the divergent U.S. and Brazilian proposals for the

FTAA, including “Barshefsky Outlines U.S. Definition of

FTAA Success in Belo Horizonte,” Inside U.S. Trade, May

2, 1997, p. 3; Richard Lawrence, “Clouds Over Belo Horizonte,” Journal of Commerce, May 15, 1997, p. 6A; “Pace

for FTAA by 2005 Slowing,” Washington Trade Daily, Mar.

11, 1997, p. 1; “Pan-American Trade: The Mirage that Won’t

Go Away,” The Economist, May 10, 1997, p. 42; Michael

Christie, “U.S. Assails Foot-Dragging on Hemisphere Trade

Pact,” Washington Times, May 17, 1997, p. A5; and Kevin

G. Hall, “U.S., Brazil Take Feud to Trade Meeting,” Journal

of Commerce, May 15, 1997, p. 1A.
76

 rights and obligations under these agreements

are not covered by or go beyond the rights and

obligations of the FTAA”;

 to make the FTAA consistent with the WTO;

 to allow countries to negotiate and join the

FTAA individually or as members of a subregional integration group negotiating as a unit;

 to give special attention to the needs and economic conditions of smaller economies in the

FTAA process;

 to establish a temporary administrative secretariat to support the FTAA negotiations;

 to conclude the FTAA negotiations by the year

2005, at the latest;

 to consider the inputs from stakeholders, including labor, and to encourage all countries to

take such inputs into account during the negotiations; and

 to establish a Preparatory Committee (PrepCom) consisting of the 34 vice ministers responsible for trade, with the responsibility of intensifying their efforts to build consensus and to

complete recommendations on the remaining

issues—namely the objectives, approaches,

structure, and venue for the FTAA negotiations—for decision by the Ministers at their

next meeting in San José, Costa Rica, in March

1998.148

The first FTAA PrepCom meeting took place in

Lima, Peru, on June 1, 1997. At that meeting, senior

trade officials approved the outline of the agenda to be

negotiated for the 1998 Summit including a U.S.-proposed reference to labor standards.149 Differences

among participants again surfaced during the second

PrepCom meeting, which took place October 27-30,

1997, in Costa Rica. At that meeting, the MERCOSUR

countries presented their request that FTAA negoti148 The Belo Horizonte Ministerial Declaration, from

the official FTAA Website, found at Internet address

http://www.ftaa-alca.org/english_Version/belo_e.htm, 

retrieved Mar. 13, 1998.

149 U.S. Department of State telegram, “Lima Meeting

of Foreign Ministers on the Summit of the Americas,” message reference No. 107634, prepared by U.S. Department of

State, Washington, DC, June 9, 1997.

ations be based on the principles of “balance, simultaneity, and gradualism;” other countries expressed the

concern that “gradualism” could slow the pace of the

negotiations. Other key issues left unresolved at that

meeting were:

 the site for the FTAA negotiations—the United

States has proposed Miami, while several Latin

American nations have proposed Rio de Janeiro

among other locations;

 the structure of the negotiations, including the

oversight, advisory, and support bodies needed;

 the number of working groups that will be set up

as negotiating groups once formal FTAA negotiations begin—various participants have

proposed that from as few as 5 to as many as 12

negotiating groups be established;

 trade in agricultural products, including a decision as to whether to create a separate negotiating group on agriculture or to address agricultural matters in the market access group; and

 the question of whether to include labor and environmental issues in the FTAA negotiations.150

These and other issues were addressed again at the

third PrepCom meeting in San José, Costa Rica, February 10-12, 1998, but again without resolution.

FTAA Negotiation Framework

All outstanding issues were resolved at the fourth

PrepCom meeting in San José, Costa Rica, March 17,

1998, and the subsequent meeting of hemispheric trade

ministers on March 19, 1998. In describing the final

FTAA negotiation framework, Ambassador Barshefsky

stated that “[t]he United States achieved all of its key

objectives . . . setting the stage for a comprehensive

and successful launch of substantive negotiations at the

[April 1998] Santiago Summit.”151

150 “Around the Globe,” Washington Trade Daily, Feb. 13, 1998, p. 6; and Kevin Hall, “Officials Make Progress in Forming a Framework for Americas’ Trade,” Journal

of Commerce, Feb. 12, 1998, p. 3A.

151 USTR, “Statement by U.S. Trade Representative

Charlene Barshefsky Regarding FTAA Trade Negotiations,”

press release 98-32, Mar. 20, 1998.
77

In their Joint Declaration issued at the conclusion

of their summit meeting, the trade ministers—

 reaffirmed their commitments to the declarations made at the 1994 Miami Summit;

 pledged to recommend to their respective heads

of state to initiate negotiation of the FTAA during the Second Summit of the Americas to be

held in Santiago, Chile, on April 18-19, 1998;

 reaffirmed their commitment to concluding the

negotiations no later than 2005;

 reaffirmed their commitment to achieve concrete progress in the negotiations by the year

2000, setting as a specific goal the conclusion of

agreements on business facilitation in such

areas as customs procedures, professional services, and intellectual property rights by the

turn of the century; and

 established an expert government-private sector working group that will make recommendations at the next FTAA meeting on the topic of

electronic commerce in the hemisphere.152

Agreement was also reached on matters concerning

the structure, organization, and venue of the negotiations. The initial structure is intended to be flexible

and may be modified over time as required to facilitate

the negotiating. Moreover, a Trade Negotiations Committee (TNC) was established at the vice-ministerial

level with the responsibility of ensuring the full participation of all the countries in the FTAA process. The

TNC is required to meet at least twice a year beginning

June 30, 1998.153

Negotiating Groups

Nine negotiating groups were established. The negotiating groups (and their respective initial chairman

and vice-chairman) are for: market access (Colombia/

Bolivia); investment (Costa Rica/Dominican Republic); services (Nicaragua/Barbados); government procurement (United States/Honduras); dispute settlement

(Chile/Uruguay and Paraguay); agriculture (Argentina/

El Salvador); intellectual property rights (Venezuela/

152 “Summit of the Americas Fourth Trade Ministerial,

San José, Costa Rica, March 19, 1998, Joint Declaration,”

found at Internet address

http://www.ftaa-alca.org/EnglishVersion/costa_e.htm, retrieved Mar. 31, 1998.

153 Ibid.

Ecuador); subsidies, antidumping, and countervailing

duties (Brazil/Chile); and competition policy (Peru/

Trinidad and Tobago). The TNC is responsible for

guiding the work of the negotiating groups.154

Venue

The meetings of the negotiating groups will be held

in a single venue, which will rotate among the following three countries according to the specified timetable:

 Miami, United States, from May 1, 1998 to February 28, 2001;

 Panama City, Panama, from March 1, 2001 to

February 28, 2003; and

 Mexico City, Mexico, from March 1, 2003 to

December 31, 2004 (or until the conclusion of

the negotiations).

Chairmanship of the FTAA Process

The chairmanship and vice-chairmanship of the

FTAA process will rotate among different countries at

the end of each subsequent ministerial meeting among

the following countries and in the following order:

 chairman: Canada; vice-chairman: Argentina,

May 1, 1998-October 31, 1999;

 chairman: Argentina; vice-chairman: Ecuador,

November 1, 1999-April 30, 2001;

 chairman: Ecuador; vice-chairman: Chile,

May 1, 2001-October 31, 2002; and

 cochairman: Brazil and the United States; no

vice-chairman; November 1, 2002-December

31, 2004 (or until the conclusion of the negotiations).

Participation of Civil Society

The FTAA process will establish a committee

(chairmanship to be decided at a later date) of government representatives, open to all member countries, to

receive inputs from business and other sectors of production, labor, environmental, and academic groups, to

analyze their inputs, and to present the range of views

for consideration in the FTAA process.

154 Ibid.
78

Africa Initiatives

Section 134 of the Uruguay Round Agreements

Act (URAA)155 directed the President to develop a

comprehensive trade and development policy for the

countries of Africa and to report to the Congress annually until 2000 on the steps taken to carry out that mandate. The Statement of Administrative Action that was

approved by the Congress in the URAA outlines the

Administration’s plans for this work.156 According to

President Clinton, 1997 marked a “watershed in our

economic and trade relations with the countries of

Africa.” On June 17, he announced a new strategy, the

Partnership for Growth and Opportunity in Africa, to

promote economic growth and opportunity in Africa.157 This was the first comprehensive trade and investment initiative for the region, appending traditional

aid programs with new ones emphasizing sustained

economic development and self-reliance. The new initiative was aimed at countries which are committed to

growth-oriented economic reforms, particularly in the

areas of trade and investment liberalization, human resources, and policy management and governance. In

connection with the new Partnership towards Sub-Saharan Africa, President Clinton scheduled an official

visit to the countries of Botswana, Uganda, South

Africa, Ghana, Rwanda, and Senegal in March

1998—the first such visit to the Sub-Saharan region by

a U.S. President in two decades—for the purpose of

discussing trade and investment opportunities.

Congress is considering legislation relating to the

creation of a new framework for U.S. trade and economic relations with Africa with legislation that complements the President’s initiative. The African Growth

and Opportunity Act: End of Dependency Act of 1996

was introduced late in the 104th Congress, but was not

enacted. Similar legislation was introduced in the

105th Congress, and passed the House of Representatives on March 11, 1998. The legislation is intended to

establish a new trade and investment policy toward

Africa. Senate action is pending. The President’s initiative and legislative developments regarding trade and

investment issues relating to Africa are described below.

155 19 U.S.C. 3554.

156 “Statement of Administrative Action,” Uruguay

Round Agreements, Texts of Agreements, Implementing Bill,

Statement of Administrative Action and Regional Supporting

Statements, Message from the President of the United States, Sept. 27, 1994, House Document 103-316, pp. 73-74.

157 The White House, “Text of a Letter from the President to the Chairmen and Ranking Members of the House

Committees on Ways and Means and International Relations

and the Senate Committees on Foreign Relations and Finance,” Dec. 23, 1997.

Partnership for Economic

Growth and Opportunity in

Africa

On June 17, 1997, President Clinton announced the

Partnership for Economic Growth and Opportunity in

Africa, to promote economic growth and development

in Sub-Saharan Africa. The plan consists of five different goals: (1) increasing access to the U.S. market for

African exports, including the negotiation of free-trade

agreements; (2) increasing technical assistance to SubSaharan Africa; (3) increasing private investment in

Africa by creating a $150 million equity fund through

OPIC to finance increased private investment and a

$500 million fund for infrastructure investment; (4)

working to eliminate bilateral debt; and (5) holding

annual economic meetings at the ministerial level with

all reforming African nations. In unveiling the initiative, President Clinton requested that other trading

partners “join us in urging the international financial

institutions—the World Bank, the IMF, the Africa Development Bank, as well as the United Nations—to

create innovative new programs so that reforming African nations can succeed in integrating themselves into

the global economy.”158

In announcing his Partnership initiative, President

Clinton also indicated that he would seek support for it

from other countries attending the G-7 summit meeting

in Denver on June 22, 1997. He asked other trading

partners to coordinate policies toward Africa to encourage reform in trade and investment and relief to heavily

indebted countries. He also asked them to urge international financial institutions to create new programs to

help African nations integrate themselves into the global economy.159

The Partnership is geared towards those countries

that adopt growth-oriented economic and financial reform policies and those that open their markets to trade

and investment. Taking into account that not all countries are ready or able to take steps to encourage high

levels of economic growth, partnership countries may

participate in one of three different levels:

Level 1 Participation: To support the efforts of

Sub-Saharan African countries to achieve economic

growth, a range of opportunities and assistance will be

available to eligible countries, including the Generalized System of Preferences (GSP), investment support,

support for regional integration, support for AmericanAfrican Business Relations, and designation of an

158 White House, “Remarks by the President at Africa

Trade Event,” press release, Washington, DC, June 17, 1997.

159 Ibid.
79

Assistant USTR for Africa, and a senior advisor on

Africa to the U.S. Export-Import Bank.160

Level II Participation: Additional support will be

offered to those GSP-eligible countries that are pursuing aggressive growth-oriented reform programs in

such areas as trade and investment liberalization, investment in human resources, and improved policy

management and governance. At the discretion of the

President, these countries would be eligible to take advantage of the following opportunities: further enhanced market access, debt reduction, U.S.-Africa Economic Cooperation Forum, bilateral technical assistance to promote reforms, support for agricultural market liberalization, trade promotion, reprogramming

commodity assistance, support for economic policy reform, and targeted multilateral assistance.161

Level III Participation: The United States will be

open to pursuing free-trade agreements with strongperforming, growth-oriented Sub-Saharan African

countries, in the future, as appropriate.162

During 1997, various activities were undertaken to

implement the Partnership. These activities are summarized in figure 3-1 under the following categories:

trade and investment, technical assistance, financing

and debt relief, enhanced dialogue with African countries, and multilateral activities.

African Growth and

Opportunity Act

The African Growth and Opportunity Act (H.R.

1432) was introduced in the 105th Congress on April

24, 1997.163 The legislation was cosponsored by Reps.

Philip Crane (R–IL), Jim McDermott (D–WA), and

Charles Rangel (D–NY). H.R. 1432 was referred to the

House Ways and Means Committee and the House International Relations Committee. The Senate companion bill S. 778, was introduced by Sen. Richard Lugar

(R–IN) on May 21 and was referred to the Senate Finance Committee. No action was taken on the Senate

bill during 1997. H.R. 1432 provided for increased

trade benefits for countries in Sub–Saharan Africa, allowed for duty–free and quota–free imports of textiles

and apparel from these countries and provided a

160 USTR, “A Comprehensive Trade and Development

Policy for the Countries of Africa,” December 1997.

161 Ibid.

162 Ibid.

163 A previous version of the African Growth and Opportunity Act, H.R. 4198, was introduced in the 104th Congress on September 26, 1996, to authorize a new U.S. trade

and investment policy in Sub-Saharan Africa. Although it

was referred to the Committee on Ways and Means, no action was taken on the bill during the 104th Congress.

foundation for negotiating free–trade agreements with

them. The bill focused on economic self–reliance

through expanded private sector activities, increased

trade and investment, and the elimination of trade barriers.

The most contested sections of H.R. 1432 were the

provisions for enhanced U.S. market access for textiles

and apparel from Sub–Saharan Africa. Section 8(c) of

the bill would eliminate U.S. textile and apparel quotas

for Kenya and Mauritius, the only Sub–Sahran African

countries currently subject to U.S. textile and apparel

quotas, but only after each country adopts a “cost–effective and efficient” visa system to guard against unlawful transshipment of textiles and apparel. The section would also require other countries in Sub–Saharan

Africa planning to export substantial amounts of textiles and apparel to the United States to have a “functioning and efficient” visa system in place to guard

against such transshipments.164

Section 9 of the bill would authorize the President

to provide countries in Sub-Saharan Africa with dutyfree treatment under the GSP for textiles and apparel

now excluded from the program. Currently, the textile

and apparel sector faces the highest average U.S. tariff.

The bill would authorize the President to designate textiles and apparel as GSP-eligible articles with respect

to eligible countries in Sub-Saharan Africa if, after receiving the advice of the U.S. International Trade

Commission, he determines such articles are not import sensitive in the context of imports from these

countries. The proposed GSP duty-free treatment

would remain in effect through May 31, 2007. (A summary of the other major provisions of H.R. 1432 is given in figure 3-2.)

Opponents of the textile provisions claimed that

duty- and quota-free access would lead to transshipment of textile goods and apparel through Sub-Saharan

Africa and hurt the U.S. textile industry. The Administration proposed granting preferential quota access for

such products only if they were assembled with U.S.

cut and formed fabric. This preferential treatment (socalled “807A” imports) would be comparable to benefits currently given to countries benefiting from the Caribbean Basin Economic Recovery Act and the Andean

Trade Preference Act. The Administration’s proposal

was opposed by Congressman Philip Crane (R-IL) and

other sponsors of H.R. 1432.

164 For additional information regarding the textile sections of H.R. 4198, see USITC, Likely Impact of Providing

Quota-Free and Duty-Free Entry to Textiles and Apparel

from Sub-Saharan Africa, USITC publication No. 3056,

September 1997, pp. ix and xx. See also ch. 5 in this report.
80

Figure 3-1

Summary of 1997 activities in support of African economic growth

World Trade Organization activities

Roundtable discussions regarding Sub-Saharan Africa were conducted at the High-Level Meeting on Integrated Initiatives for Least Developed Countries’ Trade Development during October 27-18, 1997. (See chapter 2

for details). Country-specific roundtable discussions were conducted for Madagascar, Tanzania, Djibouti, Zambia,

Mali, Chad, Uganda, and Guinea. The discussions covered each country’s need for trade-related technical assistance.

Five Sub-Saharan African countries made commitments in the negotiations on basic telecommunications services under the General Agreement on Trade in Services that concluded on February 15, 1997.

Export-Import Bank programs and outreach

The Ex-Im Bank supported $217 million in exports to Sub-Saharan Africa in FY 1997, a 50 percent increase

over 1996. The Ex-Im Bank implemented a new strategy for marketing its programs in Sub-Saharan Africa that

involved meeting with commercial attaches from each African embassy to explain Ex-Im Bank programs and to

develop potential transactions in these countries.

Trade promotion

The Africa Working Group of the Trade Promotion Coordination Committee (TPCC) was revitalized to improve coordination of the work of the 19 U.S. agencies directly involved in commercial promotion in Africa. The

U.S. Department of Commerce also reconstituted its Africa Team of domestic and international trade specialists

from the Export Assistance Center network and overseas posts to broaden its outreach, trade promotion, and

business support for U.S. investors in Africa. 

Agribusiness development

The U.S. Department of Agriculture is conducting a feasibility study regarding the placement of an Agricultural Trade Officer for three years in Sub-Saharan countries to support agribusiness development opportunities for

U.S. industry.

American-African Business Partnership

In September 1997, USAID sponsored a national economic forum in Accra, Ghana, that focused on the future

direction of Ghana’s economy and prospects for growth. USAID is also supporting access to various business

associations in West Africa to increase information about trade and investment opportunities.

Investment support

The Overseas Private Investment Corporation (OPIC) currently provides approximately $1 billion in insurance

and financing to over 60 projects in Sub-Saharan Africa. OPIC expects to make new investments through its

support of the New Opportunity Fund. Under the Partnership initiative, OPIC will develop new private sector

equity funds for Africa totaling up to $650 million.
81

Figure 3-1—Continued

Summary of 1997 activities in support of African economic growth

Transportation initiative

On October 8, 1997, the Africa Trade and Investment Roundtable was held to launch the Initiative with Africa.

The roundtable brought together over 200 U.S. business and political leaders to meet with the African diplomatic

corps and experts on Africa to discuss the initiative and identify elements of an interactive partnership. As part of

the Department of Transportation’s ongoing assistance programs, the Federal Highway Administration maintains

an active technology-sharing facility in Pretoria, South Africa, and has near-term plans to open such a center in

Dar Es Salaam, Tanzania. The Transportation Initiative, part of the African Aviation Initiative, included regional

meetings in Zimbabwe, Ethiopia, and Cote d’Ivoire to gather information concerning readiness of African nations

for competitive and/or additional scheduled air services and to share information about safety and security issues.

The Secretary of Transportation plans to lead a trade and development mission to Africa in early 1998.

Technical Assistance

U.S. Agency for International Development (USAID), as part of the Partnership, has technical assistance

programs to help African governments liberalize trade and improve their investment climate, to encourage relationships between U.S. and African firms through business associations, and to support private sector and trade-related activities under the Initiative for Southern Africa. Funding for these technical assistance programs began in

FY 1998.

In August 1997, USAID’s Regional Center for Southern Africa adopted a new regional development strategy

for the years 1997-2003. The new strategy emphasizes lowering trade and investment barriers within the southern

African region. The agency’s Southern Africa Enterprise Development Fund (SAEDF) is intended to encourage

the creation and expansion of indigenous small and medium-sized enterprises in the southern Africa region. The

SAEDF had approved investments totaling $12.5 million as of September 1997.

Other technical assistance to Sub-Saharan Africa in 1997 by USAID and other agencies was in the area of

labor, intellectual property rights, financial planning assistance, agricultural expertise, reprogramming U.S. commodity assistance programs, and strengthening democratic governance.

Financing and Debt Relief

The Administration has announced a commitment to pursuing the extinction of concessional bilateral debt for

the poorest countries that are undertaking bold reforms. Regarding multilateral debt, the Administration continues

to urge the World Bank and the IMF to provide maximum relief under the Heavily Indebted Poor Countries

(HIPC) debt initiative for HIPC-eligible countries. Uganda and Burkina Faso have been determined eligible to

participate in the HIPC program and decisions are expected soon on Mozambique and Cote d’Ivoire.

The IMF, through the Enhanced Structural Adjustment Facility, and the World Bank are collaborating on a

“reinforced strategy” to spur growth in Sub-Saharan Africa. The strategy includes support for trade liberalization,

investment, good governance, increasing the role of the private sector and investment in human resources. 
82

Figure 3-1—Continued

Summary of 1997 activities in support of African economic growth

Enhanced Dialogue with African Countries

With the initiation of the Partnership, the ongoing dialogue between the United States and the African nations

has intensified. In September 1997, the State Department briefed the African diplomatic corps on the status of the

proposed Africa Growth and Opportunity Act. Secretary of State Albright initiated a special ministerial session of

the UN Security Council on Africa. Other high-level meetings were held with representatives of the U.S. Department of the Treasury.

Multilateral Activities

The United States provides assistance to African countries bilaterally and through regional and multilateral

organizations such as the United Nations and the World Bank. Some examples of this assistance include preventive

diplomacy, peacekeeping operations, capacity strengthening of African organizations to resolve conflicts, support

for human rights, demobilization and retraining, and arms control. Other ongoing U.S. diplomatic initiatives are

also being carried out in Sub-Saharan Africa. Regarding finance, G-7 finance officials have formed an Africa

working group to examine financial and development issues on which G-7 countries might work together.

Source: A Comprehensive Trade and Development Policy for the Countries of Africa: A Report Submitted by the

President of the United States to Congress, December 1997.
83

Figure 3-2

Summary of African Growth and Opportunity Act

Section 2: Finds that it is in the mutual economic interest of the United States and Sub-Saharan Africa to

promote stable and sustainable economic growth and development in Sub-Saharan Africa.

Section 3: Expresses Congressional support for economic self-reliance for Sub-Saharan African countries.

Section 4: Makes Sub-Saharan African countries eligible to participate in programs, projects or activities or

receive assistance or other benefits under the Act for a fiscal year only if the President determines, according to

specified evidence, that it has established, or is making continual progress toward establishing a market-based

economy. 

Section 5: Expresses the sense of the Congress that sustained economic growth in Sub-Saharan Africa depends upon the development of a receptive environment for trade and investment through the continued support by

the U.S. Agency for International Development (AID) of programs that help to create this environment. Amends

the Foreign Assistance Act of 1962: 1) to provide additional program authorities to include assistance to promote

democratization and strengthen conflict resolution and 2) to increase program flexibility through Presidential

waivers of certain requirements.

Section 6: Directs the President to convene annual high-level meetings between U.S. government officials and

officials of the governments of Sub-Saharan African countries to foster close economic ties between them. Directs

the President to establish a United States-Sub-Saharan Africa Trade and Economic Cooperation Forum.

Section 7: Directs the President to develop a plan meeting certain requirements to enter into one or more trade

agreements with certain eligible Sub-Saharan African countries to establish a United States-Sub-Saharan Africa

Free Trade Area.

Section 10: Expresses the sense of the Congress that: 1) specified international financial institutions and their

programs are vital to the economic growth and development of Sub-Saharan African countries; 2) the executive

branch should extinguish concessional debt owed to the United States by the poorest Sub-Saharan countries; and

3) the Congress supports the efforts of the executive branch to secure agreement from such institutions to maximize debt reduction for such countries as part of the multilateral initiative known as the Heavily Indebted Poor

Countries (HIPC) initiative. Supports and encourages the implementation of specified initiatives through AID and

the Trade Development Agency.

Section 11: Expresses the sense of the Congress that the Overseas Private Investment Corporation (OPIC)

should exercise its authorities to initiate two or more equity funds in support of projects in Sub-Saharan African

countries, particularly projects that expand opportunities for women entrepreneurs and employment for the poor.

Section 12: Amends the Foreign Assistance Act of 1961 to revise the composition of the Board of Directors of

OPIC to require at least one of the eight presidentially-appointed Directors to have extensive private sector experience in Sub-Saharan Africa. Directs the Board to increase financial assistance in Sub-Saharan Africa. Amends the

Export-Import Bank Act of 1945 to make similar changes with respect to the Export-Import Bank of the United

States.

Section 13: Directs the President to establish the position of Assistant United States Trade Representative

within the Office of the United States Trade Representative to focus on trade issues relating to Sub-Saharan Africa.
84

The House Ways and Means Subcommittee on

Trade approved H.R. 1432 on May 22, 1997. Three

amendments, in addition to an amendment in the nature

of a substitute, were approved. The amendments included one to expand the number of Foreign Commercial Service posts and officers in Sub-Saharan Africa,

another to ensure that beneficiary countries are undertaking measures that are consistent with U.S. national

security and foreign policy, and a third that changed

the enumerated designation of Zaire to its recently

changed name, the Democratic Republic of the Congo.165

On June 25, 1997, the House Committee on International Relations approved H.R. 1432 by voice

vote. The Committee also approved an amendment to

the bill, introduced by Rep. Benjamin A. Gilman (RNY), that would prohibit U.S. assistance to any country

in the region that engaged in a “consistent pattern” of

“gross violation” of internationally recognized human

rights. The amendment was meant to apply to Nigeria,

according to the sponsor.166

On October 23, 1997, the House Ways and Means

Subcommittee on Trade approved H.R. 1432 by voice

vote with two amendments. One amendment, sug165 Africa News Service, “House Panel Approves Africa Trade Investment Act,” found at Internet address

http://www.africanews.org/usaf/house-trade.html, retrieved

June 11, 1997.

166 Bureau of National Affairs, “House Committee Approves Legislation to Boost Ties with Sub-Saharan Africa,”

International Trade Daily, Article No. 41781010, 

June 17, 1997.

gested by the U.S. Customs Service, would more effectively guard against transshipment of textile and apparel goods and the use of counterfeit documents. The

amendment also changed the date for the end of GSP

benefits from 2007 to 2008. The Subcommittee also

approved an amendment offered by Rep. William

Jefferson (D-LA) to encourage eligible countries to

promote and enable the formation of capital to support

the establishment and operation of microenterprises.167

On February 25, 1998, the House Ways and Means

Committee passed H.R. 1432 by voice vote. The committee also passed an amendment to the legislation by

Rep. Jim Nussle (R-IA) which required that no funds

authorized in the section dealing with the trade forum

be used for nongovernmental organizations.168 In response to passage of H.R. 1432, USTR Charlene Barshefsky stated, “The strong bi-partisan vote in favor of

Africa trade legislation sends a clear signal that the

Congress shares the President’s desire to help move the

region toward greater economic and political stability.”169 On March 11, 1998, the full House of Representatives passed H.R. 1432. Senate action was pending at that time.

167 “Ways and Means Panel Approves Africa Trade Bill

with Minor Changes,” Inside U.S. Trade, October 24, 1997.

168 Bureau of National Affairs, “Bill Expanding Africa

Trade Policy Passes House Ways and Means Panel,” International Trade Daily, Article No. 50571004.

169 USTR, “Statement by the United States Trade Representative Charlene Barshefsky in Response to House Ways

and Means Committee Passage of Africa Trade Legislation,”

press release no. 98-19, Feb. 25, 1988.
85

CHAPTER 4

U.S. Relations With Major

Trading Partners

This chapter reviews bilateral trade relations and

issues with seven major U.S. trading partners during

1997: Canada, the European Union, Japan, Mexico,

China, Taiwan, and Korea. Appendix tables A-1-21

provide detailed information on U.S. trade with these

partners. 

Canada

During the final year of the tariff reductions under

the free trade agreement between Canada and the

United States, economic and trade relations between

the two countries were relatively smooth.1 On January

1, 1998, duty-free status for originating goods, except

for certain agricultural goods, was achieved.2

However, given the volume of trade between the two

countries,3 a certain number of issues inevitably

receive considerable attention each year, some of

which have a significant impact on bilateral relations.

Among such issues in 1997 were trade in Canadian

dairy products, Pacific salmon and related treaty

obligations of the two trade partners, and an ongoing

bilateral dispute concerning Canadian periodicals/

magazines that was handled through the WTO dispute

settlement mechanism.

Dairy Dispute

During 1997 a trade dispute developed between the

United States and Canada over Canada’s system of

1 The U.S.-Canada Free Trade Agreement (CFTA) was

signed in 1988 and entered into force in January 1989.

January 1, 1994, marked the entry into force of the North

American Free Trade Agreement (NAFTA). The timetable

for duty reductions and most of the terms of the CFTA were

folded into the NAFTA.

2 U.S. Department of State telegram, “Canadian Tariffs

Eliminated on U.S. Goods - Many Others Unilaterally

Reduced,” message reference No. 4821, prepared by U.S.

Embassy, Ottawa, Dec. 24, 1997.

3 Unofficially estimated at $1 billion a day.

milk pricing and its refusal to implement a global

tariff-rate quota (TRQ) for fluid milk (table milk and

fresh cream). U.S. interests assert that Canada prices

milk and dairy products in such as way as to

circumvent its commitments to reduce export subsidies

under the Uruguay Round Agreement on Agriculture

(the agreement).4 According to U.S. dairy industry

representatives, the system gives Canadian producers

an unfair advantage in world markets and directly

injures the United States and other dairy-producing

countries. Canada claims that its system of dairy

product pricing is not a subsidy program.5 In

November 1997, the United States formally

complained to the World Trade Organization (WTO)

about alleged export subsidies for dairy products

provided by Canada. Consultations failed to resolve

the issue; and, in February 1998, the United States

requested establishment of a WTO dispute settlement

panel.6

This case is significant not only for the dairy

industry but also for several other agricultural

industries, because it is the first time a challenge has

been made involving Article 10 of the agreement,

designed to prevent violations of the rules of export

subsidy reductions. U.S. dairy representatives claim

that if Canada is able to circumvent its WTO

obligations in violation of Article 10, such action will

undermine all agreement rules on export subsidies.7

4 Section 301 petition to the U.S. Trade Representative,

filed by the National Milk Producers Federation, U.S. Dairy

Export Council, and International Dairy Foods Association,

Sept. 5, 1997, p. 15.

5 Comments of officials of Agriculture and Food Canada

reported in “U.S., Canada to Take Milk Spat to WTO,” The

Journal of Commerce, Oct. 6, 1997.

6 For additional information, see the discussion of WTO

dispute settlement activities in ch. 2. Information on the

status of WTO disputes found at the WTO website

http://www.wto.org/wto/dispute/bulletin.htm.

7 National Milk Producers Federation, U.S. Dairy Export

Council, and International Dairy Foods Association,

“Backgrounder: WTO Challenge of Canada’s Dairy Export

Pricing Scheme,” press release, Sept. 5, 1997.
86

Background to Canadian Dairy

Pricing Policy

The milk and dairy products industry in Canada

operates under a national supply management system,

largely insulated from international markets by a

combination of quotas, tariffs, and other import

controls, industry support, and price stabilization

arrangements.8 Each year a national quota for

industrial milk and cream is established based on the

anticipated needs of the domestic market, plus the milk

requirements of specific export programs. The quota is

then allocated among provincial marketing boards with

the responsibility for the allocation of farm quota

entitlements.9 Imports of dairy products are controlled

by TRQs, with over-quota duty rates as high as 300

percent.10 These supply restrictions, coupled with

import controls, mean that the cost of the dairy

programs in Canada is borne mostly by Canadian

consumers through higher prices.11

The Canadian Dairy Commission (CDC)

establishes the target price for industrial milk and the

assumed processor margin at the beginning of each

dairy year.12 The target price is the price determined

to be adequate for efficient milk producers to cover

their cash costs and to receive a fair return on their

labor and investment. In establishing price levels, the

CDC weighs advice received from industry

stakeholders, calculations from cost of production

formulas, market conditions, and the general state of

the Canadian economy.13

8 Agriculture and Agri-food Canada, “The Canadian

Dairy Sector: Structure, Performance and Policies,” in

R.M.A. Loyns, Karl Meilke, and Ronald D. Knutson, eds.,

Understanding Canada/United States Dairy Disputes,

proceedings of the Second Canada-U.S. Agricultural and

Food Policy Systems Information Workshop, University of

Guelph, Dec. 1996, p. 16.

9 OECD, Reforming Dairy Policy, 1996, p. 57.

10 General Agreement on Tariffs and Trade, Summary of

The Results of the Uruguay Round in the Dairy Sector,

International Dairy Agreement Fifteenth Annual Report,

Geneva, Nov. 1994, pp. 22-23.

11 U.S. Department of Agriculture (USDA), Economic

Research Service, “Dairy Policies Are Limiting U.S.-Canada

Trade,” Agricultural Outlook, Jan.-Feb. 1997, p. 20.

12 The CDC is delegated by the Canadian Government

to oversee Canada’s national supply management program,

and to manage the government-funded dairy support

program. The CDC was established in 1966, and in the early

1970s dairy products became the first commodities in

Canada to be governed by national supply management. For

information on Canadian dairy programs see CDC,“Dairy

Industry Policies,” found at Internet address

http://www.cdc.ca/cdc.html, retrieved Apr. 16, 1998.

13 Ibid.

Provincial marketing boards typically purchase

milk from producers and sell it to processors for the

manufacture of dairy products. The milk produced in

Canada is sold to processors through a common milk

classification system for the manufacture of milk-based

products defined as classes 1 through 4.14 The price

processors pay for their milk depends on the type (or

class) of manufactured dairy product for which the

milk is used. Manufacturers of class 1 products pay

the highest price for their milk, while class 4 product

manufacturers pay the least for their milk.15 Receipts

from milk sales are pooled across all classes, and

producers are paid a uniform weighted average price

(with weights reflecting the proportion of milk sold

under each class) to equalize payments to milk

producers.16

Milk is the primary ingredient in manufacturing

dairy products. Processors wishing to export dairy

products must be able to purchase their milk at a price

that allows them to be competitive on the world

market. Prior to August 1, 1995, all milk marketed

domestically (i.e., from sales of milk classes 1-4) by

Canadian dairy farmers was subject to a levy imposed

by the CDC. Proceeds from this levy were used to

subsidize Canadian dairy exporters by reducing the

high domestic cost of milk to a level which allowed

Canadian dairy products to be competitive on world

markets.17

14 Class 1— fluid milks, fluid creams, milk-based

beverages, fluid milks for the Yukon and Northwest

Territories (Alberta only); class 2—yogurt and ice cream;

class 3—specialty cheeses and cheddar; and class 4— butter,

powders and condensed milk for ingredient purposes,

condensed milk for retail, new products for the domestic

market, and animal feed and unclassified products. Class 5

was established effective August 1, 1995, as part of

Canada’s new dairy pricing and pooling scheme described in

more detail below. Ibid.

15 Under class 5, industrial milk is classified and made

available for use in dairy products and products containing

dairy ingredients at prices which vary according to end use.

The volume of dairy components accessed under this class is

monitored through permits issued by the CDC. Ibid.

16 Traditionally, provinces have used a variety of

pooling calculations to equalize payments to milk producers.

Pooling became national in scope in August 1995, with the

implementation of a pricing and pooling system for class 5

milk. In addition, revenue from all milk sales (fluid and

industrial) has been pooled among the producers of

Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia,

and Prince Edward Island since August 1996. In March

1997, the four Western provinces also implemented an all

milk pooling arrangement; although Manitoba is part of the

Western Milk Pool, it also participates in revenue sharing

with the Eastern All Milk Pool. Ibid.

17 Section 301 petition to the U.S. Trade Representative,

filed by the National Milk Producers Federation, U.S. Dairy

Export Council, and International Dairy Foods Association,

Sept. 5, 1997, p. 15.
87

Under the agreement, this system of

producer-financed export assistance qualified as an

export subsidy and was subject to the value and

volume reductions of export subsidies required under

the agreement.18 To comply with the agreement,

Canada changed its pricing policy effective August 1,

1995, in a way that ensured its dairy industry could

continue to compete successfully in world markets and

that, according to the Canadians, does not violate its

WTO commitments.19

The new 1995 system brought two major changes

to the previous policy. First, the producer levy was

removed and the system of producer-financed export

assistance was abandoned. Second, a class 5 (for

special milk types) was introduced. Class 5 established

prices for milk used for the production of exported

dairy products and products containing dairy

ingredients.20 Since August 1995, milk for exported

dairy products has been accessed through permits

issued by the CDC on a transaction by transaction basis

under subclasses 5(d) and 5(e).21 The number of

permits and the volume of milk they cover vary

depending on the quantity of milk produced that is not

required for the domestic market. The target prices

under class 5 are lower than those for domestically sold

products under classes 1-4, and thus allow processors

to manufacture dairy products for export at a

competitive world price.

Receipts from class 5 sales are pooled with those

from sales in classes 1-4 and returned to producers in

the form of a pooled average price from domestic and

export sales. The average producer price from classes

1-5 (under the new system) is lower than the price

based on the class 1-4 average (under the previous

system), because class 5 prices are the lowest of all

classes. However, producers are compensated for the

lower price by the removal of the levy. Thus, the

money previously collected from the dairy producers,

18 Uruguay Round Agreement Act, Statement of

Administrative Action, published in H. Doc. 103-316, 103d

Cong., 2d Sess., pp. 720-723.

19 “Canadian Dairy Commission Announces No Change

in Target Support Prices,” The Cheese Reporter, Feb. 14,

1997, p. 5.

20 Class 5 comprises the following: (1) cheese

ingredients for further processing for the domestic and

export markets; (2) all other dairy products for further

processing for the domestic and export markets; (3) domestic

and export activities of the confectionery sector; (4) specific

negotiated exports, including cheese under quota destined

for the United States and the United Kingdom, evaporated

milk, whole milk, whole milk powder, and niche markets;

and (5) surplus removal.

21 U.S. Department of Agriculture, Foreign Agricultural

Service, Dairy Annual (CA6076), Dec. 13, 1995, p. 7.

is now transferred directly to the processors from the

producer in the form of a lower administered price.

This system allows Canadian dairy food processors

and exporters of dairy-based products to purchase their

inputs at competitive prices and therefore export

competitively.22 The U.S. dairy industry maintains that

the effect is to implement a two-tier pricing structure,

in which the price Canadian processors pay for milk to

produce exported food products is lower than the price

they pay for milk used to produce the same products

sold on the domestic market.

The Dispute

On September 5, 1997, three major U.S. dairy

organizations—the National Milk Producers Federation, the International Dairy Foods Association, and

the U.S. Dairy Export Council—filed a petition with

the U.S. Trade Representative (USTR) under section

301 of the Trade Act of 1974,23 requesting that the

United States challenge the Canadian dairy pricing

system before the WTO Dispute Settlement Body

(DSB).24 The industry groups argue that Canada’s

program of special milk classes involves a

circumvention of export subsidies rules as outlined in

Article 10 of the agreement.25

Export subsidy commitments are outlined in each

member’s Schedule of Concessions. Article 9.1 of the

agreement specifies the types of export subsidy that are

subject to reduction commitments under the

agreement.26 Drafters of the agreement were

22 U.S. Department of Agriculture, Economic Research

Service, “Dairy Policies Are Limiting U.S.-Canada Trade,”

pp. 19-23.

23 Section 301 of the Trade Act of 1974 provides the

procedural means under U.S. trade law for U.S. businesses

and workers to seek government intervention in gaining

relief from unfair foreign trade practices that burden or

restrict U.S. commerce.

24 Section 301 petition to the U.S. Trade Representative,

filed by the National Milk Producers Federation, U.S. Dairy

Export Council, and International Dairy Foods Association,

Sept. 5, 1997, p. 31.

25 Ibid. The agreement requires that the value of export

subsidies be reduced to a level 36 percent below the 1986-90

base period average level and that the volume of subsidies be

reduced by 21 percent. This means that both the value and

volume of subsidies were capped in 1995. They are then

being progressively reduced to the required level by the year

2000. Products that did not receive export subsidies during

the base period will not be eligible for export subsidies in the

future. Uruguay Round Agreements Act, Statement of

Administrative Action, pp. 721-22.

26 Export subsidies specified in Article 9.1 of the

agreement include: payments-in-kind to market participants

contingent on export performance; government sale or

disposal of noncommercial stocks of agricultural products at

a price lower than the comparable price charged to buyers in

the domestic market; payments on the export of an
88

concerned that after devising the description of export

subsidies listed in Article 9.1 and agreeing to reduce

such subsidies, some WTO members would invent new

methods for subsidizing exports to avoid falling under

the literal definitions. Export subsidies not subject to

reductions are prohibited by Article 10 to prevent

circumvention of export subsidy reduction

commitments. Article 10 of the agreement states that

“export subsidies not listed in Article 9.1 shall not be

applied in a manner which results in, or which

threatens to lead to, circumvention of export subsidy

commitments; nor shall non-commercial transactions

be used to circumvent such commitments.”27 Thus

Article 10 bans the use of export subsidies not included

in Article 9.1 or in a member’s Schedule of

Concessions.

The U.S. dairy industry petition argues that class 5

constitutes an export subsidy as defined in the

Agreement on Subsidies and Countervailing Measures

(Subsidies Agreement)28 which defines “subsidy” as

any financial contribution, such as grants, loans,

revenue foregone, and the provision or purchase of

goods and services, by a government or any public

body that provides any income support and confers

benefit,29 and that the Canadian dairy pricing system

violates Article 10 of the Uruguay Round Agreement

on Agriculture because it allows Canada to circumvent

volume and expenditure limitations on export

subsidies. The petition argues that class 5 is applied in

a manner that constitutes noncommercial transactions

used to circumvent export subsidy commitments.

The petition claims that Canada exports dairy

products at prices below its domestic prices for

comparable products. It alleges that Canada subsidizes

lower-priced exports by charging a relatively high

price for milk used by processors supplying the

Canadian domestic market, and by charging a lower

price to Canadian processors supplying the same

product to export markets. The petition argues that the

26—Continued

agricultural product that are financed by virtue of

government action; provision of subsidies to reduce the costs

of marketing exports of agricultural products, such as

international transportation and processing; internal

transportation charges on export shipments provided by

government on terms more favorable than for domestic

shipments; and, subsidies on agricultural products contingent

on their incorporation in exported products.

27 USTR, Uruguay Round of the Multilateral Trade

Negotiations, General Agreement on Tariffs and Trade, Final

texts of the GATT Uruguay Round Agreements, Agreement

on Agriculture, Marrakesh, Apr. 15, 1994, p. 51.

28 Uruguay Round Agreements Act, Statement of

Administrative Action, pp. 911-55.

29 Ibid., p. 912.

Canadian system represents a two-tier pricing system,

involving a subsidy on exports that is financed by

producers (not the government) through the system that

pools revenues from high domestic sales prices and

lower export sale prices. According to the petition,

“without these preferential input prices, Canadian

processors of dairy products would not be competitive

on the world market due to the high domestic prices of

milk protected by import restrictions. Thus the

Canadian class 5 scheme satisfies the definition of an

export subsidy as contemplated by the Agreement on

Agriculture and the Subsidies Agreement.”30

The Canadian Government contends that the class

5 scheme does not fall within Article 9, and that

“Canada chose to meet its international commitments

under the WTO and NAFTA for most dairy products

by changing the payments on export financed producer

levies, that were defined as export subsidies under the

URA, to an end-use pricing system, which is not.”31

The petition also charges Canada with refusing to

honor its TRQ for fluid milk that it agreed to in the

agreement. Specifically U.S. industry groups wish to

force Canada to comply with its minimum access

commitments under the Uruguay Round, and

specifically to open its 64,500 ton TRQ on fluid milk

to commercial imports. Canada insists that tourists and

Canadian citizens carry milk across the border in such

quantity as to fill the quota. However, according to

U.S. officials, Canada has no valid documentation for

this, nor does it make any effort at the border to record

milk volumes. According to the petition, opening the

TRQ to commercial imports would increase U.S. dairy

exports to Canada by at least $20 million annually.32

Timetable for Dispute Settlement

On October 8, 1997, the United States filed a

complaint (WT/DS103/1) with the WTO concerning

export subsidies allegedly granted by Canada on dairy

products and the administration by Canada of the TRQ

on milk. The U.S. complaint contends that the export

subsidies by Canada distort markets for dairy products

and adversely affect U.S. sales of dairy products. The

United States alleges that Canadian practices constitute

violations of Article II of the General Agreement on

Tariff and Trade (GATT) 1994, Articles 8 and 10 of the

30 Section 301 Petition to the U.S. Trade Representative,

filed by the National Milk Producers Federation, U.S. Dairy

Export Council, and International Dairy Foods Association,

Sept. 5, 1997, p. 37. 31 Response to a question by New Zealand at WTO

Committee on Agriculture Meeting, Oct. 1997. 32 Section 301 Petition to the U.S. Trade Representative,

filed by the National Milk Producers Federation, U.S. Dairy

Export Council, and International Dairy Foods Association,

Sept. 5, 1997, p. 27.
89

Agreement on Agriculture, Article 3 of the Subsidies

Agreement, and Articles 1 and 3 of the Import

Licensing Agreement.33

Under WTO rules, the two parties must attempt to

negotiate a solution; and informal consultations were

held beginning November 19, 1997, at the WTO in

Geneva, Switzerland. Australia and Japan joined the

United States as interested parties in the case.34 These

consultations failed to draw the opposing sides closer

together. In a separate but related issue, New Zealand

filed a WTO complaint (WT/DS113/1) on December

29, 1997, concerning the Canadian dairy export

scheme, alleging that the milk classes scheme is

inconsistent with Articles 3, 8, 9, and 10 of the

Agreement on Agriculture. A WTO dispute settlement

panel was established on March 25, 1998, to jointly

address the complaints of both the United States and

New Zealand.35 A final decision in the case is not

expected until late 1998 at the earliest.

Recent Developments in the

Pacific Salmon Fishery

The Pacific salmon industry faces numerous

problems and complications. Recent high harvest rates

have depressed prices and may be depleting the

resource.36 High harvest rates may be unsustainable in

the longer run because salmon population growth rates

may prove too low to replace the removal through

harvesting37 and because industrial development along

rivers and coastlines threatens future harvests.38 Most

significantly, the fishery—one of the world’s most

valuable fish resources—is shared with Canada, raising

33 Information on the current status of WTO disputes

can be found at the WTO website

http://www.wto.org/wto/dispute/bulletin.htm.

34 U.S. Department of State telegram, “WTO

Consultations on Canada’s Dairy Regime,” message

reference No. 08274, Geneva, Dec. 1, 1997.

35 WTO, “Overview of the State-of-play of WTO

Disputes,” found at Internet address

http://www.wto.org/wto/dispute/bulletin.htm, dated 

March 31, 1998, retreived Apr. 2, 1998.

36 U.S. Department of Commerce, National Oceanic and

Atmospheric Administration (NOAA), National Marine

Fisheries Service (NMFS), “The West Coast Regional

Report,” chapter 4 in Our Living Oceans: The Economic

Status of U.S. Fisheries, 1996, NOAA Technical

Memorandum NMFS-F/SPO-22, December 1996, pp. 52-53.

37 U.S. Department of Commerce, NOAA, NMFS,

“Alaska Salmon,” Our Living Oceans: Report on the Status

of U.S. Living Marine Resources, 1995, NOAA Technical

Memorandum NMFS-F/SPO-19, February 1996, pp. 77-79.

38 U.S. Department of Commerce, NOAA, NMFS,

“Impacts of California Sea Lions and Pacific Harbor Seals

on Salmonids and on the Coastal Ecosystems of Washington,

issues of joint access and bilateral management, in

addition to competition for the U.S. industry on the

fishing grounds and in the marketplace.39

In the spring of 1997, the Canadian Government

seized several U.S.-flag fishing vessels traversing

Canadian waters on their way from Washington to

Alaska. These seizures were followed by a blockade

by British Columbia fishing vessels of a U.S.-flag

ferry. These events reflect the ongoing logjam in

U.S.-Canada negotiations over bilateral allocations of

benefits and costs of the Pacific salmon fishery.

Background

The U.S. Pacific salmon fishery is based in the

Pacific Northwest (Washington, Idaho, and Oregon)

and Alaska and is situated along the Columbia, Snake,

and other rivers. The fishery is shared with Canada,

and is supported in part by salmon runs from the Fraser

and other river systems in British Columbia and the

Yukon. The bulk of the Pacific salmon fishery consists

of five species: chinook or king, sockeye or red, pink,

chum, and coho or silver.40 Several subspecies of

salmon are classified by the United States as

“endangered” or “threatened” pursuant to the

Endangered Species Act (16 U.S.C. 1531-1543, Public

Law 93-205), which is administered in part by the

National Marine Fisheries Service (NMFS) of the U.S.

Department of Commerce.41

Salmon migrations may cover hundreds or

thousands of miles, from the middle of the North

Pacific to U.S. and Canadian river tributaries,

waterways, and other bodies of water. Salmon almost

always return to the waters of their birth, where they

38—Continued

Oregon, and California,” NOAA Technical Memorandum

NMFS-NWFSC-28, Seattle, March 1997, available at

http://research.nwfsc.noaa.gov/pubs/tm/tm28/tm28.htm. 39 US. Department of Commerce, NOAA, NMFS,

“Pacific Northwest Salmon,” Our Living Oceans: Report on

the Status of U.S. Living Marine Resources, 1995, NOAA

Technical Memorandum NMFS-F/SPO-19, February 1996,

pp. 21-31. 40 The respective scientific names are: Oncorhynchus

tshawytscha, O. nerka, O. gorbuscha, O. keta, and O.

kisutch. Minor salmon species and western bouts of the

same genus are not included here; nor is Atlantic salmon,

which in the Pacific Northwest is raised on farms, not

harvested by fishing vessels. 41 For example, Snake River coho has been determined

to be extinct; Snake River sockeye and chinook are listed as

“endangered”; and coho salmon at the Oregon/California

border are listed as “threatened.” The term “endangered”

means “any species which is in danger of extinction

throughout all or a significant portion of its range,” while

“threatened” signifies less immediate danger of extinction

than “endangered.” These listings mean that it is unlawful to

kill or harm individuals of these populations, with exceptions

to be made in accordance with existing state fishery

conservation plans. 16 U.S.C. 1532(6).
90

die after spawning.42 The commercial harvest of

salmon takes place primarily within three miles of the

Pacific Ocean shore,43 often at or close to the mouths

of rivers. Because Canadian and U.S. salmon stocks

mix with each other in the ocean, some “interceptions”

by both countries are unavoidable as vessels fishing on

the U.S.-Canadian border harvest both U.S.- and

Canadian-born salmon. Such interceptions are a cause

of significant practical and political problems for

effective fishery management, and have been the

subject of bilateral concern.

Salmon Supply

The mix of Pacific salmon species, their migratory

behavior, environmental factors, and the mostly

adverse effects of human activity on their migration

combine to make the Pacific salmon fishery one of the

biologically most complex and unique fisheries in the

United States. Both human activities and natural

phenomena may affect the supply of Pacific salmon

available to U.S. and Canadian fisheries. Human

activities, including overfishing, the construction of

dams and reservoirs in salmon migration corridors, as

well as pollution from industrial and residential

development can adversely affect salmon supply and

reduce salmon survival rates.44 Natural oceanographic

phenomena, such as changes in water temperatures

(including the periodic El Niño events of unusual

warm ocean conditions) and salinity, in turn can

adversely affect the size of a salmon population as well

as its location and depth.45

Under the Magnuson-Stevens Fishery

Conservation and Management Act (P.L. 94-265 as

amended), the U.S. Government has responsibility for

the conservation and management of anadromous fish

(including Pacific salmon) resources within the U.S.

Fishery Conservation Zone (FCZ) and beyond unless

the resources are within another nation’s fishery

conservation zone.46 The Magnusun-Stevens Act

42 For more detailed information on the life history of

Pacific salmon, see NMFS, Office of Protected Resources,

“Northwest Salmon,” (information taken from National

Marine Fisheries Service, “1995 Proposed Recovery Plan for

Snake River Salmon Summary”), found at Internet address

http://www.nmfs.gov/tmcintyr/fish/nwsalmon.html, retrieved

Apr. 18, 1998.

43 U.S. Department of Commerce, NMFS, Fisheries of

the United States, 1995, (Washington, DC: NMFS, 1995), 

p. 7.

44 U.S. Department of Commerce, NMFS, “Pacific

Northwest Salmon,” pp. 27-28.

45 Washington Department of Fish and Wildlife, 1997

Draft Wild Salmonid Policy, Seattle, WA, May 1997.

46 The U.S. FCZ extends from the boundary of eachs

state’s territory (generally 3 nautical miles from shore) to

200 nautical miles from shore.

established the Pacific Fishery Management Council,

which has implemented fishery management plans for

Pacific salmon covering commercial troll fisheries as

well as Native American and recreational fisheries,

fresh- as well as saltwater. In determining the total

allowable catch available each year for these varied

interests, the council takes into account the biological

status of the resources, market conditions and other

economic factors, augmentation of fish stocks by

hatcheries, and the likely amount to be harvested by

Canadian fishermen under the Pacific Salmon Treaty

(discussed in more detail below), which requires joint

efforts between the Federal Government, the states,

Canada, and tribal governments.

Canadian authorities also have tightened catch

limits and other restrictions to reduce fishing pressure

and offset adverse environmental effects on salmon

productivity. Recent proposals include a habitat

restoration and enhancement program, credit programs

for fishermen, and payments to fishermen for

previously owned fishing gear made useless by new

restrictions and for an early retirement program, among

others. These measures reportedly are intended to

reduce the current fishing effort so that future

production can expand, while easing the current burden

on fishermen.47

U.S.-Canada Pacific Salmon Treaty

Prior to the 1980s, the United States, Canada,

Japan, and the former Soviet Union, among others,

traditionally shared in the Pacific salmon harvest.

With the extension of their FCZs to 200 miles in the

1970s, Canada and the United States effectively

reduced a multilateral access problem to an essentially

bilateral one.48 However, problems remained because

of the borderless nature of salmon migration, harvests,

and supply conditions. The fishery costs and benefits

for one country are linked to those for the other,

creating the need for a system of joint management

with equitable sharing of costs and benefits.

The United States and Canada signed the Pacific

Salmon Treaty in 1985.49 U.S. signatories to the treaty

47 Department of Fisheries and Oceans Canada,

“Highlights of Federal Initiatives for the Pacific Salmon

Fishery,” Ottawa, Ontario, January 1997.

48 Problems remained for the harvest of salmon

populations that extended beyond 200 miles, and these were

resolved by the establishment of international forums such as

the North Pacific Anadromous Fish Commission, which

consists of representatives from the four nations listed above.

49 Treaty Between the Government of the United States

of America and the Government of Canada Concerning

Pacific Salmon, as amended. In fact, U.S.-Canada salmon
91

included the Federal Government, Alaska, Oregon,

Washington, and Northwest Native-American tribes.

The goals of the treaty were to ensure conservation to

prevent overfishing, and to provide an equitable

harvest of salmon stocks through strict limits to ensure

that interceptions of salmon by the two countries were

balanced.50 The treaty established a binational Pacific

Salmon Commission51 to regulate salmon fishing

within 200 miles of the coast, but included no dispute

resolution mechanism. Since the treaty’s

implementation, the United States and Canada have

met regularly to negotiate total allowable catches of

various salmon populations and their allocations to

each country’s fishing fleet.52

Bilateral tensions mounted during the 1990s as the

productivity of salmon stocks declined. In 1994,

frustrated by what they perceived as unfair U.S.

demands in the treaty negotiations, Canada imposed a

C$ 1,500 fee (about US$ 1,050) on U.S. fishing boats

passing through Canadian waters;53 later that year, the

NMFS reclassified Snake River chinook—once the

world’s largest salmon runs—from “threatened” to

“endangered.” The two nations sent the dispute to

impartial arbitration in 1996, with a New Zealand

49—Continued

negotiations in one form or another date back to the early

years of the century. Gordon R. Munro and Robert L. Stokes,

“The Canada-U. S. Pacific Salmon Treaty,” in D. McRae and

G. Munro, eds., Canadian Oceans Policy (Vancouver:

University of British Columbia Press, 1989).

50 Department of Fisheries and Oceans Canada, “The

Pacific Salmon Treaty: Overview,” May 1996.

51 The Pacific Salmon Commission is divided into two

national sections, with commissioners appointed by each

nation. Enabling legislation in the United States prescribes

that the U.S. section have one member from Alaska, one

from Oregon or Washington, one representing treaty tribes,

and one nonvoting federal official. The Canadian section is

led by the federal Department of Fisheries and Oceans and

includes representatives from First Nations, recreational and

commercial fisheries, as well as the B.C. provincial

government. The treaty also established several scientific

and technical committees which provide the Commission

with essential data on the stocks and fisheries. Department

of Foreign Affairs and International Trade (DFAIT), Canada,

“The Pacific Salmon Treaty: An Overview,” from the DFAIT

website, found at Internet address

http://www.dfait-maeci.gc.ca/english/foreignp/environ/

salmon.htm.

52 Ibid., and Eric Pryne and Jim Simon, “What’s Behind

the Battle Over a Salmon Treaty?” Seattle Times, May 29,

1997, found at Internet address

http://www.seattletimes.com/extra/browse/html97/

fish_052997.html, retrieved Apr. 16,1998.

53 Joseph Cone, A Common Fate: Endangered Salmon

and the People of the Pacific Northwest (New York: Henry

Holt, 1995). Defending its action, Canada called unfair the

U.S. demands that Canada reduce harvests of Snake River

salmon when U.S. (Alaskan) harvests of Canadian-origin

salmon were rising.

diplomat hired to mediate.54 However, that mediator

terminated his participation in the dispute later in 1996,

stating that the views of the two parties were too far

apart for successful mediation.55

In early 1997, Canada argued that U.S. vessels

were catching a far greater share of Canadian-origin

salmon than Canadian fishermen were catching of

U.S.-origin fish. In May 1997, Canada suspended

discussions with the United States over the

long-standing dispute on Pacific salmon and began

seizing U.S.-flag fishing vessels pursuant to existing

Canadian laws.56 The U.S. vessels were charged with

failing to “hail in when entering Canadian waters and

to stow all fishing gear on board the vessel while in

Canadian waters.”57 The United States issued an

official protest to Canada, and Alaska legislators

sought, but did not obtain, Coast Guard protection and

escort of U.S.-flag vessels in Canadian waters.58

In other Canadian actions subsequently undertaken

during 1997, the British Columbia Government

announced that it would begin taking actions, including

possibly canceling leases with the Canadian

Government on military installations that are used by

the United States, if the United States did not show

good faith in the salmon negotiations.59 On July 19,

1997, British Columbia (BC) fishing vessels blockaded

54 Department of Fisheries and Oceans Canada, “New

Steps to be Taken to Address Canada-U.S. Pacific Salmon

Fishery,” news release, March 5, 1996.

55 His draft report, leaked to the press in May 1997,

reportedly essentially sided with Canada and proposed an

accounting formula that would curtail U.S. allocations or

require payments to Canada as compensation. Danny

Westmeat, “Secret Report Sides With Canada,” Seattle

Times, May 31, 1997, found at Internet address

http://www.seattletimes.com/extra/browse/html97/

fish_053197.html, retrieved Apr. 16, 1998.

56 This action followed up on a warning from Canada

issued in June 1996, under the Coastal Fisheries Protection

Regulations, that it would begin enforcing its laws governing

foreign vessels in Canadian waters on the Pacific coast.

Department of Fisheries and Oceans Canada, “Canada Takes

Action Following Deadlock in Salmon Talks, news release,

May 21, 1997, and “New Regulations Governing Foreign

Commercial Fishing Vessels Now in Effect,” news release,

July 23, 1996.

57 Department of Fisheries and Oceans Canada,

“Fisheries Officials Arrest Three U.S. Fishing Vessels,”

news release, May 26, 1997.

58 Janet I-Chin Tu and Danny Westmeat, “Albright Joins

in the Fray, Protests Boat Seizures by Canada,” Seattle

Times, May 29, 1997, found at Internet address

http://www.seattletimes.com/extra/browse/html97/

cana_052997.html, retrieved Apr. 16, 1998.

59 “B.C. Premier Fish Tales,” Seattle Times, June 13,

1997 and “Ads Are Canada’s Latest Weapon in the Salmon

Wars,” Seattle Times, July 10, 1997, found at Internet

address http://www.seattletimes.com/extra/browse/html97/

fish_071097.html, retrieved April 16, 1998.
92

a U.S.-flag Alaska-bound ferry in the port of Prince

Rupert,60 an action that was accompanied by additional

Federal and Provincial demands that the United States

agree to limits on Alaskan fishing of Canadian-origin

salmon. The vessel was subsequently freed after

Canadian Government officials agreed to consider

compensation plans for economically injured BC

fishermen.

Special envoys for the two sides, William

Ruckleshaus for the United States and David

Strangway for Canada, were appointed in August 1997

to renew the treaty negotiations. However, the dispute

was not resolved during 1997, and efforts to resolve it

continued into 1998.61

Cultural Industries in Canada:

the Case of Magazines

Under the terms of the CFTA, and continued under

the NAFTA, Canada enjoys special protection for its

cultural industries.62 This protection was the result of

Canadian concern regarding the strong influence of

U.S. popular culture on certain Canadian industries.

One bilateral dispute that was resolved in 1997

involved the Canadian publishing industry and official

policies therein.

Background

The issue of split-run publications (i.e., U.S.

publications with a Canadian version, printed in the

United States for distribution and sale in Canada, e.g.,

60 “Canadians Block U.S. Ferry,” Washington Post, July 20, 1997, p. A-23.

61 Department of Fisheries and Oceans Canada,

“Salmon Issue Raised at International Conference,” news

release, Feb. 3, 1998.

62 Article 2005 of the Canadian-U.S. Free Trade

Agreement (CFTA) states that “cultural industries” are

exempt from the provisions of the agreement, with certain

exceptions. “Cultural industry” is defined in Article 2012 of

the CFTA as “an enterprise engaged in any of the following

activities: a) the publication, distribution, or sale of books,

magazines, periodicals, or newspapers in print or machine

readable form but not including the sole activity of printing

or typesetting any of the foregoing, b) the production,

distribution, sale or exhibition of film or video recordings, c)

the production, distribution, sale or exhibition of audio or

video music recordings, d) the publication, distribution, or

sale of music in print or machine readable form, or e) radio

communication in which the transmissions are intended for

direct reception by the general public, and all radio,

television and cable television broadcasting undertakings

and all satellite programming and broadcast network

services.” Similar definitional language appears in Article

2107 of the NAFTA, while Article 2106 and Annex 2106 of

the NAFTA continue the CFTA exemption for cultural

industries.

Sports Illustrated Canada)63 has been of concern to

Canadian officials for some time. In fact, such

publications have been banned at the border for the

past 30 years. To further discourage such publications

in Canada in an age when this hurdle can be leaped

electronically, and under the shield of protecting

Canadian cultural interests, Canada imposed a tax of

80 percent on these separate Canadian editions’

advertising revenue in December 1995. According to

USTR, the intent of the action was to force an end to

the publication of Time-Warner’s Sports Illustrated

Canada edition.64 The United States argued that the

action was discriminatory and contrary to WTO rules,

and sought review under the WTO DSB.

The U.S. complaint was filed on March 11, 1996.65

The complaint outlined four distinct measures that

Canada used to discriminate against foreign magazines

in order to protect its domestic magazine publishing

industry from U.S. competition: 1) a ban on the

importation of split-run magazines into Canada; 2) an

80-percent excise tax on advertising in split-run

publications; 3) disallowance of an income tax

deduction to Canadians who advertise in split-run

publications; and 4) discriminatory postal rates for

foreign magazines mailed in Canada, i.e. rates for

domestic magazines were lower than for magazines not

produced in Canada by Canadian companies.

1997 Developments

The Panel was formed on June 19, 1996, and its

work (submission of arguments, rebuttal, hearings,

etc.) continued into 1997. The final report was issued

on March 14, 1997. The panel ruled against Canada on

three of the four measures contested by the United

States. The ban on the importation of split-run

magazines, in effect since 1965, was found to be

inconsistent with Canada’s GATT obligations by the

WTO dispute settlement panel. The panel did not

accept the Canadian argument that the 80-percent

excise tax on the revenue from advertising placed in

split-run magazines was a tax on a service, not a good.

The tax was determined to be inconsistent with

Canada’s national treatment obligations under the

63 “Split-run magazines are periodicals sold both in

Canada and abroad, in which the Canadian edition contains

advertisements directed at a Canadian audience.”

USTR,“United States Prevails in WTO Case Challenging

Canada’s Measures Restricting Magazine Exports,” press

release 97-22, March 14, 1997.

64 USTR, “Statement of the U.S. Trade Representative,”

press release 95-93, Dec. 15, 1995.

65 USTR, “USTR Kantor Announces Challenge of

Discriminatory Canadian Magazine Practices; Cites Clinton

Administration Determination to Defend U.S. Industries,”

press release 96-23, March 11, 1996.
93

GATT. The distinct postal rates charged to domestic

periodicals and imported periodicals were also found to

be in violation of Canada’s national treatment

obligations. The panel found that another issue

challenging postal rates—the postal rate subsidy or rate

assistance program—was not a violation because it

involved a transfer of resources between government

agencies, and was effectively made directly to

Canadian publishers.66 This practice allows some

domestic magazines to defray the cost of certain postal

expenses. Therefore, with respect to the postal

subsidy, the U.S. contention was denied.

On March 14, 1997, the panel report was publicly

announced. The U.S. Government expressed support

for efforts to promote national identity through cultural

development, but maintained that “we cannot allow

Canadian entities to use ‘culture’ as an excuse to

provide commercial advantages to Canadian products

or to evict U.S. firms from the Canadian market.”67 On

the same day, the Government of Canada announced its

decision to appeal the panel ruling.

Canada did not appeal the panel’s findings in favor

of U.S. contentions concerning the import ban on

certain magazines and the use of “discriminatory”

postal rates. The Canadian appeal was directed at the

80-percent excise tax on split-run publications. The

United States contested the Canadian claims on appeal.

The United States also appealed the panel’s conclusion

that “funded” postal rates qualify as subsidies under

GATT Article III:8(b). The WTO Appellate Body

affirmed the panel’s findings in a separate decision

made public on June 30, 1997. While the panel had

previously allowed the postal subsidy for Canadian

magazines, the Appellate Body reversed the earlier

decision on this point. Thus, all four complaints of the

United States in the periodicals case were vindicated

following appeal.68

WTO rules allow for disputes to be resolved in one

of two ways: either the country found against can

dismantle the protections determined not to be in

compliance with GATT/WTO obligations, or the

offending country can account for the lost economic

opportunity resulting from the offense by providing

other compensating concessions of substantially

equivalent value to those remaining in place. Absent

66 The WTO Appellate Body subsequently disagreed

with the panel’s interpretation here and overturned the

previous decision, maintaining that the different postal rates

in question did not meet the requirement for a direct

payment from the government to domestic producers.

67 USTR, “United States Prevails in WTO Case

Challenging Canada’s Measures Restricting Magazine

Exports,” press release 97-22, March 14, 1997.

68 USTR, “WTO Appellate Body Expands U.S. Victory

in Challenge to Canada’s Restrictions on U.S. Magazine

Exports,” press release 97-62, June 30, 1997.

such action, the successful party can withdraw

concessions of equivalent value from the offending

party. The Canadian reaction to the Appellate Body’s

finding was to restate officially the Government’s

continued commitment “to maintaining a distinctly

Canadian magazine industry.”69 The aim was to

develop new means of retaining that policy objective,

while still being consistent with the WTO ruling. The

development of a new strategy to ensure the viability

of the Canadian magazine industry was the immediate

challenge for Canadian authorities following the

publication of the Appellate Body’s ruling. Canadian

Federal Government and industry consultations,

undertaken to ensure consistency and cooperation,

were taking place throughout the entire dispute process

and continued thereafter.

U.S. reaction termed the use of “culture” as a

“pretense” for discrimination against imports. USTR

Barshefsky welcomed the Appellate Body’s ruling and

called on Canada to take “prompt action ... to bring its

magazine regime into compliance with its international

obligations.”70

Regular editions of U.S. magazines were

unaffected by the WTO decision.71 Only split-run

editions were at issue in the case.

On August 29, 1997, Canada pledged to abide by

the WTO decision. It had approximately 15 months to

come into compliance.72 In September, USTR

announced the termination of the section 301

investigation into Canadian taxes on foreign

magazines. The precise measures that the Canadian

Government would take to meet the WTO ruling while

developing a program for support of the domestic

magazine industry were uncertain at year-end.73

European Union

U.S. and EU trade officials managed an active

trade agenda in 1997. The highlight was the

69 Department of Foreign Affairs and International

Trade, “Canada Reaffirms its Commitment to Canadian

Magazines in WTO Trade Dispute,” press release No. 111,

June 30, 1997.

70 USTR, “WTO Appellate Body Expands U.S. Victory

in Challenge to Canada’s Restrictions on U.S. Magazine

Exports,” press release 97-62, June 30, 1997.

71 More than 80 percent of English language magazines

sold in Canada are foreign, most of them originating in the

United States.

72 U.S. Department of State telegram, “The Economics

of the Canadian Magazine Business and the Sports

Illustrated Decision,” message reference No. 2129, prepared

by American Consulate, Toronto, Sep. 15, 1997.

73 Reports of proposed policy changes began to appear

in early 1998. Among recommendations for the magazine

sector are: direct subsidies to publishers and a modified

excise tax on foreign publications. By mutual agreement

with the United States, Canada has until Sept. 1998 to
94

conclusion of a mutual recognition agreement (MRA)

covering six key sectors in U.S.-EU commerce. This

agreement should reduce standards-related barriers to

trade, a major objective of the New Transatlantic

Agenda (NTA) launched in 1995. Other positive

developments included the completion of two WTO

dispute-settlement panel reports, with the prospect of

resolving long-standing disputes over the EU meat

hormone ban and the EU’s banana import regime, and

the amicable resolution of disputes over textiles rules

of origin,74 wheat gluten,75 and leg-hold traps.76

However, several issues, mostly concerning EU

health-related restrictions, remained unresolved at

year-end. The EU’s policy on genetically modified

organisms continues to delay U.S. shipments of corn.

A veterinary equivalency agreement, which was

supposed to enter into effect in October, remains

unimplemented and does not cover poultry. As a

result, U.S. exports of poultry to the EU remain

blocked. Furthermore, U.S. exports of cosmetics and

pharmaceuticals are threatened as the EU prepares to

implement a ban on products containing certain animal

by-products that could possibly be contaminated with

“mad cow” disease. Out of concern for this disease, on

December 11, 1997, the United States expanded a ban

on imports of beef and sheep to cover all EU Member

States. Several days later, the EU announced it would

ban imports of U.S. beef and poultry unless adequate

controls on antibiotic residue levels are introduced in

U.S. plants within six months. Finally, efforts to

bridge differences over the extraterritorial reach of

U.S. sanctions laws continued in 1997, with both sides

agreeing in early December on the need for early

implementation of the various elements of the April 11,

73—Continued

comply with the WTO decision. U.S. Department of State

telegram, “Canadian Cultural Policy: Changes Coming,”

message reference No. 348, prepared by U.S. Embassy,

Ottawa, Feb. 2, 1998.

74 See ch. 5 of this report, “U.S. Textile and Apparel

Trade in 1997,” for details.

75 See ch. 5 of this report, “ Section 301

Investigations,” for details.

76 On Dec. 23, 1997, U.S.Trade Representative Charlene

Barshefsky announced that the United States and the

European Union on Dec. 18 signed an Agreed Minute on

humane standards for the trapping of furbearing animals.

The Agreed Minute develops technical specifications for trap

performance, suggests guidelines for further research into

trap design, and envisions the phasing out of certain trapping

devices currently in use. USTR, “United States Reaches

Understanding with the European Union on Humane

Trapping Standards,” press release 97-110, Dec. 23, 1997.

1997, understanding that prompted the EU to suspend

pursuit of a WTO dispute settlement panel.77

New Transatlantic Agenda

U.S.-EU trade relations evolved in 1997 within the

context of the New Transatlantic Agenda (NTA), a

framework for improving and updating U.S.-EU ties.78

Announced at the conclusion of the December 3, 1995,

biennial meeting of U.S. and EU heads of state, the

NTA “lays out an ambitious agenda for expanding

cooperation on promoting peace and stability,

democracy, and development around the world;

responding to global challenges; contributing to the

expansion of world trade and closer economic

relations; and ‘building bridges’ between Americans

and Europeans.”79 On trade, the NTA’s key goals were

to create a Transatlantic Marketplace, characterized by

the progressive reduction of barriers that hinder the

flow of goods, services, and capital, and to strengthen

and exert leadership in the multilateral trading system.

The method for doing so includes an agreed list of

concrete steps as well as joint study of existing barriers

and ways to liberalize them. Recommendations arising

from the joint study are to be presented at the

mid-1998 U.S.-EU summit. During 1997, USTR

asked the U.S. International Trade Commission to

assist it in preparing U.S. input into the joint study by

analyzing barriers in specified sectors as well as

electronic commerce.80

The NTA’s successes in 1997 included conclusion

of a mutual recognition agreement (MRA) that should

substantially reduce standards-related obstacles to

U.S.-EU trade. A Customs Cooperation Agreement

was signed at the May 1997 U.S.-EU Summit.81

77 New Transatlantic Agenda, Senior Level Group

Report, released in conjunction with the U.S.-EU Summit,

Washington, DC, Dec. 5, 1997, p. 1, found at Internet

address

http://www.state.gov/www/regions/eur/eu/971205_slgr.html,

retrieved Dec. 9, 1997.

78 For an in-depth description of the trade and economic

component of the New Transatlantic Agenda, see, U.S.

International Trade Commission, The Year in Trade:

Operation of the Trade Agreements Program, 47th report,

1995, USITC Publication 2971, August 1996, pp. 39-42.

79 U.S. Department of State, The New Transatlantic

Agenda, Fact Sheet Prepared by the Bureau of European and

Canadian Affairs, Nov. 24, 1997 found at Internet address

http://www.state.gov/www/regions/eur/eu/new_transatagenda_

9711.html, retrieved on Feb. 6, 1998.

80 The first phase of the Commission’s study,

investigation 332-382, was transmitted to USTR in late

November 1997. The second phase was transmitted on Apr.

29, 1998. Both reports have been classified “Confidential.”

81 For background on the Customs Cooperation

Agreement, see, Joanne Guth, “Update on U.S.-EU Trade

Issues,” International Economic Review, USITC Publication

3043, May 1997.
95

Initiatives on electronic commerce and regulatory

cooperation were also launched at the December 5,

1997, U.S.-EU Summit at the urging of the

Transatlantic Business Dialogue (TABD), a group of

U.S. and European business leaders. USTR Barshefsky

and EU Vice President Sir Leon Brittan, meanwhile,

were directed to explore next steps to enhance the

U.S.-EU economic and trading relationship.82

Mutual Recognition Agreement

On June 13, 1997, after more than three years of

active negotiations, the United States and the EU

announced the conclusion of an MRA that should

substantially ease about $50 billion in two-way trade,

mainly in electronic and medical goods. The MRA

establishes conditions under which regulatory

authorities in the United States and the EU will directly

accept the results of conformity assessment procedures

(such as laboratory tests and inspection reports)

generated by bodies in the other party, obviating the

need for costly and sometimes duplicative tests and

inspections. Such acceptance will save manufacturers

time and money and conserve scarce regulatory

resources.83

The MRA had been identified as a top priority for

governmental action by businesses on both sides of the

Atlantic, as well as by the TABD (see section on

TABD following).84 As such, the MRA represents a

significant achievement85 among the results thus far

reported by USTR of the NTA’s trade and economic

component.86

82 New Transatlantic Agenda, Senior Level Group

Report, p. 2.

83 For further discussion of the MRA’s benefits, see

USTR, “Mutual Recognition Fact Sheet,” June 20, 1997;

and EU, “EU Reaches MRA Agreements to Cut Red Tape

with United States and Canada,” European Union News, No.

41/97, June 13, 1997.

84 TABD, “Message from the 1997 Co-Chairs,” TABD

News, Issue No. 97/1, March 1997.

85 See, for example, TABD, “Successful Conclusion of

Mutual Recognition Agreement,” TABD News, Issue No.

97/3, June 1997; U.S. Chamber of Commerce, “U.S.

Chamber of Commerce Hails Agreement Removing

Impediments to $40 Billion in U.S./Europe Trade,” U.S.

Chamber of Commerce News, June 16, 1997; Pharmaceutical

Research and Manufacturers of America, “MRA Agreement

Will Bring Drugs to Patients Sooner,” news release, June

13, 1997; Information Technology Industry Council, “ITI

Praises U.S. Negotiators for Successful Conclusion of

Mutual Recognition Agreement Negotiations,” news release,

June 13, 1997; Health Industry Manufacturers Association,

“International Agreement Eliminates Redundancy, Cost,

Helps Modernize Food and Drug Administration,” press

release, June 13, 1997; European-American Business

Council, “MRAs are Historic Breakthrough in EU-US

Relations,” press release, June 13, 1997.

Efforts to reach an MRA were underway for

several years. From the outset, the EU insisted that the

negotiations should result in a “balanced package” that

included an umbrella text and sectoral annexes

reflecting roughly equal value of coverage for both

sides.87 A minimum initial package would, the EU

argued, include five of the seven sectors actively being

discussed.88 The sectors, however, ranged considerably

in terms of the degree of hazard associated with them,

as well as the amount and type of regulatory oversight

already in existence. Included were telecommunications, electromagnetic compati- bility, electrical

safety, pharmaceuticals, medical devices, recreational

craft, and veterinary biologics. Negotiations over

medical devices and pharmaceuticals, two sectors of

particular commercial significance to the EU,89 proved

especially difficult.

A breakthrough on pharmaceuticals was

announced at the November 8-9, 1996, TABD meeting,

which led the two sides to set a deadline of January 31,

1997, for concluding the MRA package. However, on

February 1, 1997, USTR announced that differences

remained, notably over medical devices and

pharmaceuticals.90 The USTR announcement

prompted the TABD to “send a strong message of

concern that the January 31 deadline, agreed by

government and business at Chicago, had been

missed.”91

The two key issues were the scope of product

coverage and the type of regulatory functions that

would be retained under the MRA. The United States

initially sought to limit the scope of delegation of

approval authority to mutual recognition of quality

system inspections (known as good manufacturing

practices or GMPs) due to FDA’s legal restrictions on

86 Jeffrey M. Lang, “Statement of Ambassador Jeffrey

M. Lang, Deputy United States Trade Representative Before

the Subcommittee on Trade, Committee on Ways and Means,

U.S. House of Representatives,” July 23, 1997, p. 3. For a

full transcript of the hearing, which featured testimony by

Commerce Department, TABD, and other business and trade

policy experts, see LEGI-SLATE Report for the 105th

Congress, Monday July 28, 1997, Transcript 972040569.

87 U.S. Department of State telegram, “April 17

U.S.-EU New Transatlantic Agenda Task Force Meeting,”

message reference No. State 92440, prepared by U.S.

Department of State, Washington, DC, May 16, 1997.

88 That is, all sectors but recreational craft and

veterinary biologics. U.S. Department of State telegram,

“U.S.-EU Mutual Recognition Agreements (MRAs) -

January 6-10 Negotiations,” prepared by U.S. Mission to the

EU, message reference No. 213, Jan. 13, 1997.

89 U.S. Department of State telegram, “April 17

U.S.-EU New Transatlantic Agenda Task Force Meeting,”

message reference No. State 92440, prepared by U.S.

Department of State, Washington, DC, May 16, 1997.

90 USTR, “MRA Negotiations to Continue Between

U.S. and EU,” press release 97-06, Feb. 1, 1997.

91 TABD, “Message from the 1997 Co-Chairs.”
96

approval decisions. The EU and medical device

industry representatives said the U.S. approach was

narrow to the point of being of very limited value. The

EU was seeking coverage of some 800 medical devices

and to commit parties to accept certificates of approval

directly from third-party labs after an 18-month

confidence-building period.92

The umbrella text also was not finalized. The

United States objected to the EU’s proposal to include

a “rules of origin” clause that would limit the benefits

of the agreement to products substantially produced in

the parties. The United States said such a clause would

substantially negate the benefits of the agreement by

reducing sourcing flexibility and imposing new

paperwork. (This clause was ultimately dropped from

the final MRA.)93 The United States also wanted the

joint committee established under the agreement to

have a strictly advisory, not decision-making, role.

Finally, the U.S. side wished to make clear that to the

extent of an inconsistency between the umbrella

agreement and the sectoral annexes, the annexes would

prevail, thus ensuring that regulatory authorities had

final say. The EU wanted an umbrella text embodying

a coherent approach to all of the sectors and containing

general obligations.94

Final agreement was announced on June 13.95

Formally initialed at the June 20 Denver G-7 Summit,

the package was hailed by President Clinton as a

landmark agreement representing “a new level of

transatlantic cooperation” that offers U.S. manufacturers savings of “up to 10 percent of the cost of

delivering their exports to Europe.”96 The package

consists of an umbrella text and six sectoral annexes,

which define the scope of activity and products

covered and the exact process whereby results will be

92 U.S. Department of State telegram, “U.S.-EU Mutual

Recognition Agreements (MRAs) - January 6-10

Negotiations,” message reference No. Brussels 213, prepared

by U.S. Mission to the EU, Jan. 13, 1997.

93 U.S. Department of State telegram, “NAFTA

Committee on Standards-Related Measures,” message

reference No. 144863, prepared by U.S. Department of State,

Washington, DC, Aug. 2, 1997.

94 U.S. Department of State, “US/EU Mutual

Recognition Agreements - Industry Reaction to Rules of

Origin,” message reference No. State 14673, prepared by

U.S. Department of State, Washington, DC, Jan. 26, 1997

and “U.S.-EU Mutual Recognition Agreements (MRAs) -

January 6-10 Negotiations,” message reference No. Brussels

213, prepared by U.S. Mission to the EU, Jan. 13, 1997.

95 USTR, “U.S.-EU Reach Agreement on Mutual

Recognition of Product Testing or Approval Requirements,”

press release 97-54, June 13, 1997; and EU, “EU Reaches

MRA Agreements to Cut Red Tape with United States and

Canada,” European Union News, No. 41/97, June 13, 1997.

96 The White House, “Statement by the President:

Denver Colorado,” June 20, 1997.

accepted. The umbrella text does contain general

obligations and establish a permanent Joint Committee

but USTR reports that “several provisions guarantee

the autonomy of U.S. regulatory agencies and their

counterparts.”97 Technical committees are established

under each sectoral annex.

Initial coverage amounts to nearly $50 billion in

annual U.S.-EU trade and includes specified

telecommunications equipment,98 electrical and electronic equipment,99 medical devices,100 medicinal

products (pharmaceuticals),101 and recreational craft

(pleasure boats). For medical devices, product

evaluations will be accepted for certain products, as the

EU had been seeking, but the Food and Drug

Administration (FDA) retains final approval authority

that cannot be delegated. Each party reserves the right

to conduct its own inspections. Compared with the

U.S. proposal of late January, the products covered by

such provisions include a broader range of low- and

moderate-risk medical devices (some 300 product

categories overall), and there are provisions for

expanding the list of eligible products over time as

review guidelines become available. The TABD

reports that full implementation of the MRA will result

in $1 billion in annual savings,102 which is equivalent

to a 2 or 3 point reduction in tariffs according to

USTR.103

The entry into force of the agreement will

generally launch transition periods. These are intended

to build experience and cooperation sufficient to make

possible at their conclusion the automatic acceptance

97 USTR, “Mutual Recognition Fact Sheet,” June 20,

1997, p. 2.

98 Telecommunications terminal equipment, whether

analog or digital, for wired or radio connection, including

radio transmitters and information technology equipment, is

covered. Network and electromagnetic compatibility (EMC)

requirements are covered.

99 Safety and electromagnetic compatiblity (EMC)

requirements are covered.

100 Quality system/good manufacturing practice (GMP)

evaluations and inspections for all medical devices and

product evaluations for a range of low- and medium-risk

medical devices, beginning with devices covered under the

FDA’s Third Party Pilot Program, are covered.

101 Specifically, the annex on medicinal products covers

inspections carried out when assessing a request for

authorization to market a product, such as a new drug

(premarket approval), and inspections during routine

production of items already authorized (postmarket

surveillance). Most medicinal products are covered,

including human and veterinary drugs, starting materials

used for the manufacture of medicinal products, and

intermediate products.

102 Transatlantic Business Dialogue (TABD), Rome

Communique, Nov. 7, 1997, p. 4.

103 USTR, “U.S.-EU Reach Agreement on Mutual

Recognition of Product Testing or Approval Requirements,”

press release 97-54, June 13, 1997.
97

by the EU of conformity assessment results generated

in the United States (and vice versa). These

confidence-building periods will be 2 years in the case

of telecommunications and electronics, 3 years in the

case of medical devices and pharmaceuticals, and 18

months in the case of recreational craft. In the

pharmaceuticals and medical device area, movement

from this phase to full implementation is contingent on

demonstrated equivalence between EU and U.S. FDA

inspectional processes and between EU GMPs and

those used in the United States, the FDA explains.104

Even after the transition period is over, authorities

retain full authority to keep products off the market for

health, safety or environmental reasons. They can

refuse to accept results from any body or organization

not performing correctly the appropriate procedures.

Either party may terminate a sectoral annex or the

entire agreement, if the other party is not fulfilling its

obligations.105

The agreement is expected to be signed formally

and enter into force by mid-1998, after both sides have

completed their respective domestic requirements.106

Prior to that time, conformity assessment bodies

capable of performing the required procedures will be

identified and procedures to make the accord

operational put into effect.

The framework agreement permits future

extensions of the MRA to other sectors. The medical

device industry called for administrative and regulatory

reforms of the FDA to complement the MRA107 and

pledged to work with governments to broaden the

scope of devices covered. Discussions are underway in

an effort to add veterinary biologics and fasteners.108

At its November 1997 conference, the TABD reiterated

interest in extension of the MRA to cover other sectors,

104 Food and Drug Administration, “FDA’s Negotiations

with EU,” FDA Talk Paper, June 16, 1997, T-97-25, found at

Internet address

http://www.fda.gov/bbs/topics/ANSWERS/ANS00802.html,

retrieved Feb. 9, 1998.

105 USTR, “Mutual Recognition Fact Sheet,” June 20,

1997.

106 Ibid.

107 The Food and Drug Administration Modernization

Act of 1997 (Public Law 105-15) was signed into law on

November 21, 1997, amending the Federal Food, Drug, and

Cosmetics Act (21 U.S.C. 321). It enacted some of the

medical device industry’s proposed reforms by providing in

section 410 that (1) FDA meet with representatives of other

countries and (2) engage in efforts to move toward

acceptance of MRAs relating to the regulation of devices and

GMPs between the EU and the United States.

108 U.S. Department of Commerce, “U.S.-EU Mutual

Recognition Agreements (MRAs),” Briefing Book for the

U.S. Government Delegation to the Rome Conference of the

Transatlantic Business Dialogue.

notably chemicals.109 The TABD also suggested that a

global Conformity Assessment Agreement be pursued

in the WTO Information Technology Agreement

(ITA).110

Transatlantic Business Dialogue

The TABD, a business-driven forum involving top

level business leaders from the United States and

Europe, serves as a framework for identifying business

priorities for trade liberalization and developing

practical recommendations on how they can be

pursued. Launched by the U.S. Government and EU

Commission at a November 1995 conference in

Seville, Spain, the TABD now plays a formal role in

U.S.-EU relations, providing input to semiannual

summits among U.S. and EU leaders. During 1997,

the TABD continued its work, identifying its plans,111

providing a mid-year report on priorities,112 and

issuing a detailed communique and accompanying

specialized reports at the end of its third annual

conference among CEOs and senior-level government

representatives.113

Held in Rome from November 6-7, 1997, TABD’s

1997 annual meeting featured extensive discussion of

electronic commerce, along with continued work in the

areas of standards, business facilitation, global

initiatives, and small and medium-sized enterprises. At

the meeting’s conclusion, TABD issued the Rome

Communique, which includes business positions on

public policy questions and agreed plans to promote

and expand trade. In it, TABD praised the successful

conclusion of the MRA and the ITA,114 and urged

governments to build upon the ITA’s success by

exploring global tariff liberalization in agreed-upon

sectors.115 (The EU later made clear that it sees

109 TABD, Rome Communique, p. 3. The MRA

proposed would cover good laboratory practices and mutual

acceptance of data.

110 Ibid., p. 4.

111 TABD, “Message from the 1997, Co-Chairs.”

112 TABD, TABD Priorities for the Mid-Year Summit:

May 1997, May 13, 1997.

113 TABD, Rome Communique, and Intellectual

Property Issues Group Action Plan; TABD Working Group

on Small and Medium-Sized Enterprises, U.S.-EU Joint

Public Sector Report on the Implementation of TASBI

(Transatlantic Small Business Initiative); Transatlantic

Advisory Committee on Standardization and Conformity

Assessment, Conformity Assessment and Product Marking;

and, Electrical, Electronic, Telecommunications, Information

Technology Sectors (EETIS), Recommendations for

Eliminating Regulatory and Standards-Related Trade

Barriers and for Improving the Global Standards

Development Process. 114 TABD, Rome Communique, p. 1.

115 TABD, Rome Communique, p. 14.
98

sectoral liberalization as a poor substitute for

comprehensive, global trade negotiations.116)

Regarding global electronic commerce, which

covers the conduct of international transactions over

the Internet, the business community took a unified

stand in support of an industry-led, market-driven,

self-regulatory approach.117 Despite concerns raised

by the United States (over encryption) and EU (over

privacy),118 both governments later endorsed many of

these market-based principles in a joint statement on

electronic commerce issued in conjunction with the

December 5, 1997, U.S.-EU Summit.119 Among other

things, the statement establishes guidelines for future

work that include a commitment to “duty free

cyberspace.”120

In the standards area, TABD expressed a desire that

the MRA be made operational as a matter of priority121

and requested to be provided with a status report by the

May 1998 U.S.-EU summit.122 A work program

intended to promote the goal of “tested once, accepted

everywhere” and urging wider reliance on suppliers’

declarations of conformity was also agreed upon.123

Detailed requests for regulatory reform in 13 sectors

were presented.124 More generally, the TABD

underlined the importance of regulatory harmonization

116 EU report to accompany WTO Secretariat report on

the EU under the Trade Policy Review Mechanism,

November 26, 1997. For background, see, Bureau of

National Affairs, “U.S., EU Differ Over Best Way to

Approach Future Trade Liberalization,” International Trade

Reporter, Vol. 14, No. 48, Dec. 3, 1997, pp. 2068-69.

117 TABD, Rome Communique, p. 1.

118 Remarks by Undersecretary of Commerce for

International Trade David Aaron and EU Vice President Sir

Leon Brittan before the TABD Issue Group on Business

Facilitation, Nov. 7, 1997.

119 U.S. Department of State, “Electronic Commerce,”

Joint Statement Released in Conjunction with the U.S.-EU

Summit, Washington, D.C., December 5, 1997, found at

Internet address http://www.state.gov/www/regions/eur/eu/

971205_useu_js_electronic.html, retrieved Dec. 9, 1997.

120 USTR, “United States and European Union Reach

Agreement on Global Electronic Commerce,” press release

97-103, Dec. 9, 1997.

121 TABD, Rome Communique, p. 2.

122 TABD, Rome Communique, p. 6.

123 TABD, Committee on Standardization and

Conformity Assessment (TACS), Conformity Assessment

and Product Marking. 124 TABD, Rome Communique, pp. 2-6. The sectors

are: aerospace; agri-food biotechnology; automotive;

chemicals; dietary supplements; electrical, electronic,

telecommunications and information technology; food

additives and flavors; heavy equipment; medical devices;

pharmaceuticals; recreational marine; and

telecommunications. Although several are covered by the

MRA announced in June 1997, important issues remain,

such as rationalizing the EU’s pricing and reimbursement

schemes for pharmaceuticals.

between the U.S. and EU governments as a way to

improve efficiency,125 presaging an official commitment to work towards that end at the December 5,

1997, summit.126

In the area of business facilitation, the TABD

applauded the U.S. and EU governments’ commitment

to adopt an Organization for Economic Cooperation

and Development (OECD) Convention on Corruption

and Bribery in 1998 and willingness to consider export

controls on dual-use items the TABD considers

“unnecessary and ineffective.”127 The TABD also

strongly urged intensified efforts to reach a long-term

resolution of problems raised by U.S. sanctions laws,

reaffirming its position that economic sanctions, if

imposed, should be done on a multilateral basis (see

“Helms-Burton,” below, for a further discussion of

sanctions). The TABD urged the U.S. Government to

work with the states to obtain the immediate cessation

of economic sanctions at the subfederal level.128 At the

same time, the U.S. Government welcomed the

TABD’s call on companies doing business

internationally to adhere voluntarily to internationally

recognized principles and global best practices.129

These include nondiscriminatory employment, safe

places of work, and other core principles of workers’

rights.

On global issues, the TABD—

 stressed the need for successful negotiations

towards a financial services agreement in the

WTO and an investment agreement in the

OECD;

 reiterated its support for early entry of China

and Russia into the WTO on the basis of

“significant and bound commitments from the

beginning;”

 urged meaningful work on the new subjects

agreed at Singapore and development of an

ambitious and progressive agenda for the

WTO’s Ministerial meetings in 1998 and 1999

that includes reducing tariffs in agreed upon

sectors; and

125 Ibid., p. 2. 126 U.S. Department of State, Regulatory Cooperation:

Promoting Trade While Facilitating Consumer Protection, Joint Statement released in conjunction with the U.S.-EU

Summit, Washington, DC, Dec. 5, 1997, found at Internet

address

http://www.state.gov/www/regions/eur/eu/971205_useu_

regulatory_js.html, retrieved Dec. 9, 1997. 127 TABD, Rome Communique, pp. 7 and 9. 128 Ibid., p. 9. 129 Closing remarks of Undersecretary of State for

Economic Affairs Stuart Eizenstat before the TABD

Conference in Rome, Nov. 7, 1997.
99

 sought renewed efforts to ensure that the WTO

integrates environmental measures (such as

eco-labeling) into the WTO system in a manner

that supports growth and precludes new barriers

to trade.130

Intellectual property, government procurement, and

global climate change were also addressed, with a

consensus reached that no response to climate change

“can be truly effective without global participation,

that is, both developed and developing countries.”131

Deputy Secretary of Commerce Robert Mallett

announced creation of a high-level interagency group

to focus on implementation of TABD recommendations. The step was welcomed by TABD, given the

slow pace of action on certain of its priorities, such as

tax and customs measures.132

WTO Disputes

Bananas

The EU banana regime,133 which entered into

force on July 1, 1993, favors bananas from domestic

producers and former European colonies in Africa, the

Caribbean, and the Pacific (ACP countries) over

non-ACP bananas from Latin America. The regime

imposes duty and quota restrictions on imports of

non-ACP (known as “third-country”) bananas, such as

those from Central or South America, and limits the

amount of non-ACP bananas that can be marketed at

the in-quota duty rate from sources outside the EU

regime (such as third-country bananas shipped by U.S.

companies).

In 1994, a GATT dispute panel found that the EU

banana regime was inconsistent with EU obligations

under the GATT, but the report was never adopted.134

In 1996, Ecuador, Guatemala, Honduras, Mexico, and

the United States requested a WTO dispute-settlement

panel to examine the EU regime for the importation,

130 TABD, Rome Communique, p. 12-13.

131 Ibid., p. 15.

132 See, for example,TABD, Rome Communique, p. 7,

and TABD Priorities for the Mid-Year Summit, p. 3.

133 European Communities, “Council regulation No.

404/93 on the common organization of the market in

bananas,” Official Journal of the European Communities

(OJ), No. L 47 (Feb. 25, 1993), pp. 1-11.

134 For further details, including extensive background

on the dispute, see USITC, The Year in Trade: OTAP, 1996,

USITC publication 3024, pp. 93-94; The Year in Trade:

OTAP, 1995, USITC publication 2971, pp. 50-51; and The

Year in Trade: OTAP, 1994, USITC publication 2894, 

pp. 75-76.

sale, and distribution of bananas.135 On May 8, 1996,

the WTO Dispute Settlement Body (DSB) formed a

dispute panel.

The panel circulated its report on May 22, 1997. It

found that the EU banana import regime as well as the

licensing procedures for the importation of bananas are

inconsistent with the EU’s obligations under GATT

1994 as well as the WTO Agreement on Import

Licensing and the GATS. On June 11, 1997, the EU

notified its intention to appeal certain issues of law and

legal interpretation in the panel report. The Appellate

Body circulated its report on September 9, 1997, which

largely upheld the panel’s findings. The Appellate

Body, however, went further than the panel in finding

EU practices inconsistent with WTO obligations.

Specifically, it reversed the panel’s findings that the

Lomé waiver covers inconsistencies concerning Article

XIII (nondiscriminatory administration of quantitative

restrictions), and found that certain aspects of the EU

licensing regime violate GATT Article X (publication

and administration of trade regulations) as well as the

WTO Agreement on Import Licensing Procedures.136

The Appellate Body report and the panel report, as

modified by the Appellate Body, were adopted

September 25, 1997.

USTR highlighted the following conclusions of the

panel and the Appellate Body137—

 The important precedents established by the

rulings regarding: (1) the broad scope of

coverage of the GATS and (2) tariffs, quotas,

and import licensing for agricultural products.

 Their findings that the following EU measures

were inconsistent with WTO rules: (1)

assignment of import licenses for Latin

American bananas to French and British

companies, taking away a major part of the

banana distribution business of U.S.

companies; (2) assignment of import licenses

for Latin American bananas to European

banana ripening firms, taking away U.S.

company business, (3) more burdensome

135 These complainants consider that the EU banana

regime is inconsistent with GATT Articles I, II, III, X, XI,

and XIII, as well as with provisions of the WTO Agreements

on Agriculture, Import Licensing Procedures, Trade-Related

Investment Measures (TRIMS), and the General Agreement

on Trade in Services (GATS).

136 WTO, “WTO Appellate Body and Panel Reports,”

Focus, No. 21, Aug. 1997, p. 5; WTO, “Overview of the

State-of-play of WTO Disputes,” dated Dec. 19, 1997, found

at Internet address

http://www.wto.org/wto/dispute/bulletin.htm, retrieved 

Jan. 5, 1998.

137 USTR, “Update: Developments in International

Trade Dispute Settlement,” Feb. 9, 1998, p. 12.
100

licensing requirements for imports from Latin

American cocomplainants than for other

countries’ bananas; the EU’s discriminatory

and trade-distorting allocation of access to its

market for bananas, which did not follow the

fair-standard of the WTO, which focuses on

past levels of trade.

Consultations did not produce agreement on the

period within which the EU would be permitted to

come into compliance with its WTO obligations, and

the EU refused to clarify its intentions for

implementing the DSB’s recommendations. On

November 17, 1997, the complainants requested that

the EU allow binding arbitration to determine the

“reasonable period of time” for implementation of the

DSB rulings and recommendations, as provided for

under Article 21.3 of the WTO Dispute Settlement

Understanding.138 On December 1, 1997, the

complainants formally requested that the WTO appoint

an arbitrator. The EU and the United States presented

their cases to the arbitrator on December 17, 1997.

The arbitrator circulated his report on January 7, 1998,

finding the reasonable period of time for

implementation to be the period from September 25,

1997, to January 1, 1999, roughly 15 months from the

date of adoption of the reports.139

Libertad (Helms-Burton) Act

On March 12, 1996, President Clinton signed into

law the Cuban Liberty and Democratic Solidarity

(Libertad) Act of 1996, known as the Helms-Burton

Act.140 Among other things, the Libertad Act contains

the following provisions (1) at Title III, to create a

private right of action in U.S. courts that permits U.S.

nationals whose property was confiscated by the Cuban

Government after the 1959 revolution in that

country141 to sue Cuban governmental entities or

foreign investors who use or profit in any way from

138 WTO, “Overview of the State-of-play of WTO

Disputes,” dated Dec. 19, 1997, found at Internet address

http://www.wto.org/wto/dispute/bulletin.htm, retrieved 

Jan. 5, 1998.

139 WTO, “Overview of the State-of-play of WTO

Disputes,” found at Internet address

http://www.wto.org/wto/dispute/ bulletin.htm, dated Jan. 8,

1998, retrieved Jan. 9, 1998.

140 Public Law 101-114, 110 Stat. 785 (22 U.S.C. 6021

et seq.). Frequently referred to with reference to the two

members of Congress who were the main sponsors of the

legislation, Sen. Jesse Helms (R-NC) and Rep. Dan Burton

(R-IN).

141 U.S. property nationalized by the Cuban

Government was valued at approximately $1.8 billion in

1962. U.S. Department of State, Bureau of Public Affairs,

Background Notes: Cuba, Nov. 1994.

these properties and (2) at Title IV, to deny visas and

entry into the United States of individuals who traffic

in U.S.-claimed properties in Cuba after March 12,

1996, and their immediate family members, as well as

corporate officers and controlling shareholders of

entities that traffic in such properties.142

The EU has strongly protested the extraterritorial

effects of the U.S. law.143 On October 3, 1996, it

requested a WTO dispute panel to examine its

complaint concerning the Libertad Act, as well as three

pre-existing provisions of U.S. Cuban boycott

legislation.144 The DSB established a dispute panel on

November 20, 1996. On February 20, 1997, panelists

were appointed in the dispute. Further bilateral

consultations between the EU and United States on

Helms-Burton and the U.S. Iran-Libya Sanctions Act

(ILSA) led to an “understanding” reached April 11,

1997, that commits the EU and the United States to

work in a multilateral way to deal with trafficking of

confiscated property.145

The settlement enabled the EU to announce

tentatively on April 11, 1997, that it would suspend its

WTO case while both sides develop binding disciplines

on dealings in confiscated property. On April 25, the

panel chairman gave notice that the EU had formally

requested the panel to suspend its work. However, the

EU retained the right to reinstate its request should a

mutually satisfactory agreement not be concluded by

October 15, 1997, or if the United States takes action

under the Act, or the ILSA, adversely affecting

European interests.146 For its part, the U.S.

142 For further detail, see U.S. Department of State,

“Fact Sheet: Implementation of the Libertad Act,” U.S.

Department of State Dispatch, vol. 7, no. 15 (Aug. 8, 1996),

p. 188, and USITC, The Year in Trade: OTAP, 1996, USITC

publication 3024, pp.160-161.

143 European Commission Delegation, Office of Press

and Public Affairs, “European Commission President

Jacques Santer Underlines EU’s Deep Concern with

Helms-Burton Legislation to President Bill Clinton,”

European Union News, July 12, 1996.

144 The EU alleged that U.S. trade restrictions on goods

of Cuban origin, as well as the possible refusal of visas and

exclusion of non-U.S. nationals from U.S. territory, are

inconsistent with U.S. obligations under the WTO

Agreement, including GATT Articles I, III, V, XI, and XIII;

nullify or impair expected benefits under the GATT 1994

and the GATS; and impede the attainment of the objectives

of the GATT 1994.

145 U.S. Department of State telegram, “U.S.-EU

Helms-Burton Deal: Statement by Brittan,” message

reference No. 2721, prepared by U.S. Mission to the EU,

Brussels, Apr. 15, 1997; and U.S. Department of State

telegram, “Text of Special Envoy Eizenstat’s April 11

Statement on US.-European Commission Agreement on

Libertad (Helms-Burton) Act,” message reference No.

68456, prepared by U.S. Department of State, Washington,

DC, Apr. 12, 1997.

146 USTR, “Update: Developments in U.S. International

Trade Dispute Settlement, ” Feb. 9, 1998, p. 18.
101

administration pledged to work with Congress to draft

and implement legislation to amend the Libertad Act to

authorize the President to grant waivers under title IV

of the Act (regarding denial of visas and entry for those

trafficking in confiscated property) once bilateral

consultations with the EU are completed and the EU

has adhered to these agreed disciplines.147

U.S. officials described the understanding as

essentially terms of reference for a future agreement,

likely to be included as new international disciplines

addressing confiscated property under the OECD

Multilateral Agreement on Investment (MAI). EU

officials have said the understanding aims at a

longer-term solution through amendment of the

Helms-Burton Act as well as dialogue over the

“extraterritoriality” of the law.148

On October 14-15, 1997, the EU and United States

held bilateral consultations on the basis of the April

understanding, and subsequently agreed to continue

consultations over the Helms-Burton law within the

context of the MAI negotiations.149 On December 5,

1997, following the semiannual U.S.-EU summit, EU

officials said that no resolution had been reached

concerning Helms-Burton or the ILSA. Sir Leon

Brittan noted that the two sides were working on a

mutually acceptable agreement that would allow the

waiver of Title IV sanctions.150 Good progress on

Cuba was reported by U.S. participants; but regarding

the ILSA, President Clinton reportedly called upon the

EU to take additional steps to address the “serious and

important problem” of Iran’s efforts to acquire

weapons of mass destruction and its support of

terrorism.151

147 U.S. Department of State telegram, “Text of Special

Envoy Eizenstat’s April 11 Statement on U.S.-European

Agreement on Libertad (Helms-Burton) Act,” message

reference No. 68456, prepared by U.S. Department of State,

Washington, DC, Apr. 12, 1997.

148 European Union, “Helms-Burton Negotiations -

Statement by Sir Leon Brittan,” IP/97/291, Apr. 14, 1997,

found at Internet address http://www. europa.eu.int/rapid/,

retrieved Dec. 16, 1997.

149 U.S. Department of State telegram, “EU Declaration

on Helms-Burton,” message reference No. 7264, prepared by

U.S. Mission to the EU, Brussels, Oct. 17, 1997; and EU,

“Cooling-off Period for Helms-Burton, D’Amato Vows,”

EURECOM, vol. 9, No. 10, Nov. 1997, p. 2.

150 Bureau of National Affairs, “U.S.-EU Summit

Produces Joint Statements on Electronic Trade, Cooperation

on Regs,” BNA International Trade Daily, art. No.

43421002, Dec. 8, 1997.

151 “Transcript: Bandler-Wayne Briefing on Results of

U.S.-EU Summit,” USIA Washington File, Dec. 5, 1997.

The transcript is of a press briefing by Tony Wayne,

Principal Deputy Assistant Secretary of State for Europe and

Canada, and Don Bander, Special Assistant to the President

for Europe and Senior Director of the NSC for European

Affairs.

Meat Hormone Ban

Effective January 1, 1989, the EU banned imports

of meat from animals treated with growth-promoting

hormones, resulting in a 93 percent drop in U.S. meat

exports to the EU, which amounted to $177 million in

1988, according to GAO.152 After a U.S. attempt to

challenge the ban under the GATT 1947 was blocked

by the EU, the United States imposed (and

subsequently lifted) retaliatory duties of 100 percent ad

valorem on a variety of agricultural imports from the

EU,153 arguing that there is no scientific basis for the

ban. In January 1996, the United States requested

consultations with the EU under GATT 1994 Article

XXII (consultations).154 The United States requested a

WTO dispute-settlement panel on April 25, 1996,

claiming that EC measures restrict or prohibit imports

of meat and meat products from the United States and

are inconsistent with its WTO obligations.155 On May

20, 1996, the WTO DSB formed a dispute panel to

examine the U.S. complaint.

The panel circulated its report on August 18, 1997.

It found that the EU ban on imports of meat and meat

products from cattle treated with growth-promoting

hormones was inconsistent with provisions of the

WTO Sanitary and Phytosanitary (SPS) Agreement.156

A similar finding was subsequently made by a WTO

panel examining the EU ban on behalf of Canada.157

On September 24, 1997, the EU notified its intention to

appeal the panel reports on the U.S. and Canadian

complaints. The Appellate Body held a hearing on

November 4 and 5 and circulated its report on January

16, 1998, which upheld most of the findings and

152 U.S. General Accounting Office, Agricultural

Exports: U.S. Needs a More Integrated Approach to Address

Sanitary/Phytosanitary Issues, GAO-NSIAD-98-32,

December 1997, pp. 11 and 12.

153 For further details, see USITC, The Year in Trade:

OTAP, 1990, USITC publication 2403, p. 101; The Year in

Trade: OTAP, 1989, USITC publication 2317, p. 93.

154 U.S. Department of Agriculture, “Statement by

Secretary Glickman on the U.S. Request for Consultations

Under the World Trade Organization About the European

Union’s Hormone Ban,” press release 0040.96, Jan. 26,

1996.

155 Specifically, its obligations under GATT Articles I,

II, III, X, XI, and XIII, as well as provisions of the WTO

Agreements on Agriculture, Import Licensing Procedures,

Trade-Related Investment Measures (TRIMS), and the

General Agreement on Trade in Services (GATS).

156 Specifically, its obligations under articles 3.1, 5.1,

and 5.5 of the SPS agreement. The WTO’s summary of the

case, dated Jan. 23, 1998, is found at Internet address

http://www.wto.org/wto/dispute/bulletin.htm, retrieved Jan.

28, 1998.

157 The DSB agreed to form a panel to hear Canada’s

complaint on Oct. 16, 1996. The panel, which consisted of

the same panelists in the U.S. complaint, issued its report on

Sept. 5, 1997. USTR, “Update: Developments in

International Trade Dispute Settlement,” Feb. 9, 1998.
102

conclusions of the panel,158 except with respect to the

burden of proof in proceedings under the SPS

Agreement.159 Specifically, USTR reports—

The Appellate Body found that while a country

has broad discretion in electing what level of

protection it wishes to implement, in doing so it

must fulfill the requirements of the SPS

Agreement, including the requirement for a risk

assessment. However, the ban imposed by the

EC was not rationally related to the conclusions

of the risk assessments that the EC had

performed.160

Both the United States and the EU claimed

“victory” upon release of the Appellate Body’s

report.161 The EU highlighted the Appellate Body’s

finding “that the EU has the right to establish on a

scientific basis a level of consumer protection which it

considers appropriate and which is higher than the

level resulting from international health standards,”162

a finding USTR said the United States supports.163

Noting the Appellate Body finding that the EU’s

hormone ban is not based on risk assessment “because

the scientific studies do not focus specifically on

residues in meat of hormone-treated cattle,” the EU

Commission stated that it “will now examine carefully

together with the other EU institutions and the Member

States how to implement the EU’s international

obligations, in particular with respect to a new risk

assessment along the indications given by the

Appellate Body.”164 The EU has thirty days from

158 Specifically, it upheld the panel’s finding that the EU

import prohibition was inconsistent with Arts. 3.3 and 5.1.

The Appellate Body reversed the panel’s finding that the EU

had violated Arts. 3.1 and 5.5 of the SPS agreement.

159 The WTO’s summary of the Appellate Body’s

findings, dated Jan. 23, 1998, is found at Internet address

http://www.wto.org/wto/dispute/bulletin.htm, retrieved Jan.

28, 1998.

160 USTR, “Update: Developments in U.S. International

Trade Dispute Settlement,” Feb. 9, 1998, p. 13.

161 USTR, “Appellate Body Finds EC Hormone Ban

Inconsistent with WTO Obligations Under SPS Agreement,”

press release 98-02, Jan. 15, 1998.

162 European Union, “WTO Ruling on EU Hormone

Ban is a Victory for European Consumers,” press release no.

4/98, found at Internet address

http://www.eurunion.org/news/index.htm, retrieved Feb. 9,

1998.

163 USTR, “EC Hormone Ban Relating to Meat Imports

Violates SPS Agreement According to Appellate Body,”

USTR press release 98-04, Jan. 20, 1998.

164 European Union, “WTO Ruling on EU Hormone

Ban is a Victory for European Consumers,” press release no.

4/98, found at Internet address

http://www.eurunion.org/news/index.htm, retrieved Feb. 9,

1998.

adoption of the Appellate Body report to state its

intentions for implementing the Appellate Body’s

recommendations.

Bilateral Agricultural and

Health-Related Issues

In addition to bananas and meat hormones

(discussed in the WTO dispute section above), an array

of bilateral disputes over health restrictions on trade in

agriculture and other products faced policymakers.

The deteriorating condition of bilateral relations at the

end of 1997 over these various agricultural trade

disputes led EU and U.S. officials to hold high-level

talks January 7, 1998, in Oxford, England.

Veterinary Equivalence Agreement

The United States and the EU have worked since

1994 toward a bilateral agreement to facilitate

approximately $1.5 billion in trade in 40 animals and

animal products, including, for example, meat, poultry,

dairy products, seafood, fish, pet food, as well as

rendered products and other animal by-products.165

The agreement would establish a framework for

recognizing the equivalence of U.S. and EU sanitary

measures.166 Negotiations towards this end failed to

conclude by the end of 1996. New harmonized EU

import requirements that could disrupt U.S. exports of

livestock and livestock products were to enter into

effect on January 1, 1997. EU Member States were

permitted, however, to roll over existing sanitary

measures until April 1, 1997, providing more time to

conclude an agreement.167

On April 30, 1997, the United States and the EU

reached an Agreement on Veterinary Equivalency,

which was to be implemented on October 1, 1997. The

agreement resolved many outstanding issues regarding

red meat, dairy, and egg products, enabling the United

States to resume shipping some products that had been

blocked since April 1. The accord also provides the

United States with a basis for recognizing the

equivalency of EU red meat and pork safety rules, thus

avoiding plans for USDA inspection and approval of

EU meat plants that export to the United States.

However, wide differences remain regarding poultry,

including the use of antimicrobial treatment in the

165 For background see, Joanne Guth, “Update on U.S.

Issues with the European Union,” International Economic

Review, USITC Publication 3043, May 1997.

166 U.S. Department of Commerce, “U.S.-EU Trade

Issues,” Briefing Book for U.S. Government Delegation to

the Transatlantic Business Dialogue (TABD), Rome, Italy,

Nov. 6-7, 1997.

167 U.S. Department of State telegram, “Modest results

in December Agriculture Council,” message reference No.

010822, prepared by U.S. Mission to the EU, Brussels, Dec.

26, 1996.
103

United States.168 As a result, U.S. poultry exports to

the EU have been blocked since April 1, 1997,

representing a loss of $50 million annually to U.S.

exporters, according to the U.S. Department of

Agriculture.169

A ban on EU (predominantly French) exports of

poultry to the United States, valued at $2 million, was

imposed on May 5, 1997, until U.S. inspectors can

confirm that EU plants provide an appropriate level of

protection for public and animal health. Although the

United States is completing its review of EU poultry

plants, the EU requested consultations in the WTO on

August 18, 1997, which took place October 9, 1997.170

The veterinary equivalency agreement was to enter

into force October 1, 1997, but was not approved by

the 15 EU Member States until March 1998.

Outstanding differences included disagreement over

the EU’s policy of “regionalization,” which allows

animals and animal products from regions determined

to be disease free to be traded without impediment

even though other regions of a given EU Member State

are still found to contain an infection. Another factor

complicating EU efforts to gain Member-State

approval of the agreement was the announcement on

December 18 that the EU would ban imports of U.S.

beef and poultry if the United States does not improve

its procedures for hormone and antibiotic residue

testing within six months. Such inspections of U.S.

plants should no longer be required once the veterinary

equivalence agreement enters into effect. Despite these

concerns, the EU’s Agricultural Council approved the

agreement at its March 16-17, 1998, meeting, but made

its signature contingent on U.S. publication of a

proposed rule on regionalization and agreement by a

qualified majority of member states that the proposed

rule is consistent with U.S. commitments.

168 For background, see U.S. Department of Agriculture,

“United States and European Union Reach Agreement on

Veterinary Equivalency,” press release no. 0143.97, April

30,1997, found at Internet address

http://www.usda.gov/news/releases/1997/04/0143, retrieved

Feb. 9, 1998.

169 U.S. Department of Agriculture, “United States -

European Union Veterinary Equivalence Talks: Q & A’s,”

press release no. 0144.97 April 30, 1997, found at Internet

address http://www.usda.gov/news/releases/1997/05/0144,

retrieved Feb. 9, 1998.

170 U.S. Department of Commerce, “U.S.-EU Trade

Issues,” Briefing Book for U.S. Government Delegation to

the Transatlantic Business Dialogue (TABD), Rome, Italy,

Nov. 6-7, 1997. The EU considers the U.S. ban inconsistent

with GATT 1994 (Articles I, III, X, and XI), the Agreement

on Sanitary and Phytosanitary Measures (SPS Agreement)

(Articles 2, 3, 4, 5,13. 8, and Annex C), and the Agreement

on Technical Barriers to Trade (TBT Agreement) (Articles 2

and 5). WTO, “Overview of the State-of-play of WTO

Disputes,” dated Dec. 19, 1997, found at Internet address

http://www.wto.org/ wto/ dispute/ bulletin.htm, retrieved 

Jan. 5, 1998, p. 8.

Specified Risk Material Ban

Effective July 1, 1997, the EU banned the

marketing of certain cosmetic products.171 On July 30,

1997, the EU further banned the use of “specified risk

material (SRM)” in food, feed, and medical,

pharmaceutical, or cosmetic products.172 Both actions

were drafted out of concern that animal by-products

used in pharmaceuticals may be contaminated with

bovine spongiform encephalopathy (BSE), known as

“mad-cow” disease,173 which the EU Commission

contends could infect humans.174

The SRM directive was scheduled to be

implemented January 1, 1998. The directive bans U.S.

exports to the EU of pharmaceuticals, cosmetics, and

other products unless they can be certified free from

these materials. U.S. officials have been working to

receive exemptions from these restrictions, considering

that there have been no known cases of BSE in the

United States and that there is an active U.S.

surveillance and monitoring program in place to ensure

that the United States remains BSE-free. U.S. officials

have also been trying to obtain a processing exemption

for tallow derivatives.

On December 3, 1997, the EU Commission

proposed amendments to the SRM directive that would

authorize the continued sale of gelatin or tallow

derivatives used in the production of pharmaceuticals

and cosmetic products after January 1, 1998. The

amendments would grant temporary exemptions from

the ban for specific products.175

171 Specifically, those containing cattle, sheep, and goat

tissues and fluids from the brain, spinal cord, eyes, or

ingredients derived therefrom.

172 97/534/EC, Commission Decision of 30 July 1997

on the prohibition of the use of materials presenting risks as

regards transmissible spongiform encephalopathy, OJ L 216,

p. 95.

173 The broader veterinary rubric would be transmissible

spongiform encephalopathy (TSE) that can include sheep

(ovine SE), goats (caprine SE), and so forth, in addition to

cattle (bovine SE).

174 U.S. Department of Commerce, “U.S.-EU Trade

Issues,” and “Science Regulatory Product Evaluations,”

Briefing Book for U.S. Government Delegation to the

Transatlantic Business Dialogue (TABD), Rome, Italy, 

Nov. 6-7, 1997.

175 Specifically, pharmaceutical or medicinal products

approved for use before January 1, 1998, can be sold with

gelatin or tallow or another SRM derivative until January 1,

1999; pharmaceutical or medicinal products with “few or no

therapeutic alternatives” to gelatin or tallow can be used

until January 1, 2000; products containing tallow derivatives,

such as cosmetics will be permanently exempt from the ban

provided that the tallow has been treated with certain

approved treatments such as certain heat and pressure

conditions; reagents and products disappearing during the

manufacturing process can be used until 1999; and tallow

stocks already produced can be used up until June 1, 1998.
104

EU trading partners remain concerned. The

proposal gives EU Member States the right to grant

additional exemptions to the SRM directive, which

could result in an unmanageable and unenforceable

situation. Moreover, several weeks before the ban’s

effective date it was still unclear by whom or how the

certification process for products still subject to the ban

would operate.176 On December 15, 1997, the EU

approved a three-month delay in its SRM ban, until

April 1, 1998,177 and efforts to avert disruption of

U.S.-EU trade in cosmetics and pharmaceuticals

continued into 1988.

Meanwhile, on December 11, 1997, out of concern

over BSE, the United States extended a ban on U.S.

imports of live cattle, sheep, and goats, and the meat

and bone meal derived from these animals, to cover all

EU Member States. The original ban covered only

those Member States that had reported cases of BSE in

native-born cattle. The new restrictions can be lifted

for any country that is found to “have a [BSE]

surveillance program that conforms to international

standards and adequate import controls.”178 EU

officials reacted angrily to the timing and lack of

forewarning of the U.S. announcement, and claimed

the measure was unjustified and inconsistent with

international obligations under the WTO SPS

Agreement.179

Genetically Modified Organisms

Two primary issues have arisen concerning

products containing genetically modified organisms

(GMOs)—(1) EU approval for sale and use and (2) EU

labeling requirements. During 1997, U.S. officials

complained about the EU’s unpredictable procedures

for approving agricultural products developed with

biotechnology. Throughout the year, the EU

Commission was forced to react to a variety of

176 Bureau of National Affairs, “EU Proposes Changes

to Amend Controversial Specified Risk Material Ban,” BNA

International Trade Daily, article No. 43381007, Dec. 4,

1997.

177 Bureau of National Affairs, “EU approves delay in

ban on imports of U.S. pharmaceutical, cosmetic exports,”

BNA International Trade Daily, article No. 43501004, 

Dec. 16, 1997.

178 U.S. Department of Agriculture, Animal and Plant

Health Inspection Service, “USDA Restricts Imports of

Animals and Animal Products from Europe,” press release,

Dec. 12, 1997. See also Federal Register, Vol. 63, No. 3,

Jan. 6, 1998, pp. 406-8.

179 “Future Evolution of the Common Agricultural

Policy,” speech by Dr. Franz Fischler, European

Commissioner for Agriculture and Rural Development,

Oxford, England, Jan. 7, 1998.

Member State actions affecting GMO products,180

leading by year-end 1997 to a series of proposed

legislation attempting to establish more coherent

EU-wide policies on approval and labeling.

Of particular U.S. concern was the slow pace of

EU approval of genetically modified corn from the

United States. On December 18, 1996, the EU

Commission authorized the sale of one particular strain

of corn (maize) that had been genetically modified.181

Currently, seven varieties of genetically modified corn

have been approved in the United States but have not

yet been approved in the EU.182 Four different strains

of genetically modified corn products are currently

under review by the EU; three of these have already

been planted in the United States. Delays in EU

approval could jeopardize U.S. exports of corn

products in 1998.

New labeling requirements were also of concern.

On May 15, 1997, EU Regulation No. 258/97 entered

into force, establishing requirements regarding the

approval, marketing, and labeling of novel foods and

novel food ingredients, including GMO products. On

June 18, 1997, the EU Council adopted Directive

97/25, which requires mandatory labeling of newly

approved GMO products. On July 25, 1997, the EU

Commission released an EU-wide labeling policy for

food products manufactured from GMOs. The policy

calls for voluntary labeling certifying non-GMO

products and mandatory labeling for products of

known GMO origin, as well as those products where

GMO products cannot be excluded. The United States

is concerned about how these requirements will be

implemented and their implications for U.S. exports of

processed foods.

180 In February and March 1997, Austria, France, Italy,

and Luxembourg announced various bans on the planting

and use of genetically modified corn. After review of the

reasons for the bans, the EU Commission decided on

September 10, 1997, on draft measures to oblige Austria,

Italy, and Luxembourg to repeal their bans. Italy repealed its

ban in October 1997 and France lifted its ban on November

27, 1997. Austria and Luxembourg continue to maintain

their bans.

181 European Commission Delegation, Office of Press

and Public Affairs, “The European Commission has Decided

to Authorize Genetically Modified Maize in the Light of

Available Scientific Advice,” European Union News, 

Dec. 18, 1996.

182 U.S. Department of Commerce, “U.S.-EU Trade

Issues,” Briefing Book for U.S. Government Delegation to

the Transatlantic Business Dialogue (TABD), Rome, Italy,

Nov. 6-7, 1997.
105

Japan

During 1997, the major emphasis of U.S.-Japan

trade relations was review and monitoring of existing

bilateral agreements to ensure implementation. In

addition to monitoring progress under the 1995

U.S.-Japan automotive agreement, considerable U.S.

efforts were focused on negotiations on harbor services

and civil aviation throughout the year. The dispute

between the United States and Japan in the WTO

concerning Japan’s barriers to imports of consumer

photographic film and paper also received considerable

attention during 1997 (see chapter 2).

In response to Japan’s slowing economy and an

increase in the U.S. trade deficit with Japan, the United

States urged Japan to take steps to stimulate and

deregulate its economy. U.S. officials encouraged

Japan to boost its economy through improved domestic

demand rather than by increased exports. The United

States also pressed Japan to increase its imports from

those Asian economies attempting to recover from the

Asian financial crisis.

Autos

During 1997, the United States continued to

monitor activities and progress under the 1995

U.S.-Japan automotive agreement.183 The agreement

was intended to address some of the difficulties

experienced by U.S. firms in accessing Japan’s vehicle

distribution system by eliminating regulations in the

automobile parts aftermarket in Japan and improving

opportunities for U.S. original equipment (OE) parts

suppliers in Japan and with Japanese transplants in the

United States. The agreement included 17 objective

criteria to evaluate progress in these three areas.184 An

Interagency Enforcement Team was established to

ensure compliance with the agreement.185 The goal of

183 “Measures by the Government of Japan and the

Government of the United States of America Regarding

Autos and Parts,” Aug. 23, 1995; and U.S. Information

Agency, “Joint Statement by Ryutaro Hashimoto, Minister of

International Trade and Industry of Japan, and Michael

Kantor, United States Trade Representative Regarding Autos

and Auto Parts,” press release, June 18, 1995. For additional

background information regarding the agreement see

USITC, The Year in Trade: OTAP, 1995, USITC publication

2971, pp. 53-54; and 68 and USITC, The Year in Trade

OTAP, 1996, USITC publication 3024, pp. 96-97.

184 Ibid.

185 The Interagency Enforcement Team is cochaired by

the U.S. Department of Commerce and the Office of the U.S.

Trade Representative. USTR, “USTR and Department of

Commerce Announce Unprecedented Monitoring

Mechanism for U.S.-Japan Automotive Agreement,” press

release 95-63, Sept. 6, 1995.

U.S. manufacturers was to establish 200 dealerships in

Japan by the end of 1996, and 1,000 new dealerships

by 2000. In addition, Japan agreed to: (1) provide

government support and financial incentives to

encourage imports of autos and parts to Japan; (2)

deregulate the aftermarket for auto parts; (3) promote

increased purchases of OE parts from non-keiretsu

suppliers for use in their transplants in the United

States and for use in Japan; (4) address many

performance and technical standards that affect

Japanese imports of autos; and (5) provide vehicle

registration data for use in market research on a more

equal basis to foreign and Japanese manufacturers.186

The second annual review of the 1995 U.S.-Japan

automotive framework agreement was held during

October 8-9 in San Francisco. The review involved a

working-level meeting followed by a high-level

meeting. During the review, the United States

expressed disappointment with the slow pace of change

in Japan in the areas of expanded dealership

opportunities, auto sales, and deregulation in the parts

aftermarket. Japan agreed to take several steps in these

three areas including: 1) telling manufacturers that

dealers are free to carry foreign vehicles in their

showrooms; 2) examining the impact of zoning

restrictions on the ability of dealerships to carry more

than one brand of vehicle; 3) examining forms of

discrimination against foreign vehicles; and 4)

providing advice and assistance on market trends. In

addition, with regard to auto parts, Japan agreed to

hold hearings on creating a new class of mechanics,

so-called “specialized-certified mechanics,” to work in

specialized-certified garages187; to study the possibility

of holding a major new auto parts aftermarket

exhibition in Japan; and to continue efforts to

deregulate the auto parts aftermarket.188

186 U.S. Information Agency, “Joint Statement by

Ryutaro Hashimoto, Minister of International Trade and

Industry of Japan and Michael Kantor, United States Trade

Representative Regarding Autos and Auto Parts,” press

release, June 28, 1995.

187 Currently, government-certified repair shops require

mechanics to work on seven disassembly repair systems.

Specialized-certified mechanics would be permitted to work

on fewer than seven disassembly repair systems. For

example, a garage could specialize in repairing brakes,

requiring fewer tools, mechanics, and floor space. The new

type of mechanic and garage is expected to result in

additional independent garages which are more likely to

carry imported parts.

188 U.S. Department of Commerce telegram,

“U.S.-Japan Auto Agreement: October 8-9 Second Annual

Review in San Francisco,” message reference No. 199185,

prepared by U.S. Department of Commerce, Washington,

Oct. 22, 1997.
106

On December 4, 1997, the Interagency

Enforcement Team issued a report evaluating progress

under the agreement. According to the report:

While the Agreement has resulted in progress in

some areas, trends in other key areas are

disappointing and additional substantial efforts

are required to achieve the Agreement’s

objectives of eliminating market access barriers

and significantly expanding sales opportunities

in this sector. . . Moreover, the United States is

concerned about the surge in Japanese auto

exports to the United States and other countries

since the fourth quarter of 1996.189

 Specifically, the report referred to declining sales

of motor vehicles to Japan and disappointment with

regard to expansion of the number of dealerships and

aftermarket deregulation. Sales in Japan of motor

vehicles produced by the “Big Three” in North

America declined 20 percent during the first nine

months of 1997. Since the signing of the agreement,

only 142 new dealer outlets have been opened through

direct franchise agreements with Japanese dealerships

as opposed to the 200 expected by the end of 1996. Of

the total, only 39 new sales outlets were added in

1997.190 The weak progress in this area suggests that

Japanese auto producers continue to maintain strong

relationships with their affiliated dealerships.191 With

regard to aftermarket deregulation, Japan’s Ministry of

Transport denied several deregulatory requests by the

U.S. Government and private sector during 1997.

Specifically, no additional items, such as brake

systems, have been removed from the disassembly

repair regulations or the so-called critical parts list in

more than one year.192 The U.S. Government and

industry have urged Japan to take meaningful

deregulation actions.

Progress has been made in two other areas of the

agreement—exports of auto parts and establishment of

service garages. U.S. auto parts exports to Japan

increased by 14 percent during the first half of 1997.

Nonetheless, sales of original equipment parts to Japan

continue to be low.

189 U.S. Department of Commerce and USTR, Report to

President William Jefferson Clinton of the Interagency

Enforcement Team regarding the U.S.-Japan Agreement on

Autos and Auto Parts, Dec. 4, 1997, p. 1.

190 Ibid.

191 Ibid., Apr. 18, 1997, p. 1.

192 The disassembly repair regulations require repair

work on seven major component systems of an automobile

to be done at dealerships or other Ministry of

Transport-certified garages. These garages tend almost

exclusively to use Japanese parts because they are owned by

or closely affiliated with Japanese auto manufacturers.

In 1997, Japan’s Ministry of Transport introduced

two new categories of service garages that were

intended to encourage competition and create new

opportunities for foreign parts producers by permitting

smaller independent garages to undertake repairs

previously limited to dealerships and other Ministry of

Transport-certified garages. The United States

requested that the Ministry of Transport revise

regulations regarding the certification of mechanics

employed by these garages.193

Japanese auto producers’ compliance with Japan’s

Antimonopoly Law has been incomplete and

ineffective, according to the Department of Commerce

and USTR. Under the agreement, the Government of

Japan is to strictly and effectively enforce the

Antimonopoly Law and eliminate anticompetitive

practices in the automotive sector. Japan’s Ministry of

International Trade and Industry (MITI) sent a letter to

Japanese dealers, as specified in the agreement, stating

that they are free to sell competing motor vehicles and

each auto producer has prepared a manual for

complying with the Antimonopoly Law. Nonetheless,

there continue to be allegations that Japanese auto

producers are reluctant to carry foreign vehicles.194

Air Transport Services

During 1997, the United States and Japan

continued a series of bilateral negotiations on air cargo

and passenger services.195 The two countries held four

rounds of informal talks and three sets of formal

bilateral negotiations (in August, September, and

October).196 However, they were unable to reach an

agreement to expand aviation services. The main

outstanding issues in the talks included open skies,

“beyond” rights, additional flights and slots, and

third-country code sharing.

Open Skies

The United States has signed open-skies accords,

which cover full deregulation of pricing, scheduling,

and operating, with approximately 25 countries.

193 U.S. Department of Commerce and USTR, Report to

President William Jefferson Clinton of the Interagency

Enforcement Team regarding the U.S.-Japan Agreement on

Autos and Auto Parts, Dec. 4, 1997, p. 2.

194 Ibid., Apr. 18, 1997, pp. 18 and 19.

195 For background information on air transport

services, see USITC, The Year in Trade: OTAP, 1996, USITC

publication 3024, pp. 102-103.

196 “Aviation Talks End Without Agreement; Set to

Resume in October,” Japan Economic Institute Report, Oct. 3, 1997, p. 8.
107

During the 1997 bilateral talks with Japan, the United

States reiterated that its final goal was to achieve “open

skies.” Japan repeatedly rejected the U.S. proposal,

offering numerical limits on the number of new flights

to Japan.

Beyond Rights

The 1952 U.S.-Japan agreement on transport

services governs beyond rights (flying rights to

third-country destinations). Japan has sought to

restrain the ability of U.S. carriers to expand their

passenger and air cargo service to other destinations

after landing in Japan. For example, Japan interprets

the 1952 agreement as limiting the rights of Federal

Express to pick up cargo in Japan for delivery beyond

Japan to third countries. The United States interprets

the treaty as giving Federal Express beyond rights.

The United States has also asked Japan to reiterate

beyond rights for United and Northwest, which were

already granted under the 1952 agreement.197 Japan

has sought to place a numerical limit on the number of

flights beyond Japan and has required the number of

Japan-originating passengers on U.S. carriers flying on

to other destinations be limited to 50 percent.198

Additional Flights and Slots

 The United States proposed increasing the number

of weekly flights for American Airlines, Delta Airlines,

and other “nonincumbent” carriers. The two countries

appeared to be near a consensus during the last round

of talks that 70 additional weekly passenger flights

serving as many as 10 new cities would be granted to

U.S. carriers. Another major issue is the scarcity of

take-off and landing positions at Narita airport.

According to Japan the airport is already used to

capacity and finding additional slots for expanded

access by U.S. carriers is a major problem.

Third-Country Code Sharing

 Code sharing is a practice by which two carriers

operating separate legs of a flight are designated by the

same flight code and appear to customers as a single

flight. Code sharing is used by international airlines to

link flights to those of a domestic carrier.199 The

United States wanted Japan to agree to allow a

197 Nancy Dunne, “Japanese Resist U.S. Air Demands,”

Financial Times, Sept. 24, 1997, p. 7.

198 “Aviation Talks End Without Agreement,” p. 9.

199 Bureau of National Affairs, “U.S., Japanese

Positions in Aviation Talks Remain Widely Separated,

Officials Report,” BNA International Trade Daily, Sept. 25,

1997, article no. 42681002.

third-country carrier and a U.S. carrier to code-share

flights operating through Japan. The Government of

Japan opposed granting code-sharing rights because it

is concerned that U.S. airlines would benefit the most,

leaving Japanese carriers as feeders to more profitable

international routes.200 By the end of September,

following two rounds of formal negotiations,

significant progress had been made on many of the

major issues. At year-end, negotiations on civil

aviation continued and an agreement was reached in

early 1998.201

Harbor Services

On February 26, 1997, the Federal Maritime

Commission (FMC), in a final ruling, imposed a fee of

$100,000 each time a container-carrying liner vessel

owned or operated by a Japanese carrier enters a U.S.

port from abroad. In issuing its ruling, the FMC cited

unfavorable conditions in the foreign oceanborne trade

between the United States and Japan including

restrictions on and requirements for use of Japanese

ports. The sanctions were to become effective on April

14, 1997. In its ruling, the FMC noted that it has the

authority to impose per-voyage fees of up to

$1,000,000 and that it could increase the fees on

Japanese vessels if the issues that it had identified (as

discussed below) were not addressed in a timely

manner. The FMC stated that the fee would also be

increased upon a finding that the Government of

200 “Aviation Talks End Without Agreement,” p. 10.

201 On Jan. 30, 1998, the United States and Japan

reached an agreement on civil aviation. Highlights of the

agreement were as follows: Nonincumbent combination

carriers (Delta, American, and Continental) gained the right

to offer an additional 90 weekly round-trip flights between

the United States and Japan. Two new nonincumbent

carriers gained the right to enter the U.S.-Japan market.

Nonincumbent all-cargo carriers, UPS and Polar Air Cargo,

will be able to transport cargo to destinations beyond Japan.

An additional all-cargo carrier will be able to enter the

market in 4 years. All restrictions on the number of flights

operated and points served between the U.S. and Japan by

incumbent combination and all-cargo carriers are lifted. The

agreement resolves the dispute over incumbent carriers’

rights to fly from Japan to other international points beyond

Japan. Code sharing is permitted for the first time under the

agreement. U.S. carriers can code share among themselves

on many operations to Japan and beyond, and U.S. carriers

can code share with third-country carriers on operations to

and beyond Japan. Charter operations will increase in two

years from the current 400 flights per year to 600 flights per

year rising eventually to 800 flights. Negotiations will begin

within three years regarding a fully liberalized agreement. If

the goal is not reached by 2002, supplemental rights will be

available. U.S. Department of Transportation, “United

States, Japan Reach Aviation Agreement That Provides

Immediate Benefits, Sets Stage for Further Liberalization,”

press release 18-98, Jan. 30, 1998.
108

Japan, the Japan Harbor Transportation Association

(JHTA) or related bodies have retaliated against U.S.

carriers.202, 203 The three Japanese liner carriers that

would be affected by the proposed sanctions indicated

that they would be “severely injured by the threatened

sanctions.” A summary of the issues involved in this

bilateral dispute follows.

Prior Consultation System

The prior consultation system is administered by

the JHTA, an association of terminal operators,

stevedores (longshoremen), and sworn measurers that

excludes foreigners. Under the prior consultation

system, shipping lines must consult with the JHTA for

virtually all operational matters involving ports or

labor, including changes in berths, routes, schedules,

vessels, changes in vessel technology, assignment of

stevedoring contractor or terminal operator, requests

for work on Sunday, and changes in mandatory

weighing and measuring arrangements. The Ministry

of Transport (MOT), which has direct authority over

harbor services, reportedly provides administrative

guidance regarding the conduct of the prior

202 On Nov. 6, 1996, the FMC proposed a rule

(published on Nov. 13, 1996) pursuant to section 19(1)(b) of

the Merchant Marine Act of 1920 to assess fees on Japanese

liner operators in response to requirements and restrictions

on the use of Japanese ports. The FMC proposed to assess a

per-voyage fee of $100,000 each time a liner vessel owned

or operated by one of the three Japanese liner operators

serving U.S. trades (Kawasaki Kisen Kaisha, Nippon Yusen

Kaisha, and Mitsui O.S.K. Lines) enters a U.S. port from

abroad. The FMC had urged the Government of Japan to

avert imposition of the sanctions by affording, “U.S. carriers

relief by making available the necessary licenses,

permissions or certificates to perform, for themselves and

third parties, stevedoring and terminal operating services, or

to establish subsidiaries or related ventures to do so, as

Japanese carriers are permitted to do in the United States.”

203 On Sept.12, 1995, the FMC had issued information

demand orders regarding restrictions and requirements for

the use of port and terminal facilities in Japan. The issues of

concern included: (1) the “prior consultation” system,

involving mandatory discussions and operational approvals

involving port and terminal management, unions, and ocean

carriers serving Japan; (2) restrictions on the operation of

Japanese ports serving Japan; (3) requirements that all

containerized cargo exported from Japan be weighed and

measured by harbor workers, regardless of commercial

necessity; and (4) the disposition of the Japanese Harbor

Management Fund. The Commission noted that these

practices could result in conditions unfavorable to shipping

in the United States/Japan trade and may constitute adverse

conditions affecting U.S. carriers that do not exist for

Japanese carriers in the United States. Federal Maritime

Commission, 46 C.F.R. Part 586 [Docket 96-20], Apr. 13,

1997, and Federal Maritime Commission, “Texts: Maritime

Administration 4/11 on Japanese Ship Sanctions,” found at

Internet address http://www.usia.gov/current/news, retrieved

June 9, 1997.

consultation system and, according to the FMC, allows

the JHTA to “wield unchecked authority through the

prior consultation process. . . .”204

 The Chairman of the JHTA has the authority to

approve requests, require changes, or impose

conditions on any requests from carriers. Prior

consultation meetings are held where the actual

decisions regarding requests for changes are made by

JHTA and union officials. U.S. carriers cited concerns

about the lack of transparency in the JHTA’s

decision-making process (including absence of written

rules, reasons for decisions, or records) and antitrust

concerns regarding allocation of work among JHTA

member companies.205 Domestic carriers feel obliged

to participate in the prior consultation process or risk

retaliation in the form of work stoppages or labor

disruptions because of strong ties between the JHTA

and Japanese labor unions.

The FMC noted that the prior consultation system

was the most serious issue raised because it is “central

to the dominance of the harbor services market in

Japan, as it is the mechanism by which JHTA exercises

control over the activities of individual carriers and

stevedoring companies.” It noted that “[b]y serving as

intermediary in all negotiations and requiring, on threat

of labor disruption, that carriers submit virtually all

planned operational changes for approval, JHTA is

able to assign and allocate work among its member

companies. This process is used to eliminate

competition among terminal operators and stevedores

. . . .”206

Port Restrictions

The MOT has authority over harbor services,

including the issuance of licenses. No new licenses

have been issued by the MOT in the past 10 years.

While foreign firms are permitted to own port

facilities, foreign applications to operate terminals have

been rejected. Thus, foreign carriers are compelled to

contract with Japanese stevedore firms while Japanese

carriers are able to reduce their operating costs through

ownership of terminals and stevedore firms.207

204 Federal Maritime Commission, 46 C.F.R. Part 586

[Docket No. 96-20], final ruling, Feb. 26, 1997.

205 In June 1985, a complaint was filed with the Japan

Fair Trade Commission alleging that the JHTA was

restricting the activities of carriers and competition among

terminal operators. In 1995, Sankyu, Inc., a JHTA member,

filed a complaint with the JFTC alleging violations of

Japan’s antimonopoly law by JHTA in allocating work

among operators. Both complaints were subsequently

withdrawn.

206 Federal Maritime Commission, 46 C.F.R. Part 586

[Docket No. 96-20], final ruling, Nov. 13, 1996, and final

ruling, Feb. 26, 1997.

207 Ibid.
109

Mandatory Weights and

Measurements

The JHTA requires that all cargo be weighed and

measured, including standardized containers and cargo.

When carriers have refused sworn measurement

services and charges, they have been threatened with

work delays, stoppages and other forms of retaliation.

In December 1995 and January 1996, the JHTA, two

sworn measurement labor unions, and the Japanese and

foreign carrier groups reached an agreement to phase

out mandatory weighing and measuring during a

five-year period.208

Sunday Work

Sunday work was first allowed at Japan’s six major

ports in 1987, suspended in 1992, and then reinstituted

following the Kobe earthquake in January 1995 on a

trial basis. A temporary agreement to allow Sunday

work expired on March 10, 1997. Various restrictions

under the agreement created inefficiencies, gate

congestion on Saturdays and Mondays (the terminal

gates are closed on Sunday) and additional costs

(surcharges for Sunday work) for carriers. In addition,

uncertainties associated with Sunday work discourage

carriers from scheduling Sunday work on a regular

basis. As a result of these and the other restrictions

mentioned, Japanese port costs are among the highest

in the world.209

In late March 1997, Japan’s MOT reached an

agreement with the JHTA, port unions, and foreign

shipowners to simplify harbor practices, to ensure that

the JHTA did not abuse the prior consultation system,

and to act as a mediator if problems arose. The MOT

then hoped to win U.S. support for its proposal in time

to avoid sanctions. On April 11, following a series of

negotiations that began on April 2, the United States

and Japan reached a Memorandum of Consultation

identifying major issues of concern to the United

States, including port practices, licenses and prior

consultations. Regarding licensing, Japan promised

that the MOT would approve license applications that

meet certain criteria within four months of receipt of

the application. The agreement also included a

framework for reforming the prior consultation system

by July 31, 1997. The MOT indicated that it would

continue to use “maximum effort” to providing

208 Ibid.

209 Ibid.

leadership for reform and clarified a number of points

of interest to the United States.210

Reaction to the agreement from shippers was

positive, with U.S. carriers calling MOT’s

commitments on licensing “meaningful” and “excellent

progress.”211 However, U.S. carriers also noted the

“obvious risks” associated with JHTA’s domination of

the consultation process. In delaying the effectiveness

of the sanctions until September 4, 1997, the FMC

noted that it remained concerned about the prior

consultation system and “the attendant power enjoyed

by JHTA.”212 The FMC ordered that progress reports

regarding developments relevant to the proceeding,

such as changes to prior consultation and licensing

transactions, were to be completed by July 1 and

August 5, 1997.213

Negotiations were held throughout the summer

between the MOT, the JHTA, the Japan Ship Owners

Association, and the Japan Foreign Steamship

Association, but failed to result in progress. As a

result, on September 4, the Federal Maritime

Commission imposed sanctions of $100,000 for every

port call made in the U.S. by vessels belonging to

Kawasaki Kisen Kaisha Ltd., Mitsui OSK Lines Ltd.,

and Nippon Yusen KK. The three Japanese shippers

filed suit to stay the sanctions, but the U.S. Court of

Appeals for the District of Columbia denied the motion

on September 25.214 By October 15, the deadline for

the first payment of the sanctions, the accumulated

fines amounted to $4 million. After the three Japanese

shipping companies failed to pay the fines, on October

16, the FMC issued an order for the U.S. Coast Guard

and Customs Service to detain Japanese ships from

entering U.S. ports and to detain Japanese vessels

already docked in the United States. Meanwhile

beginning on October 10 the two sides held bilateral

negotiations to try and resolve the dispute.

On October 17, 1997, the two countries reached an

agreement in principle under which Japan agreed to a

streamlined and reformed prior consultation system, a

framework for establishing an alternative system of

210 On Apr. 13, 1997, following a tentative settlement

between the United States and Japan, the sanctions were

suspended by the Federal Maritime Commission until 

Sept. 4, 1997.

211 Federal Maritime Commission 46 C.F.R. Part 586

[Docket No. 96-20], Apr. 13, 1997 and “Texts: Maritime

Administration 4/11 on Japanese Ship Sanctions,” found at

Internet address http://www.usia.gov/current/news, retrieved

June 9, 1997.

212 Ibid.

213 Ibid.

214 Bureau of National Affairs, “FMC Waiting for $4

Million Check in Penalties Against Japanese Shippers,”

International Trade Daily, article no. 42891004, Oct. 16,

1997.
110

prior consultation, and the expeditious approval of

licenses for foreign companies seeking to operate port

businesses in Japan. As a result of the breakthrough in

the talks, the FMC announced that it had postponed

plans to have Japanese-flag liner vessels detained in

U.S. ports. However, it noted that payment of the fees

owed by the Japanese shipping companies was

“integral to the Commission’s acceptance of any final

resolution.”215 A final agreement was reached on

October 27, and the FMC voted to accept the terms of

the agreement. The FMC announced that it would not

be necessary to take action against Japanese carriers or

vessels to collect fines. The Commission agreed to

accept $1.5 million in full payment for the fees

(originally set at $4 million) previously assessed on

carriers. The FMC will continue to oversee and

monitor implementation of the agreement.216

Mexico

Two presidential meetings marked U.S.-Mexican

relations during 1997. One was President Clinton’s

first state visit to Mexico on May 6 and 7. This

summit meeting took place at a time when bilateral

relations over the issues of drugs and immigration were

somewhat strained, and the July congressional

elections in Mexico were imminent. President Clinton

and Mexican President Ernesto Zedillo presided over

the closing session of the 14th U.S.-Mexico Binational

Commission Meeting on May 5, 1997, in Mexico City,

where 11 agreements were signed in areas of

agricultural trade, financial and commercial matters,

and border issues. Notably, Mexico agreed to lower

barriers to the sale of citrus fruit grown in Arizona and

Florida, imposed on grounds of preventing fruit-fly

contamination. On its part, the United States promised

to reduce barriers to imports of fresh and frozen pork

and pork products from Sinaloa, Baja California, and

the Yucatan that it imposed because of concerns about

hog-cholera contamination. In addition, the United

States declared the Mexicali Valley free of Karnal bunt

disease in wheat, and pledged to modify current

regulations to open the U.S. market for Mexican

wheat.217

215 Federal Maritime Commission, “FMC Responds to

Progress in Resolving Japanese Port Dispute,”NR 97-19,

Oct. 17, 1997.

216 Federal Maritime Commission, “FMC Settles Fees

with Japanese Lines After U.S. and Japanese Negotiators

Come to Terms in Port Dispute,” NR 97-20, Oct. 27, 1997.

217 U.S. Department of State telegram, “Joint

Communique and Report of the Agricultural Working Group

of the U.S.-Mexico Binational Commission,” message

During his November visit, President Zedillo

expressed disappointment over the failure of the U.S.

Congress to grant “fast-track” authority to President

Clinton—an event that preceded the Mexican leader’s

arrival in Washington, D.C., by just a few days.218

Accomplishments during Mr. Zedillo’s visit included

Mexico’s commitment to facilitate the prosecution of

fugitive drug traffickers in Mexico, U.S. commitment

to discourage illegal sales of weapons in Mexico, and

the resolution of a long-standing maritime dispute on

the Gulf of Mexico. At the same time, the two leaders

failed during both of their 1997 meetings to remove

obstacles to a major outstanding bilateral economic

issue—the long-delayed implementation of NAFTA

provisions on cross-border trucking.219

In his third annual presidential address to the

nation (Informe) of September 1, 1997, President

Zedillo called attention to his administration’s success

in overcoming the financial crisis Mexico suffered

from late 1994 through early 1996, by applying tight

fiscal and monetary policies. He pointed out that

recovery on the macroeconomic level is manifest in a

projected 6-percent real growth in GDP for the year

1997, the decline of inflation from 27.7 percent in

1996 to a projected 16.9 percent in 1997, and a drop in

unemployment. However, Mr. Zedillo acknowledged

serious shortcomings in efforts to reduce poverty in

Mexico, and he pledged continued major social

spending in areas of housing and public health care.

With regard to foreign economic policy, President

Zedillo pointed out that his administration had initiated

trade negotiations with the EU220 and made advances

in trade relations with Asia-Pacific Economic

Cooperation (APEC) countries during 1997, stressing

that Mexico strives to promote freer trade with every

nation. 221

217—Continued

reference No. 04520, prepared by U.S. Embassy, Mexico

City, May 13, 1997.

218 President Zedillo’s address on Nov. 13, 1997, at a

U.S. Chamber of Commerce conference on business

opportunities in North America.

219 For details on the trucking issue, see ch. 3 of this

report and USITC, The Year in Trade: OTAP, 1995, USITC

publication 2971, August 1996, p. 56.

220 On Dec. 8, 1997, Mexico and the EU signed the

“Global Agreement for Economic Cooperation and Political

Dialogue,” a first step toward free trade between the two

entities. The accord also includes the basis for negotiation of

subjects related to investment, capital movements, public

sector purchases, competition policy, intellectual property

rights, and handling of disputes.

221 U.S. Department of State telegram, “Zedillo’s

Speech Landmark for Democracy,” message reference No.

08455, prepared by U.S. Embassy, Mexico City, Sept. 3,

1997.
111

The 1996 issue of this series of reports discussed

the U.S. embargo affecting imports of Mexican tuna

fish.222 In August 1997, President Clinton signed

legislation223 that would lift this embargo under certain

conditions outlined in the so-called “Panama

Declaration” of 1995.224

The discussion that follows in this report covers

some ongoing agricultural trade issues between the two

countries in 1997. Standards and Intellectual Property

Rights (IPR) issues with Mexico are discussed in the

NAFTA section of chapter 3.

Agricultural Trade Issues

U.S. agricultural exports have benefited greatly

from NAFTA trade liberalization in the first three years

of the accord, markedly increasing their share in

Mexico’s market. For U.S. and Canadian exporters to

Mexico, NAFTA replaced agricultural import licenses

issued by the Government of Mexico with tariff rate

quotas that expand and are ultimately eliminated over

time. These tariff-rate quotas allow duty-free entry up

to a certain level of imports and high (often

prohibitive) tariffs on imports in excess of the limit set

by the quota. In the largest categories—grains,

oilseeds, and their products—U.S. agricultural exports

expanded at an accelerated rate during the NAFTA

years, and trade relations between the two countries

were largely problem free.225

Trade disputes have arisen mostly in those

agricultural product groups in which trade is moving in

both directions, notably fruits and vegetables, live

animals or animal products, and sweeteners. Some of

these trade issues arose long before NAFTA entered

into force, focusing frequently on sanitary or

phytosanitary standards that are perceived in each

country as nontariff barriers to its agricultural exports.

On the U.S. side, growers of winter produce, mostly in

Florida and California, have been concerned for

decades about rising imports from Mexico of

counter-seasonal fruits and vegetables, including

tomatoes, melons, and tropical and semitropical

222 USITC, The Year in Trade: OTAP, 1996, USITC

publication 3024, April 1997, pp. 104-106.

223 P.L. 105-42, signed on Aug. 15, 1997.

224 The United States and 11 other countries signed the

Panama Declaration of 1995, designed to limit dolphin

deaths associated with tuna fishing to 5,000 a year. The

United States has not yet ratified this accord.

225 One exception is Mexico’s requirement that grain

importers apply for a phytosanitary import authorization for

every individual shipment. U.S. exporters consider this a

restrictive measure. U.S. exports of nonquota grains, such as

sorghum, wheat, and rice are particularly affected.

fruits. For a small number of vegetables and

fruits—onions and shallots, squash, chili peppers,

eggplants, tomatoes, and watermelons —the United

States established seasonal tariff-rate quotas (TRQs) to

safeguard against surges in imports.226 The United

States exports mostly temperate-climate fruits to

Mexico, some of which, including apples, also face

restrictions in the form of TRQs.

For 1996, the Year In Trade report discussed

agricultural issues involving U.S. imports from Mexico

of avocadoes227 and tomatoes,228 as well as issues

arising under the NAFTA. A five-year suspension

agreement that committed Mexicans to a floor under

their tomato prices, signed on October 28, 1996,

suspended the bilateral dispute over imports of

low-priced Mexican tomatoes. With regard to

avocadoes, effective March 30, 1997, the USDA lifted

the 83-year old U.S. ban from November through

February each year for fresh avocado imports from

Mexico, destined for the 19 northeastern states and the

District of Columbia. Mexican avocadoes were first

shipped to the United States in November 1997.

The present report highlights a trade dispute

between Mexican sugar producers on the one side and

U.S. producers and exporters of high-fructose corn

syrup (HFCS), a natural sweetener derived from corn,

on the other. The dispute concerns the price of U.S.

exports of HFCS and U.S. import TRQs on Mexican

sugar. In addition, this report will discuss the issue of

U.S. apple exports to Mexico. Both HFCS and apple

exports are subjects of investigations under Mexico’s

antidumping laws.

U.S. Sweeteners and Mexican

Sugar

On January 14, 1997, the Mexican National

Chamber of Sugar and Alcohol Industries (Sugar

Chamber), an association of sugar producers in

Mexico, filed a petition charging sales at less than fair

value of HFCS imported from the United States.

Mexico’s Secretariat of Commerce and Industrial

Development (SECOFI) responded by initiating an

antidumping investigation, as announced in the

February 27, 1997, Diario Oficial (Mexico’s Federal

Register). Subsequently, in a June 25 preliminary

resolution, SECOFI imposed compensatory duties on

226 Such TRQ’s will be phased out by the year 2003.

227 USITC, The Year in Trade: OTAP, 1993, USITC

publication 2769, pp. 97-98; USITC, The Year in Trade:

OTAP, 1996, USITC publication 3024, April 1997, 

pp. 106-107.

228 USITC, The Year in Trade: OTAP, 1995, USITC

publication 2971, p. 96; and The Year-In Trade: OTAP, 1996, USITC publication 3024, pp. 104-105.
112

U.S.-made HFCS amounting to $66.50 to $125.30 per

metric ton for HFCS 42, and between $63.40 and

$175.50 per metric ton for HFCS 55.229

The antidumping petition reflected, in part,

Mexican sugar producers’ concern that the less

expensive HFCS will replace domestically produced

sugar for industrial use.230 It was apparently this

concern that inspired an accord in August 1997

between Mexican sugar producers and the Mexican

soft drink bottling industry. In this accord, sugar

producers reportedly agreed to sell their product at

discounted prices to soft drink makers, provided they

voluntarily maintain imports of U.S.-made HFCS for

the next three years at levels not exceeding imports of

the period May through July 1997. The Mexican soft

drink industry’s rising demand for sweeteners was to

be met by sugar.231

At a public hearing on August 26, 27, and 29, held

by SECOFI, the Corn Refiners Association,

representing U.S. HFCS makers,232 argued that the

Mexican sugar industry’s case against HFCS imports

from the United States “[w]as unfair and violated both

international and Mexican trade laws.” One of the

principal arguments was that there are no damages or

threat of damages to the Mexican sugar industry from

HFCS because this industry is suffering from poor

management and large financial debt, neither of which

is the fault of HFCS.233

The dispute between Mexican sugar producers and

U.S. HFCS producers escalated further when the

USTR announced that the United States had requested

WTO dispute settlement consultations regarding

actions by Mexico on September 4, 1997.234 In her

229 USTR, “U.S. Announces Request for WTO

Consultations on Mexico’s High Fructose Corn Syrup

Dumping Order,” press release, 97-78, Sept. 5, 1997. HFCS

55 is used in soft drinks. HFCS 42 is used in other

beverages.

230 At the same time, the integration of Mexican sugar

producers with some of the largest Mexican soft drink

bottlers reduced this threat. See more on this subject in

Jaqueline Salsgiver, “HFCS Trade Dispute with Mexico,”

Sugar and Sweetener/SSS-221/, Sept. 1997.

231 U.S. Department of Agriculture, unofficial English

translation of an “Agreement Established by the Soft Drink

Bottling and Sugar Industries,” Foreign Agricultural Service,

FAS Online, Attache Query Detail, Sep. 10, 1997, found at

Internet address

http://www.fas.usda.gov/scriptsw/AttacheRep/attache_dout.

idc?Rep_ID=25080085.0, retrieved Dec. 9, 1997.

232 The association represents 10 companies.

233 U.S. Department of State telegram, “SECOFI

Hearings on HFCS Antidumping Case,” message reference

No. O8460, prepared by U.S. Embassy, Mexico City, Sep. 3,

1997.

234 USTR, “U.S. Announces Request for WTO

consultations on Mexico’s High Fructose Corn Syrup

Dumping Order,” press release 97-78, Sep. 5, 1997.

announcement, U.S. Trade Representative Charlene

Barshefsky expressed concern—

[a]bout Mexico’s actions in several respects,

including a failure to determine whether there

was sufficient evidence that the original petition

was made by or on behalf of the domestic

industry, failure to provide proper notification

to the United States and failure to provide the

U.S. industry timely access to the relevant

information needed in the presentation of its

case.235

On December 3, SECOFI held a second public

hearing on the HFCS dumping petition.236 HFCS

exporters from the United States repeated some of their

arguments presented at the earlier hearing. They also

called attention to subsequent events, such as the

agreement between the Mexican sugar and

soft-drink-bottler industry to limit HFCS usage, and to

a one-time subsidy program announced for sugar

exporters in October 1997237 to compensate them for

the shortfall between export prices and domestic prices

in the first nine months of 1997.238 On January 23,

1998, Mexico imposed final antidumping duties

ranging from $63.75 to $100.60 per metric ton for

HFCS 42, and duties ranging from $55.37 to $175.50

for per metric ton for HFCS 55.239

NAFTA partners’ reciprocal access to one

another’s markets is established in Section A of Annex

703.2 of NAFTA and in an understanding between the

United States and Mexico, as confirmed on November

3, 1993, in a letter by the USTR.240 These

235 Ibid. In its request to the WTO in the HFCS case,

dated Sept. 4, 1997, the United States alleges violations by

Mexico under Articles 5.5, 6.1.3, 6.2, 6.4 and 6.5 of the

Antidumping Agreement.

236 U.S. Department of State telegram, “Public Hearing

on High Fructose Corn Syrup Dumping Case,” message

reference No. 11823, prepared by U.S. Embassy, Mexico

City, Dec. 10, 1997.

237 Export subsidy programs had been generally

discontinued in Mexico.

238 U.S. Department of State telegram, “1997 Trade Act

Report: Mexico,” message reference No. 10605, prepared

by U.S. Embassy, Mexico City, Oct. 31, 1997, and U.S.

Department of State telegram, “Mexico Establishes Sugar

Export Subsidy,” message reference No. 10191, prepared by

U.S. Embassy, Mexico City, Oct. 21, 1997.

239 USTR, “U.S. Announces Request for WTO

consultations on Mexico’s High Fructose Corn Syrup

Dumping Order,” press release, 97-78, Sept. 5, 1997. HFCS

55 is used in soft drinks. HFCS 42 is used in other

beverages.

240 Letter of USTR Michael A. Kantor on November 3,

1993, to Jaime Serra Puche, Mexico’s Secretary of

Commerce and Industrial Development, reprinted in 103d

Congress, 1st Session, House Document 103-160, p. 98.
113

provisions make Mexico’s duty-free access in sugar

and syrup goods dependent on whether Mexico is a net

“surplus producer.” Production has to exceed

consumption of sugar in Mexico, including HFCS, for

two years before Mexico is eligible for certain TRQs as

a surplus producer.241 This determination is made

annually.

Pursuant to applicable NAFTA provisions, the two

countries determined that Mexico was a “surplus

producer” for the purposes of U.S.TRQ allocations in

FY 1997-98. The United States allocated a share of its

TRQ for raw and refined sugar from Mexico in

amounts up to 25,000 metric tons.242 If Mexico had

not been found to be a net surplus producer, its TRQ

share would have been only 7,258 metric tons. The

quota will be raised to 250,000 metric tons for each of

the years 2000 through 2007. The United States will

cease to restrict sugar imports from Mexico altogether

by 2008.243

Mexico’s National Manufacturing Industry

Chamber (CANACINTRA) considers even this

“surplus producer” TRQ too restrictive as compared

with U.S. sugar quotas allocated to certain

non-NAFTA countries, such as Brazil (162,201 metric

tons) and the Dominican Republic (196,878 metric

tons), which are based on historical trade.244 Sugar

producers worldwide have great interest in obtaining a

share of the U.S. sugar TRQ, because agricultural

programs designed to protect U.S. farmers have raised

US. sugar prices above world market levels.

Sugar producers are concerned with the rapid

increase of Mexico’s sugar production following

NAFTA’s inception. Production in Mexico accelerated

at a much faster rate than had been expected, because

Mexican sugar mills underwent technological

241 Ibid.

242 USTR, “USTR Announces Allocation of Raw Cane

Sugar, Refined Sugar and Sugar Containing Products

Tariff-Rate Quotas For 1997-98,” 97-85, press release,

Sept. 17, 1997.

243 Letter of USTR Michael A. Kantor on November 3,

1993, to Jaime Serra Puche.

244 On March 12, 1998, Mexico sought Chapter 20

consultations under NAFTA following the decision of the

U.S. Trade Representative not to grant Mexico any

additional access to the U.S. sugar market in FY 1997-98

(USTR, “USTR Announces Allocation of the 200,000

Metric Ton Increase in the Amount Available Under the Raw

Cane Sugar Tariff-Rate-Quota,” press release, 98-25, 

March 12, 1998).

modernization, and productivity increased following

their being privatized in the early 1990s.245

Apples

A conflict over U.S. apple exports to Mexico,

which had been building for years, came to a head in

1997.246 SECOFI announced in the March 6 edition of

the Diario Oficial the initiation of an antidumping

investigation into imports of U.S. “red delicious” and

“golden delicious” apples.247 The request for SECOFI

to investigate originated with the Regional Agricultural

Union of Fruit Producers of the Mexican state of

Chihuahua.248 This union claimed that the Mexican

apple industry suffered injury as a result of U.S. apple

sales at less than fair value, and that such injury was

evidenced by a 30-percent decline since 1992 of land

area allocated to apple production in Mexico.249

In 1997, Mexican duties on apples were 12 percent

ad valorem within applicable TRQ limits. In

accordance with NAFTA, Mexico imposed a 55,000

ton TRQ for apples in 1994. This TRQ was scheduled

to increase by 3 percent annually. Mexico was allowed

to apply 20 percent ad valorem duties on imports in

excess of the prevailing quota. NAFTA provides that

by the year 2003 apples would have duty-free access in

both partners’ markets.250

In the September 1 issue of the Diario Oficial,

SECOFI published its preliminary finding that imports

of U.S.-grown apples to Mexico increased substantially, and that they were sold at below-market

prices.251 Based on this preliminary finding, SECOFI

imposed a 101.1-percent ad valorem compensatory

duty on the imports in question. The imported apples

are produced principally in the States of Washington,

Oregon, and Idaho.

245 U.S. Department of State telegram, “1997 Trade Act

Report: Mexico,” message reference No. 10605, prepared

by U.S. Embassy, Mexico City, Oct. 31, 1997. 246 See USITC, The Year in Trade: OTAP, 1993, USITC

publication 2769, p. 97. 247 U.S. Department of State telegram, “Mexico Initiates

Dumping Investigation of U.S. Red and Golden Delicious

apple imports,” message reference No. 02361, prepared by

U.S. Embassy, Mexico City, Mar. 6, 1997. 248 According to the union, they represent 63 percent of

Mexico’s apple production of the variety in question. 249 U.S. Department of State telegram, “Mexico Finds

Hefty Dumping Duties on U.S.-produced Red Delicious and

Golden Delicious Apples,” message reference No. 08582,

prepared by U.S. Embassy, Mexico City, Sept. 5, 1997. 250 USDA Attache Query, Mexico’s Apple Antidumping

Document, Sept. 12, 1997, (translation of the Diario Oficial

notice of Sept. 1, 1997), found at Internet address

http://www.fas.usda.gov/scriptsw/AttacheRep/attache_dout.

idc?Rep_ID=25080085.0, retrieved Dec. 9, 1997. 251 Ibid.
114

In an exchange prior to the preliminary finding,

U.S. apple growers pointed out to SECOFI that the

invoices submitted to SECOFI by petitioners show

lower prices than the actual prices U.S. shippers

charged. The U.S. industry contended that it was this

difference that may have given the appearance of

unfair pricing by U.S. exporters.252 U.S. growers also

argued that the decline of Mexican production was not

due primarily to imports, but to a persistent drought in

the northern part of Mexico.253

Following the imposition of preliminary

antidumping duties, Mexico bought no more U.S.

apples in the fall of 1997, causing a depression of

prices in the United States.254 On December 18, the

U.S. Secretary of State sent a notice to the American

Embassy in Mexico, requesting an urgent meeting of

U.S. officials with the appropriate senior SECOFI

officials. The notice emphasizes Washington’s support

of the U.S. apple industry’s request for a speedy

conclusion of the pending antidumping investigation,

and includes talking points from which a citation is

given below:

From November 10 through 19, SECOFI

conducted verification audits in Washington

State. The U.S. Government appreciates the

speed with which SECOFI scheduled and

carried out these audits. The U.S. industry has

reported to us that the auditors themselves

operated in a very courteous, efficient and

professional manner. Our industry also reports

that with respect to both audits, SECOFI’s own

verification report confirms that it did not find

any significant discrepancies between the

information provided to SECOFI earlier in the

review and that maintained in the firms’

accounting records. We also understand that

there are no information requests to the U.S.

industry outstanding.

Thus, the facts of this case—as now verified by

SECOFI—support a determination that no

dumping of U.S. apples has taken place. On

this basis, the United States Government

requests that SECOFI expedite its final

determination in this case and issue it at the

earliest possible opportunity. We understand a

252 “Shippers are Ready if Mexico Tariff Lifted,” Good

Fruit Grower, Nov. 1997.

253 Kevin Hall, “Apple Dumping Dispute Bobs On,”

The Journal of Commerce, Jan. 15, 1998.

254 Kevin Hall, “U.S. Apple Growers Sense Victory in

Mexican dispute,” The Journal of Commerce, Nov. 26, 1997.

public hearing is scheduled for January 14. We

would hope a final determination can be

announced very shortly after the hearing is

held.255

China

Economic and trade relations between China and

the United States in 1997 centered on China’s efforts to

accede to the World Trade Organization (WTO).256

China continued to hold negotiations with the United

States and other WTO members through WTO

Working Party meetings and through bilateral

negotiations. Throughout the year, China introduced a

number of market-opening measures, including tariff

reductions and the elimination of and reduction in

phase-out periods of selected nontariff measures.

China also pledged not to reintroduce export subsidies

on agricultural products. These unilateral liberalization

steps were expected to strengthen the country’s bid to

join the WTO, even though the steps were often not

part of formal WTO accession negotiations. Progress

was also made in addressing bilateral issues, such as

IPR protection and China’s agricultural restrictions.

WTO Accession Negotiations

Despite some progress in several important areas,

China’s hopes of obtaining U.S. support for admission

to the WTO were unrealized in 1997.257 China agreed

to grant trading rights to foreign and domestic firms

during WTO Working Party meetings in March 1997.

China’s leading trading partners expressed disappointment in its failure to offer major concessions in several

key areas such as agriculture and services.258 The

255 U.S. Department of State telegram, “Mexico Apple

Dumping Investigation,” message reference No. 236767,

prepared by the U.S. Department of State, Washington DC,

Dec. 18, 1997. On Jan. 14, 1998, SECOFI held a public

hearing in the case. The hearing immediately followed

private meetings between U.S. exporters and Chihuahua

producers, which have narrowed, but not resolved the

differences between the parties. However, subsequent

negotiations led to a suspension agreement on Mar. 20, 1998,

which “[s]hould provide a predictable setting for U.S. apples

to once again enter the Mexican market”; USTR,

“Agreement between the U.S. Apple Industry and the

Government of Mexico,” press release, 98-33, Mar. 20,

1998. Under the terms of his agreement, among other

provisions, a specified reference price will replace the

antidumping duties.

256 For more information on China’s accession to the

WTO, see USITC, The Year in Trade: OTAP, 1996, USITC

publication 3024, p. 109.

257 USITC, “China’s WTO Application Progresses

Slowly,” International Economic Review, July 1997, p. 6.

258 U.S. Department of State telegram, “China WTO

Accession,” message reference No. 159937, prepared by

U.S. Department of State, Washington, DC, Aug. 26, 1997.
115

United States, in particular, continued to press for more

substantive concessions. China and the United States

remained at odds over tariff treatment and nontariff

barriers, market access, intellectual property rights,

guarantees of national treatment for foreign investors,

statutory inspection and a restrictive sanitary regime,

transparency and judicial review, customs valuation,

subsidies, agricultural trade practices, and trade in

services. The United States also pressed China to sign

the Agreement on Government Procurement (AGP) as

part of its WTO accession commitments.259 USTR

indicated that, “China’s accession to the WTO will be

determined by the specified commitments the Chinese

government is willing to undertake with regard to such

issues.”260 China’s accession bid is also hindered by its

insistence on being admitted to the WTO as a

developing country. However, the differences between

the United States and China over its accession to the

WTO narrowed substantially during 1997.

During 1997, China’s Ministry of Foreign Trade

and Economic Cooperation (MOFTEC) reported that

China concluded bilateral tariff negotiations with 9

WTO members and claimed that an additional 20 were

prepared to sign agreements.261 During 1997, China

agreed to participate in the WTO Information

Technology Agreement,262 to eliminate quotas and

licenses on products subject to the Civil Aircraft

Agreement,263 and to allow foreign investors greater

stakes in power projects and easier access to China’s

sea and land transportation markets.264 China also

259 The AGP partially closes a provision in WTO rules

that permits governments to procure solely domestically

manufactured goods. The AGP requires signatory

governments to eliminate offsets and to open more contracts

to foreign bidders.

260 USTR, “Ambassador Barshefsky Comments on

China WTO Talks,” press release 97-17, Mar. 6, 1997.

261 Among those signing bilateral agreements with

China during 1997 were Turkey and Singapore. U.S.

Department of State telegram, “China/WTO: Turkey,

Singapore Reach Bilateral Agreements,” message reference

No. 043286, prepared by U.S. Embassy, Beijing, Dec. 11,

1997.

262 U.S. Department of State telegram,

“China/WTO/ITA: Reported Comments of China Customs

Tariff Negotiator on China’s ITA Participation,” message

reference No. 039805, prepared by U.S. Embassy, Beijing,

Nov. 12, 1997.

263 U.S. Department of State telegram, “China WTO

Accession - Bilateral Meetings in China,” message reference

No. 164671, prepared by U.S. Embassy, Beijing, Sept. 8,

1997.

264 “Reform of Power Plants Will Open Door to

Foreigners,” China Daily Business Weekly (PRC), Apr. 7,

1997, from China Commercial Daily Brief, Apr. 8, 1997,

U.S. Embassy, Beijing, found at Internet address

http://www.redfish.com/USEmbassy-China, retrieved 

Jan. 16, 1998.

undertook a series of unilateral steps to reduce its

tariffs and nontariff barriers in accordance with its

bilateral commitments and to strengthen its bid for

WTO entry. To hasten its admission into the WTO,

China also promised to abolish tariffs on sugar, some

cotton and wool goods, furniture, and toys, and to

reduce tariffs on certain chemical products upon

accession. China also signaled a willingness to cut its

highest tariffs, which range upwards of 120 percent ad

valorem on goods such as automobiles and alcoholic

beverages.

Nontariff Barriers

China offered to reduce the maximum time frame

for phasing out nontariff barriers on a number of

products from 12 to 8 years. China’s chief WTO

negotiator, Vice Minister Long Yongtu, stated that

China’s latest modifications would substantially

reduce, and in some cases eliminate, the phase-out

period of nontariff measures (NTMs), barriers such as

licenses, quotas, and tendering.265 At the end of 1997,

China still maintained nontariff barriers, primarily

import quotas, on goods falling in 385 tariff lines.

Vice Minister Long asserted that China would

eliminate all WTO-illegal nontariff barriers by 2020.

In July, China offered to phase out nontariff measures

on 385 products within an 8 year period of joining the

WTO.266 The program included the following

arrangements:267

 NTMs on 13 products, including diesel engines

for shipbuilding, will be terminated before the

end of 1997;

 NTMs on 66 products, including sugar, cigars,

cotton, tobacco, and film, will be abolished

upon China’s accession to the WTO;

 NTMs on 69 items, such as chemical fiber

products, cassettes, records, and medical

machines, will be eliminated within 1 to 3 years

after accession;

265 U.S. Department of State telegram, “China WTO

Accession - July Working Party Meetings,” message

reference No. 151620, prepared by U.S. Department of State,

Washington, DC, Aug. 13, 1997.

266 U.S. Department of State telegrams, “China WTO

Accession,” message reference No. 159937, prepared by

U.S. Department of State, Washington, DC, Aug. 31, 1997

and “China WTO Accession - Bilateral Meetings in China,”

message reference No. 164671, prepared by U.S. Embassy,

Beijing, Sept. 8, 1997.

267 “Foreign trade & payments: More offers to the

WTO,” China: Country Report, Aug. 21, 1997, The

Economist Intelligence Unit.
116

 NTMs on 38 commodities, such as televisions,

refrigerators, and printing machines, will be

eliminated within 4 to 5 years after accession;

 NTMs on 113 commodities, such as air

conditioners, motorcycles, and wrist watches,

will be eliminated within 6 to 8 years after

accession;

 NTMs on 36 products, including machine tools

and construction machinery, will be eliminated

within 8 years after accession;

 NTMs on 50 products, such as autos, auto parts,

and fertilizers, will be eliminated within 8 years

after accession.

China’s restrictive state trading regime for

agricultural products has evolved into one of the most

hotly contested issues preventing U.S. support of

China’s accession to the WTO. The present system

requires firms to acquire official permission for each

import and export shipment; it limits imports by

funneling them through Chinese State Trading

Companies. The United States has asked China to

develop a system whereby market demand for

imported bulk agricultural commodities is controlled

by market forces rather than by government decisions

and also requested that China institute a tariff-rate

quota (TRQ) regime for all products that are state

traded.268 While China is considering the U.S.

request, it signaled its intentions to continue using state

trading companies to regulate trade, principally

through TRQs, for imports of a variety of agricultural

products, such as wheat, corn, rice, oilseeds and

oilseed products, sugar, cotton, and tobacco.269

Services

Throughout 1997, the United States continued to

encourage China to open its services market further to

foreign investors. The United States focused its efforts

on liberalization of banking, securities, insurance,

telecommunications, retailing, wholesaling, legal, and

accounting services sectors. In bilateral meetings

268 U.S. Department of State telegram, “USTR Scher

Meeting With MIT Vice Minister Luo,” message reference

No. 017273, prepared by U.S. Embassy, Beijing, May 20,

1997.

269 U.S. Department of State telegram, “Demarche

Request-China WTO Accession (Agricultural Issues),”

message reference No. 007703, prepared by U.S.

Department of State, Washington, DC, Jan. 14, 1997.

between the two nations during July in Geneva, China

failed to make an offer to open its market for

services.270 By the end of September, however, a

proposal for limited changes in China’s services sector

was orally conveyed to USTR. These and other

changes subsequently proposed by China include:

 Banking—China proposed a number of changes

in its banking sector, including: the extension of

national treatment to foreign banks in the areas

of registered capital and guarantee funds, the

approval of nine foreign banks located in

Shanghai’s Pudong district for local currency

operations, and the introduction of a 33 percent

income tax rate on both foreign and domestic

banks. Foreign banking experts, for the most

part, lauded these proposals as a progressive

move in equalizing the playing field for

foreign-based banks.271 Nevertheless, China

announced an 8 percent business tax on all

revenue produced from interest income on

foreign banks’ yuan-based loans.272

 Retailing—On November 13, 1997, MOFTEC

provided U.S. negotiators with China’s revised

services schedule. Revisions included: a

promise to gradually phase out geographic

limits on the number of cities open to foreign

retailers and increase the numerical limits on the

number of foreign joint venture retailing

companies permitted to operate in China. China

indicated that it would open up two or three

additional cities to foreign retailers upon

China’s accession to the WTO, open all

provincial capitals and major cities within two

years after accession, and drop all numerical

limits five years after accession.273 With

respect to both retailing and wholesaling, the

United States applauded China’s proposal to

phase out geographic limitations, but reminded

270 U.S. Department of State telegram, “China WTO

Accession-Bilateral Meeting with China,” message reference

No. 164671, prepared by U.S. Department of State,

Washington, DC, Sept. 30, 1997.

271 U.S. Department of State telegram, “China/WTO:

China Discusses Possible Changes to Services Offer to

U.S.,” message reference No. 035062, prepared by U.S.

Embassy, Beijing, Sept. 23, 1997.

272 Ibid.

273 U.S. Department of State telegram, “China/WTO:

China Discusses Possible Changes to Services Offer to

U.S.,” message reference No. 035062, prepared by U.S.

Embassy, Beijing, Sept. 23, 1997; and U.S. Department of

State telegram, “Market Access for Foreign Retailers in

China,” message reference No. 029833, prepared by U.S.

Embassy, Beijing, Aug. 14, 1997.
117

Chinese officials that because U.S. companies

are limited to minority–share joint ventures

they would effectively continue to lack control

over distribution decisions within China under

these proposals.274 Further, China’s offer did

not address franchising or aftersales services.

 Wholesaling—China offered a three-step

liberalization process for its wholesaling

services sector: (1) upon accession, it would

allow minority-share foreign joint ventures

licensed in the Pudong area of Shanghai to

provide wholesaling and commission-agent

services for companies’ imported products; (2)

China would open at least 10 additional cities to

minority-share foreign joint-venture wholesalers within two years of joining the WTO; and

(3) foreign wholesalers would be allowed to do

business in all provincial capitals and major

cities within five years after accession.

 Telecommunications—China’s current regulations continue to prohibit foreign companies

from investing in, operating, or managing a

telecommunications network. This prohibition

covers services ranging from basic telecom

(local and mobile phone service) to value-added

services (such as video conferencing and

e-mail). Recently the Chinese government

announced that it will permit foreign companies

to engage in joint ventures in both basic and

value-added telecommunication services in the

near future. However, this investment will

continue to be passive in nature since foreign

firms continue to be prohibited from

participating in day-to-day operations.275

China’s new proposals will allow for a

value-added telecommunications joint venture

in both Shanghai and Guangzhou within two

years of accession and will expand the total

number of joint ventures within five years of

accession.276

274 Ibid.

275 Ibid.

276 U.S. Department of State telegrams, “USTR Urges

PRC Ministry of Posts and Telecommunications Towards

Foreign Participation in Services Market,” message

reference No. 035346, prepared by U.S. Embassy, Beijing,

Sept. 27, 1997; and “China/WTO: China Provides Revised

Services Offer to U.S.,” message reference No. 037988,

prepared by U.S. Embassy, Beijing, Oct. 23, 1997.

 Insurance—In December 1997, China

announced that wholly owned foreign

insurance subsidiaries will be permitted within

three years of China’s accession to the WTO.277

Wholly owned foreign insurance companies are

currently not allowed, and foreign insurers

continued to be limited to a minority share of a

joint venture with a local Chinese firm. Only

one U.S. insurance firm, the American

International Group, can underwrite insurance

in China. Only recently has it been allowed to

expand beyond Shanghai to Guangzhou.

 Legal services—Vice Minister Long conceded

that China presently limits foreign law firms to

15 approved cities and restricts the total number

of foreign law firms operating in China to 80. In

September, China proposed to eliminate both

restrictions within one year after its accession to

the WTO.278 U.S. negotiators said that China’s

offer was encouraging, but that it failed to tackle

concerns such as whether restrictions would be

eased to allow foreign law firms to set up

multiple offices, or employ Chinese lawyers, or

establish joint ventures with Chinese law firms.

 Accounting services—In September, China

introduced a proposal to offer foreign

accounting firms the right to develop local

partners. Also, foreigners would be allowed to

qualify for a Chinese CPA license on the

condition that they pass China’s CPA exam.

Foreigners could then practice in China and be

partners of Chinese firms that are associates of

international accounting firms.279 As with

legal services, foreign firms are unsure whether

the proposal would permit them to employ

qualified Chinese accountants.

Accession Terms

China’s WTO accession bid was hampered by its

insistence on being admitted as a developing country.

The United States, the EU, Japan, and other WTO

members were hesitant to grant China developing

nation status because of the size and trading strength of

its economy. If admitted as a developing country,

China would qualify for a variety of concessions such

277 U.S. Department of State telegram, “China/WTO:

China Discusses Possible Changes to Services Offer to

U.S.,” message reference No. 035062, prepared by U.S.

Embassy, Beijing, Sept. 23, 1997.

278 Ibid.

279 Ibid.
118

as the preservation of its high tariffs, freedom from

provisions directed towards opening its agricultural

sectors, and lengthy phase-in periods for strengthened

IPR protection, and phase-outs of discriminatory

trade-related investment measures.280 Instead, WTO

members are calling on China to make its trade regime

more transparent, allow import of goods free of major

restrictions, provide adequate IPR protection, lift

agricultural trade barriers, end internal price controls,

and limit protection of infant industries.281 WTO

members are reluctant to grant China too many

concessions fearing that it would set a bad precedent

for others seeking membership, especially other

formerly centrally planned economies. By years end,

China reportedly signaled a willingness to moderate its

demand for full developing-country status to one

seeking only protection of domestic industries that

could be adversely affected by increased international

competition.282

Unilateral Liberalization

Measures

China lowered its import duties under 1,000 tariff

rate lines on April 1 and reduced duties on goods in an

additional 4,800 tariff lines on October 1, thereby

lowering the average level of its nominal MFN tariff

from 23 percent ad valorem to 17 percent. The

October tariff adjustment affected about three quarters

of China’s tariff schedule of approximately 6,600 rate

lines.283 Officials of China’s Customs Department

noted that the categories covered by these tariff

adjustments include minerals, chemicals, machinery,

textiles, and agricultural products. U.S. negotiators

acknowledged that China’s tariff cuts during 1997 were

substantial; however, they argued that China’s tariffs

are still prohibitively high for many goods, that cuts

were neither comprehensive nor wide enough, and that

the transition period for phase-outs of nontariff barriers

280 U.S. Department of State telegram, “Dep U/S

Meetings with MFA, MOA, MOFTEC,” message reference

No. 010155, prepared by U.S. Embassy, Beijing, Mar. 27,

1997.

281 U.S. Department of State telegram, “OP-ED Article

on China’s WTO Accession,” message reference No.

102440, prepared by Secretary of State, Washington, DC,

May 31, 1997.

282 “China Changes Stance on WTO Access,” South

China Morning Post (Hong Kong), Feb. 23, 1997, from

China Commercial Daily Brief, Feb. 24, 1997, U.S.

Embassy, Beijing, found at Internet address

http://www.redfish.com/USEmbassy-China, retrieved 

Jan. 16, 1998.

283 U.S. Department of State telegram, “China/Tariffs:

Another Round of Tariff Cuts (and Possible increases) to be

Implemented on October 1, 1997,” message reference No.

034878, prepared by U.S. Embassy, Beijing, Sept. 22, 1997.

remained much too long.284 Other observers noted that

China’s October round of tariff cuts targeted primarily

goods with minimal imports and consequently would

be of no material importance to foreign exporters.285

It was also pointed out that many of the tariff lines

important to U.S. exporters were either unaffected or

were cut only a few percentage points, especially for

luxury goods and goods produced by industries

targeted by the Chinese government for development.

China’s leading trading partners pointed out that

China’s new average tariff rate of 17 percent ad

valorem is still well above that of developed countries

and duty rates for goods such as sedan automobiles,

which can run as high as 120 percent, were obscured

by the sheer volume of cuts. Also, U.S. officials

reported that tariffs on imports of soybean oil, beer,

video cameras, film, crude oil, and iron ore would

actually increase under the October proposal.286

Hong Kong Reversion to

Chinese Sovereignty

On July 1, 1997, Hong Kong reverted to Chinese

sovereignty after 150 years of British rule. On that

date, the Hong Kong Special Administrative Region

(HKSAR) of the People’s Republic of China (PRC)

was created. A 1984 Sino-British Joint Declaration

and the 1990 Basic Law established the “one country,

two systems” principal underlying Hong Kong’s new

relationship with China.287 The arrangement will

enable the HKSAR to maintain its economic relations

as a separate customs territory and its ability to

participate independently in international economic

organizations and agreements such as the WTO,

APEC, the WTO Agreement on Textiles and Clothing,

and the World Customs Organization. The agreement

accords the HKSAR a high degree of autonomy from

China in managing its trade, financial, social, legal,

and other internal matters for 50 years.288 The

resumption of Chinese jurisdiction over Hong Kong is

284 U.S. Department of State telegram, “Draft 1998

Trade Act Report: People’s Republic of China,” message

reference No. 041359, prepared by U.S. Department of

State, Washington, DC, Nov. 25, 1997.

285 U.S. Department of State telegram, “China/WTO:

Austrian Embassy’s Unenthusiastic Analysis of China’s

Much Heralded Tariff Reductions,” message reference No.

041827, prepared by U.S. Embassy, Beijing, Dec. 7, 1997.

286 Ibid.

287 “Chinese Economic Policies Not to be Applied in

Hong Kong,” BBC Summary of World Broadcasts, Oct. 13,

1997, from China Commercial Daily Brief, Oct. 15, 1997,

U.S. Embassy, Beijing, found at Internet address

http://www.redfish.com/USEmbassy, retrieved Jan. 16, 1998.

288 USTR, 1997 National Trade Estimate Report on

Foreign Trade Barriers, pp. 149-150.
119

not expected to alter the flow of U.S. -Hong Kong

trade.

Bilateral Issues

Intellectual Property Protection

China has made significant progress in its

intellectual property rights (IPR) protection since the

signing of a bilateral agreement with the United States

in 1995.289 During 1997, U.S. recording industry

officials applauded China’s decisive actions against

compact disc (CD) pirates that led to the closing of 58

unauthorized CD factories and 42 illegal videodisc

production lines located in the southern provinces of

Guangdong and Fujian.290 USTR acknowledged that

“significant progress has occurred in China” in terms

of IPR protection and enforcement. Consequently,

USTR removed China from its “priority watch list”

under the “Special 301” trade law in 1996 and in April

1997 placed it on its section 306 monitoring list.291 In

1997, China agreed to implement the Trade-Related

Intellectual Property Rights (TRIPS) Agreement upon

its accession to the WTO.292

Agriculture

The United States and China held talks throughout

the year to resolve outstanding sanitary and

phytosanitary (SPS) issues that have been in dispute

since 1992. U.S. negotiators maintained that China

continues to protect its agricultural sector with

“unscientific” SPS measures, high tariffs, and the

ability of state trading companies to control market

access for imports.293 The United States noted that

China still uses restrictive phytosanitary measures to

bar imports of U.S. oranges, apples, lemons,

grapefruit, plums, grapes, tobacco, and

289 For more information on the 1995 U.S.-China IPR

agreement, see USITC, The Year in Trade: OTAP, 1996, USITC publication 3024, p. 107.

290 U.S. Department of State telegram, “Draft 1998

Trade Act Report: People’s Republic of China,” message

reference No. 041359, prepared by U.S. Embassy, Beijing,

Nov. 25, 1997.

291 USTR, “USTR Announces Results of Special

Annual Review,” press release 97-37, Apr. 1997.

292 USTR, 1998 Trade Policy Agenda and 1997 Annual

Report of the President of the United States on Trade

Agreements Program, March 1998, p. 189.

293 U.S. Department of State telegram, “China/WTO:

USG/Agribusiness Delegation Discuss Agricultural Trade

with MOFTEC Vice Minister Shi,” message reference No.

018692, prepared by U.S. Embassy, Beijing, Jun. 2, 1997.

Pacific Northwest wheat.294 Such measures have

banned imports of wheat from the northwestern United

States for over 25 years. In 1996, China canceled the

purchase of 1.4 million tons of wheat valued at $250

million due to the presence of TCK smut/bunt disease.

China’s State Planning Commission Vice Minister

Chen Yaobang insisted that China’s SPS measures

were solely a quarantine issue and were not nontariff

barriers,295 noting that the ban was confined to a

certain area of the United States and that two states

have been removed from China’s TCK wheat infected

list.296 The dispute intensified when China rejected

several shipments during 1996 from states not included

on the infection list and insisted that the U.S.

Department of Agriculture (USDA) certify that each

of the shipments was free of TCK.297 USDA and grain

industry officials insist China’s wheat policy was

inconsistent with international standards and that it is

“technically impossible to guarantee wheat from any

part of the United States to be completely free of

TCK.” USDA officials also noted that virtually every

other country, with the exception of Brazil, allows the

importation of U.S. wheat. China’s Administration of

Animal and Plant Quarantine removed a ban on poultry

and poultry products from Missouri and Oklahoma in

April after the eradication of Newcastle disease in

those two states.

China and the United States successfully concluded

market access agreements for grapes from four

California counties and sweet cherries in 1997.298 On

May 13, USTR Barshefsky lauded the agreement as

another positive “step in our on-going efforts to

increase market access for U.S. agricultural

exports.”299

Nonetheless, the United States and China were

unsuccessful in their efforts to settle a number of key

agricultural issues such as the use of “unscientific”

SPS measures, high tariffs, and import restrictions on

certain agricultural commodities. USTR Special Trade

294 U.S. Department of State telegram, “USTR Trade

Negotiator Scher Visit to China,” May 12-16, 1997, message

reference No. 015335, prepared by U.S. Embassy, Beijing,

May 6, 1997.

295 U.S. Department of State telegram, “USTR Scher

May 14, 1997 Meeting with State Planning Commission

Vice Minister Chen Yaobang,” message reference No.

017703, prepared by U.S. Embassy, Beijing, May 21, 1997.

296 Ibid.

297 U.S. Department of State telegram, “USTR Trade

Negotiator Scher Visit to China,” May 12-16, 1997, message

reference No. 015335, prepared by U.S. Embassy, Beijing,

May 6, 1997.

298 USTR, “U.S. Grape Producers Gain Market Access

in China,” press release 97-44, May 13, 1997. USTR,

“USTR Welcomes First Shipment of Sweet Cherries to

China,” press release 97-59, Jun. 23, 1997.

299 Ibid.
120

Ambassador for agriculture, Peter Scher, reminded

Chinese authorities that the resolution of these issues

was central to China’s MFN renewal and its WTO

accession.300

Other Issues

The United States and China concluded several

bilateral agreements during 1997 that ranged from the

extension of the U.S.-China maritime agreement to

June 1998 to market access agreements for textiles.301

On October 24, 1997, the USTR announced that China

and the United States had successfully concluded an

interim agreement that secured market access for

foreign financial information companies such as Dow

Jones and Reuters.302 In October of 1997, the United

States and China’s National Space Agency agreed to

add language to the U.S.-China Bilateral Agreement on

Space Launch Services accord that established clear

guidelines on pricing of China’s commercial space

launch services for low earth orbiting satellites.303

Taiwan

Taiwan redoubled its efforts to join the WTO

during 1997 by further opening its markets to imported

goods and services and by intensifying its bilateral

negotiations with WTO members. In 1997, Taiwan

reduced tariffs on a variety of industrial products in

response to pressure from the United States and made

substantial improvements in its legal framework such

as extending national treatment to foreign firms and

strengthening intellectual property rights. On April 16,

1997, Taiwan’s Legislative Yuan enacted 18 pieces of

legislation designed to translate its WTO commitments

into law.304 Throughout 1997, the United States and

300 U.S. Department of State telegram, “USTR Trade

Negotiator Scher Visit to China, May 12-16, 1997,” message

reference No. 015335, prepared by U.S. Embassy, Beijing,

May 6, 1997.

301 The United States and China renewed their bilateral

textile agreement in February 1997. For more information

on the agreement, see the section on the U.S. Textile and

Trade Program in ch. 5 of this report.

302 USTR, “U.S. Trade Representative Charlene

Barshefsky Announces Financial News Agreement With

China,” press release 97-90, Oct. 24, 1997.

303 USTR, “U.S. and China Reach Agreement to

Strengthen Space Launch Trade Terms,” press release 97-92,

Oct. 27, 1997. For more information on the agreement, see

USITC, The Year in Trade, OTAP, 1995, USITC publication

2971, p. 59.

304 The 18 laws will likely not become effective in

practical terms until Taiwan has acceded to the WTO. Laws

amended by the Legislative Yuan during 1997 include:

Foreign Trade Act, Commodity Inspection Act, Trademark

Taiwan continued their discussions on a number of

important issues such as access to Taiwan’s agricultural

and insurance markets, the protection of intellectual

property rights, tariff reductions, an “open-skies”

agreement, and the relaxation of Taiwan’s restrictions

on imported automobiles.305

Insurance

In 1996, Taiwan amended its Insurance Law by

introducing a new provision (Article 143) designed to

increase the reserve requirements mandated for

insurance companies to cover future claims. The

amendment established a single solvency standard for

all insurers active in Taiwan, both foreign branches and

domestic companies. When Taiwan initially allowed

foreign insurers to enter its insurance market in 1990, it

permitted branches to draw upon their parent

company’s financial resources to meet reserve

requirements. It also established a notably lower

minimum capital requirement for branches as opposed

to subsidiaries.306

In May 1997, when Taiwan ruled that branches of

foreign insurance companies could no longer count the

assets of their parent company to cover reserve

requirements, it triggered a dispute with the United

States. U.S. negotiators claimed that this action would

have a disproportionate effect on the branch offices of

foreign-owned insurance companies because foreignowned insurance companies have only recently been

allowed to participate in Taiwan’s insurance market.

Also, foreign insurers have not had the time or

opportunity to acquire real estate for investment

purposes or gain sufficient local earnings. In order to

meet the new requirements, foreign-owned branches

would have to boost their paid-in capital substantially

and would need substantial financial support from their

304—Continued

Law, Patent Law, Publication Law, Customs Law,

Commodity Tax Statute, Securities and Exchange Law

,Certified Public Accountant Law, Law of Commercial Ports,

Highway Law, Architect Law, Statute Governing Privileges

and Immunities Granted to Foreign Missions, Law of

Pharmaceutical Affairs, Law Governing Food Sanitation,

and the Banking Law. U.S. Department of State telegram,

“Taiwan’s Legislative Yuan Passes 18 WTO-Related Bills,”

message reference No. 001749, prepared by the American

Institute in Taiwan, Taipei, Apr. 18, 1997.

305 On Feb. 20, 1998, USTR announced the conclusion

of comprehensive market opening agreement with Taiwan

covering U.S. agricultural products, services, and industrial

goods. USTR, “The United States and Taiwan Conclude

Comprehensive Market Access Agreement,” press release,

Feb. 20, 1998.

306 “Insurance Companies,” Financing Foreign

Operations, Nov. 1, 1996, The Economist Intelligence Unit.
121

parent companies.307 The American Council of Life

Insurance estimated that the amended law would cost

existing U.S. insurance companies an average of $25

million per branch office.308

Taiwan’s Ministry of Finance announced on

November 5, 1997, that branches of foreign insurance

companies would no longer be required to comply with

the amended solvency margin requirements. The

Ministry exempted foreign-owned branches from the

higher solvency margin requirements so long as the

parent company maintained reserves sufficient to meet

its obligations.309 The Ministry indicated that U.S. and

other foreign insurance companies would be covered,

in terms of solvency margins, by prior regulations

(Article 26) that allowed foreign insurers to include the

assets of the parent company in the United States or

other home countries in meeting the new capital

requirement.310

Protection of Intellectual

Property Rights

Taiwan’s protection of intellectual property rights

(IPR) was a significant issue in 1997. Taiwan

continued to initiate steps to meet international

standards by amending its laws and regulations to

remedy deficiencies in protection and to improve

enforcement capabilities of local authorities. For

example, Taiwan’s Ministry of Economic Affairs

mandated that domestic CD-ROM manufacturers, in

accordance with its Commodity Labeling Law, affix a

unique identification number to their CDs during

production. These numbers will help authorities track

and enforce Taiwan’s IPR regulations. Taiwan’s CD

manufacturers also signed a voluntary restraint

agreement with the government pledging that they

307 U.S. Department of State telegram, “Talking Points

for Meeting on Insurance,” message reference No. 150977,

prepared by American Institute in Taiwan, Taipei, Aug. 12,

1997.

308 USTR, “Statement by U.S. Trade Representative

Charlene Barshefsky,” press release 97-95, Nov. 6, 1997.

309 U.S. Department of State telegram, “Taiwan

Exempts Foreign Branch Insurers from New Solvency

Margin Requirement,” message reference No. 005239,

prepared by American Institute in Taiwan, Taipei, Nov. 7,

1997.

310 USTR, “Statement by U.S. Trade Representative

Charlene Barshefsky,” press release 97-95, Nov. 6, 1997;

and U.S. Department of State telegram, “Taiwan Exempts

Foreign Branch Insurers from New Solvency Margin

Requirement,” message reference No. 005239, prepared by

American Institute in Taiwan, Taipei, Nov. 7, 1997.

would not sell, invest, or provide aftersales service or

maintenance to suspected mainland Chinese pirates.311

On April 15, the Legislative Yuan amended

Taiwan’s patent, trademark, and copyright law to

include important provisions such as 50 years of

retroactive protection from the date of Taiwan’s WTO

accession, explicit protection for famous trademarks, a

broader scope of registrable trademarks, a grace period

for renewal after expiration of registration, clarification

on the exclusion of trademark rights in so-called

ordinary use, a ban on registration of a trademark by a

related party without the consent of the trademark

owner, and destruction of counterfeit products and

equipment used to produce them.312 These

amendments are expected to become effective on the

date of Taiwan’s accession to the WTO. By the end of

1997, U.S. negotiators noted that Taiwan had

successfully enacted an intellectual property rights

regime that had nearly fulfilled its requirements under

the Agreement on Trade-Related Aspects of

Intellectual Property Rights.313

USTR announced its annual “Special 301” list for

countries violating U.S. copyrights on April 30, 1997,

and, for the first time since 1988, Taiwan was absent

from the list. Taiwan was lauded for its campaign to

strengthen and improve IPR protection, its progress in

combating copyright infringement, and noted its

progress in meeting its TRIPs requirements.314

Ambassador Barshefsky noted that it was important for

Taiwan to continue its strong enforcement efforts,

especially in its export monitoring system and its

adherence to the bilateral U.S.-Taiwan copyright

agreement.315 U.S. negotiators also encouraged Taiwan

to continue to interdict the flow of monies and

equipment into the PRC in support of CD piracy.

Government officials pointed to Taiwan’s removal

from the Special 301 list as proof of the effectiveness

of its campaign to eradicate IPR offences, even though

U.S. and various other foreign parties had called for

Taiwan’s reinstatement to the Special 301 list. In

February 1997, the International Intellectual Property

Alliance had alleged that various elements within

311 See USITC, The Year in Trade, OTAP, 1996, USITC

publication 3024, pp. 110-111.

312 Ibid.

313 U.S. Department of State telegram, “Taiwan: IAP

Implementation,” message reference No. 005010, prepared

by U.S. Embassy, Taipei, Oct. 27, 1997.

314 U.S. Department of State telegram, “1997 National

Trade Estimate Report,” message reference No. 000398,

prepared by the American Institute in Taiwan, Taipei,

Jan. 27, 1997.

315 U.S. Department of State telegram, “U.S.-Taiwan

Trade and Investment Framework Agreement Talks,”

message reference No. 00705, prepared by the American

Institute in Taiwan, Taipei, Feb. 20, 1997.
122

Taiwan’s business community had established

processing plants in Paraguay and Vietnam to

manufacture pirated U.S. software, video-tapes, and

other products for sale in those markets. Others

charged that counterfeit CD-ROMs manufactured in

China were still being transhipped through Taiwan.

Also, the U.S. Patent and Trademark Office formally

lodged a complaint with USTR alleging that Taiwan

was in conflict with the bilateral copyright agreement

“over scope of protection and rebuttable

presumption.”316 According to the Patent and

Trademark Office, resolution of the complaint would

require either amending Taiwan’s copyright law or

changing the bilateral agreement between the United

States and Taiwan.

WTO Accession

Taiwan made joining the WTO one of its

preeminent national priorities in 1997. As of

November 7, 1997, Taiwan had concluded WTO

membership talks with 21 of its 26 principal trading

partners and had successfully concluded formal

agreements with 16 of them.317 Bilateral negotiations

have yet to be concluded with the United States,

Switzerland, Singapore, and the EU. Throughout the

year, trade officials circulated optimistic declarations

on Taiwan’s accession to the WTO and made passage

of WTO-related legislation a leading priority. During

October’s bilateral talks negotiators were unable to

reach a definitive agreement on Taiwan’s accession to

the WTO. Among the issues still to be resolved are:

full access to Taiwan’s agricultural market (especially

pork, chicken, rice, and offal), privatization of the

government’s tobacco and wine monopoly, tariffs and

quotas on automobiles, and Taiwan’s government

procurement practices. Although U.S.-Taiwan bilateral

talks have entered their final stages, substantial issues

are still to be negotiated. Talks continue on Taiwan’s

316 Ibid.

317 On Feb. 20, 1998, USTR announced the conclusion

of a market-opening agreement with Taiwan. Among the

concessions granted by Taiwan to the United States:

immediate access to previously closed pork, beef, rice, and

chicken markets; a pledge to join the WTO Agreement on

Trade in Civil Aircraft, the WTO Agreement on Government

Procurement, and the Uruguay Round Chemical

Harmonization Tariff Agreement; a pledge to join all

Uruguay Round zero-for-zero initiatives, by eliminating all

tariffs on medical equipment, wood, pharmaceuticals,

construction equipment, toys, furniture, steel, agricultural

equipment, civil aircraft, and distilled spirits; and a promise

to privatize its Alcohol and Tobacco Monopoly Board.

USTR, “Fact Sheet U.S.-Taiwan Market Access

Agreement,” Feb. 20, 1998.

position on government procurement, high tariffs on

agricultural commodities, intellectual property rights,

tariffs and quotas on automobiles, the privatization of

Taiwan’s Tobacco and Wine Monopoly Bureau, and

the liberalization of the tobacco and alcohol markets.

Taiwan took an important step toward WTO entry

with the introduction of a draft government

procurement law that meets WTO standards for

transparency, predictability, and nondiscriminatory

practices and that succinctly enumerates contract

bidding procedures. The proposed law recommends

that government contracts now be awarded to the

“most advantageous” bid.318 On April 18, the Statute

for the Vocational Assistance Commission for Retired

Servicemen (VACRS) was passed ending preferential

procurement bidding rights for government entities

such as the VACRS.319 The legislation would require

all businesses owned by the VACRS to participate in

open bidding for government construction projects on

the same terms as private firms.

Several pieces of legislation were introduced in

late 1996 and in 1997 to cut Taiwan’s tariffs on a wide

variety of products. One bill cut tariffs on nearly 1,130

products as part of Taiwan’s WTO concession

commitments.320 If enacted, the tariff cuts would

become effective in 1998, but would have limited

affect overall on U.S. exports because the cuts would

only reduce Taiwan’s average nominal tariff from 8.64

to 8.41 percent ad valorem.321

To fulfill its commitments under the WTO

Information Technology Agreement, the Ministry of

Finance introduced legislation before the Legislative

Yuan to reduce tariffs on 368 information technology

products on May 1, 1997.322 Because the bill was

tabled without action, the government temporarily

reduced tariffs on 289 of the 368 products beginning

318 U.S. Department of State telegram, “Taiwan’s Public

Construction Commission Holds Third Meeting with Foreign

Contractors,” message reference No. 003744, prepared by

the American Institute in Taiwan, Taipei, Aug. 11, 1997.

319 U.S. Department of State telegram, “Taiwan

Lawmakers Pass Nineteen WTO-Related Bills,” message

reference No. 001878, prepared by the American Institute in

Taiwan, Taipei, Apr. 25, 1997.

320 U.S. Department of State telegram, “Taiwan: IAP

Implementation,” message reference No. 005010, prepared

by the American Institute in Taiwan, Taipei, Nov. 14, 1997.

321 Ibid.

322 Products covered in the bill included data processing

machines, keyboards, terminals, printers, semiconductor

components (diodes and transistors), electric resistors,

electronic switches, processing machinery, precision

instruments used for producing semiconductors, and radio

telecommunications products. U.S. Department of State

telegram, “Taiwan to Revise High-Tech Tariffs,” message

reference No. 002496, prepared by the American Institute in

Taiwan, Taipei, Jun. 2, 1997.
123

July 1 to satisfy the initial stages of its commitment.

The bill will create 159 new tariff lines in Taiwan’s

tariff schedule and will phase out duty rates on 15

radio telecommunications and switchboard products by

2002. The remaining 144 will have their tariffs reduced

to zero in four phases by January 1, 2000; each phase

will reduce Taiwan’s average nominal tariff by 25

percent for these products.323

After extensive negotiations, Taiwan consented to

phase out unilaterally its tariffs on most general

industrial products by 2002. However, Taiwan

forwarded a list of 564 products, including alcohol

products, construction materials, and medical items,

whose tariffs would not be eliminated until 2005.

Taiwan also communicated a desire to retain strong

import control over 14 agricultural products, including

meat, fresh fruit, and vegetables. Taiwan also

indicated that tariffs will be maintained on an

additional 139 “sensitive” items, including

automobiles, plywood, and scrap paper, beyond the

deadline. U.S. negotiators countered with a proposal

that Taiwan cut back on its list of sensitive items and

that tariff reductions be finalized by 2002. Taiwan has

also committed itself to eliminating tariffs on mobile

phones, telephones and telex switching machines and

parts, fiber-optic cable, and digital videodiscs by

2002.324

Taiwan’s Tobacco and Wine Monopoly Bureau

(TWMB) has historically enjoyed a virtual monopoly

over the production and distribution of cigarettes, beer,

wine, and other liquor products in Taiwan. The United

States is seeking to ensure transparency and equal

treatment for domestic and foreign products and gain

greater market access as part of Taiwan’s WTO

accession process. Negotiators from the United States

and Taiwan were able to arrive at a preliminary

agreement lifting the ban on alcohol advertisements in

print and electronic media. A draft law was introduced

by the Executive Yuan in December of 1996 to

restructure and privatize the TWMB by 2000.325

Under the draft law, the current monopoly tax will be

replaced by three new taxes: a VAT, tobacco and wine

tax (excise tax), and a tariff. The move to replace the

current system with a system of new taxes will ease

discriminatory treatment against imports. The proposed

323 U.S. Department of State telegram, “Taiwan to

Implement Temporary Tariff Cuts in Hi-Tech Products,”

message reference No. 002871, prepared by the American

Institute in Taiwan, Taipei, Jun. 20, 1997.

324 “Taiwan still aiming to join WTO this year,” Country

Reports, the Economist Intelligence Unit, May 15, 1997.

325 U.S. Department of State telegram, “Taiwan: Recap

and Update on Tobacco and Wine Legislation,” message

reference No. 004015, prepared by the American Institute in

Taiwan, Taipei, Aug. 27, 1997.

new MFN tariff rates on alcohol and tobacco, effective

with the implementation of the proposed law, would be

as follows:326

Product Tariff 

(percent 

ad valorem)

Beer 5.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Champagne and most wines 20.0 . . . . . . . . . . 

Vermouth and various

 fermented beverages 25.0 . . . . . . . . . . . . . . 

Grape brandies, whisky 12.5 . . . . . . . . . . . . . . 

Rum and gin 27.5 . . . . . . . . . . . . . . . . . . . . . . . . 

Cigarettes 32.5 . . . . . . . . . . . . . . . . . . . . . . . . . . 

Cigars 30.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Smoking tobacco 20.0 . . . . . . . . . . . . . . . . . . . . 

This piece of legislation languished in the Legislative

Yuan throughout 1997.

Other Trade Issues

Other important trade issues include the signing of

a draft “open-skies” initiative and changes in Taiwan’s

quotas on auto imports. On February 28, 1997, Taiwan

and the United States signed a draft agreement that

abolished limitations on the number of airlines flying

between the two nations and the frequency and number

of destinations in each country, and also grants the

right of unrestricted extension of flights to third

countries. The draft agreement also permits passenger

airlines and delivery companies from each country to

establish intermodal cargo services in the other.327

Although Taiwan has permitted imports of luxury

cars from Europe and the United States for some years,

it retained bans on imports from other countries. In

1997, Taiwan ended its 20 year ban on the importation

of Japanese automobiles. A draft agreement between

the two nations permitted Japan to ship 7,500 compact

cars to Taiwan during 1997. Japan will be permitted to

increase the number of cars it ships to Taiwan by 10

percent annually until Taiwan joins the WTO, when

imports can rise by 20 percent annually. Taiwan has

also opened its car market to Australia, the Czech

Republic, South Korea, Malaysia, Slovakia, and South

Africa. In total, Taiwan announced that it will allow its

vehicle import quotas covering all countries to increase

by 20 percent annually through 2006, when the quota

system is scheduled to be eliminated.

326 Ibid.

327 U.S. Department of State telegram, “Supporting U.S.

Business and the FY98 Foreign Affairs Budget Request,”

message reference No. 001021, prepared by the American

Institute in Taiwan, Taipei, Mar. 11, 1997.
124

However, Taiwan also indicated that it would

preserve the right to maintain tariffs on imported cars

at the current level of 30 percent for nine years after

joining the WTO. The United States and other major

trading partners have requested that Taiwan lower its

tariffs on imported automobiles to 15 percent. U.S.

auto manufacturers have complained that Taiwan uses

a graduated commodity tax that is based on engine

displacement to discriminate against larger cars such as

those imported from the United States.328

Korea

U.S.-Korea trade relations were calmer in 1997

than in past years. To some extent, this reflects a

maturing of the Korean economy and progress in

liberalizing both its economy and trade regime, as

evidenced by its first full calendar year as a member of

the OECD. It also reflects the diversion of attention

from trade friction to the turbulence of Korean

economics and politics. Bankruptcies of chaebol

(conglomerates), followed by financial crisis, currency

devaluation, and submission to an IMF rescue package

dominated the economic news and led to expectations

that much of the old business-government partnership

would fall apart. A contentious presidential election

campaign resulted in the election of long-time dissident

Kim Dae-jung, also heralding a departure from past

business-government relationships.

There were two major bilateral trade issues

involving the United States and Korea in 1997. In

July, USTR Barshefsky announced the revocation of

Korea’s designation as a priority foreign country

following the successful conclusion of negotiations to

open the Korean telecommunications market for U.S.

equipment and services suppliers. In October, USTR

Barshefsky announced that USTR had identified

Korea’s barriers to imported automobiles as a priority

foreign country practice under the Super 301

provisions of U.S. trade law. Negotiations were

expected to start sometime after the inauguration of

President-elect Kim Dae-jung on February 25.

Telecommunications

Section 1377 of the Omnibus Trade and

Competitiveness Act of 1988 requires an annual review

of U.S. telecommunications trade agreements. This

review process has regularly included the agreement

328 U.S. Department of State telegram, “Taiwan: General

Motors and Auto Trade Issues,” message reference No.

005755, prepared by the American Institute in Taiwan,

Taipei, Dec. 13, 1997.

with Korea. In recent years, the United States has

negotiated a series of bilateral telecommunications

trade agreements with Korea. These agreements have

been designed to improve procurement practices,

strengthen protection of IPR by Korea Telecom, clarify

standards-related issues, regularize type approval of

equipment, and provide equal treatment for U.S. firms

pursuing procurement opportunities in Korea.329

In July 1996, as a result of a breakdown in talks

regarding compliance with existing agreements as well

as other telecommunications issues, the United States

identified Korea as a “priority foreign country”

pursuant to section 1374 of the act. In making the

designation, USTR said that the United States sought

to better ensure Korean government nonintervention in

private sector telecommunications equipment procurement, regulatory transparency in the telecommunications services sector, and improvements in Korean

government commitments under existing bilateral

telecommunications agreements. USTR especially

noted that there had been inadequate progress made

toward ensuring Korean government non-intervention

in private procurement decisions in the wireless

communications market. Designation as a priority

foreign country under section 1374 starts a one-year

timetable leading to possible imposition of

sanctions.330

On July 23, 1997, USTR Charlene Barshefsky

announced the revocation, effective August 11, 1997,

of Korea’s designation as a priority foreign country

following the successful conclusion of a year of

negotiations between the United States and Korea.

Ambassador Barshefsky stated that “[t]aken as a

whole, the Korean government’s actions over the last

year should eliminate objectionable practices which led

to Korea’s identification in July 1996 as a $Priority

Foreign Country’ under section 1374 of the 1988

Omnibus Trade and Competitiveness Act.”331

Korea made a number of commitments that

satisfied U.S. negotiating objectives:

 The Korean Ministry of Information and

Communication issued a policy statement on

July 14, 1997. The statement clarified recent

329 See, for example, USITC, The Year in Trade, OTAP,

1992, USITC publication 2554, p. 123, and USITC, The

Year in Trade, OTAP, 1995, USITC publication 2971, p. 62.

330 USTR, “Korea Identified as a ‘Priority Foreign

Country’ under Section 1374 of the 1988 Trade Act for

Telecommunications Practices,” press release No. 96-63,

July 26, 1996.

331 USTR, “United States and Korea Successfully

Conclude Negotiations on Trade in Telecommunications

Goods and Services,” press release No. 97-70, July 23, 1997.
125

 revisions of Korean telecommunications

policies and practices, enhanced transparency,

and corrected misperceptions regarding the

treatment of foreign telecommunications goods

and services suppliers. Specific policies

detailed in the policy statement included:

national treatment and nondiscrimination for

foreign companies; government nonintervention in private sector procurement;

transparent criteria and procedures relating to

services licensing, equipment certification, and

type approval; increased foreign ownership in

domestic service providers; enhanced

protection of intellectual property and

proprietary information; clear guidelines for

technology transfer; transparent procedures for

satellite services authorization; procompetitive

regulatory measures; and an enhanced

independent regulatory role for the Korean

Communications Commission.332

 Under the WTO Information Technology

Agreement,333 Korea will eliminate in stages

tariffs on an agreed package of information

technology products (including telecommunications) by the year 2000, with tariffs on a few

additional items to be eliminated by 2004.334

 Under the WTO basic telecommunications

agreement, Korea will allow increased foreign

ownership of domestic telecommunications

services companies and adopt a series of

enforceable and procompetitive regulatory

principles. 335

Automobiles

The low level of sales of imported automobiles in

Korea has been a source of bilateral friction in recent

years. The United States maintains that Korea supports

a “sanctuary market for automobiles” while pursuing

an aggressive automobile export strategy.336 Although

332 Ibid.

333 For more information on the ITA, see USITC, The

Year in Trade, OTAP, 1996, USITC publication 3024, 

pp. 20-23, and USITC, Advice Concerning the Proposed

Modification of Duties on Certain Information Technology

Products and Distilled Spirits, USITC publication 3031,

April 1997.

334 USTR, “United States and Korea Successfully

Conclude Negotiations on Trade in Telecommunications

Goods and Services,” press release No. 97-70, Jul. 23, 1997.

335 Ibid.

336 USTR, “USTR-Commerce Joint Press Release on the

Implementation of the 1995 Agreement with Korea on

Autos,” press release No. 96-44a, Jun. 3, 1996.

Korea is now the world’s third largest auto exporter

after Japan and the EU, imports accounted for less than

one percent of all automobiles sold in Korea in

1996.337

The United States and Korea signed an

Memorandum of Understanding (MOU) in late 1995

designed to improve market access for foreign

automobiles. The MOU covers Korea’s treatment of

foreign automobiles in the areas of taxation, standards

and certification procedures, advertising, auto

financing, and consumer perception.338 Among other

things, the MOU was designed to combat excessively

high taxes on imported automobiles, remove

certification requirements on new models of

automobiles, remove restrictions on access to

television advertising, counter the perception of the

Korean consumer that purchase of a foreign

automobile will result in a tax audit for the purchaser,

and implement a consultation mechanism. In addition,

the Korean government agreed not to take any new

measures that adversely affect market access for

foreign passenger vehicles.339

After a review of Korea’s progress in

implementing the MOU in 1996, the United States

announced that Korea had generally implemented the

terms of the MOU, but much more needed to be done

by Korea to open its automobile market to a level

comparable to that of the United States. Concern was

also expressed about an increase in taxes on sport

utility vehicles (SUVs) and passenger minivans,

vehicles in which U.S. producers are competitive, that

could be contrary to standstill provisions in the

MOU.340 The increased taxes were a result of a

reclassification of the tax status of these vehicles

related to their potential use by the Korean military in

event of war.341

337 USTR, “USTR Announces Results of Annual $Super

301’ Review: Korean Auto Barriers Identified as Priority

Foreign Country Practice; and New WTO Disputes

Launched on Export Subsidies and Market Access Barriers,”

press release No. 97-87, Oct. 1, 1996.

338 For more details on the 1995 automobile MOU, see

USITC, The Year in Trade, OTAP, 1995, USITC publication

2971, p. 63-64.

339 USTR, “USTR Kantor Announces Agreement with

Korea on Autos,” press release No. 95-73, Sept. 28, 1995.

340 USTR, “USTR-Commerce Joint Press Release on the

Implementation of the 1995 Agreement with Korea on

Autos,” press release No. 96-44a, Jun. 3, 1996.

341 American Automobile Manufacturers Association,

“Comments of the American Automobile Manufacturers

Association on the Identification of Priority Practices Under

‘Super 301’,” Jul. 10, 1997.
126

In the 1997 National Trade Estimate, USTR again

acknowledged that Korea had implemented most of the

commitments it made in the MOU, but stated that

recent actions taken by the Korean government call

into question Korea’s commitment to open its domestic

passenger-car market to foreign competition. USTR

specifically cited tacit government approval of

renewed antiimport efforts, the above-mentioned

increase in taxes on SUVs, the high 8 percent ad

valorem tariff on imports of passenger vehicles, its

“cascading” taxes on autos that escalate with engine

displacement, traffic police harassment of drivers of

foreign autos, and tax audits that have been threatened

against persons leasing foreign autos or otherwise

indulging in “conspicuous consumption.”342 USTR

indicated that the United States would seek further

market opening measures from Korea in 1997.343

The United States initiated negotiations with Korea

dealing with foreign access to Korea’s domestic

automobile market, and three rounds of working-level

talks occurred in August and September 1997. The

negotiations dealt with a number of market access

issues, including U.S. requests for:

 a reduction of the 8 percent duty on auto imports

to the U.S. level of 2.5 percent, as well as a

reduction in Korea’s WTO bound rate of 80

percent;

 a change in the basis of automobile taxation

from the current system based on engine size to

one based on the age or price of the car;

342 USTR, 1997 National Trade Estimate Report on

Foreign Trade Barriers, pp. 234, 250-1.

343 Ibid., p. 251.

344 Republic of Korea, “Washington Invokes Section

301 of the U.S. Trade Law Against Korea Demanding Wider

Foreign Access to Korea’s Automobile Market,” press

release, Oct. 18, 1997, found at Internet address

http://korea.emb.washington.dc.us/embnews/pressrelease/

back971104.htm, retrieved Dec. 2, 1997.

 Korea to allow automobiles to be used as

collateral for loans;

 a simplification of the Korean safety inspection

and approval system; and

 active and specific measures by the Korean

government to change the attitude of Korean

consumers toward foreign cars;344

Agreement was not reached during the

negotiations. As a result, on October 1, 1997, USTR

Charlene Barshefsky announced that USTR had

identified Korea’s barriers to imported automobiles as

a priority foreign country practice under the Super 301

provisions of U.S. trade law. Under Super 301

procedures, USTR initiated an investigation under

section 302 (b) (1) (A) of the Trade Act of 1974, as

amended, on October 20, 1997. The investigation is

with respect to “certain acts, policies and practices of

the Government of the Republic of Korea that pose

barriers to imports of U.S. autos into the Korean

market.”345 The investigation can take from 12 to 18

months, after which the United States may take

retaliatory action. In the interim, negotiations between

the United States and Korea may take place that may

resolve the dispute before the United States takes

retaliatory action. Both sides agreed that negotiations

would not start until there had been a cooling-off

period. Talks are expected to begin in the Spring of

1998. 346

345 Republic of Korea, “Washington Invokes Section

301 of the U.S. Trade Law Against Korea Demanding Wider

Foreign Access to Korea’s Automobile Market,” press

release, Oct. 18, 1997, found at Internet address

http://korea.emb.washington.dc.us/embnews/pressrelease/

back971104.htm, retrieved Dec. 2, 1997.

346 62 F.R. 55843.

347 U.S. Department of State telegram, “USTR Korea

Director Latimer’s Meetings at MOFAT and Ministry of

Industry,” message reference No. 1976 prepared by U.S.

Embassy, Seoul, Apr. 7, 1998.
127

CHAPTER 5

Administration of U.S. Trade Laws

and Regulations

This chapter surveys activities related to the administration of U.S. trade laws during 1997. It covers

(1) the import relief laws; (2) the unfair trade laws;

(3) certain other trade provisions, including the U.S.

Generalized System of Preferences (GSP), the Caribbean Basin Economic Recovery Act (CBERA), the

Andean Trade Preference Act (ATPA), section 232 of

the Trade Expansion Act of 1962 (impairment of national security), the Agricultural Adjustment Act (interference with programs of the U.S. Department of

Agriculture); and (4) programs affecting textile and apparel imports; and (5) U.S. trade sanctions.

Import Relief Laws

The United States has enacted several safeguard

laws as well as a trade adjustment assistance program.

The U.S. global action safeguard law, which is based

on Article XIX of GATT 1994 and the Uruguay Round

Agreement on Safeguards, is set forth in sections

201-204 of the Trade Act of 1974.1 U.S. bilateral action safeguard laws are set forth in section 406 of the

Trade Act of 1974 (market disruption from imports

from Communist countries)2 and sections 301-304 of

the North American Free Trade Agreement (NAFTA)

Implementation Act.3 The trade adjustment assistance

provisions are set forth in sections 221 and following

of the Trade Act of 1974.4

Safeguard Actions

The U.S. International Trade Commission (Commission) initiated one safeguard investigation during

1997, under the U.S. global action safeguard law, with

respect to imports of wheat gluten. The Commission

instituted the investigation on the basis of a petition

filed by domestic producers of wheat gluten in Septem1 19 U.S.C. 2251 et seq.

2 19 U.S.C. 2436.

3 19 U.S.C. 3351 et seq.

4 19 U.S.C. 2271 et seq.

ber 1997. The Commission held a public hearing on

the injury phase of the investigation in December and

the investigation was still in progress at year-end

1997.5

As of year-end 1997, the United States had one

safeguard measure, a global measure, in effect: a tariff-rate quota on imports of broom corn brooms. The

measure was imposed in November 1996 and is scheduled to terminate in November 1999.6 In January 1997,

Mexico requested establishment of a panel under NAFTA Article 2008 to review the U.S. brooms measure.

A panel was subsequently formed, submissions were

filed by the respective parties, and a hearing was held.

A final ruling by the panel was made early in 1998.

For additional discussion concerning NAFTA dispute

settlement panel reviews, see chapter 3 of this report.

Adjustment Assistance

The Trade Adjustment Assistance (TAA) program,

set forth in sections 221 and following of the Trade Act

of 1974, authorizes the Secretaries of Commerce and

Labor to provide trade adjustment assistance to firms

and workers, respectively, that are adversely affected

by increased imports. Initially authorized under the

Trade Expansion Act of 1962, the current program is

scheduled to expire on September 30, 1998. In 1993, a

new subchapter was added to the TAA provisions in

the Trade Act to provide transitional assistance to

workers separated or threatened to be separated from

their employment as a result of increased imports from,

5 Inv. No. TA-201-67, Wheat Gluten. On January 16,

1998, the Commission made an affirmative determination in

the injury phase of the investigation by a vote of 3-0. Accordingly, the Commission proceeded to the remedy phase,

and transmitted its report on the investigation to the President, including the basis for its injury determination and

recommendations with respect to remedy, on March 18,

1998.

6 For a further description of the measure and the Commission investigation that preceded it, see USITC, The Year

in Trade: OTAP, 1996, USITC publication 3024, p. 129
128

or shifts in production to, Canada or Mexico under the

NAFTA.7

The TAA system of readjustment allowances to individual workers is administered by the U.S. Department of Labor through its Employment and Training

Administration (ETA) in the form of monetary benefits

for direct trade readjustment allowances and service

benefits that include allocations for job search, relocation, and training. Industry-wide technical consultation

provided through Commerce-sponsored programs is

designed to restore the economic viability of U.S. industries adversely affected by international import

competition.8

Assistance to Workers

The Department of Labor (DOL) instituted 1,292

investigations during fiscal year (FY) 1997 (October 1,

1996, through September 30, 1997) on the basis of

petitions filed for TAA. Petitioners represented a

7 Sec. 250 of the Trade Act of 1974 (19 U.S.C. 2331), as

added by sec. 502 of the NAFTA Implementation Act.

8 Sections 251 through 264 of the TAA.

broad spectrum of manufacturing concerns. The FY

1997 figure represents a decrease from the 1,693 TAA

petitions instituted in FY 1996. The results of the TAA

investigations completed or terminated in FY 1997, including those in progress from the previous fiscal year,

are shown in table 5-1.

The number of completed TAA cases (including

partial certifications and denied, terminated, or withdrawn petitions) in FY 1997 decreased to 1,354 from

1,626 in FY 1996, a decline of 16.7 percent. As shown

above, a total of 108,843 workers were fully certified

in FY 1997. Preliminary (as of December 1997) figures for FY 1997 indicate that Labor expenditures for

direct Trade Readjustment Allowances (TRA) to certified workers increased to $194.8 million, a 17.3 percent increase from the $166.1 million expenditure in

FY 1996.

In addition, DOL provided training, job search, and

relocation services preliminarily valued at $85.1 million in FY 1997, representing an 11.9 percent decrease

from the $96.6 million allocated during FY 1996.

Table 5-2 presents data on the number of workers that

used available service benefits in the last two years. As

shown, utilization decreased sharply from FY 1996 to

FY 1997.

Table 5-1

Results of petitions filed under the Trade Adjustment Assistance program, FY 1997 and FY 1996

Number of investigations Estimated number

or petitions— of workers—

Item FY 1997 FY 1996 FY 1997 FY 1996

Completed certifications 857 1,132 108,843 118,960 . . . . . . . . . . . . Partial certifications 1 2 60 110 . . . . . . . . . . . . . . . . 

Petitions denied 431 415 38,786 58,559 . . . . . . . . . . . . . . . . . . . Petitions terminated or withdrawn 65 77 3,059 3,930 . . . . 

Totals 1,354 1,626 150,748 181,559 . . . . . . . . . . . . . . . . . . . . . . . . 

Source: Preliminary (as of February 1998) data maintained by the U.S. Department of Labor, Employment and Training Administration, Office of Trade Adjustment Assistance, Management Information System.

Table 5-2

Training, job search, and relocation allowances provided under the Trade Adjustment Assistance

program, FY 1997 and FY 1996

Estimated number of participants—

Item FY 1997 FY 1996

Training 23,598 34,169 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Job search 364 719 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Relocation allowances 612 841 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Source: Preliminary (as of March 1998) data maintained by the U.S. Department of Labor, Employment and Training

Administration, Office of Trade Adjustment Assistance, Management Information System.
129

NAFTA-Related Assistance to

Workers

The NAFTA Implementation Act provides for establishment of a Transitional Adjustment Assistance

program (NAFTA-TAA).9 The program, which began

operation January 1, 1994, provides job search, training, and relocation assistance to workers in companies

affected by imports from Canada or Mexico or by

shifts of U.S. production to those countries. Data for

FY 1997 from the DOL indicate that 774 petitions

were filed for assistance under the NAFTA-TAA program, up from the 729 such filings in FY 1996. Petition activity under the program in FY 1997 is summarized in table 5-3.

The number of completed certifications in FY 1997

was 422, covering 54,757 workers, higher than 1996

levels. During the period from January 1, 1994,

through December 31, 1997, NAFTA-TAA certifications have been issued for worker groups in 1,340

firms and cover an estimated 155,779 workers.

Preliminary (as of December 1997) FY 1997 figures indicated that DOL expenditures for direct TRA to

9 NAFTA Implementation Act, Title V, NAFTA Transitional Adjustment Assistance and Other Provisions, Public

Law No. 103-182, 107 Stat. 2057, sec. 501-507 (Dec. 8,

1993).

certified workers were $21.1 million. The DOL also

provided training, job search, and relocation services to

such workers that increased from $19.1 million in FY

1996 to $27.8 million in FY 1997 (data preliminary as

of December 1997), an increase of 45.5 percent. Table

5-4 presents data on the number of workers that used

available services. As was the case for the TAA program, utilization of such services under NAFTA-TAA

also increased from FY 1996 to FY 1997.

Assistance to Firms and

Industries10

The U.S. Department of Commerce’s Economic

Development Administration (EDA) certified 159

firms as eligible to apply for trade adjustment assistance during FY 1997. This figure represents an increase from the 148 firms certified in the previous fiscal year. The EDA administers its firm assistance programs through a nationwide network of 12 Trade Adjustment Assistance Centers (TAACs). Technical services are provided to certified firms through TAAC

10 Information obtained from the Planning and Development Assistance Division, Economic Development Administration, U.S. Department of Commerce.

Table 5-3

Results of petitions filed under the NAFTA Transitional Adjustment Assistance program, FY 1997

and FY 1996

Number of investigations Estimated number

or petitions— of workers—

Item FY 1997 FY 1996 FY 1997 FY 1996

Petitions filed 774 729 86,597 81,282 . . . . . . . . . . . . . . . . . . . . . Worker groups certified 422 421 54,757 46,897 . . . . . . . . . . . . . 

Petitions denied 294 249 29,243 29,488 . . . . . . . . . . . . . . . . . . . Petitions terminated 20 19 NA NA . . . . . . . . . . . . . . . 

Source: Preliminary (as of March 1998) data maintained by the U.S. Department of Labor, Employment and Training

Administration, Office of Trade Adjustment Assistance, Management Information System.

Table 5-4

Training, job search, and relocation allowances provided under the NAFTA Transitional Adjustment Assistance program, FY 1997 and FY 1996

Estimated number of participants—

Item FY 1997 FY 1996

Training 3,965 2,664 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Job search 36 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Relocation allowances 168 81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Source: Preliminary (as of March 1998) data maintained by the U.S. Department of Labor, Employment and Training

Administration, Office of Trade Adjustment Assistance, Management Information System.
130

staffs and independent consultants under contract with

TAACs. Typical technical services include assistance

in marketing (e.g., the design of new brochures and

websites), identifying appropriate management information system hardware and software, and developing and completing quality assurance programs.

TAAC’s funding for technical services to firms adversely affected by international import competition

was $8.5 million during FY 1997, the same level

awarded in FY 1996.In addition to trade adjustment

assistance for firms, the EDA also provided $1.575

million in FY 1997 in defense conversion funding to

the TAACs, a substantial increase over the $700,000

provided in FY 1996. These expenditures assist tradeinjured firms in areas that have also experienced economic dislocations from defense expenditure cutbacks.

No funding was provided for any industry association

research projects in FY 1997.

Laws Against Unfair

Trade Practices

The U.S. Department of Commerce issued 11 new

antidumping orders during 1997, following completion

of investigations by Commerce and the Commission,

and in addition, Commerce entered into five new suspension agreements after having made affirmative preliminary or final determinations of dumping. Commerce did not issue any new countervailing duty orders

in 1997. During 1997, the Commission completed 15

investigations under section 337 of the Tariff Act of

1930 involving allegations of patent, trademark, or

copyright infringement or other unfair methods of

competition. In one of the section 337 investigations,

the Commission issued a general exclusion order prohibiting the importation of merchandise, and in five

other section 337 investigations the Commission issued

limited exclusion orders barring importation of the accused products.

Section 301 Investigations

Section 301 of the Trade Act of 1974, as amended

(the Trade Act), is the principal U.S. statute for addressing foreign unfair practices affecting U.S. exports of

goods or services. Section 301 may be used to enforce

U.S. rights under bilateral and multilateral trade agreements and may also be used to respond to unreasonable, unjustifiable, or discriminatory foreign government practices that burden or restrict U.S. commerce.

Interested persons may petition the U.S. Trade Representative (USTR) to investigate a foreign government

policy or practice or the USTR may self-initiate an investigation.

If consultations do not result in a settlement and

the investigation involves a trade agreement, section

303 of the Trade Act requires the USTR to use the

dispute settlement procedures that are available under

the agreement. If the matter is not resolved by the

conclusion of the investigation, section 304 of the

Trade Act requires the USTR to determine whether the

practices in question deny U.S. rights under a trade

agreement or whether they are unjustifiable, unreasonable, or discriminatory and burden or restrict U.S.

commerce. If the practices are determined to violate a

trade agreement or to be unjustifiable, the USTR must

take action. If the practices are determined to be unreasonable or discriminatory and to burden or restrict

U.S. commerce, the USTR must determine whether action is appropriate and, if so, what action to take. The

time period for making these determinations varies according to the type of practices alleged.

In 1997, USTR initiated six new section 301 investigations. Further developments occurred in nine investigations initiated prior to 1997. Table 5-5 summarizes USTR activities on section 301 investigations

during 1997.

Super 301

The “Super 301” provisions of the Omnibus Trade

and Competitiveness Act of 1988 were reinstituted via

Executive Order by President Clinton in 199411 and

later extended through calendar year 1997.12 The

Executive Order requires that within six months of the

submission of the annual National Trade Estimate Report, USTR review U.S. trade expansion priorities and

identify those priority foreign country practices, the

elimination of which is likely to have the most significant potential to increase U.S. exports, and to report to

the Senate Finance Committee and the House Ways

and Means Committee on any such practices. In the

1997 Super 301 report to the Congress, released on October 1, 1997, the USTR identified Korean barriers to

auto imports as a priority foreign country practice (See

chapter 4, “Korea” for details).

11 On March 3, 1994, the President signed Executive

Order 12901 reinstituting Super 301 for calendar years 1994

and 1995.

12 On September 27, 1995, the President amended

Executive Order 12901 to extend it to calendar years 1996

and 1997.
131

Table 5-5

Summary of activity on section 301 investigations on which actions were taken during 1997

Docket No. Summary and actions occurring during course of investigation

Petitions filed or investigations self-initiated in 1997:

Docket No. 301-116 Honduran Protection of Intellectual Property Rights, self-initiated by USTR 

(Oct. 1997), the USTR invited public comments and participation in a public hearing

(Nov. 1997)

On October 31, 1997, the USTR initiated an investigation with respect to certain acts,

policies, and practices of the Government of Honduras with respect to the protection of

intellectual property rights, and proposed to determine that these acts, policies, and

practices are actionable under section 301(b) and that the appropriate response is a

partial suspension of tariff preferences.

The USTR invited public comments on the matters being investigated and participation in

a public hearing concerning the proposed determinations and action (62 FR 60299 of

11/7/97).

Docket No. 301-115 Korean Barriers to Auto Imports, self-initiated by USTR (Oct. 1997), the USTR

invited public comment (Oct. 1997)

On October 20, 1997, the USTR initiated an investigation with respect to certain acts,

policies, and practices of the Government of Korea that pose barriers to imports of U.S.

autos into the Korean market.

The USTR invited public comment on the matters being investigated (62 FR 55843 of

10/28/97).

For further background, see chapter 4 of this report.

Docket No. 301-114 EU Circumvention of Export Subsidy Commitments on Dairy Products, self-initiated

by USTR (Oct. 1997), WTO consultation held (Nov. 1997)

On October 8, 1997, the USTR self-initiated an investigation with respect to certain acts,

policies and practices of the Government of the European Union (EU) concerning export

subsidies on processed cheese.

The USTR invited public comment on the matters being investigated (62 FR 53852 of

10/16/97) and requested consultations with the EU regarding the issues under

investigation. The request was made pursuant to Article 4 of the WTO DSU, Article 19, of

the Agreement on Agriculture to the extent it incorporates Article XXII of the GATT 1994,

and Article 30 of the Agreement on Subsidies and Countervailing Measures to the extent it

incorporates Article XXII of the GATT 1994. On November 18, 1997, WTO consultations

were held between the United States and the EU.

Docket No. 301-113 Canadian Export Subsidies and Market Access for Dairy Products, petition filed by

the National Milk Producers Federation, the U.S. Dairy Export Council, and the

International Dairy Foods Association, WTO consultations held (Nov. 1997)

On September 5, 1997, the National Milk Producers Federation, the U.S. Dairy Export

Council, and the International Dairy Foods Association filed a petition pursuant to section

302(a) of the Trade Act alleging that certain export subsidies of the Government of

Canada and Canada’s failure to implement a tariff-rate quota (TRQ) for fluid milk constitute

acts, policies, and practices that violate, or are inconsistent with and otherwise deny

benefits to the United States under the Uruguay Round Agreement on Agriculture and

GATT 1994.

Table continued on next page
132

Table 5-5—Continued

Summary of activity on section 301 investigations on which actions were taken during 1997

Docket No. Summary and actions occurring during course of investigation

Petitions filed or investigations self-initiated in 1997—Continued:

Docket No. 301-113 Continued

On October 8, 1997, the USTR initiated an investigation under section 302(a) of the Trade

Act of 1974 with respect to certain acts, policies, and practices of the Government of

Canada with respect to export subsidies on dairy products, and the operation of Canada’s

TRQ for fluid milk. The USTR invited written comments from the public on matters being

investigated and the determinations to be made under Section 304 of the Trade Act of

1974 (62 FR 53851 of 10/16/97). In addition, the USTR requested consultations with

Canada regrading the issues under investigation pursuant to Article 4 of the WTO DSU,

Article XXII of the GATT 1994, and Article 30 of the Agreement on Subsidies and

Countervailing Measures. On November 19, 1997, formal consultations were held

between the United States and Canada.

For further background, see chapter 4 of this report.

Docket No. 301-112 Japan Market Access Barriers to Agricultural Products, self-initiated by USTR (Oct.

1997), WTO dispute panel formed (Nov. 1997)

On October 7, 1997, the USTR self-initiated an investigation with respect to certain acts,

policies, and practices of the Government of Japan concerning Japan’s prohibition on

imports of certain agricultural products. When Japan requires quarantine treatment for an

agricultural product, Japan prohibits the importation of each variety of that product until the

quarantine treatment has been tested for that particular variety. This is true even though

the treatment has proven effective for other varieties of the same product.

The USTR requested consultations with the Government of Japan pursuant to Article 4 of

the WTO DSU, Article 11 of the Agreement on the Application on Sanitary and

Phytosanitary Measures, Article XXIII of GATT 1994, and Article 19 of the Agreement on

Agriculture, to address the matters being investigated. The USTR also invited written

comments from the public on these matters (62 FR 53853 of 10/16/97). A WTO panel

was established on November 18, 1997.

Docket No. 301-111 Certain Subsidies Affecting Access to the European Communities’ Market for

Modified Starch, petition filed by the U.S. Wheat Gluten Industry Council (Jan.

1997), investigation terminated (June 1997)

On January 22, 1997, the U.S. Wheat Gluten Industry Council filed a petition pursuant to

302(a) of the Trade Act alleging that certain subsidy schemes of the European

Communities (EC) constitute acts, policies, and practices that violate, or are inconsistent

with and otherwise deny benefits to the United States under the GATT of 1994 and the

Agreement on Subsidies and Countervailing Measures.

On March 8, 1997, the USTR initiated an investigation with respect to certain acts,

policies, and practices of the EC; more specifically the provision of subsidies that affect

access to the EC modified starch market. The USTR invited written comments from the

public on the matters being investigated and the determinations to be made under section

304 of the Trade Act, and postponed requesting WTO consultations under Section 303 for

a period up to 90 days for the purpose of ensuring an adequate basis for such

consultations (62 FR 12264 of 3/14/97).

Following consultations with the petitioners, on June 6, 1997, the Acting USTR announced

her intention to consult with the EC regarding wheat gluten exports from the EC to the

United States pursuant to a bilateral agreement with the EC on grains

Table continued on next page
133

Table 5-5—Continued

Summary of activity on section 301 investigations on which actions were taken during 1997

Docket No. Summary and actions occurring during course of investigation

Docket No. 301-111 Continued

(signed July 22, 1996). Pending the outcome of these consultations, the USTR will not

pursue consultations under the WTO agreements and terminated, effective June 6, 1997,

the investigation initiated on March 8, 1997, under section 302(a) of the Trade Act of 1974

(62 FR 32398 of 6/13/97).

Other investigations acted upon in 1997:

Docket No. 301-110 Brazilian Practices Regarding Trade and Investment in the Auto Sector, self-initiated

by Acting USTR (Oct. 1996), US requested formal consultations (Jan. 1997)

On October 11, 1996, the Acting USTR self-initiated an investigation under section

302(b)(1) of the Trade Act of 1974, with respect to certain acts, policies, and practices of

the Government of Brazil concerning the grant of tariff-reduction benefits contingent on

satisfying certain export performance and domestic content requirements.

In August 1996, the USTR sought consultations with Brazil regarding its auto regime.

Subsequently, Brazil agreed to enter into intensive talks with the United States to discuss

the removal of the discriminatory impact of the Brazilian practices on U.S. exports.

Pending the successful outcome of these talks, the

USTR decided, pursuant to section 303(b)(1)(A) of the Trade Act to delay for up to 90

days requesting WTO dispute settlement procedures (required under section 303(a) of the

Trade Act) for the purpose of ensuring an adequate basis for such consultations. The

USTR also invited written comments on the matters being investigated (61 FR 54485 of

10/18/96). On January 10, 1997, the United States requested formal consultations

pursuant to Articles 1 and 4 of the WTO, Understanding on Rules and Procedures

Governing the Settlement of Disputes (DSU), Article XXIII:1 of the GATT 1994, Article 8 of

the TRIMS Agreement, and Articles 4.1, 7.1, and 30 of the SCM Agreement. The

consultations are continuing.

Docket No. 301-109 Indonesian Practices Re: Promotion of Motor Vehicle Sector, self-initiated by USTR,

WTO dispute panel formed (July 1997)

On October 8, 1996, the USTR self-initiated an investigation under section 302(b)(1) of the

Trade Act with respect to certain acts, policies, and practices of the Government of

Indonesia concerning the grant of conditional tax and tariff benefits intended to develop a

motor vehicle sector in Indonesia.

The USTR invited public comment on the matters being investigated and requested

consultation with the Government of Indonesia pursuant to Articles 1 and 4 of the DSU,

Article XXII:1 of the GATT 1994, Article 8 of TRIMS Agreement, Articles 7 and 30 of the

SCM Agreement, and Article 64 of the TRIPS Agreement (61 FR 54247 of 10/17/96).

Because subsequent consultations proved unsuccessful, a WTO dispute panel was

formed to address this dispute on July 30, 1997.

Docket No. 301-108 Argentine Specific Duties and Non-Tariff Barriers Affecting Apparel, Textiles,

Footwear, self-initiated by USTR (Oct. 1996), WTO dispute settlement panel rules in

favor of the United States (Nov. 1997)

On October 4, 1996, the USTR self-initiated an investigation under section 302(b)(1) of the

Trade Act with respect to certain acts, policies, and practices of the Government of

Argentina concerning the imposition of (1) specific duties on apparel, textiles, footwear

and other ad valorem; (2) a discriminatory statistical tax and (3) a burdensome labeling

requirement on apparel, textiles, and footwear.

Table continued on next page
134

Table 5-5—Continued

Summary of activity on section 301 investigations on which actions were taken during 1997

Docket No. Summary and actions occurring during course of investigation

Other investigations acted upon in 1997—Continued:

Docket No. 301-108 Continued

The USTR requested public comment and also requested consultations with the

Government of Argentina pursuant to Article 4 of the DSU, Article XXII:1 GATT 1994,

Article 14 of the Agreement on Technical Barriers to Trade, Article 19 of the Agreement on

the Implementation of Article VII of the GATT 1994, and Article 7 of the Agreement on

Textiles and Clothing (61 FR 53777 of 10/15/96). Because these consultations failed to

resolve this dispute, a WTO dispute settlement panel was established on February 25,

1997. The WTO panel ruled in favor of the United States in November 1997. The panel

found that the specific duties on textiles and apparel violated Argentina’s tariff bindings

under GATT Article II, and that the statistical tax violated GATT Article VIII. Argentina has

appealed the panel’s findings. Prior to the establishment of the panel, Argentina revoked

its specific duties on footwear and replaced them with similar duties pursuant to a

domestic safeguard measure. The USTR is currently reviewing the Argentine safeguard

measure and its consistency with Argentina’s WTO obligations.

Docket No. 301-107 Australian Subsidies Affecting Leather, petition filed by the Coalition Against

Australian Leather Subsidies (August 1996), new consultations requested with the

Government of Australia (Nov. 1997)

On August 19, 1996, the Coalition Against Australian Leather Subsidies filed a petition

pursuant to section 302(a) of the Trade Act alleging that certain subsidy programs of the

Government of Australia constitute acts, policies, and practices that violate, or are

inconsistent with and otherwise deny benefits to the United States under GATT 1994 and

the SCM Agreement.

On October 3, 1996, the USTR initiated an investigation pursuant to section 302(a) to

determine whether certain acts, policies, or practices of the Government of Australia

regarding subsidies available to leather under the Textile, Clothing and Footwear Import

Credit Scheme and other subsidies to leather granted or maintained in Australia, which

are prohibited under Article 3 of the SCM Agreement, are actionable under section 301.

USTR sought public comment on this matter and requested consultations with the

Government of Australia pursuant to Articles 1 and 4 of the DSU, Article 4.1 of the SCM

Agreement, and Article XXIII:1 of GATT 1994 as incorporated in Article 30 of the SCM

Agreement (61 FR 55063 of 10/23/96). Consultations were held on October 31, 1996, and

a settlement of this dispute was reached on November 25, 1996. Due to a new,

replacement subsidies package put in place by the Government of Australia, new

consultations were requested on November 10, 1997.

Docket No. 301-106 India’s Practices Regarding Patent Protection for Pharmaceuticals and Agricultural

Chemicals, self-initiated by USTR (July 1996), WTO appellate body affirms finding of

dispute panel (Dec. 1997)

On July 2, 1996, USTR self-initiated an investigation under section 302(b)(1) of the Trade

Act with respect to certain acts, policies, and practices of the Government of India that

may result in the denial of patents and exclusive marketing rights to U.S. individuals and

firms involved in the development of innovative pharmaceutical and agricultural chemical

products.

The USTR invited public comment on the matters being investigated and requested

consultation with the Government of India pursuant to Article XXII of GATT 1994, and

Article 4 of the WTO DSU and Article 64 of the TRIPS Agreement (61 FR 35857 of

7/8/96). Subsequently, a WTO dispute settlement panel was formed to address this

dispute and,

Table continued on next page
135

Table 5-5—Continued

Summary of activity on section 301 investigations on which actions were taken during 1997

Docket No. Summary and actions occurring during course of investigation

Other investigations acted upon in 1997—Continued:

Docket No. 301-106 Continued

in a report circulated September 5, 1997, found in favor of the United States. The panel

found that India must establish a TRIPS-consistent mailbox system and provide exclusive

marketing rights, and agreed with the U.S. arguments that India had not yet done so.

India appealed this decision to the WTO’s Appellate Body on October 15, 1997. On

December 19, 1997, the WTO Appellate Body affirmed the panel’s findings on these

points.

Docket No. 301-105 Turkey’s Practices Regarding the Imposition of a Discriminatory Tax on Box Office

Revenues, self-initiated by USTR (June 1996), investigation terminated (Nov. 1997)

after satisfactory resolution of the issues

On June 12, 1996, USTR self-initiated an investigation under section 302(b)(1) of the

Trade Act with respect to certain acts, policies, and practices of the Government of Turkey

that may result in the discriminatory treatment of U.S. films in Turkey.

The USTR invited public comment on the matters being investigated and requested

consultations with the Government of Turkey pursuant to Article XXII of GATT 1994, and

Article 4 of the WTO DSU (61 FR 32883 of 6/25/96). Although a WTO dispute settlement

panel was subsequently formed to address this dispute, the Panel did not proceed

because Turkey agreed to eliminate its discriminatory practice. This settlement was

notified to the WTO Dispute Settlement Body (DSB) on July 17, 1997. Having reached a

satisfactory resolution of the issues under investigation, the USTR terminated this section

302 investigation on November 21, 1997, and will monitor implementation of the

agreement under section 306 of the Trade Act.

Docket No. 301-104 Pakistan’s Practices Regarding Patent Protection for Pharmaceuticals and

Agricultural Chemicals, self-initiated by USTR (April 1996), investigation terminated

(June 1997) after satisfactory resolution of the issues

 On April 30, 1996, USTR self-initiated an investigation under section 302(b)(1) of the

Trade Act with respect to certain acts, policies, and practices of the Government of

Pakistan that may result in the denial of patents and exclusive marketing rights to U.S.

individuals and firms involved in the development of innovative pharmaceutical and

agricultural chemicals products. The USTR invited public comment on the matters being

investigated and requested consultations with the Government of Pakistan pursuant to

Article XXII of GATT 1994, and Article 4 of the WTO DSU ( (61 FR 19971 of 5/3/97).

Consultations were held on May 30, 1996. On July 4, 1996, the U.S. requested

establishment of a Panel. After consultations between the United States and Pakistan,

Pakistan issued Ordinance No. XXVI of 1997. On February 28, 1997, the United States

and Pakistan jointly notified the WTO DSB of the settlement of this matter in light of

Pakistan’s planned implementation of Ordinance No. XXVI. Having reached a satisfactory

resolution of the issues under investigation, the USTR terminated this section 302

investigation and will monitor implementation of the agreement under section 306 of the

Trade Act. This investigation was terminated June 8, 1997 (62 FR 33695 of 6/20/97).

Docket No. 301-102 Canadian Practices Affecting Periodicals, self-initiated by USTR (March 1996),

investigation terminated (Sept. 1997) following announcement by Canada of its

intention to comply with the findings of the WTO dispute settlement panel and WTO

Appellate Body

On March 11, 1996, the USTR self-initiated an investigation under section 302(b)(1) of the

Trade Act with respect to certain acts, policies, and practices of the Government of

Table continued on next page
136

Table 5-5—Continued

Summary of activity on section 301 investigations on which actions were taken during 1997

Docket No. Summary and actions occurring during course of investigation

Other investigations acted upon in 1997—Continued:

Docket No. 301-102 Continued

Canada that restrict or prohibit imports of certain periodicals into Canada and apply

discriminatory treatment to certain imported periodicals.

The USTR requested public comment and requested consultations with the Government

of Canada pursuant to Article XXII of GATT 1994, and Article 4 of the WTO DSU (61 FR

11067 of 3/18/96). A WTO dispute settlement panel was subsequently formed and, in a

report circulated in March 1997, found in favor of the United States. The findings of this

report were upheld by the WTO’s appellate body on June 30, 1997. Because Canada

announced its intention to comply with the panel and Appellate Body reports, this

investigation was terminated on September 11, 1997 (62 FR 50651 of 9/26/97). For

further background on the dispute, see chapter 4 of this report.

Docket No. 301-100 European Communities’ Banana Import Regime, self-initiated by USTR, findings of

WTO settlement dispute panel adopted by the WTO Dispute Settlement Body 

(Sept. 1997)

Pursuant to section 302(b)(1) of the Trade Act, the USTR self-initiated a new investigation

concerning the EC’s acts, policies, and practices relating to the importation, sale, and

distribution of bananas. (See 301-94).

The USTR invited public comment on the acts, policies, and practices of the EC and

pursuant to section 303(a) of the Trade Act, requested consultations with the EC pursuant

to the WTO’s DSU (60 FR 52027 of 10/4/95).

On May 8, 1996, the DSB established a panel in response to the April 11, 1996, panel

request filed jointly and severally by Ecuador, Guatemala, Honduras, Mexico, and the

United States. A WTO settlement dispute panel was subsequently formed to address this

dispute, and, in a report circulated in May 1997, found in favor of the United States. The

findings in the report were affirmed by the WTO Appellate Body on September 9, 1997,

and adopted by the WTO DSB on September 25, 1997. For futher background on the

dispute, see chapter 4 of this report.

Source: Compiled by the staff of the U.S. International Trade Commission from databases maintained by USTR and

supplemented by USTR, 1998 Trade Policy Agenda and 1997 Annual Report of the President of the United States on

the Trade Agreements Program, March 1998.

Special 301

Under “Special 301” provisions,13 USTR must

identify those countries that deny adequate and effective protection for intellectual property rights (IPR) or

deny fair and equitable market access for persons that

rely on intellectual property protection. Countries that

have the most onerous or egregious acts, policies, or

practices and whose acts, policies, or practices have the

greatest adverse impact (actual or potential) on the

13 Special 301 provisions are pursuant to Section 182 of

the Trade Act of 1974, as amended by the Omnibus Trade

and Competitiveness Act of 1988 and the Uruguay Round

Agreement Act of 1994.

relevant U.S. products must be designated as “priority

foreign countries.” Priority foreign countries are potentially subject to an investigation under the Section

301 provisions of the Trade Act.

USTR has created a “Priority Watch List” and a

“Watch List” under Special 301 provisions. Placement

of a trading partner on either of these lists indicates

that particular problems exist in that country with respect to IPR protection or enforcement or market access for persons relying on intellectual property. Countries placed on the Priority Watch List are the focus of

increased bilateral attention concerning the problem

areas.
137

On April 30, 1997, USTR identified 46 trading

partners that deny adequate and effective protection of

intellectual property or deny fair and equitable market

access to U.S. persons that rely upon intellectual property protection. Of the 46, 10 were placed on the

Priority Watch List and 36 on the Watch List. USTR

also noted growing concern about an additional 12

countries not named to either list. Also announced was

the monitoring of China’s compliance with the 1996

bilateral intellectual property agreement under section

306 of the Trade Act. Finally, USTR used the Special

301 announcement to report its intention to bring WTO

dispute settlement cases, three of which were initiated

in 1997.14

In September, USTR reviewed the protection of intellectual property in Italy, Thailand, Panama, Luxembourg, and Ecuador. Panama was removed from the

Watch List, but USTR specified a number of areas it

would continue to monitor in anticipation of the 1998

Special 301 decisions.15 In December, Paraguay,

Turkey, Bulgaria, Brazil, and Hong Kong were reviewed.16 Paraguay was identified as a priority foreign

country, “because of alarming levels of piracy and

counterfeiting, and the Government’s continued failure

to enact adequate and effective intellectual property

legislation.”17 Bulgaria was elevated from the Watch

List to the Priority Watch List because of extensive

piracy of sound recordings and software.

Antidumping Investigations

The present antidumping law is contained in Title

VII of the Tariff Act of 1930.18 The antidumping law

provides relief in the form of special additional duties

that are intended to offset margins of dumping. Antidumping duties are imposed when (1) Commerce (the

administering authority) has determined that imports

are being, or are likely to be, sold at less than fair value

14 USTR, “USTR Announces Results of Special 301

Annual Review,” press release 97-37, Apr. 30, 1997.

15 USTR, “USTR Announces Results of Special 301

“Out-of-Cycle” Reviews,” press release 97-93, Oct. 27,

1997.

16 USTR, “USTR Barshefsky Announces Results of

Special 301 “Out-of-Cycle” Reviews,” press release 98-03,

Jan. 15, 1998.

17 USTR, President’s 1997 Report on the Trade Agreements Program, p. 245.

18 19 U.S.C. 1673 et seq.

(LTFV) in the United States, and (2) the Commission

has determined that a U.S. industry is materially injured or threatened with material injury or that the establishment of an industry in the United States is materially retarded by reason of imports sold at LTFV.

Most investigations are conducted on the basis of a

petition filed with Commerce and the Commission by

or on behalf of a U.S. industry.

In general, imports are considered to be sold at

LTFV when the United States price (i.e., the purchase

price or the exporter’s sales price, as adjusted) is less

than the foreign market value, which is usually the

home-market price, or, in certain cases, the price in a

third country, or a “constructed” value, calculated as

set out by statute.19 The antidumping duty is designed

to equal the difference between the U.S. price and the

foreign-market value calulated on an ex-factory basis.

The duty specified in an antidumping duty order reflects the dumping margin found by Commerce during

its period of investigation. This rate of duty will be

applied to subsequent imports if no request for annual

reviews is received by Commerce. If a request is received, Commerce will calculate the antidumping duties for that year for each entry.

Commerce and the Commission each conduct preliminary and final phase antidumping investigations in

making their separate determinations.20 In 1997, the

Commission completed 18 preliminary and 16 final antidumping injury investigations.21 Antidumping duty

orders were imposed as a result of affirmative Commission and Commerce determinations in 15 of the 16

final investigations on products imported from eight

different countries. The antidumping duty orders put

into effect in 1997 are shown in the following tabulation:

19 19 U.S.C. 1677b; 19 CFR part 353, subpart D.

20 Upon the filing of a petition, the Commission has 45

days to make a preliminary determination of whether there is

a reasonable indication of material injury or threat of material injury to an industry or of a material retardation of the

establishment of an industry. If this determination is affirmative, Commerce continues its investigation and makes

preliminary and final determinations concerning whether the

imported article is being, or is likely to be, sold at LTFV. If

Commerce reaches a final affirmative dumping determination, the Commission has 45 days thereafter to make its final

injury determination. If the Commission’s preliminary determination is negative, by contrast, both the Commission and

Commerce terminate further investigation.

21 The figures set forth in this section do not include

court-remanded investigations on which new votes were

taken or investigations terminated before a determination

was reached.
138

Country Item

China Collated roofing nails

Crawfish tail meat

Cut-to-length carbon steel plate

Persulfates

Brake motors

Melamine institutional dinnerware

Indonesia Melamine institutional dinnerware

Japan Vector supercomputers

Gas turbo-compressor systems

Russia Cut-to-length carbon steel plate

South Africa Cut-to-length carbon steel plate

Taiwan Collated roofing nails

Melamine institutional dinnerware

Turkey Steel concrete reinforcing bar

Ukraine Cut-to-length carbon steel plate

Details of all antidumping actions and orders, including suspension agreements,22 in effect in 1997,

are presented in tables A-22 and A-23. Table 5-6 summarizes the number of antidumping investigations during 1995-97.23

Countervailing Duty

Investigations

The United States countervailing duty law is also

set forth in Title VII of the Tariff Act of 1930. It provides for the levying of special additional duties to offset foreign subsidies on products imported into the

22 An antidumping investigation may be suspended

through an agreement before a final determination by the

U.S. Department of Commerce. An investigation may be

suspended if exporters accounting for substantially all of the

imports of the merchandise under investigation agree either

to eliminate the dumping or to cease exports of the merchandise to the United States within six months. In extraordinary

circumstances, an investigation may be suspended if exporters agree to revise prices to completely eliminate the injurious effect of the imports. A suspended investigation is reinstituted should LTFV sales recur. See 19 U.S.C. 1673c.

23 When a petition alleges dumping (or subsidies) with

respect to more than one like product and/or by more than

one country, separate investigations generally are instituted

for imports of each product from each country and each such

investigation may be given a separate number. For this reason, the numbers of investigations instituted and determinations made may exceed the number of petitions filed. Moreover, an investigation based on a petition filed in one calendar year may not be completed until the next year. Thus, the

number of petitions filed may not correspond closely to the

number of determinations made. Additionally, the numbers

set forth in this tabulation do not include determinations

made following court-ordered remands.

United States.24 In general, procedures for such investigations are similar to those under the antidumping

law. Petitions are filed with Commerce (the administering authority) and with the Commission. Before a

countervailing duty order can be issued, Commerce

must find a countervailable subsidy, and the Commission must make an affirmative determination of material injury, threat of material injury, or material retardation by reason of the subsidized imports.

No new countervailing duty orders were imposed

in 1997 as a result of investigations involving both

Commerce and the Commission. In 1997, the Commission completed six preliminary and four final injury

investigations.25 Details of countervailing duty actions

and outstanding orders, including suspension agreements26 in effect in 1997, are presented in tables A-24

and A-25. Table 5-7 summarizes the number of countervailing duty investigations during 1995-97.27

Reviews of Outstanding

Antidumping and

Countervailing Duty Orders

Section 751 of the Tariff Act of 1930 (19 U.S.C.

1675) requires Commerce, if requested, to conduct

annual reviews of outstanding antidumping and countervailing duty orders to determine the amount of any

24 A subsidy is defined as a bounty or grant bestowed

directly or indirectly by any country, dependency, colony,

province, or other political subdivision on the manufacture,

production, or export of products. 19 U.S.C. 1677(5),and

1677-1(a).

25 The figures set forth in this section do not include

court-remanded cases on which new votes were taken or

investigations terminated before a determination was

reached.

26 A countervailing duty investigation may be suspended

through an agreement before a final determination by Commerce if—(1) the subsidizing country, or exporters accounting for substantially all of the imports of the merchandise

under investigation, agree to eliminate the subsidy, to completely offset the net subsidy, or to cease exports of the merchandise to the United States within six months; or (2) extraordinary circumstances are present and the government or

exporters described above agree to completely eliminate the

injurious effect of the imports of the merchandise under investigation. A suspended investigation is reinstituted if subsidization recurs. 19 U.S.C. 1671c.

27 Because a petition will sometimes name more than

one product and/or country, and because each product and

country named is designated as a separate investigation

when proceedings are formally instituted, the number of

investigations instituted and determinations made generally

exceeds the number of petitions filed. 
139

Table 5-6

Results of antidumping duty investigations, 1995-97

Antidumping duty investigations 1995 1996 1997

Petitions filed 14 20 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Preliminary Commission determinations:

Negative 1 0 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Affirmative (includes partial affirmatives) 13 17 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . Terminated1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 01

Final Commerce determinations:

Negative 2 0 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Affirmative 40 12 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Terminated 0 0 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Suspended 1 1 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Final Commission determinations:

Negative 16 3 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Affirmative (includes partial affirmatives) 24 8 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Terminated 3 1 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1 These figures include petitions withdrawn voluntarily by petitioners.

Source: Compiled by staff of the U.S. International Trade Commission.

Table 5-7

Results of countervailing duty investigations, 1995-97

Countervailing duty investigations 1995 1996 1997

Petitions filed 2 1 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preliminary Commission determinations:

Negative 0 0 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Affirmative (includes partial affirmatives) 2 1 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Final Commerce determinations:

Negative 0 0 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Affirmative 5 2 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Suspended 0 0 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Final Commission determinations

Negative 2 0 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Affirmative (includes partial affirmatives) 3 2 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . Terminated 0 0 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 Compiled by staff of the U.S. International Trade Commission.

net subsidy or dumping margin and to determine compliance with suspension agreements. Section 751 also

authorizes Commerce and the Commission, as appropriate, to review certain outstanding determinations

and agreements after receiving information or a petition that shows changed circumstances. In these circumstances, the party seeking revocation or modification of an antidumping or countervailing duty order or

suspension agreement has the burden of persuading

Commerce and the Commission that circumstances

have changed sufficiently to warrant review and revocation. Based on either of the reviews above, Commerce may revoke a countervailing duty or antidumping order in whole or in part or terminate or resume a

suspended investigation. The Commission did not

institute any changed circumstances investigations under section 751 in 1997.

The Uruguay Round Agreements Act amended

section 751 of the Tariff Act of 1930 to require both

Commerce and the Commission to conduct “sunset”

reviews of outstanding orders five years after their

publication to determine whether revocation of an order or termination of a suspended investigation would

be likely to lead to continuation or recurrence of dumping or a countervailable subsidy and of material injury.28 Special rules apply to the conduct of sunset reviews of “transition” orders (orders in effect on

28 19 U.S.C. 1675(c).
140

January 1, 1995, the date on which the WTO Agreement entered into force with respect to the United

States). Commerce and the Commission are to begin

conducting reviews of such orders in July 1998, but no

transition order may be revoked as a result of such a

review before January 1, 2000.29

Section 337 Investigations

Section 337 of the Tariff Act of 1930, as amended

(19 U.S.C. 1337), authorizes the Commission, on the

basis of a complaint or on its own initiative, to conduct

investigations with respect to certain practices in import trade. Section 337 declares unlawful the importation into the United States, the sale for importation, or

the sale within the United States after importation of

articles that infringe a valid and enforceable U.S. patent, registered trademark, registered copyright, or registered mask work, for which a domestic industry exists or is in the process of being established.30

If the Commission determines that a violation exists, it can issue an order excluding the subject imports

from entry into the United States, or can order the violating parties to cease and desist from engaging in the

unlawful practices.31 The President may disapprove a

Commission order within 60 days of its issuance for

“policy reasons.”

In 1997, as in previous years, most complaints filed

with the Commission under section 337 alleged

29 19 U.S.C. 1675(c)(6).

30 Also unlawful under section 337 are other unfair

methods of competition and unfair acts in the importation of

articles into the United States, or in the sale of imported articles, the threat or effect of which is to destroy or substantially injure a domestic industry, to prevent the establishment

of an industry, or to restrain or monopolize trade and commerce in the United States. Examples of other unfair acts

are misappropriation of trade secrets, common law trademark infringement, misappropriation of trade dress, false

advertising, and false designation of origin. Unfair practices

that involve the importation of dumped or subsidized merchandise must be pursued under antidumping or countervailing duty provisions and not under section 337.

31 Section 337 proceedings at the Commission are conducted before an administrative law judge in accordance

with the Administrative Procedure Act, 5 U.S.C. 551 et seq.

The administrative law judge conducts an evidentiary hearing and makes an initial determination, which is transmitted

to the Commission. The Commission may adopt the determination by deciding not to review it, or it may choose to

review it. If the Commission finds a violation, it must determine the appropriate remedy, the amount of any bond to be

collected while its determination is under review by the President, and whether public interest considerations preclude

the issuance of a remedy.

infringement of a U.S. patent by imported merchandise. The Commission completed a total of 15 investigations under section 337 in 1997, including a formal

enforcement proceeding and two remanded investigations. As in recent years, the section 337 caseload in

1997 was highlighted by investigations involving complex technologies, particularly in the computer and

telecommunications fields. Significant among these

were investigations involving digital satellite television

systems, logic emulation systems used to design computer chips, screen printers used in circuit-board

manufacturing, electronic ”smart” cards, and CD-ROM

controllers, as well as various types of integrated-circuit devices and processes for semiconductor fabrication. In addition, several section 337 investigations involved other sophisticated technologies, including

diagnostic kits for detecting HIV virus levels and mass

spectrometers used to analyze the composition of substances. Other section 337 investigations active during

1997 concerned agricultural tractors, heavy-duty tires

for long-haul transport vehicles, toothbrushes, pocket

knives, and ornamental lamps. Three investigations

concerned allegations of trademark infringement and

one investigation involved allegations of copyright infringement.

During 1997, the Commission completed a formal

enforcement proceeding for alleged violations of a consent order issued by the Commission in a section 337

investigation involving rare earth magnets. The Commission also began two sanctions proceedings relating

to previously concluded investigations. Two investigations were remanded to the Commission by the United

States Court of Appeals for the Federal Circuit.

Exclusion orders were issued in six investigations.

Several investigations were terminated by the Commission without determining whether section 337 had been

violated. Generally, these terminations were based on

a settlement agreement or consent order, although two

investigations were terminated based on the withdrawal of the complaint. At the close of 1997, there were

13 section 337 investigations pending at the Commission, including two ancillary sanctions proceedings.

Commission activities involving section 337 actions in

1997 are presented in table A-26.

As of December 31, 1997, a total of 50 outstanding exclusion orders based on violations of section 337

were in effect; 29 of these orders involved unexpired

patents. Table A-27 lists the investigations in which

these exclusion orders were issued.
141

Other Import

Administration Laws

and Programs

Tariff Preference Programs

Generalized System of Preferences

The U.S. Generalized System of Preferences (GSP)

program authorizes the President to grant duty-free access to the U.S. market for certain products that are

imported from designated developing countries and

territories. It has been enhanced to allow duty-free

treatment for certain products when imported only

from countries designated as least-developed beneficiary developing countries. The program is authorized by

Title V of the Trade Act of 1974, as amended (19

U.S.C. 2461 et seq.). The GSP program expired on

May 31, 1997, and was extended retroactively through

June 30, 1998, by legislation (Public Law 105-34)

signed by the President on August 5, 1997. By offering unilateral tariff preferences, the GSP program reflects the U.S. commitment to three broad goals: (1)

to promote economic development in developing and

transitioning economies through increased trade, rather

than foreign aid; (2) to reinforce U.S. trade policy objectives by encouraging beneficiaries to open their

markets, to comply more fully with international trading rules, and to assume greater responsibility for the

international trading system; and (3) to help maintain

U.S. international competitiveness by lowering costs

for U.S. business as well as lowering prices for American consumers.

Countries are designated as “beneficiary developing countries” under the program by the President.

The President may not designate certain developed

countries and also may not designate countries that, inter alia, afford preferential treatment to the products of

a developed country, other than the United States,

which has, or is likely to have, a significant adverse

effect on United States commerce or do not afford adequate protection to intellectual property rights or afford

internationally recognized worker rights to their workers.32 The President also designates the articles that are

eligible for duty-free treatment, but may not designate

articles that he determines to be “import sensitive” in

the context of the GSP. Certain articles (for example,

footwear, textiles, and apparel) are designated by

32 19 U.S.C. 2462(b).

statute as “import sensitive” and thus not eligible for

duty-free treatment under the GSP program.33 The

statute also provides for graduation of countries from

the program when they become “high income” countries, and for removal of eligibility of articles, or articles from certain countries, under certain conditions.

Each year, the Trade Policy Staff Committee

(TPSC) conducts a review process in which products

can be added to or removed from the GSP program, or

in which a beneficiary’s compliance with the eligibility

requirements can be reviewed. In July 1995, the TPSC

in a Federal Register notice (60 F.R. 38856) began the

annual GSP review for 1995, but suspended it when

the program expired. In August 1996, the TPSC restarted the 1995 Annual GSP Review, and the United

States Trade Representative (USTR) requested the

Commission to provide advice concerning possible

modifications to the GSP for a modified list of the articles announced in the July 1995 Federal Register notice and announced the decision to not solicit petitions

or initiate a 1996 Annual GSP Review. Further, in

1996, USTR initiated a review to grant additional

benefits to least-developed beneficiary developing

countries (LDBDC) and requested the Commission’s

advice on the possible GSP designation of certain articles, in 1,895 tariff subheadings of the Harmonized

Tariff Schedule of the United States (HTS), that are

products only of countries designated as LDBDC.

And, in December 1996, the TPSC announced the initiation of a 1997 Out-of-Cycle Country Eligibility Review inviting petitions concerning country practices

under the GSP program.

In April 1997, the President proclaimed a suspension of the duty-free treatment accorded under the GSP

to certain eligible articles from Argentina, implementing a decision to withdraw benefits due to Argentina’s

failure to bring its IPR provisions into compliance with

long-standing commitments.

In May 1997, the President proclaimed certain

modifications to the GSP implementing decisions

made in regard to the 1995 Annual GSP Review and

the possible GSP designation of articles that are products only of countries designated as LDBDC. The

modifications provided for: (1) the designation of

1,783 HTS subheadings for duty-free treatment under

the GSP when produced only in the LDBDC, (2) addition of Cambodia as both a beneficiary developing

country and a LDBDC for purposes of GSP, (3) the

granting of de minimis waivers for certain articles and

33 19 U.S.C. 2463.
142

restoration to preferential treatment of certain eligible

articles from certain beneficiary countries, (4) the exclusion of certain articles from certain beneficiary

countries from eligibility for preferential treatment under GSP due to exceeding the competitive need limits

for calendar year 1996, and (5) the completion of the

1995 Annual GSP Review which resulted in the addition of three HTS subheadings covering articles designated as eligible for duty-free treatment under the GSP

and granting waivers of the competitive need limits under 22 HTS subheadings for certain countries.

In May 1997, the TPSC announced the initiation of

an Out-of-Cycle Country Eligibility Review for two

new GSP worker rights reviews, dealing with Belarus

and Swaziland, and the termination of a worker rights

review of Guatemala. Further, the TPSC announced,

in response to a petition filed by the Meat Industry

Trade Policy Council alleging that the Philippines was

not respecting commitments it made during the Uruguay Round of multilateral trade negotiations, that it

would conduct a review to determine whether the Philippines continues to qualify for benefits under GSP. In

August 1997, the TPSC in a Federal Register notice

(62 F.R. 43408) listed the petitions that were accepted

for the 1997 Annual GSP Review and the completion

of an expedited review of the GSP eligibility of melamine dinnerware from Indonesia with the decision that

denial of continued GSP eligibility was not warranted.

In September 1997, USTR requested the Commission

to provide advice concerning possible modifications to

the GSP for the list of the articles announced in the

August 1997 Federal Register notice. Further, in September 1997, the TPSC added an additional product to

the 1997 Annual GSP Review and USTR requested

that the Commission add the product to the prior list of

articles and to provide its advice on the article along

with the other articles.

There were $15.5 billion in duty-free imports entered under the GSP program in 1997,34 accounting for

over 13 percent of total U.S. imports from GSP beneficiaries and 1.8 percent of total U.S. imports (table 5-8).

Thailand was the leading GSP beneficiary in 1997, followed by Brazil, Indonesia, the Philippines, and India

(table 5-9). Table A-28 shows the top 20 GSP products

34 As discussed above, the U.S. GSP program expired

on May 31, 1997, and was extended retroactively through

June 30, 1998, by legislation signed by the President on August 5, 1997. Because of the lapse of GSP benefits, articles

otherwise eligible for GSP duty-free entry were subject to

ordinary MFN duties during the period of GSP lapse unless

another valid preferential tariff benefit, such as that provided

or product categories in 1997, and table A-29 shows

the overall sectoral distribution of GSP benefits.

Caribbean Basin Economic

Recovery Act

Eligible imports from 24 Caribbean Basin countries entered the United States free of duty or at reduced duties under the Caribbean Basin Economic Recovery Act (CBERA) during 1997.35 CBERA has been

operative since January 1, 1984, and, as amended, the

act currently has no statutory expiration date.36

CBERA is the trade-related component of the Caribbean Basin Initiative (CBI).37 President Reagan

launched CBI in 1982 to promote export-led economic

growth and economic diversification in the countries in

the Caribbean Basin.38

A wide range of Caribbean products is eligible for

duty-free entry under CBERA.39 Excluded by statute

from duty-free entry, however, are canned tuna, petroleum and petroleum derivatives, certain footwear, some

watches and watch parts, sugar from any “Communist”

country, and most textiles and apparel. Certain agricultural products (including sugar, dairy products, cotton,

peanuts, and beef) may receive duty-free entry, subject

to U.S. quotas and/or health requirements. Other restrictions apply to ethyl alcohol produced from nonCaribbean feedstock. Handbags, luggage, flat

34—Continued

by the Caribbean Basin Economic Recovery Act or the Andean Trade Preference Act (discussed below), was claimed

and accorded. Duties paid on articles otherwise eligible for

GSP duty-free entry during the period of GSP lapse were

eligible to be refunded once the program again became operative. Procedures for such refunds were announced in U.S.

Customs Service, “Renewal of the Generalized System of

Preferences Program,” 62 F.R. 46549.

35 The 24 countries designated for CBERA benefits are

listed in table A-31.

36 Public Law 98-67, title II, 97 Stat. 384, 19 U.S.C.

2701 et seq. Relatively minor amendments were made to

CBERA by Public Laws 98-573, 99-514, 99-570, and

100-418. CBERA was significantly expanded by the Caribbean Basin Economic Recovery Expansion Act of 1990,

Public Law 101-382, title II, 104 Stat. 629, 19 U.S.C. 2101

note.

37 For a more detailed description of the CBERA, including country and product eligibility, see USITC, Caribbean Basin Economic Recovery Act: Impact on U.S. Industries and Consumers, Eleventh Report, 1996, publication

2994, Sept. 1996.

38 President, “Address Before the Permanent Council of

the Organization of American States,” Weekly Compilation

of Presidential Documents, Mar. 1, 1982, pp. 217-223.

39 Section 213(a) of CBERA (19 U.S.C. 2703(a)) establishes criteria, or rules of origin, to determine which articles

are eligible for duty-free treatment under the act.
143

Table 5-8

U.S. imports for consumption1 from GSP beneficiaries and the world, 1997

(Million dollars)

All GSP

Item beneficiaries World

Total 117,334 859,110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

GSP eligible products 26,592 321,275 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GSP-LDBC eligible products 1,486 194,726 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Duty-free under GSP 15,546 15,546 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

GSP program exclusion 5,899 5,899 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . All other 6,634 494,557 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Noneligible product imports 89,255 343,108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1 Customs-value basis.

2 Excludes imports into the U.S. Virgin Islands.

3 Includes imports from all beneficiary countries from the world that are eligible for duty-free entry under GSP. For

a variety of reasons, all imports from beneficiary countries under HTS provisions that appear to be eligible for GSP

treatment do not always and necessarily receive duty-free entry under the GSP. Such eligible imports may not actually receive duty-free entry under GSP for at least four types of reasons: (1) the importer fails to claim GSP benefits

affirmatively; (2) the goods are from a beneficiary country that lost GSP benefits on that product for exceeding the

so-called competitive need limits; (3) the goods are from a beneficiary country that has lost GSP benefits on that

product because of a petition to remove that country from GSP for that product; and (4) the goods fail to meet the rule

of origin or direct shipment requirements of the GSP statute.

4 These data show total imports from all GSP beneficiary countries that actually received duty-free entry under

the GSP.

Note.—Calculations based on unrounded data.

Source: Compiled from official statistics of the U.S. Department of Commerce.

Table 5-9

U.S. imports for consumption under the GSP from leading beneficiaries,1 and total, 1997

(Million dollars)

Imports of GSP articles

Total

Rank Beneficiary imports GSP-eligible GSP duty-free2

1 Thailand 12,540 4,818 2,534 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Brazil 9,505 3,629 2,206 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

3 Indonesia 9,054 3,007 1,942 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Philippines 10,418 2,379 1,646 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 India 7,284 1,817 1,255 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Angola 2,877 1,341 668 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

7 Venezuela 12,173 612 591 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Russia 4,290 635 473 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 South Africa 2,495 515 450 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Argentina 2,195 692 410 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Top 10 72,832 19,446 12,175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total 117,334 28,079 15,546 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1 These import data show total imports from the top 10 beneficiary countries that fall in HTS provisions that are

eligible for duty-free entry under the GSP. For a variety of reasons, all imports from beneficiary countries under HTS

provisions that appear eligible for GSP do not always and necessarily receive duty-free entry under the GSP. See

footnote 2 in appendix table A-29.

2 These import data show the total imports from the top 10 GSP beneficiary countries that actually received dutyfree entry under the GSP program.

Note.—Calculations based on unrounded data.

Source: Compiled from official statistics of the U.S. Department of Commerce.
144

goods (such as wallets, change purses, and eyeglass

cases), work gloves, and leather wearing apparel are

not eligible for CBERA duty-free entry; however,

CBERA duty levels on qualifying articles were reduced by a total of 20 percent, but not more than 2.5

percent ad valorem, beginning January 1, 1992, in five

equal annual installments.

President Clinton has made improved hemispheric

relations a priority in his second term. He traveled to

Central America and the Caribbean (as well as Mexico) to meet with regional leaders during May 1997. In

official statements released during those meetings—

known as the Declaration of San Jose40 and the Barbados Declaration of Principles and Plan of Action41—President Clinton pledged to introduce legislation that would extend tariff preferences essentially

equivalent to those Mexico receives under NAFTA to

all products that are currently excluded under

CBERA.42 In doing so, he was responding to what has

been termed a “clarion call” by Caribbean Basin leaders on the urgency of upgrading CBERA benefits to

NAFTA-equivalent levels.43 However, the Clinton Administration’s parity bill, introduced in June 1997, has

40 Issued at the summit of leaders from Central America,

the Dominican Republic, and the United States in San Jose,

Costa Rica, on May 8, 1997. It included pledges to work

jointly to intensify economic relationships among the participating nations--for example, by working towards reciprocal

trade agreements and treaties on investment and intellectual

property rights. “Open Skies” Agreements between the

United States and Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua were also signed during the meeting.

U.S. Information Agency, Foreign Press Center, July 9,

1997.

41 Issued at the May 10, 1997, conclusion of the first

summit between a U.S. president and Caribbean heads of

state.

42 Among other things, the Bridgetown Declaration also

commits the United States to provide technical assistance

toward implementation of Uruguay Round commitments and

participation in the FTAA process; to create a mechanism for

rapid consultation on trade-related issues; to establish plans

for promoting bilateral trade, particularly in agriculture and

services sectors; and to work with all concerned parties to

achieve mutually satisfactory marketing arrangements for

Caribbean bananas while ensuring establishment of a WTOconsistent European Union banana regime. The declarations, which also address matters such as fostering democracy, strengthening law enforcement, and improving environmental protection, create several follow-up mechanisms.

Notably, there will be annual meetings among foreign ministers of the United States and the two regions as well as meetings among trade ministers. Both were billed by participants

as the launch of a new U.S. partnership with the regions.

Caribbean/United States Summit Plan of Action, Bridgetown, Barbados, May 10, 1997, at sections 1.1 to 1.11. The

Plan of Action is summarized in “Partnership for A Prosperous and Secure Caribbean,” Fact Sheet issued by the White

House, May 10, 1997. Both documents are available on the

U.S. Information Agency’s web site http://www.usia.gov.

43 NewsEDGE/IPS (Port of Spain), “Caribbean Politics:

Time for Action in Caribbean,” May 12, 1997.

not passed Congress, and other parity proposals originating in the House (HR 2644) and Senate (S 1278)

have yet to be passed. (The House bill was defeated on

November 7, 1997.)

In May 1997, the Trade Policy Staff Committee

(TPSC) determined that the Government of Honduras

had failed to provide adequate and effective means under its laws for foreign nationals to secure, exercise,

and enforce exclusive rights in intellectual property.

This determination was due to the failure of the Honduran government to take action against continued and

blatant copyright piracy. The TPSC recommended a

partial suspension of the duty-free treatment accorded

Honduras under GSP and the CBERA programs. On

October 31, 1997, the USTR initiated an investigation

with regard to acts, policies, and practices of the Government of Honduras with respect to the protection of

intellectual property rights and proposed to determine

that the acts, policies, and practices are unreasonable

and that the appropriate response should be a partial

suspension of tariff preferences.44

Total U.S. imports from CBERA beneficiary countries in 1997 were $16.6 billion. Imports under

CBERA preferences were valued at 19.4 percent of the

total (table 5-10). The leading items afforded duty-free

entry under CBERA in 1997 were cigars, sugar, leather

footwear uppers, and precious-metal jewelry (table

A-30). In 1997, three countries—the Dominican Republic, Costa Rica, and Guatemala—accounted for

more than two-thirds of all U.S. imports under the

CBERA preference program (table A-31).

Andean Trade Preference Act

Eligible imports from Bolivia, Colombia, Ecuador,

and Peru entered the United States free of duty under

the Andean Trade Preference Act (ATPA) during

1997.45 ATPA has been operative since December 4,

1991, and is scheduled to expire on December 4,

2001.46 ATPA is the trade-related component of the

Andean Trade Initiative. President Bush launched the

initiative in 1990 to combat the production of illegal

narcotics by helping beneficiaries promote export-oriented industries.47

44 USTR, 1998 Trade Policy Agenda and 1997 Annual

Report of the President of the United States on the Trade

Agreements Program, March 1998, p. 239. 45 For a more detailed description of the ATPA, including country and product eligibility, see USITC, Andean

Trade Preference Act: Impact on U.S. Industries and Consumers and on Drug Crop Eradication and Crop Substitution, Third Report, 1996, publication 2995, Sept. 1996. 46 19 U.S.C. 3202.

47 President, “Remarks Following Discussions With

President Rodrigo Borja Cevallos of Ecuador,” Weekly Compilation of Presidential Documents, July 23, 1990, 

pp. 1140-1143.
145

ATPA benefits were modeled after CBERA, but

some limits are linked to GSP. A wide range of Andean products is eligible for duty-free entry.48 ATPA

excludes from duty-free entry the same list of articles

excluded under CBERA, with the addition of rum.49

As under CBERA, handbags, luggage, flat goods (such

as wallets, change purses, and eyeglass cases), work

gloves, and leather wearing apparel are not eligible for

ATPA duty-free entry; however, ATPA duties on these

articles were reduced by a total of 20 percent, but not

more than 2.5 percent ad valorem, beginning January

1, 1992, in five equal annual installments.

Total U.S. imports from the four Andean countries

totaled $8.7 billion in 1997. Imports under ATPA preferences (shown by country in table A-32) were valued

at $1.35 billion, or 15.6 percent of the total (table

5-11). The leading items afforded duty-free entry under ATPA in 1997 were roses, refined copper cathodes,

and chrysanthemums, standard carnations, anthuriums,

and orchids (table A-33).

48 Section 204(a) of ATPA (19 U.S.C. 3203(a)) establishes rules of origin to determine which articles are eligible

for duty-free treatment under the Act.

49 ATPA sec. 204(b), 19 U.S.C. 3203(b).

National Security Import

Restrictions

Section 232 of the Trade Expansion Act of 1962

authorizes the President, on the basis of a formal investigation and report by the Secretary of Commerce, to

impose restrictions on imports that threaten to impair

the national security of the United States.50 Among

the most important criteria considered by Commerce

are:

 requirements of the defense and essential civilian sectors;

 maximum domestic production capacity;

 quantity, quality, and availability of imports;

 impact of foreign competition on the economic

welfare of the essential domestic industry; and

 other factors relevant to the unique circumstances of the specific case.

50 19 U.S.C. 1862.

Table 5-10

U.S. imports for consumption from CBERA countries, 1995-97

Item 1995 1996 1997

Total imports (1,000 dollars) 12,550,118 14,544,810 16,572,402 . . . . . . . . . . . . . . . . . . . . . . . . 

Imports under CBERA1 (1,000 dollars) 2,261,407 2,791,055 3,207,842 . . . . . . . . . . . . . . Percent of total 18.0 19.2 19.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1 Value of imports under CBERA has been reduced by the value of MFN duty-free imports and ineligible items

that were misreported as entering under the program.

Source: Compiled from official statistics of the U.S. Department of Commerce.

Table 5-11

U.S. imports for consumption from Andean countries, 1995-97

Item 1995 1996 1997

Total imports (1,000 dollars) . . . . . . . . . . . . . . . . . . . . . . . . 6,968,729 7,867,646 8,673,564

Imports under ATPA1

(1,000 dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 938,789 1,270,054 1,352,855

Percent of total 13.5 16.1 15.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1 Value of imports under ATPA has been reduced by the value of MFN duty-free imports and ineligible items that

were misreported as entering under the program.

Source: Compiled from official statistics of the U.S. Department of Commerce.
146

The President has 90 days to decide on appropriate

action after receipt of the secretary’s findings. The section 232 authority to adjust imports has been used sparingly in the past. It has most notably been employed in

connection with the imposition of quotas, fees, or economic sanctions on imports of petroleum products. The

U.S. Commerce Department did not initiate a section

232 investigation during 1997.

Agricultural Adjustment Act

Under section 22 of the Agricultural Adjustment

Act (7 U.S.C. 624), the President may take action in

the form of an import fee or quantitative limitation to

restrict imports that render, or tend to render, ineffective or materially interfere with the operation of any

U.S. Department of Agriculture (USDA) program. The

President acts on the basis of an investigation and report by the Commission, although he may take emergency action pending receipt of that report. Following

advice of the Secretary of Agriculture and the investigation of the Commission, the President may modify,

suspend, or terminate import restrictions because of

changed circumstances.

However, section 401(a)(2) of the Uruguay Round

Agreements Act amended subsection (f) of section 22

to prohibit the imposition of quantitative limitations or

fees under section 22 on articles that are the product of

a WTO member. The amendment became effective

with respect to all articles except wheat on the date of

the entry into force of the WTO Agreement (January 1,

1995).51 There were no investigations conducted or actions in effect under section 22 during 1997.

U.S. Textile and Apparel

Trade Program

The Uruguay Round Agreement

on Textiles and Clothing

On January 1, 1995, the Uruguay Round Agreement on Textiles and Clothing (ATC) entered into force

as part of the WTO agreements and replaced the Multifiber Arrangement (MFA), which had governed world

trade in textiles and apparel since 1974. The MFA had

51 With the exception of the tariff-rate quotas in effect

on wheat, all section 22 fees and quantitative limitations on

agricultural products were converted to bound tariffs and

tariff-rate quotas (tariffs may not be raised above a bound

level without compensating affected parties) under a process

known as “tariffication.” The special tariff-rate quotas on

wheat expired in September 1995.

permitted quotas without compensation on exports of

such goods, mainly those shipped from developing

countries to developed countries. Under the ATC, the

four WTO members that maintained MFA quotas

(Canada, the European Union, Norway, and the United

States), agreed to remove the quotas over a 10-year

transitional period that ends on January 1, 2005. At

that time all these products will be “integrated,” or

brought into the General Agreement on Tariffs and

Trade (GATT) regime, so they become subject to the

same rules as goods of other sectors.

The quotas on textiles and apparel are being phased

out in three stages. The first stage began on January 1,

1995, when WTO countries were required to integrate

at least 16 percent of their sector trade into the General

Agreement on Tariff and Trade (GATT) regime, based

on 1990 import volume. In addition, WTO countries

were required to increase the annual growth rates for

quotas still in place by 16 percent52 for major suppliers and by 25 percent for small suppliers.53 The second stage began on January 1, 1998, when another 17

percent of the trade was integrated into the GATT regime and the annual growth rates for quotas still in

place for major suppliers were increased by 25 percent.

The third stage begins on January 1, 2002, when another 18 percent of the trade is to be integrated with a

27-percent increase in the annual growth rate for quotas still in place. The remaining 49 percent of the trade

is scheduled for integration at the end of the 10-year

period, on January 1, 2005.

All WTO members are subject to the disciplines of

the ATC, and only WTO members are eligible for the

ATC’s benefits. Included in the ATC is a special transitional safeguard mechanism (Article 6) designed to

protect WTO members against damaging surges in imports during the 10-year transition period for products

that have not yet been integrated into the GATT regime

and that are not already under quota.54 The safeguard

52 For example, an annual quota growth rate of 6 percent

under the MFA in 1994 became 6.96 percent in the first stage

(1995-97), and 8.7 percent in the second stage (1998-2001),

and will increase to just over 11 percent in the third stage

(2002-04).

53 Small suppliers are those accounting for 1.2 percent

or less of an importing country’s total quotas as of December

31, 1991. Small suppliers subject to U.S. quotas include

Bahrain, Bulgaria, Colombia, Costa Rica, Czech Republic,

Dominican Republic, Egypt, El Salvador, Fiji, Guatemala,

Hungary, Jamaica, Kenya, Kuwait, Macau, Mauritius, Poland, Qatar, Romania, Slovak Republic, United Arab Emirates, and Uruguay.

54 WTO, “The Agreement on Textiles and Clothing,”

found at Internet address

http://www.wto.org/wto/goods/textiles.htm, retrieved 

Apr. 6, 1998.
147

quota may remain in place for up to three years or until

the product is integrated into the GATT.

The ATC provided for the establishment of the

Textiles Monitoring Body (TMB) to supervise the implementation of the ATC’s provisions. Article 8 of the

ATC requires that, on the basis of reports from the

TMB, the WTO Council for Trade in Goods (CTG)

will review the operation of the ATC at the conclusion

of each stage of the integration process. In a meeting

of the CTG on December 8, 1997, the chairman reported that the views of the members “remained far

apart on the progress made in the ATC implementation

process in the first stage,” which ended on December

31, 1997.55 In its report to the CTG, the TMB noted

that, with one exception, the products integrated by the

importing developed countries in the first stage were

not subject to quotas and that the products were concentrated in the relatively less-value-added products,

such as yarns and fabrics, rather than apparel and other

made-up textile products.56 In addition, the TMB noted

that the products integrated by the importing countries

in the second stage generally were also concentrated in

the relatively lower-value-added products.57 Taking the

first and second stages together, lower-value-added

products such as yarns and fabrics accounted for 76

percent of the import volume integrated by the EU, 65

percent for the United States, 60 percent for Norway,

and 47 percent for Canada.58

The TMB further indicated that an overall assessment of the integration process under the ATC should

consider several of its features, including that integration is implemented on the basis of the total volume of

imports rather than the value and that members are free

to choose products for integration if their selection

meets the essential technical requirements of the ATC.

In this regard, the TMB stated that the notifications

made by the importing developed countries and reviewed by the TMB met these requirements.59

55 WTO, Report (1997) of the Council for Trade in

Goods, Geneva, document G/L/213 (97-5407), Dec. 9, 1997,

para. 18.7, found at Internet address

http://www.wto.org/wto/ddf, retrieved Jan. 29, 1998.

56 WTO, Comprehensive Report of the Textiles Monitoring Body to the Council for Trade in Goods on the Implementation of the Agreement on Textiles and Clothing During

the First Stage of the Integration Process, document

G/L/179 (97-3288), July 31, 1997, para. 15, found at Internet

address http://www.wto.org/wto/ddf, retrieved Jan. 28, 1998.

57 Ibid., para. 58.

58 Ibid., para. 70.

59 The Statement of Administrative Action (SAA) accompanying the U.S. Uruguay Round Agreements Act states

that the Committee for the Implementation of Textile Agreements (CITA), in scheduling the products for integration into

the GATT regime, was to defer the integration of the most

U.S. Actions Under the ATC in

1997

The United States currently has quotas on textiles

and apparel from 47 countries, 37 of which are WTO

members whose sector shipments are subject to the

terms of the ATC (table 5-12). These 37 countries supplied 55 percent of the total value of U.S. sector imports in 1997. Another 11 percent of total U.S. sector

imports came from Mexico, a WTO member for whom

U.S. quotas on sector shipments are being phased out

under NAFTA. The nine non-WTO countries subject

to U.S. quotas, led by China and Taiwan, supplied 17

percent of sector imports in 1997. Sector imports from

non-WTO countries are subject to section 204 of the

Agricultural Act of 1956, which provides the President

with the basic statutory authority to enter into agreements with foreign governments to limit their exports

of textile products to the United States, and to issue

regulations to carry out such agreements.60

In 1997, the United States initiated four requests

for consultations with foreign supplying countries for

the purpose of establishing new quotas. Two of these

requests for consultations, commonly referred to as

“calls,” were safeguard actions under the ATC involving WTO countries; the other two were initiated under

section 204 of the Agricultural Act of 1956 for two

non-WTO members. The first call under the ATC,

which had proposed an annual quota on imports of

combed cotton yarn from Pakistan of 2,319,944 kilograms, was allowed to expire without further action because of a substantial drop in trade later in the year.

The second call resulted in an annual quota of

2,200,000 kilograms on artificial staple yarn (rayon)

from Thailand. The section 204 calls resulted in annual quotas on imports of cotton terry and other pile towels from Nepal of 4,089,480 towels and on cotton

gloves from Cambodia of 1,250,841 dozen pairs. The

4 calls in 1997 were up from the 2 calls initiated by the

United States in 1996, but were down considerably

from the 28 calls initiated during 1995, the first year

the ATC was in force.61

59—Continued

sensitive goods until the end of the 10-year period. See SAA,

p.115; see also CITA, “Final List of Products for Second,

Third and Final Phase Integration of Textile and Apparel

Products into GATT 1994,” published in the Federal Register of May 1, 1995 (60 F.R. 21075).

60 If a multilateral agreement like the MFA or the ATC

is concluded under the authority of section 204 among major

textile exporters, the President is authorized to issue regulations governing the importation of such products from countries that are not parties to the agreement.

61 Citing changing market conditions, the United States

rescinded 15 of the 28 calls made in 1995. All of the calls

rescinded were made with WTO members.
148

Table 5-12

Countries with which the United States has textile and apparel quotas, as of March 31, 1998, and

U.S. imports of textiles and apparel from these countries in 1997

(Million dollars)

Country Imports

WTO members subject to the ATC

Bahrain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,498

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

Bulgaria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381

Costa Rica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 850

Czech Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Dominican Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,272

Egypt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389

El Salvador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,079

Fiji . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Guatemala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 971

Honduras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,663

Hong Kong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,100

Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,010

Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,872

Jamaica . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472

Kenya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Kuwait . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Macau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930

Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715

Mauritius . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185

Myanmar (Burma) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,197

Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,846

Poland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Qatar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,288

Romania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288

Slovak Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,362

Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,661

Turkey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 886

United Arab Emirates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258

Uruguay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Non-WTO members subject to section 204 of the Agricultural Act of 1956

Cambodia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,024

Former Yugoslav Republic of Macedonia 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Laos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Nepal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Oman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,812

Ukraine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

WTO member subject to the North American Free Trade Agreement

Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,928

Source: U.S. Department of Commerce, International Trade Administration, Office of Textiles and Apparel.
149

Other Trade Agreements

In addition to the ATC, bilateral and regional trade

agreements govern the United States’ trade with several of its most important trading partners, most notably

China, Mexico, and Canada. Designed to reduce and

ultimately eliminate tariffs on textile and apparel products from its foreign suppliers, these agreements were

also established to obtain market opening commitments for exports of U.S. textiles and apparel.

China

On February 1, 1997, the United States and China

signed a new bilateral agreement governing trade in

textiles and apparel. The 4-year pact extended U.S.

import quotas on textiles and apparel from China and

reduced quotas in product areas where China had made

repeated transshipment violations.62 The pact was considered ground breaking because “[f]or the first time,

the United States obtained significant market opening

commitments from China for export of U.S.-manufactured textile and apparel products.”63 The portion of

the agreement covering U.S. import quotas went into

effect immediately and the market access portion went

into effect on January 1, 1998.

Regarding market access, China agreed to cut tariffs substantially for a number of textile and apparel

products, including those which U.S. producers believe

have the greatest export potential to the Chinese market, and to bind these tariffs at the lower rates. Such

products include cotton and manmade fiber yarns and

fabrics, knit fabrics, and printed fabrics; T-shirts,

sweatshirts, and underwear; and advanced specialty

textiles used in construction of buildings, highways,

and filtration products. These tariffs went into effect

on January 1, 1998.64

On December 31, 1997, the United States-China

bilateral trade agreement on silk products expired. Silk

products can now be imported from China into the

United States free of quota, but must still be accompanied by a visa.65 In January 1998, U.S. importers of

62 Transshipment of textiles and apparel through third

countries, especially by China, to evade quotas remains a

concern of the United States. The U.S. Customs Service

continued to conduct other investigations of transshipments

of textiles and apparel produced in China and exported to the

United States during 1997.

63 U.S. Department of State telegram, “Textiles/China:

Exchange of Notes,” message reference No. 040894, prepared by the U.S. Department of State, Washington, DC,

Mar. 5, 1997.

64 The Chinese government released its tariff rates in

January 1998.

65 The United States requires visas for textiles and apparel imports from many countries, including China. A visa

textiles and apparel called on the Clinton administration to immediately eliminate the visa requirement,

which they consider now to be unnecessary because

the silk products are no longer subject to quota.

NAFTA

Under NAFTA, which entered into force on January 1, 1994, the United States agreed to immediately

eliminate quotas on textile and apparel imports from

Mexico that meet NAFTA rules of origin.66 U.S. quotas on imports of sector goods from Mexico that do not

meet the NAFTA rules of origin will be phased out by

2004. NAFTA provides for tariff preference levels

(TPLs) that allow limited amounts of sector imports

from Canada and Mexico that do not meet NAFTA

rules of origin to enter at preferential duty rates under

NAFTA.67 Most of the TPLs were underused in 1997,

as they have been in the years since NAFTA’s entry

into force.68

The major exception is the TPL for wool apparel

from Canada, which was filled in 1996 and 1997.

Men’s and boys’ suits accounted for just over 60 percent of the imports charged to the TPL. During the

past five years, U.S. imports of men’s and boys’ wool

suits from Canada rose by 700 percent, to 5.2 million

suits valued at $146 million in 1997. U.S. industry has

expressed concern that because Canada was continuing

to fill its wool apparel TPL primarily with men’s and

boys’ suits,69 U.S. production and employment

associated with these goods had declined 40 percent

and 50 percent, respectively.70 Consequently, in

65—Continued

is an endorsement in the form of a stamp on an invoice or

export control license which certifies the origin of the goods,

specifies the product type and quantity, and authorizes the

shipment. Issued by the quota regulatory authority of the

country in which the goods originate, it is used to control the

exportation of textiles and textile products to the United

States and to prohibit the unauthorized entry of the merchandise into this country.

66 The NAFTA rule of origin is basically a “yarn forward” rule, which requires that textile and apparel goods be

produced in a NAFTA country from the yarn stage forward

in order to receive the benefits of the agreement. For certain

products, a fiber- or fabric-forward rule applies.

67 TPLs were developed primarily to alleviate short supply problems, especially as they relate to manufacturers’

inputs.

68 U.S. Customs Service, Textile Status Reports,

Charges for Canada and Mexico, Dec. 31, 1997, found at

Internet address

http://www.cebb.customs.treas.gov/public/cgi, retrieved 

Jan. 9, 1998.

69 U.S. Department of State telegram, “Wool Suits from

Canada,” message reference No. 02725, prepared by the

U.S. Department of State, Washington, DC, July 18, 1997.

70 Honorable John J. LaFalce, “NAFTA Parity for U.S.

Wool Apparel Industry,” Congressional Record, remarks

before the U.S. House of Representatives, Sept. 8, 1997.
150

September 1997, Congressman John J. LaFalce, Democrat from New York, introduced H.R. 2432, a bill designed to provide relief for domestic producers of tailored wool apparel from increased imports of such apparel from Canada. No further action was taken on the

bill by the end of 1997.

Proposed Legislation on Textiles

and Apparel from Africa

Legislation was introduced in the 105th Congress

on April 24, 1997—H.R. 1432, the African Growth

and Opportunity Act—which would authorize a new

trade and investment policy for Sub-Saharan Africa

(SSA).71 In part, the bill provides for increased access

to U.S. markets for eligible textile and apparel products

from 48 SSA countries, once designated. The bill

would eliminate existing U.S. quotas on imports of textile and apparel products from SSA countries and

would authorize the President to grant GSP duty-free

treatment to such imports. The bill sets forth several

findings of Congress regarding the competitiveness of

SSA in the global market. First, it says that SSA has

limited capacity to produce sector products, and this

capacity is projected to grow at a modest rate; accordingly, it will be difficult for SSA to supply more than 3

percent of annual U.S. textile and apparel imports during the next 10 years. Further, the bill says that if imports of sector products from SSA grow to “around 3

percent” of total U.S. sector imports, they will not represent a threat to U.S. producers, workers, or consumers. In 1997, SSA countries accounted for $400 million, or less than 1 percent, of total U.S. sector imports.

In the Senate, a companion bill, S. 778, was introduced

on May 21, 1997, and referred to the Senate Committee on Finance. In his State of the Union address on

January 27, 1998, President Clinton called upon the

U.S. Congress to include the Africa bill in its 1998

trade agenda. On March 11, the House of Representatives passed H.R. 1432 by a vote of 233-186. The Senate has yet to vote on its version of the bill.

At the request of the House Ways and Means Committee, the U.S. International Trade Commission conducted an investigation concerning the likely impact of

providing quota-free and duty-free entry to textiles and

apparel from SSA.72 The Commission estimated that

71 This bill follows H.R. 4198, African Growth and Opportunity: The End of Dependency Act of 1996, which was

introduced in September 1996 and referred to the Committee

on Ways and Means. No further action was taken on the bill

during the 104th Congress.

72 USITC, Likely Impact of Providing Quota-Free and

Duty-Free Entry to Textiles and Apparel From Sub-Saharan

allowing duty-free and quota-free entry for textiles and

apparel from SSA would result in a decrease in domestic producers’ apparel shipments of about 0.1 percent

and would have a negligible effect on shipments of the

domestic textile industry.

U.S. Textile and Apparel Trade

in 1997

U.S. imports of textile and apparel grew significantly in 1997, rising by 20 percent over the 1996 level

to a record 22.9 billion square meter equivalents

(SMEs) valued at $54.0 billion.73 The increase reversed the trend of the previous three years in which

the growth of imports had slowed steadily from 9 percent in 1994 to 6 percent in 1995 and 4 percent in

1996. The gain in 1997 imports was marked by a

23-percent increase in textile imports to 11.7 billion

SMEs valued at $11.2 billion and an 18-percent increase in apparel imports to 11.4 billion SMEs valued

at $42.9 billion. Apparel accounted for 50 percent of

the quantity but almost 80 percent of the value of total

sector imports in 1997.

Mexico, Canada, and the Caribbean Basin countries accounted for a considerable share of the increase in sector imports in 1997, as they had in 1996.

These countries benefit from preferential access to the

U.S. market under U.S. trade agreement programs—

Mexico and Canada under NAFTA, and Caribbean Basin countries under the “special access program” for

these countries. Sector imports from Mexico grew 38

percent in 1997, rising to 3.0 billion SMEs valued at

$5.9 billion, a slightly smaller growth rate than the 42

percent rise in 1996. For the second consecutive year,

Mexico remained ahead of China as the single largest

country supplier of textiles and apparel by quantity.

The volume of sector imports from Caribbean Basin

countries in 1997 rose by 25 percent to almost 3.0 billion SMEs valued at $7.7 billion. In recent years, U.S.

producers have steadily expanded their use of offshore

assembly operations in Caribbean Basin countries and

Mexico to cut costs in the face of a highly competitive

retail environment. Consequently, the vast majority of

the imports from both Mexico and the Caribbean Basin

countries continued to consist of garments assembled

from U.S. components and entered under productionsharing provisions of HTS headings 9802.00.80 and

72—Continued

Africa (investigation No. 332-379), USITC publication 3056,

Sept. 1997. 73 Import data in this section are from U.S. Department

of Commerce, Office of Textiles and Apparel, Major Shippers Report (CD-ROM). Such data, which represent U.S.

general imports of goods covered by the U.S. textile trade

agreements program, are on the Internet at 

http://otexa.ita.doc.gov/msrpoint.htm.
151

9802.00.90 (the latter only open to Mexico). NAFTAhas given Mexico a competitive advantage, however.

While garments sewn in Mexico from fabric made and

cut in the United States can enter free of duty and quota, such U.S. formed-and-cut goods from Caribbean

Basin countries can enter under virtually unlimited

“guaranteed access levels” but are still subject to duty

on the value added offshore.74 U.S. industry officials

have claimed that since the implementation of NAFTA,

trade and investment have been diverted from Caribbean Basin countries to Mexico. Although legislation

introduced in Congress in 1997 to grant NAFTA parity

was not passed,75 the 25-percent growth rate in 1997

imports from the Caribbean Basin nevertheless demonstrated the benefits that U.S. manufacturers can still

gain by having apparel production-sharing operations

in that region.

In 1997, U.S. imports of sector products from China increased by 27 percent to 2.2 billion SMEs and by

23 percent in value to $6.0 billion, thereby contributing

to the significant rise in total U.S. sector imports in

1997. This contrasted with the decrease of sector imports from China in quantity by 7 percent in 1996 and a

small increase of 2 percent in value. Industry sources

attributed the sharp rise in sector trade from China in

1997 to a resumption of the trade activity levels of the

years preceding 1996. Tight U.S. import quotas and a

variety of factors internal to China are thought to have

led to the drop in sector imports from China in 1996.

Regarding trade from other major traditional Asian

suppliers, 1997 sector imports from Hong Kong declined by 3 percent to 863 million SMEs valued at $4.1

billion. Hong Kong trade sources attributed the drop in

sector imports to the establishment by the U.S. Customs Service of additional reporting requirements, including the posting of a single-entry bond to prevent

alleged illegal transshipments of textile products from

China through Hong Kong. The Customs Service rescinded the single-entry bond requirement in July

1997. U.S. sector imports from Korea rose 12 percent

in 1997 to 818 million SMEs valued at $2.3 billion.

Sector imports from Taiwan decreased by less than 1

percent in 1997, totaling 1.2 billion SMEs valued at

$2.8 billion.

74 For every $10 in f.o.b. value, a typical CBI garment

entered under 9802.00.80 contains $6.40 in duty-free U.S.

components and $3.60 in dutiable, foreign value added.

Applying the 1997 trade-weighted average duty rate on apparel of 15.5 percent to the foreign value added yields an

average duty of $0.56, or an ad valorem equivalent of 5.6

percent of the total f.o.b. value of a typical CBI garment.

75 H.R. 2644, the United States-Caribbean Trade Partnership Act, was defeated on November 4, 1997.

In 1997, U.S. sector imports from the Association

of Southeast Asian Nations (ASEAN) increased by

20 percent to 2.6 billion SMEs valued at $6.5 billion

following negligible growth in 1996. U.S. sector imports from Indonesia, the leading ASEAN supplier by

quantity, rose by 41 percent, more than triple the 12

percent growth rate in 1996 and reached 855 million

SMEs valued at $1.9 billion. Sector imports from

Thailand grew 22 percent. U.S. sector imports from

the South Asian countries—Bangladesh, India, Pakistan, and Sri Lanka, which are among the lowest cost

suppliers in Asia—all had double-digit growth rates in

1997 in terms of quantity: 22 percent, 13 percent, 38

percent, and 12 percent, respectively. The quantity of

U.S. imports from all the South Asian countries rose 18

percent to 3.4 billion SMEs while the value of imports

increased 20 percent to $6.1 billion.

Developments in the Rules of

Origin for Textiles and Apparel

The Uruguay Round Agreements Act required the

United States to adopt new rules of origin for imports

of textiles and apparel in July 1996. As provided for

by section 334 of the URAA, the change in origin rules

affects country-of-origin determinations for U.S. imports of sector products that are subject to manufacturing and processing operations in, or contain components from, more than one country. The U.S. industry

had sought the rules change on the basis that foreign

suppliers were dividing their production operations

among various countries as a means of avoiding quotas.76 For apparel assembled in one country from parts

cut to shape in another, the new U.S. rules of origin

generally confer origin on the country where the assembly occurs, rather than the one where the cutting

took place, as was the usual case under the previous

rules. For fabrics, the country of origin is the one

where they were made, even if the fabrics undergo

dyeing, printing, and other finishing operations in

another country. For “flat goods” such as scarves and

bed linens, it is the country where the fabric was made,

rather than the country where the fabric was cut and

sewn, as was previously the case.

U.S. trading partners have expressed concern about

the new U.S. origin rules for textile and apparel products. In May 1997, the EU filed a request with the

WTO for formal consultations with the United States,

stating that the new rules adversely affected its exports

of fabrics, scarves, and other flat goods to the U.S.

76 U.S. House of Representatives, Committee on Ways

and Means, Overview and Compilation of U.S. Trade Statutes, 105th Cong., 1st sess. (Washington, D.C.: U.S. Government Printing Office, June 25, 1997), WMCP: 105-4, p. 121.
152

market. As a result of the rules change, the EU stated

that such goods are no longer recognized in the United

States as being of EU origin and lose their quota-free

access to the U.S. market. For example, for EU shipments to the United States of “discharge printed fabric”

made from unfinished cloth from Egypt, Indonesia,

Malaysia, Thailand, and Turkey, the new U.S. rules

stipulate that the country of origin is the one where the

fabric was formed rather than the one where the fabric

was processed. Consequently, whereas in the past European producers had unrestricted access to the U.S.

market for their products, the new rules of origin

would require them to comply with any U.S. quotas or

visa requirements applied to their suppliers of raw fabric. Similarly, the new rules stipulate that EU shipments to the United States of silk scarves made from

Chinese fabric are the product of China rather than Italy or France, even though about 80 percent of the total

cost of the silk scarves originated in the EU.77

Acknowledging that a return to the previous rules

of origin for flat goods would require a legislative

change (i.e., an amendment to the U.S. statute), the

United States and the EU agreed to postpone formal

WTO dispute settlement proceedings and accept an interim solution.78 The United States agreed to create an

exemption from the marking requirements for imported

silk scarves (HTS subheading 6214.10.10) and silk fabrics (HTS heading 5007), thus allowing silk scarves to

be imported with modified appellations.79 In addition,

to help alleviate the alleged impact of the rules change

on discharge printed fabric,80 the United States agreed

to exempt certain discharge printed fabrics from quotas

with respect to Egypt, Indonesia, Malaysia, and is currently negotiating with Thailand and Turkey to provide

similar exemptions. On February 25, 1998, the United

States released its formal notification to the WTO of its

agreement with the EU concerning the exemptions on

the rule of origin changes for silk and other fabrics. If

the WTO rules of origin harmonization process is not

77 European manufacturers claimed the changes in the

country-of-origin label would also eliminate the prestige and

lower the appeal that U.S. consumers often associate with

European goods, leading to lower sales. See U.S. Department of State telegram “Textiles/Rules of Origin: Agreement

with the EU,” message reference No. 146388, Washington,

DC, prepared by U.S. Department of State, Aug. 5, 1997.

78 Ibid.

79 The appellations include: “designed in Italy,” “Dyed

and Printed in Italy,” “Cut and Sewn in Italy,” “Fashioned in

Italy,” “Crafted in Italy,” “Created in Italy,” “Gucci of Italy,”

“Designed and Printed by Gucci in Italy,” “Crafted by Gucci

in Italy,” and “Created by Gucci in Italy.”

80 Discharge printed fabrics refer to fabrics that are processed as follows: dyed, not tinted, a single uniform color

other than white; further processed using a method whereby

chlorine or other color-destroying chemicals are applied to

completed by July 20, 1998, the United States has

agreed that within one month it will introduce legislation to restore the rules of origin for flat goods that

existed before July 1, 1996.

Major U.S. Trade

Sanctions Activities

The United States imposes trade sanctions against

specific foreign countries under several statutory authorities.81 Many are administered and enforced by the

Office of Foreign Assets Control (OFAC) of the U.S.

Department of the Treasury.82 A few specifically targeted trade embargoes are administered and enforced

by other agencies. The Bureau of Export Administration, Export Enforcement, of the U.S. Department of

Commerce and the U.S. Customs Service of the U.S.

Department of the Treasury play a supportive role in

monitoring compliance with the U.S. measures.

In this report, the term “trade sanction” applies to

actions undertaken (1) to restrict or prohibit U.S. trade

with designated hostile and pariah countries to further

U.S. policy and national security objectives and (2) to

prohibit trade pursuant to U.S. statutory commitments

to conserve endangered species. Also considered are

certain actions to prohibit U.S. persons or entities from

engaging in financial transactions (such as investment

and trade finance) that could facilitate international

trade by designated hostile and pariah countries.

80—Continued

discrete portions of the dyed fabric to bleach out or discharge the dye. The fabrics are then printed in those discrete

portions thereby yielding a different colored pattern on the

previously dyed ground; and/or are subjected to two or more

of the following finishing operations: bleaching, shrinking,

filling, napping, debating, permanent stiffening, weighting,

permanent embossing, or marring.

81 The basic authorizing statutes are the Trading with the

Enemy Act (50 U.S.C. App. 1-44); International Emergency

Economic Powers Act (50 U.S.C. sec. 1701-06); Iraqi Sanctions Act (Public Law 101-513, 104 Stat. 2047-55); United

Nations Participation Act (22 U.S.C. 287c); International

Security and Development Cooperation Act (22 U.S.C. 2349

aa-9); The Cuban Democracy Act (22 U.S.C. 6001-10); The

Cuban Liberty and Democratic Solidarity Act of 1996 (Public Law 104-114); and The Antiterrorism and Effective

Death Penalty Act of 1996 (Public Law 104-132).

82 OFAC acts under Presidential wartime and national

emergency powers, as well as authority granted by specific

legislation, to impose controls on transactions and to freeze

assets under U.S. jurisdiction. OFAC also has the authority

to impose civil monetary penalties for certain violations.

The United States applies criminal penalties (prison terms

and/or monetary penalties) for violations under these regulations. U.S. Department of the Treasury, OFAC, “Foreign

Assets Control Regulations for Exporters and Importers, 

Jan. 15, 1997, found at Internet address 

http://www.ustreas.gov/treasury/services/fac/fac.html, retrieved Jan. 15, 1998.
153

U.S. trade sanctions operative during 1997 are covered under many statutes. Some of the U.S. sanctions

are multilateral undertakings pursuant to United Nations (UN) resolutions and carried out in close cooperation with other governments; other sanctions are

unilateral U.S. actions. In addition to trade sanctions

imposed by the Federal Government, several U.S.

states and municipalities also imposed international

trade sanctions during 1997.

The United States imposed new or additional unilateral trade sanctions against Burma (Myanamar) and

Sudan during 1997. Also during 1997, sanctions imposed by the Commonwealth of Massachusetts against

companies that do business with Burma (such sanctions also are imposed by other individual U.S. states

and municipalities) were the subject of a WTO complaint by U.S. trading partners. Tables 5-13 and 5-14

summarize the status of major U.S. trade sanctions83

operative during 1997. Eight of the sanctions listed are

broadly categorized by targeted country, although a

given country may be subject to several U.S. statutory

regulations imposing a comprehensive set of trade

sanctions. Also listed are U.S. trade sanctions restricting imports of certain shrimp and tuna from countries

that do not comply with U.S. marine wildlife conservation efforts.84

83 For more detailed information on U.S. trade sanctions

activities against major trading partners in the context of

bilateral relations, see ch. 4; measures undertaken pursuant

to section 301 of the Trade Act of 1974 are discussed in 

ch. 5.

84 For detailed background information on the listed

trade sanctions, see USITC, The Year in Trade: OTAP, 1996,

USITC publication 3024, pp. 157-164.
154

Table 5-13

Summary of major U.S. trade sanctions operative in 1997

Country Sanctions

Burma . . Trade: Several U.S. states and municipalities apply selective purchasing/contracting measures

against companies that do business with Burma.

Investment and financial dealings: New investment in Burma by U.S. persons prohibited by Executive

Order 13047 of May 21, 1997 (62 F.R. 28299).

1997 status: On June 20, 1997, EU filed a complaint (WT/DS88/1) with the WTO against the United

States concerning the selective procurement measures enacted by the Commonwealth of Massachusetts to discriminate against companies that do business in Burma. The EU contends that, as Massachusetts is covered under the U.S. schedule to the Agreement on Government Procurement, this violates Articles VIII(B), X and XIII of the Agreement. The EU also contends that the measure also nullifies benefits accruing to it under the GPA, as well as impeding the attainment of the objectives of the

GPA, including that of maintaining balance of rights and obligations. The matter remains before the

WTO pending consultations between the EU and the United States.

Cuba . . . Trade: Sanctions prohibit imports of goods or services either directly or through third countries,1 and

prohibit exports or reexports of U.S. goods, technology, or services, brokering offshore transactions,

and provision of consulting services by U.S. persons wherever located.2 Vessels carrying goods or

passengers to or from Cuba or carrying goods in which Cuba or a Cuban national has any interest

prohibited from entering U.S. ports.

Investment and financial dealings: Cuban assets in the United States blocked, and total freeze on

financial dealings with Cuba. Title III of the 1996 Cuban Liberty and Democratic Solidarity (Libertad)

Act, also known as the Helms-Burton Act in reference to the two members of Congress who were the

main sponsors of the legislation, Senator Jesse Helms

(R-NC) and Representative Dan Burton (R-IN), permits U.S. nationals whose property was

confiscated by the Cuban government to sue Cuban governmental entities or foreign investors who

use or profit in any way from these properties; title III also authorizes the President to suspend the

right to file suit if the President determines that to do so is in the national interest and would expedite

the transition to democracy in Cuba, and requires the President to review that decision every six

months.

1997 status: No statutory changes. President Clinton has suspended the right of U.S. nationals to file

suit pursuant to title III of the Libertad Act since that provision entered into force. The United States

and the EU worked to resolve an EU complaint before the WTO filed in 1996 after the United States

implemented title III of the Libertad Act.3 On April 25, 1997, at the request of the EU, the WTO panel

suspended its work on this dispute following an agreement between the EU and the United States

under which both sides pledged to work cooperatively to develop binding disciplines on dealings in

property confiscated in Cuba. Although an October 15, 1997, deadline for establishing a mutually

satisfactory agreement was not met, U.S. and EU officials continued to work towards a settlement into

early 1998.

Iran . . . . Trade: Sanctions prohibit imports of goods or services either directly or through third countries,1 and

prohibit exports or reexports of U.S. goods, technology, or services, brokering offshore transactions,

and provision of consulting services by U.S. persons wherever located.2 U.S. persons also prohibited

from engaging in trade involving Iranian oil or petroleum products refined in Iran, as well as the

provision of goods, services, or technology that would benefit the Iranian oil industry.

Investment and financial dealings: U.S. persons prohibited from making new investments in Iran or in

Iranian property, including loans, extensions of credit, and commitments of funds.

1997 status: Executive Order 13059 of Aug. 19, 1997 (62 F.R. 44531) confirmed that virtually all trade

and investment activities with Iran by U.S. persons, wherever located, are prohibited.

See footnotes at end of table.
155

Table 5-13—Continued

Summary of major U.S. trade sanctions operative in 1997

Country Sanctions

Iraq . . . . . Trade: Sanctions prohibit imports of goods or services either directly or through third countries, except

as provided for under UN Security Council Resolution 986 of 1995 permitting Iraq to sell specific

quantities of oil and to purchase specific humanitarian goods (the Iraqi Government delayed

implementing Resolution 986 until December 1996). Also prohibited are exports or reexports of U.S.

goods, technology, or services, brokering offshore transactions, and provision of consulting services

by U.S. persons wherever located, except OFAC-licensed humanitarian goods.

Investment and financial dealings: All assets of the Iraqi government subject to U.S. jurisdiction are

blocked. All transfers or commitments to transfer funds or credit by U.S. persons to the Government

of Iraq or to persons in Iraq are prohibited.

1997 status: No statutory changes.

Libya . . . . Trade: Sanctions prohibit imports of goods or services either directly or through third countries,1 and

prohibit exports or reexports of U.S. goods, technology or services, brokering offshore transactions,

and provision of consulting services by U.S. persons wherever located.2 Also prohibited are

transactions that ultimately benefit Libya, including brokering third-country sales of Libyan crude oil or

transportation for Libyan cargo. Certain U.S. sales to Libya are permitted, including the sale of parts

and components to third countries where the U.S. goods will be “substantially transformed” into new

and different articles of commerce prior to shipment to Libya, as well as the sale of goods that come to

rest in the inventory of a third-country distributor whose sales are not predominantly to Libya.

Investment and financial dealings: All contracts, loans, and financial dealings with Libya are

prohibited. All assets of the Libyan government subject to U.S. jurisdiction are blocked. Independent

transactions by foreign subsidiaries of U.S. firms permitted if no U.S. person or permanent resident

has a role.

1997 status: No statutory changes.

North 

Korea . . . Trade: Sanctions prohibit imports1 of goods or services either directly or through third countries, and

prohibits exports2 or reexports of U.S. goods, technology or services, brokering offshore transactions,

and provision of consulting services by U.S. persons wherever located.4

Investment and financial dealings: All contracts, loans, and financial dealings with North Korea

prohibited. All assets of North Korea and North Korean nationals subject to U.S. jurisdiction blocked.

1997 status: No statutory changes.

Sudan . . . Trade: Sanctions prohibit imports of goods or services either directly or through third countries, and

prohibit exports or reexports of U.S. goods, technology, or services, brokering offshore transactions,

and provision of consulting services by U.S. persons wherever located.2

Investment and financial dealings: Financial transactions which pose a risk of furthering terrorist acts

in the United States prohibited. Beginning in 1997, Sudanese assets in the United States blocked.

1997 status: Comprehensive economic sanctions implemented by Executive Order 13067 of Nov. 4,

1997 (62 F.R. 59987) because of Sudan’s continued support for international terrorism, efforts to

destabilize neighboring governments, and human rights violations.

See footnotes at end of table
156

Table 5-13—Continued

Summary of major U.S. trade sanctions operative in 1997

Country Sanctions

Syria . . . . Investment and financial dealings: Sanctions prohibit financial transactions which pose a risk of

furthering terrorist acts in the United States.

1997 status: No statutory changes.

1 Exceptions allowed for generally $100 worth of merchandise brought into the United States as accompanied

baggage by authorized travelers. 2 Exceptions generally allowed for exports of certain humanitarian goods licensed for export and, in some

instances, certain informational material.

3 For additional information on the impact of the Cuba sanctions on U.S.-EU relations, see the section on the

EU in ch. 4.

4 Exceptions allowed when authorized by license granted by the U.S. Department of the Treasury.

Sources: Office of Foreign Assets Control, U.S. Department of the Treasury, compiled by the staff of the USITC;

U.S. Department of State telegram, “Certification of Shrimp Imports Under P.L. 101-162,” prepared by U.S. Department of State, message reference No. 106060, Washington, DC, June 5, 1997; U.S. Department of State telegram,

“Dolphin Conservation Program Act,” message reference No. 154257, prepared by U.S. Department of State,

Washington, DC, Aug. 16, 1997; and WTO, “Overview of the State-of-Play of WTO Disputes,” found at Internet address http://www.wto.org/wto/dispute/bulletin.htm, retrieved Mar. 16, 1998. For detailed background information on

the listed trade sanctions, see USITC, The Year in Trade: OTAP, 1996, USITC publication 3024, pp. 157-164.
157

Table 5-14

Other trade sanctions

Product Sanctions

Shrimp . . . . Section 609 of Public Law 101-162 requires that countries exporting shrimp to the United States

have a sea turtle conservation program comparable to the U.S. program or a fishing environment

that does not pose a threat to sea turtles. In October 1996, complaints against the United States

for its shrimp embargo were filed in the WTO by India, Malaysia, Pakistan, Thailand (WT/DS58),

and the Philippines (WT/DS61), alleging U.S. violations of Articles I, XI, and XIII of GATT 1994, as

well as nullification and impairment of benefits.

1997 status: The President certified 36 shrimp-harvesting countries as eligible to export shrimp to

the United States during 1997 (62 F.R. 19157), and so notified Congress by the annual May 1

statutory deadline; an additional 7 countries were subsequently certified. On Jan. 9, 1997,

Malaysia and Thailand requested the establishment of a WTO dispute resolution panel pursuant to

their complaint; Pakistan and India also subsequently separately requested establishment of a

panel. A panel was established on Feb. 25, 1997, incorporating all of the complainants (Australia,

Colombia, the EU, Guatemala, Hong Kong, Japan, Mexico, Nigeria, Philippines, Singapore, and Sri

Lanka reserved their third-party rights). The complaint by the Philippines remains pending

consultations.

Tuna . . . . . . The 1972 Marine Mammal Protection Act and its amendments prohibit U.S. imports of yellowfin

tuna from countries that harvest the tuna through the use of purse seine nets that encircle dolphins

or other marine mammals that swim with schools of yellowfin tuna. Following a 1991 complaint by

Mexico to the GATT, a GATT dispute resolution panel found the U.S. embargo inconsistent with

GATT rules. A second GATT panel confirmed the first panel’s decision in 1994, following a

complaint by the EU on behalf of the Netherlands Antilles.

1997 status: Imports of yellowfin tuna from all of the Eastern Tropical Pacific (ETP) Ocean fishing

nations other than Ecuador and Spain were subject to the U.S. embargo during 1997.1 On Aug. 15,

1997, President Clinton signed into law the International Dolphin Conservation Program Act (H.R.

408). This legislation provides for an end to the unilateral embargoes on imports of yellowfin tuna

required by existing U.S. law once a legally binding international dolphin conservation program is

formalized. In early 1998, the United States and several of its trading partners drafted an

agreement to implement the 1995 Panama Declaration, under which members of the

Inter-American Tropical Tuna Commission pledge to reduce to below 5,000 by 1999 the number of

dolphins killed by ETP tuna boats.

1 For additional information on the impact of the tuna embargo on U.S.-Mexican bilateral relations, see the section

on Mexico in ch. 4.

Sources: Office of Foreign Assets Control, U.S. Department of the Treasury, compiled by the staff of the USITC; U.S.

Department of State telegram, “Certification of Shrimp Imports Under P.L. 101-162,” prepared by U.S. Department of

State, message reference No. 106060, Washington, DC, June 5, 1997; U.S. Department of State telegram, “Dolphin

Conservation Program Act,” message reference No. 154257, prepared by U.S. Department of State, Washington, DC,

Aug. 16, 1997; and WTO, “Overview of the State-of-Play of WTO Disputes,” found at Internet address

http://www.wto.org/wto/dispute/bulletin.htm, retrieved Mar. 16, 1998. For detailed background information on the

listed trade sanctions, see USITC, The Year in Trade: OTAP, 1996, USITC publication 3024, pp. 157-164.

APPENDIX

Statistical Tables
e with Canada, by SITC numbers (revision 3), 1995-97

(1,000 dollars)

ion 1995 1996 1997

U.S. exports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,301,201 5,499,424 5,925,162

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203,469 232,888 301,653

aterials, inedible, except fuels 4,259,158 3,758,615 4,282,685 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 1,414,956 1,851,287 2,280,104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 124,589 173,639 222,703 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 10,360,727 11,334,840 12,712,646 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 15,417,848 16,058,037 18,730,028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 61,652,333 64,785,287 73,658,380 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 11,623,693 11,869,949 13,334,655 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 2,903,166 3,558,877 3,345,590 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities 113,261,142 119,122,843 134,793,606 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

U.S. imports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,646,490 6,663,389 7,413,214

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677,665 750,345 814,940

aterials, inedible, except fuels 10,898,443 11,314,720 11,950,346 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 13,665,083 16,775,287 17,882,257 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 339,184 404,754 379,240 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 8,126,301 8,530,839 9,510,738 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 25,381,147 25,833,114 27,305,567 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 63,645,520 67,327,222 72,064,695 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 7,760,633 8,992,086 10,301,342 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 8,741,416 9,706,847 10,258,672 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities 144,881,881 156,298,602 167,881,010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

icial statistics of the U.S. Department of Commerce.
nada, by Schedule B number, 1995-97

(1,000 dollars)

ion 1995 1996 1997

er motor vehicles with spark-ignition internal combustion reciprocating

, cylinder capacity over 3,000 cc 4,067,839 4,231,410 5,298,707 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories of bodies (including cabs) for motor vehicles 4,250,195 4,410,316 4,706,272 . . . . . . . . . . . . . . . . . . . . . . 

er motor vehicles with spark-ignition internal combustion reciprocating

, cylinder capacity over 1,500 but not over 3,000 cc 3,092,099 3,509,281 3,932,783 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories of motor vehicles, nesi 3,120,899 3,126,957 3,708,625 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ating spark-ignition piston engines, of a cylinder capacity over 1,000 cc 2,095,128 2,347,422 2,578,791 . . . . . . . . . . . 

hicles for transporting goods, with spark–ignition internal–combustion

 engine, gross vihicle weight not exceeding 5 mt 1,711,633 2,027,978 2,372,856 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

de semiconductors (1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 2,042,655 2,142,948

xes for motor vehicles 2,127,987 2,041,641 2,096,184 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 of non-canadian low value export shipments; compiled low value 1,962,846 2,413,696 1,966,754 . . . . . . . . . . . . . . . . 

d accessories for automatic data processing machines and units 1,438,221 1,387,637 1,341,975 . . . . . . . . . . . . . . . . . 

ocessing units other than those of 8471.41 and 8471.49 (3 . . . . . . . . . . . . . . . . . . . . . . . . ) 1,053,101 1,332,160

 spark-ignition internal-combustion piston engines 846,317 1,094,039 1,296,249 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd servo-brakes and parts for motor vehicles 931,266 989,663 1,064,624 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ctors for semi-trailers 1,020,135 789,893 1,055,431 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

c regulating or controlling instruments and apparatus 794,389 710,810 1,019,438 . . . . . . . . . . . . . . . . . . . . . . . . . . . 

airplanes or helicopters, nesi 679,482 770,964 864,745 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ular plates, sheets and strip, over 0.2 mm thick, of aluminum alloy 889,408 756,696 830,697 . . . . . . . . . . . . . . . . 

ooks, brochures, leaflets and similar printed matter, other than in

sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 753,069 731,383 802,992

ssion apparatus incorporating reception apparatus for radiotelephony 352,016 382,305 743,813 . . . . . . . . . . . . . . 

m oils and oils obtained from bituminous minerals, other than crude. 535,857 620,363 713,832 . . . . . . . . . . . . . . 

s and mechanical appliances having individual functions 334,956 394,548 709,350 . . . . . . . . . . . . . . . . . . . . . . . . 

seats (except medical, dentist, barbers, etc.) 640,318 619,510 684,297 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ssion-ignition internal-combustion piston engines 836,374 612,196 673,287 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

gital automatic data processing machines, entered in the form of systems (4 . . . . . . . . . . ) 611,969 672,135

pers, etc. appearing less than 4 times per week 619,465 631,020 650,786 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,099,900 38,307,454 43,259,733l all commodities 113,261,142 119,122,843 134,793,606 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ports reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part. 

Use Only” reporting number estimating low-valued exports.

ports reported under Schedule B 8471.91 part. ports reported under Schedule B 8471.91 part, .92 part, .93 part, and .99 part.

ng, figures may not add to totals shown. The abbreviation, nesi, stands for ”not elsewhere specified or included.”

fficial statistics of the U.S. Department of Commerce.
Canada, by HTS numbers, 1995-97

(1,000 dollars)

ion 1995 1996 1997

er motor vehicles with spark-ignition internal-combustion reciprocating piston

, cyclinder capacity over 3,000 cc 20,578,804 19,372,032 19,880,796 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

m oils and oils obtained from bituminous minerals, crude 6,139,318 7,367,016 7,423,720 . . . . . . . . . . . . . . . . . . . . . . . . 

hicles for transporting goods, with spark-ignition internal-combustion

engine, gross vehicle weight, not exceeding 5 mt 6,119,187 5,839,170 7,065,416 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

us wood sawn or chipped lengthwise, sliced or peeled, of thickness

ding 6mm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,952,193 6,251,623 6,598,640

cles exported and returned, not advanced or improved in condition, animals

d or returned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,485,905 5,847,162 6,076,681

er motor vehicles with spark-ignition internal-combustion reciprocating piston

, over 1,500 but not over 3,000 cc 2,826,323 5,087,297 5,461,001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

gas, gaseous state . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,246,194 3,914,607 5,068,629

nt, in rolls or sheets 4,371,269 4,019,150 3,488,032 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories of motor vehicles, nesi 3,120,298 3,198,181 3,164,471 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . m oils and oils obtained from bituminous minerals, other than crude; and

ations, nesi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,680,425 2,482,415 2,385,893

d accessories for automatic data processing machines and units 2,870,644 2,364,805 2,267,445 . . . . . . . . . . . . . . . . . 

de semiconductors (1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 1,809,672 2,044,459

nition reciprocating piston engines, of a cylinder capacity over 1,000 cc 986,352 1,712,136 1,958,517 . . . . . . . . . . . . d accessories of bodies of motor vehicles, nesi 1,144,186 1,599,083 1,832,276 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nmonetary, unwrought nesi (other than powder) 1,256,180 1,631,647 1,691,546 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ctors for semi-trailers 1,582,605 1,337,175 1,656,051 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l woodpulp, soda or sulfate, other than dissolving grades, semibleached or

ed, coniferous wood 2,402,625 1,654,302 1,649,436 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d “low value” shipments 1,425,914 1,530,975 1,628,019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ht aluminum alloys. 1,219,414 1,187,692 1,410,338 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s and aircraft, of an unladen weight over 2,000 kg but not over 15,000 kg 588,733 996,569 1,196,435 . . . . . . . . . . 

esi, over 10% (weight) fiber obtained by mechanical process 1,043,735 1,049,533 1,154,359 . . . . . . . . . . . . . . . . . . . . . 

m, not alloyed, unwrought 1,306,148 1,032,873 1,072,992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 855,698 901,670 978,160

elephonic or telegraphic apparatus 585,788 902,454 948,040 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nimals, live, nesi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 862,118 1,000,004 944,124

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,650,055 84,089,244 89,045,476l all commodities. 144,881,881 156,298,602 167,881,010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s reported under HTS 8542.11 part, .19 part, .20 part, and .80 part. 

e Only” reporting number estimating low-valued imports.

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

fficial statistics of the U.S. Department of Commerce.
e with the European Union, by SITC numbers (revision 3), 1995-97

(1,000 dollars)

ion 1995 1996 1997

U.S. exports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,647,714 4,745,961 4,614,150

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,777,735 2,575,617 2,351,538

aterials, inedible, except fuels 7,805,881 7,049,765 7,291,558 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 2,520,936 2,697,421 2,456,632 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 290,816 260,594 241,573 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 14,897,383 15,018,280 17,407,726 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 7,950,361 7,864,553 9,005,187 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 55,281,021 57,328,374 65,945,637 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 14,573,830 15,106,614 16,532,031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 5,570,285 7,072,131 5,905,124 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities 116,315,962 119,719,310 131,751,156 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

U.S. imports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,692,243 2,860,308 3,028,922

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,093,861 3,474,811 3,861,157

aterials, inedible, except fuels 1,366,382 1,350,670 1,505,497 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 3,703,626 4,254,085 3,928,611 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 353,750 461,232 432,936 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 16,259,157 19,085,053 22,117,040 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 19,008,897 20,026,561 21,237,368 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 59,361,285 62,442,613 69,790,369 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 18,850,594 20,389,556 22,384,989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 6,145,518 7,109,629 7,603,294 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities 130,835,313 141,454,518 155,890,182 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

icial statistics of the U.S. Department of Commerce.
 European Union, by Schedule B numbers, 1995-97

(1,000 dollars)

ion 1995 1996 1997

d accessories for automated data processing machines and units 6,217,129 6,566,543 7,364,918 . . . . . . . . . . . . . . . . . 

s and other aircraft, of an unladen weight exceeding 15,000 kg 3,675,047 3,927,581 6,688,338 . . . . . . . . . . . . . . . . . . . 

airplanes or helicopters, nesi 3,157,807 3,533,272 4,147,083 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 of “low value” shipments 2,937,221 3,097,566 3,286,232 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

urbojets or turbopropellers 1,860,525 2,050,435 2,742,081 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s, whether or not broken 2,006,425 2,348,784 2,315,842 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

its of automated data processing machines (2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 1,912,643 2,222,838

d accessories of motor vehicles, nesi 2,342,959 2,345,029 2,155,643 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

de semiconductors (3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 1,391,811 1,534,338

us coal, whether or not pulverized, but not agglomerated 1,739,033 1,745,058 1,519,246 . . . . . . . . . . . . . . . . . . . . . . . . 

 surgical, dental or veterinamy sciences instruments, appliances, and parts, nesi 905,086 1,057,761 1,314,483 . . . . 

gital automated data processing machines, entered in the form of systems (4 . . . . . . . . . ) 2,137,038 1,255,030

etary gold (including gold plated with platinum), unwrought, excluding powder 1,211,941 2,426,527 1,220,238 . . . . . . 

er motor vehicles with spark-ignition internal-combustion reciprocating

engine, cylinder capacity over 1,500 but not over 3,000 cc 1,092,091 1,514,978 1,212,767 . . . . . . . . . . . . . . . . . . . . . . . te diagnostic or laboratory reagents, except pharmaceuticals 888,130 980,463 1,123,945 . . . . . . . . . . . . . . . . . . . . 

c data processing storage units (5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 742,041 1,050,358

es containing tobacco 1,711,912 1,329,419 1,046,927 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nes parts, nesi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552,822 605,805 924,996

s and mechanical appliances having individual functions, nesi 916,341 805,617 737,679 . . . . . . . . . . . . . . . . . . . . 

output units of automatic data processing machines (6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 523,112 721,808

needles, nesi, catheters etc. and parts etc 479,853 625,393 709,060 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ocessing units; nesi (7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 433,582 698,529

ments, in measured doses, etc., nesi 274,618 456,889 693,502 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

iagnostic apparatus nesi, and parts 795,988 742,264 660,540 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s of a thrust exceeding 25 kN 638,551 619,574 652,794 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,403,479 43,919,183 47,999,213l all commodities 116,315,962 119,719,310 131,751,156 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

e Only” reporting number estimating low-valued exports.

s reported under Schedule B 8471.99 part. s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part. s reported under Schedule B 8471.91 part, .92 part, .93 part, and .99 part. s reported under Schedule B 8471.93 part. s reported under Schedule B 8471.92 part. 

s reported under Schedule B 8471.91 part.

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

fficial statistics of the U.S. Department of Commerce.
the European Union, by HTS numbers, 1995-97

(1,000 dollars)

ion 1995 1996 1997

er motor vehicles with spark-ignition internal-combustion reciprocating

engine, cylinder capacity over 3,000 cc 5,771,437 6,242,758 7,798,303 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

er motor vehicles with spark-ignition internal-combustion reciprocating

engine, over 1,500 but not over 3,000 cc 5,766,953 6,300,869 6,498,240 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

cles exported and returned, not advanced or improved in condition;

s exported or returned 4,139,393 4,959,995 5,184,338 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 turbojets or turbopropellers 1,804,395 2,268,191 3,196,328 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

m oils and oils obtained from bituminous minerals, other than crude 1,253,320 2,476,395 2,602,523 . . . . . . . . . . . . . . . 

medicaments put up in measure doses or in forms or packings for retail sale, nesi 944,141 1,311,324 2,286,826 . . . 

s of a thrust exceeding 25kN 1,111,990 1,154,345 2,129,231 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

yclic compounds nesi 728,793 1,098,064 1,831,811 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories for automatic data processing machines and units 1,795,847 1,473,023 1,830,449 . . . . . . . . . . . . . . . . . 

s, drawings and pastels, executed entirely by hand, framed or not framed 1,213,840 1,331,901 1,789,277 . . . . . . . . . . 

airplanes or helicopters, nesi 1,061,887 1,277,437 1,769,462 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

strial diamonds, nesi 1,352,182 1,501,938 1,745,816 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d “low valued” shipments 1,285,327 1,378,694 1,520,043 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

of jewelry and parts thereof, of precious metal (excluding silver) 1,282,348 1,310,687 1,308,948 . . . . . . . . . . . . . . . . . . 

de semiconductors (2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 1,692,771 1,298,515

s and other aircraft, of an unladen weight exceeding 15,000 kg 1,370,524 1,133,982 1,199,956 . . . . . . . . . . . . . . . . . . . s and aircraft of an unladen weight over 2,000 kg but not over 15,000 kg 967,825 1,069,409 1,174,422 . . . . . . . . . . . 

d accessories for motor vehicles, nesi 1,106,516 1,177,007 1,130,924 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

its of automated data processing machines (3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 812,560 1,024,050

si of fresh grapes or fortified wine, in containers not over 2 liters 695,222 838,615 961,493 . . . . . . . . . . . . . . . . . . 

m oils and oils obtained from bituminous minerals, crude 2,261,093 1,462,831 958,766 . . . . . . . . . . . . . . . . . . . . . . . . 

c data processing storage units (4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 816,556 904,611

r, outer sole of rubber, plastics or leather and leather upper, nesi 652,373 771,720 862,051 . . . . . . . . . . . . . . . . . 

yclic compounds with nitrogen hetero-atom(s) only, nesi 407,436 455,329 836,836 . . . . . . . . . . . . . . . . . . . . . . . . . 

 of an age exceeding one hundred years 585,942 692,654 828,131 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,558,784 45,009,054 52,671,350

l all commodities 130,835,313 141,454,518 155,890,182 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

e Only” reporting number estimating low-valued exports. 

s reported under HTS 8542.11 part, .19 part, .20 part, and .80 part. 

s reported under HTS 8471.99 part. 

s reported under HTS 8471.93 part.

ng, figures may not add to totals shown.The abbreviation, nesi, stands for “not elsewhere specified of included.”

icial statistics of the U.S. Department of Commerce.
e with Japan, by SITC numbers (revision 3), 1995-97

(1,000 dollars)

ion 1995 1996 1997

U.S. exports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,397,196 10,795,879 9,514,173

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,182,517 2,051,428 2,062,838

aterials, inedible, except fuels 6,912,015 6,308,149 5,262,177 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 971,920 1,107,921 898,572 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 119,791 114,567 95,577 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 6,023,907 5,769,207 6,319,129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 3,776,236 3,758,885 3,591,184 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 21,600,126 23,466,945 24,414,387 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 7,722,469 9,015,383 8,776,285 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 1,255,366 1,196,440 1,157,174 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,961,543 63,584,804 62,091,495

U.S. imports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298,413 279,857 356,146

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,722 34,428 38,516

aterials, inedible, except fuels 222,763 211,687 228,199 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 226,802 180,145 246,181 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 19,649 19,222 20,437 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 5,091,865 5,575,384 6,041,013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 6,901,462 6,768,200 7,501,610 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 97,353,374 89,143,404 91,635,437 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 10,337,852 10,385,310 11,865,148 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 1,917,376 2,164,619 2,547,669 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities 122,402,280 114,762,256 120,480,356 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

icial statistics of the U.S. Department of Commerce.
pan, by Schedule B numbers, 1995-97

 (1,000 dollars)

ion 1995 1996 1997

s and other aircraft, of an unladen weight exceeding 15,000 kg 1,496,438 1,375,657 2,482,343 . . . . . . . . . . . . . . . . . . . 

d accessories for automatic data processing machines and units 1,634,852 1,927,463 2,005,979 . . . . . . . . . . . . . . . . . 

aize), other than seed 1,905,821 2,454,811 1,914,567 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

de semiconductors (1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 1,265,932 1,577,737

es containing tobacco 1,467,013 1,523,004 1,549,304 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

airplanes or helicopters, nesi 958,177 1,143,732 1,295,123 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s, whether or not broken 983,029 1,142,637 1,128,280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

us wood in the rough, not treated 1,668,956 1,640,238 1,096,828 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

er motor vehicles with spark-ignition internal-combustion reciprocating

engine cylinder capacity over 1,500 not over 3,000 cc 2,059,662 1,604,034 895,454 . . . . . . . . . . . . . . . . . . . . . . . . . . 

cept antennas, for transmission, radar, radio, television, etc., nesi 722,640 735,428 886,725 . . . . . . . . . . . . . . . . 

 enriched in u235 plutonium and their compounds, etc 606,579 554,280 804,457 . . . . . . . . . . . . . . . . . . . . . . . . . . 

s and mechanical appliances having individual functions, nesi 767,624 876,988 733,244 . . . . . . . . . . . . . . . . . . . . 

d accessories for motor vehicles, nesi 380,247 556,841 721,094 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d “low value” shipments 698,087 745,691 711,626 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

bovine animals, boneless, fresh or chilled 911,976 763,590 701,821 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

its of automated data processing machines (3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 656,381 659,651

bovine animals, boneless, frozen 663,563 633,658 597,187 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd meslin, excluding durum wheat 511,099 644,957 573,526 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ocessing units, nesi (4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 607,563 511,256

gital automated data processing machines, entered in the form of systems (5 . . . . . . . . . ) 838,537 496,807

 surgical, dental or veterinary sciences instruments, appliances, and parts, nesi 396,679 405,668 459,348 . . . . 

c data processing storage units (6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 286,316 456,325

us wood sawn, sliced etc, over 6 mm thick 620,084 651,846 449,443 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

er motor vehicles with spark-ignition internal-combustion reciprocating

engine, cylinder capacity over 3,000 cc 587,147 536,320 418,929 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

etc. needles nesi, catheters, cannulae and the like; parts and

sories thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263,563 338,919 400,931

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,303,237 23,910,488 23,527,984l all commodities 60,961,543 63,584,804 62,091,495 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part. 

 Only” reporting number estimating low-valued exports.

s reported under Schedule B 8471.99 part. s reported under Schedule B 8471.91 part. s reported under Schedule B 8471.91 part, .92 part, .93 part, and .99 part. s reported under Schedule B 8471.93 part.

ng, figures may not add to totals shown.The abbreviation, nesi, stands for “not elsewhere specified or included.”

official statistics of the U.S. Department of Commerce.
Japan, by HTS numbers, 1995-97

(1,000 dollars)

tion 1995 1996 1997

er motor vehicles with spark-ignition internal-combustion reciprocating

engine, over 1,500 but not over 3,000 cc 22,551,851 19,189,833 21,143,181 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

er motor vehicles with spark-ignition internal-combustion reciprocating

engine, cylinder capacity over 3,000 cc 3,618,119 6,101,828 5,463,492 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

de semiconductors (1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 6,174,903 5,334,621

output units of automated data processing machine (2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 4,233,546 4,654,108

d accessories for automated data processing machines and units 4,558,014 4,375,585 4,377,691 . . . . . . . . . . . . . . . . . 

c data processing storage units (3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 3,370,690 3,896,917

mes used with television receiver and parts and accessories 780,642 1,224,379 2,327,577 . . . . . . . . . . . . . . . . . . . . 

ge video cameras and other video camera recorders (4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 1,712,237 1,626,635

cles exported and returned, not advanced or improved in condition;

s exported or returned 1,033,807 1,322,975 1,559,969 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

atic photocopying apparatus, operating by reproducing the original

a intermediate onto the copy (indirect process) 1,570,281 1,376,542 1,554,346 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories for motor vehicles 1,552,817 1,475,146 1,490,963 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

airplanes or helicopters, nesi 465,370 739,935 1,209,272 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s and mechanical appliances having individual functions, nesi 1,053,057 1,016,430 1,182,415 . . . . . . . . . . . . . . . . . . . . 

d accessories of photocopying apparatus 1,010,942 948,755 952,142 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

c tape-type video recording or reproducing apparatus 907,558 811,372 857,968 . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d “low valued” shipments 828,004 759,186 791,688 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nition internal-combustion piston engine parts, nesi 728,457 777,974 733,994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

xes for motor vehicles 742,415 650,966 698,672 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

elephonic or telegraphic apparatus 745,595 750,504 689,682 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tches, battery, mechanical display, base metal 627,007 653,728 647,578 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

c tapes, unrecorded, of a width exceeding 6.5 435,825 538,017 640,162 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

g centers for working metal 506,832 586,973 640,141 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

cal shovels, excavators and shovel loaders, self-propelled 641,213 525,271 617,658 . . . . . . . . . . . . . . . . . . . . . . . 

 digital automated data processing machines not exceeding 10 kg, with

t a CPU, keyboard and display (6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 513,581 616,992

l preparations for photographic uses, nesi 613,063 553,102 539,726 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,970,868 60,383,458 64,247,590l all commodities 122,402,280 114,762,256 120,480,356 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s reported under HTS 8542.11 part, .19 part, .20 part, and .80 part. s reported under HTS 8471.92 part. s reported under HTS 8471.93 part. 

s reported under HTS 8525.30.90 part. 

e Only” reporting number estimating low-valued exports.

s reported under HTS 8471.20 part.

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

icial statistics of the U.S. Department of Commerce.
e with Mexico, by SITC numbers (revision 3), 1995-97

(1,000 dollars)

ion 1995 1996 1997

U.S. exports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,138,786 3,547,511 3,027,572

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,805 67,654 60,971

aterials, inedible, except fuels 2,100,857 2,455,237 2,939,317 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 1,275,522 1,504,694 1,988,424 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 362,045 322,546 373,912 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 4,214,913 5,062,163 6,233,736 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 6,515,738 8,049,697 9,118,864 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 20,805,569 25,080,540 33,483,224 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 5,456,649 6,316,266 8,153,822 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 1,936,892 2,279,557 3,013,377 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,880,776 54,685,865 68,393,219

U.S. imports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,828,492 3,650,835 3,909,317

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,955 528,479 698,343

aterials, inedible, except fuels 1,093,025 961,686 1,000,990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 6,012,906 8,024,077 7,829,476 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 18,845 22,813 18,301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 1,299,219 1,578,881 1,791,399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 4,919,612 5,628,895 6,552,053 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 33,208,578 40,596,350 46,899,121 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 8,329,981 10,237,485 12,916,290 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 2,609,387 2,949,618 3,389,504 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,721,000 74,179,119 85,004,793

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

icial statistics of the U.S. Department of Commerce.
xico, by Schedule B number, 1995-97

 (1,000 dollars)

ion 1995 1996 1997

 “low value export” shipments 1,624,591 1,951,768 2,465,472 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories for motor vehicles, nesi 1,605,286 1,868,127 1,658,078 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories of bodies (including cabs) of motor vehicles, nesi 1,350,015 1,007,352 1,533,609 . . . . . . . . . . . . . . . . . . 

m oils and oils obtained from bituminous minerals, other than crude 764,615 988,223 1,413,561 . . . . . . . . . . . . . . . 

-ray television picture tubes, color, including monitor 567,622 917,180 1,082,988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

of plastics, nesi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 656,829 880,137 1,049,673

d accessories for automated data processing machines and units 599,517 834,572 931,677 . . . . . . . . . . . . . . . . . 

s, whether or not broken 485,346 858,812 909,354 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 electrical apparatus for electrical circuits; for electrical control nesi 447,577 697,303 855,770 . . . . . . . . . . . . . . . 

hicles for transporting goods, with spark-ignition internal-combustion

ngine, gross vehicle weight, not exceeding 5 mt 37,563 335,552 836,068 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

onolithic integrated circuits (2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 566,752 761,959

d ignition wiring sets for vehicles, ships or aircraft 557,949 685,678 743,336 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

er motor vehicles with spark-ignition internal-combustion reciprocating

engine cylinder capacity over 3,000 cc 179,264 590,874 742,338 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ocessing units, nesi (3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 337,634 677,396

ircuits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426,788 528,647 618,090

of iron or steel nesi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385,506 536,455 592,281

seats (except medical, barbers and dental, etc.) 427,819 442,382 565,191 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

xes for motor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,492 184,646 561,379

 electrical transformers, static converters and inductors 543,527 442,410 556,794 . . . . . . . . . . . . . . . . . . . . . . . . . . 

es with differential for motor 190,838 158,439 547,631 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

de semiconductors (4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 287,920 542,128

l apparatus for switching or protecting electrical circuits, nesi 493,976 522,885 507,364 . . . . . . . . . . . . . . . . . . . . . 

 boxes and cases corrugated paper and paperboard 442,815 471,489 468,896 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nition reciprocating piston engines, of a cylinder capacity over 1,000 cc 29,088 259,979 457,508 . . . . . . . . . . . . 

electric motors, generators and sets 302,755 390,693 449,923 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,744,779 16,745,910 21,528,466l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,880,776 54,685,865 68,393,219

e Only” reporting number estimating low-valued exports.

s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part. s reported under Schedule B 8471.91 part. s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part.

ng, figures may not add to totals shown.The abbreviation, nesi, stands for “not elsewhere specified or included.”

official statistics of the U.S. Department of Commerce.
Mexico, by HTS numbers, 1995-97

 (1,000 dollars)

ion 1995 1996 1997

m oils and oils from bituminous minerals crude 5,681,586 7,032,759 6,565,114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

er motor vehicles with spark-ignition internal-combustion reciprocating

engine, over 1,500 but not over 3,000 cc 5,478,466 5,972,387 5,601,248 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d ignition wiring sets and other wiring sets of a kind used in

es, aircraft or ships 2,717,792 3,013,814 3,579,345 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ete or unfinished color reception apparatus for televisions (1 . . . . . . . . . . . . . . . . . . . . . . . . ) 2,725,954 2,810,572

er motor vehicles with spark-ignition internal-combustion piston engine,

er capacity over 3,000 cc 871,675 2,267,745 2,677,954 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

cles exported and returned, not advanced or improved in condition;

s exported or returned 1,923,081 2,043,373 2,433,200 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

hicles for transporting goods, with spark-ignition internal-combustion

engine, gross vehicle weight not exceeding 5 mt 1,297,014 2,176,852 2,292,556 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 digital automated data processing machines not exceeding 10 kg, with

t a CPU, keyboard, and display (2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 1,034,153 1,659,449

ating spark-ignition piston engines, of a cylinder capacity over 1,000 cc 1,275,846 1,372,663 1,470,243 . . . . . . . . . . . 

d accessories for automated data processing machines and units 810,082 924,133 1,293,941 . . . . . . . . . . . . . . . . . 

seats (except medical, barbers, dentist, etc.) 765,097 938,360 1,171,271 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

output units for automated data processing machines (3 . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 601,535 1,104,529

oadcast receivers for motor vehicles 918,188 1,005,551 1,102,366 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nesi, diesel engine, gross vehicle weight not exceeding 5 mt 466,836 818,695 1,074,222 . . . . . . . . . . . . . . . . . . . . . 

 boys’ trousers, bib and brace overalls, breeches and shorts not

 or crocheted, of cotton 593,094 745,376 938,319 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

cept antennas, for transmission, radar, radio, television, etc., nesi 874,170 782,156 868,475 . . . . . . . . . . . . . . . . 

d accessories of bodies (including cabs) for motor vehicles 303,811 440,634 815,072 . . . . . . . . . . . . . . . . . . . . . . 

eat belts for motor-vehicles 646,788 702,186 777,064 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s or girls’ trousers, etc., of cotton, not knitted or crocheted 330,493 451,217 728,087 . . . . . . . . . . . . . . . . . . . . . . . 

ssion apparatus for radio or television 806,657 1,081,821 717,490 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories of motor-vehicles, nesi 680,803 774,685 715,002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nverters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278,573 480,035 700,361

d “low value” shipments 425,357 498,012 583,062 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

c regulating or controlling instruments and apparatus, nesi 414,920 437,009 582,830 . . . . . . . . . . . . . . . . . . . . . . 

ot roasted, not decaffeinated 508,372 472,674 545,814 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,068,703 38,793,778 42,807,588l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,721,000 74,179,119 85,004,793

s reported under HTS 8528.10 part. s reported under HTS 8471.20 part. s reported under HTS 8471.92 part. 

e Only” reporting number estimating low-valued exports.

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

official statistics of the U.S. Department of Commerce.
e with China, by SITC numbers (revision 3), 1995-97

(1,000 dollars)

ion 1995 1996 1997

U.S. exports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,305,359 769,631 396,593

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,582 3,173 8,677

aterials, inedible, except fuels 1,674,633 1,871,381 1,636,719 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 25,287 67,587 226,044 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 395,186 113,629 169,069 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 2,008,017 1,722,182 1,928,933 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 662,385 783,853 801,654 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 4,747,820 5,464,882 6,385,836 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 633,556 847,386 826,925 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 151,721 157,540 153,031 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,612,547 11,801,243 12,533,479

U.S. imports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 594,807 655,224 728,995

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,753 15,168 18,904

aterials, inedible, except fuels 332,770 376,751 481,495 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 430,685 462,465 390,659 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 2,537 7,549 8,465 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 893,699 1,077,181 1,290,242 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 4,234,204 4,548,265 5,762,918 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 11,879,776 13,813,261 17,366,754 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 26,585,800 29,819,465 35,416,085 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 403,953 434,046 531,409 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,369,985 51,209,376 61,995,926

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

icial statistics of the U.S. Department of Commerce.
na, by Schedule B numbers, 1995-97

(1,000 dollars)

ion 1995 1996 1997

s and other aircraft, of an unladen weight exceeding 15,000 kg 870,672 1,310,778 1,769,198 . . . . . . . . . . . . . . . . . . . 

s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,204,154 891,052 1,049,662

not carded or combed 828,811 727,497 572,415 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s, whether or not broken 50,657 414,476 410,960 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories for motor vehicles 17,661 62,814 233,796 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 boring or sinking machinery, nesi 68,359 85,537 231,404 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

airplanes or helicopters, nesi 104,712 166,991 202,188 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

si for transmission, radar, radio, television, etc., excluding antennas 215,663 157,737 157,199 . . . . . . . . . . . . . . . 

 oil and fractions, crude, whether or not degummed 298,680 99,135 153,238 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ssion apparatus incorporating reception apparatus 146,664 144,873 147,781 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s and mechanical appliances having individual functions, nesi 117,668 136,439 135,459 . . . . . . . . . . . . . . . . . . . . 

m oils and oils from bituminous minerals 4 16,425 118,759 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 super-heated water boilers and steam or other vapor generation boilers 18,782 33,163 115,412 . . . . . . . . . . . 

elephonic or telegraphic apparatus 162,208 120,077 103,484 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

w hides and skins of bovine animals, nesi, fresh or wet-salt 87,590 91,569 102,109 . . . . . . . . . . . . . . . . . . . . . . de semiconductors (2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 66,933 97,928

d accessories for automatic data processing machines and units thereof 50,070 67,825 96,434 . . . . . . . . . . . 

r, uncoated, unbleached, in rolls or sheets 51,754 102,362 95,053 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

achines except coin-operated; board games; mah-jog; dominoes; dice 58,357 109,586 88,235 . . . . . . . . . . . . 

m oils and oils from bituminous minerals, other than crude 19,064 35,193 87,430 . . . . . . . . . . . . . . . . . . . . . . . 

m alloy plates, sheets or strip, over 0.2 mm thick, nesi 21,372 59,242 87,287 . . . . . . . . . . . . . . . . . . . . . . . . . . . 

aft including satellites spacecraft launch vehicles 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133,790 121,674 86,000

 oilcake and other solid residue, whether or not ground 0 116,700 84,429 . . . . . . . . . . . . . . . . . . . . . . . . . 

 “low value” shipments 73,743 73,117 77,126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

bers, optical fiber bundles and cables 31,260 38,344 74,314 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,631,694 5,249,540 6,377,300l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,612,547 11,801,243 12,533,479

e Only” reporting number aggregating certain fertilizer products to prevent disclosure. 

s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part. s reported under Schedule B 8802.50 part. 

e Only” reporting number estimating low-valued exports.

ng, figures may not add to totals shown.The abbreviation, nesi, stands for “not elsewhere specified or included.”

official statistics of the U.S. Department of Commerce.
China, by HTS numbers, 1995-97

 (1,000 dollars)

ion 1995 1996 1997

r not covering the ankles, with outer soles of rubber or plastics or

sition leather and uppers of leather 1,856,584 2,122,236 2,338,496 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories for automated data processing machines and units 974,800 1,351,827 1,848,810 . . . . . . . . . . . . . . . . . 

ys and models, nesi 1,227,590 1,436,373 1,831,389 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

oys, representing animals or nonhuman creatures and parts and accessories 735,428 994,784 1,585,199 . . . . . . 

r with outer soles and uppers of rubber or plastics nesi 1,292,246 1,472,666 1,570,037 . . . . . . . . . . . . . . . . . . . . . . . . . . r covering the ankles, with outer soles and uppers of rubber or

s, excluding waterproof footwear 915,444 953,078 1,352,779 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

resenting only human beings and parts and accessories thereof,

er or not dressed 794,796 998,797 1,155,177 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

output units for automated data processing (1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 674,960 1,092,629

diobroadcast apparatus combined with sound recording or reproducing apparatus (2 . . ) 693,448 879,467

or christmas festivities and parts and accessories thereof 715,175 755,140 821,458 . . . . . . . . . . . . . . . . . . . . . . . . 

c data processing storage units (3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 580,485 816,562

cases, bags and similar containers, with outer surface of plastic

ng or of textile materials 548,358 565,907 741,464 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nverters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,409 434,200 691,208

s, pullovers, sweatshirts, vests and similar articles,

 or crocheted, of textile materials, nesi 547,383 599,558 685,176 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

of apparel of leather or composition leather 603,023 600,275 646,094 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

resenting animal and nonhuman creatures and parts and accessories 378,643 529,105 622,284 . . . . . . . . . . . . . 

phone sets with cordless handsets 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522,419 490,597 622,226

achines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396,478 441,154 592,807

 up in sets or outfits and parts and accessories, nesi 347,603 442,619 544,235 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

otwear, tennis shoes, basketball shoes with outer soles of rubber,

s, or leather and uppers of textile materials 271,484 370,570 504,421 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

r, with outer soles and uppers of rubber or plastics nesi 544,490 516,885 485,061 . . . . . . . . . . . . . . . . . . . . . . . . . 

oadcast receivers nesi, combined with sound recording or reproducing apparatus 345,992 305,011 469,190 . . . 

flowers, foliage and fruit and parts thereof, and articles made up of

al flowers, foliage or fruit, of materials other than plastics 471,990 410,477 464,450 . . . . . . . . . . . . . . . . . . . . . . . . 

of plastics and articles of other materials of headings 3901 to 3914, nesi 512,838 550,345 462,154 . . . . . . . . . . 

gs with outer surface of plastic sheeting or textile materials 374,977 386,913 420,570 . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,525,148 18,677,408 23,243,344l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,369,985 51,209,376 61,995,926

s reported under HTS 8471.92 part. s reported under HTS 8527.11 part. s reported under HTS 8471.93 part. s reported under HTS 8525.20.50.

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

official statistics of the U.S. Department of Commerce.
e with Taiwan, by SITC numbers (revision 3), 1995-97

(1,000 dollars)

ion 1995 1996 1997

U.S. exports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,559,987 1,888,389 1,568,005

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,356 122,744 163,585

aterials, inedible, except fuels 1,665,421 1,602,357 1,561,341 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 293,480 370,772 236,845 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 27,432 13,702 15,012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 2,873,580 2,307,854 2,424,310 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 1,278,447 1,067,385 1,028,466 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 8,228,400 7,631,698 9,799,262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 1,314,096 1,444,697 1,686,710 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 667,457 470,701 399,323 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,035,656 16,920,298 18,882,858

U.S. imports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282,413 278,041 294,733

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,163 6,305 6,279

aterials, inedible, except fuels 114,708 105,751 127,392 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 2,833 1,128 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 3,470 3,399 3,203 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 396,896 402,112 425,052 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 3,781,827 3,756,175 4,095,465 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 16,667,647 18,032,603 20,447,233 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 7,237,730 6,736,369 6,518,447 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 380,885 475,152 556,416 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,874,572 29,797,035 32,474,286

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

icial statistics of the U.S. Department of Commerce.
wan, by Schedule B numbers, 1995-97

 (1,000 dollars)

ion 1995 1996 1997

de semiconductors (1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 769,423 1,174,156

s and other aircraft, of an unladen weight exceeding 15,000 kg 1,201,660 662,099 766,506 . . . . . . . . . . . . . . . . . . . s and aircraft of an unladen weight over 2,000 kg but not over 15,000 kg 3,900 0 735,550 . . . . . . . . . . . 

s and mechanical appliances having individual functions, nesi 368,523 470,327 711,246 . . . . . . . . . . . . . . . . . . . . 

aize), other than seed corn 770,817 962,061 692,643 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s, whether or not broken 600,467 776,798 649,244 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

airplanes or helicopters, nesi 459,192 394,120 492,454 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

onolithic integrated circuits (2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 363,400 445,324

d accessories for automated data processing machines and units 230,286 248,316 391,344 . . . . . . . . . . . . . . . . . 

s tools nesi for dry etching patterns on semiconductor materials 3 . . . . . . . . . . . . . . . . . . 165,622 228,526 376,312

er motor vehicles with spark-ignition internal-combustion reciprocating

engine, cylinder capacity over 1,500 but not over 3,000 cc 781,545 482,805 301,229 . . . . . . . . . . . . . . . . . . . . . . . 

 “low value” shipments 219,934 213,897 222,981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

obtained by bipolar technology (5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 263,679 204,733

machines and mechanical appliances having individual functions, nesi 93,234 118,737 194,677 . . . . . . . . . . . . 

w hides and skins of bovine animals, nesi, fresh or wet-salted 200,376 173,731 191,691 . . . . . . . . . . . . . . . . . . . 

nd meslin, excluding durum wheat 155,240 214,490 160,714 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 glycol (ethanediol) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,284 113,807 154,506

xcept antenna) for use with radio transmission, radar, radio

tional aid, reception and television apparatus, nesi 50,041 99,459 149,013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

gital automated data processing machines, entered in the form of systems (6 . . . . . . . . . ) 176,131 147,773

grenades, torpedoes, mines, missiles, etc., and parts 145,692 214,913 144,622 . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 and its compounds enriched in u235; plutonium and its compounds 16 22,778 135,501 . . . . . . . . . . . . . . 

aste and scrap of primary cells, primary batteries, etc (7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 129,973 123,132

oroethane (ethylene dichloride) 108,024 157,991 120,920 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

anters for doping semiconductor materials (8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 127,481 117,536

not carded or combed 141,705 77,509 111,272 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,822,559 7,462,450 8,915,080l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,035,656 16,920,298 18,882,858

s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part. s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part. s reported under Schedule B 8456.90.50.40. 

e Only” reporting number estimating low-valued exports.

s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part. s reported under Schedule B 8571.91 part, .92 part, .93 part, and .99 part. s reported under Schedule B 8548.00 part. s reported under Schedule B 8543.10 part.

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

official statistics of the U.S. Department of Commerce.
Taiwan, by HTS numbers, 1995-97

 (1,000 dollars)

ion 1995 1996 1997

d accessories for automated data processing machines and units 3,536,231 3,832,695 4,434,286 . . . . . . . . . . . . . . . . . 

ed data processing input or output units (1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 2,150,889 2,623,974

de semiconductors (2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 2,031,877 2,008,173

 digital automated data processing machines not exceeding 10kg, with at

 CPU, keyboard and display (3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 984,759 1,304,980

onolithic integrated circuits (4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 565,027 800,817

ircuits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442,414 506,159 585,612

ssion apparatus for radio or television 231,679 351,014 495,956 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

c data processing storage units (5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 229,545 465,554

nverters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169,581 373,709 460,506

its of automated data processing machines (6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 347,292 424,876

s, pullovers, sweatshirts, vests and similar articles, knitted or

ted, of manmade fibers 327,084 298,539 341,919 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

cles exported and returned, not advanced or improved in condition;

s exported or returned 163,191 243,168 309,192 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d screws and bolts, of iron or steel, nesi, whether or not with their nuts or washers 292,388 287,754 301,579 . . 

and other cycles (including delivery tricycles) not motorized 373,356 320,944 291,414 . . . . . . . . . . . . . . . . . . . . . 

um, playground or other exercise articles and equipment; parts and

sories thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,435 399,401 282,498

or, wall, window, ceiling or roof fans, with a self-contained electric

c motor of and output not exceeding 125W 250,595 242,661 237,398 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d “low valued” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,727 211,169 232,740

paratus for carrier-current line systems or for digital line systems 8 . . . . . . . . . . . . . . . . . 132,606 228,471 230,318

cks, valves and similar appliances, nesi 215,006 226,360 227,698 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

furniture, other than of a kind used in the bedroom 273,797 227,416 214,833 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ing screws of iron or steel 194,343 201,473 208,016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

niture, other than of a kind used in offices 234,410 208,055 193,955 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories of bodies (including cabs) for motor vehicles, nesi 145,787 161,743 183,243 . . . . . . . . . . . . . . . . . . 

machines for working wood, cork, bone, hard rubber, hard plastics, etc 120,833 144,953 181,091 . . . . . . . . . . . . 

l plugs and sockets for a voltage not exceeding 1,000 v 134,163 138,432 165,347 . . . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,678,628 14,913,504 17,205,977l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,874,572 29,797,035 32,474,286

s reported under HTS 8471.92 part. s reported under HTS 8542.11 part, .19 part, .20 part, and .80 part. s reported under HTS 8471.20 part. s reported under HTS 8542.11 part, .19 part, .20 part, and .80 part. s reported under HTS 8471.93 part. s reported under HTS 8471.99 part. 

e Only” reporting number estimating low-valued imports.

s reported under HTS 8517.40.

ng, figures may not add to totals shown.The abbreviation, nesi, stands for “not elsewhere specified of included.”

icial statistics of the U.S. Department of Commerce.
e with Korea, by SITC numbers (revision 3), 1995-97

(1,000 dollars)

ion 1995 1996 1997

U.S. exports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,249,909 2,490,823 1,597,285

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188,052 197,183 236,278

aterials, inedible, except fuels 3,201,465 2,645,975 2,514,433 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 649,323 736,105 664,539 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 107,502 59,588 69,894 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 2,602,781 2,576,711 2,481,135 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 1,667,959 1,454,480 1,352,588 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 11,458,695 12,316,061 12,693,838 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 1,906,648 2,245,938 2,214,149 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 450,615 710,541 463,292 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,482,948 25,433,405 24,287,441

U.S. imports

d live animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148,026 143,845 154,844

es and tobacco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,576 16,527 13,134

aterials, inedible, except fuels 155,977 143,846 151,622 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

uels, lubricants and related materials 134,829 93,944 69,147 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd vegetable oils, fats and waxes 1,181 1,397 1,608 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ls and related products, nesi 438,134 494,916 563,952 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tured goods classified chiefly by material 2219,552 2,200,218 2,486,930 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ry and transport equipment 16,485,315 15,437,528 15,567,136 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

neous manufactured articles 4,178,715 3,555,100 3,484,240 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

dities and transactions not classified elsewhere in SITC 253,399 444,275 446,397 . . . . . . . . . . . . . . . . . . . . . . . . . . 

l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,025,703 22,531,596 22,939,009

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

icial statistics of the U.S. Department of Commerce.
rea, by Schedule B numbers, 1995-97

 (1,000 dollars)

ion 1995 1996 1997

de semiconductors (1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 923,321 1,853,313

s and other aircraft of an unladen weight exceeding 15,000 kg 1,255,114 1,393,126 1,375,270 . . . . . . . . . . . . . . . . . . . . 

airplanes or helicopters, nesi 737,852 643,830 722,910 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s and mechanical appliances having individual functions, nesi 865,102 873,948 527,299 . . . . . . . . . . . . . . . . . . . . 

d accessories for automatic data processing machines and units 275,404 365,600 478,362 . . . . . . . . . . . . . . . . . 

nd raw hides and skins of bovine animals, nesi, fresh or wet-salted 614,210 457,249 460,665 . . . . . . . . . . . . . . . . 

aize), other than seed corn 1,110,315 1,259,806 450,431 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s, whether or not broken 335,769 438,684 372,331 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

machines and mechanical appliances having individual functions, nesi 241,862 385,349 340,088 . . . . . . . . . . . . 

waste and scrap, nesi 331,702 281,587 334,079 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ssion apparatus incorporating reception apparatus 438,291 529,926 316,014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d accessories for motor vehicles, nesi 247,798 225,418 315,609 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

obtained by bipolar technology (2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 419,652 288,178

gital automated data processing machines entered in the form of systems (3 . . . . . . . . . . ) 305,280 253,797

m oils and oils from bituminous minerals, crude 0 173,180 237,503 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 “low value” shipments 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228,475 244,075 235,401

not carded or combed 361,490 256,601 223,540 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nd meslin, excluding durum wheat 260,308 328,082 222,028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

si, for radar, radio, television, etc. transmission except antennas 147,109 147,848 206,786 . . . . . . . . . . . . . . . . . 

bovine animals, boneless, frozen 233,199 155,447 203,776 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

urbojets or turbopropellers 84,139 81,942 199,588 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

onolithic integrated circuits (5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 154,148 162,894

nts and apparatus for measuring or checking electrical quantities, nesi 46,762 84,885 160,618 . . . . . . . . . . . . us coal, whether or not pulverized, but not agglomerated 164,385 161,192 153,734 . . . . . . . . . . . . . . . . . . . . . . . . 

es containing tobacco 136,303 129,481 153,507 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,115,589 10,419,658 10,247,721l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,482,948 25,433,405 24,287,441

s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part. s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part. s reported under Schedule B 8471.91 part, .92 part, .93 pat, and .99 part. s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part. 

e Only” reporting number estimating low-valued exports. 

s reported under Schedule B 8542.11 part, .19 part, .20 part, and .80 part.

ng, figures may not add to totals shown.The abbreviation, nesi, stands for “not elsewhere specified or included.”

official statistics of the U.S. Department of Commerce.
Korea, by HTS numbers, 1995-97

(1,000 dollars)

ion 1995 1996 1997

de semiconductors (1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 5,479,323 5,258,762

d accessories for automated data processing machines and units 2,383,535 1,940,961 1,915,474 . . . . . . . . . . . . . . . . . 

er motor vehicles with spark-ignition internal-combustion reciprocating

engine, over 1,500 but not over 3,000 cc 1,100,581 1,259,739 1,453,573 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

output units for automated data processing machines (2 . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 1,487,729 1,399,141

c data processing storage units (3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 231,475 622,029

er motor vehicles with spark-ignition internal-combustion reciprocating

engine over 1,000 but over 1,500 cc 549,750 586,827 446,449 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

onolithic integrated circuits (4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 401,436 419,072

ve ovens of a kind used for domestic purposes 399,302 385,822 359,567 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

cles exported and returned, not advanced or improved in condition 179,807 360,447 343,335 . . . . . . . . . . . . . . . . 

ssion apparatus incorporating reception apparatus 389,041 176,416 306,659 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s, pullovers, sweatshirts, vests and similar articles,

 or crocheted, of manmade fibers 209,507 182,541 240,096 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 boys’s jackets and windbreakers of manmade fibers, not knitted or crocheted 190,379 180,870 197,499 . . . . . . 

unrecorded magnetic tapes or sound recording, of a width exceeding 6.5mm 157,340 146,984 145,541 . . . . . . . 

pelled mechanical shovels and excavators, with a 360-degree revolving

tructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,654 115,381 133,966

ircuits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,882 119,600 133,519

oven fabrics at least 85 percent by weight of nontextured polyester filaments (5 . . . . . . . ) 122,002 117,820

d products of iron or nonalloy steel in coils nesi, of a thickness less than 3 mm (6 . . . . . ) 112,468 116,149d products of iron or nonalloy steel in coils nesi, of a thickness

m or more but less than 4.75 mm (7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 115,737 114,748

cs nesi, knitted or crocheted, of manmade fibers 11,290 56,511 111,402 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

r bags, etc. nesi plastic/textile materials 144,139 122,080 107,834 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

oadcast receivers for motor vehicles 105,438 89,577 106,948 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

c monolithic integrated circuits, digital, nesi 347,000 65,139 98,383 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s, pullovers, etc. of cotton, knitted or crocheted 82,567 83,838 96,787 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

 jewelry nesi, of base metal, whether or not plated with precious metal 96,477 97,388 96,309 . . . . . . . . . . . . 

c tape-type video recording or reproducing apparatus 561,632 272,659 96,103 . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,071,320 14,192,953 14,437,167

l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,025,703 22,531,596 22,939,009

s reported under HTS 8542.11 part, .19 part, .20 part, and .80 part. s reported under HTS 8471.92 part. s reported under HTS 8471.93 part. s reported under HTS 8542.11 part, .19 part, .20 part, and .80 part. s reported under HTS 5407.60 part. s reported under HTS 7208.14.50 part and 7208.24.50 part. s reported under HTS 7208.13.50 part and 7208.23.50 part.

ng, figures may not add to totals shown. The abbreviation, nesi, stands for “not elsewhere specified or included.”

official statistics of the U.S. Department of Commerce.
tive in 1997, filed under authority of title VII of the Tariff Act of 1930, by final outcomes and by USITC investigation

(Affirmative (A); Partial Affirmative (P); Negative (N); Suspension Agreement (S); Terminated (T))

Date Preliminary Final

original determination determination Date of

Country petition final

of origin filed Commission ITA1 ITA1 Commission action2

Affirmative

ete reinforcing bars Turkey Mar. 8, 1996 A A A A Apr. 9, 1997 . . . . . . . . . . . . . . 

 process gas turbo

sor systems Japan May 8, 1996 A A A A June 9, 1997 . . . . . . . . . . . . . . . . . . . . . 

China July 11, 1996 A A A A June 25, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ercomputers Japan July 29, 1996 A A A A Oct. 3, 1997 . . . . . . . . . . . . . . . . . . . . . 

l meat China Sept. 20, 1996 A A A A Sept. 8, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . 

ofing nails China Nov. 26, 1996 A A A A Nov. 19, 1997 . . . . . . . . . . . . . . . . . . . . . . . ofing nails Taiwan Nov. 26, 1996 A A A A Nov. 19, 1997 . . . . . . . . . . . . . . . . . . . . . . 

Partial Affirmative

nstitutional dinnerware China Feb. 6, 1996 A A A P Feb. 18, 1997 . . . . . . . . . . . . 

nstitutional dinnerware Indonesia Feb. 6, 1996 A A A P Feb. 18, 1997 . . . . . . . . . nstitutional dinnerware Taiwan Feb. 6, 1996 A A A P Feb. 18, 1997 . . . . . . . . . . . 

ke drums and rotors China Mar. 7, 1996 A A A P Apr. 9, 1997 . . . . . . . . . . . . . . 

Negative

nd high-beryllium alloys Kazakstan Mar. 14, 1996 A A A N Feb. 24, 1997 . . . . . . . 

pun rayon singles yarn Austria Aug. 20, 1996 A A A N Sept. 22, 1997 . . . . . . . . . . 

ring wire Japan Feb. 14, 1997 N (3) (3) (3 . . . . . . . . . . . . . . . . . . . . . . . . ) Mar. 31, 1997

Suspended

de Japan Jan. 16, 1996 A A S S Jan. 7, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

th carbon steel plate China Nov. 5, 1996 A A A A Dec. 2, 1997 . . . . . . . . . . . . . . th carbon steel plate Russia Nov. 5, 1996 A A A A Dec. 2, 1997 . . . . . . . . . . . . . th carbon steel plate South Africa Nov. 5, 1996 A A A A Dec. 2, 1997 . . . . . . . . . th carbon steel plate Ukraine Nov. 5, 1996 A A A A Dec. 2, 1997 . . . . . . . . . . . . . 

Terminated

ofing nails Korea Nov. 26, 1996 A A N T Oct. 1, 1997 . . . . . . . . . . . . . . . . . . . . . . . 

emperature milk Canada Mar. 17, 1997 T (3) (3) (3 . . . . . . . . . . . . . . . . ) Mar. 28, 1997

In Progress

om access memory 

ductors Korea Feb. 25, 1997 A A (4) (4) (4 . . . . . . . . . . . . . . . . . . . . . . . . . . )

om access memory 

ductors Taiwan Feb. 25, 1997 A A (4) (4) (4 . . . . . . . . . . . . . . . . . . . . . . . . . )

el wire rod Canada Feb. 26, 1997 A A (4) (4) (4 . . . . . . . . . . . . . . . . . . . . . )el wire rod Germany Feb. 26, 1997 A A (4) (4) (4 . . . . . . . . . . . . . . . . . . . . )

el wire rod Trinidad & Tobago Feb. 26, 1997 A A (4) (4) (4 . . . . . . . . . . . . . )

el wire rod Venezuela Feb. 26, 1997 A A (4) (4) (4 . . . . . . . . . . . . . . . . . . . )

able.
d

tive in 1997, filed under authority of title VII of the Tariff Act of 1930, by final outcomes and by USITC investigation

(Affirmative (A); Partial Affirmative (P); Negative (N); Suspension Agreement (S); Terminated (T))

Date Preliminary Final

original determination determination Date of

Country petition final

of origin filed Commission ITA1 ITA1 Commission action2

In Progress

tic salmon Chile June 12, 1997 A (4) (4) (4) (4 . . . . . . . . . . . . . . . . . . . . . . . . )

eel wire rod Germany July 30, 1997 A (4) (4) (4) (4 . . . . . . . . . . . . . . . . . . )eel wire rod Italy July 30, 1997 A (4) (4) (4) (4 . . . . . . . . . . . . . . . . . . . . . . . )eel wire rod Japan July 30, 1997 A (4) (4) (4) (4 . . . . . . . . . . . . . . . . . . . . . )eel wire rod Korea July 30, 1997 A (4) (4) (4) (4 . . . . . . . . . . . . . . . . . . . . . )eel wire rod Spain July 30, 1997 A (4) (4) (4) (4 . . . . . . . . . . . . . . . . . . . . . )eel wire rod Sweden July 30, 1997 A (4) (4) (4) (4 . . . . . . . . . . . . . . . . . . . )eel wire rod Taiwan July 30, 1997 A (4) (4) (4) (4 . . . . . . . . . . . . . . . . . . . . )

Commerce, International Trade Administration (ITA). 

he final action was taken by the ITA, the date shown is the Federal Register notice date of that action. 

staff of the U.S. International Trade Commission.
 183

Table A-23

Antidumping orders and findings in effect as of Dec. 31, 1997

Effective date of

Country and commodity original action1

Argentina:

Oil country tubular goods Aug. 11, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Seamless pipe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 3, 1995

Silicon metal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 26, 1991

Rectangular tubing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 26, 1989

Barbed wire and barbless wire strand Nov. 13, 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carbon steel wire rod . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nov. 23, 1984

Armenia: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Australia:

Corrosion-resistant carbon steel flat products Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Canned Bartlett pears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 23, 1973

Austria: Railway track equipment Feb. 17, 1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Azerbaijan: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Bangladesh: Cotton shop towels Mar. 20, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Belarus-Baltic: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Belgium:

Cut-to-length carbon steel plate Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Industrial phosphoric acid Aug. 20, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 13, 1979

Brazil:

Seamless pipe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 3, 1995

Stainless steel bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 21, 1995

Silicomanganese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dec. 22, 1994

Ferrosilicon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 14, 1994

Stainless steel wire rod . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 28, 1994

Cut-to-length carbon steel plate Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hot-rolled lead and bismuth carbon steel products Mar. 22, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Circular welded non-alloy steel pipe Nov. 2, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Silicon metal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 31, 1991

Industrial nitrocellulose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 10, 1990

Frozen concentrated orange juice May 5, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brass sheet and strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 12, 1987

Carbon steel butt-weld pipe fittings Dec. 17, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Malleable cast iron pipe fittings May 21, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Iron construction castings May 9, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Canada:

Corrosion-resistant carbon steel flat products Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cut-to-length carbon steel plate Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pure magnesium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 31, 1992

New steel rails . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 15, 1989

Color picture tubes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 7, 1988

Brass sheet and strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 12, 1987

Oil country tubular goods June 16, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Iron construction castings Mar. 5, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Red raspberries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 24, 1985

Sugar and syrups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 9, 1980

Racing plates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 27, 1974

Elemental sulphur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dec. 17, 1973

Steel jacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 13, 1966

Chile: Fresh cut flowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 20, 1987

China:

Cut-to-length carbon steel plate Oct. 24, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Collated roofing nails . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nov. 19, 1997

Crawfish tail meat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 15, 1997

See footnote at end of table.
 184

Table A-23—Continued

Antidumping orders and findings in effect as of Dec. 31, 1997

Effective date of

Country and commodity original action1

China—Continued:

Persulfates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 7, 1997

Brake rotors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 17, 1997

Melamine institutional dinnerware Feb. 25, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Polyvinyl alcohol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 14, 1996

Manganese metal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 6, 1996

Furfuryl alcohol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 21, 1995

Pure magnesium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 12, 1995

Glycine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 29, 1995

Coumarin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 9, 1995

Cased pencils . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dec. 28, 1994

Silicomanganese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dec. 22, 1994

Paper clips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nov. 25, 1994

Garlic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nov. 16, 1994

Sebacic acid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1994

Helical spring lock washers Oct. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Compact ductile iron waterworks fittings Sept. 7, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Ferrosilicon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 11, 1993

Sulfanilic acid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 19, 1992

Carbon steel butt-weld pipe fittings July 6, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Tungsten ore concentrates Nov. 21, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Chrome-plated lug nuts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 20, 1991

Sparklers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 18, 1991

Silicon metal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 10, 1991

Sodium thiosulfate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 19, 1991

Heavy forged handtools Feb. 19, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Industrial nitrocellulose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 10, 1990

Tapered roller bearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 15, 1987

Porcelain-on-steel cookware Dec. 2, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Candles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 28, 1986

Iron construction castings May 9, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Paint brushes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 14, 1986

Barium chloride . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oct. 17, 1984

Chloropicrin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 22, 1984

Potassium permanganate Jan. 31, 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Cotton shop towels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oct. 4, 1983

Printcloth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 16, 1983

Colombia: Fresh cut flowers Mar. 18, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Ecuador: Fresh cut flowers Mar. 18, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Estonia: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Finland:

Cut-to-length carbon steel plate Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Rayon staple fiber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 21, 1979

France:

Calcium aluminate flux . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 13, 1994

Stainless steel wire rod . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 28, 1994

Corrosion-resistant carbon steel flat products Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Hot-rolled lead and bismuth carbon steel products Mar. 22, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Antifriction bearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 15, 1989

Brass sheet and strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 6, 1987

Industrial nitrocellulose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 10, 1983

Sorbitol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 9, 1982

Anhydrous sodium metasilicate Jan. 7, 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 13, 1979

Large power transformers June 14, 1972 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Georgia: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

See footnote at end of table.
 185

Table A-23—Continued

Antidumping orders and findings in effect as of Dec. 31, 1997

Effective date of

Country and commodity original action1

Germany:

Large newspaper printing presses Sept. 4, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Seamless pipe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 3, 1995

Cold-rolled carbon steel flat products Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corrosion-resistant carbon steel flat products Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cut-to-length carbon steel plate Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Hot-rolled lead and bismuth carbon steel products Mar. 22, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sodium thiosulfate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 19, 1991

Industrial nitrocellulose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 10, 1990

Industrial belts (except synchronous and V-belts) June 14, 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Antrifriction bearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 15, 1989

Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Brass sheet and strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 6, 1987

Barium carbonate, precipitated June 25, 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 13, 1979

Animal glue and inedible gelatin Dec. 22, 1977 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Greece: Electrolytic manganese dioxide Apr. 17, 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Hungary: Tapered roller bearings June 19, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

India:

Stainless steel bar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 21, 1995

Forged stainless steel flanges Feb. 9, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stainless steel wire rod . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dec. 1, 1993

Sulfanilic acid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 2, 1993

Welded carbon steel pipes and tubes May 12, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Indonesia: Melamine institutional dinnerware Feb. 25, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Iran: Raw pistachios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 17, 1986

Israel:

Industrial phosphoric acid Aug. 19, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Oil country tubular goods Mar. 6, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Italy:

Certain pasta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 24, 1996

Oil country tubular goods. Aug. 11, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Seamless pipe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 3, 1995

Grain-oriented electric steel Aug. 12, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Synchronous industrial belts and V-belts June 14, 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Antifriction bearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 15, 1989

Granular polytetrafluoroethylene resin Aug. 30, 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brass sheet and strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 6, 1987

Brass fire protection equipment Mar. 1, 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Pressure-sensitive tape Oct. 21, 1977 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Large power transformers June 14, 1972 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Japan:

Vector supercomputers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oct. 24, 1997

Gas turbo-compressor systems June 16, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Large newspaper printing presses Sept. 4, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Clad steel plate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 2, 1996

Polyvinyl alcohol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 14, 1996

Oil country tubular goods. Aug. 11, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stainless steel bar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 21, 1995

Grain-oriented electric steel June 10, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Defrost timers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 2, 1994

Corrosion-resistant carbon steel flat products Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Electric cutting tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 12, 1993

See footnote at end of table.
 186

Table A-23—Continued

Antidumping orders and findings in effect as of Dec. 31, 1997

Effective date of

Country and commodity original action1

Japan—Continued:

EL flat panel displays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 4, 1991

Gray portland cement and cement clinker May 10, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Benzyl paraben . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 13, 1991

Laser light-scattering instruments Nov. 19, 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Industrial nitrocellulose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 10, 1990

Mechanical transfer presses Feb. 16, 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Drafting machines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dec. 29, 1989

Telephone systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dec. 11, 1989

Industrial belts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 14, 1989

Antifriction bearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 15, 1989

Electrolytic manganese dioxide Apr. 17,1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Microdisks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 3, 1989

Granular polytetrafluoroethylene resin Aug. 24, 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brass sheet and strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 12, 1988

Nitrile rubber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 16, 1988

Forklift trucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 7, 1988

Stainless steel butt-weld pipe fittings Mar. 25 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Color picture tubes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 7, 1988

Tapered roller bearings over 4 inches Oct. 6, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Malleable cast-iron pipe fittings July 6, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Butt-weld pipe fittings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 10, 1987

Cellular mobile telephones Dec. 19, 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calcium hypochlorite . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 18, 1985

Titanium sponge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nov. 30, 1984

High powered amplifiers July 20, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Steel wire strand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dec. 8, 1978

Impression fabric of manmade fibers May 25, 1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Melamine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 2, 1977

Acrylic sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 30, 1976

Tapered roller bearings 4 inches and under Aug. 8, 1976 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Polychloroprene rubber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dec. 6, 1973

Steel wire rope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oct. 15, 1973

Synthetic methionine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 10, 1973

Roller chain other than bicycles Apr. 12, 1973 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bicycle speedometers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nov. 22, 1972

Large power transformers June 14, 1972 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fishnetting of manmade fiber June 9, 1972 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Television receiving sets Mar. 10, 1971 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Kazakstan:

Ferrosilicon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 7, 1993

Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Titanium sponge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 28, 1968

Kenya: Fresh cut flowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 23, 1987

Korea:

Oil country tubular goods Aug. 11, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cold-rolled carbon steel flat products Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corrosion-resistant carbon steel flat products Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 10, 1993

Carbon steel wire rope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 26, 1993

Stainless steel butt-weld pipe fittings Feb. 23, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Welded stainless steel pipes Dec. 30, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Circular welded nonalloy pipe Nov. 2, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

PET film . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 5, 1991

Industrial nitrocellulose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 10, 1990

Telephone systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 7, 1990

Color picture tubes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 7, 1988

Stainless steel cookware Jan. 20, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brass sheet and strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 12, 1987

Malleable cast iron pipe fittings May 23, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Television receiving sets Apr. 30, 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

See footnote at end of table.
 187

Table A-23—Continued

Antidumping orders and findings in effect as of Dec. 31, 1997

Effective date of

Country and commodity original action1

Kyrgyzstan: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Latvia: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Lithuania: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Malaysia: Extruded rubber thread Oct. 7, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Mexico:

Oil country tubular goods Aug. 11, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cut-to-length carbon steel plate Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carbon steel wire rope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 25, 1993

Circular welded non-alloy pipe Nov. 2, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Gray portland cement and cement clinker Aug. 30, 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fresh cut flowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 23, 1987

Porcelain-on-steel cookware Dec. 2, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Moldova: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Netherlands:

Aramid fiber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 24, 1994

Cold-rolled carbon steel flat products Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brass sheet and strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 12, 1988

New Zealand:

Fresh kiwifruit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 2, 1992

Brazing copper wire and rod Dec. 4, 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Norway: Atlantic salmon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 12, 1991

Poland: Cut-to-length carbon steel plate Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Romania:

Cut-to-length carbon steel plate Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Antifriction bearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 15, 1989

Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Tapered roller bearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 19, 1987

Russia:

Cut-to-length carbon steel plate Oct. 24, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ferrovanadium and nitrided vanadium July 10, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Pure magnesium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 12, 1995

Ferrosilicon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 24, 1993

Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Titanium sponge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 28, 1968

Singapore:

Industrial belts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 14, 1989

Antifriction bearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 15, 1989

Color picture tubes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 7, 1988

Rectangular pipes and tubes Nov. 13, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

South Africa:

Cut-to-length carbon steel plate Oct. 24, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Furfuryl alcohol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 21, 1995

Brazing copper wire and rod Jan. 29, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Spain:

Stainless steel bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 2, 1995

Cut-to-length carbon steel plate Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Potassium permanganate Jan. 19, 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Sweden:

Cut-to-length carbon steel plate Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Antifriction bearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 15, 1989

See footnote at end of table.
 188

Table A-23—Continued

Antidumping orders and findings in effect as of Dec. 31, 1997

Effective date of

Country and commodity original action1

Sweden—Continued:

Seamless stainless steel hollow products Dec. 3, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Brass sheet and strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 6, 1987

Stainless steel plate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 8, 1973

Taiwan:

Collated roofing nails . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nov. 19, 1997

Melamine institutional dinnerware Feb. 25, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Polyvinyl alcohol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 14, 1996

Forged stainless steel flanges Feb. 9, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Helical spring lockwashers June 28, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Stainless steel butt-weld pipe fittings June 16, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Welded stainless steel pipes Dec. 30, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Circular welded nonalloy pipe Nov. 2, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Chrome-plated lug nuts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 20, 1991

Telephone systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dec. 11, 1989

Rectangular tubing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 27, 1989

Stainless steel cookware Jan. 20, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Butt-weld pipe fittings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dec. 17, 1986

Porcelain-on-steel cookware Dec. 2, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Oil country tubular goods June 18, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Malleable cast iron pipe fittings May 23, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Circular pipes and tubes May 7, 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Television receiving sets Apr. 30, 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Carbon steel plate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 13, 1979

Tajikistan: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Thailand:

Furfuryl alcohol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 25, 1995

Canned pineapple . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 18, 1995

Butt-weld pipe fittings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 6, 1992

Malleable cast iron pipe fittings Aug. 20, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Circular welded pipes and tubes Mar. 11, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Turkey:

Steel concrete reinforcing bar Apr. 17, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Certain pasta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 24, 1996

Aspirin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 25, 1987

Pipes and tubes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 15, 1986

Turkmenistan: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Ukraine:

Cut-to-length carbon steel plate Oct. 24, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Pure magnesium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 12, 1995

Uranium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 30, 1993

Ferrosilicon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 7, 1993

Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Titanium sponge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 28, 1968

United Kingdom:

Cut-to-length carbon steel plate Aug. 19, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Lead and bismuth steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 22, 1993

Sodium thiosulfate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Feb. 19, 1991

Industrial nitrocellulose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 10, 1990

Antifriction bearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 15, 1989

Uzbekistan: Solid urea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 14, 1987

Venezuela:

Ferrosilicon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June 24, 1993

Circular welded non-alloy pipe Nov. 2, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

See footnote at end of table.
 189

Table A-23—Continued

Antidumping orders and findings in effect as of Dec. 31, 1997

Effective date of

Country and commodity original action1

Yugoslavia: Industrial nitrocellulose Oct. 16, 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Suspension agreements in effect:

Canada: Potassium chloride Jan. 19, 1988 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

China: Honey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 16, 1995

Japan:

Sodium azide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 7, 1997

Color negative photo paper Aug. 12, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Small electric motors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nov. 6, 1980

Kazakstan: Uranium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oct. 16, 1992

Kyrgyzstan: Uranium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oct. 16, 1992

Mexico: Fresh tomatoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nov. 1, 1996

Netherlands: Color negative photo paper Aug. 12, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Russia: Uranium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oct. 16, 1992

Ukraine: Silicomanganese Oct. 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Uzbekistan: Uranium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oct. 16, 1992

Venezuela: Gray portland cement and cement clinker Feb. 27, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1 The U.S. Department of Commerce conducts a periodic review of outstanding antidumping duty orders and

suspension agreements, upon request, to determine if the amount of the net margin of underselling has changed. If a

change has occurred, the imposed antidumping duties are adjusted accordingly. The results of the periodic review

must be published together with a formal notice of any antidumping duty to be assessed, estimated duty to be

deposited, or investigation to be resumed.

Source: Compiled by staff of the U.S. International Trade Commission from data maintained by the U.S. Department

of Commerce (International Trade Administration).
ses active in 1997, filed under authority of title VII of the Tariff Act of 1930, by final outcomes and by USITC

(Affirmative (A);Negative (N))

Date Preliminary Final

original determination determination Date of

Country petition final

of origin filed Commission ITA1 ITA1 Commission action2

Negative

el wire rod Canada Feb. 26, 1997 A A A N Nov. 28, 1997 . . . . . . . . . . . . . . . . . . . . . 

el wire rod Germany Feb. 26, 1997 A A A N Nov. 28, 1997 . . . . . . . . . . . . . . . . . . . . el wire rod Trinidad & Tobago Feb. 26, 1997 A A A N Nov. 28, 1997 . . . . . . . . . . . . . el wire rod Venezuela Feb. 26, 1997 A A A N Nov. 28, 1997 . . . . . . . . . . . . . . . . . . . 

In Progress

tic salmon Chile June 12, 1997 A N (3) (3) (3 . . . . . . . . . . . . . . . . . . . . . . . . )

eel wire rod Italy July 30, 1997 A (3) (3) (3) (3 . . . . . . . . . . . . . . . . . . . . . . . )

Commerce, International Trade Administration (ITA).

he final action was taken by the ITA, the date shown is the Federal Register notice date of that action. 

staff of the U.S. International Trade Commission.
 191

Table A-25

Countervailing duty orders and findings in effect as of Dec. 31, 1997

Effective date of

Country and commodity original action1

Belgium: Cut-to-length carbon steel plate Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Brazil:

Cut-to-length carbon steel plate Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Hot-rolled lead and bismuth carbon steel products Mar. 22, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Brass sheet and strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 8, 1987

Heavy construction castings May 15, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Agricultural tillage tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oct. 22, 1985

Cotton yarn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 15, 1977

Certain castor oil products Mar. 16, 1976 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Canada:

Pure and alloy magnesium Aug. 31, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

New steel rails . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 22, 1989

Live swine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 15, 1985

Chile: Fresh cut flowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 19, 1987

European Union:2 Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 31, 1978

France:

Corrosion-resistant carbon steel flat products Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Hot-rolled lead and bismuth carbon steel products Mar. 22, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Brass sheet and strip . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 6, 1987

 Germany:

Cold-rolled carbon steel flat products Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Corrosion-resistant carbon steel flat products Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Cut-to-length carbon steel plate Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Hot-rolled lead and bismuth carbon steel products Mar. 22, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

India:

Sulfanilic acid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 2, 1993

Certain iron-metal castings Oct. 16, 1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Iran:

Roasted pistachios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oct. 7, 1986

Raw pistachios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 11, 1986

Israel:

Industrial phosphoric acid Aug. 19, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Oil country tubular goods Mar. 6, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Italy:

Certain pasta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 24, 1996

Oil country tubular goods Aug. 10, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Seamless pipe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aug. 8, 1995

Grain-oriented electric steel June 7, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Korea:

Cold-rolled carbon steel flat products Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Corrosion-resistant carbon steel flat products Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Stainless steel cookware Jan. 20, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Malaysia: Extruded rubber thread Aug. 25, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Mexico:

Cut-to-length carbon steel plate Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Porcelain-on-steel cookware Dec. 12, 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Netherlands: Fresh cut flowers Mar. 12, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Norway: Atlantic salmon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 12, 1991

See footnotes at end of table.
 192

Table A-25—Continued

Countervailing duty orders and findings in effect as of Dec. 31, 1997

Effective date of

Country and commodity original action1

Pakistan: Cotton shop towels Mar. 9, 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Peru: Fresh cut flowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apr. 23, 1987

Spain:

Cut-to-length carbon steel plate Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Stainless steel wire rod . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jan. 3, 1983

Sweden:

Cut-to-length carbon steel plate Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Cold-rolled carbon steel flat products Oct. 11, 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rayon staple fiber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 15, 1979

Taiwan: Stainless steel cookware Jan. 20, 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Thailand: Steel wire rope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 11, 1991

Turkey:

Certain pasta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 24, 1996

Pipes and tubes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 7, 1986

United Kingdom:

Cut-to-length carbon steel plate Aug. 17, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hot-rolled lead and bismuth carbon steel products Mar. 22, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Venezuela: Ferrosilicon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May 10, 1993

Suspension agreements in effect:

Argentina: Carbon wire rod Sept. 27, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Brazil: Frozen concentrated orange juice Mar. 2, 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Colombia: Textiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mar. 12, 1985

Peru: Cotton shop towels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sept. 12, 1984

Singapore: Refrigerator compressors Nov. 7, 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Thailand: Certain textile mill products Mar. 12, 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Venezuela: Gray portland cement and cement clinker Mar. 17, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1 The U.S. Department of Commerce conducts a periodic review of outstanding countervailing duty orders and

suspension agreements, upon request, to determine if the amount of the net subsidy has changed. If a change has

occurred, the imposed countervailing duties are adjusted accordingly. 2 Includes Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, and the

United Kingdom.

Source: Compiled by staff of the U.S. International Trade Commission from data maintained by the U.S. Department

of Commerce (International Trade Administration).
 193

Table A-26

Section 337 investigations completed by the U.S. International Trade Commission during 1997 and

those pending on Dec. 31, 1997

Status of Commission

Investigation Article Country1 determination

Completed:

337-TA-334 Certain Condensers, Parts Thereof Japan Issued limited exclusion

and Products Containing Same order.

Including Air Conditioners for

Automobiles

337-TA-372 Certain Neodymium-Iron-Boron China Formal enforcement

Magnets, Magnet Alloys, and proceeding terminated;

Articles Containing Same Commission converted

consent order to limited

exclusion order and cease

and desist order, and

assessed civil penalty of

$1,550,000.

337-TA-376 Certain Variable Speed Wind Germany Remand by the Federal

Turbines and Components Circuit; Commission subThereof stituted purchaser of

patent as co-complainant.

337-TA-380 Certain Agricultural Tractors Under Japan Issued a general exclusion

50 Power Take-Off Horsepower order and cease and desist

orders.

337-TA-381 Certain Electronic Products, Including Korea Terminated based on

Semiconductor Products, Manufac- settlement agreement.

tured by Certain Processes

337-TA-382 Certain Flash Memory Circuits Korea Issued limited exclusion

and Products Containing Same order and cease and

desist order; orders

rescinded based on

settlement agreement.

337-TA-383 Certain Hardware Logic France Issued limited exclusion

Emulation Systems and order and cease and desist

Components Thereof order.

337-TA-385 Certain Random Access Memories, Japan, Singapore Terminated based on

Processes for the Manufacture of settlement agreement.

Same, and Products Containing Same

337-TA-388 Certain Dynamic Random Access Taiwan Terminated based on

Memory Controllers and Certain settlement agreement.

Multi-Layer Integrated Circuits, as

Well as Chipsets and Products

Containing Same

337-TA-389 Certain Diagnostic Kits for the Netherlands Terminated based on

Detection and Quantification of settlement agreement.

Viruses

337-TA-390 Certain Transport Vehicle Tires Korea Terminated based on

withdrawal of complaint.

337-TA-391 Certain Toothbrushes and Packaging China, Taiwan Issued limited exclusion

Thereof order.

337-TA-392 Certain Digital Satellite System (DSS) No foreign respondents Terminated based on

Receivers and Components Thereof finding of no violation.

See footnote at end of table.
 194

Table A-26—Continued

Section 337 investigations completed by the U.S. International Trade Commission during 1997 and

those pending on Dec. 31, 1997

Status of Commission

Investigation Article Country1 determination

Completed:

337-TA-394 Certain Screen Printing Machines, United Kingdom Terminated based on

Vision Alignment Devices Used settlement agreement.

Therein, and Component Parts

Thereof

337-TA-398 Certain Multiple Implement, Multi- China, Singapore Termination based on

Function Pocket Knives and Related withdrawal of complaint.

Packaging and Promotional Materials

Pending: 

337-TA-370 Certain Salinomycin Biomass and Germany Ancillary sanctions

Preparations Containing Same proceeding pending before

the Commission.

337-TA-383 Certain Hardware Logic France Ancillary sanctions

 Emulation Systems and proceeding pending before

Components Thereof Commission.

337-TA-393 Certain Ion Trap Mass Spectrometers Germany Pending before the ALJ.

and Components Thereof

337-TA-395 Certain EPROM, EEPROM, Flash Taiwan, Japan Pending before the ALJ.

Memory, and Flash Microcontroller

Semiconductor Devices and Products

Containing Same

337-TA-396 Certain Removable Electronic France Pending before the ALJ.

Cards and Electronic Card Reader

Devices and Products Containing

Same

337-TA-397 Certain Dense Wavelength Division Italy Pending before the ALJ.

Multiplexing Systems and 

Components Thereof

337-TA-399 Certain Fluid-Filled Ornamental Taiwan Pending before the ALJ.

Lamps

337-TA-400 Certain Telephonic Digital Added Israel Pending before the ALJ.

Main Line Systems, Components

Thereof, And Products Containing

Same

337-TA-401 Certain CD-ROM Controllers and Taiwan, Pending before the ALJ.

Products Containing Same Singapore,

Malaysia

337-TA-402 Certain Integrated Circuits and Korea Pending before the ALJ.

Products Containing Same

337-TA-403 Certain Acesulfame Potassium and China Pending before the ALJ.

Blends and Products Containing Same Japan

337-TA-404 Certain SDRAMs, DRAMs, ASICs, Pending before the ALJ.

RAM-and-Logic Chips,

Microprocessors, Microcontrollers,

Processes for Manufacturing Same

and Products Containing Same

See footnote at end of table.
 195

Table A-26—Continued

Section 337 investigations completed by the U.S. International Trade Commission during 1997 and

those pending on Dec. 31, 1997

Status of Commission

Investigation Article Country1 determination

337-TA-405 Certain Automotive Scissors Jacks Canada Pending before the ALJ.

1 This column lists the countries of the foreign respondents named in the investigation.

Source: U.S. International Trade Commission, Office of Unfair Import Investigations.
 196

Table A-27

Outstanding section 337 exclusion orders as of Dec. 31, 1997

Investigation Date patent

No. Article Country1 expires2

337-TA-55 Certain Novelty Glasses Hong Kong Nonpatent

337-TA-69 Certain Airtight Cast-Iron Stoves Taiwan, Korea Nonpatent

337-TA-74 Certain Rotatable Photograph and Card Display Hong Kong Nonpatent

Units and Components Thereof

337-TA-87 Certain Coin-Operated Audio-Visual Games and Japan, Taiwan Nonpatent

Components Thereof

337-TA-105 Certain Coin-Operated Audio-Visual Games and Japan, Taiwan Nonpatent

Components Thereof

337-TA-112 Certain Cube Puzzles Taiwan, Japan, Canada Nonpatent

337-TA-114 Certain Miniature Plug-In Blade Fuses Taiwan Nonpatent

337-TA-118 Certain Sneakers With Fabric Uppers and Korea Nonpatent

Rubber Soles

337-TA-137 Certain Heavy-Duty Staple Gun Tackers Taiwan, Hong Kong, Nonpatent

Korea

337-TA-140 Certain Personal Computers and Components Taiwan, Hong Kong, July 14, 1998

Thereof Singapore, Switzerland

337-TA-152 Certain Plastic Food Storage Containers Hong Kong, Taiwan Nonpatent

337-TA-167 Certain Single Handle Faucets Taiwan Nonpatent

337-TA-170 Certain Bag Closure Clips Israel Aug. 25, 20003

May 26, 20013

337-TA-174 Certain Woodworking Machines South Africa, Taiwan Mar. 27, 19983

Sept. 17, 20013

337-TA-195 Certain Cloisonne Jewelry Taiwan Nonpatent

337-TA-197 Certain Compound Action Metal Cutting Snips Taiwan Nonpatent

and Components Thereof

337-TA-228 Certain Fans With Brushless DC Motors Japan Sept. 30, 20023

337-TA-229 Certain Nut Jewelry and Parts Thereof Philippines, Taiwan Nonpatent

337-TA-231 Certain Soft Sculpture Dolls, Popularly Known No foreign respondents Nonpatent

as “Cabbage Patch Kids,” Related Literature,

and Packaging Therefor

337-TA-240 Certain Laser Inscribed Diamonds and the Israel Dec. 23, 20003

Method of Inscription Thereof

337-TA-242 Certain Dynamic Random Access Memories, Japan, Korea Aug. 6, 2002

Components Thereof, and Products Containing Sept. 24, 2002

Same

337-TA-254 Certain Small Aluminum Flashlights and Hong Kong, Taiwan June 6, 20043

Components Thereof

337-TA-266 Certain Reclosable Plastic Bags and Tubing Singapore, Taiwan, Nonpatent

Korea, Thailand,

Hong Kong

See footnotes at end of table.
 197

Table A-27—Continued

Outstanding section 337 exclusion orders as of Dec. 31, 1997

Investigation Date patent

No. Article Country1 expires2

337-TA-276 Certain Erasable Programmable Korea Feb. 13, 19993

Read Only Memories, Components Dec. 23, 20003

Thereof, Products Containing Such June 17, 20023

Memories and Processes for June 7, 20053

Making Such Memories

337-TA-279 Certain Plastic Light Duty Screw Anchors Taiwan Nonpatent

337-TA-285 Certain Chemiluminescent Compositions and France Nonpatent

Components Thereof and Methods of Feb. 2, 1999

Using, and Products Incorporating, the Same

337-TA-287 Certain Strip Lights Taiwan Nonpatent

Apr. 7, 20003

337-TA-293 Certain Crystalline Cefadroxil Monohydrate Italy, Spain, Switzerland Mar. 12, 2002

337-TA-295 Certain Novelty Teleidoscopes Hong Kong Nonpatent

337-TA-308 Certain Key Blanks For Keys of High Security Korea Jan. 13, 2004

Cylinder Locks June 19, 20053

337-TA-314 Certain Battery-Powered Ride-On Toy Vehicles Taiwan Sept. 22, 2001

and Components Thereof Jan. 31, 2003

Dec. 6, 20033

Sept. 22, 20063

337-TA-319 Certain Automotive Fuel Caps and Radiator Taiwan Nonpatent

Caps and Related Packaging and Oct. 4, 19983

Promotional Materials June 22, 20063

July 22, 20063

337-TA-320 Certain Rotary Printing Apparatus Using Heated France, Spain Apr. 30, 20043

Ink Composition, Components Thereof, and

Systems Containing Said Apparatus and

Components

337-TA-321 Certain Soft Drinks and Their Containers Colombia Nonpatent

337-TA-324 Certain Acid-Washed Denim Garments and Hong Kong, Taiwan, Oct. 22, 20063

Accessories Brazil, Chile

337-TA-333 Certain Woodworking Accessories Taiwan Mar. 2, 20083

337-TA-334 Certain Condensers, Parts Thereof and Products Japan Mar. 12, 2008

Containing Same, Including Air Conditioners

for Automobiles

337-TA-337 Certain Integrated Circuit Telecommunication Taiwan May 18, 2001

Chips and Products Containing Same,

Including Dialing Apparatus

337-TA-344 Certain Cutting Tools For Flexible Plastic Taiwan Aug. 1, 20003

Conduit and Components Thereof

337-TA-354 Certain Tape Dispensers Hong Kong, Taiwan Apr. 7, 2001

337-TA-360 Certain Devices For Connecting Computers Taiwan Feb. 13, 2007

Via Telephone Lines

337-TA-364 Certain Curable Fluoroelastomer Compositions Italy Sept. 1, 1998

Precursors Thereof

See footnotes at end of table.
 198

Table A-27—Continued

Outstanding sec. 337 exclusion orders as of Dec. 31, 1997

Investigation Date patent

No. Article Country1 expires2

 337-TA-365 Certain Audible Alarm Devices For Divers Taiwan Aug. 21, 20073

Oct. 12, 20083

337-TA-372 Certain Neodymium-Iron-Boron Magnets, Magnet China, Hong Kong, May 20, 20053

Alloys, and Articles Containing Same Taiwan

337-TA-374 Certain Electrical Connectors and Products Taiwan Jan. 22, 2008

Containing Same

337-TA-376 Certain Variable Speed Wind Turbines and Germany Feb. 1, 20113

Components Thereof

337-TA-378 Certain Asian-Style Kamaboko Fish Cakes Japan Nonpatent 

337-TA-380 Certain Agricultural Tractors Under 50 Japan Nonpatent

Power Take-Off Horsepower

337-TA-383 Certain Hardware Logic Emulation France Oct. 5, 20083

Systems and Components Thereof Oct. 5, 20083

Oct. 5, 20083

Apr. 28, 2009

Apr. 28, 2009

337-TA-391 Certain Toothbrushes and the Packaging Thereof China, Taiwan Aug. 4, 2006

1 This column lists the countries of the foreign respondents named in the investigation.

2 Multiple dates indicate the expiration dates of separate patents within the investigation.

3 Patent term extended pursuant to 35 U.S.C. 154(c).

Source: U.S. International Trade Commission, Office of Unfair Import Investigations.
mption of leading GSP-duty-free imports, 1997

(1,000 dollars)

Total U.S. Imports of GSP articlesimports for

scription consumption1 GSP-eligible2 GSP duty-free3

roleum oils and oils from bituminous minerals, crude,

esting 25 degrees A.P.I. or more 12,881,988 1,082,382 674,127 . . . . . . . . . . . . . . . . . . . . . . . . . . 

e telephone sets with cordless handsets 1,804,955 544,275 506,549 . . . . . . . . . . . . . . . . . . . . 

or, cartridge or cassette magnetic tape-type video recording

pparatus 2,610,529 717,269 320,592 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

w sugar not containing added flavoring or coloring 827,391 738,423 319,672 . . . . . . . . . . . 

play units for ADP machines with color cathode-ray tube not

ntered with the rest of a system 7,333,854 803,861 200,197 . . . . . . . . . . . . . . . . . . . . . . . . . . . 

oden (except bent-wood) furniture, other than seats 1,857,878 352,784 198,897 . . . . . . . . . 

d necklaces and neck chains, other than rope or mixed link 720,736 206,246 178,083 . . . 

rochromium containing more than 3 percent of carbon 191,719 176,254 176,224 . . . . . . . cles of jewelry and parts thereof, of precious metal except

ilver, except necklaces and clasps 2,301,143 804,490 173,974 . . . . . . . . . . . . . . . . . . . . . . . . 

dio-tape player combinations 1,710,564 295,993 165,966 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ined copper cathodes and sections of cathodes 1,344,874 575,505 158,839 . . . . . . . . . . . . . 

tion wiring sets, other wiring sets of a kind used in

ehicles, aircraft or ships 4,279,997 474,672 152,762 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ndard wood moldings of pine 271,201 132,562 130,821 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

gical, medical clothing (including gloves) of vulcanized

ubber 728,066 197,724 125,577 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

adwheels for motor vehicles 584,333 126,943 122,871 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . mpressors of a kind used in refrigerating equipment (including

ir conditioning) not exceeding 1/4 horsepower 191,685 124,064 121,503 . . . . . . . . . . . . . . 

holstery leather, from full grains and splits 371,389 184,813 110,856 . . . . . . . . . . . . . . . . . . holstery leather, other than from full grains and splits 140,655 103,002 101,165 . . . . . . . . . 

ephone sets; videophones nesi 1,061,290 180,543 96,623 . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nted circuits, without elements (other than connecting elements)

tted thereon 2,071,287 114,431 96,367 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Total, above items 43,285,533 7,936,237 4,131,665 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total, all GSP items 434,007,834 28,078,693 15,545,585 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

o the U.S. Virgin Islands. 

how total imports of the top 20 products reported under an HTS subheading that establishes eligibility for duty-free treatment under

asons, all imports from beneficiary countries that are eligible for GSP do not always necessarily receive duty-free GSP treatment.

 not actually receive GSP duty-free treatment for at least four types of reasons: (1) the importer fails to claim GSP benefits

s are from a beneficiary country that lost GSP benefits on that product for exceeding the so-called competitive need limits; (3) the

ary country that has lost GSP benefits on that product because of a petition to remove that country from GSP for that product;

meet the rule of origin or direct shipment requirements of the GSP statute. 

how the total imports of the top 20 products that actually received duty-free entry under the GSP program. 

g became eligible for duty-free treatment for imports only from countries designated as least developed beneficiary developing

, 1997.

 on unrounded data. The abbreviation, nesi, stands for not elsewhere specified or included.

icial statistics of the U.S. Department of Commerce.
mption and imports eligible for GSP treatment, by import categories under the Harmonized Tariff Schedule (HTS), 1997

(Million dollars)

Total U.S. Imports of GSP articlesimports for

scription consumption1 GSP-eligible 2 GSP duty-free 3

e animals; animal products 11,595 201 98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

getable products 13,338 805 184 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

mal and vegtable fats, oils, and waxes 1,565 47 45 . . . . . . . . . . . . . . . . . . . . . 

pared foodstuffs; beverages, spirits; tobacco 17,501 2,031 919 . . . . . . . . . . . . . . . 

eral products 73,875 1,545 763 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

emical products 47,302 1,448 828 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

stics and rubber 22,475 1,225 822 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

w hides and skins, leather, furskins; saddlery; handbags 7,127 635 444 . . . . . . 

od; charcoal; cork; strawand other plaiting materials 13,226 1,157 665 . . . . . . . . . od pulp;paper and paperboard 17,202 155 117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

tiles and textile articles 57,009 260 177 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

otwear, headgear, umbrellas; artificial flowers 15,918 390 128 . . . . . . . . . . . . . . . 

ne, plaster, cement, asbestos, ceramic and glass articles 8,751 580 524 . . . . . 

arls, precious or semi-precious stones; imitation jewellery 19,008 1,597 646 . . . . . se metals and articles of base metal 46,799 2,666 1,834 . . . . . . . . . . . . . . . . . . . . . . . 

chinery and appliances; electrical equipment 261,289 9,416 5,129 . . . . . . . . . . . . . . . . 

hicles, aircraft, vessels, transport equipment 129,450 1,151 704 . . . . . . . . . . . . . . . . 

tical, photographic, medical, and musical instruments; clocks 29,772 1,257 419 . . 

ms and ammunition; parts and accessories thereof 611 41 36 . . . . . . . . . . . 

cellaneous manufactured articles 32,905 1,470 1,065 . . . . . . . . . . . . . . . . . . . . . . . . . 

rks of art, collectors’ pieces and antiques 3,568 – – . . . . . . . . . . . . . . . . . . . 

ecial classification provisions 28,824 – – . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Total, above items 859,110 28,079 15,546 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

o the U.S. Virgin Islands. 

how total imports, by sector that are reported under an HTS subheading that establishes eligibility for duty-free treatment under

asons, all imports from beneficiary countries that are eligible for GSP do not always necessarily receive duty-free GSP treatment.

 not actually receive GSP duty-free treatment for at least four types of reasons: (1) the importer fails to claim GSP benefits

s are from a beneficiary country that lost GSP benefits on that product for exceeding the so-called competitive need limits; (3) the

ary country that has lost GSP benefits on that product because of a petition to remove that country from GSP for that product;

meet the rule of origin or direct shipment requirements of the GSP statute. 

how the total imports, by sector that actually received duty-free entry under the GSP program.

 on unrounded data.

official statistics of the U.S. Department of Commerce.
mption of leading imports under CBERA, 1995-97

 (1,000 dollars)

dity 1995 1996 1997

heroots and cigarillos, each valued 23¢ or over 74,815 154,951 330,704 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ar not containing added flavoring or color 127,475 240,394 280,714 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

r uppers, other than formed, of leather 186,753 194,789 200,376 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

and parts of precious metal except silver, except necklaces and clasps 142,386 134,610 139,028 . . . . . . . . . . . . 

 surgical, or dental instruments and appliances 119,831 80,475 98,891 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l (Methyl alcohol), nesi 40,849 67,144 90,596 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . es, fresh or dried, not reduced in size, in crates or other packages 35,240 43,017 72,621 . . . . . . . . . . . . . . . . 

gar to be used for the production (other than distillation) of polyhydric alcohols 9,289 76,022 72,476 . . . . . 

pes, fresh, not entered Aug. 1-Sept. 15. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,419 62,912 65,044

 rods, hot-rolled, not tempered or treated, of iron or nonalloy steel 2 . . . . . . . . . . . . . . . . 57,279 60,491 62,478

ircuit assemblies for telephonic apparatus for switching or terminal apparatus, nesi – 35,938 55,153 . 

ed fish, including sable, ocean perch, snapper, grouper, and monkfish 34,963 45,739 52,807 . . . . . . . . . . . . 

electrical telephonic switching or terminal apparatus, incorporating printed circuit 38 240 48,759 . . . 

c circuit breakers, for a voltage not exceeding 1,000 V 34,725 33,975 44,358 . . . . . . . . . . . . . . . . . . . . . . . . . . 

s, electrical splices and couplings 37,201 41,320 42,304 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ermic hair dryers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,923 36,830 39,346

oncentrated orange juice 19,095 31,571 38,925 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

oneless beef, except processed 45,293 37,359 35,633 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

nwoven disposable apparel designed for use in hospitals 15,705 21,001 31,052 . . . . . . . . . . . . . . . . . . . . . . . . 

motive gaskets, washers, and seals of vulcanized rubber 24,687 25,862 28,928 . . . . . . . . . . . . . . . . . . . . . . . . ured ethyl alcohol for nonbeverage purposes 54,139 59,905 28,058 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

l variable resistors, other than wirewound, including rheostats and potentiometers 14,842 13,551 27,209 . . 

elons if not entered Jun 1-Nov. 30 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,502 21,621 27,105

 chilled boneless beef, except processed 51,598 33,403 26,732 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

luding metal clad with gold) articles (other than jewellry or goldsmiths’ wares) (4) 4 . . . . . . 8,837 23,602

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,246,045 1,561,959 1,962,899l of all commodities 2,261,407 2,791,055 3,207,842 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

rts reported under HTS 0807.10.20. rts reported under HTS 7213.31.30 and 7213.40.30. rts reported under HTS 0807.10.70. 

1996, imports reported under HTS 7115.90.10 part.

ng, figures may not add to totals show. The abbreviation, nesi, stands for “not elsewhere specified of included.”

official statistics of the U.S. Department of Commerce.
mption under CBERA provisions, by sources, 1993-97

(1,000 dollars)

1993 1994 1995 1996 1997

epublic 657,673 751,028 845,356 932,413 1,136,523 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

388,252 478,109 527,716 657,127 746,354 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

208,262 171,381 168,467 279,768 270,268 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

127,399 139,838 156,840 207,289 263,814 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Tobago 44,602 142,901 144,248 184,895 226,244 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

74,408 80,554 78,543 116,007 135,340 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

26,530 41,126 68,550 91,254 81,799 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

38,524 35,141 39,357 51,352 81,064 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

76,496 69,316 87,330 95,965 74,515 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

12,526 13,112 16,676 24,760 34,710 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

33,378 15,770 26,522 30,223 31,194 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1,246 13,100 17,409 32,285 28,512 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

167,110 45,062 22,855 20,765 25,132 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

20,177 21,313 23,043 23,089 24,983 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

15,986 17,220 18,776 19,241 24,636 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

4,463 6,077 6,503 7,129 5,263 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

271 886 1,488 3,962 4,679 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

144 768 724 1,007 4,071 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Antilles 3,490 3,214 4,468 4,357 3,862 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d Grenadines 233 1,299 2,527 3,580 2,373 . . . . . . . . . . . . . . . . . . . . . . . . 

1,293 2,112 2,201 2,204 1,557 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1,111 809 1,683 1,615 522 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

Islands 17 11 12 631 262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

21 12 114 138 166 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

1,903,613 2,050,158 2,261,407 2,791,055 3,207,842 

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ng, figures may not add to the totals shown.

official statistics of the U.S. Department of Commerce.
 203

Table A–32

U.S. imports for consumption under ATPA, by country, 1995–97

 (1,000 dollars)

Rank Country 1995 1996 1997

1 Colombia 499,262 560,546 605,472 . . . . . . . . . . 

2 Peru 207,569 385,298 460,992 . . . . . . . . . . . . . . 3 Ecuador 147,859 218,419 217,437 . . . . . . . . . . . 4 Bolivia 84,100 105,791 68,955 . . . . . . . . . . . . 

Total 938,789 1,270,054 1,352,855 . . . . . . . . . . 

Note.—Because of rounding, figures may not add to the totals shown.

Source: Compiled from official statistics of the U.S. Department of Commerce.
mption of leading imports under ATPA, 1995-97

 (1,000 dollars)

dity 1995 1996 1997

resh cut . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,897 156,039 184,116

s and sections of cathodes of refined copper 11,995 91,749 158,790 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

hemums, standard carnations, anthuriums and orchids 147,875 161,918 147,786 . . . . . . . . . . . . . . . . . . . . . . . . . 

ers and flower buds suitable for bouquets, nesi 64,388 81,386 75,825 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

mpounds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – 70,366

d chain for jewelry, of precious metal except silver 101,574 100,841 68,014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

of jewery and parts thereof of precious metal except silver except necklaces

asps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,810 57,383 55,254

d skipjack, not in airtight containers 36,524 57,933 47,261 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

mimanufactured forms of nonmonetary gold (1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 10,875 41,299

e (spray) carnations, fresh cut 32,360 36,035 36,801 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

esive plates, sheets, film, foil, strip 29,967 33,598 30,957 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

ar not containing added flavoring or color 31,860 54,635 20,884 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

us, fresh or chilled, not reduced in size, not entered Sept. 15-Nov 15 12,868 15,285 19,804 . . . . . . . . . . . . . . 

klaces and neck chains, other than rope or mixed link 10,926 11,676 19,117 . . . . . . . . . . . . . . . . . . . . . . . . . . 

 chilled fish, including sable, ocean perch, snapper, grouper, and monkfish 19,174 14,471 18,307 . . . . . . . . . 

es, sheets, strip and foil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – 15,112 17,894

d copper; copper anodes for electrolytic refining 13,395 5,197 15,690 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

luding metal clad with gold) articles (2) (2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 11,855

of wood, including pencil slats and others 10,682 10,166 11,752 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

golf bags, travel bags, sports bags, and cases 9,272 11,249 11,747 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

cklaces and neck chains of gold 13,966 29,033 9,676 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

d electric conductors nesi, of copper 386 677 9,577 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – 8,634

ons ready for consumption (3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) 9,169 8,448

us, fresh or chilled, not reduced in size, entered Sept. 15-Nov. 15 6,286 6,707 7,749 . . . . . . . . . . . . . . . . . 

l of items shown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727,206 971,135 1,107,604l all commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 938,789 1,270,054 1,352,855

1996, imports reported under HTS 7108.13.50 part. 1997, imports reported under HTS 7115.90.10 part. 

rts reported under HTS 1704.90.20 part.

ng, figures may not add to totals show. The abbreviation, nesi, stands for “not elsewhere specified of included.”

official statistics of the U.S. Department of Commerce.